SBCA SAYS NORTHPOINT DECISION DOESN'T REFLECT TEST RESULTS

MDS America supported FCC decision, CEO Kirk Kirkpatrick calling it huge win” for rural areas. He said ruling would encourage “most efficient and rapid introduction of new technology. Satellite Receivers is “prepared to participate” in FCC licensing process and is “looking forward to opportunity” Commission ruling provides, CEO David Charles said, and “our only concern” is participation of DBS operators. They will “attempt to stonewall the process by artificially increasing the license cost or by acquiring licenses and not implementing” service, he said.

Despite industry opinions that Commission chose middle ground with decision, FCC is preparing to move forward with auction. Companies involved are waiting for final order that include service rules before developing plans for next stage of rulemaking. Decision could have major impact on DirecTV, EchoStar, MDS America, Northpoint, Pegasus and Satellite Receivers along with yet-to-be-named wireless and local cable companies that might be eligible to bid on spectrum in Component Economic Areas (CEAs) being used in geographic licensing scheme.

DirecTV supports auction, but hadn’t decided whether it would participate in competitive bidding for geographic license, spokesman said: “We are considering our options.” EchoStar also supports FCC auction but, like DirecTV, stopped short of saying whether it would be involved until it could read final text. However, interference remains major issue for DBS companies. SBCA promised to continue to “work to protect interests” of DBS customers.

That also was major concern for Comr. Martin, who said licensing approach adopted by Commission “sanctions unlimited interference” to some DBS subscribers and “places too much of the burden” of MVDDS development on “backs of DBS industry.” Adoption of technical requirements that limit DBS unavailability to 10% is unacceptable because it will result in double or triple those levels in top 32 TV markets, according to Commission study. “In fact, there is no practical limit on how much more outage may permissibly result.”

Commission approved auction in 3-1 vote, with Chmn. Powell joining Comrs. Abernathy and Martin in majority. Comr. Copps, lone dissenter, said “the auction was a very important piece” of rulemaking: “Auctions aren’t perfect, but we believe they can be designed” to support goals of Commission. He supported Northpoint position that it should be protected on auction. However, he said he would have supported auction if it had established guidelines that protected minority and local ownership, rural service, diversity and must-carry rules. Copps said satellite companies should have been banned from auction along with dominant cable operators. Commission “sacrificed these public interest mandates to the theory than unconstrained auction” would provide best solution, he said. “Given the choice between a bad auction and no auction, I must choose no auction.”

FCC “cast overboard” must-carry obligations, Copps said. “I believe that the combination of foreclosing” must-carry obligation and “allowing DBS companies to hold MVDDS licenses creates an opportunity to evade the will of Congress.” He said ruling could give DBS operators “technical and legal means” to overturn must-carry. SBCA has filed constitutional challenge to must-carry rules at Supreme Court. Northpoint remains committed to must-carry, Vp Toni Bush said, but geographic licensing process that uses CEAs probably will “discourage people from carrying local broadcasts.” CEAs are much smaller than DMAs, she said, and Commission decision isn’t “consistent with goal of trying to promote carriage of local broadcasters.” Details on auction and reasons for using CEAs instead of DMAs will be in final order, FCC source said.

FCC decision isn’t relevant to ICO’s pending petition for flexibility to provide ancillary terrestrial service, company said Wed. ICO proposal differs in 4 basic ways: (1) ICO’s service is integral part of satellite offering, not standalone terrestrial service. (2) Proposed system is global nongeostationary mobile satellite service, not geostationary fixed satellite service. (3) ICO end users are mobile, not fixed. (4) ICO operates in international mobile satellite service (MSS) allocation, not domestic DBS allocation. “A Northpoint-type sharing scenario has neither been proposed nor found to be possible for MSS.” ICO said MSS licensees weren’t asking FCC to authorize “wholly separate services, as it has done in Northpoint ruling, but to use existing spectrum allocations in “most efficient and flexible way.”