Advanced Television Systems

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 73

[MM Docket No. 87-268; FCC 98-23]

Advanced Television Systems

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: This Memorandum Opinion and Order on Reconsideration of the

Fifth Report and Order (``MO&O'') reaffirms & clarifies the

Commission's rules to implement digital television. The intended effect

of this action is to provide a host of new and beneficial services to

the American public, while preserving and improving free universal

television service that serves the public.

EFFECTIVE DATE: May 1, 1998.

FOR FURTHER INFORMATION CONTACT: Mania Baghdadi, Mass Media Bureau,

Policy & Rules Division, 202-418-2130.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's MO&O,

MM Docket No. 87-268, FCC 98-23, adopted February 17, 1998 and released

February 23, 1998. The full text of this MO&O is available for

inspection and copying during normal business hours in the FCC

Reference Center (Room 239), 1919 M Street, N.W., Washington, DC, and

also may be purchased from the Commission's copy contractor,

International Transcription Service, Inc., 1231 20th Street, N.W.,

Washington, D.C., 20036, (202) 857-3800.

I. Introduction

1. In the Fifth Report and Order, 62 FR 26996 (May 16, 1997), in

the digital television (``DTV'') proceeding, we adopted rules to permit

the nation's broadcasters to implement the conversion to digital

television in accordance with the Telecommunications Act of 1996

(``1996 Act''). Our goals were to preserve and promote free,

universally available, local broadcast television in a digital world,

as well as to advance spectrum efficiency and the rapid recovery of

spectrum by fostering the swift development of DTV. Accordingly, we

sought to maximize broadcasters' flexibility to provide a digital

service to serve the needs and desires of the viewers, while adopting

rules to ensure a smooth transition to digital television.

2. We established an aggressive but reasonable construction

schedule, a requirement that broadcasters continue to provide free,

over-the-air television service, a target date of 2006 for the

completion of the transition, and a simulcasting requirement phased in

at the end of the transition period. We also recognized that digital

broadcasters remain public trustees of the nation's airwaves and have a

responsibility to serve the public interest. In order to permit an

opportunity to reassess the decisions we made in the Fifth Report and

Order, we also noted our intention to conduct a review of the progress

of the transition to DTV every two years. In response to petitions for

reconsideration from various parties, we take this opportunity to

reaffirm, revise, or clarify certain of our actions. Issues raised in

the petitions for reconsideration that are not addressed here will be

resolved in separate proceedings or future orders as noted.

II. Issue Analysis

A. Eligibility

3. Background. The 1996 Act expressly limited initial eligibility

for DTV licenses to persons that, as of the date of the issuance of the

licenses, hold either a construction permit or license (or both) for a

television broadcast station. In the Fifth Report and Order, the

Commission issued initial DTV licenses simultaneously to all eligible

full-power permittees and licensees. We concluded that it more

effectively effectuates the Congressional scheme to implement the

statute through a streamlined three-phased licensing process, with the

first phase consisting of the initial DTV license, rather than through

the conventional two-phased licensing process. Use of the two-step

process without the initial licensing phase would have prevented the

establishment of a date certain at which to determine initial

eligibility because, given the statutory directive that eligibility be

limited to permittees and licensees as of the date of issuance of the

DTV licenses, it could potentially

[[Page 15775]]

have left eligibility open until the last DTV operating license was

granted, a period that could possibly take years. This was also

necessary to allow us to establish the DTV Table of Allotments.

i. Alleged Exclusion of Eligible Permittees

4. Petitions/Comments. Coast TV (``Coast'') and Three Feathers

Communications, Inc. (``Three Feathers'') assert that they held

television construction permits as of the date of issuance of the DTV

licenses but were erroneously excluded from the list of eligible

broadcasters.

5. Discussion. Commission records indicate that Three Feathers held

a construction permit for channel 36, Hutchinson, KS, as of the date of

issuance of the DTV licenses. Similarly, Coast's application for a

construction permit for channel 38, Santa Barbara, CA, had also been

granted before that date, thereby making it eligible for a DTV license.

Their exclusion was inadvertent. Accordingly, the foregoing facilities

of Three Feathers and Coast are eligible for initial DTV licenses

pursuant to the Fifth Report and Order, and we shall amend the DTV

Table of Allotments to reflect their eligibility.

ii. Eligibility of Parties with Pending NTSC Applications

A. General Matters

6. Petitions/Comments. Several petitioners argue that parties whose

new NTSC construction permit applications were still pending as of the

date of issuance of the initial DTV licenses should be able to

participate in the transition to DTV, at least under certain

circumstances. Many of these petitioners filed applications within the

past three years that are mutually exclusive with other applications

and which, as a result, have not been grantable by the Commission. Some

petitioners claim that the newly granted NTSC construction permits

would be worth very little if they could not be used for DTV, but

instead had to be surrendered to the Commission at the end of the

transition period. Similarly, other petitioners assert that pending

applicants cannot realistically make the substantial investments

required to proceed with their applications and construct facilities

absent assurances that their NTSC channels can be converted to DTV.

7. Discussion. The 1996 Act stated that, if the Commission

determines to issue additional DTV licenses, the Commission ``should

limit the initial eligibility for such (DTV) licenses to persons that,

as of the date of such issuance, are licensed to operate a television

broadcast station or hold a permit to construct such a station (or

both) * * * In the Fifth Report and Order, we fully implemented this

provision. We made no decision at that time regarding the assignment of

DTV channels to new permittees and licensees whose pending NTSC

applications had not yet been granted and who were, as a result, not

awarded initial DTV licenses.

8. We shall afford new NTSC permittees, whose applications were not

granted on or before April 3, 1997 and who were therefore not eligible

for an initial DTV paired license, the choice to immediately construct

either an analog or a digital station on the channel they were granted.

They will not be awarded a second channel to convert to DTV but may

convert on their single 6 MHz channel. If they choose the analog

option, they will be subject to the traditional two-year construction

period applied to NTSC stations, and they may, upon application to the

Commission, convert their analog facility to DTV at any point during

the transition period, up to the end of that period.

9. All NTSC service must cease at the end of the transition period.

Because NTSC is a technology of the past that will cease to exist,

authorizing new analog stations that cannot evolve to digital operation

would have significant public interest costs. It could limit the

ability of the analog broadcaster to serve its viewers as well as it

otherwise might; it could put the licensee at a competitive

disadvantage vis-a-vis its emerging digital competitors; and viewers

would lose altogether a channel of free, over-the-air video programming

at the end of the transition period. In contrast, allowing the

transition to DTV would allow broadcasters to better serve their

viewers on a local scale, and it could help facilitate the overall

conversion from analog to digital broadcasting across the country.

10. Before the NTSC permittee or licensee can build a DTV station,

either initially or after first building an analog station, it must

file a DTV application. We will treat these DTV applications as minor

modifications. The proposed DTV facility must protect all DTV and NTSC

stations by complying with all applicable DTV technical rules. In

addition, such a new permittee or licensee's DTV facility must

generally comply with analog operating rules, such as minimum operating

hours, except where the analog rule is inconsistent with the digital

rules or inapplicable to digital technology. It must also provide one,

free over the air video program service, as with other DTV licensees.

These stations will also be afforded the flexibility to provide digital

ancillary or supplementary services authorized by Sec. 73.624(c) of the

Commission's rules, consistent with the DTV standard.

11. To prevent warehousing of spectrum, we will require these

permittees to build a station, analog or digital, within the initial

two-year construction period granted, rather than applying the DTV

construction timetable adopted in the Fifth Report and Order. We will

not extend the time for construction based on sale of the permit or

based on a decision to convert to DTV in the initial two-year period

before the analog station is built. Those stations that first construct

and operate an analog station (within the initial two-year period) and

then choose later to construct a DTV station must convert by the 2006

deadline and, upon grant of a DTV permit, will have (subject to the

2006 deadline) until the construction deadline for that category of

station or a period of two years, whichever is longer, within which to

build the DTV station.

12. DTV stations operating on a core NTSC channel will continue to

do so after the end of the transition period. However, stations

operating outside the core will be doing so on an interim basis only.

At the end of the transition period, to fully implement the policies

adopted in the Sixth Report and Order, 63 FR 460 (January 6, 1998), and

the recently concluded Channels 60-69 Reallocation, 63 FR 6669

(February 10, 1998), proceeding, the Commission will reassign all out-

of-core DTV broadcasters, including the currently pending applicants,

to channels in the core. Because the out-of-core allotment is intended

to be temporary, the subsequent move to a core channel will be

considered a minor change in facilities, intended solely to effectuate

the policies set forth in the above-mentioned documents.

B. Denied NTSC Applications

13. Petitions/Comments. SL Communications (``SL'') requests

reconsideration of an allotment decision in the Sixth Report and Order

that we consider here because it implicates eligibility. SL requests

that we allot a DTV channel for a vacant analog UHF channel in Texas,

for which an initial construction permit application was filed by

another party. In 1995, that applicant and SL filed a petition to

substitute SL for the applicant. The petition was denied on February

27, 1997, the proceeding was terminated, and a petition for

reconsideration is pending. Because there was no

[[Page 15776]]

permittee or licensee for the channel in question, there was no

corresponding DTV allotment made in the Sixth Report and Order and no

additional license awarded in the Fifth Report and Order. SL argues

that a DTV allotment should have been made because an application was

on file before October 24, 1991.

14. Discussion. We decline to reconsider this allotment eligibility

decision. Under the eligibility criteria established by section

336(a)(1) of the Communications Act and adopted in the Fifth Report and

Order, SL was not eligible for the award of an initial DTV license, as

it was not a permittee or licensee as of the date of issuance of the

DTV licenses. Indeed, the original applicant for which SL sought to

substitute did not have a permit at that time, and the application had

been denied. Thus, regardless of the outcome of the proceeding to

reconsider whether the NTSC application was properly denied, we were

not required to take the vacant analog allotment into consideration

when we crafted the DTV Table of Allotments. It would be premature to

give such consideration in the instant case because no permit or

license has been granted. However, in its recent order denying the

petition for reconsideration, Dorothy O. Schulze and Deborah Brigham,

FCC 98-21 (adopted February 12, 1998), the Commission held that the

NTSC channel is exempt from the general provisions of the Sixth Report

and Order deleting vacant NTSC allotments and that the Mass Media

Bureau should take appropriate steps to permit the filing of

applications for this channel. If such an application for an NTSC

construction permit is subsequently granted, the permittee will have

the same rights and obligations as other parties with pending NTSC

applications, as discussed above.

B. Definition of Service--Spectrum Use

15. Background. In the Fifth Report and Order, we recognized the

benefit of affording broadcasters the opportunity to develop additional

revenue streams from innovative digital services. Therefore, we allowed

broadcasters the flexibility to respond to the demands of their

audiences by providing ancillary or supplementary services that do not

derogate the mandated free, over-the-air program service. We did not

require that such services be broadcast-related, and we noted that such

ancillary or supplementary services could include, but are not limited

to, subscription television programming, computer software

distribution, data transmissions, teletext, interactive services, audio

signals, and any other services that do not interfere with the required

free service.

16. As noted in the Fifth Report and Order, our decision to allow

broadcasters flexibility to provide ancillary or supplementary services

is supported by section 336. This section specifically gives the

Commission discretion to determine, in the public interest, whether to

permit broadcasters to offer such services. Section 336(a)(2) of the

Act provides that if the Commission issues additional licenses for

advanced television services, it ``shall adopt regulations that allow

the holders of such licenses to offer such ancillary or supplementary

services on designated frequencies as may be consistent with the public

interest, convenience, and necessity.''

i. Ancillary or Supplementary Services

17. Petitions/Comments. The Personal Communications Industry

Association (``PCIA'') argues that the Fifth Report and Order did not

adequately define ``ancillary or supplementary'' services. PCIA claims

that the provision of land mobile service by DTV licensees would not

serve the public interest, as it would create an uneven playing field

between DTV licensees and mobile service providers. PCIA further claims

that consideration of the effect of the Order on mobile licensees is

missing from the Fifth Report and Order's Final Regulatory Flexibility

Analysis, as it identifies small businesses that may be impacted by the

decisions in the Fifth Report and Order, but analyzes the impact only

on other broadcast licensees.

18. PCIA also argues that the Commission's decision is contrary to

the 1993 Budget Act, which authorized the Commission to auction

spectrum used for commercial mobile radio purposes. PCIA claims that

DTV licensees, which were not required to participate in an auction,

will ultimately have license rights different from those of other

mobile service providers. They argue that these licensees do not appear

from the Fifth Report and Order to have the same regulatory

responsibilities as current mobile providers and are permitted to

provide video broadcast and subscription services.

19. PCIA acknowledges that Sec. 73.624(c)(1), adopted in the Fifth

Report and Order, states that DTV licensees offering such services must

comply with the Commission's regulations regarding each specific

service. However, it argues that the Commission has failed to define

these regulatory requirements in sufficient detail. For example, PCIA

questions whether DTV licensees offering land mobile services will be

required to provide emergency 911 access, telephone number portability,

and mandatory resale.

20. AAPTS and PBS (``AAPTS/PBS'') oppose PCIA's petition and argue

that DTV licensees should be allowed to provide land mobile and other

ancillary or supplementary services that do not relate to broadcast

service. AAPTS/PBS states that the Fifth Report and Order's blanket

authorization of supplementary services is consistent with the mandate

of section 336(a)(2), which allows ancillary service offerings that are

consistent with the public interest. AAPTS/PBS also observes that

allowing public television stations the flexibility to provide a

variety of services is crucial, as these services could generate needed

revenue for DTV construction and operation.

21. Discussion. We are unpersuaded by PCIA's arguments that we

should specifically exclude the provision of mobile services from the

definition of DTV ancillary or supplementary services. As we stated in

the Fifth Report and Order, we believe that the approach we have taken

with respect to permitting ancillary or supplementary services will

best serve the public interest by fostering the growth of innovative

services to the public and by permitting the full possibilities of DTV

to be realized. Granting broadcasters the flexibility to offer whatever

ancillary or supplementary services they choose may also help them

attract consumers to the service, which will, in turn, speed the

transition to digital. Such flexibility should encourage

entrepreneurship and innovation, will contribute to efficient spectrum

use, and will expand and enhance use of existing spectrum. Permitting

broadcasters to assemble a wide array of services that consumers desire

will also help promote the success of the free television service.

22. Section 336(b) outlines our authority to permit the provision

of ancillary or supplementary services by DTV licensees. Under this

section, we are required to limit ancillary or supplementary services

to avoid derogation of any advanced television services that we may

require. We are also required to apply any regulations relevant to

analogous services. Our decision is fully consistent with the statutory

requirements. The services we have authorized will not derogate

advanced television service, nor will they create inequities for other

regulated services.

23. The Fifth Report and Order addressed the issue of parity in the

treatment of various service providers. We stated that, consistent with

section

[[Page 15777]]

336(b)(3), all non-broadcast services provided by digital licensees

will be regulated in a manner consistent with analogous services

provided by other persons or entities. We also noted that we currently

follow such an approach for ancillary or supplementary services

provided by NTSC licensees, for example, on the vertical blanking

interval (VBI) and the video portion of the analog signal. Further, in

the Fifth Report and Order, we noted that we would review our flexible

approach to permit ancillary or supplementary services during our

periodic DTV reviews and to make adjustments to our rules as needed.

These reviews will allow us to address any specific concerns raised by

the mobile service industry regarding the provision of certain

ancillary or supplementary services by DTV licensees on a case-by-case

basis if warranted.

24. Contrary to the claims of PCIA, our decision regarding

ancillary or supplementary services will fulfill our Congressional

mandate to establish a fee program that prevents unjust enrichment of

DTV licensees. In enacting section 336, Congress specifically

recognized the possibility that DTV licensees might offer services

competing with those subscription-based services operating on spectrum

purchased in the auction process. Congress therefore required that the

Commission establish a fee program for ancillary or supplementary

services provided by digital licensees if subscription fees are

required in order to receive such services.

25. In considering the assessment of fees for the ancillary or

supplementary use of the DTV spectrum, Congress mandated that to the

extent feasible, the fee imposed should recover an amount that equals

but does not exceed the amount that would have been realized in an

auction of the spectrum under section 309(j). Congress stated that the

fee should be designed to prevent the unjust enrichment of DTV

licensees using the DTV spectrum for services analogous to services

provided on spectrum assigned at auction. We recently issued a Notice

of Proposed Rule Making to consider proposals as to how this statutory

provision should be implemented and these fees assessed.

26. Finally, there is no basis to PCIA's claim that we were

required to consider the impact of our DTV decision on land mobile

licensees in the Final Regulatory Flexibility Analysis (FRFA) appended

to the Fifth Report and Order. The FRFA, required of agencies in

rulemaking proceedings by the Regulatory Flexibility Act, is designed

to protect small entities that are directly subject to administrative

rules rather than all entities that are indirectly affected by the

results that any rules will produce.

ii. Minimum Programming Hours

27. Petition. Chronicle Publishing Co. (``Chronicle'') observes

that the Fifth Report and Order requires broadcasters to provide a free

digital video programming service, the resolution of which is

comparable to or better than that of today's service, aired during the

same time periods that their analog channel is broadcasting. Chronicle

argues that there may be unexpected difficulties for stations operating

on channels adjacent to nearby stations, for which the interference

issues are not yet fully understood. To accommodate such difficulties,

Chronicle requests that the Commission modify the foregoing requirement

to exempt broadcasters from providing a free digital video signal

between the hours of midnight and 6:00 a.m. (even though the analog

station is broadcasting) in order to allow licensees to conduct

maintenance or resolve any technical or other unanticipated problems

arising from the use of new digital technology, especially in the UHF

band. Chronicle maintains that such ``down time'' is essential for the

ultimate success of DTV.

28. Discussion. We decline to grant Chronicle's requested

modification to our requirement that broadcasters provide a free

digital video programming service when the analog station is

broadcasting. This requirement was designed to assure that broadcasters

provide on their digital channel the free over-the-air television

service on which the public has come to rely. We believe that it is a

minimal requirement that should not be unduly burdensome, particularly

in light of the flexibility we have otherwise provided to broadcasters

to provide a variety of digital services. While we recognize that

broadcasters may have technical problems to resolve as they make the

transition to DTV, we believe that the remedy requested is overbroad.

In the event, however, that stations experience unexpected technical

difficulties with the required transition to DTV such as those outlined

by Chronicle, they may request special temporary authority to operate

at variance from our required minimum digital television service on a

case-by-case basis so that such technical difficulties can be resolved.

If it later appears that a more general change in our requirements may

be necessary, we can consider that modification during our periodic

reviews.

C. Public Interest Obligations

29. Background. In the Fifth Report and Order, we noted that the

1996 Act provided that broadcasters have public interest obligations

with respect to the program services they offer, regardless of whether

they are offered using analog or digital technology. Noting the

differences in views as to the nature and extent of digital

broadcasters' public interest obligations, we stated that we would

issue a Notice to collect and consider all views on broadcasters'

public interest obligations in the digital world. However, we also put

broadcast licensees and the public on notice that existing public

interest requirements continue to apply to all broadcast licensees,

that the Commission may adopt new public interest rules for digital

television, and that the Fifth Report and Order ``forecloses nothing

from our consideration.''

30. Petitions. Media Access Project, et al. (``MAP''),1

contends that the Commission should not delay its analysis of what

modified (and increased) public interest obligations it should impose

on DTV licensees. According to MAP, the Commission's failure to impose

new public interest obligations violates section 201 of the 1996 Act,

47 U.S.C. 336(d), 336 (a)(1), and 47 U.S.C. 336(b)(5). MAP adds that

new public interest obligations are also warranted because broadcasters

will have full use of 12 MHz (double their available spectrum) for at

least 9 years, and also will be able to provide a number of commercial

services that were previously impossible. MAP urges the Commission to

clarify that all new and existing public interest obligations will

apply to both free and subscription program services in both analog and

digital modes. MAP contends that such a conclusion appears implicit in

the Fifth Report and Order and is supported by 47 U.S.C. 336(d).

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\1\Media Access Project filed jointly with the Center for Media

Education, the Consumer Federation of America, the Minority Media

and Telecommunications Council, and the National Federation of

Community Broadcasters.

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31. Decision. We will not reconsider the approach we took in the

Fifth Report and Order with respect to the issue of the nature and

extent of broadcasters' public interest obligations in the digital

world. MAP has not presented sufficient reasons why we must make an

immediate decision on these questions instead of issuing a Notice so

that we may collect and consider all views on these important issues.

[[Page 15778]]

D. Transition

i. Simulcast

32. Background. In the Fifth Report and Order, the Commission

declined to adopt a simulcast requirement for the early years of the

transition, but it adopted a phased-in simulcasting requirement as

follows: by the sixth year from the date of adoption of the Fifth

Report and Order, there is a 50 percent simulcasting requirement; by

the seventh year, a 75 percent simulcasting requirement; and, by the

eighth year, a 100 percent simulcasting requirement, which will

continue until the analog channel is terminated and the analog spectrum

returned.

33. Petitions: Include Simulcasting Target Dates in Periodic

Reviews. MSTV contends that although the simulcasting phase-in is based

on the transition end date of 2006, the Commission may change this

date. Therefore, MSTV urges the Commission to expressly include

simulcasting target date requirements in its biennial review of the DTV

transition. MSTV contends that this will ensure that simulcasting

requirements remain tied to consumer acceptance of DTV, and

broadcasters have the flexibility to program their DTV channels to best

attract the public to DTV during the early stages of the transition.

34. Limited Simulcasting Exemption for Public TV Stations. AAPTS/

PBS contends that public stations may be adversely affected by the

partial-to-full simulcasting requirement, as well as by the requirement

that the digital channel operate during the same hours as the

licensee's NTSC station. According to AAPTS/PBS, these requirements

effectively impose a minimum operating requirement on the DTV station.

It therefore advocates that the Commission not require public stations

to simulcast their NTSC programming on their DTV stations, because that

will effectively require that the licensee operate the DTV station

whenever the NTSC station is operating. AAPTS/PBS instead urges that

the Commission apply the simulcast requirement only during the hours

when a licensee operates the DTV station. AAPTS/PBS notes that for many

public stations, the power requirements for operating a DTV station

whenever their NTSC station is operating (which is often 18 hours a

day) will exceed their financial resources and may chill their ability

or willingness to build a DTV station in the first place. Since there

are no minimum operating requirements for noncommercial TV stations,

according to AAPTS/PBS, these two DTV operation requirements ``could

have the perverse result of providing an incentive for public

television stations to reduce their NTSC operating hours in order to

comply with these (two Fifth Report and Order) requirements.''

35. Accordingly, AAPTS/PBS urges that the Commission afford public

stations the discretion to determine how many hours a day to operate

their DTV stations. AAPTS/PBS contends that public stations will still

offer DTV services during a reasonable portion of the day because they

incurred the DTV construction costs, and PBS will be delivering HDTV

programming at least during prime time. In addition, because public

stations rely on audience contributions for their operating costs, they

will have an incentive to operate their DTV stations the maximum number

of hours they can afford. AAPTS/PBS therefore contends that this

proposal will not adversely affect the transition to DTV. If a public

station operates its DTV station fewer than the number of hours

required to meet the simulcast percentage, the licensee should be

required to simulcast for the entire time the DTV station is operating.

36. Discussion: Periodic Review. We agree with MSTV that we should

expressly include simulcasting requirements in our periodic review. As

discussed below, Congress now requires us to reclaim the analog

spectrum by December 31, 2006 and to grant extensions of that date to

stations under circumstances specified in the statute. We will conduct

a periodic review of the progress of DTV every two years until the

cessation of analog service. In these reviews, we will address any new

issues raised by technological developments, necessary alterations in

our rules, or other changes necessitated by unforeseen circumstances.

37. Noncommercial Stations. We do not believe that it is necessary

at this time to grant AAPTS/PBS's request to afford public stations

discretion to determine how many hours a day to operate their DTV

stations. We note that, in the Fifth Report and Order, we adopted a

six-year period for public stations to construct their DTV facilities,

the longest construction period for any category of DTV applicant. We

reiterate our beliefs, stated in that Order, that special relief

measures may eventually be warranted to assist public television

stations to make the transition, that it would be premature at this

time to determine what those measures might be, and that the specific

nature of any special relief for public stations is best considered

during our periodic reviews.

ii. Licensing of DTV and NTSC Stations

38. Background. In the Fifth Report and Order, we concluded that

the NTSC and DTV facilities should be licensed under a single, paired

license. We stated that this will help both the Commission and

broadcasters by keeping administrative burdens down, and that it would

allow us to treat the DTV license and the NTSC license together for the

purposes of revoking or not renewing a license. Therefore, we stated

that once broadcasters have satisfied construction and transmission

requirements, they will receive a single, paired license for the DTV

and NTSC facilities.

39. Petitions/Comments. The Department of Special Districts, San

Bernardino County, California (``San Bernardino'') notes that the 1996

Act requires the Commission to condition the DTV license on the

``require[ment] that either the additional license or the original

license held by the licensee be surrendered to the Commission for

reallocation or reassignment (or both) pursuant to Commission

regulation.'' San Bernardino argues that this condition should appear

on the face of the instrument for all license renewals granted after

the start of 1998, consistent with the eight-year license term and the

2006 reversion date adopted in the Fifth Report and Order.

40. Discussion. We note that the 2006 reversion date is now

statutory. After the adoption of the Fifth Report and Order and the

filing of the petitions for reconsideration, Congress enacted the

Balanced Budget Act of 1997, which provides that ``(a) broadcast

license that authorizes analog television service may not be renewed to

authorize such service for a period that extends beyond December 31,

2006'' unless the Commission grants an extension based on specific

criteria enumerated in the statute. We believe that this statutory

language addresses any concerns San Bernardino may have regarding the

reversion of one of the licenses of each station. Nevertheless, to

ensure that all broadcasters are aware of their obligation to surrender

either the original license or the additional license pursuant to

Commission regulation, we will place on all broadcast television

licenses granted after December 31, 1998, an express condition

requiring return of one of the two 6 MHz channels at the end of the

transition period. We will impose such a condition on all renewals

granted until the transition period has ended.

[[Page 15779]]

E. Application/Construction Period

41. Background. In the Fifth Report and Order, we announced that we

would apply a streamlined three-stage application process to the group

of initially eligible analog permittees and licensees allotted a paired

channel in the DTV Table of Allotments. In the Fifth Report and Order

itself, the Commission completed Stage 1, the initial modification of

the license for DTV, by issuing DTV licenses to all parties initially

eligible to receive them. Before initial DTV licensees can commence

construction, however, we required that they file an application for a

construction permit. We stated that we would treat the construction

application, the second stage, as a minor change application, which

does not require a showing of financial qualifications. We observed

that the DTV construction permit application would not constitute a

change in frequency, but merely the implementation of the initial DTV

license on a channel assigned in the Sixth Report and Order. In the

third stage, upon completion of construction, the permittee may

commence program tests upon notification to the Commission, provided

that an application for a license to cover the construction permit for

the DTV facility is timely filed.

i. Financial Qualifications

42. Petitions/Comments. MAP argues that the Commission should have

required broadcasters to demonstrate their financial qualifications as

a condition of awarding an initial DTV permit or license. MAP notes

that the Commission's classification of an application for DTV

construction permit as a minor change means that the applicant is not

required to demonstrate its financial qualifications. MAP asserts that

this decision threatens to delay the institution of DTV service because

financially unqualified applicants may warehouse awarded spectrum or

simply be unable to construct DTV facilities.

43. MAP also argues that the conversion to DTV is not a change in

facilities, but instead involves issuing a new construction permit and

license to each existing broadcaster making the transition. Because the

license is new, according to MAP, the Commission is statutorily

required to determine whether the broadcaster is qualified to receive

it. In this regard, MAP cites section 308(b) of the Communications Act

of 1934, as amended, which states that ``(a)ll applications for station

licenses, or modifications or renewals thereof, shall set forth such

facts as the Commission may by regulation prescribe as to the * * *

financial * * * qualifications of the applicant to operate the

station.'' In the alternative, MAP asserts that even if the DTV

applications are categorized as a change, the Commission's

classification of them as minor is inconsistent with Sec. 73.3572(a)(1)

of the Commission's rules. That provision of the rules defines a major

change as one involving a change in frequency or community of license.

MAP disputes the Commission's assertion in the Fifth Report and Order

that ``the change involved in constructing and operating a DTV facility

does not constitute a change in frequency, merely the implementation of

the initial DTV License on a channel assigned in the Sixth Report and

Order.'' MAP states that, regardless of whether broadcasters use their

new frequency for the current analog or future digital transmissions,

they will change their frequencies and be subject to

Sec. 73.3572(a)(1).

44. Discussion. We decline to reconsider the streamlined licensing

process, under which we do not require a showing of financial

qualifications. We continue to believe that the DTV construction permit

applications related to these allotments should be treated as minor

change applications. They do not involve new stations or changes in

frequency as these terms have traditionally been used for the purposes

of Sec. 73.3572(a)(1) of the Commission's rules to define a major

change. This is not an instance where an individual broadcaster has

devised its own plan to change its channel or community of license and

is requesting Commission authorization of that specific change. To the

contrary, in order to implement the transition to DTV that we have

found will serve the public interest, each application is to implement

a specific DTV channel allotment expressly set forth by the Commission

in the Sixth Report and Order for use by the applicant, the incumbent

analog broadcast licensee, as contemplated by Congress.

45. We also conclude that treating DTV applications like

applications for minor changes is consistent with Section 308(b) of the

Communications Act. Section 308(b) authorizes the Commission to

exercise its discretion when determining whether a financial

qualifications showing requirement for certain classes of applications

would serve the public interest. As noted above, Section 308(b)

requires that ``(a)ll applications for station licenses, or

modifications or renewals thereof, shall set forth such facts as the

Commission may by regulation prescribe as to the * * * financial * * *

qualifications of the applicant to operate the station.'' 47 U.S.C.

308(b) (emphasis supplied). Consistent with this statutory language,

the Commission long ago made a public interest determination that

applicants for minor changes in broadcast facilities (i.e., analog

television and radio) do not need to provide information regarding

their financial qualifications. MAP does not assert that this

Commission policy is inconsistent with section 308(b). Further, MAP

does not state why the Commission's public interest determinations

regarding analog television application forms and DTV license

application forms should be considered differently for the purposes of

section 308(b). Accordingly, we find MAP's section 308(b) argument

unpersuasive.

46. As we emphasized in the Fifth Report and Order, one of our

primary goals is to achieve a rapid and efficient transition from

analog to digital broadcast television. We continue to believe that the

approach we have taken will foster swift and widespread construction

and operation of digital television stations with minimal risk of

spectrum warehousing or disuse. A number of factors will encourage

broadcasters to construct their DTV stations quickly. These factors

include stations' need to compete with other video program providers,

who are also delivering or preparing to deliver digital video

programming; the planned cessation of NTSC broadcasting in 2006; and

the opportunity to offer a variety of ancillary services in addition to

the one mandatory, over-the-air video programming service.

47. In addition, as we discussed in the Fifth Report and Order, we

will grant requests for extensions of time within which to construct

DTV facilities only if they meet specific, delineated criteria. We will

grant an extension of the applicable deadline where a broadcaster has

been unable to complete construction due to circumstances that are

either unforeseeable or beyond the licensee's control, and only if the

licensee has taken all reasonable steps to resolve the problem

expeditiously. As we stated in the Fifth Report and Order, ``such

circumstances include, but are not limited to, the inability to

construct and place in operation a facility necessary for transmitting

DTV, such as a tower, because of delays in obtaining zoning or FAA

approvals, or similar constraints, or the lack of equipment necessary

to transmit a DTV signal.'' As a further guarantee that valuable DTV

spectrum would not be warehoused, the Fifth Report and Order noted that

we do not anticipate that the circumstance of

[[Page 15780]]

``lack of equipment'' would include the cost of such equipment.

ii. Construction Schedule

48. Background. The Fifth Report and Order adopted a construction

schedule for DTV facilities. Affiliates of the top four networks (ABC,

CBS, Fox and NBC) must build digital facilities in the ten largest

television markets by May 1, 1999. Affiliates of those networks in the

top 30 television markets, not included above, must construct DTV

facilities by November 1, 1999. All other commercial stations must

construct DTV facilities by May 1, 2002. All noncommercial stations

must construct their DTV facilities by May 1, 2003. We delineated

specific criteria pursuant to which we would grant requests for

extensions of time within which to construct.

General Issues

49. Petitions/Comments. Several petitioners request reconsideration

of the construction schedule. For example, Cordillera Communications

(``Cordillera''), which intends to construct nine DTV stations,

requests an extension of the deadlines or, in the alternative,

relaxation of the standards for granting extensions. According to

Cordillera, the full implementation of DTV will take longer than the

ten-year period the Commission has established. Cordillera cites the

time needed to acquire a tower site, construct a tower in compliance

with local and federal regulations, acquire equipment to provide

maximum service, and evaluate the impact of DTV on its viewers who

receive its NTSC signals via translator. It adds that modifying the

construction schedule will prevent the Commission from needlessly

expending resources on processing extension applications.

50. Discussion. We do not believe that it would serve the public

interest to extend the construction timetable established in the Fifth

Report and Order. If a broadcaster does not complete construction

within the time period contemplated by the current timetable, it may

request an extension of time within which to construct, as noted above.

The criteria we use to determine whether grant of an extension would

serve the public interest adequately address the concerns raised by

Cordillera. In addition, arguments related to zoning are more relevant

to our ongoing proceeding considering the alleged impact of delays to

DTV station construction caused by local zoning regulations.

Effect on Radio Stations

51. Petitions/Comments. National Public Radio (``NPR'') requests

that we extend the construction schedule. It claims that the current

timetable, combined with the allotment, in the Sixth Report and Order,

of DTV channels on the basis of current transmitter sites and

replication of existing NTSC service areas, threatens to create a

shortage of available tower capacity for DTV antennas. As a result, NPR

claims, a substantial number of public radio stations will be forced to

relocate their transmitting antennas at a significant financial cost

and possible loss of signal coverage areas. It adds that several FM

stations have already been informed that they will have to relinquish

their tower space to make way for a DTV antenna.

52. Discussion. We decline to alter the construction schedule as

requested by NPR. First, NPR's claim that a significant number of

educational FM stations will have to relinquish their tower space and

pay for a costly relocation of their transmitting antennas is, at this

time, speculative. NPR provides no documentary evidence to support its

claim that several FM stations have already been informed that they

will have to relinquish their tower space in order for the tower owner

to make room for DTV equipment. It also provides insufficient

information regarding the cost or time period of such circumstances.

Thus, NPR has not demonstrated at this time that the construction

schedule will have any undue negative impact on a significant number of

public radio stations. We can revisit this issue, if warranted, during

the periodic DTV reviews.

Issues Relating to Noncommercial Television Stations

53. Petitions/Comments. AAPTS/PBS states that public television

stations with both NTSC and DTV channels outside the core channels

should be permitted to defer DTV construction until they have a

permanent DTV channel (i.e., the end of the transition period, when

they have a core channel). According to AAPTS/PBS, 13 public television

stations have both their analog and their digital channels outside

channels 2-46, and 13 have channels outside channels 7-51. It adds that

``over half of those stations in each case have operating budgets of

less than $5 million. Under the current rules, they not only will have

to build two DTV stations, but will have to migrate their viewers to a

new channel at the end of the transition.'' AAPTS/PBS states that since

the Commission has not yet determined what the core channels will be,

these public TV stations do not know what that new channel will be at

the end of the transition period or when they will learn of the

assignment. AAPTS/PBS asserts that this uncertainty makes planning and

finding funding for the transition difficult.

54. AAPTS/PBS's proposal is supported by Motorola as a way for

noncommercial educational stations to alleviate conversion costs.

According to Motorola, the proposal ``recognize(s) the difficult

economics involved with a two step migration to digital service. More

importantly, (it) could accelerate the recovery of UHF channels 60-69

for public safety or other wireless use.''

55. Discussion. We decline to adopt the modifications to the

construction schedule proposed by AAPTS/PBS. We do not believe that

such modifications are necessary. Because we recognized the financial

difficulties often faced by noncommercial broadcasters, the

construction timetable we adopted in the Fifth Report and Order

provided noncommercial stations a six-year period within which to

construct their DTV facilities, the longest construction period

allotted to any category of DTV applicant. In the Fifth Report and

Order, we also stated that special relief measures may eventually be

warranted to assist public television stations to make the transition,

but we concluded that it was premature to determine what those specific

measures should be. We stated then, and we continue to believe, that

determining the specific nature of whatever special relief may be

needed for noncommercial educational broadcasters is best considered

during our periodic reviews. AAPTS/PBS has not demonstrated that its

concerns regarding public television stations with both NTSC and DTV

channels outside the core channels cannot adequately be addressed in

that context. Nonetheless, as discussed in the Memorandum Opinion and

Order on Reconsideration of the Sixth Report and Order, we will

consider, on a case-by-case basis, requests to defer construction and/

or to make an immediate transition to digital when filed by those

stations that have both analog and digital channels outside the core.

Satellite Stations

56. Petitions/Comments. Hubbard Broadcasting, Inc. (``Hubbard'')

seeks clarification as to the application of the construction schedule

to satellite stations. Hubbard asks how the construction schedule

applies to satellite stations such as its own that transmit the same

network programming as their parent, not by virtue of a network

affiliation agreement, but by rebroadcast consent granted by the

network.

[[Page 15781]]

57. Discussion. We clarify that the construction exception for

same-market affiliates applies to satellite stations. Thus, with regard

to Hubbard's particular example, the two satellite stations are located

within the same market as their parent and, according to Hubbard,

broadcast the programming of the same network. Under our rules, if a

network has more than one affiliate in a top 30 market, the station

with the smaller audience share is not subject to the expedited

schedule for networks affiliates. Therefore, regardless of the

stations' satellite status or type of network contract being used,

Hubbard's two satellites are not subject to an accelerated construction

schedule. Instead, they are subject to the five-year construction

deadline.

iii. Processing Procedures

58. Background. In the Sixth Report and Order, the Commission

allowed flexibility for DTV facilities to be built at locations within

five kilometers of the reference allotment sites without consideration

of additional interference to analog or DTV service, provided the DTV

facilities do not exceed the allotment reference HAAT and ERP values.

In the Fifth Report and Order, we noted that we would expedite

processing of construction permit applications that could correctly

certify as to a series of checklist questions, which include whether

the proposed facility conforms to the DTV Table of Allotments by

specifying an antenna site within five kilometers of the reference

allotment site. We noted our intent to grant a construction permit to

such broadcasters within a matter of days and noted that other

applicants would be required to furnish additional technical

information.

59. Petitions/Comments. Costa de Oro TV (``Costa de Oro'') asks the

Commission to establish expedited processing procedures for stations

that need to relocate their transmitters due to the inability to use

their current sites. It also asks several questions as to how certain

types of applications will be processed.

60. Discussion. The October 16, 1997 Public Notice setting forth

how DTV construction applications will be processed generally addresses

issues such as those raised by the petitioners. As we noted in the

Fifth Report and Order, we intend to give processing priority to

routine DTV applications, which are those in which the applicant can

certify compliance with several key processing requirements. We also

are expediting the processing of DTV applications in any of the

television markets where broadcasters are subject to an accelerated

construction timetable (i.e., the top 30 markets). With regard to

showings that a requested change is in compliance with the Commission's

interference standards, all non-routine DTV applications will be

processed pursuant to the criteria adopted in the Sixth Report and

Order and its reconsideration order, and as set forth in OET Bulletin

No. 69.

iv. Selection of Permanent DTV Channel

61. Petitions/Comments. AAPTS/PBS petitions the Commission to

require stations with both their NTSC and their DTV channel within the

core to select their permanent channel several years before the end of

the transition period, such as at the end of the construction period

or, at the latest, a year after they commence operation.

62. Discussion. The issue of whether we should require stations

with both channels within the core to select their permanent channel

early in the transition will be dealt with in the Memorandum Opinion

and Order on reconsideration of the Sixth Report and Order. We take

this opportunity to clarify that non-core licensees will not be subject

to competing applications when they apply for their permanent DTV

channels.

v. Immediate Transition

63. Petitions/Comments. In the Fifth Report and Order, we

contemplated that each broadcaster would operate its analog station

while constructing its digital facilities, and then operate both

facilities upon the completion of construction for the duration of the

transition. However, several parties request that the Commission allow

stations, at least under certain circumstances, to make an immediate

and complete transition to DTV upon construction, so that they would

not have to operate both digital and analog facilities. For example,

Meyer Broadcasting Company (``Meyer''), Reiten Television, Inc.

(``Reiten'') and NDBA argue that, because of the transition's high cost

to small market stations, the Commission should allow such stations to

make an immediate transition from analog to digital, eliminating the

need for them to build additional facilities.

64. AAPTS/PBS makes a similar argument for noncommercial,

educational television stations, as a way to compensate for their

unique funding difficulties. It asserts that, in order to give needed

flexibility to smaller public TV stations, the Commission should allow

public TV stations with both an NTSC and a DTV channel within the core

to convert to DTV on their in-core NTSC channel, rather than having to

spend the money to build a separate DTV station. In the alternative,

AAPTS/PBS asks that the Commission consider individual requests by

stations to employ the immediate transition option where the licensee

has been unable to raise the funds to construct the DTV station or

lacks the resources to operate two stations simultaneously. In support,

Motorola claims that adoption of the proposal could accelerate the

recovery of UHF channels 60-69 for public safety or other wireless use.

65. Discussion. We recognize both the economic challenges facing

small market broadcasters and the unique funding difficulties often

experienced by noncommercial television stations. Indeed, we explicitly

considered these concerns in the Fifth Report and Order when we set the

construction schedule and adopted the service rules. It is exactly

because of the matters raised by the petitioners that commercial small

market broadcasters and all noncommercial broadcasters have a greater

period of time within which to construct their facilities. As the

network affiliates in the top 30 markets construct and begin to operate

their DTV stations, we expect the market to drive construction costs

down to a level that all commercial stations will be able to finance

construction of their own facilities. This cost decrease should also

assist noncommercial broadcasters.

66. However, adoption of these proposals could undermine the

simulcasting policy set forth in the Fifth Report and Order, a policy

that is premised on the idea that each licensee will be operating an

NTSC and a DTV station until the end of the transition period. The

simulcasting requirement is intended to ensure that broadcasters

provide substantially the same programming to all their viewers,

regardless of whether those viewers have acquired digital receiver

equipment yet. Further, adoption of the proposals could disenfranchise

some viewers who watch noncommercial television by removing their

option to continue to watch NTSC television until the end of the

transition period. Accordingly, we do not at this time believe that

adopting the above proposals of Reiten, NDBA, or AAPTS/PBS would serve

the public interest. However, we note that we can revisit this

conclusion during any of our biennial DTV reviews, should a change in

circumstances warrant.

F. Recovery Date

67. Background. In the Fifth Report and Order, the Commission

established a target date of 2006 for the cessation of

[[Page 15782]]

analog service. It stated that one of its overarching goals in this

proceeding is the rapid establishment of successful digital broadcast

services that will attract viewers from analog to DTV technology, so

that the analog spectrum can be recovered. Accomplishment of this goal

requires that the NTSC service be shut down at the end of the

transition period and that spectrum be surrendered to the Commission.

68. Subsequent to the release of the Fifth Report and Order, in the

Balanced Budget Act of 1997, Congress directed the Commission to

reclaim the analog spectrum by December 31, 2006. Congress also

required the Commission to grant an extension of that date to a station

under a number of specific circumstances cited in that

statute.2

---------------------------------------------------------------------------

\2\The Commission shall extend the date described in

subparagraph (A) for any station that requests such extension in any

television market if the Commission finds that: (i) One or more of

the stations in such market that are licensed to or affiliated with

one of the four largest national television networks are not

broadcasting a digital television service signal, and the Commission

finds that each such station has exercised due diligence and

satisfies the conditions for an extension of the Commission's

applicable construction deadlines for digital television service in

that market; (ii) digital-to-analog converter technology is not

generally available in such market; or (iii) in any market in which

an extension is not available under clause (i) or (ii), 15 percent

or more of the television households in such market: (I) Do not

subscribe to a multichannel video programming distributor (as

defined in section 602) that carries one of the digital television

service programming channels of each of the television stations

broadcasting such a channel in such market; and (II) do not have

either: (a) at least one television receiver capable of receiving

the digital television service signals of the television stations

licensed in such market; or (b) at least one television receiver of

analog television service signals equipped with digital-to-analog

converter technology capable of receiving the digital television

service signals of the television stations licensed in such market.

Balanced Budget Act of 1997, adding new paragraph 47 U.S.C. 309

(j)(14)(B).

---------------------------------------------------------------------------

69. Petitions. County of Los Angeles, CA (``Los Angeles'') contends

that the 2006 recovery deadline should be shortened for NTSC and DTV

stations between channels 60-69 located in southern California, which

it argues is necessary to alleviate the severe spectrum shortages

facing Los Angeles area public safety agencies. According to Los

Angeles, this will be particularly important if the Commission is

unable to eliminate any of the allotments between channels 60-69 that

affect public safety frequencies. Los Angeles advocates that, at a

minimum, the Commission should adopt a very firm deadline so that

public safety agencies can plan accordingly.

70. San Bernardino objects to the 2006 recovery date, maintaining

that too early a reversion date may hurt viewers in rural areas

dependent on traditional translator services. According to San

Bernardino, the Commission's computer channel selection process for DTV

treated existing built-out TV translator systems such as San

Bernardino's as though they did not exist. San Bernardino argues that

these rural locations, which are at or near full channel capacity,

might lose one or two channels as the result of DTV allotments

transmitting in distant markets, and would find the additional loss of

channels 60-69 to be devastating. San Bernardino argues that it is

obvious, even if the technology were affordable and available, that

such community TV operators will not be able to double their systems

and simulcast NTSC and DTV at any time during the transition. San

Bernardino also argues that if many rural areas are unable to receive a

DTV signal throughout the transition, the residents (perhaps 2-4

million people) will not tolerate a ``lights out'' by a date certain

for NTSC television. Val Pereda (``Pereda'') also objects to the 2006

date, contending it will make existing NTSC television sets obsolete

and require consumers to buy expensive DTV converters and sets.

71. Decision. As discussed above, the Balanced Budget Act requires

us to reclaim the analog spectrum by December 31, 2006, and has

established specific circumstances under which we are to grant stations

an extension of that date. Although we have discretion to set an

earlier deadline, we decline to grant in this proceeding the request of

Los Angeles for an earlier recovery deadline for NTSC and DTV stations

between channels 60-69. On reconsideration of the Sixth Report and

Order, we are making adjustments to the DTV allotments, as suggested by

MSTV, that will make some spectrum available for public safety in the

southern California area. We have issued a Notice in another proceeding

to seek comment on the service rules for this spectrum that Congress

designated for public safety services. We also decline to grant the

remaining petitioners' requests for reconsideration of the recovery

date. Upon receipt of an appropriate petition, as specified in the

Balanced Budget Act, we will examine the circumstances of individual

licensees and grant extensions to any that qualify.

G. Must-Carry and Retransmission Consent

72. Background. In the Fifth Report and Order, the Commission

decided to defer consideration of the application of must-carry and

retransmission consent requirements to DTV to a future proceeding, in

order to obtain a full and updated record on these issues. We noted

that, on March 31, 1997, the Supreme Court upheld the constitutionality

of the must-carry provisions contained in the Cable Television Consumer

Protection and Competition Act of 1992, in Turner II. The Turner II

case, however, did not expressly address the issue of must-carry of

digital television signals.

73. Petition. Malrite Communications Group (``Malrite'') urges the

Commission to modify the ``must carry'' rules to require cable system

operators to adopt ``appropriate'' digital technologies, i.e.,

technologies compatible with broadcast DTV standards. Malrite

acknowledges, however, that there is a separate proceeding that will

allow the Commission to consider cable compatibility.

74. Decision. We find that this reconsideration proceeding is not

the proper forum in which to determine the applicability of the must-

carry and retransmission consent provisions in the digital context. As

discussed above, we intend to issue a Notice in a separate proceeding

to seek additional comments regarding these issues. We believe that

opening the record for further comments in that proceeding will allow

us to reach a well-reasoned decision that will take into account the

implications of the Turner II decision and the most current information

with respect to must-carry and retransmission of DTV signals.

H. Sunshine Act

75. Background. The Commission adopted both the Fifth Report and

Order and the Sixth Report and Order in the DTV proceeding at an open

Commission meeting on April 3, 1997, and issued a Sunshine Agenda

notice announcing the addition of these two items that morning. The

Notice stated that, under Sec. 0.605(e) of the Commission's rules,

``[t]he prompt and orderly conduct of the Commission's Business

requires this change and no earlier announcement was possible.''

76. Petitions/Comments. The Community Broadcasters Association

(``CBA'') argues that the Sunshine Act requires seven days public

notice for matters to be discussed at an open meeting. CBA notes that

the Sunshine Agenda notice went out on March 27 and did not mention the

DTV docket, and that the notice adding the DTV items was not issued

until the very day of the meeting. As a result, CBA argues, there was

effectively no advance notice that the DTV items would be discussed at

the April 3, 1997 meeting as required by the Sunshine Act. Asserting

that this violated the Sunshine Act, CBA claims

[[Page 15783]]

that adoption of the DTV rules at the April 3, 1997 meeting was

invalid.

77. MSTV argues in opposition that the Sunshine Act was not

violated as claimed by CBA. MSTV notes that the Commission complied

with the statutory exception in the Sunshine Act, which allows a

meeting without seven days prior notice if such late notice is

necessary to conduct the agency's business. MSTV also observes that

according to the legislative history of the Sunshine Act, when

noncompliance is unintentional and does not harm the interests of any

party, the underlying matter need not be reconsidered.

78. Discussion. We find CBA's claim that we violated the Sunshine

Act to be unwarranted. The Sunshine Act states that:

[t]he subject matter of a meeting * * * may be changed following

the public announcement required by this subsection only if (A) a

majority of the entire membership of the agency determines by a

recorded vote that agency business so requires and that no earlier

announcement of the change was possible, and (B) the agency publicly

announces such change and the vote of each member upon such change

at the earliest practicable time.

Consistent with these statutory requirements, the April 3, 1997

Sunshine Agenda Notice made such a determination by recorded vote.

79. In addition, Sec. 0.605(e) of the Commission's rules, 47 CFR

0.605(e), makes clear that ``[i]f the prompt and orderly conduct of

agency business requires that a meeting be held less than one week

after the announcement of the meeting, or before that announcement, the

agency will issue the announcement at the earliest practicable time.''

We made such a finding in our April 3, 1997 Sunshine Agenda Notice.

Further, CBA has not made a showing of how its or any other party's

interests were harmed by the short notice. Accordingly, we believe that

there is no basis for a finding that the adoption of the DTV rules at

the April 3, 1997 meeting was in violation of the Sunshine Act or

otherwise invalid.

I. Other Issues

i. Channels 60-69

80. Petitions/Comments. As noted above, the Commission has recently

concluded a rule making proceeding reallocating the spectrum from

channels 60-69 to a variety of services, including broadcast

television. Motorola argues that all licensees should be able to

decline to construct DTV facilities on channels 60-69, provided they so

inform the Commission, so the spectrum can be used for public safety

and other wireless purposes. Motorola seeks to have as few DTV channels

as possible allotted to channels 60-69, to allow broadcasters that do

have such allotments to change them, and to prevent the Commission from

allotting future channels within that spectrum to DTV broadcasters. In

this regard, Motorola states that each additional DTV allotment between

channels 60 and 69 would preclude the use of at least 6 MHz of spectrum

by new wireless users for nearly 8000 square miles, potentially denying

new wireless service to millions of customers.

81. Discussion. We do not believe that allowing broadcasters to

decline to construct DTV facilities on channels 60 through 69 would

necessarily serve the public interest. In the Sixth Report and Order,

we allotted spectrum between channels 60 and 69 to the fewest number of

broadcasters possible, in light of our then-pending proceeding

examining whether that spectrum should be reallocated. As we noted in

the Channels 60-69 Reallocation Report and Order, ``the operation of

some TV and DTV stations in this spectrum is clearly required to

facilitate the DTV transition: and the Budget Act provides for this,

stating `[a]ny person who holds a television broadcast license to

operate between 746 and 806 megahertz may not operate at that frequency

after the date on which the digital television service transition

period terminates as determined by the Commission.''' Had other

channels been available, they would have been allotted to these

broadcasters.

ii. Line-of-Sight to City of License

82. Petitions/Comments. Hammett and Edison observes that

Sec. 73.625(a)(2) of the rules adopted in the Fifth Report and Order

requires DTV transmitter sites to be free of a major obstruction in the

path over the principal community to be served, but does not require

that line-of-sight coverage of the principal community be achieved.

Petitioner indicates that the analog TV rule regarding selection of

transmitter site (Sec. 73.685) includes such a corollary requirement

and suggests that this apparently inadvertent oversight in the wording

of Sec. 73.625(a)(2) be corrected by including the analog TV line-of-

sight text. Hammett and Edison states that while engineers may

reasonably differ in their opinions whether an obstruction is major,

there is no ambiguity in the line-of-sight requirement.

83. Discussion. We do not believe the requested change is

warranted. In the Fifth Report and Order, we attempted to minimize the

DTV rules we created to the extent possible. In so doing, we did not

include provisions that are admonitory, describing a recommended

practice instead of a mandatory requirement. The analog TV line-of-

sight rule indicates that the transmitter location ``should be so

chosen that line-of-sight can be obtained * * *'' This is not mandatory

language.\3\ For either NTSC or DTV, there are situations where line-

of-sight coverage over the entire community is not possible. In such

situations, licensees should avoid obstruction to the extent possible.

This should be clear from the ``major obstruction'' rule we adopted,

and we believe that it would not be reinforced by the requested

additional admonitory language. The decision to exclude it from the new

DTV rule was not inadvertent, and Hammett and Edison has not presented

any justification for including it upon reconsideration.

---------------------------------------------------------------------------

\3\Section 73.685(b) of the rules reads as follows:

Location of the antenna at a point of high elevation is

necessary to reduce to a minimum the shadow effect on propagation

due to hills and buildings which may reduce materially the strength

of the station's signals. In general, the transmitting antenna of a

station should be located at the most central point at the highest

elevation available. To provide the best degree of service to an

area, it is usually preferable to use a high antenna rather than a

low antenna with increased transmitter power. The location should be

so chosen that line-of-sight can be obtained from the antenna over

the principal community to be served; in no event should there be a

major obstruction in this path * * *

---------------------------------------------------------------------------

III. Conclusion

84. Our decisions in the Fifth Report and Order were designed to

foster technological innovation and competition, while minimizing

government regulation. We continue to believe that our decisions

modified herein will ensure that we will soon see a digital television

service that provides a host of new and beneficial services to the

American public, while preserving free universal television service

that serves the ``public interest, convenience, and necessity.''

IV. Administrative Matters

85. Paperwork Reduction Act of 1995 Analysis. The decision

contained herein has been analyzed with respect to the Paperwork

Reduction Act of 1995 and found to contain no new or modified form,

information collection and/or recordkeeping, labelling, disclosure or

record retention requirements on the public. This decision would not

increase or decrease burden hours imposed on the public.

86. Supplemental Final Regulatory Flexibility Analysis. In the

Fifth Report and Order, we conducted a Final Regulatory Flexibility

Analysis (``FRFA'') as required by the Regulatory Flexibility Act, 5

U.S.C. 603. No petitions to reconsider the FRFA were

[[Page 15784]]

filed. However, in its petition for reconsideration of the Fifth Report

and Order, the Personal Communications Industry Association (``PCIA'')

asserted that the FRFA's discussion of small businesses that would be

affected by the DTV rules and policies should have included mobile

licensees, not just other broadcast licensees. Rejecting PCIA's

argument, the Commission notes that the FRFA's scope is limited to

small entities directly subject to administrative rules, rather than

all entities that are indirectly affected by the results that any rules

will produce.

87. Also, the Commission on its own motion has made three minor

technical changes to the rules adopted in the Fifth Report and Order

and one minor substantive change, which are explained above. They do

not affect the previous FRFA. These minor rule changes do not alter in

any significant way the FRFA or the potential effect of the rules on

any small entities that may be subject to them. The Commission shall

send a copy of this Supplemental Final Regulatory Flexibility Analysis,

along with this Memorandum Opinion and Order on Reconsideration of the

Fifth Report and Order, in a report to Congress pursuant to the Small

Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 801

(a)(1)(A).

Ordering Clauses

88. Accordingly, it is ordered that, pursuant to sections 4(i) &

(j), 303(r), 307, 309, and 336 of the Communications Act of 1934 as

amended, 47 U.S.C. Sec. 154(i), (j) 303(r), 307, 309, and 336, this

Memorandum Opinion and Order is adopted.

89. It is further ordered that the Petitions for Reconsideration in

this proceeding are granted to the extent described above, and are

otherwise denied.

90. It is further ordered that the rule changes set forth in this

document shall become effective May 1, 1998.

91. It is further ordered that, upon release of this Memorandum

Opinion and Order, this proceeding is hereby terminated.

List of Subject in 47 CFR Part 73

Television broadcasting.

Federal Communications Commission,

Magalie Roman Salas,

Secretary.

Rule Changes

Part 73 of Title 47 of the Code of Federal Regulations is amended

as follows:

PART 73--RADIO BROADCAST SERVICES

1. The authority citation for Part 73 continues to read as follows:

Authority: 47 U.S.C. 154, 303, 334, 336.

2. Section 73.624 is amended by revising paragraph (c) to read as

folows:

Sec. 73.624 Digital Television Broadcast Stations.

* * * * *

(c) Provided that DTV broadcast stations comply with paragraph (b)

of this section, DTV broadcast stations are permitted to offer services

of any nature, consistent with the public interest, convenience, and

necessity, on an ancillary or supplementary basis. The kinds of

services that may be provided include, but are not limited to computer

software distribution, data transmissions, teletext, interactive

materials, aural messages, paging services, audio signals, subscription

video, and any other services that do not derogate DTV broadcast

stations' obligations under paragraph (b) of this section. Such

services may be provided on a broadcast, point-to-point or point-to-

multipoint basis, provided, however, that any video broadcast signal

provided at no direct charge to viewers shall not be considered

ancillary or supplementary.

(1) DTV licensees that provide ancillary or supplementary services

that are analogous to other services subject to regulation by the

Commission must comply with the Commission regulations that apply to

those services, provided, however, that no ancillary or supplementary

service shall have any rights to carriage under Secs. 614 or 615 of the

Communications Act of 1934, as amended, or be deemed a multichannel

video programming distributor for purposes of section 628 of the

Communications Act of 1934, as amended.

(2) In all arrangements entered into with outside parties affecting

service operation, the DTV licensee or permittee must retain control

over all material transmitted in a broadcast mode via the station's

facilities, with the right to reject any material in the sole judgment

of the permittee or licensee. The licensee or permittee is also

responsible for all aspects of technical operation involving such

services.

(3) In any application for renewal of a broadcast license for a

television station that provides ancillary or supplementary services, a

licensee shall establish that all of its program services on the analog

and the DTV spectrum are in the public interest. Any violation of the

Commission's rules applicable to ancillary or supplementary services

will reflect on the licensee's qualifications for renewal of its

license.

* * * * *

[FR Doc. 98-8458 Filed 3-31-98; 8:45 am]

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