Posted on August 23, 2008 by David Oxenford

What to Do With TV Channels 5 and 6 - Proposals to Turn Them Over to Radio Services

The Digital Television conversion has allowed the FCC to reclaim significant portions of the TV spectrum for wireless and public safety uses - television channels above 51 will no longer be used for broadcast TV at the end of the analog to digital transition.  But, as part of the FCC's Diversity proceeding (see our post here), a proposal dealing with the other end of the TV spectrum is being considered - whether to remove Channels 5 and 6 from the television band and instead use these channels for FM radio.  These channels are adjacent to the lower end of the FM band.  Because of this adjacency, the existence of TV Channel 6 in a market can limit the use of the lowest end of the FM band (used for Noncommercial Educational stations) to avoid interference to the TV station.  Similarly, Channel 6's audio can be heard on many FM radio receivers, a fact that has recently been used by some LPTV operators to use their stations to deliver an audio service that can be received by FM radios (see our post on this subject).  In comments filed in the Diversity proceeding, parties have taken positions all across the spectrum - from television operators who have opposed using the channel for anything but television, to those suggesting that the channels be entirely cleared of television users and turned into a digital radio service.  Proposals also suggest using the band for LPFM operations, and even for clearing the AM band by assigning AM operators to this band to commence new digital operations.

In comments that our firm submitted on behalf of a group of noncommercial FM radio licensees who also rebroadcast their signals on a number of FM translator stations, we suggested that Channel 6 could provide a home for LPFM operations, instead of trying to squeeze those stations into the existing FM band.  There are currently proposals to squeeze more LPFM stations into the FM band by supplanting some FM translators (see our summary of some of those proposals here).  In these comments in the Diversity proceeding, we pointed out that, as there are currently radios on the market that receive 87.9, 87.7 and even 87.5, using these three channels for LPFM service would provide an immediate home to these stations, and far more opportunity for than LPFM would have in the already congested FM band.  These opportunities would exist even in most of the largest radio markets in the country, except in the handful of markets where a Channel 6 television station will continue to operate after the digital transition.  By adopting this proposal, the service that would be provided by FM translators would not be threatened. 

Another set of comments submitted by a group which includes a number of consulting engineers went even further, suggesting that all of Channels 5 and 6 be turned over to a radio service, that the service be operated in a digital mode, and that AM stations and LPFMs all be moved to these new channels.  The proposal is quite detailed, submitting a table of allotments for the relocation of the AM stations.  The proposal also sets out alternative channels for all current full-power television stations on Channels 5 and 6 where they could be moved to clear these two channels for radio operations.

On the other hand, a number of groups have opposed use of these channels for radio.  The opposition includes those stations who already are operating their digital stations on these channels, and organizations including the NAB and MSTV who represent broadcast television stations.  These groups argue that these two channels need to be retained as television channels not only for use by the television stations that have digital operations there, but also for new stations that can be allotted after the end of the digital transition, as well as for LPTV stations that are already operating there and ones that could be built in the future. 

Thus, the Commission will be faced with a choice between using these channels for more radio or more television.  So far, no party has argued that there is no need for this additional service given the multiple services that each TV and FM radio station can provide when operating digitally, nor have questions been raised as to what the addition of new channels (either radio or TV) will do for revenues of existing stations already facing unprecedented competition from other forms of new media.  Of course, the competition will come digitally in any event through other means of wireless delivery, so more competition is inevitable whether or not these channels are used for new broadcast services.  The use of these channels for more broadcasting will only hasten the inevitable increase in competition that broadcasters will face.   At the same time, the addition of all these channels will show, once again, that the incredible competition that exists to broadcasters and demonstrate that government regulation is not necessary to ensure that local service will be provided as, if the marketplace demands it, it will be provided (see our post here). 

Reply Comments on these important issues are due on August 29.
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Posted on June 16, 2008 by David Oxenford

FCC Extends Comment Deadline in Diversity Proceeding

The FCC today issued an order extending the comment deadline in its Broadcast Diversity proceeding, extending the comment date a full month until July 30, with Reply Comments now due on August 29.  This important proceeding, about which we wrote here, will address many issues, including proposals to, among other things, repurpose television Channel 6 (and possibly Channel 5) for FM use after the completion of the television digital transition, to allow FM licensees who multicast to sell one of their multicast channels independently of the main channel, to allow certain AM stations with expanded band channels to avoid turning in one of their channels at the end of the 5 year transition period if the licensee is a designated entity (or sells one of its channels to a designated entity), and to provide Class A television stations with must-carry status.  The rulemaking proceeding will also look at whether the current definition of a designated entity (focusing on the fact that it is a small business as opposed to any review of the race or gender of its owners) is the one that the FCC should continue to use.  Thus, this is an important proceeding in which many broadcasters should be interested, and now you have more time to prepare comments on the issues that are raised.
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Posted on March 29, 2008 by David Oxenford

FCC's Acts to Increase Diversity in Media Ownership - Part 2, The Proposals for Future Actions - Channel 6 for FM, AM Expanded Band, Definition of Designated Entity, Must Carry for Class A TV and Others

We recently wrote about the Federal Communications Commission’s actions in their Diversity docket, designed to promote new entrants into the ranks of broadcast station owners. In addition to the rules adopted in the proceeding, the FCC is seeking comment on a number of other ideas – some to restrict the definition of the Designated Entities that are eligible to take advantage of these rules, others to expand the universe of media outlets available to potential broadcast owners – including proposals to expand the FM band onto TV channels 5 and 6, and proposals to allow certain AM stations, which were to be returned to the FCC after their owners received construction permits for expanded band stations, to retain those stations or transfer them to Designated Entities. The proposals, on which public comment is being sought, are summarized below.

Definition of Designated Entity. The first issue raised by the Commission deals with whether the class of applicants entitled to Designated Entity status and entitled to take advantage of the Commission’s diversity initiatives should be restricted. One proposal is to restrict the Designated Entity status to companies controlled by racial minorities. The Commission expressed skepticism about that proposal, noting that the courts had throw out several versions of the FCC’s EEO rules, finding that there was insufficient justification offered by the FCC to constitutionally justify raced-based preferences. The Commission asked that proponents of such preferences provide a “compelling” showing of needed, as necessary for a constitutional justification for governmental race-based discrimination.

Alternatively, certain parties suggested that the current Designated Entity ("DE") status is too broad, as it could include all sorts of new, small businesses, even including some that are backed by wealthy individuals who do not need government assistance. Thus, if race-based classifications are not acceptable, these groups suggest that the Commission confer DE status only on those groups that demonstrate to the Commission, through a “full file” review, that they are socially and economically disadvantaged. This would be similar to some programs established by university admissions offices to avoid race-based classifications, but still admit minorities and members of other socially disadvantaged groups who might otherwise be overlooked in an admissions process. The Commission asks the proponents of these rules to explain what criteria the FCC would use to determine who is socially and economically disadvantaged, and whether the adoption of such a standard would require a unique review of every applicant who comes before the FCC seeking such status, or if there are objective criteria that could be used to make review easier.

FCC Form 323 Revisions.  To gather information about minority ownership, the Commission is also asking if it should revise some of the processes it uses to collect ownership information, particularly ownership information about broadcast ownership by minorities and women. This information is gathered currently on a station's Ownership Report, submitted every two years on FCC Form 323 (or more often if there has been a transfer of ownership).  Rather than filing ownership reports every two years on the anniversary date of a station’s renewal filing, the Commission asks if it should create a single, uniform date for the filing of FCC Form 323 ownership reports by all broadcast stations. The Commission also asks if it should require the filing of reports by stations owned by individuals and partnerships owned entirely by individuals (which are currently exempt from the requirement to file updated Ownership Reports every two years, as the Commission considers any ownership changes in these entities to require the filing of a transfer form, at a minimum a short-form Form 316 pro-forma transfer of control as, under the common law, any change in the partners of a general partnership represented the creation of a new partnership). Also, to insure that ownership information is correct, the FCC asks if it should conduct random audits of the Form 323 reports that are submitted.

Proposals For Changes in FCC Technical Rules to Increase Broadcast Opportunity.  The Commission also advanced certain suggestions to make available more broadcast stations for DEs to acquire. These include the following proposals:

  • Allowing FM licensees who are multicasting in digital to actually sell one of the multicast channels to a DE, which would be given a separate license for that station, which could itself be sold in the future, separate from the main station with which it is associated. 
  • Allowing AM licensees who operate an Expanded Band AM station (operating on 1610-1700 on the AM band) to keep both the expanded band AM and their original AM station in the traditional AM band if they are a Small Business, or to sell one of the stations to a DE within a year. Most of these stations were supposed to turn in one of these licenses at some point within the last few years (within 5 years of the commencement of operation by the Expanded band station), but many have been permitted to retain the stations on a temporary basis while this proposal, first advanced two years ago, makes its way through the Commission.
  • Reassigning TV channels 6, and possibly 5, for use for new FM stations after the digital television transition. Channel 6, which is immediately adjacent to the FM band, has been kept pretty much vacant under the DTV allocation table, to eliminate interference to FM noncommercial stations which sometimes occurs under current rules. We previously wrote about this proposal, here.
  • Allowing the change in city of license of a radio station to any other community within the same radio market (presumably to allow for better coverage of population centers) even if the move would leave the current community without any full-power radio service, if the applicant agrees to finance the construction of a low power FM station in the community that is being abandoned.
  • Proving must-carry status to Class A TV stations (presumably enhancing their economic viability). Class A TV stations are LPTV stations that were specially designated as Class A stations in a one-time window in the late 1990s, if they could show that they were originating local television programming and otherwise met all rules applicable to full-power stations (e.g. main studio, public file, children’s television rules). Such stations are given protected status from being bumped off the air by new full-power TV stations or increases in the facilities of existing stations.

Incubator Program.  In addition to these proposals, the Commission asked for comments on a proposal to create a trail “incubator program": by which a large broadcaster could receive an exemption from the radio multiple ownership rules so that it could have one more station in a market than would be otherwise permitted if it “incubated” the ownership of another radio station in the same market by providing financing or other assistance to the incubated station.

Proposals to Review Broadcast Transactions for Effect on Minority Ownership.  Finally, the FCC asked for comments on proposals that the Commission be able to evaluate any broadcast transaction for its potential effect on minority ownership, to deny temporary multiple ownership waivers in large broadcast transactions which would create temporary ownership holdings in excess of the ownership rules, and to allow minority owners to exceed ownership caps in any market if necessary for those owners to have holdings equal to those of the largest owner in a market (which might have grandfathered holdings).

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These proposals include ones that could create opportunities for many broadcasters and for many individuals who are interested in entering the broadcasting industry through the construction of new stations or the acquisition of existing stations.  There are, however, potential issues for some broadcasters, particularly in connection with the final proposal to review broadcast transactions for their effect on minority ownership, which could slow the processing of some transactions.  Broadcasters should review the entirety of the proposals made by the FCC, and file comments on those issues that most directly affect them. 

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Posted on March 24, 2008 by David Oxenford

NCE Applications Must Protect Channel 6 TV Stations Until the End of the Digital Television Transition

Channel 6 of the television band is immediately adjacent to the lower end of the FM band.  Noncommercial FM radio stations, located at the lower end of the FM band (88.1 FM to 91.9), have the potential to interfere with television stations on that channel.  Thus, FCC rules require that noncommercial FM stations protect Channel 6 stations that are in their area, often limiting their power unless they can work out interference agreements with the local TV station.  As the FCC has tried to vacate Channel 6 as part of the digital transition, some noncommercial FM applicants, including some who filed during the recent filing window for new Noncommercial FM stations, have filed applications seeking construction permits at power levels that ignore the Channel 6 station, on the theory that, by the time the noncommercial station is on the air, the TV station will have vacated Channel 6.  In a decision issued on Friday, the Commission rejected one such application, finding that the acceptance of the application premised on an event that has not yet occurred would be unfair to potential applicants who were waiting to file applications until the television stations actually changed channels.

The decision, in a footnote, noted another problematic issue raised by these applications.  As only some applicants filed their applications in the recent NCE window premised on the disappearance of the Channel 6 TV stations, those that had not take that tact would be at a comparative disadvantage in assessing their applications under the NCE selection criteria.  As the comparative position of NCE applicants was supposed to have been frozen at the time the window applications were filed, those relying on a future event would seem to get an unfair advantage.  Thus, it appears that, in time, similar actions will be taken with respect to other similarly situated applicants, clearing up a source of concern or consternation for many who filed during that window.

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