[Federal Register Volume 66, Number 53 (Monday, March 19, 2001)]
[Rules and Regulations]
[Pages 15353-15357]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 01-6637]
[[Page 15353]]
=======================================================================
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 73 and 74
[MM Docket No. 95-31; FCC 01-64]
Reexamination of Comparative Standards for Noncommercial
Educational Applicants
AGENCY: Federal Communications Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Commission affirmed its April 2000 decision to use a point
system to select among mutually exclusive noncommercial educational
(NCE) broadcast applicants on reserved channels. In response to
requests for additional information, the Commission clarified various
aspects of the new system and revised several rules to reflect the
clarifications. Appendix D to the decision identifies approximately
1,500 pending applications that are members of closed mutually
exclusive groups on reserved channels. The Commission will issue a
public notice announcing a date by which those applicants must file
either a supplement to claim points or a settlement agreement. The
Commission will waive its rules to permit timely filed settlements to
exceed the amount of the applicants' reasonable and prudent expenses.
DATES: Effective April 18, 2001.
ADDRESSES: Secretary, Federal Communications Commission, 445 12th
Street, SW., Washington, DC 20554. Internet address: http://
www.fcc.gov.
FOR FURTHER INFORMATION CONTACT: Irene Bleiweiss, Federal
Communications Commission, Mass Media Bureau, Audio Services Division,
445 12th Street, SW., Washington, DC 20554, (202) 418-2700. Internet
address: ibleiwei@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's
Memorandum Opinion and Order adopted February 15, 2001, and released
February 28, 2001, which affirms and clarifies earlier action in this
proceeding (See 65 FR 36375, June 8, 2000; 66 FR 3884, January 17,
2001). The complete text of this Memorandum Opinion and Order is
available for inspection and copying during normal business hours in
the FCC Reference Center (Room CY-A257), 445 12th Street, SW.,
Washington, DC, and also may be purchased from the Commission's copy
contractor, International Transcription Service, (202) 857-3800, 1231
20th Street, NW., Washington, DC 20036. The text and list of applicants
in Appendix D can also be obtained over the internet, in the headlines
section of the FCC's home page http://www.fec.gov.
Synopsis of Order
1. On February 28, 2001, the Commission released a decision
responding to seventeen Petitions for Reconsideration and/or
Clarification of noncommercial educational (NCE) broadcast selection
procedures adopted in April 2000. The decision clarifies filing
procedures and selection methods for mutually exclusive applicants
seeking to construct new or to make major changes to existing reserved
channel NCE broadcast stations including FM, FM translator, and
television stations. While providing additional guidance to applicants,
the decision leaves the point system that will be used to select among
applicants basically unchanged from that adopted in April 2000.
2. Future applicants seeking to build new reserved channel NCE
stations or to make major changes to such existing stations will file
applications during a ``filing window.'' They will claim points as part
of their original application, based on their qualifications at the
time of filing. If mutually exclusive applications are received during
the filing window the Commission will use a point system and tie
breakers to select among them. Each applicant's characteristics at the
time of filing will determine that applicant's maximum points and its
maximum position in a tie breaker. If an applicant makes changes after
filing that detract from the original proposal, it will lose points.
3. Procedures will differ somewhat for pending applications,
because those applications did not contain any point information at the
time of filing. Procedures will depend on whether the applicant is in a
group that is considered ``closed'' or ``open'' in terms of whether it
is subject to future competition from additional parties.
4. Appendix D to the Commission's decision lists the applicants in
``closed'' groups. With respect to these applicants the Commission will
issue a public notice announcing a supplement date, approximately 30
days thereafter. By that date, applicants in ``closed'' groups must
file either a settlement agreement or a supplement to claim points.
Applicants filing neither will be dismissed. The Commission will waive
its rules to permit closed group applicants that file settlements on or
before the supplement date to receive consideration that exceeds
reasonable and prudent expenses.
5. Two types of settlements are acceptable: Universal settlements
and technical solutions, each of which allows immediate grant of an
authorization. Universal settlements resolve the claims of all
applicants in the mutually exclusive group. Technical solutions make it
possible, by means of a minor engineering change, for one applicant to
remove itself from the group on the four corners of its application
without affecting the viability of any other applicants.
6. Non-settling applicants in closed groups must file point
supplements to remain viable. They may claim non-technical points based
on their qualifications as of the future ``supplement date'' to be
announced by public notice. To some degree this may enable existing
applicants to enhance their positions. For example, an applicant that
unconditionally withdraws pending applications prior to the supplement
date would not count those stations for purposes of the tie breaker
which favors applicants with fewer pending applications. Not all point
factors can be enhanced in that manner, however. For example, only
those applicants that have been local for a full two years by the
supplement date can claim points as an ``established'' local applicant.
An organization cannot be considered established through its later
actions, such as by changing in its board of directors after our
adoption of the point system. Applicants also will not be permitted to
claim additional points based on recent technical changes, because
applications have already been studied for technical matters and
changes now would cause undue delay. The applicant's technical points
will be examined as of the date on which we issued a ``B'' cut-off
public notice establishing the closed group or, if no such notice has
been issued, as of April 21, 2000, the release date of our Report and
Order in this proceeding. These dates establish maximum points, which
will be reduced if the applicant makes detracting changes thereafter.
7. With respect to the final type of applicants (those with pending
applicants that are still ``open'' to future competition because they
were never placed on an ``A'' cut-off notice) such applicants will be
considered along with any additional applications filed within the
first filing window. Pending applicants in open proceedings have two
options for claiming points. If an applicant chooses to keep its
application pending, it may amend that application during the first
filing window to enhance its proposal and claim the points for which it
would qualify as of the close of the filing window. Alternatively, an
applicant may withdraw its pending application
[[Page 15354]]
prior to the first filing window and file a new application that
includes point information within that window. In either case, existing
applicants that are subject to competition will have the same
opportunity as new applicants to submit their best proposals during the
first filing window.
8. The Commission's decision makes several other clarifications.
The rules are amended to clarify that, to the extent that attribution
is relevant to an NCE station, the attribution standards contained in
the notes to 47 CFR 73.3555 (the commercial ownership rule) will apply.
The rules are amended to incorporate the provision that government
entities are considered local throughout their areas of jurisdiction.
It is clarified that the NCE standards for fair distribution pursuant
to 47 U.S.C. 307(b) are based on whether a station is the first or
second reserved channel FM station received by a substantial population
within the station's 60dBu contour. For NCE 307(b) purposes, it is
immaterial whether there are also stations operating on non-reserved
channels with noncommercial formats and whether there are other NCE
stations licensed to a particular community. It is clarified that
consortia of schools can qualify for the state-wide network credit. It
is clarified that for purposes the point system and its tie breakers,
radio applicants (whether full service or translator) will count as
their existing stations and applications, AM, FM, and FM translator
stations other than fill-in stations. Television applicants will count
UHF, VHF, and Class A stations. To ensure efficient processing the
Commission will waive the requirement that applications for new NCE FM
stations and major changes to existing mutually exclusive NCE FM
stations be amended pursuant to Docket No. 98-93 to provide city grade
coverage.
Supplemental Final Regulatory Flexibility Analysis
As required by the Regulatory Flexibility Act (``RFA''),\1\ an
Initial Regulatory Flexibility Analysis (``IRFA'') was incorporated in
the Further Notice of Proposed Rulemaking and a Final Regulatory
Flexibility Analysis (FRFA) was incorporated in the Report and Order.
In the Matter of Reexamination of the Comparative Standards for
Noncommercial Educational Applicants, MM Docket No. 95-31, Further
Notice of Proposed Rule Making, 63 FR 58358 (October 30, 1998), 13 FCC
Rcd 21167 (1998) (Further Notice); Report and Order, 65 FR 36375 (June
8, 2000), 15 FCC Rcd 7386 (2000). This present Supplemental Final
Regulatory Flexibility Analysis (``Supplemental FRFA'') conforms to the
RFA as amended by the Contract with America Advancement Act of 1966,
Public Law 104-121, 110 Stat. 847 (1996) (``CWAAA''). Subtitle II of
the CWAAA is The Small Business Regulatory Enforcement Fairness Act of
1996 (``SBREFA''). See 5 U.S.C. 604.
---------------------------------------------------------------------------
\1\ See 5 U.S.C. 603. The RFA, see 5 U.S.C. 601, has been
amended by the Contract with America Advancement Act of 1996, Pub.
L. No. 104-121, 110 Stat. 847 (1996) (``CWAAA''). Title II of the
CWAAA is the Small Business Regulatory Enforcement Fairness Act of
1996 (``SBREFA'').
---------------------------------------------------------------------------
Need For and Objectives of the Memorandum Opinion and Order
In the Report and Order, the Commission established a point system,
a type of simplified paper hearing, to select among applicants
competing to construct new noncommercial educational (NCE) broadcast
stations on channels reserved for NCE use. The Commission received
petitions requesting reconsideration and clarification of a variety of
issues. This Memorandum Opinion and Order affirms the use of a point
system and the elements therein, but makes the following
clarifications: (1) Attribution standards applicable to NCE stations
are clarified; (2) the stated policy that government entities are
considered local throughout their areas of jurisdiction is incorporated
into the rules; (3) it is clarified that first and second NCE aural
signals received, rather than those licensed to a community, will be
considered for the threshold fair distribution analysis and that, if
fair distribution is not decisive only equivalent mutually exclusive
applications with respect to fair distribution will proceed to be
considered under a point system; (4) the manner in which applicants
will claim points is clarified; and (5) the manner in which to count
translator stations is clarified. Additionally, the Memorandum Opinion
and Order gives applicants in pending closed groups of mutually
exclusive applications a limited opportunity to settle for more than
reasonable and prudent expenses.
Summary of Significant Issues Raised by the Public Comments in Response
to the FRFA
No comments were received in direct response to the FRFA in MM
Docket No. 95-31. Two Petitioners for Reconsideration, while not
addressing the FRFA, ask for clarification of whether small community
colleges with fewer than five campuses can qualify for state-wide
network points. The Memorandum Opinion and Order clarifies that small
colleges that form consortiums with other colleges, so that at least
five campuses are served, can so qualify. See infra.
Description and Estimate of the Number of Small Entities to Which Rules
Will Apply
The RFA directs agencies to provide a description of and, where
feasible, an estimate of the number of small entities that will be
affected by the rules. 5 U.S.C. 603(b)(3). The RFA generally defines
the term ``small entity'' as having the same meaning as the terms
``small organization,'' ``small business,'' and ``small governmental
jurisdiction.'' In addition, the term ``small business'' has the same
meaning as the term ``small business concern'' under the Small Business
Act. See 5 U.S.C. 601(3); 15 U.S.C. 632. A small business concern is
one which: (1) Is independently owned and operated; (2) is not dominant
in its field of operation; and (3) satisfies any additional criteria
established by the Small Business Administration (``SBA''). Small
Business Act, 15 U.S.C. 632 (1996). A small organization is generally
``any not-for-profit enterprise which is independently owned and
operated and is not dominant in its field.'' 5 U.S.C. 601(4).
Nationwide, as of 1992, there were approximately 275,801 small
organizations. 1992 Economic Census, U.S. Bureau of Census, Table 6
(special tabulation of data under contract to Office of Advocacy of
U.S. Small Business Administration). ``Small governmental
jurisdiction'' generally means ``governments of cities, counties,
towns, townships, villages, school districts, or special districts,
with a population of less than 50,000.'' 5 U.S.C. 601(4). The Census
Bureau estimates that this ratio is approximately accurate for all
governmental entities. Thus, of the 85,006 governmental entities, we
estimate that 81,600 (91 percent) are small entities.
The rules adopted in this Order will apply to television and radio
stations licensed to operate on channels reserved as ``noncommercial
educational.'' Specifically, the rules will affect reserved channel FM,
FM translator, and TV stations that apply to make major changes to
those existing stations and to applicants for permits to construct new
reserved channel FM, FM translator, and TV stations. Stations that
operate on non-reserved channels, such as TV translator stations and AM
stations are not affected. Stations in low power services (LPTV and
LPFM) also are not affected.
[[Page 15355]]
With respect to television stations, the Small Business
Administration defines a television broadcasting station that has no
more than $10.5 million in annual receipts as a small business.
Television broadcasting stations consist of establishments primarily
engaged in broadcasting visual programs by television to the public,
except cable and other pay television services. Television stations
that the Federal Communications Commission (FCC) would consider
commercial, as well as those that the FCC would consider noncommercial
educational, are included in this industry. Also included are other
establishments primarily engaged in television broadcasting and which
produce taped television program materials. Separate establishments
primarily engaged in producing taped television program materials are
classified under another SIC number.
For 1992 the total number of television stations that produced less
than $10.0 million in revenue was 1,155 of the 1,509 television
stations then operating, both commercial and noncommercial, or 77
percent. As of February 1, 2001, of the 1,667 total television
stations, 374 were noncommercial educational. Thus, we estimate that
the proposed rules will potentially affect 288 (77 percent of 374)
noncommercial educational television stations that are small
businesses. These existing stations would only be affected if they file
an application for major modification of their existing facilities, and
if another applicant files a mutually exclusive application. These
estimates may overstate the number of small entities since the revenue
figures on which they are based do not include or aggregate revenues
from non-television affiliated companies. On the other hand they may
understate the number of small entities, because we believe that a
larger percentage of noncommercial educational stations are small
businesses than the percentage applicable to the television industry as
a whole. We recognize that the proposed rules may also affect minority
and women owned stations, some of which may be small entities. In 1997,
minorities owned and controlled 38 (3.2%) of 1,193 commercial
television stations in the United States. Comparable figures are not
available for noncommercial stations. According to the U.S. Bureau of
the Census, in 1987 women owned and controlled 27 (1.9%) of 1,342
commercial and noncommercial television stations in the United States.
The proposal would also affect pending and future mutually exclusive
applications for noncommercial television stations. As of February
2001, there are currently 89 pending applications for 31 channels
reserved for noncommercial educational television usage.
The rules would also affect noncommercial educational radio
stations. The SBA defines a radio broadcasting station that has no more
than $5 million in annual receipts as a small business. 13 CFR 121.201,
SIC code 4832. A radio broadcasting station is an establishment
primarily engaged in broadcasting aural programs by radio to the
public. 1992 Census, Series UC92-S-1, at Appendix A-9. Radio stations
that the Federal Communications Commission (FCC) would consider
commercial, as well as those that the FCC would consider noncommercial
educational, are included in this industry. Also included are entities
which primarily are engaged in radio broadcasting and which produce
radio program materials. However, radio stations which are separate
establishments and are primarily engaged in producing radio program
material are classified under another SIC number. The 1992 Census
indicates that 96 percent of radio station establishments produced less
than $5 million in revenue in 1992. The Census Bureau counts radio
stations located at the same facility as one establishment. Therefore,
each colocated AM/FM combination counts as one establishment. Official
Commission records indicate that 11,334 individual radio stations were
operating in 1992. FCC News Release, No. 31327 (January 13, 1993). As
of February 1, 2001, Commission records indicate that 12,751 radio
stations were operating. Of that radio station total, 2,170 stations
were noncommercial educational FM radio stations. Thus, we estimate
that 2,083 (96%) of these noncommercial educational stations are small
businesses, possibly more because we believe that a greater percentage
of noncommercial educational stations are small businesses than of the
radio industry overall. These existing stations would only be affected
by the proposal if they choose to file applications for major
modification of facilities and if their applications are mutually
exclusive with the application of another noncommercial entity.
Applicants for new NCE radio stations would also potentially be
affected. As of February 2001 there were 439 pending mutually exclusive
groups of 1,356 applications, for new noncommercial FM radio stations.
We also note that this proposal will affect future full service FM
applications. It also will affect pending and future noncommercial FM
translator applicants. As of February 1, 2001 there were 43 pending
mutually exclusive groups of 97 applications for reserved channel FM
translator stations.
Description of Projected Reporting, Recordkeeping and Other Compliance
Requirements
Most of the provisions of the Report and Order are unchanged by the
Memorandum Opinion and Order. As noted in the Report and Order, the
point system is expected to reduce the overall administrative burden of
the Commission's application processes on applicants and the
Commission. Use of a point system will eliminate the expense of
preparing for and appearing at lengthy traditional hearings. Applicants
should also receive decisions faster, because the Commission will make
numerical calculations instead of preparing detailed hearing decisions.
These savings should more than offset the time that would be required
for applicants to gather and submit documentation supporting the points
claimed. No additional professional services are required by applicants
filing under these revised rules. Further, the cost of compliance will
not vary between large and small entities.
Steps Taken to Minimize Significant Economic Impact on Small Entities,
and Significant Alternatives Considered
All significant alternatives presented in the petitions and
responsive comments were considered. The alternatives considered
generally would affect all reserved channel applicants, regardless of
whether they are small or large entities, and whether they are seeking
to construct small or large stations. For example, the Commission
considered but did not adopt suggestions to use lotteries rather than a
point system, to adjust the previously established qualifications
needed to receive various points, and to adopt points for new factors
such as radio reading services. While generally affirming the choices
made previously in its Report and Order in this proceeding, MM Docket
No. 95-31, 15 FCC Rcd 7386 (2000), the Commission clarified various
matters. Only one clarification specifically affects small entities. In
response to a concern raised by community colleges, the Commission
clarified that existing rules permit applicants with fewer than 5
colleges/50 secondary schools of their own to qualify as state-wide
networks if through a consortium or similar arrangement they are also
able to count schools under the authority of other
[[Page 15356]]
educators to which they regularly provide curriculum programming. This
option may benefit small entities. We expect that there is no
significant economic impact on small entities as a result of this
clarification. We will continue to consider small entities favorably in
the point system, in that they are more likely than large entities to
qualify for the points awarded for diversity of ownership, established
local entity, and in a tie breaker for number of existing
authorizations and applications.
Report to Congress
The Commission will send a copy of the Memorandum Opinion and
Order, including this Supplemental FRFA, in a report to be sent to
Congress pursuant to the Congressional Review Act. See 5 U.S.C.
801(a)(1)(A). In addition, the Commission will send a copy of this
Memorandum Opinion and Order, including this Supplemental FRFA, to the
Chief Counsel for Advocacy of the Small Business Administration. A copy
of the Memorandum Opinion and Order and Supplemental FRFA, (or
summaries thereof) will also be published in the Federal Register
pursuant to 5 U.S.C. 604(b).
List of Subjects in 47 CFR Parts 73 and 74
Radio broadcasting, Television broadcasting.
Federal Communications Commission.
Magalie Roman Salas,
Secretary.
Regulatory Text
For the reasons discussed in the preamble, parts 73 and 74 of
Chapter 1 of Title 47 of the Code of Federal Regulations are amended as
follows:
PART 73--RADIO BROADCAST SERVICES
1. The authority citation for part 73 continues to read:
Authority: 47 U.S.C. 154, 303, 334, and 336.
2. Section 73.3555 is amended by revising the last sentence of
paragraph (f) to read as follows:
Sec. 73.3555 Multiple ownership.
(f) * * * However, the attribution standards set forth in the Notes
to this section will be used to determine attribution for noncommercial
educational FM and TV applicants, such as in evaluating mutually
exclusive applications pursuant to subpart K.
* * * * *
3. Section 73.7000 is amended by revising the definition of ``Local
applicant'' to read as follows:
Sec. 73.7000 Definition of terms (as used in subpart K only).
* * * * *
Local applicant: An applicant physically headquartered, having a
campus, or having 75% of board members residing within 25 miles of the
reference coordinates for the community to be served, or a governmental
entity within its area of jurisdiction.
* * * * *
4. Section 73.7002 is amended by revising paragraph (b) to read as
follows:
Sec. 73.7002 Fair distribution of service on reserved band FM
channels.
* * * * *
(b) In an analysis performed pursuant to paragraph (a) of this
section, a full service FM applicant that will provide the first or
second reserved channel noncommercial educational (NCE) aural signal
received by at least 10% of the population within the station's 60dBu
(1mV/m) service contours will be considered to substantially further
fair distribution of service goals and to be superior to mutually
exclusive applicants not proposing that level of service, provided that
such service to fewer than 2,000 people will be considered
insignificant. First service to 2,000 or more people will be considered
superior to second service to a population of any size. If only one
applicant will provide such first or second service, that applicant
will be selected as a threshold matter. If more than one applicant will
provide an equivalent level (first or second) of NCE aural service, the
size of the population to receive such service from the mutually
exclusive applicants will be compared. The applicant providing the most
people with the highest level of service will be awarded a construction
permit, if it will provide such service to 5,000 or more people than
the next best applicant. If none of the applicants in a mutually
exclusive group would substantially further fair distribution goals,
all applicants will proceed to examination under a point system. If two
or more applicants will provide the same level of service to an
equivalent number of people (differing by less than 5,000), only those
equivalent applicants will be considered together in a point system.
* * * * *
5. Section 73.7003 is amended by adding two new sentences to the
end of paragraphs (b)(2) and (c)(1) and adding new paragraphs (e) and
(f) to read as follows:
Sec. 73.7003 Point system selection procedures.
* * * * *
(b) * * *
(2) * * * Radio applicants will count commercial and noncommercial
AM, FM, and FM translator stations other than fill-in stations.
Television applicants will count UHF, VHF, and Class A stations.
* * * * *
(c) * * *
(1) * * * Radio applicants will count commercial and noncommercial
AM, FM, and FM translator stations other than fill-in stations.
Television applicants will count UHF, VHF, and Class A stations.
* * * * *
(e) For applications filed after April 21, 2000, an applicant's
maximum qualifications are established at the time of application and
will be reduced for any post-application changes that negatively affect
any evaluation criterion.
(f) For applications filed on or before April 21, 2000, an
applicant's maximum qualifications are established as of the relevant
date listed in paragraph (f)(1), (2), or (3) of this section. After the
relevant date for determining an applicant's maximum points, points
will be reduced for any changes that negatively affect any evaluation
criterion. Applicants will establish their qualifications according to
the following:
(1) If the applicant is in a group for which a ``B'' cut-off notice
issued prior to April 21, 2000 its maximum non-technical qualifications
are established as of the date by which applicants must supplement
their applications to supply point information, and its maximum
technical qualifications are established as of the date of the ``B''
cut-off notice;
(2) If the applicant is in a group for which an ``A'' cut-off
notice issued prior to April 21, 2000 but for which no ``B'' cut-off
notice issued, its maximum non-technical qualifications are established
as of the date by which applicants must supplement their applications
to supply point information, and its maximum technical qualifications
are established as of April 21, 2000;
(3) If the applicant was neither placed on an ``A'' cut-off list
prior to April 21, 2000 nor filed in response to such an ``A'' cut-off
list, it is subject to competition from applications filed within the
first filing window, and its maximum technical and non-technical
qualifications will be determined as of the close of the first filing
window.
[[Page 15357]]
PART 74--EXPERIMENTAL RADIO, AUXILIARY, SPECIAL BROADCAST AND OTHER
PROGRAM DISTRIBUTIONAL SERVICES
1. The authority citation for part 74 continues to read:
Authority: 47 U.S.C. 154, 303, 307, 336(f), and 554.
2. Section 74.1233 is amended by revising paragraphs (e)(3)(i) and
(ii) to read as follows.
Sec. 74.1233 Processing FM translator and booster station
applications.
* * * * *
(e) * * *
(3) * * *
(i) Existing authorizations. Each applicant's number of existing
radio authorizations (licenses and construction permits for AM, FM, and
FM-translators but excluding fill-in translators) as of the time of
application shall be compared, and the applicant with the fewest
authorizations will be chosen as tentative selectee. If each applicant
is applying for a fill-in translator only, and consideration of its
other radio stations is not dispositive, its number of existing fill-in
translator authorizations will also be considered, and the fill-in
applicant with the fewest fill-in authorizations will be chosen as
tentative selectee.
(ii) Existing applications. If a tie remains, after the tie breaker
in paragraph (e)(3)(i) of this section, the remaining applicant with
the fewest pending radio new and major change applications (AM, FM, and
non fill-in FM translators) will be chosen as tentative selectee. If
each applicant is applying for a fill-in translator only, and
consideration of its other radio stations is not dispositive, its
number of existing fill-in translator applications will also be
considered, and the fill-in applicant with the fewest fill-in
authorizations will be chosen as tentative selectee.
* * * * *
[FR Doc. 01-6637 Filed 3-16-01; 8:45 am]
BILLING CODE 6712-01-U