Powell Defends Payments to TV Stations

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Federal Communications Commission chairman Michael Powell is defending the
agency's decision to allow dozens of TV stations to collect millions of dollars
for spectrum they were supposed to return to the FCC without charge.

In an Oct. 23 letter to Senate Commerce Committee chairman Fritz Hollings
(D-S.C.), a critic of the FCC's action, Powell said the commission had to
respond to conflicting mandates established by Congress and its decisions would
strengthen free television and benefit consumers.

'Without our most recent action, broadcasters may have been more likely to
just take the money and run instead of continuing broadcasting service to the
public,' Powell said.

In an Oct. 17 letter to Powell, Hollings accused him of defaulting on the
FCC's obligation to manage the spectrum by allowing TV stations to 'extract
millions of dollars from wireless carriers in return for vacating this spectrum
band early.'

Hollings called the commission's plan 'outrageous' and claimed that the FCC
bent 'the law to meet the excessive demands of industry.'

Under the agency's plans, 99 analog TV stations located in channels 60
through 69 may sell their spectrum to wireless companies and continue
broadcasting in analog on digital-channel assignments located outside of the
60-through-69 band.

Under digital-TV-transition rules established by the FCC and Congress, TV
stations have the right to remain in the 60-through-69 band until 2006 or until
85 percent of households in a market have digital-reception equipment, whichever
is later.

Because TV stations could hang on to their 60-through-69 spectrum almost
indefinitely, the FCC decided that allowing wireless companies that want the
spectrum to pay TV stations to leave it promptly was the best way to clear the
band expeditiously for use not just by wireless carriers, but also by
public-safety organizations, which were allocated 24 megahertz within the
band.

As a result of the FCC's plan, Powell told Hollings that rapidly cleared
spectrum would increase government revenue at next June's auction by wireless
bidders and put more spectrum into the hands of the public-safety community to
serve its need for nationwide interoperability.

'I have no idea how much it will cost the auction winners to clear the
incumbents before the end of [the digital-TV] transition, but I do believe that
by these efforts, the United States Treasury and American consumers will
ultimately be compensated with greater auction returns and more valuable service
offerings, respectively,' Powell said.

Although Powell may not know how much money the TV stations will receive,
Paxson Communications Corp. -- which has 17 analog stations in the 60-through-69
band -- expects to receive $1 billion from the wireless companies to clear out
within a few years.

FCC member Kathleen Abernathy, in speech in Chicago Wednesday, defended the
60-through-69 plan, claiming that because the commission was hampered by law, it
had to craft a plan 'amenable to a private market-based solution' through
voluntary band-clearing.

'There have been concerns raised about this process -- that is, broadcasters
will gain a windfall to be paid by the June-2002 auction winners,' she said. 'I
appreciate this concern but, without the authority to mandate relocation before
2006 and with a significant need for spectrum by public safety, I am
hard-pressed to reverse the current policy approach.'

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