[Federal Register Volume 63, Number 62 (Wednesday, April 1, 1998)]
[Rules and Regulations]
[Pages 15774-15784]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-8458]


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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]
BILLING CODE 6712-01-P