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Senate panel backs Northpoint - Broadcasting & Cable

Senate panel backs Northpoint

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Over the objections of the chairman and ranking Democrat, members of the
Senate Commerce Committee June 26 voted 13-9 to make the Federal Communications
Commission issue spectrum free-of-charge for a terrestrial-based competitor to
direct-broadcast satellite, rather than auctioning the frequencies.

The main beneficiary of the amendment is expected to be Northpoint Technology Ltd., the
company that lobbied the FCC to create the service. The FCC currently plans to
auction the spectrum.

"Our rural areas are struggling to get broadband and local television
signals," said Rep. John Sununu (R-N.H.), a sponsor of the measure. "This will
assist us with the local-into-local challenge" faced by satellite television.

Committee chairman John McCain (R-Ariz.) said he was strongly opposed to the
legislation, which "reverses long-standing policy requiring competitive
auctions."

He noted that the Bush administration opposes giving away the frequencies, located
on the same spectrum band as DBS, as do the wireless industry, satellite
broadcasters and potential bidder MDS America.

Ranking Democrat Ernest Hollings (South Carolina) said issuing the spectrum without
auction would be an exemption that would be hard to deny to others.

But other lawmakers said the a grant would be consistent with licenses
granted to DBS operators and would bring more service to isolated areas where
satellite is the only service.

"We should make an exemption in this case consistent with what we've done in
the past," said Sen. Maria Cantwell (D-Wash.), a co-sponsor.

Northpoint "filed an application in my state for 500 channels in areas that
will never get service unless this amendment is adopted," said Alaska Republican
Ted Stevens.

The provision is attached to a larger bill revamping oversight of
nonbroadcast spectrum.

Andrew Wright, president of the Satellite Broadcasting & Communications
Association, said the vote sends the wrong message by forcing the FCC to "forego the
auction procedure required by current law and interrupts a pending appeal before
a federal court on the FCC decision to assign terrestrial licenses by
competitive bidding."

The SBCA opposes spectrum sharing with terrestrial service, fearing interference.

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