Copyright 2000 Federal News Service, Inc.
Federal News Service
February 17, 2000, Thursday
SECTION: PREPARED TESTIMONY
LENGTH: 4156 words
HEADLINE:
PREPARED TESTIMONY OF EDWARD O. FRITTS PRESIDENT & CEO NATIONAL ASSOCIATION
OF BROADCASTERS AND BRUCE T. REESE PRESIDENT & CEO, BONNEVILLE INTERNATIONAL
CORPORATION ON BEHALF OF THE NATIONAL ASSOCIATION OF BROADCASTERS
BEFORE THE HOUSE COMMERCE COMMITTEE TELECOMMUNICATIONS
& FINANCE SUBCOMMITTEE
SUBJECT - FCC'S LOW POWER
FM: A REVIEW OF THE FCC'S SPECTRUM MANAGEMENT RESPONSIBILITIES
BODY:
INTRODUCTION
Thank you, Mr.
Chairman, for the opportunity to appear before the House Telecommunications
Subcommittee today. The National Association of Broadcasters (NAB) represents
the owners and operators of America's radio and television stations. Our remarks
today will address the Low Power FM (LFPM) Radio Service
adopted by the Federal Communications Commission (FCC) on January 20, 2000.1 The
FCC has a fundamental obligation under Section 1 of the Communications Act to
"make available ... a rapid, efficient, Nation- wide and world wide wire and
radio and communication service." FCC Chairman William E. Kennard noted in his
Separate Statement on the LPFM Report and Order that "at the heart of this
mandate is the notion of opening up new opportunities in a way that protects the
integrity of existing services."2 This mandate should be read in light of the
history that gave rise to communications regulation in the 1920's - the need to
control interference to radio service. NAB believes the FCC has abandoned its
mandate and primary function of spectrum manager and has crossed over to social
engineering at the expense of the integrity of the spectrum for existing FM
broadcast stations and their listeners. NAB fully supports HR. 3439, a bill that
would rescind the FCC's newly adopted LPFM rules. Representatives Oxley and
Pallone, and the other 70 cosponsors have begun an important step to undo the
FCC's action in order to protect free, over-the-air FM broadcasting from further
interference. Further, NAB applauds the Subcommittee for holding today's hearing
in order to gain more insight into this important issue. The FCC has failed in
its mandate to properly weigh the costs and benefits of its new service and
rushed to judgment without taking into account the volumes of evidence in its
record that point to an opposite conclusion than the one it reached.
FROM THE BIRTH OF LPFM TO THE DEATH OF SPECTRUM INTEGRITY: THE FCC'S
RUSH TO CREATE A NEW SERVICE
Not even 13 months ago, on January 28,
1999, the FCC voted to adopt a Notice of Proposed Rule Making designed to
establish an LPFM service. The FCC proposed to authorize two levels of LPFM
service - 1000-watt stations or 100-watt stations. It also sought comment on
whether it should authorize a service with stations at 10 watts or less. The FCC
proposed to drastically alter the technical rules applicable to FM broadcasting
in order to "make room" for enough new LPFM entrants to justify its efforts in
pursuing the service.
The FCC asked for substantial technical evidence
regarding existing FM receivers because its proposals would have a direct effect
on how these radios would perform with additional LPFM stations inserted into
the crowded FM band.3 The FCC proposed to loosen its interference protection
separation distances to introduce more LPFM stations. It believed that there
would be minimal interference to existing radio service because radios would be
able to adequately reject the additional signals produced by the LPFM stations;
however, at that time, the FCC had not conducted its own study to test its
assumption.
The adjacent channel interference separation distances are
in place to help prevent interference from occurring to stations that operate
near one another on the band. These adjacent channel stations need to have a
specific amount of mileage between transmitter locations so that their signals
do not bleed into each other, resulting in the listening public's inability to
properly receive the signals virtually interference-free. At the FCC's request,
three independent parties submitted receiver studies into the docket.4 The FCC's
Office of Engineering and Technology (OET) also prepared a report of its
receiver testing. NAB provided a detailed technical study to the FCC regarding
FM radio performance in the absence of second- and third adjacent channel
protections.5 NAB tested 28 radios from five different categories.6 This sample
was the largest and most representative of the universe of existing FM receivers
of any of the receiver studies submitted into the record.?
In order to
quantify the amount of interference that would result with the introduction of
LPFM, a definition of unacceptable interference had to be developed. We chose an
interference standard that is based on subjective audience listening and one
that was also relied on by the FCC in past proceedings, and which is supported
by international standards.8 This was the benchmark NAB used to determine
whether radios would acceptably reject adjacent channel interference. By
contrast, the OET study focused only on distortion, a measure that has not
previously been used to evaluate interference. Our study indicated that a
majority of the radios tested did not perform up to the level previously assumed
by the FCC, and certainly did not show that radio performance had improved. Car
radios and home stereos generally were able to reject adequately the interfering
signals. However, portable radios, personal radios and clock radios - those
categories that make up 65.3% of the radios sold in 1998 - failed to perform up
to a level that could conceivably be considered "fair" reception under accepted
testing standards.9
After the receiver testing was completed, NAB took
the analysis one step further and conducted a study to determine how much
interference could result in the 60 cities the FCC had initially studied to
determine if LPFM was feasible. NAB used the FCC's computer program to study the
effects of the transmitter locations of LPFM stations in these 60 cities. Then,
we applied the data from our receiver testing to approximate the areas of
interference resulting from the LPFM allotments. Finally, we used population
data to estimate the number of listeners who would receive unacceptable
interference to at least one full-power FM station due to an LPFM station being
dropped in under the FCC's proposal. NAB found that, conservatively, millions of
people would experience interference in these 60 cities.10
NAB concluded
that radio receivers have not improved in their interference rejection
capabilities, and thus, the FCC's key assumption in its Notice was unwarranted.
Further, we commented that because the FCC relied on this assumption as its
justification for proposing an LPFM service, the FCC could not adopt its
proposed LPFM service because it would cause unacceptable levels of interference
to the listening public.
For Reply Comments, NAB commissioned two
independent analyses of all four receiver studies because of the different
conclusions reached by the studies. The NAB and CEMA studies concluded that
unacceptable interference would result from the LPFM proposal, and thus the
Commission could not loosen its interference protections for LPFM. The National
Lawyers Guild and the OET determined that radios could reject the additional
interference, and thus LPFM stations could be authorized.
NAB's
review provided the FCC with a detailed comparison of the type of receivers
tested, the interference criteria used and the test methodology.11 Both groups
of experts concluded that NAB's testing was the most comprehensive and NAB's
test methodology of using signal-to- noise ratios was the appropriate way to
test for signal interference. One group of experts went further to prove that,
although the four studies applied different methodologies and different
conclusions were reached, the main difference between the studies was the
definition of when unacceptable interference results.12 Those same experts
concluded that NAB provided the strongest support for our interference criteria
and that the listening public would likely demand a higher level of reception
quality.
It is important to note that in addition to the volumes of
comments provided by NAB in this proceeding, thousands of other comments were
filed, generating a huge record for the FCC to consider. Yet, a little over two
months after the comment period officially closed, the FCC adopted a Report and
Order authorizing two levels of LPFM service- one level for 100 watt stations
and another "microradio" level where stations operate at 10 watts or less.
NAB believes the FCC failed to adequately analyze the interference issue
and mistakenly relied on the OET receiver study - one that experts have
concluded does not properly measure the audible effects of the interference that
will result. 13 At least two FCC Commissioners also questioned whether the
interference issue was properly resolved prior to the adoption of the Report and
Order. Commissioner Michael Powell, in his separate statement, confessed that he
has "no clear idea as to whether or not existing broadcasters will suffer
intolerable interference" and suggested a phase-in approach that would have
answered questions before any harms are realized.14 Further, Commissioner
Furchtgott-Roth said, "There are real costs to existing stations, their
listeners, and to public perception of the quality of FM radio as a media
service - here that the Commission has not even attempted to quantify."15
Finally, the Commission itself noted in its Report and Order that the limited
number of receivers tested makes it difficult to draw statistical inferences
with regard to the general population of FM receivers.16 This fact alone should
have given the FCC pause as to whether it could have - and should have - adopted
LPFM rules.
WHAT ARE THE BENEFITS OF AN LPFM SERVICE THAT OUTWEIGH THE
COSTS?
In order to justify adopting an LPFM service, in its Report and
Order the FCC relies on a cost/benefit analysis. It recognized that some
interference would be caused by LPFM, but concluded that the benefits outweighed
the costs. Such an analysis, if done properly, identifies and weighs the
benefits of an action with the costs that will be incurred. NAB believes the FCC
failed to properly conduct this analysis.
The FCC's View of the Benefit
of LPFM Service
The FCC believes that the establishment of a LPFM
service will permit a greater number of new stations to be authorized and will
foster diversity of voices on the airwaves. Both Chairman Kennard and
Commissioner Gloria Tristani note this new service is important because they
believe that the radio broadcast industry has become too concentrated since the
Telecommunications Act of 1996 was signed into law. They believe that this
consolidation has led to a decrease in diversity on the airwaves.There has been
significant consolidation in the radio industry since Congress relaxed the
ownership limits on radio stations to bolster the economic efficiencies that
result from common ownership. This Congressional policy decision has not
negatively affected the diversity of formats available to listeners. NAB
provided substantial evidence to the FCC in the LPFM proceeding that format
diversity has increased in the last three years, as stations have been able to
diversify to reach particularized audiences.17 Indeed, an earlier FCC study
itself reached the same conclusion. Thus, the choices for listeners have
increased - not decreased to where "national play lists and syndicated
programming" are prevalent, as Commissioner Tristani believes.18 Thus, the
existence of the "problem" the FCC identified is not supported by the facts.
Further, NAB provided a study to the FCC of the radio marketplace that
concluded that a significant percentage of independent voices exist in the radio
market - including larger markets - even after consolidation.19 For example,
NAB's study shows that nationally, 28.8% of all commercial radio stations in all
Arbitron metros are stand alone stations, while another 21.4% are part of a
local two-station operation. Thus, nearly half of the commercial radio stations
in the nation are still either a stand alone station or part of a duopoly in
their market, and not part of a large group, as assumed by the FCC.
With
this evidence, we proved that the FCC's assumptions that consolidation permitted
by the Telecommunications Act of 1996 has eliminated independent voices in the
radio industry and reduced format diversity are unfounded. Congress should not
let the FCC determine whether to effectuate the will of Congress. In this
instance, the FCC has concluded that consolidation has had a negative effect
despite the evidence provided by NAB that points to the contrary - and has
adopted new rules designed to counteract the policy set by Congress in 1996.
Any Alleged Benefit Will Not Be Realized
The FCC states that it
is modifying its interference protections in order to provide room for LPFM
stations in markets that otherwise would not have space available. The FCC
believes that the greatest demand for LPFM stations will be in highly populated
areas where it believes alternative forms of radio service are most needed.
However, it is these same highly populated areas where virtually no LPFM
stations can be allocated, no matter how the FCC alters its interference
protections. In this particular case, it appears that the FCC's goal and benefit
of new voices can never be realized in most of the major markets.
Alternatively, the FCC's LPFM plan will provide numerous opportunities
in the smaller and medium sized markets where the lack of demand for such
services has left hundreds of available full-power allotments open. Thus, the
fact that there is spectrum standing open begs whether there was a need for the
new voices in these markets in the first place. Also, as we note below, the
benefit is diminished - if not extinguished - by interference to LPFM stations
from full-power stations and other LPFM stations. This is another fact the FCC
entirely ignored.
In short, the FCC only identified one benefit to its
LPFM service - the provision of new diversity of voices. However, this benefit
will not be realized in the areas where the FCC believes it is needed the most
and it is questionable whether the benefit is needed elsewhere. In making its
decision, the FCC claims to have weighed the costs and the benefits and
concluded that the one benefit substantially outweighs the costs associated with
its implementation of LPFM service. The truth of the matter is that the FCC has
not properly weighed the costs because it has chosen to ignore a substantial
part of the record in order to justify implementing its new service.
The
Costs Ignored by the FCC
There are three areas where the FCC has ignored
- or mistakenly undervalued - the costs of an LPFM service on the listening
public, on existing broadcasters, and in some cases, on even the LPFM stations.
The first area is one of interference.
As noted above, NAB provided in
the record a substantial receiver study and a comprehensive critique of the
other receiver studies. The conclusion of those studies is that there will be
significant unacceptable interference due to the introduction of LPFM service.
This interference will affect the American public's ability to receive
full-power station signals. The FCC claims to have analyzed the record and
concluded the risk of interference is minimal. However, in the FCC's Report and
Order, there is virtually no discussion of NAB's expert critique of the OET
study and no attempt to quantify the interference potential in order to properly
weigh this against the alleged benefit.
The conclusions reached by the
FCC were made by discounting the interference suffered by less expensive radios.
In the Report and Order, the FCC recognized that poorer quality radios may
experience some additional interference. However, it believes that its decisions
"should not be constrained solely by the performance limitations of lower cost
radios any more than we should use those radios to redefine existing FM radio
service."21 This decision is an abrupt reversal of the FCC's Notice, where it
assumed current radios had improved at rejecting interference. In the face of
evidence that the typical radio instead performs worse, the FCC simply decided
to ignore the evidence.
Additionally, NAB provided evidence that showed
the threat of interference to LPFM stations from full-power stations.
We showed that it is possible that if a 100 watt LPFM station
were placed on a third-adjacent channel of a Class B FM station one mile from
each other, 72.9% of the LPFM station's service area would face interference.22
Further, the FCC itself has not provided any protection from LPFM stations in
this regard. The LPFM stations will be allowed to accept more interference from
full-power stations (and other LPFM stations) than previously proposed by the
FCC. These facts are significant costs that were not considered in the FCC's
analysis.
The second cost that the FCC ignored is in the area of
economics. NAB provided evidence to the FCC in this area concluding that the
economic harms to both existing broadcasters in their efforts to serve their
listeners and the economic costs to LPFM stations should preclude the FCC from
moving forward on its proposal. 23 The study concludes that the limited benefit
of the "narrowcast" programming that will be provided by LPFM stations is likely
to be low quality and of limited value, making the viability of LPFM stations
doubtful. Additionally, the introduction of LPFM service will cause interference
to full-power stations and this interference translates into audience losses
that results in a decrease in local service programming by full-power stations.
This result has strong support because the FCC has been down this road before.
In the early 1980's, the FCC adopted a plan to drop in thousands of new
fullpower stations to provide service to underserved communities.24 In the eight
years following, nearly 2,500 stations were added. The effect of this was
disastrous on the radio industry. In fact, the FCC was forced to modify its
ownership rules to provide increased efficiencies to heal the radio marketplace.
Congress, then, provided further deregulation with the Telecommunications Act of
1996.
The FCC chose to ignore this evidence claiming it does not need to
consider such arguments because, as Chairman Kennard stated, "it is not the
business of the FCC to pick winners and losers."25 However, as Commissioner
Michael Powell aptly points out, "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."26
Ironically, it is likely that the most harm from the LPFM service will
come to the independently owned, "morn-and-pop" stations in the smaller markets
that have fought to keep their heads above water and provide quality local
programming. In many of these instances, these stations are minority owned
stations. Even in the absence of the interference potential, the threat of new
voices - even if noncommercial - could reduce the ability of these stations to
maintain the level of service now provided. If that service changes, it is the
listeners who will suffer due to the inability of LPFM stations to fill in the
gap of programming quality and quantity.
Finally, the FCC virtually
ignored the issue of enforcement as a factor in its analysis. With its LPFM
service, the FCC expects to license over 1,000 new stations. These stations are
subject to many - but not all - of the same regulations as full-power
broadcasters. However, the FCC has not proposed any plans as to how it expects
to enforce its rules on this new amateur radio service where the licensees will
either be those who have never operated a broadcast station or did so illegally.
The fact is that the FCC is operating with greatly reduced Field Office staff.
For the past few years, these offices have diligently attempted to shut down
illegal pirate broadcasters, in addition to enforcing the rules for all other
FCC licensees. The FCC apparently has no plans to devote more resources to
enforcement, and thus seems to be relying only on the good faith of
inexperienced LPFM operators to ensure that the rules are followed.
These amateur operators will not possess the same incentive to abide by
the rules as full-power broadcasters because they do not have the same
investment in the license. While the FCC may think that it has no reason to
believe that these amateur operators will not follow the rules, the fact is that
the LPFM movement does have roots in pirate broadcasting. The FCC does not have
the ability to control thousands of new LPFM stations and continue to shut down
pirates. NAB believes that part of the FCC's mandate to provide efficient use of
the spectrum also includes the ability to maintain that use through effective
enforcement. That element is severely lacking in this case and must be
considered in any analysis.
CONCLUSION
Mr. Chairman, NAB is
encouraged by the Subcommittee's interest in the LPFM issue. The FCC has taken
steps that threaten the spectrum integrity of the FM band without justifiable
cause. NAB also supports HR. 3439, a measure that would turn back the clock and
undo the FCC action before real harm results. The FCC has rushed to judgment by
substituting social engineering for rational, prudent policy making by adopting
a service that lacks any benefit that outweighs the substantial costs that will
be produced. Once again, we would like to express on behalf of NAB, its
appreciation for the opportunity to testify before the members of the House
Telecommunications Subcommittee today.
FOOTNOTES:
1 Report and
Order in MM Docket No. 99-25, Creation of a Low Power Radio Service, adopted
January 20, 2000; released January 27, 2000.
2 See Separate Statement of
Chairman William E. Kennard, Re: Creation of a Low Power Radio Service (MM
99-25) at 2.
3 Currently there are almost 8.000 full-power FM radio
stations operating in the United States.
4 In addition to NAB's receiver
study, the Consumer Electronics Manufacturers Association (CEMA, now the
Consumer Electronics Association), National Public Radio and the Corporation for
Public Broadcasting conducted and submitted a study. Additionally, the National
Lawyers Guild and various LPFM proponents conducted their own receiver study.
5 A copy of the NAB's comments and reply comments has been attached to
this testimony for incorporation into the record of this hearing.
6 NAB
tested eight car radios, five home stereos, five portable/"boom boxes", five
personal/"Walkman" radios and five clock radios.
7 Attached to these
written comments as Appendix A is a brief comparison of the four receiver
studies comparing the number of radios tested, the types of radio tested and the
test methodology.
8 Our study used the ITU Recommendation 641,
"Determination of Radio- Frequency Protection Ratios For Frequency-Modulated
Sound Broadcasting," 1986, Geneva, Switzerland. This ITU standard sets a -50 dB
signal-to-noise ratio as acceptable reception. On a subjective listening chart,
perceived impairment from interference at this level is rated at "slightly
annoying." Any reception levels produced by a radio above this number indicated
the radio could reject the adjacent channel signal, any number below this level
indicated the listener would receive an unacceptable amount of interference. It
should be noted that some of the tested radios did not perform at this level
without injecting additional interference. In those cases, we determined that
unacceptable interference occurred when the radio's reception dropped 5 dB from
its initial level. NAB supported this alternative interference criteria method
in our Comments. Although the FCC criticized this aspect of our study, if we had
not used the alternative criteria, the results would have shown even greater
harm from the introduction of LPFM.
9 Nee NAB Comments. Vol. 2.
10 See NAB Comments, Vol. 3, at 20.
11 See NAB Reply Comments at
Appendix A and B.
12 See NAB Reply Comments at Appendix B.
13
See NAB Reply Comments at Appendix B.
14 See Separate Statement of
Commissioner Michael Powell at 3.
15 See Separate Statement of
Commissioner Harold Furchtgott-Roth at 1.
16 Report and Order in MM
Docket No. 99-25 at '" 98.
17 See Format Availability After
Consolidation, NAB Comments, Vol. 1, Attachment B.
18 See Separate
Statement of Commissioner Gloria Tristani, Re: Creation of a Low Power Radio
Service (MM 99-25). Commissioner Tristani believes that LPFM is "a partial
antidote the negative effects of consolidation."
19 See Independent
Radio Voices in Radio Markets, NAB Comments. Vol. 1, Attachment A.
20
Report and Order at 6 2.
21 Report arid Order at Para. 98.
22
See NAB Comments. Vol. 1 at 23.
23 See LPFM: The Threat to Consumer
Welfare, NAB Comments. Vol. 1, Attachment C.
24 Modification of FM
Broadcast Station Rules to Increase the Availability of Commercial FM Broadcast
Assignments, 94 FCC 2d 152 (1983).
25 See Separate Statement of Chairman
William E. Kennard at 1. 26 See Separate Statement of Commissioner Michael
Powell at 2.
END
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