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Testimony of Commissioner Harold W. Furchtgott-Roth Before the Subcommittee on Telecommunications, Trade and Consumer Protection On the FCC’s Low-Power FM: A Review of the FCC’s Spectrum Management Responsibilities and H.R. 3439, the Radio Broadcasting Preservation Act, Thursday, February 17, 2000, 10:00 a.m.

Thank you Chairman Tauzin, distinguished members of the Telecommunications, Trace, and Consumer Protection Subcommittee, for inviting me to testify on the Federal Communications Commission’s recent decision to create a new class of “low power” radio service – or, put another way, to degrade the quality of radio service on the FM band for listeners nationwide.

As you know Mr. Chairman, I dissented from both the Notice of Proposed Rulemaking (NPRM) and the Order adopting final rules on this matter. At the outset of the low power proceeding, however, I made clear that I was not – nor am I today -- opposed to the creation of a low power radio service per se. Whatever new service could have been provided within the range of existing interference regulations would have been worth considering. But I did not believe that we should create new stations at the expense of those interference protection standards. That, unfortunately, is precisely what the Commission did last month.

Under the well established protection standards in place at the time of the NPRM, the Commission could have authorized so few new stations – not more than a handful across the country -- that the results would hardly have warranted the effort of printing the new regulations. In order to create any marginal amount of new service, protection standards had to be loosened so as to eliminate long-standing third adjacent channel safeguards.

In my view, this action represents a severe incursion on the rights of current FM band licenseholders, as well as on the value of their licenses. These licensees reasonably expected that the Commission would protect the integrity of the band on which they were licensed to operate, and they invested heavily in their businesses based on this reasonable expectation.

Perhaps more importantly, this action also impairs the ability of current licensees to serve their listeners, who must not be forgotten. While a few new people may be able to broadcast, others may lose their ability to receive and listen to existing stations due to interference. I do not think that radio listeners will be pleased to find out that their favorite station is no longer listenable on their radio. Troublingly, however, the Commission never made any effort to assess, much less quantify, the effect on existing stations and listeners of eliminating these well established interference protections.

Clearly, the Commission’s action harms existing license holders and their listeners. On the other side of the ledger – the “benefits” side -- let’s consider what the Commission has actually achieved.

According to the NPRM in this proceeding, elimination of third adjacent channel protections for 100 watt stations will allow for the creation of one such station – in Houston, Texas -- in the top five American cities. No such stations will be created in New York, Los Angeles, Chicago, Philadelphia, San Diego, Dallas, San Francisco, Washington, Charlotte, or Miami.

At the very last minute – in fact, the evening before the final vote took place, and without the knowledge of this Commissioner -- these numbers were rejiggered so as to produce slightly more stations. Current and final estimates are that in the five largest cities there will now be a total of three stations. And, where there were previously no stations, there will now be one station in Philadelphia, four in Dallas, two in San Francisco, three in Washington, and four in Miami. But there will still be no stations in New York, Los Angeles, San Diego, or Charlotte. Of course, the extra stations that were created between the NPRM stage and the final Order were bought at the price of dropping proposed spacing requirements that would have protected low power from full service stations.

So while there may be a few more stations now than originally thought, they are still very few in number, and those stations are defenseless in terms of interference from regular power stations, further decreasing the utility of these stations. So much for the goal of creating low power stations to serve urban communities; there will be precious few new licensees in urban markets, and these small-scale licensees will have to contend with a sea of interference from full power broadcasters.

In fact, the bulk of new licensees will be in smaller markets. In many of these areas, full power stations likely could already be dropped in without changing third-adjacent channel standards at all. (At least, there is no indication of an effort on the part of the Commission even to consider such an alternative approach.) Given that there is little existing demand for additional full-power stations in these markets, there is no evidence of commercial viability. Indeed, the evidence suggests that such stations are not capable of existence as going concerns.

Perhaps there is a demand for lower power noncommercial stations. Theoretically, however, any such actual demand could be met by the dispensation of licenses within our previous rules – i.e., by giving out 101 watt licenses consistent with the 100 watt minimum requirement. Notably, the rationale for the 100-watt minimum was efficiency in spectrum distribution. It was thought inefficient, unwise, and unmanageable to license radio stations at operating powers any less than this. The Commission has never explained why it is any less inefficient today than it has been for decades to allocate radio spectrum at lower levels.

In any event, we receive few if any applications for 101 watt licenses, even in the noncommercial arena. Similarly, if somebody really wanted to operate a 50-watt station, they might file a request for waiver of the 100-watt minimum rule. As far as I can tell, though, no such waiver has ever been filed, again suggesting a lack of any real demand for such licenses. In short, there is no evidence in the behavior of license applicants that suggests any pent-up demand for the stations in question.

After creating this new class of licensees, the Commission then loaded them up with the same heavy regulatory burdens that most broadcasters must shoulder. For instance, the newly recreated Equal Employment Opportunity rules will apply to low power stations to the same extent that they apply to all broadcasters. Also applicable are all the political programming rules, cross-ownership restrictions, special ownership limits for low power stations, and a slew of other FCC regulations.

The required actions and paperwork for compliance with these regulations may well prove overwhelming for the operators of low-power radio stations. If these duties are taken seriously by operators and enforced by the Commission, low power operators will spend more time attempting to figure out what Title 47 of the Code of Federal Regulations requires of them than they will spend broadcasting.

The net result of the foregoing is that there is very little evidence – in the form of applications for, say, 101 watt stations or waivers of the 10-watt minimum – indicative of current market demand for the stations now being created. Layered on top of the apparently low state of demand for these licenses today are the many regulations to which the stations will be subject. Any current demand for 100 and 10 watt stations will only be dampened by these regulatory burdens.

In short, the Commission has, at the expense of established service quality and existing radio listeners, created: a handful of new stations in primarily non-urban areas, failing to fulfill one of its own chief goals; stations that themselves may well be unlistenable due to interference from high power stations; a threat to the development of digital radio services; a heavy regulatory scheme, including ownership, cross-ownership, political programming, and EEO rules, to govern these very small operators; and more enforcement and administration burdens for the Commission.

To conclude, this is not a wise balance of interests. Nor does it comply with our fundamental statutory charge to "make available . . a rapid, efficient, Nation-wide and world-wide wire and radio communication service." 47 USC section 151 (emphasis added).

Thank you.