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61st Annual Report of the FCC (1995)

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Released: December 31, 1995
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• 1919 M Street NW, Washington, DC • 1919 M Street NW, Washington, DC • 1919 M Street NW, Washington, DC •

FCC Auctions Generate Billions for
the U. S. Treasury
Chairman Hundt presents President Clinton and Vice President Gore a check for $7,736,020,384 for the U.S. Treasury.
This represents the proceeds from the auction of 99 licenses to provide broadband PCS service.

Commissioners
Members of the Federal Communications Commission
during fiscal year 1995.
Reed E. Hundt ,Chairman
(Term expires June 30, 1998)
James H. Quello,
(Term expires June 30, 1996)
Andrew C. Barrett,
(Term expires June 30, 1995)
Susan Ness,
(Term expires June 30, 1999)
Rachelle B. Chong,
Term expires June 30, 1997)

2 LETTER OF TRANSMITTAL • FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

Letter of Transmittal

Letter of Transmittal

Federal Communications Commission

Washington, D.C. 20554

To the Congress of the United States
We submit for your consideration the 61st Annual Report of the Federal Communica-
tions Commission for fiscal year 1995. It includes information required by the Com-
munications Act of 1934, as amended, and the Communications Satellite Act of 1962.
The report contains a comprehensive review of key events in the Commission's areas of
regulatory concern: broadcasting, cable television, common carrier communications,
international communications, wireless telecommunications services, spectrum
management, and frequency allocations.
It also covers major administrative matters, engineering, legal and legislative activi-
ties.
Respectfully,
Reed E. Hundt
Chairman
For sale by the U.S. Government Printing Office
Superintendent of Documents, Mail Stop: SSOP, Washington, D. C. 20402-9328


TABLE OF CONTENTS 3
Contents
Commissioners.......6
Commissioners From 1934 to the Present .......8
The Commission.......10
Disabilities Taskforce.......16
FCC On Line.......18
Mass Media Bureau.......20
Overview.......21
FY95 Highlights .......23
Major Proceedings.......24
Mass Media Statistics.......33
Common Carrier Bureau.......40
Overview.......41
FY95 Highlights.......42
Major Proceedings.......43
Common Carrier Facts .......45
Wireless Telecommunications Bureau.......46
Overview......47
FY95 Highlights .......49
Major Proceedings.......49


4 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

Contents
Compliance and Information Bureau.......54
Overview.............55
FY95 Highlights .......57
Major Proceedings.......58
International Bureau.......60
Overview......61
FY95 Highlights .......62
Major Proceedings.......64
Cable Services Bureau.......68
Overview.......69
FY95 Highlights.......72
Major Proceedings .......72

Office Of Engineering And Technology.......78
Overview.......79
FY95 Highlights.......81
Major Proceedings.......82

TABLE OF CONTENTS 5
Office of Plans and Policy.......91
Overview.......91
FY95 Highlights .......91
Major Proceedings.......92
Office of Legislative and
Intergovernmental Affairs.......94

Overview.......94
Enacted Laws.......94
Legislative Program .......95
Other Legislative Activities.......95

Litigation.......97
Decisions of Special Interest.......97
Other Decisions.......99
Judgments.......101
FCC Organization.......102

6 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

Commissioners

Reed E. Hundt (Democrat)
Chairman

Nominated to the Commission to serve as Chairman by President Clinton; confirmed by the Senate
November 19, 1993; sworn in November 29, 1993; term ends June 30, 1998.

Prior to coming to the Commission, Chairman Hundt was a senior partner in the Washington , D.C.
, office of Latham &Watkins, a national and international law firm, where his practice included
representation on state, federal and international communication issues including local exchange
telephone, long distance, international fiber optic, cable television alternatives and satellite, and
First Amendment work.

He also has handled pro bono matters for the United States Court of Appeals for the Fourth Cir-
cuit, the NAACP Legal Defense Fund, the Lawyers Committee for Civil Rights, Conservation In-
ternational and the D.C. Preservation League. He served as a law clerk to the late Chief Judge
Harrison L.Winter of the United States Court of Appeals for the Fourth Circuit. Hundt was a senior
advisor to the Clinton for President campaign and a senior advisor and member of the Economic
Council for the Presidential Transition Team. In addition, he has advised Vice President Gore on
economic issues since 1984.

Born in Ann Arbor, MI, March 3, 1948, Hundt received a B.A., magna cum laude, with an excep-
tional distinction in history, from Yale College in 1969 and a J.D. from Yale Law School in 1974.
Chairman Hundt belongs to the District of Columbia, Maryland and California Bars.

James H. Quello (Democrat)

Nominated to the Commission by President Nixon; confirmed by the Senate April 23, 1974; sworn
in April 30, 1974. Reappointed by President Reagan in 1981 and again in 1984 for a third term;
confirmed by the Senate June 15, 1984; sworn in July 26, 1984; Commissioner Quello was reap-
pointed by President Bush in 1991 for a fourth term; confirmed by the Senate June 25, 1991; sworn
in July 12, 1991; term ends June 30, 1996.

Commissioner Quello served as Interim Chairman February 5, 1993 to November 29, 1993. He
rose from position of Promotion Manager (1960) of radio station WJR, Detroit, to Vice President,
General Manager (1974); retired as Vice President of Capital Cities Broadcasting Corporation
(1972). Detroit Housing and Urban Renewal Commissioner (1951-73); trustee, Michigan Veterans
Trust Fund (1951-74).

Member of Governor’s Special Study Commission on Urban Problems; Governor’s Special Study
Committee on Legislative Compensation; Assistant National Public Relations Chairman, Veterans
of Foreign Wars; TV-radio Chairman, United Foundation; Executive Board Member, Boy Scouts
of America; and board member, American Negro Emancipation Centennial.

Born in Laurium, MI, April 21, 1914, he holds a B.A. degree from Michigan State University (1935).
He has been awarded an Honorary doctorate of public service from Northern Michigan University
(1975); distinguished alumni award and honorary doctorate of humanities from Michigan State
University (1974 and 1977).


BIOGRAPHIC SKETCHES OF CURRENT COMMISSIONERS 7

Andrew C. Barrett (Republican)

Nominated to the Commission by President Bush; confirmed by the Senate August 4,
1989; sworn in September 8, 1989. Reappointed by President Bush in 1990; confirmed
by the Senate May 23, 1990; sworn in June 21, 1990. Term ended June 30, 1995.

Formerly served as Commissioner, Illinois Commerce Commission (1980-89). Served as
Assistant Director of Illinois Department of Business and Economic Development (1979-
80). Served as Director of Operations for the Illinois Law Enforcement Commission
(1975-79). Past Associate Director for the Chicago Branch NAACP, (1971-75). He also
served as Associate Director for the National Conference of Christians and Jews (1968-
71).

He holds a B.A. degree from Roosevelt University (1969), an M.A. degree from Loyola
University of Chicago (1971), and a J.D. degree from DePaul University (1975).

Susan Ness (Democrat)

Nominated to the Commission by President Clinton on April 14, 1994; confirmed by the
Senate on May 19, 1994. Ness fills the seat vacated by the Honorable Ervin Duggan. Term
ends June 30, 1999.

As a communications attorney, she has served as a senior lender and group head in the
Communications Industries Division of the American Security Bank, a regional financial
institution based in Washington, D.C.

Served as Assistant Counsel to the House Committee on Banking, Currency and Housing.
Later, founded and directed the Judicial Appointments Project of the National Women’s
Political Caucus. Served as vice chair of the Montgomery County Task Force on Community
Access Television and was president of the Montgomery County Commission for Women.

She holds a B.A. from Douglass College (Rutgers University), a Masters in Business
Administration from the Wharton School at the University of Pennsylvania and a J.D.,
cum laude, from Boston College Law School.

Rachelle B. Chong (Republican)

Nominated to the Commission by President Clinton to fill the vacancy left by the Honor-
able Sherrie Marshall. The term began on July 1, 1992, and ends on June 30, 1997; con-
firmed by the Senate on May 19, 1994; sworn in on May 23, 1994. She is the first Asian-
American to serve on the Commission.

Formerly a partner in the international law firm of Graham & James. Practiced tele-
communications law before the California Public Utilities Commission on behalf of cel-
lular telephone carriers, radio common carriers and developers of innovative telecom-
munications devices.

Practiced communications law from 1984-1986 with the now-defunct Washington, D.C.
law firm of Kadison, Pfaelzer, Woodard, Quinn & Rossi. She is a founding member of
Women in Telecommunications in Northern California and a member of the governing
Committee of the ABA Forum Committee on Communications. A Phi Beta Kappa scholar,
she holds dual B.A. degrees in Journalism and Political Science from the University of
California at Berkeley (1981) and a J.D. from Hastings College of Law (1984).


8 FCC ANNUAL REPORT

Commissioners From 1934 to the Present

Commissioner

Party Affiliation

State

Term of Service

*Eugene O. Sykes
Democrat
Mississippi
July 11,1934to Apr. 5, 1939
Chairman ............................................................................................................................................. July 11, 1934 to Mar. 8, 1935
*Thad H. Brown
Republican
Ohio
July 11, 1934 to June 30, 1940
*Paul A. Walker
Democrat
Oklahoma
July 11, 1934 to June 30, 1953
Acting Chairman ................................................................................................................................. Nov. 3, 1947 to Dec. 28, 1947
Chairman ............................................................................................................................................. Feb. 28, 1952 to Apr. 17, 1953

*Norman Case
Republican
Rhode Island
July 11, 1934 to June 30, 1945
Irvin Stewart
Democrat
Texas
July 11, 1934 to June 30, 1937
*George Henry Payne
Republican
New York
July 11,1934 to June30,1943
*Hampson Gary
Democrat
Texas
July 11, 1934 to Jan. 1, 1935
*Anning S. Prall
Democrat
New York
Jan. 17, 1935 to July 23, 1937
Chairman ............................................................................................................................................. ,Mar. 9, 1935 to July 23, 1937
*T. A. M. Craven
Democrat
District of Columbia
Aug.25,1937toJune30,1944
Virginia
July 2, 1956 to Mar. 25, 1963
*Frank McNinch
Democrat
North Carolina
Oct. 1, 1937 to Aug. 31, 1939
Chairman ............................................................................................................................................. Oct. 1, 1937 to Aug. 31, 1939
*Frederic I. Thompson
Democrat
Alabama
Apr. 13,1939 to June 30, 1941
*James Lawrence Fly
Democrat
Texas
Sept. 1, 1939 to Nov. 13, 1944
Chairman ............................................................................................................................................. Sept. 1,1939 to Nov. 13, 1944
Ray C. Wakefield
Republican
California
Mar.22, 1941 to June 30, 1947
*Clifford J. Durr
Democrat
Alabama
Nov. 1, 1941 to June 30, 1948
*Ewell K .Jett
Independent
Maryland
Feb. 15, 1944 to Dec. 31, 1947
Interim Chairman ............................................................................................................................... Nov. 16, 1944 to Dec. 20, 1944
*Paul A. Porter
Democrat
Kentucky
Dec. 21, 1944 to Feb. 25, 1946
Chairman ............................................................................................................................................. Dec. 21, 1944 to Feb. 25, 1946
Charles R. Denny
Democrat
District of Columbia
Mar.30,1945toOct.31,1947
Acting Chairman ................................................................................................................................. Feb. 26, 1946 to Dec. 3, 1946
Chairman ............................................................................................................................................. Dec. 4, 1946 to Oct. 31, 1947

*William H. Willis
Republican
Vermont
July 23, 1945 to Mar. 6, 1946
*Rosel H. Hyde
Republican
Idaho
Apr. 17, 1946 to Oct. 31, 1969
Chairman ............................................................................................................................................. Apr. 18, 1953 to Apr. 18, 1954
ActingChairman .................................................................................................................................. Apr. 19, 1954 to Oct. 3, 1954
Acting Chairman ................................................................................................................................. May 1, 1966 to June 26, 1966
Chairman ............................................................................................................................................. June 27, 1966 to Oct. 31, 1969

*Edward M. Webster
Independent
District of Columbia
Apr. 10, 1947 to June 30, 1956
*Robert F .Jones
Republican
Ohio
Sept. 5, 1947 to Sept. 19, 1952
*Wayne Coy
Democrat
Indiana
Dec. 29, 1947 to Feb. 21, 1952
Chairman ............................................................................................................................................. Dec. 29,1947 to Feb. 21,1952
George E. Sterling
Republican
Maine
Jan. 2,1948 to Sept. 30,1954
*Frieda B. Hennock
Democrat
New York
July 6, 1948 to June 30, 1955
*Robert T .Bartley
Democrat
Texas
Mar. 6, 1952 to June 30, 1972
*Eugene H. Merrill
Democrat
Utah
Oct. 6, 1952 to Apr. 15, 1953
*John C. Doerfer
Republican
Wisconsin
Apr. 15, 1953 to Mar. 10, 1960
Chairman ............................................................................................................................................. July 1, 1957 to Mar. 10, 1960
*Robert E. Lee
Republican
Illinois
Oct. 6,1953 to June 30, 1981
Interim Chairman ............................................................................................................................... Feb. 5, 1981 to Apr. 12, 1981
Chairman ............................................................................................................................................. Apr.13,1981 to May 18,1981

*George C. McConnaughey
Republican
Ohio
Oct.4, 1954 to June 30, 1957
Chairman ............................................................................................................................................. Oct. 4, 1954 to June 30, 1957
*Richard A. Mack
Democrat,
Florida
July 7, 1955 to Mar. 3, 1958
*Frederick W. Ford
Republican
West Virginia
Aug.29,1957 to Dec.31, 1964
Chairman ............................................................................................................................................. Mar. 15, 1960 to Mar. 1, 1961
*John S. Cross
Democrat
Arkansas
May 23, 1958 to Sept. 30, 1962

COMMISSIONERS FROM 1934 TO PRESENT 9

Commissioners From 1934 to the Present

Commissioner

Party Affiliation

State

Term of Service

Charles H. King
Republican
Michigan
July 19, 1960 to Mar. 2, 1961
Newton N. Minow
Democrat
Illinois
Mar. 2, 1961 to June 1, 1963
Chairman ............................................................................................................................................. Mar. 2, 1961 to June 1, 1963
E. William Henry
Democrat
Tennessee
Oct. 2,1962 to May 1, 1966
Chairman ............................................................................................................................................. June 2, 1963 to May 1, 1966
Kenneth A. Cox
Democrat
Washington
Mar. 26, 1963 to Aug. 31, 1970
Lee Loevinger
Democrat
Minnesota
June 11, 1963 to June 30, 1968
*James J. Wadsworth
Republican,
New York
May 5,1965 to Oct.31,1969
Nicholas Johnson
Democrat
Iowa
July 1, 1966 to Dec. 5, 1973
H. Rex Lee
Democrat
District of Columbia
Oct.28,1968to Dec. 31, 1973
*Dean Burch
Republican
Arizona
Oct. 31, 1969 to Mar. 8, 1974
Chairman ............................................................................................................................................. Oct. 31, 1969 to Mar. 8, 1974
Robert Wells
Republican
Kansas
Nov. 6, 1969 to Nov. 1, 1971
Thomas J. Houser
Republican
Illinois
Jan. 6, 1971 to Oct. 5, 1971
Charlotte T. Reid
Republican
Illinois
Oct. 8, 1971 to July 1,1976
Richard E. Wiley
Republican
Illinois
Jan. 5, 1972 to Oct. 13, 1977
Chairman ............................................................................................................................................. Mar. 8, 1974 to Oct. 13, 1977
Benjamin L. Hooks
Democrat
Tennessee
July 5, 1972 to July 25, 1977
James H. Quello
Democrat
Michigan
Apr. 30, 1974-
Chairman,.........................................................................................................................................Feb. 5, 1993 to Nov 28,1993
Glen O. Robinson
Democrat
Minnesota
July 10, 1974 to Aug. 30, 1976
Abbott M. Washburn
Republican
Minnesota
July 10,1974 to Oct. 1, 1982
Joseph R. Fogarty
Democrat
Rhode Island
Sept.17,1976 to June 30, 1983
Margita E. White
Republican
Sweden
Sept. 23,1976 to Feb. 28, 1979
Charles D. Ferris
Democrat
Massachusetts
Oct.17,1977to Apr. 10, 1981
Chairman ............................................................................................................................................. Oct. 17, 1977 to Feb. 4, 1981
Tyrone Brown
Democrat
Virginia
Nov. 15, 1977 to Jan. 31, 1981
Anne P. Jones
Republican
Massachusetts
Apr. 7, 1979 to May 31, 1983
Mark S .Fowler
Republican
Canada
May 18, 1981 to Apr. 17, 1987
Chairman ............................................................................................................................................. May 18, 1981 to Apr. 17, 1987
Mimi Weyforth Dawson
Republican
Missouri
July 6, 1981 to Dec. 3, 1987
Henry M. Rivera
Democrat
New Mexico
Aug. 10, 1981 to Sept. 15, 1985
Stephen A. Sharp
Republican
Ohio
Oct. 4, 1982 to June 30, 1983
Dennis R. Patrick
Republican
California
Dec. 2,1983 to Apr. 17, 1987
Chairman ............................................................................................................................................. Apr. 18, 1987 to Aug. 7, 1989
Patricia Diaz Dennis
Democrat
New Mexico
June 25, 1986 to Sept.29, 1989
Alfred C. Sikes
Republican
Missouri
Aug. 8, 1989 to Jan. 19, 1993
Chairman ............................................................................................................................................. Aug. 8, 1989 to Jan. 19, 1993
Sherrie P. Marshall
Republican
Florida
Aug. 21,1989 to April 30, 1993
Andrew C. Barrett
Republican
Illinois
Sept. 8, 1989-
Ervin S. Duggan
Democrat
Georgia
Feb. 28, 1990 to Jan. 30, 1994
Reed E. Hundt
Democrat
Maryland
Nov. 29, 1993-
Chairman
Susan Ness
Democrat
New Jersey
May 19, 1994-
Rachelle B. Chong
Republican
California
May 23, 1994-
*

Deceased


10 FEDERAL COMMUNICATIONS COMMISSION ANNUAL REPORT

The Commission

The Federal Communications Commission (FCC) is an independent federal regu-
latory agency responsible directly to Congress. Established by the Communica-
tions Act of l934, it is charged with regulating interstate and international com-
munications by radio, television, wire, satellite, and cable. Its jurisdiction covers
the 50 states and territories, the District of Columbia and U.S. possessions.
The FCC is directed by five Commissioners appointed by the President and con-
firmed by the Senate for staggered five-year terms. No more than three can be
members of the same political party.
The President designates one of the Commissioners to serve as Chairman. The
Commissioners hold regular agenda meetings and special meetings. They also
may act between meetings by “circulation,” a procedure whereby a document is
submitted to each Commissioner individually for official action.
The Chairman presides over all FCC meetings. The Chairman coordinates and
organizes the work of the Commission and represents the agency in legislative
matters and in relations with other government departments and agencies.
The Commission reorganized itself in FY95 to establish two new bureaus -- Wire-
less Telecommunications and International -- to reflect the changes in the indus-
tries it regulates.
It also continued its use of emerging technologies to serve more efficiently its
customers -- the American public and regulated industries.
The FCC expanded its use of the Internet, which has become an increasingly
popular way for the public to access information. In FY95 the FCC established a
http://www.fcc.gov/Welcome.html">“home page” and expanded its Internet communications pipeline to meet increased
use by the public and staff. The Commission implemented a fax-on-demand sys-
tem to allow quick access to forms, press releases and other information. In
addition, the FCC installed six video teleconferencing systems in its various of-
fices in Washington, DC, and Gettysburg, PA.
The FCC completed the installation of ISDN (Integrated Services Digital Net-
work) telephones for Headquarters staff in FY95. In addition, the Headquarters
voice mail system was enhanced to allow greater capacity and flexibility.

COMMISSION 11
Information technology continues to be a significant factor in the success of
the Commission’s auction activities. Technology is used for remote bid sub-
mission plus electronic calculation and notification of round results.

Bureaus and Offices

The Commission is composed of six operating bureaus and 10 offices which
provide support services.

Office of the Managing
Director (OMD)

Under the supervision and direction of the Chairman, the Managing Director
serves as the FCC’s chief operating and executive official. The Managing
Director provides managerial leadership to, and exercises supervision and di-
rection over, the FCC’s bureaus and staff offices in management and adminis-
trative matters; formulates and administers all management and administrative
policy programs and directives for the Commission; assists the Chairman in
carrying out administrative responsibilities; advises the Chairman, Commis-
sioners and management on administrative and related matters; administers
the FCC’s management systems and directs agency efforts in improving man-
agement effectiveness, operational efficiency and employee productivity.

Office of Public Affairs
(OPA)

The Office of Public Affairs is responsible for informing the press and public of
the FCC’s actions, facilitating public participation in the FCC’s decision-mak-
ing processes, operating many of the FCC’s public reference rooms and library
and conducting an extensive consumer outreach program. OPA issues daily
news releases, public notices and other informational material; prepares the
Annual Report and other publications; handles telephone, written, and walk-in
requests for information. OPA maintains the FCC’s Internet web site.

Office of the Inspector
General (OIG)

The Office of the Inspector General was created by the Inspector General
Amendments Act of l988. The Inspector General conducts and supervises
audits and investigations relating to the programs and operations of the agency.
The Inspector General recommends policies for activities designed to promote
economy, efficiency and effectiveness, as well as to prevent and detect fraud
and abuse in agency programs. The Inspector General also provides a means
for keeping the Chairman, Commissioners and the Congress fully informed
about problems and deficiencies at the agency.

Office of Hearings and
Review (OHR)

Administrative Law Judges preside over hearings and issue Initial Decisions.
Review of Initial Decisions is done by the full Commission.

12 FEDERAL COMMUNICATIONS COMMISSION ANNUAL REPORT

Office of the General

Counsel (OGC)

The General Counsel serves as the chief legal advisor to the Commission and its
various bureaus and offices. The General Counsel also represents the Commission
before the federal courts of appeals, recommends decisions in adjudicatory matters
before the Commission, assists the Commission in its decisionmaking capacity, per-
forms a variety of legal functions regarding internal administrative matters and ad-
vises the Commission on fostering competition and promoting deregulation in a
competitive environment.

Office of Workplace

Diversity (OWD)

The Office of Workplace Diversity, established this year, serves as the principal
advisor to the Chairman and Commission on all aspects of workforce diversity,
affirmative recruitment, equal employment opportunity and civil rights within the
Commission. The office develops, coordinates, evaluates, and recommends to the
Commission internal policies, practices, and programs designed to foster a diverse
workforce and to promote equal opportunity for all employees and applicants for
employment.

Office of Communication

Business Opportunities

(OCBO)
Also new this year, the Office of Communications Business Opportunities is re-
sponsible for providing advice to the Commission on issues and policies concerning
opportunities for ownership and contracting by small, minority and women-owned
communications businesses. The office also advises the Commission on policies to
foster equal employment opportunity in the communications industries for minori-
ties, women, and people with disabilities. The office works with entrepreneurs,
industry and public interest organizations and individuals to provide information
about policies to promote ownership and employment opportunities in the commu-
nications industry.

Office of Plans and Policy

(OPP)
The Office of Plans and Policy serves as principal economic and technical policy
adviser to the Commission, analyzing agenda items and developing long-term policy.
The office also produces working papers on major policy issues. (A more extensive
profile of the office is included later in this report.)

Office of Legislative and

Intergovernmental Affairs

(OLIA)
The Office of Legislative and Intergovernmental Affairs serves as the Commission’s
principle point of contact with Congress and other governmental entities. Its name
was changed this fiscal year from the Office of Legislative Affairs to reflect its
expanded responsibilities. (A more extensive profile of the office is included later in
this report.)

COMMISSION 13

Office of Engineering and
Technology (OET)

The Office of Engineering and Technology is responsible for managing the
non-Government use of the spectrum. OET makes recommendations to the
Commission on how the radio spectrum should be allocated and establishes
the technical standards to be followed by users. OET provides technical lead-
ership to create new opportunities for competitive technologies and services
for the American public. (A more extensive profile of the office is included
later in this report.)

The Operating Bureaus

The Commission is divided into six operating bureaus reflecting six broad
divisions of Commission responsibility. These are: the Mass Media, Common
Carrier, Wireless Telecommunications, Compliance and Information, Interna-
tional, and Cable Services Bureaus.
FCC Chairman Reed Hundt, far right, listens to President Clinton talk about reinventing government.

14 FEDERAL COMMUNICATIONS COMMISSION ANNUAL REPORT

FCC Appropriations History

1970-79
1980-89
1990-95
1980 ------ $76,047,000
1990 ....... $107,550,000
1970 ------ $24,561,000
1971 ------ $26,844,000
1981 ------ $80,363,000
1991 ....... 116,794,0001/
1982 ------ $79,900,000
1972 ------ $31,969,000
1992 ....... $126,309,000
1983 ------ $82,917,000
1973 ------ $34,173,000
1993 ....... $140,000,0002/
1984 ------ $88,283,000
1974 ------ .$40,155,000
1994 ....... $160,300,000
1985 ------ $95,441,000
1975 ------ $46,900,000
1995 ....... $185,232,000 3/
1976 ------ $51,163,000
1986 ------ $90,341,000
1977 ------ $56,911,000
1987 ------ $97,099,000
1978 ------ $64,550,000
1988 ------ $99,613,000
1979 ------ $70,466,000
1989 ------ $99,613,000
1/ Final action of Graham- Rudman - Hollings Sequestration Act on total appropriation
Level of $116,794,000 reduced available funds by $1,518 to $116,792,482.

2/ Appropriation included $11,500,000 in supplemental no-year funding to implement
the Cable Television Consumer Protection and Competition Act of 1992.

3/ Reduced by $305,000 for administration and contract costs savings to $184,927,000.

Regulatory Fees Collected from 1994-1995

1994................................$58,917,000.00
1995..............................$119,339,000.00

Fees Collected from 1987-1995

FY92...............................$50,618,000.00
FY87...............................$10,330,000.00
FY93...............................$39,102,000.00
FY88...............................$41,206,000.00
FY94...............................$42,780,000.00
FY89...............................$56,858,000.00
FY95...............................$50,609,000.00
FY90..............................$27,559,000.00
FY91...............................$46,361,000.00

COMMISSION 15

FCC Personnel Chart

Full Time Permanent

Washington Field

Total

Employees

D.C.

Commissioners Offices
31
-------
31
Office of Plans and Policy
16
-------
16
Office of Managing Director
223
4
227
Mass Media Bureau
302
------
302
Information Resources Management
262
3
265
Compliance and Information Bureau
77
243
320
Wireless Telecommunications Bureau
158
130
288
Office of Engineering and Technology
90
------
90
Office of General Counsel
75
-------
75
Administrative Law Judges
16
------
16
Review Board
6
-------
6
Office of Public Affairs
60
-------
60
Office of Legislative and Inter-Governmental
14
--------
14
Affairs
Office of Inspector General
5
-------
5
International Bureau
117
--------
117
Cable Services Bureau
179
--------
179
Office of Communications Business
8
--------
8
O p p o r t u n i t i e s
Office of Workplace Diversity
3
------
3
Total
1642
380
2,022

16 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

http://www.fcc.gov/dtf/dtfhome.html">

Disabilities Taskforce


One of the Commission’s overriding concerns in FY95 was to ensure that the
benefits of the information revolution were available to everyone, including the
disability community.
The FCC Disabilities Issues Task Force was formed in March of 1995 by Chair-
man Reed Hundt, the FCC Disabilities Issues Commissioner. Linda Dubroof,
Deputy Chief of the Network Services Division, Common Carrier Bureau, was
appointed Director of the Task Force in June 1995 by Chairman Hundt. Every
Bureau and Office of the FCC is represented on the Task Force. The Task Force
serves as the FCC’s main point of contact and coordination on all disability
access initiatives, and works to ensure that the FCC takes steps to promote
access to the Information Superhighway by individuals with disabilities.
Accomplishments
http://www.fcc.gov/dtf/dtftop.html">•In June 1995 Chairman Hundt announced a “Top Ten List” of things that the
FCC could do to facilitate access for persons with disabilities. Working Groups
were formed to implement this Top Ten List.
•In July 1995, to commemorate the 2nd anniversary of Telecommunications
Relay Services (TRS) for persons with hearing and speech disabilities, Miss
America 1995 Heather Whitestone visited the FCC and participated in a live
TRS call with Chairman Hundt. The TRS working group began discussion of a
future Notice of Inquiry (NOI) addressing how TRS can serve more Americans
in more efficient ways.
•The Commission implemented a policy ensuring that all Commission open
meetings are closed-captioned for people with hearing disabilities; Task Force
members began work on an accessibility handbook and a training video for
FCC employees on disability issues.
•In April 1995 the Wireless Telecommunications Bureau adopted a Notice of
Proposed Rulemaking (NPRM), WT No. 95-56, to create a new Low Power
Radio Service that would include auditory assistive listening devices for indi-
viduals with hearing disabilities.

DISABILITIES TASKFORCE 17
• Task Force members and other FCC officials met with cable industry
representatives and representatives of the disability community to nego-
tiate a plan for ensuring that the Emergency Alert System (EAS) will be
accessible to persons with disabilities.
• The Task Force began work on an FCC policy paper regarding the uni-
versal design of telecommunications equipment and services; partici-
pated in industry and consumer fora on universal design and other acces-
sibility issues.
• Representatives of the Task Force and the Mass Media Bureau began
http://www.fcc.gov/Bureaus/Mass_Media/Notices/fcc95484.txt">circulating drafts of a historic Notice of Inquiry (NOI) on closed-
captioning and video description of video programming, for Commis-
sion adoption and release in December 1995.
• Task Force members and Common Carrier Bureau staff conducted a Ne-
gotiated Rulemaking between industry and consumers on wireline tele-
phone hearing aid- compatibility, over rules which were suspended in
http://www.fcc.gov/Bureaus/Common_Carrier/Notices/fcc95474.txt">April 1993; also prepared a Notice of Proposed Rulemaking (NPRM),
for release in November 1995 to implement the recommendations of the
Negotiated Rulemaking Committee.
• Chairman Hundt and the Task Force began dialogue with industry and
consumer groups on the issue of hearing aid-compatibility with wireless
digital (PCS) telephones, with plans for a January 1996 Summit between
industry and consumers on wireless compatibility.
Chairman Hundt and Heather Whitestone, Miss America 1995, demonstrate use of the Telcommunications Relay
Services, which allows hearing - or speech-impaired people to have access to all telephone services.

18 FEDERAL COMMUNICATIONS COMMISSION •

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FCC On Line

FY95 is the year the FCC went “on line.” Until this year the Internet program was very
limited, and had virtually no visual presence. Transactions were almost all based on file
transfer protocol. Chairman Hundt committed the FCC to using Internet’s World Wide
Web as a mechanism for disseminating information about Commission proceedings and
documents. The Office of Public Affairs was given the responsibility of organizing and
managing the FCC’s Internet activities, with technical support from the Office of the
Managing Director. At the same time, all Bureaus and Offices were requested to partici-
pate in and contribute to the development of Internet.
It was during this time that the FCC completed the evolution of its computing infrastruc-
ture from an archaic centralized mainframe computing environment with little or no
communications capability into a modern distributed computer infrastructure . The
project became known at the FCC as the Information Systems Modernization project.
ISM began in 1989 with the official decision to “replace the Honeywell” and was com-
pleted in 1995 when Chairman Hundt unplugged the old mainframe. The project in-
cluded development of a highly reliable local area network, placement of a personal
computer on every employee’s desk, and migration of virtually every license processing
application in the Commission to a new computing platform. Internet is one of the most
radically different of all the new applications which needed that modern infrastructure to
exist.
During FY95 the Office of Public Affairs began operating as a production center with a
goal of publishing all FCC documents on the Internet concurrently with paper release.
To achieve this goal, OPA created a file structure to accommodate all types of FCC
documents and drafted an entire suite of Internet Pages to serve as the basis for Bureaus
and Offices to use in devising their own pages. At the same time, computer support staff
set up automated scripts (programs) to create indexes to assist users in finding the docu-
ments they needed to see. The use of intelligent file names (i.e., names which reflect
information about the file) plus the indexes constituted the most reliable means to locate
documents on the FCC site. All over the FCC, authors now send their documents to a
special mailbox. At the same time that those documents are released in paper copy.
From this mailbox, OPA staff format and post the documents to the Internet, providing
unprecedented access to FCC customers across the country and throughout the world.
During the year more than 5,000 documents were published on the ‘Net, many within one
day of release. The page also invited questions, comments or suggestions to be directed
to a new email box: FCCINFO@fcc.gov.
Public usage of the system quickly rose to 14,000 “hits” per day on the original Internet
server. This number includes Auctions activities featuring Round Results, which are
loaded onto the Net within 1/2 to 3/4 hour of close of bidding. The initial surge of usage
stabilized at about 16,000 hits per day. Hundreds of email queries per month are re-
ceived in the various email boxes publicized on Internet, ranging from comments on the
site itself, to questions of how to obtain information or services from the FCC, to thought-
fully composed discussions of various policy issues.

FCC ON-LINE 19
Usage statistics show that the most frequently “hit” files are the Main FCC Home Page,
http://www.fcc.gov/Welcome.html">http://www.fcc.gov; auctions information; Chairman’s and Commissoners' Pages; and
special interest pages. Databases, especially where individual queries are available, are
also highly visited. Finally, a large number of individual files are hit once or twice.
During this start-up phase the FCC also began a Listserver Daily Digest subscription
service. The Digest is a summary of Commission activities reflected in its published
documents. It includes bibiliographic information and summaries of public notices,
news releases, and documents scheduled for publication in the FCC Record. There are
now approximately 1,000 subscribers on the DD listserver.
Comments and requests to add new information or to expand existing services began
flowing in from around the world via email, phone and letter. The FCC has received
numerous comments on the wealth of information now being transmitted via Internet.
At the same time, customers are requesting more complete document coverage concur-
rent with notification, better explanations of what’s on the ‘Net, additional information
about applications status, better access to Commission staff, electronic forms and elec-
tronic filing are what the public wants on the Internet. Requests for more and more
information increase with each new addition to the site, and at the same time usage of the Chairman Hundt officially decommis-
site increases.
sions the FCC's old Honeywell com-
puter on May 19,1995, ushering in a
http://www.fcc.gov/chairman.html">During FY95 Chairman Hundt initiated “the Chairman’s Corner” a bi-weekly column in new era in FCC computing.
which he discusses public policy issues and invites responses to his comments. Com-
http://www.fcc.gov/Quello.html">missioners Quello, Ness and Chong also have set up their own pages, complete with
speeches, columns and biographical information. The Chairman and Commissioners
each have a reply form which enables readers to respond directly to the issues or topics
discussed in the column. This feature brings the Commssion within reach of “regular
citizens” who highly appreciated it, judging by favorable comments received via email,
whether or not the commenter agrees with the underlying policy positions. Additionally,
Chairman Hundt and Commissioner Chong have participated in online “chats” via
America Online and Compuserve.

20 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT


MASS MEDIA BUREAU 21
http://www.fcc.gov/mmb.html">

Mass Media Bureau


The Mass Media Bureau IS the part of the FCC that deals with broadcasting -

Overview

- television and radio -- as well as Multipoint Distribution Service (MDS)
(sometimes called wireless cable) and Instructional Television Fixed Service
(ITFS), a service used mainly by educational entities to provide classroom
instruction struction to multiple locations. The Bureau issues licenses (autho-
rization of service), performs policy and rulemaking functions and adminis-
ters the enforcement program for all mass media services.
The

AUDIO SERVICES DIVISION

(ASD), the largest Division in the Bu-
reau, licenses commercial and noncommercial educational AM, FM and FM
translator services. In FY95 ASD planned and implemented a major reorgani-
zation aimed at streamlining its operations, reducing levels of review, and im-
proving its speed of service. The reorganization eliminated all three branches,
reduced the number of supervisors by seven, and established work groups fo-
cused on a particular type of work rather than a broadcast service. Through the
reorganization, the Division divided its legal staff so that senior staff and re-
viewers concentrated on the contested cases and appeals, and the less senior
staff on the more routine applications. The reorganization also allowed the
managers to implement a more focused case-by-case tracking system. ASD
designed a new computerized application processing and tracking system for
processing the more than 12,000 radio renewal applications that will be filed
during the current license renewal cycle. Additionally, ASD created a radio
renewal booklet to facilitate the renewal process for licensees by consolidating
all forms, information, helpful tips and worksheets in a convenient packet. ASD
also took a number of steps to improve the availability of information to its
customers. It established a Customer Service Team to upgrade the quality and
efficiency of the Division’s public information dissemination by providing the
public with information about processing procedures, application status, and
expected processing times. The AM and FM engineering databases are now
available to the public from commercial sources or, in compressed form, through
the Internet. A toll-free Radio Renewal Information telephone line and a radio
renewal email Internet address have also been established to assist licensees in
the license renewal process.

22 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

The

VIDEO SERVICES DIVISION

(VSD) licenses commercial and noncom-
mercial educational TV, Low Power TV, TV translators, MDS and ITFS. To
prompt the development of the Multipoint and/or Multichannel Distribution Ser-
vice (MDS) as a viable competitor to cable television service, the Commission in
June 1994 refocused and prioritized the MDS application process, transferring
that function to the Mass Media Bureau. In accordance with the principles of the
National Performance Review, VSD formulated a new organizational structure
that featured multidisciplinary, collaborative work teams under the immediate guid-
ance of a sole management-level official within that Division. During FY95 the
reorganized MDS staff was able to make significant progress towards eliminating
the large backlog of MDS applications and legal cases that were pending at the
time that the MDS service was transferred to the Bureau. At the same time, sev-
eral rulemaking initiatives were developed by Video Services Division in order to
develop more effective procedures to promote the initiation of new and improved
ITFS and MDS services.
The

POLICY AND RULES DIVISION (

PRD) conducts rulemaking proceed-
ings which affect the mass media services and provides legal and technical analy-
ses of these rules. The Policy and Rules Division also conducts sociological and
economic studies to formulate and evaluate Commission policies in terms of their
economic effects on the media or on other Commission-regulated industries or
society. During FY95 the Allocations Branch of the Policy and Rules Division
streamlined its internal process for adopting most rulemaking decisions. It has
reduced the review process by eliminating one intermediate level of review. It has
also significantly increased its reliance on procedural rules in disposing of peti-
tions for reconsideration and applications for review by issuing summary disposi-
tions of issues that are repetitious of earlier pleadings and that have been ad-
dressed in earlier decisions. These changes, along with a temporary shift in re-
sources, permitted the Branch to reduce its backlog of cases over one-year-old by
over 50% during the summer of 1995.
The

ENFORCEMENT DIVISION

(ED) responds to complaints, conducts in-
vestigations concerning broadcast stations, handles matters concerning political
broadcasting regulations, enforces the broadcast and cable television equal em-
ployment opportunity laws and rules, and participates in formal adjudicative pro-
ceedings involving broadcast stations. During FY95 the Enforcement Division
streamlined its organization and improved speed of service without sacrificing
quality by developing substitutes for a former level of managerial review. Specifi-
cally, it eliminated two management positions through attrition. It encouraged
peer review to reduce further the amount of managerial review necessary. The
Division also established task forces, frequently across Branch lines, to focus the
Division’s efforts on its highest priorities. These task forces were led by non-
managerial team leaders, chosen for their expertise in the task at hand. The

MASS MEDIA BUREAU 23
flattened structure and the task forces have increased efficiency, team spirit
and morale while reducing levels of review.
In FY95 the Bureau adopted the practice of streamlining its decision docu-
ments by eliminating long detailed recitation of background and non-deci-
sional facts. The underlying legal analysis is not reduced, but the letter deci-
sions more succinctly present the basis for the decision. This new practice
significantly reduced the amount of review and editing time.

FY95
Highlights

• Eliminated Prime Time Access Rule.
• Developed and successfully carried out a plan to eliminate by June
1995 the existing backlog of radio and television assignment and
transfer applications that were contested and/or involved rule waiv-
ers and that had been pending for over 180 days, except for those
cases that were blocked by circumstances beyond the Bureau’s con-
trol. In all, 93 contested sales applications were disposed by staff
action and recommendations to the Commission for disposition were
made with respect to 10 other sales applications. At the same time,
the Bureau met its concurrent commitment to maintain the current
speed of service for routine radio and television sales applications at
60 days.
• Reduced substantially the backlog of MDS applications and legal cases
pending at the assumption of the MDS authorization of service func-
tion. By the close of FY95 the reorganized MDS staff reduced that
number to 4,065, a 72% reduction. This included a 96% reduction
(from 5,523 to 207) in the number of petitions to deny that were pend-
ing at the time of the transfer.
• Conducted 109 lotteries involving 420 mutually exclusive LPTV and
TV translator applications, of which nearly 12% were filed by entities
that were more than 50% minority owned. In 14 of 49 lotteries (26%)
a minority applicant was the winner.
• Increased by more than 32% (from 468 to 628) the number of ITFS
new and major change application disposals with nearly 88% of those
disposals being non-routine actions.
• Significantly improved the speed of service for FM license applications
by streamlining the authorization process, reducing the average pro-
cessing time from 10 months to 90 days.

24 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

• Responded to 18,031 telephone and 7,594 written complaints and inquiries
made in connection with the Bureau's enforcement program. Also, issued 16
Notices of Apparent Liability totaling $183,000 and six forfeiture orders totaling
$51,500.

Major

Proceedings

Multipoint

In December 1994 the Commission issued a Notice of Proposed Rulemaking

Distribution Service

(Notice) seeking comments on proposals to streamline the procedures by which
(MM Docket No. 94-131 and
applications for new facilities in the single channel and multichannel Multipoint

PP Docket No. 93-253)

Distribution Services (MDS) are filed and processed. The Commission pro-
posed to adopt filing procedures consistent with its competitive bidding proce-
dure, requiring applicants to file only short-form applications for predetermined
geographic areas with the successful bidders filing long-form applications at a
later date. Comments on alternative filing procedures, including a national filing
window and one limited to existing licensees and systems operations, were also
solicited. In the Notice, the Commission also invited comment on the technical
and practical feasibility of utilizing a mandatory electronic filing approach in con-
junction with the proposed filing procedures.
The Commission’s announced goal in instituting this proceeding was to facilitate
development of wireless cable, the delivery of video programming via micro-
wave channels to subscribers using MDS and/or Instructional Television Fixed
Service (ITFS). On June 30, 1995, the Commission adopted a Report and Order
that established a geographic licensing plan, utilizing a simultaneous multiple
round bidding process, under which the Commission would allot one MDS au-
thorization for each of the Rand McNally defined 487 Basic Trading Areas (BTAs)
and six additional BTA-like geographic areas. The BTA authorization holder
would have the exclusive right to construct facilities to provide wireless cable
service over any usable MDS channel within the BTA, provided currently autho-
rized and previously proposed MDS stations, as well as the protected service
areas and receive sites of ITFS systems, were not interfered with.
While the signals of a BTA authorization holder were not allowed to interfere
with those of any other BTA authorization holder, the Commission permitted
BTA authorization holders to negotiate interference protection rights in recogni-
tion of the fact that BTA boundaries did not always track desired service areas.
In the Report and Order, the Commission also initiated a variety of measures to

MASS MEDIA BUREAU 25
streamline further the MDS application and implementation processes, for ex-
ample, authorizing the voluntary use of electronic filing and fee payments for
new MDS applications and establishing computerized interference studies us-
ing new data elements to be included in the revised MDS application form.
Adoption of the new licensing plan and related measures should promote rapid
opportunities for MDS to reach its competitive potential.
Advanced Television (ATV) is a generic term referring to any system for dis-

Advanced Television

tributing television that results in improved television audio and video quality.

Service

High Definition Television (HDTV) is a type of ATV system. HDTV refers to
http://www.fcc.gov/Bureaus/Mass_Media/Notices/fcc95315.html">(MM Docket No. 87-268)
systems that aim to offer approximately twice the horizontal resolution and
twice the vertical resolution of conventional television pictures, which would
approach the quality of 35 mm film, and provide sound quality rivaling that of
compact discs. In February of 1993 the Advisory Committee on Advanced
Television Service reported to the Commission that a digital advanced televi-
sion system was achievable but that the competing systems that it had evalu-
ated would all benefit from further development and that none could be rec-
ommended over the others at that time. Three months later, in May of 1993,
seven companies and institutions that had been proponents of the tested sys-
tems joined together in a “Grand Alliance” to develop a final digital advanced
television system. They developed such a system and a standard was devel-
oped based on it. That system appears capable not only of delivering HDTV
but, additionally, of allowing each broadcaster to deliver up to four standard
definition television (SDTV) signals in the same amount of frequency space as
it currently uses to deliver a single programming stream.
On November 28, 1994, the Advisory Committee reported that standard to
the Commission and recommended its adoption as the advanced television
http://www.fcc.gov/Bureaus/Mass_Media/Notices/fcc95315.html">standard. On July 28, 1995, the Commission adopted a Fourth Further Notice
of Proposed Rule Making and Third Notice of Inquiry (Notice)
in this pro-
ceeding. In that Notice, the Commission noted that the development of the
flexible Grand Alliance digital advanced television would enable broadcasters
to provide HDTV service, or SDTV service, or other digital services and to
switch quickly and easily between these services. This, the Commission rea-
soned, was a change in circumstance that warranted revisiting a number of
previously considered issues. Accordingly, it sought comment on a wide array
of issues including digital broadcast programming requirements, eligibility for
digital broadcast television licenses, the length of the transition to digital broad-
cast television, the recovery of spectrum, the value of recovered spectrum, the
treatment of noncommercial stations, and cable “must carry” requirements.

26 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

Children’s Television

In April 1995 the Commission issued a Notice of Proposed Rule Making (No-
http://www.fcc.gov/Bureaus/Mass_Media/Orders/fcc95143.txt">(MM Docket No. 93-48)
tice) seeking comment on proposals to clarify and strengthen its rules imple-
menting the Children’s Television Act of 1990 (CTA). The CTA directs the
Commission to review, in any application for license renewal, whether a tele vi-
sion broadcast licensee has “served the educational needs of children through the
licensee’s overall programming, including programming specifically designed to
serve such needs.” The Commission first adopted rules implementing the CTA
in 1991.
In 1993 the Commission initiated this proceeding by adopting a Notice of In-
quiry
to examine whether its rules should be revised to identify more clearly the
levels and types of programming necessary to serve children’s educational needs
adequately. In June 1994 the Commission also convened an en banc hearing on
the subject of children’s television programming. Based on comments respond-
ing to the Notice of Inquiry and submitted in conjunction with the en banc hear-
ing, the Commission proposed in the Notice to improve the information available
to parents and the local community regarding educational television program-
ming, and to revise its definition of “core” educational programming to give
licensees clearer guidance regarding the types of programming required by the
CTA. In addition, the Commission proposed three alternative options: monitor
licensee performance for a specified period of time to determine whether or not
efforts to improve the dissemination of information to the public and a clarified
definition of educational programming result in a significant increase in such
programming; establish a safe harbor quantitative processing guideline specify-
ing an amount of core programming that would represent one means of satisfy-
ing the CTA’s programming obligation; establish a quantitative programming stan-
dard requiring that every station be responsible for airing a minimum amount of
core programming. Other proposals in the Notice include allowing stations to
meet a quantitative guideline or standard by sponsoring programs shown on other
stations. The deadlines for filing comments and reply comments on the Notice
have passed, and the Commission is presently evaluating these comments.

Television

The Commission adopted a Further Notice of Proposed Rule Making to review
Ownership Rules
its regulations governing television broadcasting and its policies and rules gov-
http://www.fcc.gov/Bureaus/Mass_Media/Orders/fcc95097.txt"> (MM Dockets 91-221and 87-8)
erning terrestrial satellite television stations. The Further Notice proposes a new
analytical framework within which to evaluate the Commission’s ownership rules
applied to television stations and provides a structured approach to a compre-
hensive economic and diversity analysis of the rules. Both national and local
ownership rules are under consideration in this proceeding, as are Limited Mar-
keting Agreements (LMAs) involving television stations. Nationally, an entity

MASS MEDIA BUREAU 27
may generally have an attributable interest in no more than 12 commercial
television stations or television stations reaching 25% of the total television
households. Locally, the “duopoly” rule prohibits an entity from having an
attributable interest in two or more commercial TV stations whose Grade B
contours overlap. The “one-to-a-market” rule generally prohibits a party from
holding cognizable ownership interests in commercial radio and television sta-
tions in the same market.
Parties are permitted to own, pursuant to waiver requests, radio-television
combinations in the top 25 television markets where there will be at least 30
separately owned broadcast licensees after the combination. Radio-television
combinations may also be permitted in the same market involving “failed”
stations that have not been operated for a substantial period of time. At the
close of FY95, these rules were the subject of consideration for possible legis-
lative action.

Broadcast Attribution

The Commission adopted a Notice of Proposed Rule Making to review its

Rules

broadcast attribution rules. The attribution rules define what interests are
http://www.fcc.gov/Bureaus/Mass_Media/Notices/fcc94324.txt">(MM Dockets Nos. 94-150,
cognizable for purposes of applying the multiple ownership rules to specific
http://www.fcc.gov/Bureaus/Mass_Media/Notices/fcc94324.txt">92-51, and 87-154)
situations. The multiple ownership rules limit the number of broadcast sta-
tions that a single person or entity, directly or indirectly, is permitted to own,
operate, or control. The Commission asked for comment on: (1) whether to
raise the voting stock attribution benchmarks from 5 percent to 10 percent
and from 10 percent to 20 percent for passive investors; (2) whether to restrict
the availability of the current exceptions to attribution for minority corporate
stockholdings where there is a single majority shareholder and for nonvoting
stock; (3) whether to relax insulation standards for business development com-
panies and other widely-held limited partnerships; (4) how to treat limited
liability companies and other new business forms for attribution purposes; (5)
whether to repeal or retain the remaining aspects of the Commission’s cross-
interest policy, which prevents individuals from having “meaningful” desig-
nated interests in two media outlets serving substantially the same area; and
(6) whether to adopt a new policy under which the Commission would scruti-
nize multiple “cross interests” or other significant business relationships, when
held in combination among ostensibly competing broadcasters, to determine
whether the combined interests, which individually would not raise concerns,
would raise issues with respect to the Commission’s diversity and competition
concerns.

28 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

Minority and
The Commission adopted a Notice of Proposed Rule Making proposing initia-

Female Ownershi

p
tives designed to increase minority and female ownership of mass media facili-
http://www.fcc.gov/Bureaus/Mass_Media/Notices/fcc94323.txt">(MM Dockets Nos. 94-149
ties. The Notice seeks current data with respect to female ownership and empha-
http://www.fcc.gov/Bureaus/Mass_Media/Notices/fcc94323.txt"> and 91-140)
sizes that the proposals will be applied to women only if the Commission re-
ceives sufficient information to construct a legally sustainable basis for doing so.
(The legality of minority preferences was upheld by the Supreme Court in Metro
Broadcasting . In its June 12, 1995, decision in Adarand Constructors, Inc. v.
Pena, the Supreme Court held that race-based federal affirmative action pro-
grams are subject to strict judicial scrutiny. The Commission is in the process of
evaluating the impact of this decision.) The major initiatives proposed by the
Commission include (1) a reworked version of its earlier “incubator” proposal
which would permit owners to exceed the appli cable ownership caps if they as-
sist minorities or women in becoming station owners; (2) an exception to the
attribution rules that would deem investments in minority and female-controlled
facilities non-attributable if a control group of minorities or women hold more
than 50 percent of the voting stock and a specified minimum level of equity; and
(3) various modifications to the existing minority tax certificate policy. The
Notice sought comment on how these and other proposals could apply to all
mass media, including broadcast, cable, LPTV and wireless cable facilities.
Broadcast TV
On June 15, 1995, the Commission issued a Notice of Proposed Rule Making
Networks and
initiating an examination of its rules regarding programming practices of broad-

Affiliates:

cast television networks and their affiliates. The Notice specifically addresses
Network
the right to reject rule, the time option rule, the exclusive affiliation rule, the dual

Programming

network rule and the network territorial exclusivity rule. The Notice proposes to
Practices
retain the right to reject rule with a clarification to eliminate financial consider-
(MM Docket No. 95-92)
ations as a sole justification for program rejection; to modify the time option rule
to permit time option agreements if they contain an appropriate deadline for
invoking the option; to eliminate the exclusive affiliation rule, at least in large
markets; and to eliminate the first prong of the network territorial exclusivity
rule -- prohibiting exclusivity for rejected programs vis-a-vis other stations in the
same community, but to retain the second prong of the rule -- prohibiting exclu-
sivity vis-a-vis stations not in the same community. The Commission also asked
a series of questions designed to evaluate the costs and benefits of the dual net-
work rule. The Commission has, via this Notice and other related proceedings,
put all of the network/affiliate rules out for public comment as part of a compre-
hensive review.

MASS MEDIA BUREAU 29
On June 14, 1995, the Commission issued a Notice of Proposed Rule Making

Broadcast TV

to reexamine two rules regulating broadcast television network/affiliate rela-

Networks and

tionships. The first rule prohibits agreements by which a network can influ-

Affiliates:

ence or control the rates its affiliates set for the sale of their non-network
http://www.fcc.gov/Bureaus/Mass_Media/Notices/fcc95226.html"> Advertising Rules
(MM Docket No. 95-90)

broadcast time, and the other rule prohibits broadcast television affiliates that
are not owned by their networks from being represented by their networks for
the sale of non-network advertising time. The Notice requests information
that will allow the Commission to ascertain whether the rules continue effec-
tively to promote diversity and competition. Should the record indicate that
neither television broadcast networks nor networks and their affiliates have
the ability or incentive to manipulate the market price for network or national
spot television advertising time, the Commission will consider eliminating or
modifying the rules. In addition, it will consider eliminating or modifying the
rules if the record indicates that they are ineffective in correcting the public
interest harm they were designed to remedy. On the other hand, should the
Commission determine that networks, or networks and their a ffiliates, have
the ability and incentive to manipulate the market price for network or na-
tional spot television advertising time, and that these rules effectively address
any resulting public interest harm, it will consider retaining the rules. The
Notice also asks whether the rules as currently formulated achieve their in-
tended purpose or if they are readily circumvented. Finally, the Commission
will consider the costs the rules may impose and asks commenters to weigh
these costs against the rules’ potential public interest benefits. This proceed-
ing is part of the Commission’s comprehensive review of all its network/affili-
ate rules.
On April 5, 1995, the Commission issued a Notice of Proposed Rule Making

Broadcast TV Networks

proposing to eliminate or modify the Commission’s requirement that broad-
and Affiliates:
cast television stations file their network affiliation agreements with the Com-
Filing of Network
mission and that these filings be publicly available. The Notice asks several

Affiliation Agreements

questions about the benefits and costs of these filings. The primary benefit of
http://www.fcc.gov/Bureaus/Mass_Media/Notices/fcc95145.txt">(MM Docket No. 95-40)
the rule is that it allows the Commission to continuously monitor network/
affiliate contractual relations. The primary cost is that the rule makes available
information which can be used to skew the competition for affiliation agree-
ments. In light of evidence on benefits and costs of these filings, the Notice
proposes the Commission take one of several possible actions. First, the Com-
mission might eliminate the filing requirement and depend upon its general
ability to obtain the agreements when either the Commission or an outside
party thinks there is a need to examine network/affiliate contractual relations.
Next, the Commission might continue the filing requirement but either make
the filings confidential or redact certain financial information if the filings con-
tinue to be publicly available. Finally, the Commission might retain the rule if

30 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

there is no other less burdensome manner in which it can achieve the intent of the
rule. This proceeding is part of the Commission’s comprehensive review of all
its network/affiliate rules.
O n M arch 7, 1 9 9 5 , the C o m m ission elim in a ted tw o of its ru les governin g n e t-

Broadcast

w o rks and the relationship betw een television netw o rks and their affiliates. O ne
TV Networks
o f these, the “netw ork statio n o w n e rship” rule, prohibited netw orks from o w n-
and Affiliates:
in g television broadcast stations in m arkets that had so few stations, or stations

Station Ownership

of such unequal desira b ility (in term s of coverage, p o w er, frequency, or other
and Affiliation Limits
(MM Docket No. 91-221)
related m atters), that com p e titio n w o u ld be substantially restrained by perm it-
tin g n e tw ork ow nership of a statio n . T h e o th e r rule w as the “secondary affilia-
tion” rule, w h ich lim ited secondary affiliations in m arkets w here tw o stations had
affiliated w ith tw o of the th ree “trad itional” netw orks and th e re w as at least one
independent (i.e., unaffiliated) station w ith c o m parable facilities. In such cir-
c u m stances, the rule required a netw ork seeking an affiliatio n in the m arket to
o ffer its p ro g ram m ing first to the independent statio n .
T h e C o m m ission concluded that changes in the television m arketp lace had m ade
b o th rules obsolete. W ith regard to th e n e tw ork statio n o w nership rule, th e
C o m m issio n n o te d the grow th in th e n u m ber of tele v ision broadcast stations
since th e a d o p tion of the rule, the fact that it had rarely been invoked (and w as
never successfully in v o k e d to b lock netw ork ow nership of a station) and th e
lim ited num ber of com m u n ities rem aining w here it could p o tentially be invoked
as reasons for the rule’s elim inatio n . T h e s e c o n d a ry a ffiliatio n ru le w as elim i-
n a ted due to im provem e n ts in U H F television reception since the rule’s adop-
tio n , enabling U H F to better com pete against V H F stations and rem o v ing one of
the obstacles to the developm ent o f U H F service for w hich the secondary affili-
ation rule w as desig n e d to c o m pensate. T h e C o m m issio n a lso n o te d th a t th e
increased availability of program m ing and heig h tened com petition for affiliates
also c o n trib u ted to b o th rules’ obsolescence.

Financial Interest and

O n S e p tem b e r 6 , 1 9 9 5 , th e C o m m ission issued a Report and Order that elimi-

Syndication Rules

nated the financial interest and syndication (fin/syn) rules. The fin/syn rules had
http://www.fcc.gov/Bureaus/Mass_Media/Orders/fcc95382.txt"> (MM Docket No. 95-39)
placed significant restraints on the ability of the three networks to acquire finan-
cial interests in television programming and to participate in the syndication mar-
ket. The Commission originally adopted the fin/syn restrictions in 1970 based
upon its belief that the three networks -- ABC, CBS, and NBC -- at that time
dominated the market for television programming and thus inhibited the growth
of independent and diverse sources and outlets for such programming. The domi-
nance of the networks subsequently declined over the years with the emergence
of cable, the Fox network, and independent television stations. As a result, after
extensive proceedings, the Commission in 1993 eliminated certain aspects of the
fin/syn rules immediately but retained other re strictions for an interim period.

MASS MEDIA BUREAU 31
The new Report and Order was based upon analysis of the market for televi-

Prime Time

sion programming since that time. The Commission concluded that propo-

Access Rule

nents ofretaining the remaining fin/syn rules had failed to meet their burden of
(PTAR)
demonstrating that repeal would not serve the public interest. Further, the
http://www.fcc.gov/Bureaus/Mass_Media/Orders/fcc95314.txt">(MM Docket No. 94-123)
Commission found that the evidence suggested the need to accelerate elimina-
tion of the remaining restrictions. Thus, the Commission directed that the re-
maining rules be eliminated effective upon publication of the Report and Order
summary in the Federal Register , which occurred on September 21, 1995.
On July 31, 1995, the Commission issued a Report and Order repealing the
Prime Time Access Rule (PTAR) effective August 30, 1996. PTAR generally
prohibits television stations affiliated with the ABC, CBS, and NBC networks
in the top 50 prime time markets from broadcasting more than three hours of
network programming or off-network programming (i.e., reruns of programs
formerly shown on the networks) during the four hours of prime time. This
rule was adopted in 1970, when the three networks were viewed as dominating
the television marketplace, to promote independent sources of television pro-
gramming and to prevent the networks from dictating affiliate programming
choices during the whole of prime time. PTAR also has been seen as furthering
the growth of independent stations by providing them greater access to popular
off-network programming. The Commission concluded that PTAR is not nec-
essary under today’s market conditions. The networks no longer dominate the
television marketplace, and the rule places artificial restraints on what affiliates
subject to the rule can show during the access period. The Commission deter-
mined PTAR is no longer necessary to promote independent sources of televi-
sion programming, to promote the growth of independent stations or new net-
works, or to safeguard affiliate autonomy. The Commission provided a one-
year transition period until the final repeal of PTAR to moderate any potential
disruption to the marketplace.
At the end of FY95 the Commission issued a Notice of Inquiry to assess the
http://www.fcc.gov/Bureaus/Mass_Media/Notices/fcc95484.txt">

Closed Captioning/


current availability, cost, and uses of closed captioning and video description,
http://www.fcc.gov/Bureaus/Mass_Media/Notices/fcc95484.txt">

Video Description Services


and to examine what further Commission actions may be appropriate to pro-
http://www.fcc.gov/Bureaus/Mass_Media/Notices/fcc95484.txt"> (MM Docket No. 95-176)
mote these services. It also asked for comments on the appropriate means of
promoting their wider use in programming delivered by television broadcast-
ers, cable operators, and other video programming providers. Closed captioning
provides important benefits primarily for individuals with hearing disabilities by
displaying the audio portion of a television signal as printed words on the tele-
vision screen. Video description is a more recent innovation that benefits indi-
viduals with vision disabilities. It provides audio descriptions of a program’s
key visual elements that are inserted during the natural pauses in the program’s
dialogue.

32 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

Both the Senate and the House of Representatives have passed bills which, if
enacted, would for the first time generally require the closed captioning of video
programming. The submission of the information sought by the NOI may pro-
vide a useful foundation for further Commission action whether or not the pend-
ing legislation is enacted.

MASS MEDIA BUREAU 33

Mass Media Statistics

Current Broadcast Authorizations

Outstanding broadcast authorizations for major services at the close of Fiscal Year 1995 totaled
26,341, an increase of 1,302 over Fiscal Year 1994.

Increase

Class

Sept. 30,

Sept. 30,

or
1994
1995
(decrease)
Standard (AM)
5,049
5,059
10
Frequency Modulation (FM)
5,872
5,935
63
Educational FM
1,987
2,064
77
UHF Commercial TV
742
744
2
VHF Commercial TV
569
571
2
UHF Educational TV
249
252
3
VHF Educational TV
127
127
--
LPTV/TV Translators (UHF-VHF)
7,713
8,558
845
FM Translator and Booster
2,731
3,031
300

Totals

25,039
26,341
1,302
There were 14,752 AM, FM and TV broadcast stations authorized at the close of FY 1995. A total of 13,529
had operating authorizations, and 1,223 were under construction.

Outstanding

Outstanding

Licensed

Construction

Licensed

Construction

Class

Stations

Permits for

Stations

Permits for

Sept. 30,

New Stations

Sept. 30,

New Stations

1994

Sept. 30,

1995

Sept. 30,

1994
1995
Standard (AM)
4,919
130
4,908
151
Frequency Modulation (FM)
5,076
796
5,274
661
Educational FM
1,715
272
1,805
259
UHF Commercial
598
144
620 124
VHF Commercial TV
559
10
559 12
UHF Educational TV
240
9
240 12
VHF Educational TV
123
4
123
4
Totals
13,230
1,365
13,529
1,223

34 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

Nonhearing Applications Statistics

Class

On hand

Dismissed

Designated

On hand

Oct. 1,

denied
for

Oct. 1,

1994

New

Granted

returned
hearing
1995

Standard Broadcast (AM)

New stations and major changes 69
64
45
7
0
81
Assignments and transfers
129
942
896
33
0
142
Renewals
67
728
143
1
0
651
Licenses and other
259
567
523
27
0
276

Frequency Modulation (FM) (Commercial and Educational)

New stations and
major changes
502
695
192
90
0
915
Assignments and transfers 348
1,385
1,337
59
0
337
Renewals
139
789
195
0
0
733
Licenses and other
1,641
1,976
2,165
187
0
1,265

FM Translators and Boosters

New stations and
major changes
389
756
430
158
0
557
Assignments and transfers 36
111
98
10
0
39
Renewals
53
208
48
4
0
209
Licenses and other
111
498
394
24
0
191

Television (TV) (Commercial and Educational)

Class

On hand

Dismissed

Designated

On hand

Oct. 1,

denied
for

Oct. 1,

1994

New

Granted

returned
hearing
1995
New stations and
major changes
46
79
4
3
0
118
Assignments and transfers 35
987
916
55
0
51
Renewals
202
1
119
1
0
83
Licenses and other
194
282
249
10
0
217

LPTV/TV Translators and Boosters

New stations and
major changes
2,817
30
1,265
561
0
1,021
Assignments and transfers 51
284
289
3
0
43
Renewals
180
48
158
1
0
69
Licenses and other
157
1,322
1,302
33
0
144

MASS MEDIA BUREAU 35

Instructional TV Fixed

New stations and
major changes
649
605
558
70
0
626
Assignments and transfers 0
20
19
0
0
1
Renewals
0
82
73
0
0
9
Licenses and other
383
1,035
965
3
0
450

Broadcast Licenses Denied/Dismissed

The following is an informal list of applications for license or license renewals
denied or dismissed by the Commission from 1934 to the present:
Date of
Date of
denial/
station
Call letters
Location
dismissal
deletion
KGIX
Las Vegas, NV
07-31-34
05/14/35
KPJM
Prescott, AZ
10-15-35
12-16-35
KGBZ York, NE
05-21-36
07-28-36
KWEA Shreveport, LA
07-02-36
08-01-36
KWTN Watertown, SD
05-25-38
11-06-39
KGDY Huron, SD
05-25-38
06-24-38
WHEF Kosciusko, MS
10-25-38
11-14-38
KGCA Decorah, IA
11-04-40
11-24-40
KIDW Lamar, CO
09-22-42
09-22-42
WOKO Albany, NY
03-27-45
11-09-47
WORL Boston, MA
04-23-47
05-31-49
WJBW New Orleans, LA
04-22-48
08-14-49
WIBK
Knoxville, TN
08-10-49
11-17-52
KWRZ Flagstaff, AZ
08-18-49
06-22-50
KXXI
Reno, NV
12-27-49
02-28-50
KSFE
Needles, CA
08-04-50
08-04-50
KENE
Belen, NM
01-10-51
01-31-51
KLIO
Portland, OR
04-24-57
05-27-57
WREA East Palatka, FL
07-19-61
02-12-62
WITV(TV)
Fort Lauderdale, FL
07-27-61 09-18-61
KCKY Coolidge, AZ
02-23-62
12-10-62
KCLF
Clifton, AZ
02-23-62
12-10-62
KGLU Safford, AZ
02-23-62
12-10-62
KVNC Winslow, AZ
02-23-62
12-10-62
KZOW, KWJB-FMGlobe, AZ
02-23-62
12-10-62
KRLA Pasadena, CA
03-15-62
08-01-64 1/
WDKD Kingstsree, SC
07-25-62
02-01-65
WSPN Saratoga Springs, NY
08-09-63
03-03-64
WIXI
Irondale, AL
09-11-63
10-30-64
WMOZ Mobile, AL
01-29-64
08-03-66
WIZ
Lorain, OH
03-31-64
07-14-67
WGMA Hollywood, FL
04-17-64
2/
WHZN Hazleton, PA
03-18-65
04-06-65
WLEV-TV Bethlehem, PA
06-16-65
08-25-65
WBPZ-TV Lock Haven, PA
06-16-65
08-25-65

36 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

Broadcast Licenses Denied/Dismissed (Continued)

Date of

D

ate of
denial/
station

Call letters

Location

dismissal
deletion
KSHO-TV
Las Vegas, NV
07-23-65
06-09-67
KMRE
Anderson, CA
06-02-65
09-15-65
KABE
Westwego, LA
10-06-65
06-06-66
WKSB
Milford, DE
04-29-66
06-20-66
KSFV-FM
San Fernando, CA
01-30-68
03-28-68
WNJR
Newark, NJ
11-26-68
05-31-84 9/
WKOV
Wellston, OH
01-24-68
09-11-70
KICM
Golden, CO
10-02-68
04-08-69 3/
WHDH-TV
Boston, MA
01-22-69
03-19-72
KXXI(FM)
Alamorgordo, NM
05-06-69
08-27-69 3/
WCGA
Calhoun, GA
10-29-69
12-17-71
WTRG
Honolulu, HI
03-18-70
02-18-71 3/
KFLY, KFLY-FM
Corvallis, OR
05-20-70
03-03-71
KPTN
Central Point, OR
05-20-70
03-03-71
WXUR, WXUR-FM
Media, PA
07-01-70
07-06-73 3/
KJML-FM
Sacramento, CA
07-27-70
09-14-70
KVIN
Vinita, OK
06-21-71
04-20-72
KWLG
Wagoner, OK
06-21-71
08-25-72
WCFV
Clifton Forge, VA
05-27-71
07-01-71
KRSD-TV
Rapid City, SD
10-28-71
06-20-73 3/
KDSI-TV
Lead, SD
10-28-71
06-20-73 3/
WEBY
Milton, FL
05-10-72
04-18-73
KDOV
Medford, OR
05-10-72
06-29-72
WLUX
Baton Rouge, LA
09-20-72
2/
WPRY
Perry, FL
05-23-73
07-06-73
WHMC
Gaithersburg, MD
03-10-73
12-03-73
WMRE
Monroe, GA
11-28-73
09-05-74
KANI
Montgomery, AL
12-19-73
09-01-75
WSRA
Milton, FL
01-10-74
02-08-74
WAIQ(TV-ED)
Montgomery, AL
12-17-74
6/
WBIQ(TV-ED)
Birmingham, AL
12-17-74
6/
WCIQ-TV-ED)
Mount Chesna State Park, AL
12-17-74
07-15-76
WDIQ(TV-ED)
Dozier, AL
12-17-74
07-15-76
WEIQ(TV-ED)
Mobile, AL
12-17-74
07-15-76
WFIQ(TV-ED)
Florence, AL
12-17-74
07-15-76
WGIQ(TV-ED)
Louisville, AL
12-17-74
07-15-76
WHIQ(TV-ED)
Huntsville, AL
12-17-74
07-15-76
KEFM(FM)
Omaha, NE
01-30-75
09-08-76
KOIL
Omaha, NE
01-30-75
09-22-83 9/
KISN
Vancouver, WA
01-30-75
09-02-76

MASS MEDIA BUREAU 37

Broadcast Licenses Denied/Dismissed (Continued)

Date of

Date of

denial/
station

Call letters

Location

dismissal
deletion
WIFE
Indianapolis, IN
01-30-75
06-01-76
WIFE-FM
Indianapolis, IN
01-30-75
09-02-76
WLBB
Carrolton, GA
04-30-75
08-19-81
WOOK
Washington, DC
09-09-75
04-22-78
WFAB
Miami, FL
09-17-75
02-21-77
WOTW,WOTW-FM
Nashua, NH
02-19-76
07-30-78
WHBI-FM
Newark, NJ
05-19-76
7/
WMOU,WXLQ(FM)
Berlin, NH
06-29-76
03-06-80
KORK-TV
Las Vegas, NV
06-30-76
10-01-79
WKYZ
Madisonville, TN
08-25-76
01-10-77
KFDR
Grand Coulee, WA
01-17-77
03-14-77
WXPN-FM(ED)
Philadelphia, PA
03-22-77
5/
WSWG,WSWG-FM
Greenwood, MS
07-13-77
12-14-81
WWLE
Cornwall, NY
10-07-77
02-13-81
WLIR(FM)
Garden City, NY
11-18-77
06-21-83
WJUX(FM)
Miami, FL
11-05-78
04-29-81
WHLW
Lakewood, NJ
02-17-78
2/
WJJZ
Mt. Holly, NJ
04-04-78
11-24-82
WBRL
Berlin, NH
05-04-78
11-10-80
KOAD
Lemoore, CA
07-12-78
10-16-78
KIKX
Tucson, AZ
05-29-80
05-28-82
WNAC-TV
Boston, MA
06-04-80
05-26-82
KHJ-TV
Los Angeles, CA
06-04-80
12-16-88
WOR-TV
New York, NY
06-04-80
8/
KDIG-FM
San Diego, CA
07-24-80
7/
WDRK
Greenville, OH
05-14-81
08-03-83
KHOF-TV
San Bernardino, CA
11-14-80
05-24-83
WVCA-FM
Gloucester, MA
06-15-82
9/
KVOF-TV
San Francisco, CA
02-07-84
KHOF-FM
Los Angeles, CA
11-13-83
4/
WBUZ(AM)
Fredonia, NY
03-24-89
06-04-91
WBBY-FM
Westerville, OH
07-23-90
02-13-92
KQEC(TV)
San Francisco, CA
03-21-90
4/
WSNS-TV
Chicago, IL
07-23-91
10/
KUKQ(AM)
Tempe, AZ
05-16-91
04-07-92 KUPD(FM)
Tempe, AZ
05-16-91
04-06-92
KSRK(AM)
Lufkin, TX
09-03-93
09-03-93
WBRL(AM)
Berlin, NH
09-03-93
1/ Operating on temporary authority.
2/ Later allowed to assign license.
3/ License surrendered.
4/ No final action.
5/ New authorization granted 10-10-79.
6/ Reinstated as CP 2-14-80.
7/ New interim operation.
8/ Station moved to Secaucus, NJ; not deleted.
9/ New license issued.
10/ Under appeal with the Court of Appeals

38 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

Broadcast License and Permit Revocations

The following are licenses and construction permits revoked by the
Commission.

Date of

Date of

revocation
station

Call letters

Location

order
deletion
KUMA
Yuma, AZ
02-20-39
02-01-40
WSAL
Salisbury, MD
10-24-39
03-31-40
WWPN
Middlesboro, KY
10-16-47 1/
02-27-48
KGAR, KGAR-FM
Garden City, KS
02-27-48
05-19-49
WPBP
Mayaguez, PR
12-22-48
05-02-49
KCRO
Englewood, CO
10-14-49
08-09-50
KWIK
Burbank, CA
12-14-49
05-15-51
KPAB
Laredo, TX
01-26-50
02-14-51
WXLT
Ely, MN
05-23-50
03-28-51
KFMA
Davenport, IA
06-21-50 1/
04-02-51
KALA
Sitka, AK
05-21-52
08-06-52
WSHA(TV)
Sharon, PA
10-27-54 1/
03-31-55
KOTO
Albuquerque, NM
06-22-55 1/
11-09-55
WGAV
Amsterdam, NY
09-25-57 1/
04-28-59
KHCD
Clifton, AZ
07-23-58
01-27-59
KAJK(TV)
Reno, NV
06-03-59 1/
07-07-59
KBOM
Bismarck-Mandan, ND
11-30-60
03-03-63
KLFT
Golden Meadow, LA
01-19-61
06-25-62
WIOS
Tawas City-East Tawas, MI 12-20-61
01-13-62
KPSR(FM)
Palm Springs, CA
07-19-61
08-16-62
WLOV(FM)
Cranston, RI
11-01-61
01-30-63
KCPA(FM)
Dallas, TX
02-12-62
06-27-62
WGRC
Green Cove Springs, FL
02-20-62
06-27-62
KWK
St. Louis, MO
05-27-63
03-01-66
WBMT
Black Mountain, NC
06-26-63
09-01-63
WELF-FM
Glen Ellyn, IL
03-11-64
03-11-64
WELG-FM
Elgin, IL
03-11-64
03-11-64
WCLM(FM)
Chicago, IL
09-27-64
08-28-66
WHHL
Holly Hill, SC
06-22-66
07-12-67
WPFA
Pensacola, FL
05-11-66
2/
WSRA
Milton, FL
08-01-67
08-17-67
WEKY
Richmond, KY
05-03-68
2/
KDFR(FM)
Tulare, CA
07-03-68
12-03-68 3/
KLSU
White Castle, LA
03-26-73
06-05-73
WFAN-TV
Washington, DC
04-16-74
10-22-75
WMET(TV)
Baltimore, MD
04-16-74
10-22-75
WVGB
Beaufort, SC
06-24-76
06-01-81 4/

MASS MEDIA BUREAU 39

Broadcast License and Permit Revocations (Continued)

Date of

Date of

revocation
station

Call letters

Location

order
deletion
WCLY
Columbia, PA
05-19-77
09-14-78
WLLE
Raleigh, NC
07-21-77
01-21-80
KKUZ-AM
Terrance Lake, WA
01-13-89
02-13-89
KRGL-AM
Myrtle Creek, OR
05-05-89
06-05-89
WRPZ-AM
Paris, KY
08-22-90
WBBY(FM)
Westerville, OH
02-21-90
02-11-92
WKSP-AM
Kingstree, SC
08-01-91
08-13-91
WPSC-AM
Pageland, SC
02-07-92
07-07-92
WDAT-AM
Amory, MS
08-03-92
WAST(AM)
Ashtabula, OH
08-19-92
06-07-91
WORI-AM
Oak Ridge, TN
06-24-92 3/
06-11-92
KOKY-AM
Jacksonville, AR
07-13-92 3/
WKIJ(AM)
Parrish, AL
11-11-92
11/02-92
WFRK(AM)
Coleman, FL
01-07-93
KBRS(AM)
Springdale, AK
08-03-93
WKLO(AM)
Danville, KY
08-26-93
08-26-93
=====================================================================
1/ Construction permit only.
2/ Later allowed to assign license.
3/ License surrendered.
4/ New interim operation commenced.

40 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT


COMMON CARRIER BUREAU 41
http://www.fcc.gov/ccb.html">

Common Carrier Bureau


The Common Carrier Bureau has responsibility for FCC rules and regulations

Overview

dealing with most of the telecommunications services provided to the public.
The companies providing these services are called common carriers, and are
most conveniently thought of as telephone companies, even though they pro-
vide a wide range of other services.
The 1934 Communications Act requires common carriers to charge reason-
able prices. It directs the FCC to review tariffs, authorize facilities, establish
accounting rules, and investigate complaints. Most of the regulatory respon-
sibility for these matters resides in the Common Carrier Bureau, although, as
part of a major reorganization completed this year, some responsibilities have
been divided among different bureaus.
The reorganization placed the allocation of radio spectrum and other matters
relating to mobile service providers (such as cellular telephone companies) in
a new Wireless Telecommunications Bureau. Regulatory responsibilities for
certain aspects of international service, including the allocation of satellite
orbital slots, were transferred to a new International Bureau.
Over 1,300 telephone companies provide local telephone service in the United
States. These companies include the Bell Operating Companies (BOCs) that
formerly were part of the integrated Bell System. As a result of the AT&T
divestiture in 1984, the BOCs are now part of seven separate regional holding
companies: Ameritech, Bell Atlantic, BellSouth, NYNEX, Pacific Telesis,
SBC Communications, and U S West.
The Bureau is divided into six divisions:
The

ACCOUNTING AND AUDITS DIVISION

deals with a variety of ac-
counting matters including the establishment of accounting systems and the
setting of depreciation rates. Its staff also conducts audits of regulated carri-
ers.

42 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

The

ENFORCEMENT DIVISION

handles complaints and other matters re-
lated to the enforcement of the Communications Act. All carriers, even those
the Commission has chosen not to regulate directly because of their small size,
are subject to certain consumer protection requirements, and consumers retain
the right to bring their complaints to the Commission.
The

INDUSTRY ANALYSIS DIVISION

tracks industry trends and publishes
a variety of statistical reports. It also administers the Commission’s programs
for assisting low-income subscribers.
The

NETWORK SERVICES DIVISION

handles issues related to telephone
numbering, network reliability, and the Commission’s registration program to
ensure that equipment connected to the telephone system does not harm the
telephone network.
The POLICY AND PROGRAM PLANNING DIVISION handles legal pro-
ceedings establishing and revising many of the Commission’s more complex
rules.
The

TARIFF DIVISION

reviews tariffs filed by regulated carriers which in-
clude the terms and conditions of service offerings as well as prices.

FY95

Highlights
• Investigated the rates of a number of Operator Service Providers (OSPs);
• Issued Notices of Apparent Liability (NALs) against a variety of
interexchange carriers for unauthorized conversion of long distance ser-
vices (slamming);
• Amended rules pertaining to slamming to protect consumers and
curtail abuses of letters of agency (LOAs);
• Issued the first ever "Common Carrier Scorecard" to educate both con-
sumers and carriers about trends and problems in the industry based on
actual consumer complaint statistics;
• Conducted periodic meetings with both local exchange and inter-exchange
carriers to address industry problem areas;
• Adopted rules for nationwide Caller ID service.

COMMON CARRIER BUREAU 43

Major
Proceedings

On July 20, 1995, the Commission released a
Notice of Proposed Rulemaking

Subscribership Levels

(NPRM) seeking comment on ways to increase the level of telephone
and Public Switched
subscribership in the United States.

Network Use
http://www.fcc.gov/Bureaus/Common_Carrier/Notices/fcc95281.txt">(CC Docket 95-115).

On May 4, 1995, the Commission affirmed that the widespread availability

Caller ID

of Caller ID was in the public interest, and that rules addressing telephone
http://www.fcc.gov/Bureaus/Common_Carrier/Notices/fcc95187.html">(CC Docket 91-281)
number delivery must balance the privacy interests of both the calling and
called parties.
The Hearing Aid Compatibility Act of 1988 (HAC Act) required the Com-

Hearing Aid

mission to establish rules that ensure reasonable access to telephone service

Compatibility

by persons with hearing disabilities, and to seek to eliminate the disparity
http://www.fcc.gov/Bureaus/Common_Carrier/Notices/fcc95474.txt"> (CC Docket 87-124)
between hearing aid users and non-users in obtaining access to the telephone
network. In implementing this Act the Commission undertook to resolve
certain hearing-aid compatibility issues through a negotiated rulemaking pro-
ceeding.
In the spring of 1995 the Commission established a 19-member Hearing Aid
Compatibility Negotiated Rulemaking Committee. Committee members
represented all interested parties, including the Commission, telephone equip-
ment manufacturers, employers, hospitals, nursing homes, hotels and mo-
tels and persons with disabilities. The Committee held eight formal meet-
ings over 64 calendar days, and formed working groups which met infor-
mally during that same period. The Committee successfully completed its
work, reaching consensus on all issues, and, in August 1995 filed a Final
Report of its recommendations with the Commission. The Commission stated
that it planned to consider a Notice of Proposed Rulemaking
on these rules in
the fall.
On July 13, 1995, the Commission released a
Notice of Proposed Rulemaking

Telephone Number Port-

seeking comment on a wide variety of policy and technical issues concern-
ability
ing number portability. Telephone numbers are critical to the routing of
http://www.fcc.gov/Bureaus/Common_Carrier/Notices/fcc95284.html"> (CC Docket No. 95-116)
telephone calls over the public switched network in the United States be-
cause they generally identify a particular customer being called and a par-
ticular service provider. As a consequence, telecommunications customers
cannot generally retain their telephone numbers if they wish to change ser-
vice pro

44 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

viders or geographic locations. Number portability is the ability of customers to
retain their telephone numbers when they switch service providers, services,
and/or locations. The Commission’s Notice examines the public interest ben-
efits and costs of various forms of number portability.
On May 30, 1995, the Commission released a
Notice of Proposed Rulemaking

End User Common

seeking comment on the application of Subscriber Line Charges (SLCs) to ser-
Line Charges for ISDN
vices providing multiple voice-grade-equivalent channels over a single facility.
http://www.fcc.gov/Bureaus/Common_Carrier/Notices/fcc95212.txt"> (CC Docket No. 95-72)
These services, such as integrated services digital network (ISDN) service, per-
mit customers to obtain digital transmission over existing copper wire, through
the use of advanced equipment. In addition to obtaining multiple channels over
a single local loop or T-1 facility, these services can transmit data at higher
speeds and with greater accuracy. The Commission stated in opening this pro-
ceeding that it must be careful to avoid creating regulatory barriers to the devel-
opment of beneficial new technologies, particularly when those services and
technologies can facilitate access to the benefits of the National Information
Infrastructure. At the same time, it should not favor one technology or service
over others.
On June 13, 1995, the Commission adopted a
Report and Order amending the

Policies and Rules

rules concerning the Letters of Agency (LOAs) used to change the long-dis-

Concerning

tance carrier of a telephone customer. The new rule requires that LOAs be sepa-

Unauthorized

rate from inducements such as prizes or contests, and that they clearly state that,

Conversion of Long Dis-

by signing the LOA, the consumer is requesting a change in his long-distance
tance Carriers
service. In conjunction with the amendment of the rules concerning the unau-
http://www.fcc.gov/Bureaus/Common_Carrier/Orders/orcc4019.txt">(CC Docket No. 94-129)
thorized conversion of long-distance service, the Enforcement Division initi-
ated a series of investigations into carrier “slamming” practices. Notably, one
carrier was fined for converting a widow’s telephone service by forging the
signature of her husband, who had been deceased for three years.

COMMON CARRIER BUREAU 45
• The seven regional companies with Bell origins serve most of the major

Common

metropolitan areas. They serve about 50% of the land mass of the United

Carrier Facts

States and 75% of the population. The rest of the local companies (also called
local exchange carriers or LECs) include more than a thousand small indepen-
dent telephone companies and several larger holding companies such as GTE.
• In the aggregate, the revenues of LECs exceeded $100 billion in 1995.
About $60 billion was received for local services and subscriber line charges;
more than $25 billion was charged to long distance carriers; and the remaining
$15 billion was received primarily from short distance toll calls completed in
their own service territories. In recent years new local companies have begun
to install fiber optic cable to service major business customers and lay the
foundations for local competition. As of FY1995, however, the new entrants
remained tiny in comparison to the established LECs.
• Telecommunications Relay Services (TRS) is one of the fastest-growing
segments of the telecommunications industry. During the first two years of
TRS (1993 - 1995) interstate minutes of TRS use grew at an average rate of
approximately 1.5 percent per month. During the 1994 calendar year, the total
volume of TRS calls was approximately 136 million minutes of use, including
approximately 120 million minutes of intrastate use and 16 million min
utes of
interstate use. For the 1995 calendar year, NECA estimates usage will be a
total of 151 million minutes, including 133 million minutes of intrastate use
and 18 million minutes of interstate use.
• For most of this century, AT&T provided virtually all of the nation’s long
distance telephone service. Beginning in the 1970s, other firms began to enter
the industry. Today, there are several hundred companies that provide long
distance telephone service. In 1995 AT&T provided about 56% of the nation’s
service; MCI about 18%; Sprint 9%; and smaller carriers accounted for the
remaining 17%. In addition to $13 billion of short distance toll calls handled
by LECs, the long distance carriers provided $75 billion of services.
• The most rapidly growing component of long distance calling is in the
international market. During 1995 American callers were billed more than
$13 billion for international calls. The regulation of international calls, espe-
cially the prices charged for international calls, is a responsibility the Com-
mon Carrier Bureau shares with the International Bureau.

46 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT


WIRELESS TELECOMMUNICATIONS BUREAU 47
http://www.fcc.gov/wtb/">WIRELESS
http://www.fcc.gov/wtb/"> TELECOMMUNICATIONS
http://www.fcc.gov/wtb/">BUREAU
The Wireless TelecommunicationsBureau was officially established on Decem-

Overview

ber 1, 1994, to manage all Federal Communications Commission domestic
wireless telecommunications programs and policies, except those involving
satellite communications.
The functions include licensing, enforcement and regulatory duties. The Bu-
reau also is responsible for implementing competitive bidding authority for
spectrum auctions, given to the Commission by the Omnibus Budget Recon-
ciliation Act of 1993.
To meet its important mission, the Bureau is dedicated to the following goals:
1. To foster competition among different services.
2. To promote universal service, public safety and service to indi-
viduals with disabilities.
3. To maximize efficient use of spectrum.
4. To develop a framework for analyzing market conditions for wire-
less services.
5. To minimize regulation where appropriate.
6. To promote the offering of new and innovative services, particu-
larly by small businesses and new entrants.
7. To serve WTB customers efficiently (including improving licens-
ing, eliminating backlogs, disseminating information and making
staff accessible).
8. To enhance consumer protection and outreach and to improve the
enforcement process.

48 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

During 1995 the Wireless Telecommunications Bureau continued to pursue new
and innovative ways to meet its customers’ needs. Below are several examples:
Promoting
• During FY95 the Bureau has rapidly and efficiently implemented the first suc-
Competition
cessful spectrum auction process. Auctions have proven to be a fast, fair and
efficient mechanism to introduce competition in wireless services quickly, with-
out regulatory delay.
• The Bureau issued licenses in record time to jumpstart competition. In the
Broadband PCS auction, licensees received their licenses just four months after
the conclusion of the auction.
• The Bureau promoted competition in wireless services through its develop-
ment of the Commission’s policy positions in such areas as LEC-CMRS inter-
connection, resale, flexible service definitions such as PCS and General Wireless
Communications Services. Furthermore, the Bureau has played a leading role in
fostering wireless competition in the local loop.
Promoting the
http://pswac.ntia.doc.gov"> During FY95 the Bureau formed the Public Safety Wireless Advisory Commit-
Public Interest
tee to identify spectrum for public safety use and to create a comprehensive
scheme for the creation of an interoperable federal, state and local public safety
network. This Committee is jointly led by the FCC and the National Telecom-
munications and Information Administration.
•The Bureau increased its efforts to coordinate with the FTC and other Govern-
ment agencies to eliminate “application mills.” Application mills are entities which
encourage filing of speculative applications which lead to processing backlogs
and license “flipping,” both of which delay the delivery of valuable services to the
public.
•The Bureau began working with the wireless industry and the hearing-impaired
community to ensure that the benefits of wireless telecommunications will be
available to hearing-impaired individuals throughout America.
• The Bureau has reduced application backlog by reducing bureaucratic delay in
Working Better and
licensing and allowing licensees to provide service more quickly. The new Bu-
Smarter
reau inherited a significant backlog of more than 189,000 applications and initi-
ated an aggressive backlog reduction program which reduced the backlog by
nearly 65%.

WIRELESS TELECOMMUNICATIONS BUREAU 49
• The Bureau implemented electronic filing procedures, which have reduced
processing time from an average of 75 days in the Amateur service to next day
service. Electronic filing is rapidly being implemented in all application pro-
cesses.
• In mid-August, the Consumer Assistance Branch implemented a new telehone
procedure which allows callers to listen to pre-recorded messages while wait-
ing for a representative. The first message gives the option of faxing future
inquiries. Our monthly fax receipts from that point on have more than tripled.
A response is made to the requestor within 24 hours, thus enhancing our ac-
cessibility to our customers.

FY95
Highlights

• Broadband Personal Communications Services auction raised $7.7 billion
for the United States Treasury and enabled two new wireless licensees in
\each market to increase competition in the wireless industry.
• Narrowband Regional Personal Communications Service auction raised
each market to offer services such as two-way paging, voice messaging
and information services.
http://pswac.ntia.doc.gov">Public Safety Wireless Advisory Committee formed.
• The FCC’s first electronic filing process was developed, which provides
significant cost and time savings to both the FCC and the public.
• Allocation of spectrum below 5 GHz transferred from Federal Govern-
ment use as specified in the Omnibus Budget Reconciliation Act of 1993.
• Acting on WTB recommendations, the Commission has issued a series of
orders eliminating state rate regulation of wireless services.
Major
Proceedings

On March 13, 1995, the FCC concluded the auction of 99 PCS licenses. A

Conclusion of

total of 18 winning bidders together bid $7 billion for these 99 licenses in 51

Broadband PCS

Major Trading Areas (MTAs). Two licenses were awarded in each area, ex-

Blocks A

cept where one of the two licenses in each of those markets previously went to
and B Auction
“pioneer’s preference” winners: Omnipoint, Cox, and American Personal Com
munications. These “pioneers” paid a total of $700 million for their licenses,
bringing the total for these licenses to $7.7 billion.

50 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

This auction is recognized in the Guiness Book of World Records as the largest
auction ever.
Broadband Personal Communications Services (Broadband PCS) is broadly de-
fined by the Federal Communications Commission as “radio communications that
encompass mobile and ancillary fixed communication services that provide ser-
vices to individuals and businesses and can be integrated with a variety of compet-
ing networks.” For example, PCS phone service could be used in the develop-
ment of more advanced cellular phone services which would be able to pinpoint
the subscriber in any given locale. The frequency would allow the signal to be
transmitted a greater distance and in this case, would “roam” with the subscriber.
This would eliminate the need for many different phone lines (i.e., car phones) and
would probably be much less costly.
The FCC’s auctions of Broadband PCS licenses helped kick off an entirely new
industry. Analysts predict that within ten years, there could be 100 million wire-
less telephone subscribers -- an increase of more than 70 million. The creation of
this new industry is estimated to generate billions of dollars of future investment
and create hundreds of thousands of new jobs.
Competition in the PCS industry will benefit consumers and businesses. The FCC’s
licensing plan for this spectrum provides for up to four new full service providers
of wireless services in each market. Consumers will be able to choose from mul-
tiple providers and will receive lower prices and better services as a result. Busi-
nesses will increase their productivity and enhance efficient delivery of products
because they will have greater choice among service providers and more advanced
telecommunications services. Businesses also will benefit by pro viding a support-
ing role to this new industry, in construction of infrastructure, software develop-
ment, etc.
On October 26, 1994, the FCC concluded the auction of 30 narrowband PCS

Conclusion of Regional

Narrowband PCS Auction

licenses. The 30 licenses covered five geographic areas, with 6 licenses in each
area. A total of nine winning bidders together bid $489 million for these licenses.
After reducing the winning bids by the 40 percent bidding credit small businesses
owned by women and minorities received, the net revenues for this auction were
$395 million.
Narrowband PCS is different from broadband PCS because each license provides
the licensee with the right to provide service over a smaller portion of the spec-
trum. Narrowband licenses typically allow operation on 50 kHz channels paired
with 50 kHz channels, 50 kHz channels paired with 12.5 kHz channels, or un-
paired 50 kHz channels. Broadband licenses allow operation on either 30 MHz
channels or 10 MHz channels.

WIRELESS TELECOMMUNICATIONS BUREAU 51
The FCC defined narrowband PCS as a “family of mobile and portable radio
communications services which could provide services to individuals and busi-
nesses, and be integrated with a variety of cometing networks.” The FCC
anticipated that advanced paging and messaging services would be the pre-
dominant narrowband services provided.
In an effort to ensure broad participation by small businesses and minority and
women-owned businesses, firms identified by the FCC as designated entities,
the FCC provided a 40 percent bidding credit on 10 of 30 licenses: one 50
kHz/50 KHz paired channel and one 50 kHz/12.5 kHz channel in each of the
five regions. The 40 percent bidding credit was another measure to ensure
meaningful participation by minority and women-owned businesses in the
emerging PCS industry. The FCC also offered other provisions designed to
reduce entry barriers faced by small businesses and minority and women-owned
businesses, including installment payments, bidding credits and tax certificates.
These incentives seem to be a successful method of attracting broad participa-
tion by small businesses and minority and women-owned firms. Twenty of the
28 qualified bidders in this auction identified their firm as a minority-owned
business, women-owned business, or small business. Of the nine winning bid-
ders, four were qualified as small businesses that are owned by minorities and/
or women.
In these Orders, the Wireless Telecommunications Bureau addressed challenges
http://www.fcc.gov/Bureaus/Wireless/Orders/orwl4004.txt">

PCS Licensing Orders


to the licensing of the Personal Communications Service A and B Blocks,
including a request that licensing be stayed until the conclusion of subsequent
Personal Communications Service auctions. The Bureau rejected these chal-
lenges and granted the licenses, concluding that the immediate grant of the
licenses would introduce competition into the wireless marketplace and was in
the public interest.
The auction and licensing process was considerably faster than the comparable

Transfer of Spectrum

licensing process for cellular and other wireless services in which lotteries or
from Federal
comparative hearings were used. In this auction, and in the regional narrowband

Government Use

auction, licensees received their licenses approximately four months after the
http://www.fcc.gov/Bureaus/Wireless/Orders/da950521.txt">(ET Docket 94-32)
conclusion of the auction.
On February 7, 1995, the Commission adopted the http://www.fcc.gov/Bureaus/Wireless/Orders/da950521.txt">First Report and Order,
and on July 31, 1995, the Commission adopted the http://www.fcc.gov/Bureaus/Wireless/Orders/fcc95319.txt">Second Report and Order
in response to directives contained in the Omnibus Budget Reconciliation Act
of 1993, mandating steps to be taken leading to the transfer of spectrum below
5 GHz currently assigned for use by the Federal Government to the private
sector. Commission actions to this end taken in 1995:

52 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

States' Petitions to

(1) Allocated the 2390-2400 MHz band for use by unlicensed Personal Commu-

Regulate CMRS Rates

nications Services devices, providing for continued use of the 2402 MHz band
(PR Docket No. 94-109)
by devices operating in accordance with Part 15 of the Commission’s Rules,
allocating both of these bands for use by the Amateur service on a primary basis,
and allocating the band 4660-4685 MHz for use by Fixed and Mobile services.
(2) Created the General Wireless Communications Service (GWCS) to operate
in the 4660-4685 MHz band. The GWCS service continues the Commission’s
efforts to promote flexible use of spectrum, and allow the market to determine
how spectrum should be allocated
From May 4, 1995, through August 8, 1995, the Commission adopted a series of
orders denying seven states the authority to continue regulating intrastate rates
for cellular and other commercial radio services, on the grounds that the peti-
tions filed by Arizona, California, Connecticut, Hawaii, Louisiana, New York
and Ohio did not meet the statutory standard established by Congress; that mar-
ket conditions fail to protect consumers from unjust and unreasonable rates or
unjustly and unreasonably discriminatory rates.
These steps ended state regulation of rates cellular carriers charge and promoted
competition by allowing a competitive marketplace to determine wireless rates.

PLMRS

On June 15, 1995, the Commission adopted a proceeding containing a Report
(PR Docket No. 92-235)
and Order that dealt with three main issues in the Private Land Mobile Radio
Services: channelization, transition time, and consolidation of radio services. The
Order established a narrowband channel plan that facilitates the use of spec-
trally-efficient equipment, and provides for a technology neutral transition that
allows users the opportunity to continue using their existing equipment and gradu-
ally migrate to narrower channels as the need arises. Additionally, the Order
encouraged industry to reach a consensus plan to consolidate frequency coordi-
nators and submit their proposal to the Commission.
The proceeding contained a Further Notice of Proposed Rulemaking that pro-
poses to introduce market-based incentives such as exclusivity, competitive
bidding, and user fees into the Private Land Mobile Radio Services. Market-
based incentives would encourage efficient spectrum usage and allow users to
make the equipment choices which best address their needs.

WIRELESS TELECOMMUNICATIONS BUREAU 53

54 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT


COMPLIANCE AND INFORMATION BUREAU 55
http://www.fcc.gov/cib/">Compliance and Information Bureau
In order to describe more clearly the nature of the Bureau’s service to the

Overview

public and to its other customers, the name of the former Field Operations
Bureau (FOB) was changed to the Compliance and Information Bureau (CIB)
on December 1, 1 994.
During FY95 CIB undertook a comprehensive management staff review of
its mission, functions, processes and organizational structure in accordance
with principles outlined in the National Performance Review. The resulting
reorganization of the Bureau will result in the streamlining of CIB’s opera-
tions and the creation of a more effective organization that will achieve sig-
nificant savings in operational costs.
The Bureau’s vision statement is to ensure commu nications excellence. The
mission of the Compliance and Information Bureau is to support the nation’s
communications capability by fostering sound communications policy, pro-
moting compliance with that policy, informing the public, and using its tech-
nical expertise to solve communications problems. The Bureau is in the busi-
ness of informing the public about FCC regulations, policies, practices, and
procedures; informing the Commissioners and the other Bureaus about tele-
communications problems and about the needs of the users; obtaining com-
pliance with FCC rules; and using its expertise in communications technol-
ogy to solve problems.
CIB carries out its programs to serve the public and the Commission through
a number of field offices located throughout the United States. The field
activities, in turn, are directed by three regional offices. Program and policy
development for CIB is the responsibility of the Bureau’s divisions and other
offices located at the FCC’s headquarters in Washington, D.C.
CIB’s compliance program is administered by the

ENFORCEMENT DI-
VISION

and is designed to ensure that U.S. radio laws and Commission rules
are observed. The compliance program involves staff activities such as in-
specting radio stations for compliance with the Communications Act and Com-
mission Rules, investigating the unlicensed or unauthorized operation of ra-
dio stations, resolving radio frequency interference problems, inspecting and

56 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

certifying ship radio stations, and providing assistance to public safety and law
enforcement agencies experiencing radio communications problems. CIB pur-
sues administrative sanctions, as well as civil and criminal court actions, against
persons and entities that violate the Communications Act and/or the
Commission’s rules.
The Enforcement Division is composed of the Investigations Branch, the Signal
Analysis Branch, and the Legal Branch. During FY95 the Enforcement Divi-
sion initiated a proceeding entitled Notice of Proposed Rulemaking (NPRM) in
the Matter of the Commission’s Forfeiture Policy Statement and Amendment of
Section 1.80 of the Rules to Incorporate the Forfeiture Guidelines
. Addition-
ally, the Division conducted a number of significant information gathering and
investigative initiatives for other Commission bureaus and offices during the
fiscal year and engaged in various activities to inform, assist and educate licens-
ees, user groups, industry groups and the general public about matters within the
Commission’s jurisdiction.
CIB’s

INFORMATION STAFF

develops, produces and delivers information
dissemination products and services that support the overall mission of the Com-
mission and CIB’s goals and objectives. The Information Staff experienced an
extremely busy FY95 that included performing a major role in the comprehen-
sive study and review of the Bureau, as well as the planning, development and
execution of a Public Affairs Specialist Training Workshop for the Bureau.
The EMERGENCY ALERT SYSTEM STAFF of CIB is also a vital part of
the Bureau’s Information Staff. On November 10, 1994, the Commission adopted
http://www.fcc.gov/Bureaus/Compliance/Orders/fcc95420.txt">a Report and Order initiated and prepared by the EAS Staff that replaced the old
Emergency Broadcast System (EBS) with a new Emergency Alert System (EAS)
that represents a vast technical and operational improvement over the old one.
CIB’s

ENGINEERING DIVISION

supports the Bureau’s enforcement and
public information functions through the Equipment and Standards Branch in
Washington, D.C., the Equipment Construction and Installation Branch in Pow-
der Springs, Georgia, and the Advanced Technology Group in Columbia, Mary-
land. The Equipment and Standards Branch (ESB) establishes and reviews tech-
nical measurement procedures to determine compliance with FCC regulations
and to provide regulatory feedback. It also develops technical specifications for
equipment used by FCC f ield offices, provides facilities used by these offices,
and analyzes and interprets data collected by field offices to improve Bureau
effectiveness. The Equipment and Construction and Installation Branch (ECIB)
designs and constructs specialized equipment for field use that can not be pur-
chased or economically contracted for in small quantities. It also has a patent
program to protect the Commission’s investment in unique devices developed

COMPLIANCE AND INFORMATION BUREAU 57
by the Branch. The Advanced Technology Group (ATG) analyzes communi-
cations technology advances, applies new technologies to CIB’s activities
and provides information and identifies training needs to keep field staff abreast
of technological developments. The Engineering Division experienced an
extremely busy FY95. In addition to its routine duties, it provided a great
deal of innovative technical planning and support to the comprehensive study
and review of the Bureau undertaken during the past fiscal year.

FY95 Highlights

• Change of Bureau name and comprehensive management
staff review of CIB’s mission, processes and organiza-
tion.
• NPRM regarding the Commission’s monetary forfeiture
policy statement.
• NOI concerning the inspection of radio installations on
large cargo and small passenger ships.
• R&O and FNPRM that established a new EAS to replace
the old EBS.
• NPRM regarding the inspection of Great Lakes Agreement
Ships.
• Audits conducted by CIB of Designated Entities
participating in Commission spectrum auctions.
• CIB participation in approximately 100 EAS workshops and
seminars throughout the United States
• CIB Public Affairs Training Workshop.
• Establishment of a CIB and FCC-wide team to look into
and propose solutions to telephone interference problems.
• CIB-conducted inquiry and survey of 65 TV stations
regarding children’s educational television programming.
• Production of a training module for the Small Business Administra-
tion (SBA) to alert small and minority business persons of the first
and second rounds of the FCC’s spectrum auctions.

58 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT


Design and formulation of plans for a portable EAS kiosk

Participation in an Advanced Television Task Force propagation study.

Major

Proceedings
Emergency
Report and Order and Further Notice of Proposed Rulemaking in the Matter of

Broadcast

Amendment of Part 73, Subpart G, of the Commission’s Rules Regarding the
Emergency Broadcast System, FO Docket Nos. 91-301 and 91-171 -- adopted
November 10, 1994, and released December 9, 1994. A CIB rulemaking pro-
ceeding that improved and replaced the old Emergency Broadcast System (EBS)
with a new Emergency Alert System (EAS), created a new generation of techni-
cally improved alerting equipment, incorporated EAS rules into a new Rule Part
11, and streamlined the operational procedures of EAS.

Forfeitures

Notice of Proposed Rulemaking in the Matter of the Commission’s Forfeiture
(CI Docket No 95-6)
Policy Statement and Amendment of Section 1.80 of the Rules to Incorporate the
Forfeiture Guidelines, CI Docket No 95-6 -- adopted January 13, 1995, and re-
leased February 10, 1995. A CIB rulemaking proceeding that sought comments
on the Commission’s Forfeiture Policy Statement and proposed to amend Sec-
tion 1.80 of the Rules to incorporate the monetary forfeiture policy statement
guidelines for assessing forfeitures. In July 1994 the U.S. Court of Appeals for
the District of Columbia Circuit set aside the Commission’s Forfeiture Policy
Statement, finding that, as implemented by the Commission, the Policy State-
ment had the effect of a rule and thus was improperly issued without notice and
comment. In the proceeding the Commission proposed monetary forfeiture guide-
lines that were virtually identical to the guidelines in effect prior to the Court’s
decision and sought comments on all aspects of the proposal.

Great Lakes Agreement

Notice of Proposed Rulemaking in the Matter of Amendment of Part 80 of the
(CI Docket No. 95-54)
Commission’s Rules Regarding the Inspection of Great Lakes Agreement Ships,
CI Docket No. 95-54 -- adopted April 24, 1995, and released May 16, 1995. A
CIB rulemaking proceeding that proposed to allow owners and operators of ships
subject to the annual inspection requirements of the Great Lakes Agreement to
have inspections performed by a private sector classification society instead of
by the Commission, reducing economic burdens on the public and the Commis-
sion while ensuring maritime safety.

COMPLIANCE AND INFORMATION BUREAU 59
Notice of Inquiry in the Matter of Amendment of the Commission’s Rules

Ship Radio Installation

Concerning the Inspection of Radio Installations on Large Cargo and Small
http://www.fcc.gov/Bureaus/Compliance/Notices/fcc96194.txt">(CI Docket No. 95-55 )
Passenger Ships, CI Docket No. 95-55 -- adopted April 24, 195, released May
16, 1995. A CIB proceeding to review the Commission’s current rules re-
garding the inspection of ships for compliance with the Communications Act
and the International Convention for the Safety of Life at Sea. The proceeding
is a companion item to CI Docket No. 95-54 and seeks information that will
allow the Commission to streamline ship inspection procedures for the mari-
time services, remove unnecessary rules, improve service to the maritime com-
munity, and above all else, preserve maritime safety.

60 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT


INTERNATIONAL BUREAU 61
http://www.fcc.gov/ib/">

INTERNATIONAL BUREAU


In response to dramatic changes in the telecommunicat ions marketplace and

Overview

its increasing globalization, the FCC, at the beginning of FY95, established
the International Bureau to centralize and consolidate the Commission’s inter-
national policies and activities and more effectively represent the global tele-
communications interests of the U.S. government and industry.
Prior to the establishment of the Bureau, international policy activities and
other international functions were distributed across four Bureaus and two Of-
fices within the Commission.
The International Bureau develops, recommends and administers policies, stan-
dards, procedures and programs for the authorization and regulation of inter-
national telecommunications facilities and services, the licensing of domestic
and international satellite systems, and the authorization and regulation of in-
ternational broadcast stations. The Bureau advises and recommends to the
Commission, or acts for the Commission under delegated authority, in the de-
velopment and administration of international telecommunications policies and
programs. The Bureau serves as the Commission’s representative in matters
involving international organizations. It consists of three divisions: Telecom-
munications, Satellite and Radiocommunication, and Planning and Negotia-
tions.
The

TELECOMMUNICATIONS DIVISION

deals with the authorization
and regulation of international telecommunications facilities and services. It
represents the Commission at international conferences and meetings involv-
ing non-radio related telecommunications matters. The Division directs and
coordinates Commission participation in bilateral telecommunications discus-
sions and provides assistance in telecommunications trade negotiations. The
Telecommunications Division consists of two branches: Policy and Facilities
Branch and Multilateral and Development Branch.
The SATELLITE AND RADIOCOMMUNICATION DIVISION deals with
policies, rules, procedures and standards for licensing and regulating satellite
space and earth station facilities, both domestic and international. It under

62 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

takes Commission responsibilities under the Communications Satellite Act f or
the oversight of Comsat as the U.S. signatory to INTELSAT and Inmarsat. The
Division represents the Commission in international conferences and meetings
involving radio-related telecommunications matters such as satellites, spectrum
allocation, standards, broadcasting, aviation, maritime and safety of life at sea
in the International Telecommunication Union (ITU) and other international
fora. The Division directs and coordinates within the Commission and with
other federal agencies Commission preparation for various interagency and in-
ternational meetings. The Satellite and Radiocommunication Division consists
of three branches: Radiocommunication Policy Branch, Satellite Policy Branch
and Satellite Engineering Branch.
The

PLANNING AND NEGOTIATIONS DIVISION

directs and coordinates,
in consultation with other bureaus and offices as appropriate, Commission ne-
gotiations with Mexico, Canada and other nearby countries regarding interna-
tional agreements. The Division represents the Commission in international
conferences and meetings involving radio frequency assignment related matters
and ensures that Commission regulations, procedures and frequency allocations
comply with international and bilateral agreements. The Planning and Negotia-
tions Division consists of two branches: Negotiations Branch and Notifications
Branch.
The International Bureau maintains a public reference center containing all non-
docketed public files of Bureau related matters, enabling the public to satisfy all
international and satellite reference needs at one central location. The public
reference center is located at 2000 M Street, N.W., Room 102, Washington,
D.C. 20554. Types of documents available include: Applications and authori
zations (International Section 214; international earth station; domestic and in-
ternational space stations; domestic and international earth stations; direct broad-
cast satellite; cable landing; international public fixed radio and recognized pri-
vate operating agency); released Intelsat and Inmarsat documents; international
treaties and agreements; international operating agreements; ITU publications;
tariff and accounting rate information.

FY95

Highlights
In its first year, the International Bureau raised the standard of government ser-
vice, consistently working to streamline processes and develop new and effec-
tive ways to do its work. To date the Bureau has:
• Held four public roundtable discussions with industry to solicit its views on
necessary regulatory changes and, based on these discussions, prepared a pack-
age of regulatory and legislative initiatives.

INTERNATIONAL BUREAU 63
• Established the use of a status conference for all applications which
have not been acted upon within six months of filing.
• Reduced the statutory comment public notice period from 45 days after
public notice to 30 days for issuance of Section 214 authorizations in routine
cases.
• Established new procedures to permit the grant of Special Temporary Au-
thority in authorizing certain satellite earth station applications and for pro
forma transfers of 214 licenses -- allowing industry immediately to provide
(and consumers immediately to receive) services without unnecessary regu-
latory processing delays.
• Increased the use of Section 319(d) waiver procedures to permit applicants
to proceed with the construction of satellite space stations (at their own risk)
pending action on the underlying applications.
• Granted 173 earth station renewal applications, in an unprecedented 10-day
period, clearing the way for continued delivery of video programming, data
transmission and telecommunications services.
• Held roundtable discussions and started crackdown on international dial-a-
porn abuses ( indecent or obscene, recorded or live, conversations that are
offered over the telephone on a commercial basis by information providers
located in foreign countries).
• Submitted information for advanced publication on 101 satellite networks,
including 26 non-government domestic networks. Also submitted 140 re-
quests for coordination with foreign systems.
• Submitted 12,226 notifications, including 77 notices for the space
radiocommunications services, 4,012 notifications of quarterly schedules of
international high-frequency broadcasting stations, 896 AM broadcast sta-
tions and 7,241 notifications of terrestrial assignments.

64 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

Major

Proceedings

Complementing these process reinvention achievements noted above, the Bu-
reau has successfully completed a very ambitious substantive agenda, including
the following most significant accomplishments:
http://www.fcc.gov/ib/wrc97/">

WRC-95


The success of the United States proposals at the World Radiocommunication
Conference (WRC-95) exceeded all expectations and paved the way for the in-
troduction of innovative global communication satellite networks proposed by
U.S. industry by securing key allocation and regul atory measures. Remain -ing
work on several important items related to these efforts will be carried forward
to WRC-97. WRC-95 also achieved a major simplification of the International
Radio Regulations.
http://www.fcc.gov/Bureaus/International/Notices/fcc95285.txt">

Part 25


Part 25 Streamlining Proceeding Since its inception, the International Bureau
http://www.fcc.gov/Bureaus/International/Notices/fcc95285.txt"> Streamlining
has pursued policies to ensure that the Commission’s goal of fostering growth
http://www.fcc.gov/Bureaus/International/Notices/fcc95285.txt">

Proceeding


within the satellite communications industry is achieved. The last review of the
Commission’s rules in this area (47 C.F.R., Part 25) occurred in the late 1980s,
and satellite technology has evolved significantly since that time. In August
1995 the Commission issued a Notice of Proposed Rulemaking (NPRM) de-
signed to eliminate any outmoded and cumbersome regulatory requirements and
increase the efficiency of space and earth station licensing process to enable
carriers to more quickly respond to the evolving needs of a global telecommuni-
cations marketplace.
http://www.fcc.gov/Bureaus/International/Notices/fcc95286.txt">

International


On July 13, 1995, the Commission proposed rules and regulations to stream-
http://www.fcc.gov/Bureaus/International/Notices/fcc95286.txt">

Section 214


line the international Section 214 application process and tariff requirements.
http://www.fcc.gov/Bureaus/International/Notices/fcc95286.txt">

Streamlining


The proposed rules would greatly reduce the regulatory burdens on applicants,
http://www.fcc.gov/Bureaus/International/Notices/fcc95286.txt">

Proceeding


authorized carriers, and the Commission and provide them with greater flexibil-
ity to meet the evolving needs of a global telecommunications market.
http://www.fcc.gov/Bureaus/International/Notices/fcc95229.txt">

Digital Audio


In June 1995 the Commission adopted a Notice of Proposed Rulemaking (NPRM)
http://www.fcc.gov/Bureaus/International/Notices/fcc95229.txt">

Radio Service (DARS)


to solicit comments on how to develop service rules and policies to govern the
licensing and operation of satellite digital audio radio service (DARS) operating
in the 2310-2360 MHz frequency bands. The NPRM proposed options for se-
lecting DARS licensees including licensing the four pending applicants for all
or part of the spectrum or reopening the proceeding to new applicants, the NPRM
also requested comment on the impact of Satellite DARS on terrestrial broad-
casts and possible rules for the design of DARS service.

INTERNATIONAL BUREAU 65
The Commission adopted a Report and Order establishing a market entry
http://www.fcc.gov/Bureaus/International/Notices/fcc95053.html">

Market Entry of


standard for foreign carriers seeking to provide basic international telecom-
http://www.fcc.gov/Bureaus/International/Notices/fcc95053.html">

Foreign Affiliated Entities


munications services under Section 214 of the Communications Act of 1934,
as amended (the Act). The Report and Order also establishes a standard by
which the Commission will review whether it is in the public interest to per-
mit foreign investment in licensees of common carrier radio facilities in ex-
cess of the benchmarks contained in Section 310(b)(4) of the Act.
The Commission adopted an Order on Reconsideration confirming that in-

Call-Back

ternational “call-back” service using uncompleted call signalling violates nei-
ther U.S. nor international law. “Call-back” offerings enable customers abroad
to access U.S. international service and pay U.S. rates for international calls
rather than the generally higher prices charged by foreign carriers. The Com-
mission agreed with the Department of State that call-back is not prohibited
or otherwise restricted by International Telecommunication Union (ITU) regu-
lations. The FCC reaffirmed its view, as a matter of international comity, that
U.S. call-back operators are not authorized to provide uncompleted call sig-
nalling in those countries whose laws explicitly prohibit this offering.
In October 1994 the Commission adopted licensing rules for a new type of

Mobile Satellite Service

mobile satellite service -- the “Big LEO” service -- operating in the 1610-
(MSS) Systems Above the
GHz (Big LEOs)

1626.5/2483.5-2500 MHz bands. Systems of this new type could be used to
provide integrated communications services to all parts of the world, includ-
ing areas where telecommunications has been unavailable or prohibitively
expensive for most inhabitants. In January 1995 the Commission authorized
three applicants to build and launch “Big LEO” satellite systems, which will
deploy the world’s first commercial LEO satellites capable of providing voice
and data mobile services on a global basis.
In 1995 the Commission issued a Notice of Proposed Rulemaking to elimi-
http://www.fcc.gov/Bureaus/International/Notices/fcc95146.html">

DISCO I


nate the outdated regulatory framework that distinguished domestic satellite
systems from international satellite systems, and to allow all U.S.-licensed
satellites in the fixed-satellite service (FFS) systems, mobile satellite service
(MSS) systems and direct broadcast satellite service (DBS) systems. These
proposals would enhance the opportunity for the provision of innovative sat-
ellite service offerings and increased competition in satellite communication
services without artificial regulatory barriers.

66 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

Direct Broadcast

The Commission conducted its first ever Direct Broadcast Satellite auctions in

Satellite

January 1996, less than four months after it affirmed an International Bureau

Service (DBS)

decision to reclaim channels held by DBS permittee Advanced Communications
Corporation (ACC). The auctions raised $735 million for the U.S. Treasury.
The Commission will soon issue a Notice of Proposed Rule Making (DISCO II)
to address questions of U.S. market entry for non-U.S. -licensed satellites and
foreign-originated programming. DBS is a service which permits satellite deliv-
ery of video programming directly to homes via 18" receive dishes.

International

Mexico - Several meetings were held with representatives of the Mexican Gov-

Negotiations:

ernment over the past year. The primary focus of the negotiations efforts was the

Canada & Mexico

establishment of new agreements to facilitate coordination of designated services
in specific frequency bands. A significant milestone was reached on May 16th at
the Bi-National Consultative Commission on Telecommunications Meeting when
two new Protocols were signed governing the bilateral use of spectrum by pro-
viders of the newly launched Broadband and Narrowband Personal Communica-
tions Services (PCS). Canada - Discussions with Canada continued on a variety
of issues. The long term project of creating a General Coordination Agreement
to update the 1962 Above 30 MHz Agreement and consolidate all of its associ-
ated interim arrangements continued to show progress. New versions of 220-222
MHz Land Mobile and Mobile Earth Terminal draft agreements were exchanged.

INTERNATIONAL BUREAU 67


CABLE TELEVISION BUREAU 69
http://www.fcc.gov/Bureaus/Cable/WWW/csb.html">

Cable Services Bureau


The Cable Services Bureau administers and enforces cable television rules and

Overview

licenses private microwave radio facilities used by cable systems. The Bureau
is charged with implementing the 1992 Cable Television and Consumer Pro-
tection and Competition Act which directed the Commission to ensure good
service and reasonable rates for cable television subscribers n ationwide.
At the close of FY95 the Cable Services Bureau employed 186 people. The
Bureau is organized into four Divisions: Consumer Protection and Competi-
tion, Policy and Rules, Financial Analysis, and Compliance, and Engineering
and Technical Services. The Bureau also has an Office of Government and
Public Outreach.
Since the institution of cable rate regulation, the Bureau has been pursuing
enforcement of the rate regulations by using a number of methods: responding
to numerous telephone calls and letters from cable subscribers regarding rates
and service and investigating more than 7,000 rate complaints from subscrib-
ers and local officials. The Bureau began to issue orders based on the com-
plaints in the last quarter of calendar year 1994; issued 62 Letters of Inquiry to
various cable operators in regard to their cable rate and service offerings; took
action resolving 137 must carry petitions; issued six tax certificates; issued
orders involving seven areas of dominant influence (ADI) modifications; handled
57 significantly viewed cases; released 141 orders resolving appeals of local
rate orders; resolved 137 challenges by cable operators of the certification of
local franchising authorities based on assertions that effective competition ex-
ists in the communities in question; resolved 15 leased access cases; resolved
78 must-carry complaints and nine retransmission consent disputes; resolved
four program access complaints; and resolved 25 petitions for reconsideration.
The Bureau has made great efforts in outreach to and education of its primary
customers -- cable subscribers, cable operators, state and local governments,
and members of Congress, for which it serves as a single point of contact for
cable related issues before the Commission. The Office of Government and
Public Outreach was created in April 1995 to sustain and improve the Bureau’s
customer service. The Bureau is developing a comprehensive outreach pro-
gram to increase informed participation in rulemaking process by local fran-

70 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

chising authorities (LFAs) and other interested parties; to educate LFAs in, and
facilitate the implementation of, FCC regulations at the local level; and to improve
communication and understanding among the FCC, cable regulators, and the
cable industry.
The Cable Services Bureau’s outreach program has established a relationship with
national, state, and local trade associations who assist with the distribution and
dissemination of Bureau-released information. In addition, it coordinates meet-
ings with various groups having either a general or specific interest in cable regu-
lation and provides briefings on various aspects of cable regulation and the cable
industry on a regular basis upon request of interested parties.
Resolution of thou-
In FY95 the Bureau responded to 944 written congressional inquiries and pro-
sands of cable pro-
vided information and assistance to numerous congressional staff members work-
gramming services
ing on the Telecommunications Act of 1996. The staff participated in various
(CPS) rate complaints
meetings with congressional staff to review and respond to certain aspects of the
was one of the
then proposed legislation.
Bureau’s most impor-
tant activities this past

In FY95 the Bureau’s customer service assistants responded to a total 72,655
year.
telephone inquiries relating to cable television service and regulation. This same
staff responded to 26,920 informal inquiries and complaints regarding cable ser-
vice.
The Bureau is very active in educating the public and staff about the Bureau’s
customer service standards. It operates several hotlines for answering general
inquiries from the public, local franchise authorities and cable operators. It pre-
pares and maintains Fact Sheets addressing such issues as Customer Service Stan-
dards, Signal Quality Standards, Program Content Rules, Cable Carriage of Broad-
cast Stations, Equal Employment Opportunity Rules, and the Cable Television
Information Bulletin.
Resolution of thousands of cable programming services (CPS) rate complaints
was one of the Bureau’s most important activities this past year. The Bureau’s
goal is to ensure that cable operators' CPS rates are not unreasonable. The Bu-
reau issued over 700 rate decisions as a result of a review of over 11,000 rate
complaints. Of the number of cable operator petitions for reconsideration (filed
with the Bureau) or applications for review (filed with the Commission) of the
Bureau’s rate decisions, approximately 70% were brought to resolution through
the Bureau’s ambitious efforts to negotiate rate settlements and social contracts
with the country’s major cable operators. The Bureau’s efforts not only reduced
administrative burdens on all parties, but provided subscribers with immediate
refunds. In total, the Bureau has resolved rate complaints involving 33.3 million
subscribers resulting in $48.8 million in refunds.

CABLE TELEVISION BUREAU 71
The two major social contract initiatives achieved by the Bureau in 1995 were
the Continental Cablevision, Inc., Social Contract and the Time Warner Social
Contract. The Continental Cablevision, Inc., Social Contract provided an esti-
mated $9.5 million in subscriber refunds and established a reduced lifeline basic
service tier rate 15% - 20% below otherwise justified rate levels. In addition,
Continental Cablevision, Inc., committed to invest $1.35 billion during the pe-
riod 1995-2000 for domestic cable system upgrades. In return, Continental
Cablevision, Inc., was permitted to establish regional average equipment rates
and was permitted to create a migrated product tier (MPT) at the per channel
CPS tier rate, with permission to move the MPT to a new product tier (NPT) in
20 months and begin pricing the NPT in accordance with the Commission’s
Going Forward Rate Rules.
The two major social
Under the Time Warner Social Contract subscribers were provided with an
contract initiatives
estimated $4.7 million (plus interest) in refunds in the form of subscriber bill
achieved by the Bureau
credits. Time Warner agreed to establish a lifeline basic service tier priced at
in 1995 were the Conti-
10% below permitted rate regulated basic service tier levels, and agreed to
nental Cablevision, Inc.,
allow its subscribers the right to remove, replace, rearrange or maintain any
Social Contract and the
cable wiring located in the interior space of the subscriber’s dwelling unit. Time
Time Warner Social
Warner committed to invest $4 billion in domestic cable system upgrades over
Contract.
the next 5 years and agreed to provide free service connections at one outlet in
all existing public schools (K-12) within 200 feet of a Time Warner activated
plant and within its service area. (Schools beyond 200 feet are to be provided
this connection at cost.)
Additionally, secondary private schools that receive funding under Title I of the
Elementary and Secondary Education Act of 1965 and that are within Time
Warner’s service area are to receive service connections at cost. All schools
receiving these connections will also receive a monthly educational program
guide having curriculum support ideas to assist educators in effectively using
the new services. Time Warner also agreed to provide its on-line service free
(when this service becomes available) to these schools upon request, and agreed
to provide the first modem free of charge and additional modems at cost.
In return, Time Warner was permitted to increase its CPS rates by no more than
$1 per year for each of the next five years, plus external costs and inflation. The
Social Contract also provided Time Warner the right to create a MPT, consist
ing of four channels in systems that did not have prior a la carte offerings and
permitted Time Warner to create two MPTs in systems where low penetration a
la carte offerings had been previously offered, however the total channels per-
mitted to be migrated in these areas may not exceed six. Depending on the
MPT offering, the MPTs must be priced based on a specified $.29/channel cap,
the current rate or the lowest uniform rate where a contiguous system offered a

72 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

NPT under the Commission’s rules. Time Warner may convert its MPTs to NPT
after April 1997 and begin pricing the NPT in accordance with the Commission’s
Going Forward Rate Rules.

FY95

Highlights

• Negotiated cable rate complaints settlements and social contracts that w ill,
when finally implemented, refund nearly $40 million dollars in overcharges to
consumers.
• Responded to over 100,000 phone calls, letters and other inquiries from the
public regarding cable television service.
• As required by the 1992 Cable Act, adopted two items easing the bur-
dens of regulation for small cable systems
• Conducted the Second Annual Report to Congress on the status of
competition in the market for the delivery of video programming. The
Report found that, although more consumers are receiving video pro-
gramming through alternatives tocable, the cable subscribership con
tinues to dwarf the combined subscribership of its competitors.
Major

Proceedings

Headend Upgrades

In FY95 the Commission decided that its requirement that qualifying small sys-
(MM Docket 92-266)
tems choose between a streamlined cost-of-service procedure for recovering the
headend costs of new channels and the per channel adjustment methodology
available to all cable operators when they add new channels was insufficient to
give qualifying systems an appropriate incentive to add new channels.
Accordingly, in the Seventh Order on Reconsideration, the Commission revised
its rules to allow independent small systems and small systems owned by small
MSOs to recover for each channel added by using both the per channel adjust-
ment methodology and the streamlined cost-of-service procedure for upgrading
headend equipment. The Commission also determined that limiting eligibility to
use the streamlined cost-of-service procedure for upgrading headend equipment
to independent small systems and small systems owned by small MSOs may not
have given slightly larger systems an appropriate incentive to add channels. Thus,
the Order allows larger systems to use the streamlined cost of service approach
subject to the same conditions as independent

CABLE TELEVISION BUREAU 73
small systems and small systems ownedby small MSOs, provided that (a) the
systems are either independently owned or owned by small MSOs and (b) the
monthly per subscriber cost of the additional headend equipment necessary to
receive an additional channel is one cent or more. The Commission further
streamlined the cost-of-service procedure for headend upgrades associated
with channel additions on single-tier systems. In the Order, the Commission
recognized that qualifying systems have the same small customer base over
which to spread the cost of new equipment associated with providing addi-
tional channels, whether or not they have cable programming service tiers
(CPSTs).
In FY95 the Commission adopted the Ninth Order on Reconsideration, end-

Inflation Recovery

ing the freeze on small cable television system operators’ and low-price sys-
http://www.fcc.gov/Bureaus/Cable/Orders/fcc95043.txt">(MM Docket 92-266)
tem operators’ adjustment of their rates for inflation. “Small operators” are
defined as those serving 15,000 or fewer subscribers and not affiliated with a
larger operator. “Low-price systems” are defined as those systems that charge
relatively low prices for regulated services under benchmark rates on March
31, 1994. The Ninth Order on Reconsideration allows small operators and
low-price systems that have taken advantage of the transition relief to adjust
their transition rates to reflect increases in inflation without any further delay.
The Order provides that such operators may adjust their rates to reflect the net
of inflation adjustments permitted to other operators, minus any inflation ad-
justments they have already received. The Order also provides that, in the
future, small operators and low-price systems may make inflation adjustments
in the same manner as other cable operators.
In the Tenth Order on Reconsideration the Commission lessened the burden

Parallel Rate

on particular operators when they request future rate adjustments. In the

Tracking

Second Reconsideration Order, the Commission relieved transition system
(MM Docket 92-266)
operators of the obligation to track both their transition rates and full reduc-
tion rates on rate forms filed with the Commission. Transition systems fall into
two categories -- systems with a total subscriber base of 15,000 or fewer
customers and which are not affiliated with a larger operator, and systems
whose March 31, 1994, rates are above the benchmark rate but have permit-
ted rates at or below the benchmark. The formula for setting the benchmark
rate was established in the Second Reconsideration Order. Although they
were not required to reduce their rates to the benchmark, transition systems
were not allowed to adjust their transition rates for inflation. To track differ-
ences in transition and full reduction rates, transition systems were required to
report their current transition rates and rates that would apply if the full reduc-

74 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

tion rate were imposed. In the Ninth Order on Reconsideration, however, the
Commission authorized transition systems to adjust their transition rates for
inflation thereby eliminating the underlying difference between adjustment fac-
tors for transition rates and adjustment factors for full reduction rates. Ac-
cordingly, the Commission, in the Tenth Order on Reconsideration, relieved
transition operators of the burden of tracking both rates on rate forms.
http://www.fcc.gov/Bureaus/Cable/Orders/fcc95343.txt">

Home Shopping


In the Twelfth Order on Reconsideration the Commission eliminated regula-
http://www.fcc.gov/Bureaus/Cable/Orders/fcc95343.txt">(MM Dockets
tory disincentives for operators to provide home shopping services on their
http://www.fcc.gov/Bureaus/Cable/Orders/fcc95343.txt">92-266
systems. The Commission deleted the requirement that operators offset the
http://www.fcc.gov/Bureaus/Cable/Orders/fcc95343.txt">and 93-215)
mark up for channel additions with sales commissions received from home
shopping channels. The Commission’s order applies only to per channel mark
ups on the cable programming service tier and does not apply to license fees to
the extent such fees are imposed. Because the Commission does not require
offsets for value received from traditional programmers in the form of adver-
tising availabilities, the Commission concluded that offset requirements for
home shopping sales commissions had the effect of favoring one type of chan-
nel content over another. The home shopping sales commission offset had the
effect of eliminating the mark up incentive to add a home shopping channel
simply because cable subscribers responded in significant numbers to offerings
on a shopping channel. On the other hand, traditional channels that allowed
operators to earn revenue on advertising availabilities did not trigger a similar
offset obligation for the operator. Accordingly, the Twelfth Order on Recon-
sideration
was adopted to eliminate this disparity. In addition, the elimination
of the offset requirement reduced accounting and adjustment burdens associ-
ated with the regular calculation of sales commission offsets.
In FY95 the Commission adopted the Thirteenth Order on Reconsideration

Annual Rate

Adjustments

simplifying rules affecting cable operators’ rates. The Order established a new
(MM Docket 92-26)
optional rate adjustment methodology that encourages operators to limit their
rate increases to once per year. This methodology limits delays in recovering
costs that operators may experience under the current system. The Order also
eliminated the practice of reviewing the entire cable programming service tier
(CPST) rate after the Commission receives a complaint about CPST rates. In
addition, the Order permits a CPST rate change to go into effect without wait
ing for the Commission to approve it, unless the Commission rejects the pro-
posed change within 30 days after the filing of the proposal.

CABLE TELEVISION BUREAU 75
The Commission adopted two items in furtherance of its statutory obligation

Small Systems

to ease the burdens of regulation for smaller cable systems. In the Sixth Report
(MM Dockets 92-266
and Order and Eleventh Order on Reconsideration, the Commission expanded
and 93-215)
the definition of a “small system,” created a new category of cable operators
known as “small cable companies,” and established a new method of rate regu-
lation, based upon cost-of-service principles, for the exclusive use of small sys-
tems owned by small cable companies, as newly defined.
In particular, the Commission determined that systems serving 15,000 or fewer
subscribers would be deemed small systems and that operators serving 400,000
or fewer subscribers over all of their systems would constitute small cable com-
panies. Small systems owned by small cable companies, as now defined, are
eligible to elect the new small system cost-of-service relief, as well as other
relief previously made available to certain smaller systems and operators.
The new cost-of-service approach involves a very simple, five-element calcu-
lation based upon a system’s costs. The calculation produces a per channel rate
for regulated services that will be presumed reasonable if it is no higher than
$1.24 per channel, although the requested rate remains subject to limited re-
view by the local franchising authority or the Commission. If the formula gen-
erates a rate exceeding $1.24 per regulated channel, the operator still may charge
that rate if it meets its burden of proving that the rate is reasonable. Adoption
of this item resulted in the elimination of the prior categories of small systems,
small operators, and small MSOs.
In addition, the Commission determined that transition relief would no longer
be available to systems that had not previously elected that form of rate regula-
tion. Separately, as a result of the Eighth Order on Reconsideration, small
systems owned by small cable companies may enter into alternative rate regula-
tion agreements with certified local franchising authorities. Through these agree-
ments, the parties negotiate directly with each other to determine reasonable
rates for basic service and cable programming service tiers. The agreements
also may include provisions relating to rate increases and network upgrades.
The agreements do not have to be based on the Commission’s standard rules or
forms governing regulated rates, but must take into account the regulatory
criteria of the 1992 Cable Act. These agreements ensure that participating
systems will not be required to charge rates lower than would be permitted by
the Commission’s benchmark rules.

76 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

The Commission initiated a survey to determine cable industry average costs.
http://www.fcc.gov/Bureaus/Cable/Orders/da952138.txt">

Survey of Cable


http://www.fcc.gov/Bureaus/Cable/Orders/da952138.txt">

Industry Costs


The industry cost survey is needed to determine whether and to what extent
http://www.fcc.gov/Bureaus/Cable/Orders/da952138.txt"> (MM Docket 92-266)
“low-price” systems should be required to make further rate reductions. In its
Second Order on Reconsideration, Fourth Report and Order and Fifth Notice of
Proposed Rulemaking
(Second Reconsideration Order), the Commission pro-
vided special “transition” relief from the impact of reducing regulated rates by
the full competitive differentials to low-price systems. Low-price systems are
defined as those not subject to effective competition whose March 31, 1994,
rates are above the benchmark rate but their permitted rates are at or below the
benchmark. The order further indicated that transition relief would terminate
upon completion of an industry cost survey. Accordingly, a cost survey was
mailed to 660 cable systems requesting information regarding primary system
costs and operations, including plant costs, intangibles, revenues, operating ex-
penses and capitalization. The questionnaire also asks for information about
employment and plant facility statistics. The Commission expects to analyze and
publish the survey results during FY96.

Annual Report on

The 1992 Cable Act requires the Commission to publish an annual statistical
Average Rates for
report on the average rates for cable programming service and for converter

Cable Programming

boxes, remote control units, and other equipment provided by cable systems.

Service and

This report must compare the rates charged by cable systems that are subject to

Equipment

effective competition with those not subject to effective competition. To obtain
(MM Docket 92-266)
information for the required comparisons, the Bureau mailed survey question-
naires to a targeted group of cable communities known to face effective compe-
tition and to a randomly selected group of cable communities not subject to
effective competition. The survey sought information concerning rates for basic
and cable programming services, and equipment used to receive such services.
The survey also requested that cable operators provide data for three dates: August
31, 1993, the effective date of the initial rate regulation rules; July 14, 1994,
following the effective date of the revised benchmark rules and the end of the
refund deferral period; and January 1, 1995, the beginning of the most recent
annual period. The Bureau expects to analyze and publish a statistical report
based on the survey responses during FY96.

Competition in the

The Commission released its Second Annual Report to Congress on the status of

Video Programming

competition in the market for the delivery of video programming. This Congres-

Delivery Market

sionally-mandated report provides information that summarizes the status of com-
http://www.fcc.gov/Bureaus/Cable/Reports/fcc95491.zip">(CS Docket 95-61)
petition in the video marketplace and updates the information provided in the
Commission’s first annual report released in 1994. The Commission’s major
findings were:

CABLE TELEVISION BUREAU 77
• For the cable industry, subscriber penetration, average system
channel capacity, the number of programming services available,
revenues, expenditures on programming, and capital investment
generally have increased since 1994;
• Although the percentage of subscribers choosing competitive al-
ternatives to incumbent cable operators has increased since the
1994 report, cable subscribership continues to dwarf the com-
bined subscribership of all other multichannel video program-
ming distributors (MVPDs);
• Since 1994, there has been increased horizontal concentration of
cable multiple system operators (MSOs) nationwide and increased
regional “clustering” of cable system ownership. Local markets
for the distribution of multichannel video programming tend to be
highly concentrated as measured by subscribership among all
MVPDs;
• While the number of cable programming services has increased
over the past year, the percentage of services that are vertically
integrated with cable operators has declined slightly; and
• Technological advances are occurring that will permit MVPDs to
increase the number of channels offered and the types of service
offerings. However, it is unclear whether existing cable opera-
tors or their existing and potential competitors will benefit most
from these technological advances.

78 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT


OFFICE AND ENGINEERING AND TECHNOLOGY 79
http://www.fcc.gov/oet/">

Office Of Engineering


http://www.fcc.gov/oet/"> And Technology
Developing the radio frequency spectrum into a usable national resource for

Overview

public and private use is a primary FCC function. The FCC, through its Office
of Engineering and Technology (OET), does this by balancing spectrum de-
mands among competitors and promulgating “rules of the road” to maximize
spectrum usefulne ss.
During the past fiscal year OET took the goals of Reinventing Government
seriously. It created a new streamlined structure to assess more efficiently
current and future technical and engineering spectrum needs. Under the new
OET, investigation, analysis and planning for future spectrum uses are more
quickly accomplished utilizing the engineering, technical, policy and economic
expertise among its interdisciplinary staff members. The staff provides swifter
analysis of spectrum options; formulates solutions to spectrum management
concerns; designs spectrum charts, maps and models; promotes collaborative
policy and technical issues development; and applies more innovative, for-
ward-thinking approaches to new challenges before the Commission.
Important rulemakings such as the allocation of new spectrum for millimeter
wave activities and digital audio radio services have evolved from OET tech-
nical work. This past year, OET identified spectrum that can be converted
from the Government to the private sector, or that can be made available for
sharing among several technologies.
OET recommended the use of 25 megahertz at 4.6 GHz for fixed and mobile
services that could eventually support a wide variety of innovative applica-
tions, such as live ground-to-air distribution of television programming, digital
broadcast auxiliary operations, and public safety video communications. OET
examined important issues which affect our disabled population such as the
problem of compatibility between proposed Personal Communications Ser-
vices (PCS) and wireless services and telephone and hearing aids.
OET's streamlining the steps for granting experimental licenses and equipment
authorizations has resulted in new types of equipment entering the market-

80 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

place. Other activities in FY95 included recommending several major frequency
allocation actions to advance communications services to the public in the years to
come; identifying spectrum that can be converted from the Gov ernment to the
private sector; undertaking specialized projects; providing technical support to other
bureaus, such as the development of PCS propagation maps; redesigning spectrum
to allow for expanded uses, such as for emerging technologies; authorizing equip-
ment and issuing experimental licenses for new technologies and services; working
with other Government agencies on special communications requirements and agree-
ments; and attending important international meetings.
The OET Technical Information Library responded to numerous requests for in-
formation and various technical documents, in addition to filling hundreds of in-
house requests for assistance. Part of the educational effort includes the produc-
OET is customer-
tion of telecommunications reports, special studies, informative publications, and
friendly. It has created
fact sheets on a variety of technical and regulatory activities. Four bibliographies,
outreach and educa-
consisting of compendiums of documents relating to communications technology,
tional programs to
were produced. “High Tech” files were produced for the subjects of Integrated
inform the public better
Services Digital Network (ISDN), DTV, PCS, and fiber optics, with computerized
of important activities of monthly updates available to interested staff.
the Office. OET had
over 60,000 interactions

OET is customer-friendly. It has created outreach and educational programs to
inform the public better of important activities of the Office. OET had over 60,000
with the public in FY95.
interactions with the public in FY95.
The Office produces telecommunications reports, special studies and Fact Sheets
on a variety of technical and regulatory activities. Informative publications are
prepared to keep the public apprised of recent developments. For example, OET
responded to more than 1600 inquiries during the year just concerning the safety of
radiofrequency fields, safety standards and environmental effects. OET staff also
serve on various industry, Government and international committees and task forces
in order to lend expertise in particular areas of telecommunications, engineering
and spectrum management concerns.
OET’s technical and computer staffs have improved the ability of the public to
access important spectrum management information. Outreach activities, espe-
cially those of a time-sensitive nature, are also provided electronically. OET has
created a database to track OET rulemaking and maintains the Worldwide Web,
OET Homepage, and email address. The site, Homepage and email address have
drastically increased the public’s access to OET by providing an easy route to
important information concerning the Office and its activities. For example, the
Homepage includes a “hot topics” list, a “frequently asked questions” list and in-
formation on OET divisions. Our email address is OET@fcc.gov and our site is
www.fcc.gov.

OFFICE AND ENGINEERING AND TECHNOLOGY 81
The Public Access Link (PAL) provides computerized information on the sta-
tus of pending applications, limited technical information on granted authori-
zations, and other information related to equipment authorization that is of
interest to the public. The system remains on-line continuously, providing a
twenty-four hour service to the public. Use of the PAL system is approxi-
mately 3,700 calls and 8,000 ID accesses monthly.
During FY95 OET staff presented a series of tutorials to the FCC staff and the
public concerning technology developments. These included tutorials on “The
Global Positioning System,” “Millimeter Waves,” and “Software Radio Ba-
sics.”

FY95
Highlights

• Launched an investigation of potential interference from PCS handheld
devices to hearing aids.
• In the areas of radio technology, recommended the allocation of 50
megahertz of spectrum in the 2.3 GHz band for satellite digital audio
radio broadcasting.
• Following a growing commercial interest in the integration of services,
recommended the allocation of 10 megahertz of spectrum at 2.4 GHz
for unlicensed personal computer devices to support data transmission.
• Recommended the allocation of 70 megahertz of spectrum in the 2
GHz range for future mobile-satellite systems and additional alloca-
tion for amateurs at 219 MHz.
• Granted nearly a thousand experimental licenses to diverse entities.
These licenses aided in identifying what new services and technologies
were under development and in what parts of the spectrum.
• An emphasis on less burdensome procedures for equipment authoriza-
tion and refinements to the application process has almost eliminated
the “type approval” step in which the proposed equipment had to be
submitted to the OET Lab. As a result, more than 7,000 applications
for equipment authorization were processed this year including PCS
licensed and unlicensed equipment.

82 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

• Examined how best to allot additional channels from the allocated television
spectrum for Digital Television. Studies are being conducted to minimize the
impact on current television during the transition to digital television. After the
transition period, some spectrum might be recovered to support future commu-
nications services.
• Refined radio propagation prediction methods which will be useful in assessing
the impact of PCS on the current spectrum users and on stations in Canada
operating close to our borders.
• Worked toward deregulating digital devices by replacing current requirements
for personal computers and peripherals. This would allow manufacturer self-
declaration of conformity with radio interference standards and increase the speed
of computer products to the market.

Major

Proceedings

Pioneer’s

As a result of a series of modifications to the pioneer’s preference program made

Preference Rules

in FY95, the rules now provide that any licenses awarded pursuant to the pro-
http://www.fcc.gov/Bureaus/Engineering_Technology/Orders/oret4012.txt">(ET Docket 93-266)
gram in services in which competitive bidding is used are subject to a payment of
85 percent of the average price paid for comparable licenses. The rules also
specify a termination date for the pioneer’s preference program of September
30, 1998.

Mobile-Satellite

On January 30, 1995, the Commission adopted a Notice of Proposed Rule Mak-
Service at 2 GHz
ing that proposed to allocate the 1990-2025 MHz (Earth-to-space) and 2165-
http://www.fcc.gov/Bureaus/Engineering_Technology/Orders/fcc95039.txt">(ET Docket 95-18)
2200 MHz (space-to-Earth) bands to the mobile-satellite service (MSS). The
Commission proposed to allocate the bands for both geostationary (GSO) and
low-Earth orbit (LEO) use, but solicited comment on whether limiting the bands
to one type of use would be preferable. The Commission stated that the pro-
posed allocation would create opportunities to provide new and competitive
services and technologies to the public, particularly in rural areas; stimulate eco-
nomic development; and create new high technology jobs.

OFFICE AND ENGINEERING AND TECHNOLOGY 83
On June 26, 1995, the Commission adopted a Second Report and Order which
reallocated the 1525-1530 MHz band to the mobile-satellite service on a pri-

Mobile-Satellite Service at

mary basis for space-to-Earth (downlink) transmissions. This action was aimed
1530-1544 & 1626.5-
at increasing the efficiency of MSS operations by equalizing the amount of
1645.5 MHz
spectrum available in the uplink and downlink segments. The action imple-
(GEN Docket 90-56)
mented a WARC-92 spectrum allocation and facilitated international coordi-
nation for use of this spectrum.
On January 12, 1995, the Commission adopted a Report and Order in Docket

Digital Audio Radio

90-357 allocating spectrum in the 2310-2360 MHz band for satellite digital

Services

audio radio services (DARS). This action was consistent with the 1992 World
(GEN Docket 90-357, IB
Administrative Radio Conference, which allocated the band to the United States

Docket 95-91)

for the broadcast satellite service. The Commission said that the allocation
was the first step toward providing the American public with new multi-chan-
nel, multi-format digital radio services with sound quality equivalent to com-
pact disks on a nationwide or regional basis. On June 14 1995, the Commis-
sion adopted a Notice of Proposed Rule Making in Docket 95-91, proposing
service and licensing rules for satellite DARS.
On April 5, 1995, the Commission adopted a Report and Order, making 15

Cordless Telephones

new channel pairs available for cordless telephone use. The new channels
http://www.fcc.gov/Bureaus/Engineering_Technology/Orders/fcc95148.txt"> (ET Docket 93-235)
offer several advantages over other alternative frequency bands. First, the
close proximity of the new channels to existing frequencies will enable contin-
ued use of existing technology. As a result, the cost of products using the new
channels will not increase significantly. Second, cordless telephones using the
new channels will be able to make use of the ten originally authorized channels
to offer 25-channel capability. Third, the risk of the new channels’ causing
interference to other services is low. Cordless telephones operating on the
new frequencies will deliver improved service at an affordable cost. In addi-
tion, consumers may choose among cordless telephones operating in other
frequency bands that ffer different performance levels at higher costs.
On October 20, 1994, the Commission adopted a Notice of Proposed Rule

Transfer of Government

Making, proposing for use by non-Government fixed and mobile services 50

Spectrum

megahertz of transferred Federal Government spectrum at 2390-2400, 2402-
(ET Docket 94-32)
2417, and 4660-4685 MHz. On February 7, 1995, in a http://www.fcc.gov/Bureaus/Engineering_Technology/Orders/fcc95047.txt">First Report and Order
and Second Notice of Proposed Rule Making, the Commission allocated the
2390-2400 MHz band for use by unlicensed PCS devices, provided for contin-
ued use of the 2402-2417 MHz band by low-power devices operating in ac-
cordance with Part 15 of the Commission’s rules, allocated both of these bands
for use by the Amateur radio service on a primary basis, and proposed to
allocate the 4660-4685 MHz band to a General Wireless Communications
Service (GWCS). On July 31, 1995, in a Second Report and Order, the Com-
mission adopted the GWCS allocation and service rules.

84 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

Amateur

On March 14, 1995, the Commission adopted a Report and Order that allo-

Radio Service

cated the 219-220 MHz band to the Amateur radio service on a secondary
http://www.fcc.gov/Bureaus/Engineering_Technology/Orders/fcc96025.txt">(ET Docket 93-40)
basis for fixed digital message forwarding systems. This allocation will facili-
tate the regional and nationwide provision of a packet data network. The
additional Amateur allocation was necessary because of congestion in the 222-
225 MHz Amateur band.

Closed Caption

On July 25, 1995, the Commission adopted an Order deleting a requirement

Decoder

that television receivers manufactured after January 1, 1995, incorporate closed-

Circuitry

caption decoder circuitry that is compatible with a cable television copy pro-
(GEN Docket 91-1)
tection system manufactured by the Eidak Corporation. This action relieved
electronics manufacturers of the burden of incorporating special circuitry in
television receivers for a technology that is not used by cable systems.

New York Waiver

On March 14, 1995, the Commission permitted the temporary assignment of
(FCC 95-115)
frequencies in the 482-488 MHz band (television Channel 16) to public safety
agencies in the New York City metropolitan area. Public safety use of these
frequencies will be permitted for a period of at least five years or until the
Commission assigns Channel 16 in New York City for advanced television
service (ATV) and the television licensee begins to utilize Channel 16 for ATV
operations. The Commission granted the waiver to provide public safety agen-
cies with immediate spectrum relief that is urgently needed in the congested
New York City metropolitan area.
OET’s technical and engineering studies in FY95 reflected the movement to-

Technical

ward more advanced technologies. OET created a model for propagation

Activities

predictions and associated criteria for coordination of PCS with existing mi-
crowave stations. This model has become the definitive guide to industry in
the introduction of PCS into the existing microwave environment.
OET launched an investigation of potential interference from PCS handheld
devices to hearing aids. Using state-of-the-art operations research, OET de-
veloped computer models capable of evaluating proposed HDTV channel al-
lotment tables. OET completed an empirical study in support of the ATV
advisory committee dealing with short-term propagation variability of UHF
television signals.
OET directed an FCC/Environmental Agency field measurement study of cel-
lular radio and paging facilities and produced a study on radio frequency fields
from amateur radio facilities to determine the potential for these sites to pose
a health hazard. The Office also studied the potential for interference from

OFFICE AND ENGINEERING AND TECHNOLOGY 85
proposed new cordless telephone frequencies in support of rule making estab-
lishing new channels. In promoting efficient use of the spectrum, OET con-
ducted spectrum usage studies in the 38.6-40 GHz band and in the 6 GHz
band, as well as conducting surveys of equipment availability. It also per-
formed a technical analysis of the 1990-2110 MHz Auxiliary Broadcast Band
to determine the feasibility of sharing with mobile satellite operations and to
determine potential for relocating Broadcasting Auxiliary Services.
OET provided analyses of existing spectrum utilization in the 800 MHz pri-
vate radio bands, assessments of technical developments that could increase
the channel capacity of current public safety spectrum, and studies of spectrum
that might become available for future public safety use.
This year models that were developed from situations in which transmitters in
the new personal communications systems might cause interference to existing
microwave systems were refined and incorporated into industry standards.
In support of various Commission proceedings, OET carried out a number of

Propagation Analysis

propagation studies to define service and interference potential in the micro-
wave, land mobile, and broadcasting services, including the evaluation of a
number of applications and waiver requests involving the effects of terrain and
meteorological conditions on propagation.
Also, OET continued participation in an international program which provides
median frequency skywave data from around the world. These data are being
analyzed and compared with various prediction models as part of the prepara-
tion for an ITU Conference on LF/MF broadcasting planned for 1998/1999. A
technical paper describing daytime skywave propagation has been prepared
for presentation at this conference, and a version of this paper was published in
the IEEE, “Transactions on Broadcasting.”
During FY95 the staff performed analyses to identify frequency bands for emerg-

Telecommunications

ing technologies and studied the current use and users of the 6 GHz band to

Analysis

evaluate the band’s suitability for new technologies. OET also developed nu-
merous maps and studies in support of rulemaking action in several regulated
services such as land mobile, point-to-point microwave, cellular, marine radio
services, the digital audio radio service in the 2.3 GHz band and maps of the
931 MHz paging stations along the Mexican and Canadian borders for use in
international negotiations.

86 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

Engineering

FY95 activities included an investigation of potential interference from PCS to
Evaluation
hearing aids; measurements of interference immunities of television receivers to
signals on proposed new cordless telephone frequencies; investigations of alter-
native radiated emissions measurement technologies; participation in the devel-
opment of measurement procedures for unlicensed PCS; development of re-
vised measurement procedures for unlicensed spread spectrum radios; assess-
ment of rationality of existing emission limits below 30 MHz; study of the re-
quirement for, and alternatives to, construction of an enclosed test site for the
FCC Lab; and oversight of DAR system development and testing. Support was
also provided to the advanced television standards development effort in the
form of development and evaluation of channel allocation models, as well as
technical oversight and expert observation of ATV laboratory and field testing.

Radiofrequency (RF)

OET is responsible for advising the Commission, the public, and industry on

Radiation

matters relating to potential hazards of environmental radiofrequency radiation,
and with respect to implementation of RF radiation standards under Section
1.1307(b) of the Commission’s Rules. In that regard, several hundred inquiries
concerning this issue were handled by OET staff. Inquiries included telephone
calls, letters, and Congressional inquiries. In addition, numerous investigations
and evaluations were made by OET staff relating to specific transmitters regu-
lated by the Commission. These evaluations were made for other bureaus as
well as in response to requests made directly to OET by outside organizations,
members of the public, and other federal, state and local agencies. Transmitters
involved included broadcast stations, cellular radio facilities and transmitters,
amateur radio stations, land-mobile facilities, and satellite uplink base stations.

Authorization,

Experimental

Activities

Experimental

The Experimental Radio Service Program examines new spectrum uses that will

Radio Service

accommodate myriad technological services in the future. It permits the public
to experiment with new uses of radio frequencies. This past year it assisted
industry by granting experimental licenses and has been able to reduce signifi-
cantly the application processing time.
During FY95, 742 applications for radio research and developmental projects
were granted. In addition, 333 requests for special temporary authority were
authorized. Federal contracts for developing radio equipment and exploring

OFFICE AND ENGINEERING AND TECHNOLOGY 87
new radio techniques made up a considerable portion of the authorizations
issued. At the close of the fiscal year, 1,055 experimental stations were in
operation, and 139 stations were operating under special temporary authority.
The equipment authorization program includes several specific procedures by

Equipment

which the agency approves radio equipment as a prerequisite to importat
Authorization
ion, marketing or use. An emphasis on less burdensome procedures for equip-
ment authorization and refinement to the application process has almost elimi-
nated the “type approval” step in which the proposed equipment had to be
submitted to the program. As a result, nearly 7,000 applications for equipment
authorization were processed in FY95, including the first licensed and unli-
censed PCS equipment.

Post-Grant
Sampling

OET also tests production units marketed to the public after the initial equip-
ment authorization grant has been issued. The Commission uses the results of
these tests to evaluate the certification, verification, and notification pro- grams;
to take action in cases of non-compliance with FCC rules; to confirm initial
estimates of the interference potential of new devices; to support rule making
actions; to verify test data provided by manufacturers in support of equipment
authorization applications; and to monitor the results of tests by independent
laboratories.
In FY95 a number of miscellaneous devices suspected of non-compliance based
on marketing investigations or interference complaints were tested, including
RF light bulbs, baby monitors, 49 MHz cordless telephones, 900 MHz cordless
telephones (both narrowband and spread spectrum), remote control transmit-
ters, personal computers and peripherals, FAX machines, walkie talkies, an elec-
tronic cash register, and an ultrasonic cleaner. To ensure manufacturers’ com-
pliance with Commission procedures and standards, OET continued a program
to review descriptions of test facilities, as required by the rules. All test sites
were reviewed on a timely basis, and a list of the test facilities that were accept-
able was maintained as a public document, and on the Public Access Link (PAL)
information system.
OET prepared technical information detailing the consequences for PCS use
near the U.S./Canadian border that was influential in gaining Canadian Govern-
ment concurrence with FCC actions creating PCS.

88 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

OET staff participated in the negotiations with the United States Trade Represen-

International

tative and the Department of Commerce to develop a Mutual Recognition Agree-

Activities

ment (MRA) with the European Union (EU) for Conformity Assessment. OET
participated in three separate sets of meetings with the EU in FY 95. The purpose
of the MRA is to facilitate trade by harmonizing and possibly streamlining the
conformity assessment procedures between the USA and the EU. The equipment
under consideration for the MRA is information technology and telephone termi-
nal equipment. Additional negotiations will continue into FY 96. Any changes to
the FCC equipment authorization program, as a result of a MRA, would be ac-
complished through rulemaking.

Commmittee and

OET staff also serves on various industry, Government and international commit-

Coordination Group

tees and tasks forces in order to lend expertise in particular areas of telecommuni-

Activities

cations, engineering and spectrum management concerns.
OET staff participated in the Information Infrastructure Standards Panel, an ANSI
organization created to identify areas where standards are needed to facilitate
development of a national and global information infrastructure and to identify
any existing standards that can be used to fulfill these needs. OET also partici-
pated in meeting of the Interagency Committee for Standards Policy, a high level
committee to provide consistency and direction in development and use of stan-
dards in the Federal Government. OET is also a member of the American Na-
tional Standards Institute and the Institute of Electrical and Electronic Engineers.
OET staff participated in meetings and made presentations to various industry
groups, including the Institute of Electrical and Electronic Engineers (IEEE), the
FCC’s Advanced Television Advisory Committee, and the Telecommunications
Industry Association (TIA).

ITU

OET staff remain active in the work of the ITU. OET was an active participant in

Radiocommunication

the work of Study Group 3 of ITU-R, which studies Radio Wave Propagation
(ITU-R) Study Group
matters. An OET staff member authorized a chapter on LF/MF propagation to be

Activities

incorporated into the draft Ionospheric Propagation Handbook and participated
in the U.S. National Committee, as a member of the Home Team, deliberating
U.S. national positions for the 1996 Plenary Assembly and the World Radio Con-
ference.
OET staff participated in the ITU-R Working Party 8A dealing with issues per-
taining to the land mobile service, including the PCS. Additionally, OET staff
drafted material for ITU-R Study Group 1 to provide countries information on
spectrum planning and management and attended meetings of the U.S. group for
ITU-R 10/11S and ITU-R Working Party 8D.

OFFICE AND ENGINEERING AND TECHNOLOGY 89
In support of the ITU the ITU-R Working Party 3K, OET conducted an ana-
lytical study of skywave propagation during daytime. OET also conducted an
evaluation of the GTEM measurement cell, resulting in a liberalization of poli-
cies regarding use of the cell for radiated emission compliance measurements.
An OET staff member also acts as the U.S. Representative to the ITU-R Task
Group 8/1 on future public land mobile telecommunications systems. The
high-profile ITU activity is geared towards creating worldwide personal com-
munications services beginning in the year 2000.
The Radio Technical Liaison Committee (RTLC) is a group of high level spec-

Radio Technical Liaison

trum managers from the FCC and the Canadian Department of Communica-

Committee

tions which meets regularly to discuss matters of mutual concern involving

Activities

spectrum use and technical standards. OET’s Deputy Chief is the Co-Chair-
man of this committee. Discussions this past year focused on mobile commu-
nications systems operating along the border, on the issue of reviewing exist-
ing bilateral agreements, and on equipment authorization processes.
OET staff participated in meetings of the International Special Committee on
Radio Interference (CISPR) of the International Electrotechnical Committee
(IEC), serving as experts on U.S. technical standards. CISPR activities in-
clude participation in meetings of the U.S. National Committee (USNC) Tech-
nical Advisory Group (TAG) for developing positions to CISPR Subcommit-
tee A for instrumentation and measurement methods; the USNC TAG for
CISPR Subcommittee B for controlling the interference potential of ISM equip-
ment; the USNC TAG for CISPR Subcommittee E for limiting and measuring
the interference characteristics of broadcast receivers and associated equip-
ment; the USNC TAG for CISPR Subcommittee F for limiting and measuring
the interference characteristics of home appliances and lighting devices; the
USNC TAG for CISPR Subcommittee G for determining the interference lim
its and test procedures for ITE; and the Advisory Group for the USNC for the
CISPR. OET staff also participated in several CISPR ad hoc meetings for
limits and measurements of emissions on frequencies above 1 GHz. The re-
sults of these meetings will determine the procedures for protecting the new
digital radio services (i.e., Personal Communications Service) above 1 GHz.
OET staff represented the FCC on the Standards Board of the Institute of
Electrical and Electronics Engineers, the American National Standards Insti-
tute, and the National Committee of the International Electrotechnical Com-
mission, all of which form a link between national and international, voluntary
and regulatory standards activities. OET staff also represented the FCC on

90 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

the American National Standards Committee, C63, on Electromagnetic Com-
patibility. Many of the voluntary industry standards developed by C63 have
been incorporated into the FCC Rules, particularly in the area of measurement
methodology.

OFFICE OF PLANS AND POLICY 91

Office of Plans

and Policy
The Office of Plans and Policy (OPP) serves as the principal economic, techni-

Overview

cal, and policy adviser to the Commission, analyzing agenda items and devel-
oping long term policy. The office also produces working papers on major
policy issues.
The continuing focus of OPP’s work during FY95 was to encourage economic
growth; enhance access to telecommunications service offerings for consum-
ers, producers, and new entrants; support the creation of new services; and
promote market-oriented approaches to spectrum management.

FY95
Highlights

• OPP put in place the auction mechanism that led to the largest auction,
public or private, in history. The auction of Broadband Personal Communi-
cations Services licenses generated over $7.7 billion for the U.S. Treasury in
FY95.
• Vice President Al Gore presented the Hammer award for reinventing govern-
ment to several OPP staff for their accomplishments in the Personal Com-
munications Services (PCS) auctions. The FCC further awarded Evan Kwerel
of OPP a gold medal award for distinguished service for his contributions to
the auction design and implementation. For his role in the auctions, Jonathan
Cohen was featured as the “Dealmaker of the Month” in the May 1995 issue
of American Lawyer Magazine.
• OPP staff presented papers and speeches at numerous industry and academic
conferences, both domestic and international, and published articles in Jour-
nals and professional publications.
• OPP spearheaded the recruitment and hiring of 39 economists throughout
the Commission, recognizing the importance of expanded economic analysis
in telecommunications policymaking.
• During FY95 OPP participated in the Commission’s interdisciplinary task
forces implementing Personal Communications Services; Equipment Com-
patibility; and Spectrum Auctions.

92 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

Major

Proceedings

PCS and

Personal Communications Services (PCS) are a broad family of mobile and por-

Spectrum Auctions

table communications services that are widely predicted to usher in an era of
mobile telecommunications technology that will permit access to an array of voice,
data, and video communications services regardless of where a subscriber may
be located. Equipment being developed for PCS includes small, lightweight wire-
less telephone handsets; computers that can communicate over the airwaves
wherever they are located; portable facsimile machines and other graphic de-
vices. OPP staff worked to craft policy in the PCS arena to ensure that there is a
robust and competitive market for PCS services; foster the diversity of PCS ser-
vice offerings; permit broad participation in the provision of PCS, including par-
ticipation by existing cellular providers; and to consider special opportunities for
participation by small businesses, rural telephone companies and businesses owned
by minorities and women. OPP, which first proposed auctions in 1986, was re-
sponsible for managing the process implementing spectrum auctions and had
principal authorship of several documents that set forth PCS service rules, gen-
eral spectrum auction rules and specific rules for each service to be auctioned.

Broadband

As a part of the PCS Task Force, OPP began planning for the auction of broad-

PCS Service

band licenses to provide Personal Communications Services in the 2 GHz band
and Auction Rules
(broadband PCS). This set the stage for the largest and most important auction
http://www.fcc.gov/Bureaus/Wireless/Orders/fcc94285.txt">(PP Docket No. 93-253)
of public assets to date. The first auction of 30 MHz licenses in each of 99 Major
Trading Areas began on December 5, 1995, and ended on March 13, 1995. The
auction generated a total of $7.7 billion in high bids.

MDS Service and

In an effort to facilitate the development and rapid deployment of wireless cable

Auction Rules

services, the Commission adopted rules to auction 493 licenses for Multipoint
(MM Docket No. 94-131
Distribution Service (MDS). OPP was involved in the planning and design of the
and PP Docket No. 93-253)
service and auction rules. The MDS auction began on November 19, 1995.

Spectrum

OPP has long championed the Commission’s effort to continually evaluate spec-

Management

trum use in an effort to allocate it in an efficient manner. To accomplish this goal,
OPP has been involved in a number of spectrum allocation proceedings to pro-
mote efficiency of allocation and flexibility of use. OPP staff worked closely with
the Office of Engineering and Technology, the International Bureau, and the
Wireless Telecommunications Bureau to craft spectrum management policies that
will make best use of this valuable public resource.

OFFICE OF PLANS AND POLICY 93
The Commission has recognized the evolution of digital technology and ad-

Advanced

vances made in the development of a standard for digital broadcasting of

Television
http://www.fcc.gov/Bureaus/Mass_Media/Notices/fcc95315.html"> (MM Docket No. 87-268)

video, including high definition television (HDTV). In July the Commission
released a Notice of Proposed Rule making seeking comment on issues re-
lated to the transition of television to the next generation, a digital standard.
OPP has played a major role in providing economic and policy analysis to
shape the debate around the move to digital television

94 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

Office of Legislative and
Intergovernmental Affairs

Overview

In FY95 the FCC’s Office of Legislative Affairs was reorganized and renamed
the Office of Legislative and Intergovernmental Affairs. Among its functions it
informs the Congress of the Commission’s regulatory decisions, prepares Com-
mission witnesses for Congressional hearings, facilitates responses to Congres-
sional inquiries, and prepares Commission responses to legislative proposals. In
addition, the Office acts on FCC policies and acts as liaison to other Federal, state
and local government agencies.

Enacted

During FY95 the Congress enacted four laws affecting, or of interest to, the
Commission. These included legislation extending and amending the Satellite Home

Laws

Viewer Act, recognizing the achievements of radio amateurs, clarifying a tele-
communications carrier’s duty to cooperate in the interception of communica-
tions for law enforcement purposes, and implementing the General Agreement
on Tariffs and Trade as it relates to the FCC’s “pioneer preference” program. A
more detailed listing follows:
1.

PL 103-369 (S.2406):

“Satellite Home Viewer Act of 1994.” Extended the
statutory copyright license for home satellite viewers until December 31,1999.
Established signal intensity measurement procedures to determine whether a sub-
scriber is an “unserved household.” Amended the definition of “cable system” to
include wireless video retransmissions, and redefined a “local service area of a
primary transmitter” to include a primary transmitter’s local television market.
This bill was signed into law on October 18, 1994.
2.

PL 103-408 (S.J.Res. 90):

A joint House-Senate resolution to recognize the
achievements of radio amateurs, and to establish support for such amateurs as
national policy. Recognized contributions of amateur radio operators and en-
couraged FCC to adopt policies to facilitate new technologies in amateur radio
communications. This joint resolution was signed into law on October 22, 1994.
3. PL 103-414 (H.R. 4922): “Communications Assistance for Law Enforcement
Act.” Clarified a telecommunications carrier’s duty to cooperate in the intercep-
tion of communications for law enforcement purposes. Expanded the privacy and

OFFICE OF LEGISLATIVE AFFAIRS 95
security protections of cellular and other radio-based communications. Re-
quired the Attorney General to make payments to telecommunications carriers
to comply with the bill’s requirements. Required the FCC to determine whether
or not compliance by specific carriers is “reasonably achievable.” This bill was
signed into law on October 25, 1994.
4. PL 103-465 (H.R. 5110): An amendment to a bill to approve and imple-
ment the trade agreements concluded in the Uruguay round of multilateral
trade negotiations, otherwise known as the General Agreement on Tariffs and
Trade (GATT). Required the FCC to recover for the public a portion of the
value of the public spectrum that has been awarded by the Commission to
licenses granted under the FCC’s “pioneer preference” program. Required the
three pioneers to date to pay not less than 85 percent, on a per population
basis, of the highest auction bids for licenses in the 20 largest markets in which
no applicant has obtained preferential treatment. This bill was signed into law
on December 8, 1994.
In May 1995 the Commission submitted to the Congress a legislative package

Legislative

consisting of 37 proposals. Nearly all of these proposals were deregulatory or

Program

pro-competitive in nature in that their enactment would eliminate certain Com-
mission functions, privatize other responsibilities, reduce regulatory burdens
on industry, increase telecommunications competition, save agency resources,
or otherwise streamline agency processes.
Among the FCC’s 37 legislative proposals were amendments granting the FCC
more flexibility in the administration of its application and regulatory fee pro-
grams, delicensing aviation, maritime and personal radio services, privatizing
the inspection of ship radio stations, and expediting the processing of applica-
tions for Instructional Television Fixed Service.
(Twenty-one of the FCC’s 37 1995 legislative proposals were eventually in-
cluded in the Telecommunications Act of 1996, PL 104-104, to be reported on
in more detail in the FCC Annual Report for FY96.)
1. Coordinated the preparation of testimony, briefing material, and responses

Other

to follow-up questions for a number of Congressional hearings on such mat- Legislative
ters as electromagnetic interference to medical devices, the FCC’s “pioneer
preference” program, and implementation of the General Agreement on Tar- Activities
iffs and Trade, the FCC tax certificate policy and program, Inspector General
recommendations for ways to obtain budgetary savings and spending reduc-
tions, alien ownership, cable rate deregulation, FY96 appropriations, regula-
tory sunset legislation, FCC reauthorization, consolidation of the FCC head-
quarters locations, and cellular resellers.

96 FEDERAL COMMUNICATIONS COMMISSION •

ANNUAL REPORT

2. Monitored and reported on hearings, bill mark-ups, and floor action of interest
to the Commission on such matters as FY96 appropriations, telecommunications
reform legislation, TV violence, spectrum allocation and assignment policies, com-
petitive bidding authority, the FCC tax certificate policy and program, regulatory
reform legislation, alien ownership, FCC reauthorization, abolition of the Depart-
ment of Commerce, and the budget reconciliation process and related legislation.
3. Coordinated and participated in informational briefings of Members of Con-
gress and Congressional staff on a wide variety of mass media and telecommuni-
cations issues.
4. Prepared both formal and informal comments for both the Congress and the
Office of Management and Budget on pending communications legislation.
5. Coordinated extensive Congressional liaison activities. Processed 5,862 writ-
ten Congressional inquiries, and approximately 12,000 telephone inquiries on a
variety of matters, especially implementation of the Cable Act of 1992, spectrum
auctions authority, other policy matters, and the status of applications for frequen-
cies, construction or modification of facilities, and special temporary authority.

LITGATION 97

Litigation

The Commission participated in approximately 310 federal appeals and Su-
preme Court proceedings during FY95. At the end of the fiscal year, 120 ap-
pellate and Supreme Court cases were pending. In addition, during the fiscal
year, the Commission participated in approximately 84 federal district court
cases. At the end of the fiscal year, 47 district court cases were pending.

Decisions of Special
Interest

Action for Children’s Television v. FCC , No. 93-1092, 58 F.3d 654 (D.C.
Cir. 1995), cert. denied, U.S. (1996).

The Court upheld the constitutionality of Section 16(a) of the Public Telecom-
munications Act of 1992 (47 U.S.C. §303a), which seeks to shield minors
from indecent radio and television programs by restricting hours within which
stations may air such programs. By a 7-4 majority, the full Court held that the
government had a compelling interest in protecting children from broadcast
indecency and that “channelling” broadcasts of indecent material to the hours
of 10 pm to 6 am would not unduly burden First Amendment rights of broad-
casters or of adult viewers and listeners.

American Scholastic TV Programming Foundation v. FCC , No. 93-1652,
46 F.3d 1173 (D.C. Cir. 1995).

Section 533(b) of the Cable Communications Policy Act of 1984 forbids com-
mon carriers from “provid[ing] video programming” to subscribers within the
common carrier’s service area. The D.C. Circuit upheld the FCC’s ruling that
the video programming prohibition of Section 533(b) applies only to video
programming provided over cable television systems and not to video pro-
gramming supplied by “wireless cable” systems, which use radio signals rather
than physical wires to transport their signals. The court accordingly rejected a
challenge to the FCC’s award of a license to provide educational television via
wireless cable to a company affiliated with a local telephone company in
Roanoke, Virginia. The court also rejected as improperly raised a challenge to
the FCC’s ruling that wireless cable systems are not cable systems within the
meaning of the Cable Act because they do not utilize a “closed path” to trans-
port their signals, as required by the Act.

98 FEDERAL COMMUNICATIONS COMMISSION ANNUAL REPORT

Committee for Effective Cellular Rules v. FCC , No. 93-1220, 53 F.3d
1309 (D.C. Cir. 1995).

The Court affirmed an order amending the FCC’s cellular rules to provide
new standards and procedures governing applications for unserved areas. The
order, inter alia, modified the definition of a Cellular Geographic Service Area
(CGSA) in a way that effectively increased the protected reliable service area
of most incumbent licensees, thereby diminishing the areas available to appli-
cants for unserved areas. The Court held that the FCC did not act arbitrarily
and capriciously when it amended its regulations through notice and com-
ment rulemaking; nor did it exceed its statutory authority when it implemented
a global change to the technical requirements for cellular licenses, even though
the change resulted in the modification of virtually all
existing cellular li-
censes and significantly reduced the unserved areas that potential applicants
previously anticipated would be available to them for licensing.

MCI Telecommunications Corp. v. FCC , No. 93-1166, 59 F.3d 1407 (D.C.
Cir. 1995), petition for writ of certiorari pending sub nom ., BellSouth
Telecommunications, Inc., et al. v. FCC, et al ., No. 95-1230.

In this case, the Commission adjudicated hundreds of individual complaints
filed by customers of the local exchange carriers (LECs) seeking damages
because the rates they had paid for interstate access service had produced
earnings in excess of the maximum rate of return the Commission had pre-
scribed. The Commission found that virtually all the customers showed that
the LECs were liable for damages because the LECs had violated the rate of
return prescriptions and Section 201 of the Act. The Commission allowed
offsets to the damages awards to the extent that the customer had purchased
service in other interstate access categories from the LECs during the same
periods at the rates that had produced underearnings. The Court affirmed the
damages awards, but found that the offsets were arbitrary and capricious.

Southwestern Bell Corp. v. FCC , No. 93-1562, 43 F.3d 1515 (D.C. Cir.
1995).

The Court of Appeals reversed the Commission’s rulemaking decision to al-
low non-dominant carriers to file tariffs identifying a range of rates within
which customers would pay for service rather than fixed, precise rates. The
Court held that Section 203 requires carriers to identify the precise rates they
will charge in their tariffs and that the Commission had no authority to change
this fundamental aspect of rate regulation. The Commission had adopted the
range of rates rules after its more liberal policy of allowing non-dominant
carriers to offer service without tariffs had been set aside in the Supreme
Court.

LITGATION 99

SBC Communications Inc. v. FCC , No. 94-1637, 56 F.3d 1484 (D.C. Cir.
1995).

The Court of Appeals affirmed the Commission’s approval of AT&T’s acqui-
sition of McCaw, the largest cellular company in the country. The Court held
that the Commission had properly considered the public interest ramifications
of the merger, including its potential effects on competition, and had adequately
explained its conclusions. The Court also held that the conditions the FCC
had placed on the merger were reasonable and adequate to address appropri-
ate policy concerns.

Time Warner Entertainment Co., L.P. v. FCC , No. 93-1723, 56 F.3d 151
(D.C. Cir. 1995), petitions for writ of certiorari pending sub nom ., Time
Warner Entertainment Company, L.P. v. FCC & USA , No. 95-774 and
National Cable Television Association, Inc. v. FCC & USA , No. 95-775.

The D.C. Circuit denied in principal part consolidated challenges by the cable
industry and local franchising authorities to the FCC’s first five major rulemaking
orders implementing the cable rate regulation provisions of the Cable Televi-
sion Consumer Protection and Competition Act of 1992. The orders on re-
view, among other things, (1) established cable ratemaking standards that re-
sulted in substantial rate reductions by most cable operators that are not sub-
ject to effective competition, (2) established certification standards and ad-
ministrative review procedures for local franchising authorities charged under
the 1992 Cable Act with regulating the “basic” cable service rates of most
cable operators, and (3) established procedures for adjudicating at the FCC
consumer complaints regarding the rates charges for “upper tier” cable pro-
gramming services. The court rejected claims by the cable industry petitioners
that the rate regulation rules violated their first amendment rights as speakers.
The court also rejected, in most respects, opposing statutory and administra-
tive law challenges to the rules from both the cable petitioners (on one side)
and local franchising authorities (on the other) .

Other Decisions

In addition to the preceding decisions of special interest, the following cases
were decided by published decisions during FY95:
Achernar Broadcasting Co. v. FCC, No. 91-1516, decided 8/18/95, 62 F.3d
1441 (D.C. Cir.).
Action for Children’s Television v. FCC
, No. 93-5178, decided 7/18/95, 59
F.3d 1249 (D.C. Cir.), cert. denied, U.S. (1996).

100 FEDERAL COMMUNICATIONS COMMISSION ANNUAL REPORT
Adams Telcom, Inc. v. FCC, No. 93-1103, decided 10/28/94, 38 F.3d 576 (D.C.
Cir.).
Alliance for Community Media v. FCC
, No. 93-1169, decided 6/6/95, 56 F.3d
105 (D.C. Cir.), petitions for writ of certiorari pending sub nom
., Denver Area
Educational Telecommunications Consortium, Inc., et al. v. FCC, et al
., No. 95-
124 and Alliance for Community Media, et al. v. FCC, et al
., No. 95-227.
American Message Centers v. FCC, No. 93-1549, decided 3/28/95, 50 F.3d 35
(D.C. Cir.).
Atlantic Tele-Network, Inc. v. FCC, No. 93-1616, decided 7/25/95, 59 F.3d 1384
(D.C. Cir.).
CHM Broadcasting Ltd. Partnership v. FCC
, No. 92-1263, decided 10/17/94, 24
F.3d 1453 (D.C. Cir.).
Corporate Telecom Services, Inc. v. FCC
, No. 94-1275, decided 6/2/95, 55 F.3d
672 (D.C. Cir.).
Destination Ventures, Ltd. v. FCC, No. 94-35295, decided 2/1/95, 46 F.3d 54
(Ninth Cir.).
Florida Public Telecommunications Assn, Inc. v. FCC
, No. 91-1486, decided 5/
23/95, 54 F.3d 857 (D.C. Cir.).
GTE California, Inc. v. FCC, No. 93-70924, decided 10/31/94, 39 F.3d 940 (Ninth
Cir.).
JAJ Cellular v. FCC, No. 94-1021, decided 5/19/95, 54 F.3d 834 (D.C. Cir.).
Jersey Shore Broadcasting Corp. v. FCC
, No. 93-1253, decided 11/1/94, 37 F.3d
1531 (D.C. Cir.).
MCI Telecommunications Corp. v. FCC
, No. 93-1464, decided 6/27/95, 57 F.3d
1136 (D.C. Cir.).
Metropolitan Council of NAACP Branches v. FCC
, No. 93-1471, decided 1/27/
95, 46 F.3d 1154 (D.C. Cir.).

LITGATION 101
Zell Miller v. FCC, No. 92-8777, decided 9/29/95, 66 F.3d 1140 (Eleventh
Cir.), petitions for writ of certiorari pending sub nom
., National Association of
Broadcasters, et al. v. Zell Miller, et al., No. 95-1197 and FCC and USA v. Zell
Miller, No. 95-1200.
Kathryn Moser and National Association of Telecomputer Operators v. FCC,
et al., No. 93-35686, decided 2/6/95, 46 F.3d 970 (Ninth Cir.).
People of the State of California v. FCC
, No. 92-70083, decided 10/18/94, 39
F.3d 919 (Ninth Cir.), cert. denied, 115 S.Ct. 1427 (1995).
Press Broadcasting Co., Inc. v. FCC, No. 94-1439, decided 7/21/95, 59 F.3d
1365 (D.C. Cir.).
Swan Creek Communications, Inc. v. FCC
, No. 93-1230, decided 11/22/94,
39 F.3d 1217 (D.C. Cir.).

Judgments

Also, during FY95, 12 appellate cases were decided by unpublished decisions.
Status of Litigation
Location
Cases
Cases
Cases Disposed
Cases
Pending
Filed
of During FY95
Pending
Sept. 30, 1994
During
Sept. 30,
FY 95
1995
Supreme Court
1
11
5
7
C.A.D.C.
104
158
166
96
Other
13
23
19
17
Total
118
192
190
120

Commissioners
Reed E. Hundt, Chairman
James H. Quel o
Rachel e B. Chong
Susan Ness
Office of
Inspector General
Office of
Office of
Office of
Office of
Office of
Engineering &
General
Managing
Public
Legislative &
Technology
Counsel
Director
Affairs
Intergovernmental
Al ocation & Standards Div.
Administrative Law Div.
Human Resources Management
Public Service Div.
Affairs
Equipment Authorization Div.
Competition Div.
Information Management
Reference Operations Div.
New Technology Development Div.
Litigation Div.
Operations
News Media Staff
Policy & Rules Div.
Program Analysis
Information Technology Staf
Administrative Staf
Secretary
Television Staf
Office of
Office of
Office of
Office of
Administrative
Plans &
Communications
Workplace
Law Judges
Policy
Business
Diversity
Opportunities
Common
Wireless
Mass
Compliance &
Cable
Carrier
Telecommunications
Media
Information
International
Services
Bureau
Bureau
Bureau
Bureau
Bureau
Bureau
Enforcement Div.
Auctions Div.
Audio Services Div.
Compliance Div.
Planning & Negotiations Div.
Consumer Protect. & Competition Div
Competitive Pricing Div.
Commercial Wireless Div.
Enforcement Div.
Technology Div.
Satel ite & Radiocomm. Div.
Engineering & Technical Services Div
Accounting & Audits Div.
Enforcement Div.
Policy & Rules Div.
Of ice of Information Resources
Telecommunications Div.
Financial Analysis & Compliance Div
Network Services Div.
Office of Operations
Video Services Div.
Of ice of Management & Resources
Administrative & Management Staff
Policy & Rules Div.
Policy & Programming Planning Div
Customer Svcs. Div.
Administration & Mgmt. Staf
Regional Offices
Government & Public Outreach Staf
Industry Analysis Div.
Licensing Div.
Field Of ices
Management Staf
Policy Div.
Private Wireless Div.
Mgmt. & Planning Staff

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