[Federal Register: April 20, 2005 (Volume 70, Number 75)]
[Rules and Regulations]
[Page 20479-20481]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20ap05-12]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 25
[FCC 04-271, Auction 52]
Auction of Direct Broadcast Satellite Licenses
AGENCY: Federal Communications Commission.
[[Page 20480]]
ACTION: Final rule.
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SUMMARY: The Commission restricts eligibility for the Direct Broadcast
Satellite license authorizing use of channels 23 and 24 at the 61.5\0\
W.L. orbit location. Specifically, licensees currently operating
satellites at orbit locations capable of providing DBS service to the
50 U.S. states will be prohibited from acquiring, owning, or
controlling this license until four years after the award of the
initial license.
DATES: Effective December 3, 2004.
FOR FURTHER INFORMATION CONTACT: Diane Conley, Auctions and Spectrum
Access Division, Wireless Telecommunications Bureau, (202) 418-0786;
Selina Khan, Satellite Division, International Bureau, (202) 418-7282.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's
Auction of Direct Broadcast Satellite Licenses Order (``DBS Order''),
released on December 3, 2004. The complete text of the DBS Order as
well as related Commission documents are available for public
inspection and copying during regular business hours at the FCC
Reference Information Center, Portals II, 445 12th Street, SW., Room
CY-A257, Washington, DC 20554. The DBS Order and related Commission
documents may also be purchased from the Commission's duplicating
contractor, Qualex International, Portals II, 445 12th Street, SW.,
Room CY-B402, Washington, DC 20554, telephone 202-863-2893, facsimile
202-863-2898, or via e-mail qualexint@aol.com. When ordering documents
from Qualex, you must provide the appropriate FCC document number (for
example, FCC 04-271 for the DBS Order). The DBS Order and related
documents are also available on the Internet at the Commission's Web
site: http://wireless.fcc.gov/auctions/52/.
I. Introduction
1. In the DBS Order, the Commission concludes that eligibility for
the Direct Broadcast Satellite (``DBS'') license for channels 23 and 24
at the 61.5\0\ W.L. orbit location, which authorizes use of the last
two available channels at an eastern DBS orbit location, should be
restricted. Specifically, licensees currently operating satellites at
orbit locations capable of providing DBS service to the 50 U.S. states
will be prohibited from acquiring, owning, or controlling this license
until four years after the award of the initial license. The Commission
concludes that such a restriction on eligibility for this license will
serve the public interest by helping to promote the development of an
additional provider of DBS services.
II. Background
2. The Commission first adopted competitive bidding rules for the
DBS service in 1995. Revision of Rules and Policies for the Direct
Broadcast Satellite Service, Report and Order, 60 FR 65587, December
20, 1995. In 2002, the Commission released Policies and Rules for the
Direct Broadcast Satellite Service, Report and Order, 67 FR 51110,
August 7, 2002, in which it streamlined the regulation of DBS and moved
the DBS rules from part 100 to part 25.
3. On March 3, 2003, the Commission issued a public notice
announcing an auction of DBS licenses (the Auction No. 52 Comment
Public Notice, 68 FR 12906, March 18, 2003), in which it sought comment
on, inter alia, a number of questions regarding whether eligibility
restrictions were warranted for any of the four licenses slated to be
offered in Auction No. 52.
4. In an Order released on January 15, 2004, the Commission
declined to adopt any eligibility restrictions for the three available
licenses at the 175[deg] W.L., 166[deg] W.L., and 157[deg] W.L. orbit
locations. The Commission deferred the matter of eligibility for the
fourth license--the 61.5[deg] W.L. license--to a separate order.
Auction of Direct Broadcast Satellite Licenses, Order, 69 FR 8965,
February 26, 2004. Following the release of that Order, the 61.5[deg]
W.L. license was removed from the inventory of Auction No. 52, which
was held on July 14, 2004. Pursuant to its delegated authority, the
Wireless Telecommunications Bureau will schedule an auction of the
61.5[deg] W.L. license.
III. Discussion
A. Eligibility of DBS Incumbents
5. The Commission concludes that it is appropriate to restrict the
eligibility of entities currently operating satellites at orbit
locations capable of providing DBS service to the 50 U.S. states, their
wholly owned subsidiaries, and entities they control, to acquire, own,
or control the license for the two channels at 61.5[deg] W.L. until
four years after the award of the initial license. The two channels at
61.5[deg] W.L. are unique because they are the only remaining
unassigned DBS channels in the 12 GHz band that are assigned to the
United States under the International Telecommunication Union Region 2
Band Plan that can provide service to the eastern continental United
States with a sufficiently high look angle that the signal is not
blocked by terrestrial obstacles. Because the 61.5[deg] channels are
the last two available that can serve all of the eastern United States
plus most of the rest of the country, they could be important to
increasing the number of options or choices available to subscribers of
DBS or multichannel video programming distribution services. Increased
choices in the DBS marketplace could yield important public interest
benefits, including greater price competition, the development of
additional new services, and technological innovation. Enhanced DBS
competition has the potential to bring such benefits to consumers both
in markets in which DBS operators compete with cable systems and in
markets in which they do not. Whether an additional DBS competitor
provides a choice of similar programs at a lower price or provides a
different group of program options, or other kinds of DBS, broadband
and other types of services, consumers will benefit from those
increased options.
6. The Commission concludes that it is reasonable to specify four
years as the period during which it will not allow any entity operating
satellites at DBS orbit locations capable of serving the 50 states to
acquire the 61.5[deg] W.L. license because DBS licensees are required
to complete construction of their first satellite within four years of
authorization. The purpose of the eligibility restriction is to promote
the development of an additional DBS provider, and the Commission
wishes to assign the 61.5[deg] W.L. license to an entity that will use
the license to provide DBS service, not to an entity that will resell
the license to a previously ineligible party soon after acquiring it.
The best way to ensure that entities do not acquire the license with
the intention of reselling it to a previously ineligible party is to
prohibit such resale before the construction of the first satellite
authorized under the license is completed. Thus, the Commission will
require compliance with the four-year milestone before the 61.5[deg]
W.L. license may be transferred to a company that is operating at orbit
locations capable of providing DBS service to the 50 states.
7. Entities prohibited from acquiring, owning, or controlling the
license for the two channels at 61.5[deg] W.L. until four years after
the award of the initial license are also prohibited from leasing the
subject spectrum during the same time period. Those parties that will
be considered to have a controlling interest will be individuals and
entities with either de jure or de facto control of an applicant for
this license. De jure control is evidenced by holdings of greater than
50 percent of the voting stock of a corporation, or in the case of a
partnership, general partnership interests. De facto control is
determined on a case-by-case basis. Further, for
[[Page 20481]]
purposes of the eligibility restriction adopted the Commission will
apply the definitions of ``controlling interests'' and ``affiliate''
currently set forth in 47 CFR 1.2110(c)(2) and 47 CFR 1.2110(c)(5).
B. Cable/DBS Cross-Ownership
8. The Commission does not anticipate any significant competitive
problems from cable system ownership of the 61.5[deg] W.L. license, and
therefore it concludes that it is not appropriate or necessary to
restrict cable operators from acquiring this license.
C. Other Issues
9. The Commission finds that it is not in the public interest to
avoid mutual exclusivity entirely with respect to the 61.5[deg] W.L.
license and therefore 47 U.S.C. 309(j)(6)(E) does not require it to do
so.
10. Because the Commission has no evidence before it to suggest
that Dominion Video Satellite, Inc. (``Dominion''), would be required
to turn over the 61.5[deg] W.L. channels to EchoStar Satellite L.L.C.
(``EchoStar'') if it were to win the license for them, Dominion's
current lease arrangement with EchoStar should not by itself disqualify
Dominion from acquiring the license for the 61.5[deg] W.L. channels.
The Commission will review specific allegations that leasing has led to
a de facto transfer of control on a case-by-case basis.
IV. Conclusion
11. For the reasons stated above, the Commission concludes that it
will further the public interest to prohibit firms currently operating
satellites at orbit locations capable of providing DBS service to the
50 U.S. states, as well as their wholly owned subsidiaries and entities
they control, from acquiring, owning, or controlling the license for
the two channels currently available at the 61.5[deg] W.L. orbit
location until four years after the award of the initial license. In
addition, the Commission concludes that such entities should be
prohibited from leasing these channels during the same period.
V. Report To Congress
12. The Commission has sent a copy of this Order in a report sent
to Congress and the General Accounting Office pursuant to the
Congressional Review Act, 5 U.S.C. 801(a)(1)(A).
VI. Ordering Clauses
13. Accordingly, it is ordered that, pursuant to sections 4(i),
303(r), and 309(j) of the Communications Act of 1934, as amended, 47
U.S.C. 154(i), 303(r), and 309(j), entities currently operating
satellites at orbit locations capable of providing DBS service to the
50 U.S. states, their wholly owned subsidiaries, and entities they
control shall be ineligible to acquire, own, or control the license for
Direct Broadcast Satellite channels 23 and 24 at the 61.5[deg] W.L.
orbit location for a period beginning with the release date of this
Order and ending four years after the date of the issuance of the
initial license. Such entities are prohibited from leasing these two
channels during the same period.
14. It is further ordered that the International Bureau, in
awarding the license for Direct Broadcast Satellite channels 23 and 24
at the 61.5[deg] W.L. orbit location, shall place upon it the condition
that it may not be transferred or assigned to any entity described in
the preceding clause, and this condition shall automatically expire
four years after issuance of the license unless it is extended by the
Commission.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 05-7716 Filed 4-19-05; 8:45 am]
BILLING CODE 6712-01-P