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January 20, 2000

STATEMENT OF COMMISSIONER MICHAEL POWELL,
DISSENTING IN PART

Re: Report and Order - In the Matter of Creation of Low Power Radio Service (MM Docket 99-25)

This item's goal is to create a class of radio stations "designed to serve very localized communities or underrepresented groups within communities." Notice of Proposed Rulemaking, MM Docket No. 99-25, 14 FCC Rcd 2471, 2473 (1999). Attempting to give greater voice to narrower interests is generally laudable and I support the objective. But, the question that gives me pause is what the cost is to existing stations that provide equally valuable service to their communities. Because this Order fails to give credence to this concern, I respectfully dissent in part.

I do not quibble with the Commission's objectives. Certainly, the extensive consolidation of radio stations into large commercial groups and the financial challenges of operating full power commercial stations have limited the broadcasting opportunities for highly localized interests. The introduction of a low power FM service may partially address this concern. However, to borrow from the teaching of the medical profession, when trying to treat a problem, we should "first do no harm."(1) There presently exist many small and independent stations across the country that are especially notable for their local focus. This admirable group includes a fair number of stations owned by minorities and women, as well as stations with smaller audiences and limited advertising. These stations have struggled to survive as independent voices against the rising tide of consolidation brought on by the economic stress of small scale production. It would be a perverse result, indeed, if these stations were to fail or the quality of locally originated programming suffer, because new LPFM stations diluted their already tenuous base of support.

There are two interrelated, yet distinct, threats to these small stations that stem from the new LPFM service: 1) signal interference and 2) erosion of economic viability. The first has garnered all the attention. The Commission has endeavored to minimize the dangers of interference in this item. It wrongly has ignored the second concern.(2) I have met with a number of small market broadcasters that tell me that when they raise concerns about the threat of LPFM to their economic viability they are bluntly rebuked--told that such considerations are of no import, that we are only concerned with spectrum efficiency and that we do not pick winners and losers. I, too, heard this line during our internal deliberations. I find the proposition absurd. We regularly consider the economic impacts of our actions on licensees. Just one example is the degree to which we have attempted to balance the need for consolidation to achieve economic efficiency against our goal to foster myriad diverse voices. Indeed, the Commission itself has recognized that the industry's ability to function in the public interest, convenience and necessity is fundamentally premised on the industry's economic viability.(3)

The introduction of the LPFM service is not simply a way to get greater use out of the spectrum, regardless of who gets the benefits. It is a policy choice to create stations that allow very small communal and parochial interests to find a voice. We are not agnostic as to whether they proliferate and prosper. Indeed, we have made special accommodations to suit our conception of this service, like eliminating the third adjacency protections normally imposed on FM broadcasters. Indeed, for years small broadcasters have tried to expand their services to the community by seeking more lenient interference restrictions, but to no avail. Similarly, we are minting a unique and distinct definition of "community" in order to facilitate the LPFM service. My view is to make such accommodations for this service, while putting our heads in the sand as to the economic impacts on existing stations is in fact, contrary to the assumption of some, picking winners and losers.

The threat to small independent broadcasters by the introduction of LPFM service is not trivial.(4) While the non-commercial educational LPFM stations will not be direct competitors for advertising dollars to existing commercial stations, they can threaten the economic health of these stations in meaningful ways. LPFM stations might very well siphon financial support away from small market stations. Local support that is presently coming to existing stations in the form of advertising might migrate to one or more LPFM stations in the form of underwriting.(5) Moreover, the presence of one or more LPFM stations will certainly dilute audience share, on which securing advertising dollars is based. I note, for example, that many of the Order's protections exist only within the "protected contour" of the existing FM station. We know, however, that many FM stations reach significant audience share outside that contour and garner significant financial support from these areas.(6) Finally, market dilution may make it difficult to secure financial support from lenders or investors.

The proponents of LPFM retort that the number of new stations will be few in a given market, and limited in their reach. Perhaps, in some markets this is true. But, the 41 new station possibilities in Elko, Nevada and Springerville, Arizona, or the 25 new station possibilities in Billings, Montana certainly are not trivial to the established stations in those small, rural markets. In all, the Bureau tells us that there is a possibility of 700 to 1000 new LP100 stations (more if LP10 stations come into the market).

It is important to emphasize that an adverse impact on existing stations directly compromises the public interest. Locally originated programming that we favor is expensive to produce compared to the scale efficiencies of syndicated programming. The erosion of economic return, even slight in small markets, may adversely impact the quantity and quality of local programming, which is unlikely to be replaced by micro stations operating under even greater economic constraints. The link between local programming and economic efficiency is well-established. Former Commissioner Ervin S. Duggan stated it succinctly:

Broadcast stations that can't stay above water economically can't serve their communities. Broadcasters have always borne a fundamental obligation to provide service in the public interest. Most have borne that obligation quite well, despite occasional adversity. But the FCC and the nation cannot expect broadcasters to fulfill that obligation if the structure and economics of the industry don't permit it.(7)

The threat of compromising this maxim of the public interest should have compelled the Commission to fully consider the economic impact of its decision.

Are these threats minimal or serious? We are left to wonder, wait and see for the Commission has refused to seriously consider what might be the economic consequences. I fear that many small and independent stations will find this to be the straw that broke the camels back, or that last "wafer thin mint"(8) forcing them to sell out or cut back it local programming. The result would be a further decrease in independent and perhaps in minority and female ownership of full power stations that we so often bemoan. The lost community value, furthermore, would not simply be transferred to the new LPFM stations. Those stations may serve a very small piece of the overall community, but could not possibly make up for the greater service coverage of the lost full power station, nor the lost opportunity for a minority or women to share in the fruits of the broadcasting business.

Signal Interference

I must confess that I have no clear idea as to whether or not existing broadcasters will suffer intolerable interference. The engineering studies on the record reach very different conclusions. When carefully examined, however, one finds that the basic methodologies and analysis are consistent with each other. Where these studies differ, is what the various proponents believe is "acceptable" interference or degradation of service. This I find to be a relatively subjective judgment rather than an engineering one, colored by the self-interest of the various proponents. It is my practice in such a situation to defer to the conclusions of the Offices and Bureaus when not clearly persuaded otherwise. Thus, customarily, I would accept the staff's conclusion that third adjacency protection is unnecessary. I do have some hesitancy, however, because I note that by doing so, we diverge from protections we have insisted on--some say with unbending resolve--with respect to other FM services. Nonetheless, to resolve this lingering doubt I would have introduced the LPFM system another way than that we adopt here.

A Better Way

On balance, I would have taken a different approach to introducing LPFM service. I believe in light of lingering concerns about signal interference and my pronounced concern about the economic impact of the new service we should have introduced this service gradually. It might begin with some experimental licensing in certain communities to assess the real world impact of signal interference. Subsequently, we could have fully introduced the service with third channel adjacency protections. This would have two benefits. First, it would minimize the risk of interference in a manner consistent with existing services and second, it would introduce substantially fewer stations into the market, thereby allowing us to evaluate the economic impacts of these new stations in these markets. Finally, if all went well, we could then move to full service with less adjacency protection, as warranted by our experience. Such an approach strikes me as prudent and preferable to the shotgun introduction which we let loose today.

Conclusion

For the foregoing reasons, I dissent in part.






1.

1 Paraphrasing Of the Epidemics. Hippocrates. Translated by Francis Adams (found at http://classics.mit.edu/Hippocrates/epidemics.1.i.html).

2.

2 See Comments of John Haring and Harry M. Shooshan III "LPFM: The Threat to Consumer Welfare," In re Creation of a Low Power Radio Service, Notice of Proposed Rulemaking, MM Dkt No. 99-25 at 24. (Harring & Shooshan) contained in Comments of the National Association of Broadcasters, vol. I ("A station's economic scale of operations is affected both by technical parameters of the broadcast 'machine' it operates and the competitive economic environment in which it operates. The premise of the Commission's LPFM proposal is that the operative constraint on very 'narrowcast' broadcast operations is primarily technical. . . .That is a false premise: In today's operating environment, the constraint on narrowcast programming is primarily economic rather than technical.").

3.

3 See In re Revision of Radio Rules and Policies, Memorandum Opinion and Order and Further Notice of Proposed Rulemaking, 7 FCC Rcd. 6387, 6389, para. at 11 (1992) (emphasis added).

4.

4 See generally, Haring & Shooshan (an economic analysis documenting the economic risks and possible loss to consumer welfare of the LPFM service).

5.

5 47 U.S.C. 399b, 47 U.S.C. 541(e).

6.

6 It is true, that they do not enjoy protection from new full power stations outside their protected contours either, but new such stations would be hindered by the third adjacency spacing criteria and other limitations.

7.

7 "Localism Tied to the Tracks?," remarks of Commissioner Ervin S. Duggan, FCC before the Mississippi Association of Broadcasters (June 27, 1992).

8.

8 To those unfamiliar with Monty Python, this line comes from the film The Meaning of Life. I will not describe the scene other than to say the phrase is spoken by a waiter urging a patron who has over-indulged to have just one last morsel, the infamous "wafer thin mint."