The Honorable William Kennard
Chairman
Federal Communications Commission
1919 M Street, N.W.
Washington, D.C. 20554
RE: Definition of an Over-the-Air Signal of Grade B Intensity for Purposes of the Satellite Home Viewer Act, RM No. 98-9335
Dear Chairman Kennard:
I am writing today to express support for expedited review by the Commission of the impact of a federal court's decision to issue a preliminary injunction that will result in the nationwide termination of the satellite delivery of network programming to millions of consumers.(1) At issue is the meaning of the phrase "over-the-air signal of grade B intensity" in the Satellite Home Viewer Act, (2) which determines whether a consumer is eligible to receive network programming via satellite. It is my understanding that the court construed the statute without the benefit of guidance from the Commission and the effect may prove to be detrimental to competition and consumer choice.
The statutory language of the Satellite Home Viewer Act makes it clear that the Commission's Rules are to give meaning to this key phrase. The Act permits direct broadcast satellite (DBS) service providers and other satellite carriers to deliver network programming only to those consumers residing in an "unserved household." With regard to a particular network, the Act defines "unserved household" to mean a household that "cannot receive, through use of a conventional outdoor rooftop receiving antenna, an over-the-air signal of grade B intensity (as defined by the Federal Communications Commission)" of a local network affiliate, and in the 90 days prior to subscribing to the satellite service, has not subscribed to a cable service that carries the local network affiliate.(3) The legislative history reemphasizes the Commission's paramount role in defining this key phrase by referring specifically to the Commission's field strength contour regulations, which currently only define Grade A and Grade B contours for purposes of tower siting and the multiple ownership rules, but does not provide assurance of actual signal quality to the viewer.(4)
On the other hand, the federal court, upon the recommendations of a magistrate judge, has selected a different methodology in ordering the termination of satellite delivery of network programming. The court's order relies on the use of Longley-Rice propagation maps, which among other things, provide for signal strength variations on the basis of irregular terrain.(5) This methodology, if implemented, would in many cases appear to afford a local network affiliate with copyright protection in locations beyond which the Commission would actually protect their signal from interference.(6)
The National Rural Telecommunications Cooperative (NRTC) in its Emergency Petition for Rulemaking has pointed out the many flaws of either of these approaches to defining "an over-the-air signal of grade B intensity."(7) In the alternative, it suggests that the Commission adopt a new definition for purposes of the Act that would require "a geographic area in which 100 percent of the population, using readily available and affordable equipment, receives over-the-air coverage by network affiliates 100 percent of the time."(8)
While the National Telecommunications and Information Administration (NTIA) takes no position at this time on the specific definition that the Commission should adopt, it rapidly becomes clear that the definition is key to whether many consumers will have real choice of programming providers. NTIA's Institute for Telecommunication Sciences (ITS) has provided sample data on the number of households that could be affected by adoption of either the Commission's current Grade B contour rules (47 C.F.R. § 73.683) or the court-ordered Longley-Rice method.(9) In addition, ITS also provided data on the number of affected households if the Commission's Grade B contour was superimposed upon the Longley-Rice maps.(10) This "hybrid" methodology takes into consideration irregular terrain, which could prevent consumers from actual receipt of an over-the-air signal of sufficient strength, without extending copyright protection beyond current interference protection under Commission rules.
The results of the ITS sample study of network affiliates in the top 100 DMAs are astounding.(11) Depending upon which method ITS employed to determine affected households in the sample, there are as many as 9 million households (almost 10 percent of American television households) that would be rendered ineligible to receive satellite-delivered network programming.(12) Although other methodologies could render differing numbers, the wide variations in results derived from the three accepted methods used by ITS confirm the conclusion that the definition of "an over-the-air signal of grade B intensity"can have an impact on competition and consumer choice.
This Administration has strongly supported the development of robust competition in the multichannel video programming marketplace as the way to bring greater viewing choices, lower prices and better services to consumers. As the Commission has recognized, DBS is the most widely available alternative to cable television, but that impediments to carriage of local broadcast signals reduce the ability of DBS to compete effectively with cable.(13) While copyright law changes are required to permit a DBS provider to provide network programming to all consumers, the definition of "an over-the-air signal of grade B intensity" can also have a marked effect on the ability of DBS service to compete for a significant number of households.
For these reasons, NTIA urges the Commission to review the court's decision and to undertake a rulemaking to define "over-the-air signal of grade B intensity" for purposes of the Satellite Home Viewer Act that will best promote competition and consumer choice. Thank you for your consideration of these views.
Sincerely,
Larry Irving
cc: The Honorable Susan Ness
The Honorable Harold Furchtgott-Roth
The Honorable Michael Powell
The Honorable Gloria Tristani
ENDNOTES
1. See CBS Inc., et al. v. PrimeTime 24 Joint Venture, Case No. 96-3650-CIV-NESBITT (S.D. Fla. July 10, 1998).
2. Satellite Home Viewer Act of 1994, Pub. L. No. 103-369, 108 Stat. 3477 (1994) (codified at 17 U.S.C. § 119).
3. 17 U.S.C. § 119(d)(10)(emphasis added).
4. See H.R. Rep. No. 100-887 (Part I), 100th Cong., 2d Sess. 26, 7 U.S.C.C.A.N. 5611, 5629 (1988)(citing 47 C.F.R. § 73.683(a)).
5. See Order Affirming in Part and Reversing in Part Magistrate Judge Johnson's Report and Recommendation, CBS, Inc. et al. v. PrimeTime 24 Joint Venture, Case No. 96-3650-CIV-NESBITT, at 26 (S.D. Fla. May 13, 1998)(citing 47 C.F.R. § 73.686); see also Supplemental Order Granting Plaintiff's Motion for Preliminary Injunction, CBS, Inc. et al. v. PrimeTime 24 Joint Venture, Case No. 96-3650-CIV-NESBITT (S.D. Fla. July 10, 1998).
6. See supra discussion of preliminary study by NTIA's Institute for Telecommunication Sciences.
7. See NRTC Emergency Petition at ¶¶ 7-10, 18, 19.
9. See enclosed table entitled "Network Affiliate Sample from the Top 100 DMAs". ITS took a sample of one network affiliate station from each of the top 100 Neilsen Media Research Designated Market Areas (DMAs) ranked by number of households. This sample reflects significant geographic diversity, communities of various sizes, UHF and VHF stations, varying channel numbers, and equal numbers of affiliates of each of the four networks.
10. This methodology is also similar to the hybrid model adopted by the Commission so that digital television allotments would, to the maximum extent possible, replicate existing NTSC service areas. See Advanced Television Systems and Their Impact upon the Existing Television Broadcast Service, Sixth Report and Order, MM Dkt. No. 87-268, 12 F.C.C. Rcd.14588, ¶¶ 12-33 (1997).
11. The ITS sample study is intended for illustrative purposes only.
12. See enclosed table entitled "Network Affiliate Sample from the Top 100 DMAs." ITS maps plotting the results of this sample graphically reveal the widely varying results. See enclosed representing a selection of the FCC contour, Longley-Rice contour, and "hybrid" contour of a single network affiliate from the top 10, middle 10 and bottom 10 of the top 100 DMAs. Maps for all of the sampled stations plus some additional network affiliates in the top 100 DMAs are available electronically at http://flattop.its.bldrdoc.gov/gifs_ntia/gifindex.htm.
13. See Fourth Annual Report, Annual Assessment of the Status of Competition in Markets for the Delivery of Video Programming, 13 F.C.C. Rcd. 1034, ¶¶ 11, 58 (1998).