[Federal Register Volume 70, Number 75 (Wednesday, April 20, 2005)]
[Rules and Regulations]
[Pages 20479-20481]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-7716]


=======================================================================
-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 25

[FCC 04-271, Auction 52]


Auction of Direct Broadcast Satellite Licenses

AGENCY: Federal Communications Commission.

[[Page 20480]]


ACTION: Final rule.

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

SUMMARY: The Commission restricts eligibility for the Direct Broadcast 
Satellite license authorizing use of channels 23 and 24 at the 61.5\0\ 
W.L. orbit location. Specifically, licensees currently operating 
satellites at orbit locations capable of providing DBS service to the 
50 U.S. states will be prohibited from acquiring, owning, or 
controlling this license until four years after the award of the 
initial license.

DATES: Effective December 3, 2004.

FOR FURTHER INFORMATION CONTACT: Diane Conley, Auctions and Spectrum 
Access Division, Wireless Telecommunications Bureau, (202) 418-0786; 
Selina Khan, Satellite Division, International Bureau, (202) 418-7282.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
Auction of Direct Broadcast Satellite Licenses Order (``DBS Order''), 
released on December 3, 2004. The complete text of the DBS Order as 
well as related Commission documents are available for public 
inspection and copying during regular business hours at the FCC 
Reference Information Center, Portals II, 445 12th Street, SW., Room 
CY-A257, Washington, DC 20554. The DBS Order and related Commission 
documents may also be purchased from the Commission's duplicating 
contractor, Qualex International, Portals II, 445 12th Street, SW., 
Room CY-B402, Washington, DC 20554, telephone 202-863-2893, facsimile 
202-863-2898, or via e-mail [email protected]. When ordering documents 
from Qualex, you must provide the appropriate FCC document number (for 
example, FCC 04-271 for the DBS Order). The DBS Order and related 
documents are also available on the Internet at the Commission's Web 
site: http://wireless.fcc.gov/auctions/52/.

I. Introduction

    1. In the DBS Order, the Commission concludes that eligibility for 
the Direct Broadcast Satellite (``DBS'') license for channels 23 and 24 
at the 61.5\0\ W.L. orbit location, which authorizes use of the last 
two available channels at an eastern DBS orbit location, should be 
restricted. Specifically, licensees currently operating satellites at 
orbit locations capable of providing DBS service to the 50 U.S. states 
will be prohibited from acquiring, owning, or controlling this license 
until four years after the award of the initial license. The Commission 
concludes that such a restriction on eligibility for this license will 
serve the public interest by helping to promote the development of an 
additional provider of DBS services.

II. Background

    2. The Commission first adopted competitive bidding rules for the 
DBS service in 1995. Revision of Rules and Policies for the Direct 
Broadcast Satellite Service, Report and Order, 60 FR 65587, December 
20, 1995. In 2002, the Commission released Policies and Rules for the 
Direct Broadcast Satellite Service, Report and Order, 67 FR 51110, 
August 7, 2002, in which it streamlined the regulation of DBS and moved 
the DBS rules from part 100 to part 25.
    3. On March 3, 2003, the Commission issued a public notice 
announcing an auction of DBS licenses (the Auction No. 52 Comment 
Public Notice, 68 FR 12906, March 18, 2003), in which it sought comment 
on, inter alia, a number of questions regarding whether eligibility 
restrictions were warranted for any of the four licenses slated to be 
offered in Auction No. 52.
    4. In an Order released on January 15, 2004, the Commission 
declined to adopt any eligibility restrictions for the three available 
licenses at the 175[deg] W.L., 166[deg] W.L., and 157[deg] W.L. orbit 
locations. The Commission deferred the matter of eligibility for the 
fourth license--the 61.5[deg] W.L. license--to a separate order. 
Auction of Direct Broadcast Satellite Licenses, Order, 69 FR 8965, 
February 26, 2004. Following the release of that Order, the 61.5[deg] 
W.L. license was removed from the inventory of Auction No. 52, which 
was held on July 14, 2004. Pursuant to its delegated authority, the 
Wireless Telecommunications Bureau will schedule an auction of the 
61.5[deg] W.L. license.

III. Discussion

A. Eligibility of DBS Incumbents

    5. The Commission concludes that it is appropriate to restrict the 
eligibility of entities currently operating satellites at orbit 
locations capable of providing DBS service to the 50 U.S. states, their 
wholly owned subsidiaries, and entities they control, to acquire, own, 
or control the license for the two channels at 61.5[deg] W.L. until 
four years after the award of the initial license. The two channels at 
61.5[deg] W.L. are unique because they are the only remaining 
unassigned DBS channels in the 12 GHz band that are assigned to the 
United States under the International Telecommunication Union Region 2 
Band Plan that can provide service to the eastern continental United 
States with a sufficiently high look angle that the signal is not 
blocked by terrestrial obstacles. Because the 61.5[deg] channels are 
the last two available that can serve all of the eastern United States 
plus most of the rest of the country, they could be important to 
increasing the number of options or choices available to subscribers of 
DBS or multichannel video programming distribution services. Increased 
choices in the DBS marketplace could yield important public interest 
benefits, including greater price competition, the development of 
additional new services, and technological innovation. Enhanced DBS 
competition has the potential to bring such benefits to consumers both 
in markets in which DBS operators compete with cable systems and in 
markets in which they do not. Whether an additional DBS competitor 
provides a choice of similar programs at a lower price or provides a 
different group of program options, or other kinds of DBS, broadband 
and other types of services, consumers will benefit from those 
increased options.
    6. The Commission concludes that it is reasonable to specify four 
years as the period during which it will not allow any entity operating 
satellites at DBS orbit locations capable of serving the 50 states to 
acquire the 61.5[deg] W.L. license because DBS licensees are required 
to complete construction of their first satellite within four years of 
authorization. The purpose of the eligibility restriction is to promote 
the development of an additional DBS provider, and the Commission 
wishes to assign the 61.5[deg] W.L. license to an entity that will use 
the license to provide DBS service, not to an entity that will resell 
the license to a previously ineligible party soon after acquiring it. 
The best way to ensure that entities do not acquire the license with 
the intention of reselling it to a previously ineligible party is to 
prohibit such resale before the construction of the first satellite 
authorized under the license is completed. Thus, the Commission will 
require compliance with the four-year milestone before the 61.5[deg] 
W.L. license may be transferred to a company that is operating at orbit 
locations capable of providing DBS service to the 50 states.
    7. Entities prohibited from acquiring, owning, or controlling the 
license for the two channels at 61.5[deg] W.L. until four years after 
the award of the initial license are also prohibited from leasing the 
subject spectrum during the same time period. Those parties that will 
be considered to have a controlling interest will be individuals and 
entities with either de jure or de facto control of an applicant for 
this license. De jure control is evidenced by holdings of greater than 
50 percent of the voting stock of a corporation, or in the case of a 
partnership, general partnership interests. De facto control is 
determined on a case-by-case basis. Further, for

[[Page 20481]]

purposes of the eligibility restriction adopted the Commission will 
apply the definitions of ``controlling interests'' and ``affiliate'' 
currently set forth in 47 CFR 1.2110(c)(2) and 47 CFR 1.2110(c)(5).

B. Cable/DBS Cross-Ownership

    8. The Commission does not anticipate any significant competitive 
problems from cable system ownership of the 61.5[deg] W.L. license, and 
therefore it concludes that it is not appropriate or necessary to 
restrict cable operators from acquiring this license.

C. Other Issues

    9. The Commission finds that it is not in the public interest to 
avoid mutual exclusivity entirely with respect to the 61.5[deg] W.L. 
license and therefore 47 U.S.C. 309(j)(6)(E) does not require it to do 
so.
    10. Because the Commission has no evidence before it to suggest 
that Dominion Video Satellite, Inc. (``Dominion''), would be required 
to turn over the 61.5[deg] W.L. channels to EchoStar Satellite L.L.C. 
(``EchoStar'') if it were to win the license for them, Dominion's 
current lease arrangement with EchoStar should not by itself disqualify 
Dominion from acquiring the license for the 61.5[deg] W.L. channels. 
The Commission will review specific allegations that leasing has led to 
a de facto transfer of control on a case-by-case basis.

IV. Conclusion

    11. For the reasons stated above, the Commission concludes that it 
will further the public interest to prohibit firms currently operating 
satellites at orbit locations capable of providing DBS service to the 
50 U.S. states, as well as their wholly owned subsidiaries and entities 
they control, from acquiring, owning, or controlling the license for 
the two channels currently available at the 61.5[deg] W.L. orbit 
location until four years after the award of the initial license. In 
addition, the Commission concludes that such entities should be 
prohibited from leasing these channels during the same period.

V. Report To Congress

    12. The Commission has sent a copy of this Order in a report sent 
to Congress and the General Accounting Office pursuant to the 
Congressional Review Act, 5 U.S.C. 801(a)(1)(A).

VI. Ordering Clauses

    13. Accordingly, it is ordered that, pursuant to sections 4(i), 
303(r), and 309(j) of the Communications Act of 1934, as amended, 47 
U.S.C. 154(i), 303(r), and 309(j), entities currently operating 
satellites at orbit locations capable of providing DBS service to the 
50 U.S. states, their wholly owned subsidiaries, and entities they 
control shall be ineligible to acquire, own, or control the license for 
Direct Broadcast Satellite channels 23 and 24 at the 61.5[deg] W.L. 
orbit location for a period beginning with the release date of this 
Order and ending four years after the date of the issuance of the 
initial license. Such entities are prohibited from leasing these two 
channels during the same period.
    14. It is further ordered that the International Bureau, in 
awarding the license for Direct Broadcast Satellite channels 23 and 24 
at the 61.5[deg] W.L. orbit location, shall place upon it the condition 
that it may not be transferred or assigned to any entity described in 
the preceding clause, and this condition shall automatically expire 
four years after issuance of the license unless it is extended by the 
Commission.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 05-7716 Filed 4-19-05; 8:45 am]
BILLING CODE 6712-01-P