FCC Restricts Cable in MVDDS Auction

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The cable industry is looking over Federal Communications Commission
restrictions placed on wireless licenses that go on the auction block Feb. 12,
2003.

The official name for the service is Multichannel Video Distribution and Data
Service.

The FCC is planning to sell one MVDDS license each in 354 markets.

Although the spectrum is used by direct-broadcast satellite carriers, the
agency agreed that the same airwaves could be shared by terrestrial users based
on technology developed by Northpoint Technology Ltd., which hopes to deploy
dozens of cable and local TV channels, as well as high-speed Internet
access.

The FCC will allow DBS carriers to acquire MVDDS without restriction, but
cable operators were not so fortunate.

Because of cable's market power in video, the commission said a cable
operator with at least 35 percent of the pay TV subscribers in an MVDDS license
area is barred from owning more than 20 percent of the overlapping MVDDS
licensee.

'We find that open eligibility for in-region cable operators poses a
significant likelihood of substantial competitive harm,' the FCC said in a
216-page order released Thursday.

Nevertheless, the agency is hoping cable operators will acquire MVDDS
licenses to build out unserved portions of franchise areas and invade adjacent
cable markets.

The FCC also disclosed that MVDDS licensees would not be required to carry
local TV stations but retransmission-consent rules would apply.

The agency said it would reconsider its must-carry exclusion if DBS carriers
used MVDDS licenses in a manner designed to bypass their must-carry obligations
under the Satellite Home Viewer Improvement Act.

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