Clearing of the 740-806 MHz Band; Conversion to Digital Television

AGENCY:

Federal Communications Commission.

ACTION:

Final rule; petitions for reconsideration.

SUMMARY:

In this document, the Commission resolves petitions for reconsideration and clarification of the Third Report and Order of this proceeding. The Commission generally affirms the decisions it reached in that proceeding, although it makes certain adjustment to the rules and policies adopted in this proceeding and the related digital television proceeding to broadcasters and new licensees in the 746-806 MHz band. The Commission also rejects arguments by a petitioner seeking to reverse its decisions on interference issues, and clarifies certain aspects of the applicable interference standards.

DATES:

Effective October 10, 2001.

FOR FURTHER INFORMATION CONTACT:

William Huber of the Auctions and Industry Analysis Division at (202) 418-0660 (voice), (202) 418-7233 (TTY), e-mail: whuber@fcc.gov.

SUPPLEMENTARY INFORMATION:

This is a summary of an Order on Reconsideration of the Third Report and Order (“Order on Reconsideration”) in WT Docket No. 99-168, adopted on September 7, 2001 and released on September 17, 2001. The full text of this document is available for public inspection and copying during regular business hours at the FCC Reference Information Center, Portals II, 445 12th Street, SW, Room CY-A257, Washington, DC, 20554. This document may also be purchased from the Commission's duplicating contractor, Qualex International, Portals II, 445 12th Street, SW, Room CY-B402, Washington, DC, 20554, telephone 202-863-2893, facsimile 202-863-2898, or via e-mail qualexint@aol.com.

Synopsis of the Order on Reconsideration of the Third Report and Order

1. By the Order on Reconsideration, the Commission resolves petitions for reconsideration and clarification of the Third Report and Order in this proceeding (“Upper 700 MHz Third Report and Order”), 66 FR 10204 (February 14, 2001). The Commission generally affirms the decisions it reached in the Upper 700 MHz Third Report and Order, although it makes certain adjustments to the rules and policies adopted in this proceeding and the related digital television (“DTV”) proceeding to accommodate the implementation of voluntary band-clearing agreements among incumbent broadcasters and new licensees in the 746-806 MHz (“Upper 700 MHz”) band, which is currently occupied by TV Channels 60-69. The Commission also rejects arguments by a petitioner seeking to reverse our decisions on interference issues, and clarifies certain aspects of the applicable interference standards.

2. The Commission has received three petitions for reconsideration of the Upper 700 MHz Third Report and Order. One petition was filed by Spectrum Clearing Alliance (“SCA”), which is led by Paxson Communications Corporation and joined by a number of other broadcasters having existing analog TV operations on Channels 60-69 as well as by other parties interested in band clearing. SCA stated in its petition that it is developing a comprehensive, private band-clearing plan that would be a “definitive framework for clearing the 700 MHz band.” SCA asserted that the adoption by the Commission of certain procedural and DTV policy changes would facilitate early clearing and provide certainty to prospective bidders that the Channel 59-69 spectrum will be cleared by a certain date. One signatory of the SCA Petition, Spectrum Exchange Group, LLC (“Spectrum Exchange”), which has expressed an interest in serving as an intermediary to facilitate SCA's clearing scheme, also filed a separate petition in support of the SCA plan.

3. The Association for Maximum Service Television, Inc. (“MSTV”) also filed a petition, primarily seeking reconsideration of our decision in the Upper 700 MHz Third Report and Order not to adopt a new “no interference” standard that would prohibit any new involuntary interference to existing licensees. MSTV also sought clarification of the appropriate interference standard to be used for protection of DTV allotments and facilities from modified analog operations. Finally, MSTV requested that the Commission rule out the possibility that other types of band-clearing policies might be adopted in the future and express “an unqualified commitment to voluntary band clearing.”

4. DTV Construction Deadlines For Single-Channel Broadcasters. The Commission initially adopted a DTV construction schedule that requires rapid build-out of digital broadcast facilities, among other reasons, to “ensure that recovery of broadcast spectrum occurs as quickly as possible.” The DTV construction deadlines are set forth in § 73.624(d) of the Commission's rules. According to the remaining deadlines, those commercial television broadcasters that have not yet constructed their authorized digital facilities must do so by May 1, 2002, and noncommercial broadcasters must complete their DTV facilities by May 1, 2003. Consistent with this plan, the Upper 700 MHz Third Report and Order stated that, if a broadcaster is left with only a single analog allotment as a result of a voluntary band-clearing agreement, it must convert to DTV by the deadline set forth in § 73.624(d).

5. SCA sought reconsideration of the Commission's decision in the Upper 700 MHz Third Report and Order to require broadcasters that are left with a single channel as a result of a band-clearing arrangement to comply with the current DTV construction deadlines. In its petition, SCA requested that the Commission permit an incumbent broadcaster participating in an arrangement that clears an allotment in the Channels 59-69 band and leaves that broadcaster with only a single channel to remain in analog operation beyond the DTV construction deadline and to convert to digital at any time during the DTV transition. In a subsequent ex parte submission, SCA proposed that such single-channel broadcasters be permitted to continue to operate in analog “until December 31, 2005 or when 70% of the television households in their markets are capable of receiving digital broadcast signals over-the-air.”

6. Upon review of the arguments presented, the Commission agrees that a broadcaster that gives up one of its channels to accommodate band clearing should have the flexibility to convert to DTV at a later stage in the transition period.

7. The Commission finds that the DTV conversion process as a whole will not be significantly retarded by affording this limited group of broadcasters the flexibility to complete their digital conversion at a later date. Under the policy the Commission adopts today, if a broadcaster gives up one of its channels to accommodate band clearing (pursuant to Commission authorization), that single-channel broadcaster may continue to operate in analog until December 31, 2005. Moreover, if such single-channel broadcaster seeks an extension of this deadline and is able to demonstrate that less than 70% of the television households in its market are capable of receiving digital broadcast signals, the Commission will presume that such request is in the public interest. Because the number of Channel 59-69 stations is small and because stations with low viewership may be more likely to give up their second allotment, extending the DTV construction deadline for these single-channel broadcasters should not have a significant effect on the broadcast industry's ability to meet the 85% consumer penetration target set forth in section 309(j)(14)(B) of the Act. Thus, the Commission finds that the benefits of relief from the upcoming DTV construction deadline for this group of broadcasters outweigh the potential risk that such limited relief may delay the DTV transition.

8. Interference Protection Standards. The Upper 700 MHz Third Report and Order confirms our intention to review license modification applications associated with band-clearing arrangements under established DTV protection criteria. Among those criteria are provisions that specifically allow certain levels of de minimis interference from proposed DTV stations to nearby full-service TV and DTV facilities. Under our de minimis interference allowance, non-conforming DTV applications may be permitted where interference will affect less than two percent of the population served by another analog or DTV station (provided that no new interference may be caused to a station already predicted to receive interference from all other broadcasters to ten percent or more of its population). The Upper 700 MHz Third Report and Order rejected a proposal by MSTV and other broadcast interests seeking the adoption of a new “no interference” standard that would prohibit any new involuntary interference to existing licensees.

9. MSTV sought reconsideration of this decision. The Commission disagrees with the premise of MSTV's argument, and affirms the policies announced in the Upper 700 MHz Third Report and Order. MSTV's argument is premised on its belief that issues associated with clearing of the Upper 700 MHz band are “completely different” from those of the DTV transition. MSTV fails to recognize that the process of clearing the Upper 700 MHz band has long been an integral part of the DTV transition process. For example, in the DTV Sixth Further Notice of Proposed Rule Making, 61 FR 43209 (August 21, 1996), the Commission stated that “the recovery of spectrum continue[s] to be a key component of our implementation of DTV service.” Contrary to MSTV's assertion, the policies outlined in the Upper 700 MHz Third Report and Order do not extend the de minimis interference protection criteria to a new or different problem. Rather, the Upper 700 MHz Third Report and Order simply clarified that DTV broadcasters participating in band-clearing arrangements could continue to benefit from the flexibility allowed under the DTV technical rules.

10. In urging the Commission to clarify that the DTV two percent de minimis interference allowance does not extend to analog license modification applications, MSTV contended that the Upper 700 MHz Third Report and Order has created an ambiguity about the circumstances in which the DTV two percent de minimis interference limit applies. The Upper 700 MHz Third Report and Order did not change the interference standards for analog proposals to protect DTV service. Applicants seeking modifications of full-service analog TV stations may not cause any additional interference to DTV service, other than a 0.5% reduction in service population to account for rounding and calculation tolerances.

11. DTV Replication Policy. One of the Commission's goals in designing the initial DTV Table of Allotments was to design DTV service areas that would, to the greatest extent possible, allow each broadcaster to provide DTV service to a geographic area that is comparable to its existing NTSC service area. This replication goal meant that each DTV channel allotment was chosen to best allow its DTV service to match the Grade B service contour of the NTSC station with which it was paired. Implicit in the replication goal is the Commission's expectation that DTV stations will eventually be constructed with “full-replication” facilities. In the initial stages of the DTV transition, each DTV facility will be entitled to interference protection to its existing and authorized DTV contour, as well as to its April 1997 NTSC Grade B service area. Although the Commission considered whether broadcasters should be required to replicate fully their analog service areas with DTV coverage, the Commission decided in its recent DTV Biennial Review Order, 66 FR 9973 (February 13, 2001), not to require full replication of analog facilities with DTV. Instead, the Commission decided that it would “cease to give interference protection to [broadcasters'] unreplicated service area as of December 31, 2004.” Thus, by December 31, 2004, commercial DTV licensees must either be on-the-air replicating their April 1997 NTSC Grade B service area or lose interference protection to the unreplicated portion of this service area outside the noise-limited signal contour.

12. In its petition, SCA asserted that, where a broadcaster does not fully replicate for purposes of implementing a band-clearing arrangement, the Commission should not eliminate interference protection from unreplicated service areas at the end of 2004.

13. The Commission decides to create a limited exception to the DTV replication use-or-lose policy for single-channel broadcasters that do not fully replicate (operate with their full allotted facilities) after implementing a band-clearing arrangement. As with its decision on DTV construction deadlines for single-channel broadcasters, the Commission believes that this approach is supported by the congressional plan for the transition of this spectrum to new public safety and commercial uses.

14. In the DTV Biennial Review Order, the Commission chose not to require such replication so as “to give broadcasters a measure of flexibility as they build their DTV facilities to collocate their antennas at common sites, thus minimizing potential local difficulties locating towers and eliminating the cost of building new towers.” The Commission finds that it is consistent with the underlying intent of that policy to afford certain broadcasters relief from the DTV replication protection deadline. For instance, in connection with a band-clearing arrangement as discussed, it would be inconsistent with the intent of the replication policy to remove DTV replication protection at the end of 2004 from a single-channel broadcaster that has been permitted to continue its analog operations on a digital allotment until the end of 2005 (or perhaps later). Instead, in such a case, the Commission believes that a broadcaster that is left with a DTV single-channel allotment as a result of a band-clearing arrangement should retain the interference protection associated with that DTV allotment for a period of 31 months after beginning to transmit in digital. This period is equal to the period of interference protection for unreplicated areas that the Commission provided to all broadcasters in the DTV Biennial Review Order.

15. Spectrum Clearing Alliance's Comprehensive Band-Clearing Plan. In the Upper 700 MHz Third Report and Order, the Commission found that “secondary auctions” or other such comprehensive market-oriented band-clearing mechanisms could be used to facilitate efficient band clearing.

16. SCA asserted that, with Spectrum Exchange and other broadcasters, it is currently in the process of developing a “comprehensive” band-clearing plan that is intended to serve as a framework for clearing the Channel 59-69 band. In its petition, SCA asked for a certain level of Commission involvement in executing its plan, and outlined certain actions to be taken by the Commission to assist in publicizing SCA's band-clearing plan.

17. The Commission acknowledges that there are strong public interest benefits favoring comprehensive band clearing. However, the Commission finds that additional involvement beyond its existing processes is not necessary to facilitate SCA's proposed private clearing arrangement (or any other comprehensive clearing plans). Under a voluntary, comprehensive band-clearing scheme established prior to the auction, bidders in the Commission's auction will be able to bid with some certainty that the spectrum will be cleared and avoid the delay and expense of complex post-auction bargaining.

18. The Commission finds that the Order on Reconsideration, in addition to the existing public processes for considering modification applications and associated regulatory requests to implement band-clearing agreements, should be sufficient to maximize the likelihood that all potential participants would have actual notice of an opportunity to participate in voluntary, comprehensive band-clearing arrangements, such as that being developed by SCA.

19. Expedited Processing of Regulatory Requests. In the Upper 700 MHz Third Report and Order, the Commission found it unnecessary to adopt a 60-day application processing deadline. SCA requested reconsideration of the decision not to adopt an explicit timeline. In light of the substantial public interest benefits associated with voluntary band-clearing agreements, the Commission delegates to the Mass Media Bureau authority to establish a 90-day processing period for band-clearing requests. The Commission concludes that an explicit time period would promote certainty in the clearing process.

20. License modification applications necessary to implement band-clearing arrangements would be granted at the end of the 90-day time period, unless the application is found to be defective, is opposed, or an integral request for waiver or other regulatory request cannot be granted. Upon notice to the applicant, the Mass Media Bureau could toll the 90-day deadline during the period in which an applicant is responding to a staff request for additional information. The Mass Media Bureau could also, upon notice to the applicant, extend the processing period if the caseload of regulatory requests associated with band-clearing arrangements makes it administratively impractical to complete processing within a 90-day period. The 90-day processing period would not apply to those applications that do not make a prima facie case of meeting the presumptions previously established in this proceeding for voluntary requests associated with band-clearing arrangements or that are not otherwise entitled to streamlined processing. Staff will regularly issue notice of modifications granted pursuant to this process.

21. Proposal to Relax Waiver Policies. Our previous decisions in this proceeding have provided guidance on a number of aspects of the Commission's treatment of regulatory requests associated with band-clearing arrangements. In regard to such regulatory requests, SCA proposed that the Commission adopt a “relaxed waiver standard” with respect to interference to Class A stations or where other requirements (e.g., city grade coverage) are not met.

22. In light of the balance that the Commission has achieved among the various objectives in this proceeding, it declines to adopt a general “relaxed waiver” policy.

23. Treatment of Pending Channel 59-69 Applicants. The Commission confirms that broadcasters with pending DTV applications will be permitted to benefit from band-clearing policies announced in this proceeding. The Commission finds no principled reason to distinguish between those broadcasters that have already been granted authority to operate in this band and those that have not yet received an authorization. Clearing of both pending applications and authorized facilities would serve the objectives of this proceeding.

24. The Commission continues to believe that voluntary agreements between broadcasters and new wireless licensees should result in the effective clearing of the 700 MHz band, and find no basis for disturbing our announced policy.

Procedural Matters

A. Regulatory Flexibility Act and Paperwork Reduction Act

25. Section 213 of the Consolidated Appropriations Act, 2000 states that the Regulatory Flexibility Act (as well as certain provisions of the Contract With America Advancement Act of 1996 and the Paperwork Reduction Act) shall not apply to the rules and competitive bidding procedures governing the frequencies in the 746-806 MHz band (currently used for television broadcasts on Channels 60-69). Because the policies and rules adopted in the Order on Reconsideration of the Third Report and Order relate only to assignments of those frequencies, no Final Regulatory Flexibility Analysis or Paperwork Reduction Analysis is necessary.

B. Alternative Formats

26. Alternative formats (computer diskette, large print, audio cassette and Braille) are available to persons with disabilities by contacting Brian Millin at (202) 418-7426 (voice), TTY (202) 418-7365, or at bmillin@fcc.gov. The Order on Reconsideration of the Third Report and Order can also be downloaded at http://www.fcc.gov/Bureaus/Wireless/Orders/2001/index.html .

27. For further information concerning the Order on Reconsideration of the Third Report and Order, contact William Huber of the Auctions and Industry Analysis Division at (202) 418-0660 (voice), (202) 418-7233 (TTY), e-mail: whuber@fcc.gov, Wireless Telecommunications Bureau, Washington, DC 20554.

Ordering Clauses

28. Pursuant to sections 1, 2, 4(i), 5(c), 7(a), 301, 302, 303, 307, 308, 309(j), 309(k), 311, 316, 319, 324, 331, 332, 333, 336, 337, 614, and 615 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i), 155(c), 157(a), 301, 302, 303, 307, 308, 309(j), 309(k), 311, 316, 319, 324, 331, 332, 333, 336, 337, 614, and 615, the Consolidated Appropriations Act, 2000, Public Law Number 106-113, 113 Stat. 2502, and § 1.425 of the Commission's rules, 47 CFR 1.425, it is ordered that the Order on Reconsideration of the Third Report and Order is hereby adopted.

29. It is further ordered that, pursuant to sections 1, 2, 4(i), and 303 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i) and 303, and § 1.429 of the Commission's rules, 47 CFR 1.429, the Petition for Reconsideration filed by MSTV on March 16, 2001 is denied, and the Petitions for Reconsideration filed by Spectrum Clearing Alliance and Spectrum Exchange Group, LLC on March 16, 2001 are granted to the extent discussed herein.

30. It is further ordered that authority is hereby delegated to the Mass Media Bureau to implement the policies for the introduction of new wireless services and to promote the early transition of incumbent analog television licensees to DTV service to the extent discussed herein.

List of Subjects in 47 CFR Part 27

• Communications common carriers
• Radio