LPFM Executive Summary

EXECUTIVE SUMMARY FROM
THE LEGAL DEPARTMENT

Executive Summary

of
NAB's Comments in MM Docket 99-25
(Creation of a Low Power FM Radio Service)

The National Association of Broadcasters ("NAB") submits these Comments in response to the Notice of Proposed Rule Making in MM Docket 99-25 (Creation of a Low Power Radio Service). NAB opposes the proposals in the Notice because, among other things, we believe the Commission’s assumptions regarding the need for such a service and its assumptions regarding technical issues are unfounded.

First, the Commission has assumed that consolidation has decreased independent voices in the industry, made entry harder and decreased diversity. NAB shows that consolidation has not eliminated independent voices. In many markets (including major markets), substantial portions of stations remain standalones or duopolies. There is no indication that independent voices have been eliminated after the Telecommunications Act of 1996.

Further, NAB's study of format diversity proves that since the Telecommunications Act, the number of formats has continued to increase. Thus, consolidation has lead to more diverse service to the public, not less as the Commission hypothesized. The Commission also dismissed other options, such as Internet radio, too quickly in its quest to provide for more radio stations. Internet radio is a viable option for individuals and groups to be heard. Internet usage and access has been increasing daily. Thus, there are other alternatives to provide "voices" without degrading existing radio services.

Most importantly, recognizing that under existing standards, very few LPFM stations could be located in large markets the Commission assumed that receivers have improved to the point that radios can reject 2nd and 3rd adjacent channel interference, and proposed to eliminate these protections. It based this assumption on unsubstantiated comments of LPFM supporters and without having conducted any receiver testing on its own. NAB's receiver study proves that the majority of receivers do not perform even as well as the Commission's existing standards assume. Shoehorning LPFM stations into existing markets will create new interference for millions of listeners and reduce the quality of radio service. Further, these LPFM stations would themselves be subject to interference from existing stations, and NAB’s receiver studies show that their service areas would in fact be far smaller than the Commission supposed. All five Commissioners have committed that they would not adopt LPFM if it would create interference to existing radio service. Thus, the Commission cannot eliminate 2nd and 3rd adjacent channel protections. Without eliminating these protections, the feasibility of LPFM is eliminated in the medium and large markets.

The Commission also did not consider the impact of its proposals on the transition to In-Band, On Channel Digital Audio Broadcasting ("IBOC DAB"). The Commission must establish an IBOC standard and implement it before any LPFM service is established.

The proposal in the Notice to authorize low power service also is contrary to decades of Commission decisions which concluded that lower powered stations are an inefficient use of spectrum. The Notice fails to even recognize these decisions, much less suggest any reasons why they are no longer valid. As the courts have repeatedly held, agencies may not depart from established precedents without a cogent explanation of the reasons for their change in views.

In addition to the technical issues, the LPFM proposal will undermine the ability of stations to serve the public. The reasons behind the LPFM proposal mirror those of Docket 80-90, where the Commission changed its rules to add thousands of new stations. It was Docket 80-90 that led to relaxation of the ownership rules first by the Commission and ultimately by Congress. The consolidation the Commission is attempting to combat is a direct result of its prior actions in adding new stations.

An economic study from Strategic Policy Research ("SPR") shows that local stations will not be able to continue to offer quality local programming if LPFM is established. SPR concludes that the result of the LPFM proposal from an economic viewpoint will lead to a decrease in service from full power stations. SPR also concludes that LPFM stations likely would not be able to provide any useful service to communities.

The Commission also failed to consider the impact of its LPFM proposal on existing reading services for the sight-impaired. These services depend on subcarriers, and they could be wiped out if LPFM is implemented. Additionally, the Commission would have to grandfather all existing translators and boosters for both the LP1000 and LP100 service in order to ensure that the service provided by these stations – and depended on by listeners – is not interrupted. Doing so would reduce the number of LPFM stations that could be allocated in larger markets to almost nothing.

NAB also addresses the implementation issues faced by the Commission. The magnitude of the Commission’s proposal should place enforcement at the top of the issues to be considered before implementation. The Commission proposes to drop in hundreds of LPFM stations without regard to its own ability to monitor and enforce its regulations. It is one thing to establish rules, and quite another to carry them out. The task of regulating thousands of full-power stations, shutting down pirate stations and controlling hundreds – or thousands – of low power stations could become impossible to carry out. Further, it is a job that only can be done by the Commission, and not any other entity. The Commission should not consider authorizing LPFM unless and until it has adopted an enforcement plan and identified the additional resources necessary to carry it out.

The Commission cannot implement its proposed ownership restrictions for LPFM. There is no basis for barring broadcasters from holding LPFM licenses. Further, the Telecommunications Act of 1996 applies to any broadcast service, whether it existed at the time of the Act’s implementation or not. The Act’s provisions apply to "commercial radio stations," and do not distinguish between power levels. Thus, there is no basis to conclude that the liberalized local and national ownership provisions of the Act would not apply to LPFM merely because these stations operate at lower power. Also, the Commission cannot restrict the ownership levels for LPFM as contemplated in the Notice, if an LPFM service is established. In fact, under the Act’s provisions, adding new commercial voices – even LPFM stations – would increase the number of voices in each market. The result would be further opportunities for efficiencies through consolidation in the radio industry. This would be a counter intuitive effect from the Commission’s perspective.

The Commission also proposes to grant amnesty to pirate broadcasters who voluntarily ceased broadcasting after the LPFM proposal was adopted. Pirate broadcasters should not be afforded any amnesty with regard to their character qualifications as potential applicants for an FCC broadcast license.

If established, NAB believes that LPFM stations must follow the same regulations as full power stations. There should be no distinction in regulation between low power and full power stations. An FM station is an FM station no matter what power since they will not appear to listeners to be different. Separate regulatory schemes will confuse the public, burden the Commission and result in inequitable regulatory burdens.

In proposing the LPFM service, the Commission believes it can provide opportunities to a wide variety of individuals and groups. In reality, there is no guarantee that the goals of the Commission will be realized. Any commercial broadcast license must be auctioned pursuant to the Balanced Budget Act of 1997. Further, the spectrum limitations – even under the Commission’s own Spectrum Availability Analysis – show that virtually no LPFM stations of any size could be available in most of the urban markets. In the smaller markets, there is already spectrum available without altering any protection criteria.

Finally, the Commission asked for comment on establishing a microradio service. In addition to the fact that microradio and LP100 stations are inherently inefficient uses of the spectrum, a microradio service would exacerbate other issues raised by the LPFM proposal. A microradio service must not be considered.

The Commission’s LPFM proposal rests on a series of assumptions about the radio marketplace, about the technical standards needed for interference-free service, and about the legal and economic environment for radio service. NAB’s comments examine each of these suppositions and demonstrate that they are without foundation. There is no need for LPFM service; LPFM would create vast amounts of new interference and risk the radio industry’s transition to digital; LPFM would result in a net loss of service to the public; and LPFM stations must be subject to the same regulatory regime as other stations. Since the assumptions supporting the LPFM proposal are not valid, the Commission should not authorize a low power radio service.

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NAB's Counsel Memos are intended to serve as a source of general information on legal issues of interest to the broadcast industry. Broadcasters seeking information on how the principles discussed in a Counsel Memo apply to their specific circumstances should seek the advice of their own attorneys.

Updated: 8/99