The long saga over the Federal Communications Commission’s plan to use a chunk of direct-broadcast satellite frequencies for a new land-based pay-TV/broadband service began what might be its final stage Monday when federal appeals judges heard oral arguments in legal challenges to the new service.
Satellite TV providers are suing to have the new service killed before it gets started, based on what the industry says will be hours of harmful new interference each year to their customers’ signals. Representing the DBS industry, attorney Richard Bress argued that the FCC violated the law by approving the new service after it conceded that DBS customers might have to employ mitigation measures to prevent new interference from the land-based service, which will be delivered via microwave from towers disbursed throughout the country.
Bress estimated that DBS viewers will experience between 8 and 20 hours worth of new interference because of the service. "That’s inconsistent with the statute" forbidding new service from causing harmful interference to existing services.
Separately, Northpoint Technology, the company that convinced the FCC to create the new service, argues that the FCC was wrong not to award the company the spectrum rather than auctioning it. Northpoint attorney Michael Kellogg argued that the FCC Northpoint should have received the terrestrial service license for free because it was the only qualified land-based provider to apply for a license when the application window for the spectrum opened in 1994.
The FCC authorized the new service in 2000, but rather than hand a nationwide license to Northpoint it divided the service into 192 markets and auctioned the licenses to the highest bidder in February 2004.
In a classic case of hedging, one of the biggest winners was South.com, a company controlled by DBS provider Echostar and one of the parties suing to have the new service ruled illegal.
FCC attorney Joel Marcus defended the terrestrial service from both legal attacks.
He disputed the satellite TV industry’s contention that any new interference will be severe enough to create any significant reduction in customer picture quality. "There is an enormous margin of safety built into the the FCC’s interference test," he told the judges.
As for Northpoint’s claim to free spectrum rights, he said only satellite providers were entitled to get spectrum without going through an auction--and several did.
Northpoint was creating an entirely new service for which new rules had to be created and the auction carried out.