Spectrum management initiative may impact broadcasters

The Commission's Spectrum Task Force has taken its first stab at rewriting the FCC's spectrum policies, releasing its report in late November. The report, and the supporting working group studies, advocate a revolutionary approach to spectrum management and contain proposals that may impact negatively on television stations.

The task force recommends that the Commission move away from the current “command and control” regulatory scheme, where the Commission specifies the type of services that may be offered by its licensees, and instead utilize a new model under which spectrum owners would have flexibility in terms of the services they provide. This new model, however, would not apply in the area of broadcasting in light of the public interest obligations imposed by the Communications Act. Indeed, the task force wants to dilute TV broadcasters' spectrum rights even as it denies them the spectrum use flexibility it recommends for other services. For instance, the report suggests that in high-density urban areas, where spectrum demand is greatest, the Commission should consider licensing digital television stations on single frequencies but with multiple low-powered transmitters, an approach possible with DTV but not analog transmissions. The task force sees this scheme improving DTV coverage but also as a means to free up TV spectrum for new services.

An outgrowth of the task force's report is a Notice of Inquiry adopted on Dec. 11, 2002, that calls for comments on permitting new services within the TV broadcast spectrum. While any such proposal is a long way from adoption, current TV licensees must remain aware of the possibility that the pressures being felt by the FCC to accommodate new technologies may ultimately cause the erosion of their current exclusive spectrum rights.

FCC to crack down on fee delinquents

The FCC has proposed new rules that will significantly upsize the downside of trying to stiff the Commission when it comes to paying regulatory and other fees. In particular, the FCC has proposed to withhold action on any application filed by anyone who is delinquent on any filing fees, regulatory fees or other debt owed to the Commission.

The so-called “red light” rule would have a couple of safety provisions to prevent major hardship or unfairness. For example, it would not apply if the delinquent payment is being challenged or in emergency situations, nor would it apply to fines imposed by the FCC that have not been enforced in court.

Still, the proposal has some scary elements. For example, the FCC proposes to be able to rescind actions on granted applications — even years after their approval — if it discovers that it was owed money at the time the application was granted. This could substantially erode the concept of “finality.” Historically, once the Commission has acted, it has 40 days within which to rescind or modify its decision. If it does not act within that time frame, and if no one seeks reconsideration or review of the decision, then the decision becomes “final” and the parties subject to the decision can move ahead safe in the knowledge that the Commission's decision will remain the same.

But under the concept that the FCC has proposed, parties would never be able to say for sure that an action had been final because the Commission would reserve the right to rescind any action at any time in the future should it determine that money was owed by the applicant at the time of the action.

It also is unclear from the proposed rules whether the taint of delinquency for old debts can spread from the delinquent payor to innocent parties who own the station in the future. For example, if a station owner sells it without paying regulatory fees for several years, would the FCC apply the red light rule to the new owner? Clearly, aggressive enforcement efforts against payment delinquencies will likely be a source of significant confusion and uncertainty.

Harry C. Martin is an attorney with Fletcher, Heald & Hildreth PLC, Arlington, VA.