Fisher Wayland Cooper Leader & Zaragoza L.L.P.

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1 Fisher Wayland Cooper Leader & Zaragoza L.L.P. Memorandum to Broadcast Clients 2001 Pennsylvania Avenue, N.W. Suite 400 Washington, DC Telephone (202) Facsimile (202) BC No Website: December 21, 1999 IN THIS ISSUE < the application of television stations= public interest obligations to the Anew flexibility FCC Issues Notice of Inquiry on the Public Interest Standard for DTV Stations 1 Commission Acts in Response to the Community Broadcasters Protection Act of TV Stations Should Be Wary of Bulk SHVA Waiver Requests 2 Delay in DAB Development Likely 3 New FM Allotments 4 Firm Notes 4 FCC Issues Notice of Inquiry on the Public Interest Standard for DTV Stations The Commission has issued a Notice of Inquiry seeking comments on whether the public interest standard to which television stations are held accountable should be revised as stations proceed in their transition to digital broadcasting. The Notice has been planned since the FCC=s April 1997 DTV order, which stated that the Commission would later examine the adequacy of the existing public interest standard as applied to DTV stations. The Notice is extremely broad in its approach. The Commission seeks comments in the following areas: both surprised and disturbed by many aspects.... First, the majority has crafted a and capabilities@ of DTV, such as multiple channel transmission; < how TV stations can best serve their local communities Ain terms of providing their viewers information on their public interest activities, and using digital technology to provide emergency information in new ways@; < how DTV stations can Aincrease access to programming by people with disabilities, and further the longstanding legislative and regulatory goals of diversity@; and < whether DTV stations can Aenhance the quality of political discourse through uses of the airwaves for political issues and debate.@ The four areas of inquiry, already dubbed Athe four Ds@ by FCC Chairman William Kennard, Adigital, disaster, disability & diversity, and discourse,@ raise the specter of a public interest standard that includes many elements not normally associated with the standard in the history of broadcast regulation. Critics of the public interest standard frequently rail against its lack of specificity, claiming that its ambiguity makes it meaningless. Defenders, of course, counter that the broad outlines of the standard are what has made it flexible and enduring. Commissioner Harold Furchtgott-Roth, who dissented in part, highlighted a number of aspects of the Notice that should be of concern to broadcasters. He said that he was document of vast breadth, often musing about public interest mandates that have no

2 Fisher Wayland Cooper Leader & Zaragoza L.L.P. BC No December 21, 1999 Page 2 discernible nexus to the transition to digital technology. Rather, it appears that special interests have seized on this opportunity to wring as many concessions as possible out of broadcasters. For example, the [Notice] considers proposals that broadcasters fund solutions to such diverse problems as minority access to capital and the quality of our political discourse. I believe even suggesting such broad policies in this deregulatory and competitive age is pure folly.... Second, this [Notice] is remarkably out-of-step with today=s communications marketplace. The Notice seems to reflect a vintage 1960s= big-government proregulation philosophy based on the fundamental factual premise that broadcast television is the sole, dominant media outlet. Yet the new millennium is a vastly different time. The Commission=s rules should be moving towards deregulation, not further burdening the emergence of one nascent mass media competitor: digital television (DTV). Commissioner Michael Powell, while concurring in the adoption of the Notice, nonetheless expressed his concern, echoing Commissioner Furchtgott-Roth, that Aas a fundamental matter, I question why the mere use of a digital medium rather than an analog one justifies new public interest obligations, particularly ones of the breadth and scope envisioned in this [Notice].@ This proceeding is one in which broadcasters must make their voices heard early and clearly. At the time of publication of this Memorandum, the full text of the Notice had not yet been released, so comment and reply comment deadlines are not yet available. We will, of course, report that information when it is known. For more information on the issues presented by the Notice, as well as assistance in the preparation and filing of comments and reply comments, please contact the firm. Commission Acts in Response to the Community Broadcasters Protection Act of 1999 Responding to the November 29 enactment of the Community Broadcasters Protection Act of 1999 (CBPA), the FCC has announced that it is suspending until further notice the filing of comments in its rulemaking considering the creation of a Class A TV service (MM Docket ). The CBPA directs the Commission to create such a service, and to establish regulations for the service within 120 days of the date of enactment of the CBPA (November 29, 1999). The CBPA also directs the FCC to send a notice to all low power television (LPTV) licensees by December 29, 1999 that describes the process under the CBPA for designation as a Class A television station. The CBPA further provides that by January 29, 2000, LPTV stations that intend to seek Class A designation must submit to the Commission a AStatement of Eligibility for Class A Low Power Television Station Status.@ Copies of that one-page FCC form are being sent to LPTV licensees by the FCC this month. LPTV licensees who do not receive a notice and a form from the FCC should contact the firm immediately for assistance. Under the CBPA, Aabsent a material deficiency,@ the FCC is directed to certify those LPTV licensees that indicate they are eligible for Class A status. Such certified licensees must then file an application for Class A status within 30 days after the FCC adopts final rules for the service. The Commission will then have 30 days to grant acceptable applications. The enactment of the CBPA clearly will greatly narrow the scope of comments in the FCC=s rulemaking, and it is likely that the Commission will issue a Further Notice of Proposed Rulemaking framing the remaining issues within the next few months. For more information on the impact of the CBPA, please contact the firm. TV Stations Should Be Wary of Bulk SHVA Waiver Requests The NAB has reported that many television stations have been receiving bulk waiver requests from EchoStar, seeking to allow subscribers to continue to receive network programming by satellite from EchoStar. The waiver requests in some cases include lists of hundreds and even thousands of subscribers, and have been prompted by the recent legislative changes to the Satellite Home Viewer Act (SHVA). Under the SHVA, certain waiver requests must be acted on by television stations within 30 days of receipt. However, it is unclear if the bulk requests

3 Fisher Wayland Cooper Leader & Zaragoza L.L.P. BC No December 21, 1999 Page 3 being made by EchoStar fall within this statutory The issues related to the SHVA are very complex, and we urge our television station clients who receive such waiver requests from EchoStar or any other satellite carrier to immediately contact the firm for advice and assistance in protecting their legal rights. language. IMPORTANT DATES Delay in DAB Development Likely Proponents of in-band, on-channel (IBOC) digital audio broadcasting (DAB) were supposed to have provided laboratory and field testing data to the National Radio Systems Committee (NRSC) subcommittee considering DAB by December 15, The material to be provided was supposed to demonstrate that IBOC service will be of a significantly higher quality than existing analog service. The firm has learned that one of the proponents, Lucent, has not provided the data and has cited the time constraints imposed by the Commission=s DAB rulemaking as the reason. This development will likely delay the development of DAB, although it is not possible at this time to say with any certainty by how long. In addition, another of the three IBOC proponents, Digital Radio Express, has decided to withdraw its proposal and join the third proponent, USA Digital Radio (USADR). USADR filed an extensive description of its laboratory and field testing data on December 15, in which it claims excellent results, including Ano audible interference@ to the host analog signal, co-channel, or adjacent channel stations. Whether IBOC DAB will work in real world conditions is an important question. Many in the industry believe that, as with all new technologies, laboratory and even field tests, however broadly designed, are often not the same as when the technology is actually tested in its intended environment. That said, the NRSC program is currently in the first phase of a contemplated two-phase process. In phase one, the proponents will attempt to demonstrate that IBOC DAB is substantially better than analog service. In phase two, independent, outside evaluators will first verify the accuracy of the results presented by the proponents in phase one, and then also seek to find differences between the competing systems, and determine which system best performs in various situations.

4 Fisher Wayland Cooper Leader & Zaragoza L.L.P. BC No December 21, 1999 Page 4 It will certainly take some time for these issues to be adequately explored and addressed. We will, of course, report additional developments as they occur. Comments in response to the FCC=s Notice of Proposed Rulemaking on DAB are due by January 24, 2000, and reply comments are due by February 22, For more information on the status of DAB development, including assistance in the preparation and filing of comments and reply comments in response to the Notice, please contact the firm. New FM Allotments The following new FM allotments have been announced recently by the FCC. Due to the current freeze on the filing of broadcast applications, however, no filing windows for these allotments have been opened. It is anticipated that filing windows will be opened once the Commission has lifted the freeze. For more information, please contact any of the firm=s attorneys. Community Iowa Park, TX Centerville, TX Hunt, TX Van Alstyne, TX Thayne, WY Marbleton, WY Granite, OK 260A Firm Notes Channel 242A 278A 260A 290C1 239A 282C3 The firm would like to take this opportunity to thank our clients for the strong, continuing relationship it has had with you over the past year, and extends its best wishes for a happy holiday season and an even better year ahead in If you have suggestions on ways that the firm can improve its service to you, please contact any of the attorneys. The firm is pleased to announce the recent arrival of two new associates, Tony Lin and Michael Spielman. Tony completed his bachelor of arts in economics and mathematics at the University of Virginia in 1991, received his law degree, with high distinction, from the University of Iowa College of Law in 1995, and completed his master=s degree and Ph.D. in economics at the University of Iowa in 1996 and 1997, respectively. He was a McDermott Scholar at the University of Virginia from 1987 to 1991, a University of Iowa Foundation Fellow from 1991 to 1992, and a Law Opportunity Fellow 1992 to While in law school, Tony wrote for and was a member of the Journal of Corporation Law from 1993 to He was a lecturer in economics at Southern Illinois University from 1997 to 1998, and is the author of Distinguishing Kodak Lock-in and Franchise Lock-in, 23 So. Ill. U. L. J. 87 (1998). Tony was in private communications law practice for a year prior to becoming associated with the firm. He is admitted to the Iowa and District of Columbia bars, and is in the firm=s communications practice. His direct dial telephone number is , and his address is tlin@fwclz.com. Michael completed his bachelor of arts in political science at Washington University in 1991, received his law degree, magna cum laude, and his M.B.A. from Case Western Reserve University in 1995, and his LL.M. in Taxation from New York University School of Law in He became a member of the Order of the Coif and Beta Gamma Sigma in 1995, and of Beta Alpha Psi in Michael served as Attorney-Advisor to Judge Renato Beghe of the United States Tax Court from 1998 to He was International Tax Counsel at MCI WorldCom in Michael is the author of Whole Loan Repurchase Agreements: An Assessment of Investment Transaction Risks in Light of Continuing Legal Uncertainty, 99 Commercial Law Journal 476 (1994). He is admitted to the Connecticut, New York, District of Columbia and United States Tax Court bars, and is in the firm=s taxation, corporate and business practices. His direct dial telephone number is , and his address is mspielman@fwclz.com. Fisher Wayland Cooper Leader & Zaragoza L.L.P. Editor: Managing Editor and Principal Writer: Scott R. Flick, Esq. Ricky A. Pursley Memorandum to Broadcast Clients is published by the law firm of Fisher Wayland Cooper Leader & Zaragoza L.L.P., Suite 400, 2001 Pennsylvania Avenue, N.W., Washington, D.C , telephone , facsimile , fwclz@fwclz.com, Website: The Memorandum is a service to the firm's clients and friends, and is intended to provide general information only. The contents should not be construed as legal or business advice. Legal and business advice should always be obtained for specific facts and circumstances as the need arises. For more information on any of the subjects discussed in the Memorandum, please contact the Editor or any of the firm's

5 Fisher Wayland Cooper Leader & Zaragoza L.L.P. BC No December 21, 1999 Page 5 other attorneys. Copyright , Fisher Wayland Cooper Leader & Zaragoza L.L.P. All rights reserved. RAP122199