FCC Lets More Stations Cash Out

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Dozens of TV stations can sell out to wireless companies at no charge, instead of returning their TV licenses to the federal government, the Federal Communications Commission has ruled.

The Dec. 12 decision — billed as an effort to speed the transition to digital TV and the introduction of advanced wireless services — was the FCC's second attempt since September to give TV stations a financial incentive to clear spectrum for new users.

The unanimously adopted ruling affects 100 analog and 166 digital TV stations that operate in broadcast channels 52 to 59, a contiguous, 48-megahertz block that the cell phone industry would like to utilize for wireless Internet access and other advanced mobile services. The FCC plans to auction the spectrum by Sept. 30, 2002, whether or not the TV stations vacate it.

Ideally, the FCC would be able to collect more auction money for the U.S. Treasury if bidders know precisely when TV stations will leave the 52-to-59 band.

Assuming an analog TV station sells its spectrum to a wireless company, the FCC must approve the deal. But the parties would have no guarantee that the agency would find that the deal serves the public interest, FCC officials said.

After FCC approval, the TV station would not be allowed to use its digital assignment in the core digital-television band (channels 2 through 51) to transmit an analog signal, an FCC source said.

Although the station would solely rely upon digital transmission at a time when few U.S. households have such receivers, FCC policies established in January permit the station to insist on cable carriage in either analog or digital format.

A TV station with analog cable carriage would retain about 70 percent of its viewing audience, depending on the market, and could add more off-air viewers as they acquire digital receivers.

The 166 digital stations affected by the FCC decision are allowed to sell out as well. If they do sell, they must use their analog channels in the DTV core for digital broadcasting after May 1, 2002, an FCC source said.

The FCC's decision to bar stations in the 52-to-59 band from continuing analog service after a sale was a departure from its September decision regarding a similar plan to clear TV channels 60 to 69 for auction to wireless companies.

Under the 60-to-69 plan, a broadcaster that sold an analog license within the 60-to-69 allocation may use its digital license in the 2-to-51 core to provide analog service until 70 percent of TV households in the market can receive digital signals.

On a broad level, the FCC plans for 52-to-59 and 60-to-69 are a substantial revision of the digital-TV rules the agency adopted in 1997.

Under those rules, each analog TV-station owner was awarded a free digital license. Television stations were required to broadcast in analog and digital until 2006, or until 85 percent of TV homes in a market could receive digital signals, whichever occurs later.

At the end of transition, broadcasters were to return their analog licenses to the FCC at no charge for future auction.

House Energy and Commerce Committee chairman Billy Tauzin (R-La.) wrote a letter Nov. 6 to FCC chairman Michael Powell complaining about the 60-to-69 decision, particularly the decision to allow stations to continue analog broadcasting.

Tauzin spokesman Ken Johnson said the 52-to-59 decision was better than the 60-to-69 decision, because the 52-to-59 stations are barred from analog operations.

"At first blush, the commission's decision does not appear to be inconsistent with the digital rollout," Johnson said. "The commission took some of our concerns into account."

American Enterprise Institute political scientist Norman Ornstein blasted the FCC for allowing stations in the 60-to-69 band to sell the licenses, rather than requiring them to hand them back in. He said the 52-to-59 ruling was just as bad.

"This is classic case of compounding the felony," Ornstein said.

The FCC said it would allow TV translator stations and about 1,000 low-power TV stations to continue to operate in the 52-to-59 band after the digital transition.

The agency also said it would dismiss about 57 applications for new analog TV stations in the 52-to-59 band. That was a setback for The WB, which wanted to add stations to its affiliate base to boost competition to ABC, CBS, NBC and Fox.

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