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106th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    106-384

======================================================================



 
             COMMUNITY BROADCASTERS PROTECTION ACT OF 1999

                                _______


October 14, 1999.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Mr. Bliley, from the Committee on Commerce, submitted the following

                              R E P O R T

                        [To accompany H.R. 486]

      [Including cost estimate of the Congressional Budget Office]

      The Committee on Commerce, to whom was referred the bill 
(H.R. 486) to amend the Communications Act of 1934 to require 
the Federal Communications Commission to preserve low-power 
television stations that provide community broadcasting, and 
for other purposes, having considered the same, report 
favorably thereon with an amendment and recommend that the bill 
as amended do pass.

                                CONTENTS

                                                                   Page
Amendment........................................................     2
Purpose and Summary..............................................     4
Background and Need for Legislation..............................     4
Hearings.........................................................     7
Committee Consideration..........................................     7
Committee Votes..................................................     7
Committee Oversight Findings.....................................     8
Committee on Government Reform Oversight Findings................     8
New Budget Authority, Entitlement Authority, and Tax Expenditures     8
Committee Cost Estimate..........................................     8
Congressional Budget Office Estimate.............................     8
Federal Mandates Statement.......................................    12
Advisory Committee Statement.....................................    12
Constitutional Authority Statement...............................    12
Applicability to Legislative Branch..............................    12
Section-by-Section Analysis of the Legislation...................    13
Changes in Existing Law Made by the Bill, as Reported............    15

                               Amendment

      The amendment is as follows:
      Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Community Broadcasters Protection Act 
of 1999''.

SEC. 2. FINDINGS.

  The Congress finds the following:
          (1) Since the creation of low-power television licenses by 
        the Federal Communications Commission, a small number of 
        license holders have operated their stations in a manner 
        beneficial to the public good providing broadcasting to their 
        communities that would not otherwise be available.
          (2) These low-power broadcasters have operated their stations 
        in a manner consistent with the programming objectives and 
        hours of operation of full-power broadcasters providing 
        worthwhile services to their respective communities while under 
        severe license limitations compared to their full-power 
        counterparts.
          (3) License limitations, particularly the temporary nature of 
        the license, have blocked many low-power broadcasters from 
        having access to capital, and have severely hampered their 
        ability to continue to provide quality broadcasting, 
        programming, or improvements.
          (4) The passage of the Telecommunications Act of 1996 has 
        added to the uncertainty of the future status of these stations 
        by the lack of specific provisions regarding the permanency of 
        their licenses, or their treatment during the transition to 
        high definition, digital television.
          (5) It is in the public interest to promote diversity in 
        television programming such as that currently provided by low-
        power television stations to foreign-language communities.

SEC. 3. PRESERVATION OF LOW-POWER COMMUNITY TELEVISION BROADCASTING.

  Section 336 of the Communications Act of 1934 (47 U.S.C. 336) is 
amended--
          (1) by redesignating subsections (f) and (g) as subsections 
        (g) and (h), respectively; and
          (2) by inserting after subsection (e) the following new 
        subsection:
  ``(f) Preservation of Low-Power Community Television Broadcasting.--
          ``(1) Creation of class a licenses.--
                  ``(A) Rulemaking Required.--Within 120 days after the 
                date of enactment of the Community Broadcasters 
                Protection Act of 1999, the Commission shall prescribe 
                regulations to establish a class A television license 
                to be available to licensees of qualifying low-power 
                television stations. Such regulations shall provide 
                that--
                          ``(i) the license shall be subject to the 
                        same license terms and renewal standards as the 
                        licenses for full-power television stations 
                        except as provided in this subsection; and
                          ``(ii) each such class A licensee shall be 
                        accorded primary status as a television 
                        broadcaster as long as the station continues to 
                        meet the requirements for a qualifying low-
                        power station in paragraph (2).
                  ``(B) Notice to and certification by licensees.--
                Within 30 days after the enactment of the Community 
                Broadcasters Protection Act of 1999, the Commission 
                shall send a notice to the licensees of all low-power 
                televisions licenses that describes the requirements 
                for class A designation. Within 60 days after such date 
                of enactment, licensees intending to seek class A 
                designation shall submit to the Commission a 
                certification of eligibility based on the qualification 
                requirements of this subsection. Absent a material 
                deficiency, the Commission shall grant certification of 
                eligibility to apply for class A status.
                  ``(C) Application for and award of licenses.--
                Consistent with the requirements set forth in paragraph 
                (2)(A) of this subsection, a licensee may submit an 
                application for class A designation under this 
                paragraph within 30 days after final regulations are 
                adopted pursuant to subparagraph (A) of this paragraph. 
                Except as provided in paragraphs (6) and (7), the 
                Commission shall, within 30 days after receipt of an 
                application of a licensee of a qualifying low-power 
                television station that is acceptable for filing, award 
                such a class A television station license to such 
                licensee.
                  ``(D) Resolution of technical problems.--The 
                Commission shall act to preserve the service area of 
                each low-power television licensee pending the final 
                resolution of the class A application of such licensee. 
                If, after granting certification of eligibility for a 
                class A license, technical problems arise requiring an 
                engineering solution to a full-power station's allotted 
                parameters or channel assignment in the digital 
                television Table of Allotments, the Commission shall 
                make such modifications, as necessary, to ensure 
                replication of the full-power digital television 
                applicant's service area, as provided for in section 
                73.622 of the Commission's regulations (47 C.F.R. 
                73.622).
          ``(2) Qualifying low-power television stations.--For purposes 
        of this subsection, a station is a qualifying low-power 
        television station if--
                  ``(A)(i) during the 90 days preceding the date of 
                enactment of the Community Broadcasters Protection Act 
                of 1999--
                          ``(I) such station broadcast a minimum of 18 
                        hours per day;
                          ``(II) such station broadcast an average of 
                        at least 3 hours per week of programming that 
                        was produced within the market area served by 
                        such station, or the market area served by a 
                        group of commonly controlled low-power stations 
                        that carry common local programming produced 
                        within the market area served by such 
                        group; and
                          ``(III) such station was in compliance with 
                        the Commission's requirements applicable to 
                        low-power television stations; and
                  ``(ii) from and after the date of its application for 
                a class A license, the station is in compliance with 
                the Commission's operating rules for full-power 
                television stations; or
                  ``(B) the Commission determines that the public 
                interest, convenience, and necessity would be served by 
                treating the station as a qualifying low-power 
                television station for purposes of this section, or for 
                other reasons determined by the Commission.
          ``(3) Common ownership.--No low-power television station 
        authorized as of the date of enactment of the Community 
        Broadcasters Protection Act of 1999 shall be disqualified for a 
        class A license based on common ownership with any other medium 
        of mass communication.
          ``(4) Issuance of licenses for advanced television services 
        to television translator stations and qualifying low-power 
        television stations.--The Commission is not required to issue 
        any additional license for advanced television services to the 
        licensee of a class A television station under this subsection, 
        or to any licensee of any television translator station, but 
        shall accept a license application for such services proposing 
        facilities that will not cause interference to the service area 
        of any other broadcast facility applied for, protected, 
        permitted, or authorized on the date of filing of the advanced 
        television application. Such new license or the original 
        license of the applicant shall be forfeited after the end of 
        the digital television service transition period, as determined 
        by the Commission. A licensee of a low-power television station 
        or television translator station may, at the option of 
        licensee, elect to convert to the provision of advanced 
        television services on its analog channel, but shall not be 
        required to convert to digital operation until the end of such 
        transition period.
          ``(5) No preemption of section 337.--Nothing in this 
        subsection preempts or otherwise affects section 337 of this 
        Act.
          ``(6) Interim qualification.--
                  ``(A) Stations operating within certain bandwidth.--
                The Commission may not grant a class A license to a 
                low-power television station for operation between 698 
                and 806 megahertz, but the Commission shall provide to 
                low-power television stations assigned to and 
                temporarily operating in that bandwidth the opportunity 
                to meet the qualification requirements for a class A 
                license. If such a qualified applicant for a class A 
                license is assigned a channel within the core spectrum 
                (as such term is defined in MM Docket 87-286, February 
                17, 1998), the Commission shall issue a class A license 
                simultaneously with the assignment of such channel.
                  ``(B) Certain channels off-limits.--The Commission 
                may not grant under this subsection a class A license 
                to a low-power television station operating on a 
                channel within the core spectrum that includes any of 
                the 175 additional channels referenced in paragraph 45 
                of its February 23, 1998, Memorandum Opinion and Order 
                on Reconsideration of the Sixth Report and Order (MM 
                Docket No. 87-268). Within 18 months after the date of 
                enactment of the Community Broadcasters Protection Act 
                of 1999, the Commission shall identify by channel, 
                location, and applicable technical parameters those 175 
                channels.
          ``(7) No interference requirement.--The Commission may not 
        grant a class A license, nor approve a modification of a class 
        A license, unless the applicant or licensee shows that the 
        class A station for which the license or modification is sought 
        will not cause--
                  ``(A) interference within--
                          ``(i) the predicted Grade B contour (as of 
                        the date of enactment of the Community 
                        Broadcasters Protection Act of 1999, or 
                        November 1, 1999, whichever is later, or as 
                        proposed in a change application filed on or 
                        before such date) of any television station 
                        tranmitting in analog format; or
                          ``(ii)(I) the digital television service 
                        areas provided in the DTV Table of Allotments, 
                        (II) the areas protected in the Commission's 
                        digital television regulations (47 C.F.R. 
                        73.622(e) and (f)), or (III) the digital 
                        television service areas of stations 
                        subsequently granted by the Commission prior to 
                        the filing of a class A application;
                  ``(B) interference within the protected contour of 
                any low-power television station or low-power 
                television translator station that--
                          ``(i) was licensed prior to the date on which 
                        the application for a class A license, or for 
                        the modification of such a license, was filed;
                          ``(ii) was authorized by construction permit 
                        prior to such date; or
                          ``(iii) had a pending application that was 
                        submitted prior to such date; or
                  ``(C) interference within the protected contour of 80 
                miles from the geographic center of the areas listed in 
                section 22.625(b)(1) or 90.303 of the Commission's 
                regulations (47 C.F.R. 22.625(b)(1) and 90.303) for 
                frequencies in--
                          ``(i) the 470-512 megahertz band identified 
                        in section 22.621 or 90.303 of such 
                        regulations; or
                          ``(ii) the 482-488 megahertz band in New 
                        York.''.

                          Purpose and Summary

    H.R. 486, the Community Broadcasters Protection Act of 
1999, will ensure that many communities across the nation will 
continue to have access to free, over-the-air low-power 
television (LPTV) stations, even as full-service television 
stations proceed with their conversion to digital format. In 
particular, H.R. 486 requires the Federal Communications 
Commission (FCC) to provide certain qualifying LPTV stations 
with ``primary'' regulatory status, which in turn will enable 
these LPTV stations to attract the financing that is necessary 
to provide consumers with critical information and programming. 
At the same time, recognizing the importance of, and the 
engineering complexity in, the FCC's plan to convert full-
service television stations to digital format, H.R. 486 
protects the ability of these stations to provide both digital 
and analog service throughout their existing service areas.

                  Background and Need for Legislation


The basics of low-power television

    The FCC began awarding licenses for low-power television 
service in 1982. Low-power television service is a relatively 
inexpensive and flexible means of delivering programming 
tailored to the interests of viewers in small localized areas. 
It also ensures that spectrum allocated for broadcast 
television service is more efficiently used and promotes 
opportunities for entering the television broadcast business.
    The FCC estimates that there are more than 2,000 licensed 
and operational LPTV stations, about 1,500 of which are 
operated in the continental United States by 700 different 
licensees in nearly 750 towns and cities.1 LPTV 
stations serve rural and urban communities alike, although 
about two-thirds of all LPTV stations serve rural communities. 
LPTV stations in urban markets typically provide niche 
programming (e.g., bilingual or non-English programming) to 
under-served communities in large cities. In many rural 
markets, LPTV stations are consumers' only source of local, 
over-the-air programming. Owners of LPTV stations are diverse, 
including high school and college student populations, churches 
and religious groups, local governments, large and small 
businesses, and even individual citizens.
---------------------------------------------------------------------------
    \1\ LPTV stations are distinct from so called ``translators.'' 
Whereas LPTV stations typically offer original programming, translators 
merely amplify or ``boost'' a full-service television station's signal 
into rural and mountainous regions adjacent to the station's market.
---------------------------------------------------------------------------
    From an engineering standpoint, the term ``low-power 
television service'' means precisely what it implies, i.e., 
broadcast television service that operates at a lower level of 
power than full-service stations. Specifically, LPTV stations 
radiate 3 kilowatts of power for stations operating on the VHF 
band (i.e., channels 2 through 13), and 150 kilowatts of power 
for stations operating on the UHF band (i.e., channels 14 
through 69). By comparison, full-service stations on VHF 
channels radiate up to 316 kilowatts of power, and stations on 
UHF channels radiate up to 5,000 kilowatts of power. The 
reduced power levels that govern LPTV stations mean these 
stations serve a much smaller geographic region than do full-
service stations. LPTV signals typically extend to a range of 
approximately 12 to 15 miles, whereas the originating signal of 
full-service stations often reach households 60 or 80 miles 
away.
    Compared to its rules for full-service television station 
licensees, the FCC's rules for obtaining and operating an LPTV 
license are minimal. But in return for ease of licensing, LPTV 
stations must operate not only at reduced power levels but also 
as ``secondary'' licensees. This means LPTV stations are 
strictly prohibited from interfering with, and must accept 
signal interference from, ``primary'' licensees, such as full-
service television stations. Moreover, LPTV stations must yield 
at any point in time to full-service stations that increase 
their power levels, as well as to new full-service stations.

Low-power television's uncertain future

    The video programming marketplace is intensely competitive. 
The three largest broadcast networks that once dominated the 
market now face competition from several emerging broadcast and 
cable networks, cable systems, satellite television operators, 
wireless cable, and even the Internet. Low-power television 
plays a valuable, albeit modest, role in this market because 
itis capable of providing locally-originated programming to rural and 
urban communities that have either no access to local programming, or 
an over-abundance of national programming.
    Low-power television's future, however, is uncertain. To 
begin with, LPTV's secondary regulatory status means a licensee 
can be summarily displaced by a full-service station that seeks 
to expand its own service area, or by a new full-service 
station seeking to enter the same market. This cloud of 
regulatory uncertainty necessarily affects the ability of LPTV 
stations to raise capital over the long-term, irrespective of 
an LPTV station's popularity among consumers.
    The FCC's plan to convert full-service stations to digital 
substantially complicates LPTV stations' already uncertain 
future. In its digital television (DTV) proceeding, the FCC 
adopted a table of allotments for DTV service that provided a 
second channel for each existing full-service station to use 
for DTV service in making the transition from the existing 
analog technology to the new DTV technology. These second 
channels were provided to broadcasters on a temporary basis. At 
the end of the DTV transition, which is currently scheduled for 
December 31, 2006, they must relinquish one of their two 
channels.
    In assigning DTV channels, the FCC maintained the secondary 
status of LPTV stations (as well as translators). In order to 
provide all full-service television stations with a second 
channel, the FCC was compelled to establish DTV allotments that 
will displace a number of LPTV stations, particularly in the 
larger urban market areas where the available spectrum is most 
congested.
    The FCC's plan also provides for the recovery of a portion 
of the existing broadcast television spectrum so that it can be 
reallocated to new uses. Specifically, the FCC provided for 
immediate recovery of broadcast channels 60 through 69, and for 
recovery of broadcast channels 52 through 59 at the end of the 
DTV transition. As further required by Congress under the 
Balanced Budget Act of 1997,2 the FCC has completed 
the reallocation of broadcast channels 60 through 69. Existing 
analog stations, including LPTV stations and a few DTV 
stations, are permitted to operate on these channels during the 
DTV transition. But at the end of the transition, all analog 
broadcast TV stations will have to cease operation, and the DTV 
stations on broadcast channels 52 through 69 will be relocated 
to new channels in the DTV core spectrum. As a result, the FCC 
estimates that the DTV transition will require about 35 to 45 
percent of all LPTV stations to either change their operation 
or cease operation. Indeed, some full-service stations have 
already ``bumped'' several LPTV stations a number of times, at 
substantial cost to the LPTV station, with no guarantee that 
the LPTV station will be permitted to remain on its new channel 
in the long term.
---------------------------------------------------------------------------
    \2\  See 47 U.S.C. Sec. 337.
---------------------------------------------------------------------------
    The Committee, therefore, seeks to provide some regulatory 
certainty for low-power television service. The Committee 
recognizes that, because of emerging DTV service, not all LPTV 
stations can be guaranteed a certain future. Moreover, it is 
not clear that all LPTV stations should be given such a 
guarantee in light of the fact that many existing LPTV stations 
provide little or no original programming service.
    Instead, the Committee seeks to buttress the commercial 
viability of those LPTV stations which can demonstrate that 
they provide valuable programming to their communities. The 
Committee's record reflects that there are a significant number 
of LPTV stations which broadcast programming--including locally 
originated programming--for a substantial portion of each day. 
From the consumers' perspective, these stations provide video 
programming that is functionally equivalent to the programming 
they view on full-service stations, as well as national and 
local cable networks. Consequently, these stations should be 
afforded roughly similar regulatory status. H.R. 486, the 
Community Broadcasters Protection Act of 1999, will achieve 
that objective, and at the same time, protect the transition to 
digital.

                                Hearings

    The Subcommittee on Telecommunications, Trade, and Consumer 
Protection met on April 13, 1999, and held an oversight hearing 
on the Regulatory Classification of Low Power Television 
Licensees. The Subcommittee heard testimony from the following 
witnesses: Mr. Roy J. Stewart, Chief, Mass Media Bureau, 
Federal Communications Commission, accompanied by Mr. Keith 
Larson, Associate Chief, Engineering, Mass Media Bureau, 
Federal Communications Commission; Mr. James C. May, Executive 
Vice President, National Association of Broadcasters; Mr. 
Arthur D. Stamler, General Manager, WAZT-LPTV (Woodstock, 
Virginia); Mr. Michael Sullivan, Executive Director, Community 
Broadcasters Association; Mr. George E. DeVault, Jr., 
President, Holston Valley Broadcasting Corporation; and Mr. Ron 
Bruno, General Manager and Owner, WBGN-TV (Pittsburgh, 
Pennsylvania). In addition, the Honorable William E. Kennard, 
Chairman of the Federal Communications Commission, submitted 
testimony for the record.

                        Committee Consideration

    On July 29, 1999, the Subcommittee on Telecommunications, 
Trade, and Consumer Protection met in open markup session and 
approved H.R. 486 for Full Committee consideration, amended, by 
a voice vote. On August 5, 1999, the Full Committee met in open 
markup session and ordered H.R. 486 reported to the House, 
amended, by a voice vote, a quorum being present.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House requires 
the Committee to list the record votes on the motion to report 
legislation and amendments thereto. There were no record votes 
taken in connection with ordering H.R. 486 reported. An 
Amendment in the Nature of a Substitute by Mr. Norwood, #1, 
that (1) requires the Federal Communications Commission (FCC) 
to make modifications to ensure replication of a full power 
station's signal should any technical problems arise due to the 
grant of a Class A license to a low power television 
(LPTV)station; (2) permits television translators to qualify for Class 
A advanced television licenses in the same manner as LPTV stations; and 
(3) strengthens the non-interference requirements for both digital and 
analog service areas of stations subsequently granted by the FCC prior 
to the filing of a Class A application, was agreed to by a voice vote. 
A motion by Chairman Bliley to order H.R. 486 reported to the House, 
amended, was agreed to by a voice vote, a quorum being present.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee held an oversight 
hearing and made findings that are reflected in this report.

           Committee on Government Reform Oversight Findings

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, no oversight findings have been 
submitted to the Committee by the Committee on Government 
Reform.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee finds that H.R. 
486, the Community Broadcasters Act of 1999, would result in no 
new or increased budget authority, entitlement authority, or 
tax expenditures or revenues.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, September 1, 1999.
Hon. Tom Bliley,
Chairman, Committee on Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 486, the Community 
Broadcasters Protection Act of 1999.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Kathleen 
Gramp, who can be reached at 226-2860.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

H.R. 486--Community Broadcasters Protection Act of 1999

            Summary
    H.R. 486 would direct the Federal Communications Commission 
(FCC) to establish rules and procedures under which certain 
low-power television stations (LPTV stations) could change 
their regulatory status and associated broadcast rights. The 
FCC would be directed to develop the rules and approve 
applications within six months after enactment of the bill.
    CBO expects that implementing H.R. 486 would result in the 
net loss of about $95 million in offsetting receipts from 
spectrum auctions in 2002. The bill's changes could lead to a 
loss of additional amounts in future years, but CBO estimates 
that there would be no additional impact through 2007, when the 
FCC's authority to auction spectrum is scheduled to expire. 
Because the bill would affect direct spending, pay-as-you-go 
procedures would apply. We estimate that the bill would have no 
net effect on discretionary spending because the FCC is 
authorized under current law to collect fees from the 
discretionary spending because the FCC is authorized under 
current law to collect fees from the telecommunications 
industry sufficient to offset the cost of its regulatory and 
applications activities.
    H.R. 486 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would have no significant impact on the budgets of state, 
local, or tribal governments.
            Background
    LPTV stations are broadcast stations that transmit signals 
at much lower power levels than conventional TV stations. Under 
current policy, LPTV stations are licensed as secondary users 
of the part of the radio spectrum allocated to television 
broadcasting, which means they can be replaced at any time if 
the FCC allocates frequencies to primary users, such as full-
power TV stations. The ongoing transition to digital television 
(DTV) will reduce the amount of spectrum allocated for TV 
broadcasting and will lead the FCC to displace or even revoke 
the licenses of many LPTV broadcasters. Specifically, the 
frequencies now used forchannels 52 through 69 will be 
reallocated for other purposes. The remaining spectrum (that used by 
channels 2 through 51, also known as the core) should be sufficient to 
accommodate all existing full-power stations, but may not support all 
existing LPTV stations. Accommodating secondary licensees is especially 
difficult during the transition to DTV because full-power stations are 
temporarily using two channels--one for analog and one for digital 
broadcasts. Pending applicants for new, full-power analog stations may 
also claim channels now used by secondary licensees. Hundreds of LPTV 
stations are now in the process of trying to avoid permanent 
displacement by obtaining alternative channels in the core or by 
adjusting their operations to accommodate primary licensees.
    In addition, the FCC has indicated that it will auction 
channels within the core that will not be used by primary 
licensees once the transition to DTV is complete. According to 
industry and agency analysts, those auctions could include 
spectrum that will no longer be needed for analog stations or 
interference buffers as well as spectrum used only by secondary 
licensees. Recent FCC rulings suggest that such channels will 
be auctioned in 2002, consistent with the terms of the Balanced 
Budget Act of 1997.
    H.R. 486 would create a new Class A license for LPTV 
stations that would give eligible stations primary status. 
Licensees would be eligible for Class A status if they met 
certain programming requirements or if the FCC deemed it to be 
in the public interest. Eligible licensees would be granted 
primary status if they are licensed to operate on certain 
channels in the core. Eligible stations located on channels 52 
through 69 would be given primary status only after they are 
assigned a channel in the core. Class A licensees and certain 
other stations also could obtain an additional channel for DTV 
services, subject to availability. However, the new Class A 
stations would not be allowed to interfere with existing full-
power analog stations or with certain DTV services.
    According to the FCC, at least 200 LPTV stations may be 
eligible for Class A status in fiscal year 2000. Class A 
licensees may be located in highly valuable markets, such as 
New York, Los Angeles, and Boston, as well as in mid-size and 
small markets, such as Orlando, San Antonio, and Nashville. 
More Class A stations may be added in subsequent years if the 
FCC provides eligible licensees with a second channel, but 
these additional licenses would have to be relinquished at the 
end of the transition.
            Estimated cost to the Federal Government
    CBO estimates that implementing H.R. 486 would reduce net 
proceeds from FCC auctions by about $95 million in 2002. This 
estimate reflects the potential effects of the bill on proceeds 
from auctions of TV spectrum for new users and from auctions 
involving LPTV stations. Based on information from the FCC, we 
estimate that the bill would have no significant effect on the 
commission's administrative costs.

Effect on Auctions of Licenses for New Primary Licensees

    By increasing the number of primary licensees in the core, 
H.R. 486 would reduce the number of channels that could be 
auctioned for new full-power TV stations or other digital 
services. Whether the FCC would auction frequencies used by 
LPTV stations under current law is unclear at this time, but 
implementing H.R. 486 would foreclose that option for the 
channels occupied by LPTV stations that would have primary 
status under the bill (i.e., those that would become Class A 
licensees). To take account of this regulatory uncertainty, CBO 
assumes that there is a 50 percent chance that the FCC will 
auction channels used by secondary licensees under current law.
    The cost of this legislation would depend on several 
factors, such as the location of potential Class A licensees 
and how much their channels would be worth in 2002 if they were 
auctioned for new full-power stations or digital services. For 
purposes of this estimate, CBO assumes that 25 percent of the 
Class A licenses (at least 50, depending on how many stations 
gain primary status) would affect auction proceeds in 2002. 
This estimate reflects our expectation that most of the Class A 
stations would be in small markets with relatively low market 
values. Our estimate also excludes the potential effects on 
some major markets, such as New York, Los Angeles, and 
Philadelphia, because we expect that few slots will be 
auctioned in 2002 in certain congested markets until full-power 
stations return their analog channels at the end of the 
transition period (sometime after 2007).
    Data on the value of broadcast services are largely limited 
to information on the sale of existing stations. According to 
industry sources, existing TV stations sold for an average of 
about $30 million in 1997. For the purposes of this estimate, 
we used an average of $25 million because we are excluding some 
of the top markets from our analysis of the cost of this bill. 
Based on agency sources, CBO assumes that the value of the 
spectrum assigned for such stations represents about 50 percent 
of the sales price of an operating station, with the remainder 
attributable to a station's tangible assets, good will, and 
other intangible assets. This suggests current spectrum values 
of about $12 million per channel for stations in mid-sized 
markets. This average is consistent with CBO's analysis of 
proceeds from the upcoming auction of primary licenses for 
broadcast services.
    CBO expects that the market value of channels auctioned in 
2002 would be less than their current value, however. We expect 
that most of the licenses auctioned in 2002 could not be used 
until the transition to DTV is completed sometime after 2007, 
causing companies todiscount their bids to reflect the deferred 
income streams. Digital broadcasting also will permit more over-the-air 
channels to be offered in each market, which will decrease the price of 
new channels. Adjusting for these factors, we estimate that the auction 
of new channels in 2002 would average about $4 million per channel.
    Assuming the bill would preclude the auction of about 50 
channels and using an average price of $4 million per channel 
suggests that enacting H.R. 486 could reduce auction receipts 
by $200 million in 2002. Because we assume that there is only a 
50 percent chance that the FCC would auction these channels 
under current law, however, CBO estimates that implementing 
this bill would reduce offsetting receipts from the auction of 
new primary licenses in 2002 by about $100 million. If the 
presence of Class A licensees resulted in a loss of offsetting 
receipts from the auction of a channel in a top market--an 
unlikely but possible event--the cost of this legislation would 
be significantly higher.
    Enacting H.R. 486 also could result in a loss of receipts 
after 2002 if the auction held in 2002 does not include all of 
the spectrum that will be available at the end of the 
transition to DTV. The costs could be significant if, as 
assumed in this estimate, the FCC postpones auctioning channels 
in major markets until the congestion clears at the end of the 
transition. However, CBO does not expect the FCC to auction 
more broadcast channels until after 2007, which is the year the 
commission's general auction authority expires. Hence CBO 
estimates that this bill would not affect offsetting receipts 
over the 2003-2007 period.

Effect on Auctions of Licenses for Existing LPTV Stations

    CBO estimates that offsetting receipts from the auction of 
LPTV stations would increase by about $5 million in 2002 as a 
result of this bill. CBO expects that proceeds from auctions 
involving displaced LPTV stations could be higher if two or 
more of the applicants competing for a license were eligible 
for Class A status, because the value of a primary license 
would be greater than that of a secondary license. Based on 
information regarding stations awaiting relocation, CBO assumes 
that only a small number of LPTV auctions would involve more 
than one Class A applicant and that the average proceeds from 
each auction would be small.
            Pay-as-you-go considerations
    The Balanced Budget and Emergency Deficit Control Act sets 
up pay-as-you-go procedures for legislation affecting direct 
spending or receipts. Because H.R. 486 would affect direct 
spending, pay-as-you-go procedures would apply. The estimated 
impact on outlays is shown in the following table. For purposes 
of enforcing pay-as-you-go procedures, only the effects in the 
current year, the budget year, and the succeeding 4 years are 
counted.

----------------------------------------------------------------------------------------------------------------
                                                       By fiscal year, in millions of dollars--
                                    ----------------------------------------------------------------------------
                                      1999   2000   2001   2002   2003   2004   2005   2006   2007   2008   2009
----------------------------------------------------------------------------------------------------------------
Changes in outlays.................      0      0      0     95      0      0      0      0      0      0      0
Changes in receipts................                                 Not applicable
----------------------------------------------------------------------------------------------------------------

            Intergovernmental and private-sector impact
    H.R. 486 contains no intergovernmental or private-sector 
mandates as defined in UMRA and would have no significant 
impact on the budgets of state, local or tribal governments. 
These governments may experience some minimal benefits to the 
extent that they own low-power television stations that would 
qualify for the Class A license to be established under the 
bill.
    Estimate prepared by: Kathleen Gramp.
    Estimate approved by: Paul N. Van de Water, Assistant 
Director for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of Rule XIII of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional authority for this legislation is provided in 
Article I, section 8, clause 3, which grants Congress the power 
to regulate commerce with foreign nations, among the several 
States, and with the Indian tribes.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    Section 1 provides the short title of the bill, the 
``Community Broadcasters Protection Act of 1999.''

Section 2. Findings

    Section 2 describes the Congress' findings on the 
importance of low-power television service. The Congress finds 
that LPTV stations have operated in a manner beneficial to the 
public, and in many instances, provide worthwhile and diverse 
services to communities that lack access to over-the-air 
programming. The Congress also finds, however, that LPTV 
stations' secondary regulatory status effectively blocks access 
to capital.

Section 3. Preservation of low-power community television broadcasting

    Section 3 amends section 336 of the Communications Act of 
1934 3 to require the FCC to create a new ``Class 
A'' license for certain qualifying LPTV stations. New paragraph 
(1)(A) in particular directs the FCC to prescribe rules within 
120 days of enactment for the establishment of a new Class A 
television license that will be available to qualifying LPTV 
stations. The FCC's rules must ensure that a Class A licensee 
receives the same license terms and renewal standards as any 
full-service licensee, and that each Class A licensee is 
accorded primary regulatory status. Subparagraph (B) further 
requires the FCC, within 30 days of enactment, to send to each 
existing LPTV licensee a notice that describes the requirements 
for Class A designation. Within 60 days of enactment (or within 
30 days of the FCC's notice), LPTV stations intending to seek 
Class A designation must submit a certification of eligibility 
to the FCC. Absent a material deficiency in an LPTV station's 
certification materials, the FCC is required under subparagraph 
(B) to grant a certification of eligibility.
---------------------------------------------------------------------------
    \3\ 47 U.S.C. Sec. 336.
---------------------------------------------------------------------------
    Subparagraph (C) permits an LPTV station, within 30 days of 
the issuance of the rules required under subparagraph (A), to 
submit an application for Class A designation. The FCC must 
award a Class A license to a qualifying LPTV station within 30 
days of receiving such application. Subparagraph (D) mandates 
that the FCC must act to preserve the signal contours of an 
LPTV station pending the final resolution of its application 
for a Class A license. In the event technical problems arise 
that require an engineering solution to a full-service 
station's allotted parameters or channel assignment in the DTV 
table of allotments, subparagraph (D) requires the FCC to make 
the necessary modifications to ensure that such full-service 
station can replicate its service area, as provided for in the 
FCC's rules.
    Paragraph (2) lists the criteria an LPTV station must meet 
to qualify for a Class A license. Specifically, the LPTV 
station must: during the 90 days preceding the date of 
enactment, broadcast a minimum of 18 hours per day--including 
at least 3 hours per week of locally-originated programming--
and also be in compliance with the FCC's rules on low-power 
television service; and from and after the date of its 
application for a Class A license, be in compliance with the 
FCC's rules for full-service television stations. In the 
alternative, the FCC may qualify an LPTV station as a Class A 
licensee if it determines that such qualification would serve 
the public interest, convenience, and necessity or for other 
reasons determined by the FCC.
    Paragraph (3) provides that no LPTV station authorized as 
of the date of enactment may be disqualified for a Class A 
license based on common ownership with any other medium of mass 
communication.
    Paragraph (4) makes clear that the FCC is not required to 
issue Class A LPTV stations (or translators) an additional 
license for advanced television services. The FCC, however, 
must accept applications for such services, provided the 
station will not cause interference to any other broadcast 
facility applied for, protected, permitted or authorized on the 
date of the filing of the application for advanced television 
services. Either the new license for advanced services or the 
original license must be forfeited at the end of the DTV 
transition. The licensee may elect to convert to advanced 
television services on its analog channel, but is not required 
to convert to digital format until the end of the DTV 
transition.
    Paragraph (5) clarifies that nothing in new subsection 
336(f) preempts, or otherwise affects, section 337 of the 
Communications Act of 1934.4
---------------------------------------------------------------------------
    \4\ 47 U.S.C. Sec. 337.
---------------------------------------------------------------------------
    Paragraph (6) precludes the FCC from granting Class A 
licenses to LPTV stations operating between 698 megahertz (MHz) 
and 806 MHz (i.e., television broadcast channels 52 through 
69). However, the FCC shall provide to LPTV stations assigned 
to, and temporarily operating on, those channels the 
opportunity to qualify for a Class A license. If a qualifying 
LPTV station is ultimately assigned a channel within the band 
of frequencies that will eventually comprise the ``core 
spectrum'' (i.e., television broadcast channels 2 through 51), 
then the FCC is required to issue a Class A license 
simultaneously. However, the FCC may not grant a Class A 
license to an LPTV station operating on a channel within the 
core spectrum that the FCC will identify within 180 days of 
enactment.
    Finally, paragraph (7) provides that the FCC may not grant 
a Class A license (or a modification thereto) unless the 
requesting LPTV station demonstrates that it will not interfere 
with one of three types of radio-based services. First, under 
subparagraph (A), the LPTV station must show that it will not 
interfere with: (i) the predicted Grade B contour of any 
station transmitting in analog format; or (ii) the digital 
television service areas provided in the DTV table of 
allotments, or the digital television areas explicitly 
protected (as opposed to those areas that may be permitted) in 
the Commission's digital television regulations, or the digital 
television service areas of stations subsequently granted by 
the FCC prior to the filing of a Class A application. Second, 
under subparagraph (B), the LPTV station must show that it will 
not interfere with any licensed, authorized or pending LPTV 
station or translator. And third, under subparagraph (C), the 
LPTV station must show that it will not interfere with other 
services (e.g., land mobile services) that also operate on 
television broadcast channels 14 through 20.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

             SECTION 336 OF THE COMMUNICATIONS ACT OF 1934


SEC. 336. BROADCAST SPECTRUM FLEXIBILITY.

  (a)  * * *

           *       *       *       *       *       *       *

  (f) Preservation of Low-Power Community Television 
Broadcasting.--
          (1) Creation of class a licenses.--
                  (A) Rulemaking required.--Within 120 days 
                after the date of enactment of the Community 
                Broadcasters Protection Act of 1999, the 
                Commission shall prescribe regulations to 
                establish a class A television license to be 
                available to licensees of qualifying low-power 
                television stations. Such regulations shall 
                provide that--
                          (i) the license shall be subject to 
                        the same license terms and renewal 
                        standards as the licenses for full-
                        power television stations except as 
                        provided in this subsection; and
                          (ii) each such class A licensee shall 
                        be accorded primary status as a 
                        television broadcaster as long as the 
                        station continues to meet the 
                        requirements for a qualifying low-power 
                        station in paragraph (2).
                  (B) Notice to and certification by 
                licensees.--Within 30 days after the enactment 
                of the Community Broadcasters Protection Act of 
                1999, the Commission shall send a notice to the 
                licensees of all low-power televisions licenses 
                that describes the requirements for class A 
                designation. Within 60 days after such date of 
                enactment, licensees intending to seek class A 
                designation shall submit to the Commission a 
                certification of eligibility based on the 
                qualification requirements of this subsection. 
                Absent a material deficiency, the Commission 
                shall grant certification of eligibility to 
                apply for class A status.
                  (C) Application for and award of licenses.--
                Consistent with the requirements set forth in 
                paragraph (2)(A) of this subsection, a licensee 
                may submit an application for class A 
                designation under this paragraph within 30 days 
                after final regulations are adopted pursuant to 
                subparagraph (A) of this paragraph. Except as 
                provided in paragraphs (6) and (7), the 
                Commission shall, within 30 days after receipt 
                of an application of a licensee of a qualifying 
                low-power television station that is acceptable 
                for filing, award such a class A television 
                station license to such licensee.
                  (D) Resolution of technical problems.--The 
                Commission shall act to preserve the service 
                area of each low-power television licensee 
                pending the final resolution of the class A 
                application of such licensee. If, after 
                granting certification of eligibility for a 
                class A license, technical problems arise 
                requiring an engineering solution to a full-
                power station's allotted parameters or channel 
                assignment in the digital television Table of 
                Allotments, the Commission shall make such 
                modifications, as necessary, to ensure 
                replication of the full-power digital 
                television applicant's service area, as 
                provided for in section 73.622 of the 
                Commission's regulations (47 C.F.R. 73.622).
          (2) Qualifying low-power television stations.--For 
        purposes of this subsection, a station is a qualifying 
        low-power television station if--
                  (A)(i) during the 90 days preceding the date 
                of enactment of the Community Broadcasters 
                Protection Act of 1999--
                          (I) such station broadcast a minimum 
                        of 18 hours per day;
                          (II) such station broadcast an 
                        average of at least 3 hours per week of 
                        programming that was produced within 
                        the market area served by such station, 
                        or the market area served by a group of 
                        commonly controlled low-power stations 
                        that carry common local programming 
                        produced within the market area served 
                        by such group; and
                          (III) such station was in compliance 
                        with the Commission's requirements 
                        applicable to low-power television 
                        stations; and
                  (ii) from and after the date of its 
                application for a class A license, the station 
                is in compliance with the Commission's 
                operating rules for full-power television 
                stations; or
                  (B) the Commission determines that the public 
                interest, convenience, and necessity would be 
                served by treating the station as a qualifying 
                low-power television station for purposes of 
                this section, or for other reasons determined 
                by the Commission.
          (3) Common ownership.--No low-power television 
        station authorized as of the date of enactment of the 
        Community Broadcasters Protection Act of 1999 shall be 
        disqualified for a class A license based on common 
        ownership with any other medium of mass communication.
          (4) Issuance of licenses for advanced television 
        services to television translator stations and 
        qualifying low-power television stations.--The 
        Commission is not required to issue any additional 
        license for advanced television services to the 
        licensee of a class A television station under this 
        subsection, or to any licensee of any television 
        translator station, but shall accept a license 
        application for such services proposing facilities that 
        will not cause interference to the service area of any 
        other broadcast facility applied for, 
protected,permitted, or authorized on the date of filing of the 
advanced television application. Such new license or the original 
license of the applicant shall be forfeited after the end of the 
digital television service transition period, as determined by the 
Commission. A licensee of a low-power television station or television 
translator station may, at the option of licensee, elect to convert to 
the provision of advanced television services on its analog channel, 
but shall not be required to convert to digital operation until the end 
of such transition period.
          (5) No preemption of section 337.--Nothing in this 
        subsection preempts or otherwise affects section 337 of 
        this Act.
          (6) Interim qualification.--
                  (A) Stations operating within certain 
                bandwidth.--The Commission may not grant a 
                class A license to a low-power television 
                station for operation between 698 and 806 
                megahertz, but the Commission shall provide to 
                low-power television stations assigned to and 
                temporarily operating in that bandwidth the 
                opportunity to meet the qualification 
                requirements for a class A license. If such a 
                qualified applicant for a class A license is 
                assigned a channel within the core spectrum (as 
                such term is defined in MM Docket 87-286, 
                February 17, 1998), the Commission shall issue 
                a class A license simultaneously with the 
                assignment of such channel.
                  (B) Certain channels off-limits.--The 
                Commission may not grant under this subsection 
                a class A license to a low-power television 
                station operating on a channel within the core 
                spectrum that includes any of the 175 
                additional channels referenced in paragraph 45 
                of its February 23, 1998, Memorandum Opinion 
                and Order on Reconsideration of the Sixth 
                Report and Order (MM Docket No. 87-268). Within 
                18 months after the date of enactment of the 
                Community Broadcasters Protection Act of 1999, 
                the Commission shall identify by channel, 
                location, and applicable technical parameters 
                those 175 channels.
          (7) No interference requirement.--The Commission may 
        not grant a class A license, nor approve a modification 
        of a class A license, unless the applicant or licensee 
        shows that the class A station for which the license or 
        modification is sought will not cause--
                  (A) interference within--
                          (i) the predicted Grade B contour (as 
                        of the date of enactment of the 
                        Community Broadcasters Protection Act 
                        of 1999, or November 1, 1999, whichever 
                        is later, or as proposed in a change 
                        application filed on or before such 
                        date) of any television station 
                        transmitting in analog format; or
                          (ii)(I) the digital television 
                        service areas provided in the DTV Table 
                        of Allotments, (II) the areas protected 
                        in the Commission's digital television 
                        regulations (47 C.F.R. 73.622(e) and 
                        (f)), or (III) the digital television 
                        service areas of stations subsequently 
                        granted by the Commission prior to the 
                        filing of a class A application;
                  (B) interference within the protected contour 
                of any low-power television station or low-
                power television translator station that--
                          (i) was licensed prior to the date on 
                        which the application for a class A 
                        license, or for the modification of 
                        such a license, was filed;
                          (ii) was authorized by construction 
                        permit prior to such date; or
                          (iii) had a pending application that 
                        was submitted prior to such date; or
                  (C) interference within the protected contour 
                of 80 miles from the geographic center of the 
                areas listed in section 22.625(b)(1) or 90.303 
                of the Commission's regulations (47 C.F.R. 
                22.625(b)(1) and 90.303) for frequencies in--
                          (i) the 470-512 megahertz band 
                        identified in section 22.621 or 90.303 
                        of such regulations; or
                          (ii) the 482-488 megahertz band in 
                        New York.
  [(f)] (g) Evaluation.--Within 10 years after the date the 
Commission first issues additional licenses for advanced 
television services, the Commission shall conduct an evaluation 
of the advanced television services program. Such evaluation 
shall include--
          (1)  * * *

           *       *       *       *       *       *       *

  [(g)] (h) Definitions.--As used in this section:
          (1)  * * *

           *       *       *       *       *       *       *