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November 9, 2000


Re: Principles for Promoting the Efficient Use of Spectrum by Encouraging the Development of Secondary Markets; Promoting Efficient Use of Spectrum Through Elimination of Barriers to the Development of Secondary Markets (adopted November 9, 2000)

I support our action here to examine whether we can facilitate more efficient use of commercial and private wireless licensed spectrum by encouraging a secondary market in spectrum usage. I write separately, however, to dissent on the scope of our discussion in the Policy Statement and to highlight my keen interest in encouraging comments on certain issues raised in the Notice.

As an initial matter, the Policy Statement alludes to future consideration of secondary markets in spectrum dedicated to broadcast licenses, and I believe the item should have focused exclusively on spectrum used for commercial and private wireless services. Our action here stems in large part from last May's Secondary Markets Public Forum, which did not include any panelists from the broadcast industry or the public interest community and focused on commercial and private wireless spectrum. Any discussion of spectrum licensed for broadcast use must include the principles of localism and diversity. While the Policy Statement acknowledges public interest "considerations" in the broadcast context, the values of localism and diversity are at the core of broadcasters' public interest obligations and should not be subordinate to spectrum efficiency. These issues were not raised at the Public Forum, and the Policy Statement merely asserts that the Commission will accord such values "adequate weight in pursuing a secondary markets policy." I believe that we must engage with the broadcast industry and the public interest community before we hint at embarking on a secondary market campaign in the broadcast arena, and we must reflect on the importance of these values in any debate. I cannot support such discussion when we have not.

Nonetheless, I support the essence of these items as they explore how this agency can take steps to foster increased use of spectrum licensed for commercial and private wireless services, consistent with the Communications Act and sound public policy. It goes without saying that spectrum is an increasingly valuable public resource, and that spectrum management is a core function of this agency. In exercising this responsibility, exploring ways to encourage more intense use of this limited public resource serves the public interest. Secondary market transactions may be one opportunity to do just that.

A vision of secondary market transactions, however, raises several legal and policy issues. With regard to the Notice, I intend to look closely at the comments regarding our obligation to review radio spectrum license transfers under section 310(d) of the Act. We are aware that some leasing arrangements are scuttled by regulatory uncertainty and others by the transactions cost of license transfer proceedings. Leasing arrangements without Commission approval, we are told, would tap the secondary market. To that end, what is the nature of our statutory obligation to review radio license transfers of control? How should we define control under section 310(d) for purposes of commercial and private wireless licenses? Are there considerations beyond ultimate responsibility for compliance with our rules that we must consider in the context of spectrum use and control of a license? I encourage interested parties to examine these issues thoroughly. We cannot ignore the obligations of the Act in the name of secondary markets.

The Notice also seeks comment on the extent to which existing service rules applicable to licensees should extend to spectrum lessees. I believe the wisest course in this uncharted territory is to move deliberately, lest we find ourselves advancing secondary markets at the expense of the underlying purposes of our rules. More to the point, I am concerned that relaxation of our service rules, under the guise of furthering secondary markets, could invite opportunities to circumvent enforcement of our licensing responsibilities and public interest requirements. I am inclined to support a starting point where the lessee "stands in the shoes" of the licensee, agreeing to all interference and service rules that attach to the licensee. Certainly, there are circumstances that warrant relief from the service rules, and I encourage commenters to explore where we should grant such relief.

Ultimately, my goal is to find a balance that will foster secondary markets without undermining our obligations under the Communications Act or our policies to promote the public interest. I hope that this Policy Statement and the Notice offer tangible steps, and I look forward to reviewing the record.