BASIC FCC POLICIES ON ITFS EXCESS CAPACITY LEASES

Prepared by Todd D. Gray and Steven C. Schaffer for NIA Panel on Excess Capacity Leasing - February 20, 2002

NIA-2002 Conference Presentation

1. Minimum ITFS usage: 20 hours per channel per week (applies to both analog and digital systems)

2. Types of transmissions qualifying as "ITFS use": The FCC is flexible in allowing ITFS licensees to determine what qualifies, so long as:

"such transmissions are in furtherance of the educational mission of an accredited public or private school, college or university, or other eligible institution, offering courses to enrolled students. Such uses may include downstream or upstream video, data and voice transmissions. In addition, while not heretofore qualifying to satisfy educational usage requirements, qualifying uses now may include, but are not limited to, teacher conferencing, remote test administration, distribution of reports and assignments, research towards and sharing works in progress for courses, professional training, continuing education and other similar uses"

3. Recapture/Reservation of ITFS Transmission Time: 20 hours per channel per week recapture requirement (with no economic or operational detriment) for analog systems; reservation requirement of 5 % of capacity of channels for digital systems

4. Channel Loading and Shifting and Swapping Allowed: Channel Loading is putting all required ITFS use for a four-channel group onto one channel in the same group licensed to the same educator; Channel Shifting is putting all required ITFS use for a four-channel group onto other channels in the same system, but which are licensed to a different educator; Channel Swapping is exchanging specific individual ITFS channels to accommodate specific needs for a single licensee’s channels to be used in different ways

5. Lease Term: Lease term cannot exceed 15 years

6. Responsibility for Station Construction and Operation/Content: ITFS licensee held responsible for compliance with FCC rules regarding station construction (including complying with construction deadlines) and operation; where an licensee is not the source of transmissions over its licensed bandwidth, it is not regarded as having legal control over the content of the transmission; however, licensee must retain sole control over content and amount of its educational (ITFS) usage

7. Modifications of ITFS facilities: Only the ITFS licensee can file FCC applications for modifications to its station’s facilities

8. Right to Acquire ITFS Equipment at End of Lease: ITFS licensee must retain some right to acquire the actual ITFS transmission equipment used by the ITFS licensee for educational purposes, or comparable equipment, in the event the lease agreement is terminated; this requirement applies to both dedicated and common (shared) equipment

9. Non-Compete Clause: Non-compete clauses cannot be unreasonable (FCC has struck down a provision denying ITFS licensee the right to allow anyone else to use excess capacity for 3 years after the contract term)

10. Downstream Transmission Capacity: If channels are to be used for two-way, ITFS licensees must retain 25% of its capacity for downstream or "point to multipoint" transmissions