[Federal Register Volume 77, Number 13 (Friday, January 20, 2012)]
[Rules and Regulations]
[Pages 2916-2923]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-967]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 73
[MB Docket No. 09-52; FCC 11-190]
Policies To Promote Rural Radio Service and To Streamline
Allotment and Assignment Procedures
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: In this document, the Commission adopted procedures designed
to promote the initiation of commercial FM radio service by and to
Native American tribes, by providing a procedure for such tribes to
establish threshold qualifications when applying for commercial FM
allotments added to the Table of Allotments using the Commission's
Tribal Priority.
DATES: The rules and policies established in this order contain
information collection requirements that have not been approved by OMB.
The Commission will publish a document in the Federal Register
announcing the effective date.
ADDRESSES: Peter Doyle or Thomas Nessinger, Federal Communications
Commission, Media Bureau, Audio Division, 445 12th Street SW., Room 2-
B450, Washington, DC 20445.
FOR FURTHER INFORMATION CONTACT: Peter Doyle, Chief, Media Bureau,
Audio Division, (202) 418-2700 or Peter.Doyle@fcc.gov; Thomas
Nessinger, Attorney-Advisor, Media Bureau, Audio Division, (202) 418-
2700 or Thomas.Nessinger@fcc.gov.
For additional information concerning the Paperwork Reduction Act
information collection requirements contained in this document, contact
Cathy Williams at (202) 418-2918, or via the Internet at
Cathy.Williams@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's Third
Report and Order (Third R&O), FCC 11-190, adopted December 28, 2011,
and released December 29, 2011. The full text of the Third R&O is
available for inspection and copying during regular business hours in
the FCC Reference Center, 445 Twelfth Street SW., Room CY-A257, Portals
II, Washington, DC 20554, and may also be purchased from the
Commission's copy contractor, BCPI, Inc., Portals II, 445 Twelfth
Street, SW., Room CY-B402, Washington, DC 20554. Customers may contact
BCPI, Inc. via their Web site, http://www.bcpi.com, or call 1-(800)
378-3160. This document is available in alternative formats (computer
diskette, large print, audio record, and Braille). Persons with
disabilities who need documents in these formats may contact the FCC by
email: FCC504@fcc.gov or phone: (202) 418-0530 or TTY: (202) 418-0432.
Paperwork Reduction Act of 1995 Analysis
This Third R&O adopts new or revised information collection
requirements, subject to the Paperwork Reduction Act of 1995 (PRA)
(Pub. L. 104-13, 109 Stat 163 (1995) (codified in 44 U.S.C. 3501-
3520)). These information collection requirements will be submitted to
the Office of Management and Budget (OMB) for review under section
3507(d) of the PRA. The Commission will publish a separate notice in
the Federal Register inviting comment on the new or revised information
collection requirements adopted in this document. The requirements will
not go into effect until OMB has approved them and the Commission has
published a notice announcing the effective date of the information
collection requirements. In addition, the Commission notes that
pursuant to the Small Business Paperwork Relief Act of 2002, Public Law
107-198, see 44 U.S.C. 3506(c)(4), it previously sought specific
comment on how the Commission might ``further reduce the information
collection burden for small business concerns with fewer than 25
employees.''
Synopsis of Order
1. In the Third R&O, the Commission addressed the proposals set
forth in the Second Further Notice of Proposed Rule Making (Second
FNPRM) that accompanied the Second Report and Order in this proceeding
(76 FR 9797, March 4, 2010, FCC 11-28, rel. Mar. 3, 2011) (Second R&O).
The Tribal Priority gives qualified Native American Tribes and Alaska
Native Villages (Tribes) a priority under section 307(b) of the
Communications Act when seeking to establish new radio stations that
primarily cover tribal lands. Because applicants for new AM broadcast
and FM noncommercial educational (NCE) broadcast stations submit
showings under section 307(b) at the time of filing an application for
construction permit, the Tribal Priority gives Tribes an advantage over
applicants filing mutually exclusive proposals. However, in the case of
commercial FM broadcast stations, there is a two-step application
process: first, the FM channel is allotted at a selected community, and
the section 307(b) evaluation is made at this stage of the process.
Second, the FM allotment is auctioned, with any party desiring to do so
participating in the auction. An application for an FM commercial
construction permit is only filed after the auction is held, and only
by the winning bidder.
2. Recognizing ``the risks inherent in applying a section 307(b)
preference at the allotment stage for auctionable non-reserved band
spectrum,'' (First Report and Order, 75 FR 9797, Mar. 4, 2010, FCC 10-
24, rel. Feb. 23, 2010), the Commission sought comment in the Further
Notice of Proposed Rule Making, 75 FR 9856, March 4, 2010, FCC 10-24,
rel. Feb. 23, 2010 (FNPRM) in this proceeding on whether to establish
an auction bidding credit for Tribes seeking to provide commercial FM
radio service to their Tribal Lands and members. The Tribal bidding
credit was originally proposed to mitigate concerns that, due to the
two-step nature of the commercial FM licensing process, Tribes or
Tribal entities that employ the Tribal Priority to obtain FM allotments
might be outbid by competing, non-Tribal applicants. The only
commenters to address this issue proposed a 35 percent bidding credit
that would be available to Tribes or Tribal entities that participated
in the allotment proceeding for the FM channel being auctioned,
regardless of new entrant status, along with an additional 25 percent
new entrant bidding credit to Tribes with no interests in media of mass
communications, for a total maximum bidding credit of 60 percent.
3. The Commission found the record inconclusive as to the
effectiveness of tribal bidding credits. The Commission was unclear as
to whether and how it could craft such credits so as to meaningfully
advance its goals consistent with the competitive bidding mandate of 47
U.S.C. 309(j). On further consideration, the Commission believed an
alternative approach might be more effective to achieve its policy
goals and would be more consistent with its statutory mandate to
license spectrum in the public interest. The Commission thus sought
comment, in the Second FNPRM, on whether to require, as a threshold
qualification to apply for a commercial FM channel allotted pursuant to
the Tribal Priority, that
[[Page 2917]]
applicants qualify for a Tribal Priority for the channel. Under this
approach, a Tribe or Tribal entity applying for an FM channel allotted
based on the Tribal Priority would be required to establish at the
application stage its qualifications to provide the service for which
the channel was specifically allotted.
4. The Commission stated that the proposed threshold qualifications
would be more effective than tribal bidding credits in advancing the
Tribal Priority's goals. As set forth in the First R&O, the Priority is
premised on the unique ability of Tribes and Tribal entities to serve
their Tribal communities ``[b]ecause of their status as sovereign
nations responsible for, among other things, `maintaining and
sustaining their sacred histories, languages, and traditions.' ''
(First R&O, 25 FCC Rcd at 1587-88). As the Commission previously noted,
the identity of the service provider to Tribal areas is critical to
Tribal Priority-based allocations. Whereas in AM and NCE radio services
the Tribal Priority generally operates as a dispositive preference in
the application process, guaranteeing that a qualified applicant will
obtain the license, commercial FM licensing is a two-step process in
which a dispositive preference at the initial, allotment stage does not
guarantee the grant of a license in the second, application step. An
unavoidable consequence of the auctions process is that Tribes and
Tribal entities uniquely qualified to serve their communities may be
outbid in the commercial FM application process by non-Tribal
applicants that file mutually exclusive applications. At best, Tribal
bidding credits could only enhance the competitive position of Tribal
applicants. They could not, however, completely eliminate the risk of
qualified Tribal applicants being outbid, thereby frustrating the
Commission's goals in allocating the channel pursuant to the Tribal
Priority. In contrast, the proposed threshold qualification requirement
would ensure that only a Tribe or Tribal entity qualified to provide
the unique service contemplated by the allocation is eligible for the
license to provide that service. Such an approach would set the
commercial FM service on the same footing as other radio services with
regard to the Tribal Priority, and avoid undermining the Commission's
policy goals in establishing the Tribal Priority.
5. The Commission further stated that the proposed threshold
qualifications would be consistent with its statutory mandate under 47
U.S.C. 309(j)(6)(E), which provides, in pertinent part, that
``[n]othing in this subsection, or in the use of competitive bidding,
shall * * * be construed to relieve the Commission of the obligation in
the public interest to continue to use * * * threshold qualifications *
* * in order to avoid mutual exclusivity in application and licensing
proceedings.'' The use of threshold qualifications would serve the
public interest because the premise of the Tribal Priority is a Tribe's
or Tribal entity's unique ability to serve the needs and interests of
its local community. Unlike a prohibited ``pioneer's preference,''
which would favor the application of the party that petitioned to add
an allotment using the Tribal Priority, the threshold qualification
would be based on the Tribe's or Tribal entity's ability to fulfill the
purpose for which the channel was allotted under the Tribal Priority,
rather than on its participation in the allotment proceeding. Thus,
eligible Tribes or Tribal entities may be eligible to apply for a
channel allotted pursuant to the Tribal Priority even if they did not
petition for the allotment. To the extent that mutually exclusive
applications may still be filed under the proposed threshold
qualifications approach, thus requiring competitive bidding, the
bidders would initially be limited to qualified Tribes and Tribal
entities, so the Commission's policy goals would not be frustrated. In
the Second FNPRM, the Commission also asked whether to adopt an
exception to the general prohibition of collusion set forth in 47 CFR
1.2105(c), applicable to mutually exclusive applications in the
commercial FM broadcast service, so that Tribes or Tribal entities that
file mutually exclusive applications for a channel allotted pursuant to
the Tribal Priority could have an opportunity to resolve any mutual
exclusivities through engineering solutions or settlement.
6. The Commission received two comments and one reply comment on
these issues: NPM and NCAI again filed joint comments, and Gila River
Telecommunications, Inc. (GRTI) filed comments and reply comments. All
commenters supported the threshold qualifications approach as proposed
in the Second FNPRM, and supported the proposal to allow settlements
among qualifying mutually exclusive Tribal applicants. All commenters
also concurred an FM allotment added by a qualified Tribe or Tribal-
owned entity using the Tribal Priority (Tribal Allotment) should be
initially awarded only to a Tribe or Tribal entity, and should remain
reserved for such an entity even if no Tribal applicants meeting such
threshold qualifications express interest in a Tribal Allotment when
initially offered. NPM/NCAI in particular believed that it would
frustrate the purpose of the Tribal Priority to open, then abruptly
close, a Tribal filing window, only to offer the Tribal Allotment to
non-Tribal applicants, given that many financial, technical, and
geographic obstacles exist to the rapid deployment of broadcast radio
service to tribal lands. NPM/NCAI thus argued that any threshold
qualifications plan should account for such obstacles, and should allow
sufficient time for Tribes to finance and construct facilities. GRTI,
while agreeing with NPM/NCAI on this point, added that some Tribes are
prepared and eager to begin station construction quickly, but that such
desires can be thwarted by what it perceives as Commission delays. GRTI
thus suggested that the Commission implement an ``expedited
processing'' system for Tribes meeting threshold qualifications and
proposing new AM, full-power FM, and low-power FM facilities.
7. Based on the Commission's examination of the record in this
proceeding, it adopted the proposed threshold qualifications approach
to commercial FM application processing as set forth below, including
measures to address situations in which Tribes and Tribal entities
require additional time to apply for a license. While committed to
assisting Tribes in establishing radio service meeting the needs of
their communities and citizens, the Commission was also mindful of its
fundamental interest in expediting new radio service to communities and
preventing the so-called ``warehousing'' of scarce spectrum. The latter
concern militates against procedures that would unreasonably delay
authorizing new stations, or tie up spectrum for indefinite periods of
time. To some extent, a Tribe may time the award of a new FM commercial
facility by petitioning for a new Tribal Allotment only when it is
ready to commence construction (although, in certain areas where
spectrum is more scarce, Tribes could also reasonably conclude that the
risks of deferring application filing are too great). Moreover, while
there do exist financial obstacles to initiating new broadcast service,
the procedures proposed in the Second FNPRM apply only to commercial FM
facilities, which by their nature are intended to be financially self-
sustaining. Finally, as GRTI pointed out in its comments, some Tribes
are ready, willing, and able to commence construction immediately, and
would be disserved by any process
[[Page 2918]]
that includes built-in delays. The adopted procedures are intended to
balance these concerns by accommodating both those Tribes and Tribal
entities that wish to initiate commercial FM service quickly and those
that might need additional time to muster the resources needed to apply
for a new station and complete construction.
8. Under the threshold qualifications procedure adopted herein,
once a Tribal Allotment is allocated, as set forth in the First R&O,
within a reasonable period of time after publication of the new
allotment in the Federal Register, the Commission will announce by
Public Notice a Threshold Qualifications Window (TQ Window). During the
TQ Window, any Tribe or Tribal entity that could qualify to add that
particular Tribal Allotment, including the original proponent of the
allotment, may file FCC Form 301 for the Tribal Allotment (the original
Tribal Allotment proponent will already have filed FCC Form 301
simultaneously with its Petition for Rule Making proposing the new
allotment, under established Commission procedures; thus, the original
Tribal Allotment proponent need only submit a notice stating that it
wishes its pending Form 301 application to be processed immediately, or
it may file an amendment to its pending Form 301 application during the
TQ Window, as appropriate). Such an applicant must demonstrate that it
meets all of the following eligibility criteria for grant of a Tribal
Priority at the allotment stage:
(A) The applicant is either a federally recognized Tribe or Tribal
consortium, or an entity 51 percent or more of which is owned or
controlled by a Tribe or Tribes. Qualifying Tribes or Tribal entities
must be those at least a portion of whose Tribal Lands lie within the
principal community contour of the proposed facility. Although the 51
or greater percent Tribal control threshold need not consist of a
single Tribe, the qualifying entity must be 51 percent or more owned or
controlled by Tribes at least a portion of whose Tribal Lands lie
within the proposed facility's principal community contour;
(B)(1) At least 50 percent of the area within the proposed
principal community contour is over that Tribe's Tribal Lands, or (2)
the proposed principal community contour (a) encompasses 50 percent or
more of that Tribe's Tribal Lands, (b) serves at least 2,000 people
living on Tribal Lands, and (c) the total population on Tribal Lands
residing within the proposed station's service contour (the class
reference contour as set forth in 47 CFR 73.211(b), which is the 1mV/m
[60 dB[mu]] contour) constitutes at least 50 percent of the total
covered population (and, in the case of either (B)(1) or (B)(2), the
proposed station's principal community contour does not cover more than
50 percent of the Tribal Lands of a Tribe that is not a party to the
application). To the extent that a Tribe lacks Tribal Lands, the
applicant may demonstrate eligibility for waiver of the above-listed
tribal land coverage provisions, by demonstrating a geographic area
identified with the Tribe. See Second R&O, 26 FCC Rcd at 2561-63.
Likewise, the Commission will consider requests for waiver of the other
requirements where appropriate;
(C) The proposed community of license must be located on Tribal
Lands; and
(D) The proposed service must constitute first or second aural
(reception) service, or first local Tribal-owned commercial
transmission service at the proposed community of license (see First
R&O, 25 FCC Rcd 1583, 1596-97 (2010); Second R&O, 26 FCC Rcd at 2561-
63, 2586-87).
9. If only one acceptable application is filed during the TQ
Window, whether by the original Tribal Allotment proponent submitting
notification to process its application immediately or by another
qualified applicant, that application will be processed promptly, and
the Tribal Allotment will not be auctioned. Absent an affirmative
submission by the original Tribal Allotment proponent during the TQ
Window notifying the Commission that it wishes its Form 301 application
to be processed immediately, the allotment proponent's already-filed
Form 301 application will not be considered an ``acceptable
application'' at this stage of the threshold qualifications proceeding.
In the event that two or more acceptable applications are filed during
the TQ Window, the Commission will announce a limited period, after the
close of the TQ Window but before the next FM auction, in which the
parties may negotiate a settlement (including a time-sharing agreement)
or bona fide merger, as a way of resolving the mutual exclusivity
between their applications. Any such settlement or merger will be
subject to the same limits and conditions as other agreements for
resolving application conflicts (see 47 CFR 73.3525). Technical
solutions will not be allowed as settlements. Unlike the case of
competing new commercial AM applications (some groups of which are
allowed to resolve their mutual exclusivity by means of engineering
solutions), in which each mutually exclusive applicant has submitted a
discrete engineering proposal in its application which may be amended,
a Tribal Allotment will have been added to the Table of Allotments (47
CFR 73.202) only after it has undergone the allocations rulemaking
process. That process involves not only a complete engineering review
of the proposed allotment, but also consideration of comments and,
often, competing allotment proposals. Allowing a post-allocation
technical solution that would result in grant of more than one FM
allotment would effectively circumvent the FM allocations rulemaking
process, and the right of parties to file comments and counter-
proposals that is inherent in that process. If there are other fully
spaced channels that could accommodate another Tribal Allotment, one of
the competing applicants could simply petition to add such an allotment
through the normal allocations rulemaking process. If, however, there
are no channels available, the Commission declined GRTI's suggestion
that it relax its spacing or other rules designed to prevent
interference among stations. A settlement that establishes technically
deficient Tribal stations is not an effective means to establish viable
and needed radio service to Tribal Lands.
10. If a settlement or merger is reached, the parties shall so
notify the Commission as set forth in the Public Notice announcing the
TQ Window. The Commission's staff will promptly begin processing the
surviving application pursuant to the settlement or merger. If a
settlement or merger cannot be reached among the mutually exclusive
applicants, the Tribal Allotment will be auctioned during the next
scheduled FM auction. However, at that time only the applicants whose
applications were accepted for filing during the TQ Window, as well as
the original Tribal Allotment proponent, will be permitted to bid on
that particular Tribal Allotment, i.e., bidding on that allotment will
be closed to all other potential applicants. The closed group of
mutually exclusive TQ Window applicants must comply with generally
applicable auction procedures (e.g., by correctly completing Form 175
and timely making an upfront payment; see 47 CFR 1.2105-1.2106,
73.5002). In the event that only one Tribal applicant qualifies to bid
in the first auction of a Tribal Allotment, it must submit an upfront
payment and enter a bid during the auction in order to obtain the
construction permit. The winning bidder for the Tribal Allotment must
comply with all auction rules for winning bidders in order to be
awarded the construction permit; that is, it must
[[Page 2919]]
timely make any required down and final payments, and must timely file
FCC Form 301 (or, in the case of the original proponent of the Tribal
Allotment, amend its pending Form 301 or advise the staff that its
pending Form 301 application may be processed). See 47 CFR 1.2107,
1.2109, 1.2112, 73.5003, 73.5005.
11. In the NCE FM context, the Commission's rules impose a holding
period on authorizations granted pursuant to a Tribal Priority, for a
period beginning from the award of a construction permit through four
years of on-air operations, prohibiting community of license changes
and/or technical changes that would result in the modified facility no
longer qualifying for a Tribal Priority. See First R&O, 25 FCC Rcd at
1586, 1593, 1596-97. This is to discourage trafficking in
authorizations granted pursuant to the Tribal Priority, which could
frustrate the goals of the priority and potentially harm the
communities that the Tribal Priority is intended to benefit. The same
rationale applies in the commercial FM context with regard to
authorizations awarded (1) to a singleton TQ Window applicant, (2)
after a settlement among TQ Window applicants, and (3) after an auction
among a closed group of bidders composed only of threshold qualified
tribal applicants. Accordingly, the permittee or licensee of an
authorization awarded to a TQ Window singleton, after a post-TQ window
settlement, or after an auction to a closed group of threshold
qualified tribal applicants, is prohibited from assigning or
transferring the authorization, except to another party that qualifies
for the Tribal Priority under which the Tribal Allotment was awarded in
all respects, for a period beginning from the award of a construction
permit through four years of on-air operations.
12. In the event that no qualifying party applies during the TQ
Window, and the Tribal Allotment proponent requests that its pending
FCC Form 301 application not be immediately processed (by sending a
letter to the Audio Division, Media Bureau, staff during the TQ
Window), the Tribal Allotment will be placed in a queue to be auctioned
in the normal course for vacant FM allotments. When the Tribal
Allotment is offered at auction for the first time, only applicants
meeting the threshold qualifications (those who would have qualified to
add the Tribal Allotment, including the original proponent of the
allotment, as detailed above) may specify that particular Tribal
Allotment on FCC Form 175, Application to Participate in an FCC
Auction. Any applicant not meeting threshold qualifications that
selects the Tribal Allotment in its Form 175 application will be
prohibited from entering a bid for the Tribal Allotment. Qualifying
Tribal applicants must, as noted above, otherwise qualify to bid at
auction, and must comply with all Commission rules relating to the
conduct of auctions and award of construction permits to winning
bidders, as discussed above.
13. Should no qualifying party apply to bid on a Tribal Allotment
in the first auction in which it is offered, or should no such party
qualify to bid in the first auction in which a Tribal Allotment is
offered, then the Tribal Allotment will be offered in a subsequent
auction or auctions, and any applicant, whether or not a Tribe or
Tribal entity, may apply for the Tribal Allotment. The Commission
declined to adopt the commenters' suggestion that a Tribal Allotment
only be offered for initial licensing to a qualifying Tribe or Tribal
entity in perpetuity. Such a prohibition would frustrate the policies
favoring expeditious initiation of radio service, and disfavoring the
practice of allowing spectrum to lie fallow for indefinite periods.
14. Due to the Commission's adoption of the threshold
qualifications approach, it did not adopt its original proposal of a
Tribal bidding credit. The Commission continues to believe that a
bidding credit, of whatever magnitude, is insufficient to ensure that
Tribal Allotments will end up in the hands of qualifying Tribal
applicants. See Second R&O, 26 FCC Rcd at 2588-89. It is expected that,
under the procedures adopted, the majority of FM commercial Tribal
Allotments will be awarded through the TQ Window approach. Moreover, to
the extent that multiple qualifying Tribes or Tribal entities would bid
on a Tribal Allotment at auction, all would likely qualify for the same
Tribal or new entrant bidding credits. Adding a bidding credit to the
procedures adopted here would therefore serve no purpose.
15. The procedures adopted here are designed to accommodate both
those Tribes and Tribal entities seeking to establish new commercial FM
services quickly, and those Tribes needing more time to marshal their
resources. These procedures also align with Congress's direction that
the Commission use threshold qualifications to avoid mutual exclusivity
in application and licensing proceedings when it is in the public
interest to do so. 47 U.S.C. 309(j)(6)(E). Most importantly, these
procedures provide the best means of assuring that FM commercial
allotments pursuant to the Tribal Priority will be awarded to
qualifying Tribes or Tribal entities, thus achieving the goals of the
Tribal Priority.
16. The Commission realizes that any process leading to deployment
of communications services on Tribal lands and removing barriers to
entry must recognize Tribal sovereignty and self-determination, the
unique needs and priorities of Native Nations and Tribal communities,
and the importance of consultation and coordination with Tribal
government and Native community leaders. It has historically
acknowledged ``the rights of Indian Tribal governments to set their own
communications priorities and goals for the welfare of their
membership.'' See Establishing a Government-to-Government Relationship
with Indian Tribes, Policy Statement, 16 FCC Rcd 4078, 4080-81 (2000).
To that end, the Commission directed the Office of Native Affairs and
Policy (ONAP) and the Audio Division of the Media Bureau (AD) to
coordinate in establishing informational materials and training
opportunities for Tribes and Tribal entities, in order to help them
better understand the complexities of the threshold qualification and
licensing processes established herein. Additionally, ONAP and AD were
directed, as appropriate, to remain available to consult with Tribal
applicants on any questions that they may have at any stage of the
radio application and licensing processes, especially as they relate to
Tribal licensing priorities. Id. at 4082.
Final Regulatory Flexibility Analysis
17. As required by the Regulatory Flexibility Act of 1980, 5 U.S.C.
603, as amended (RFA), an Initial Regulatory Flexibility Analysis
(IRFA) was incorporated in the Second FNPRM to this proceeding. The
Commission sought written public comment on the proposals in the Second
FNPRM, including comment on the IRFA. The Commission received no
comments on the IRFA. This present Final Regulatory Flexibility
Analysis (FRFA) conforms to the RFA. See 5 U.S.C. 604.
Need for, and Objectives of, the Report and Order
18. In the Third R&O, the Commission adopted new procedures under
which commercial FM allotments added using the Commission's Tribal
Priority may be awarded to tribal applicants meeting the threshold
qualifications for adding such an allotment. The new procedures were
adopted in order to provide a significant opportunity for the award of
such tribal allotments to tribal applicants, in
[[Page 2920]]
keeping with the goals underlying the Commission's Tribal Priority.
19. The further rulemaking proceeding leading to the Third R&O was
initiated to obtain further comments concerning an alternative proposal
to assist Native American Tribes and Alaska Native Villages (Tribes)
seeking to establish new commercial FM service to Tribal communities.
In the Further Notice of Proposed Rulemaking, the Commission proposed
an auction bidding credit to Tribes and entities owned by Tribes. The
Commission received only one proposal for a potential tribal bidding
credit: To grant Tribes a 35 percent Tribal Bidding Credit (TBC), to be
added to any new entrant bidding credit for which they may qualify, to
a maximum of 60 percent. The Commission believed this record was
inconclusive to adopt a TBC, and further believed it was unclear
whether and how a TBC could be crafted to advance the dual goals of
increasing Tribal ownership of radio facilities and maximizing the
value of spectrum through competitive bidding, as mandated by 47 U.S.C.
309(j). On further consideration, the Commission determined that an
alternative approach would more effectively achieve the policy goals
underlying the Tribal Priority adopted in the First R&O in this
proceeding, 25 FCC Rcd at 15896-97, and be more consistent with its
statutory mandate. See 47 U.S.C. 309(j)(6)(E).
20. Specifically, in the Second FNPRM the Commission sought comment
on whether to require, as a threshold qualification to apply for a
commercial FM channel allotted pursuant to the Tribal Priority, that
applicants qualify for a Tribal Priority for that channel. Such an
approach is consistent with other procedures used by the Commission,
such as those used to reserve vacant FM allotments for noncommercial
educational (NCE) use. Additionally, while the Tribal Priority operates
as a dispositive preference in the AM commercial and FM NCE application
contexts, as currently formulated the priority is not dispositive for
FM commercial stations, because a Tribe that adds an FM allotment using
the Tribal Priority may still be outbid at auction by a non-Tribal
applicant. The alternative approach proposed by the Commission would
correct this asymmetry, and would also more effectively ensure that FM
allotments added using the Tribal Priority are ultimately licensed to
Tribes, who would use such FM channels for their intended purposes of
promoting Tribal language, culture, and self-government. The Commission
therefore sought comment on this alternative approach and its potential
ramifications, including whether non-Tribal applicants should be
allowed to apply for FM allotments added using the Tribal Priority, but
for which no Tribe expresses interest. The Commission also sought
additional input from commenters on the TBC, and on other ways in which
the Commission could promote commercial Tribal radio service, including
comment on potential barriers that may discourage Tribal participation
in the broadcast auction and licensing processes.
21. Commenters on these issues favored the adoption of the
threshold qualifications procedure, as the best means of ensuring that
Tribal-added FM allotments would ultimately be licensed to those whom
the Tribal Priority was meant to benefit. Native Public Media and the
National Congress of American Indians (NPM/NCAI), filing joint
comments, expressed concern that expedited procedures would force
Tribes to receive construction permits before they were financially and
technically able to construct facilities. Another commenter, Gila River
Telecommunications, Inc. (GRTI), agreed, but at the same time argued
that there should be expedited threshold qualifications procedures for
those Tribal applicants who are ready and able to begin station
construction. All commenters agreed that Tribal allotments should not
be made available to non-Tribal applicants at any time. Commenters also
agreed that, if the threshold qualifications procedure were not
adopted, a TBC of up to 60 percent should be afforded to Tribal
applicants for FM allotments added using the Tribal Priority.
22. In the Third R&O in this proceeding, the Commission adopted the
threshold qualifications procedure proposed in the Second FNPRM. Under
the threshold qualifications procedure, once a commercial FM allotment
is allocated using the Tribal Priority (Tribal Allotment), within a
reasonable time thereafter the Commission staff will announce by Public
Notice a Threshold Qualifications Window (TQ Window). During the TQ
Window, any Tribe or Tribal entity that could qualify to add that
particular Tribal Allotment may file FCC Form 301 for the Tribal
Allotment. The original Tribal Allotment proponent, which will already
have filed Form 301 at the time it proposed the allotment, must submit
to the staff a notice stating that it wishes its already-filed Form 301
application to be processed immediately, or make that statement in an
amendment to its Form 301. An applicant in the TQ Window must
demonstrate that it meets all of the eligibility criteria for grant of
a Tribal Priority at the allotment stage. See paragraph <8>, above.
23. If only one acceptable application is filed during the TQ
Window, whether by the original Tribal Allotment proponent submitting
notification to process its application immediately or by another
qualified applicant, that application will be processed promptly, and
the Tribal Allotment will not be auctioned. In the event that two or
more acceptable applications are filed during the TQ Window, the
Commission will announce a limited period, after the close of the TQ
Window but before the next FM auction, in which the parties may
negotiate a settlement (including a time-sharing agreement) or bona
fide merger, as a way of resolving the mutual exclusivity between their
applications. There is precedent for such settlements or mergers in the
AM auction context, involving certain mutually exclusive applicants for
new and modified AM stations. See Implementation of Section 309(j) of
the Communications Act--Competitive Bidding for Commercial Broadcast
and Instructional Television Fixed Service Licenses, First Report and
Order, 13 FCC Rcd 15920, 15927 (1998), (subsequent history omitted). If
a settlement or merger is reached, the parties shall so notify the
Commission as set forth in the Public Notice announcing the TQ Window.
The staff will promptly begin processing the surviving application
pursuant to the settlement or merger. If a settlement or merger cannot
be reached among the mutually exclusive applicants, the Tribal
Allotment will be auctioned during the next scheduled FM auction.
However, at that time only the applicants whose applications were
accepted for filing during the TQ Window, as well as the original
Tribal Allotment proponent, will be permitted to bid on that particular
Tribal Allotment, i.e., bidding on that allotment will be closed to all
other potential applicants. The closed group of mutually exclusive TQ
Window applicants must comply with generally applicable auction
procedures. The winning bidder for the Tribal Allotment must comply
with all auction rules for winning bidders in order to be awarded the
construction permit; that is, it must timely make any required down and
final payments, and must timely file FCC Form 301 (or, in the case of
the original proponent of the Tribal Allotment, amend its pending Form
301 or advise the staff that its pending Form 301 application may be
processed).
24. In the event that no qualifying party applies during the TQ
Window,
[[Page 2921]]
and the original Tribal Allotment proponent requests that its pending
FCC Form 301 application not be immediately processed, the Tribal
Allotment will be placed in a queue to be auctioned in the normal
course for vacant FM allotments. When the Tribal Allotment is offered
at auction for the first time, only applicants meeting the threshold
qualifications (those who would have qualified to add the Tribal
Allotment, including the original proponent of the allotment) may
specify that particular Tribal Allotment on FCC Form 175, Application
to Participate in an FCC Auction. Any applicant not meeting threshold
qualifications that selects the Tribal Allotment in its Form 175
application will be prohibited from entering a bid for the Tribal
Allotment. Qualifying Tribal applicants must, as noted above, otherwise
qualify to bid at auction, and must comply with all Commission rules
relating to the conduct of auctions and award of construction permits
to winning bidders. Should no qualifying party apply to bid on a Tribal
Allotment in the first auction in which it is offered, or should no
such party qualify to bid in the first auction in which a Tribal
Allotment is offered, then the Tribal Allotment will be offered in a
subsequent auction or auctions, and any applicant, whether or not a
Tribe or Tribal entity, may apply for the Tribal Allotment. A Tribal
Allotment won in an open auction (that is, one open to non-threshold
qualified applicants) will not be subject to the four-year prohibition
on assignment or transfer (but will still be subject to a four-year
prohibition on community of license or technical changes). Because of
the similarity of the new threshold qualifications procedures to the
procedures for awarding NCE construction permits based on the Tribal
Priority (namely, to discourage trafficking in such permits so that
they will be used to further the goals of the Tribal Priority by
enabling Tribes or tribal entities to broadcast to Tribal Lands), the
Commission will impose the same holding period prohibition on
commercial FM permits awarded using the threshold qualifications
procedures. The Commission will therefore prohibit the permittee or
licensee of an authorization awarded to a TQ Window singleton, after a
post-TQ window settlement, or after an auction to a closed group of
threshold qualified tribal applicants, from assigning or transferring
the authorization, except to another party that qualifies for the
Tribal Priority under which the Tribal Allotment was awarded in all
respects, for a period beginning from the award of a construction
permit through four years of on-air operations.
Summary of Significant Issues Raised by Public Comments in Response to
the IRFA
25. There were no comments filed that specifically addressed the
rules and policies proposed in the IRFA.
Description and Estimate of the Number of Small Entities to Which the
Proposed Rules Will Apply
26. The RFA directs the Commission to provide a description of and,
where feasible, an estimate of the number of small entities that will
be affected by the rules adopted herein. 5 U.S.C. 603(b)(3). The RFA
generally defines the term ``small entity'' as having the same meaning
as the terms ``small business,'' small organization,'' and ``small
government jurisdiction.'' 5 U.S.C. 601(6). In addition, the term
``small business'' has the same meaning as the term ``small business
concern'' under the Small Business Act. 5 U.S.C. 601(3). 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). 15 U.S.C. 632.
27. The rules and policies adopted in the Third R&O will primarily
apply to Tribes, consortia of Tribes, and entities 51 or more percent
owned by Tribes or consortia, that apply for commercial FM radio
stations, but potentially will apply to all AM and FM radio
broadcasting licensees and potential licensees, to the extent that they
may ultimately be allowed to apply for Tribal Allotments in the event
that qualified Tribal applicants do not do so. A radio broadcasting
station is an establishment primarily engaged in broadcasting aural
programs by radio to the public. 15 U.S.C. 632. Included in this
industry are commercial, religious, educational, and other radio
stations. Id. Radio broadcasting stations which primarily are engaged
in radio broadcasting and which produce radio program materials are
similarly included. Id. However, radio stations that are separate
establishments and are primarily engaged in producing radio program
material are classified under another NAICS number. Id. The SBA has
established a small business size standard for this category, which is:
firms having $7 million or less in annual receipts. 13 CFR 121.201,
NAICS code 515112 (updated for inflation in 2008). According to BIA/
Kelsey, MEDIA Access Pro Database on November 1, 2011, 10,785 (97%) of
11,127 commercial radio stations have revenue of $7 million or less.
Therefore, the majority of such entities are small entities. Please
note, however, that many radio stations are affiliated with much larger
corporations having much higher revenue. This estimate, therefore,
likely overstates the number of small entities that might be affected
by any ultimate changes to the rules and forms.
Description of Projected Reporting, Recordkeeping and Other Compliance
Requirements
28. As described, certain rules and procedures will change,
although the changes will not result in substantial increases in
burdens on most applicants. The new procedures will only apply to
Tribes and entities majority owned by Tribes, which do not constitute
the majority of commercial FM applicants. Moreover, because of the
geographic limits of commercial FM allotments, and the qualifying
criteria for the Tribal Priority, the number of threshold qualified
applicants for a given allotment will likely be small. Questions will
be modified in FCC Form 301 to indicate whether the applicant is
applying for a Tribal Allotment, and certifying that it qualifies for
the Tribal Priority for that particular Tribal Allotment. These are
largely self-identification questions reflecting the applicant's
status, although in the case of eligibility for the Tribal Priority
some geographic analysis may be required, and/or a showing may be
needed to establish eligibility for the Tribal Priority in the absence
of tribal lands as defined in the First R&O. Additionally, questions
will have to be added to FCC Form 175, in the case of Tribal Allotments
that proceed to competitive bidding, in order to establish the
applicant's eligibility to apply for a Tribal Allotment in the first
instance. However, these burdens should be moderate to minimal, as it
is anticipated that a substantial number of commercial tribal FM
allotments will be awarded before the auction stage, and many threshold
qualified tribal applicants will have established their qualifications
before auction, either at the allocations stage or during a TQ window.
In any event, such burdens are needed in order to achieve the
Commission's statutory mandate of fair, efficient, and equitable
distribution of radio service (and, in the case of Tribal Priority
claimants, are necessary in order to open up the Tribal Priority to
greater numbers of Tribes seeking to establish new radio service).
Certain notifications may also be required of some applicants, for
example, notification that a Tribal
[[Page 2922]]
Allotment proponent wishes its already-filed FCC Form 301 application
to be considered in the TQ Window, or a request for approval of a
merger or settlement agreement among TQ Window applicants. The
remaining procedural changes in the Third R&O are changes in Commission
procedures, requiring no input from applicants. For example, under the
new threshold qualifications procedure, the Commission will have to
generate Public Notices setting forth procedures for TQ Windows, or
modify auction Public Notices to set forth special procedures for
Tribal Allotments being auctioned.
Steps Taken To Minimize Significant Impact of Small Entities, and
Significant Alternatives Considered
29. The RFA requires an agency to describe any significant
alternatives that it has considered in reaching its proposed approach,
which may include the following four alternatives (among others): (1)
The establishment of differing compliance or reporting requirements or
timetables that take into account the resources available to small
entities; (2) the clarification, consolidation, or simplification of
compliance or reporting requirements under the rule for small entities;
(3) the use of performance, rather than design, standards; and (4) an
exemption from coverage of the rule, or any part thereof, for small
entities. 5 U.S.C. 603(c)(1)-(c)(4).
30. With regard to the proposals in the Second FNPRM, NPM/NCAI
expressed concern about the ability of some Tribes to act quickly to
construct and license new commercial FM stations. There is, according
to NPM/NCAI, a significant and adverse economic impact that some Tribes
face when seeking to initiate new radio service. Factors causing such
an adverse economic impact include lack of capital or federal program
support; short construction seasons in many Tribal areas; complications
with regard to tower siting, due to factors such as preservation of
sacred sites and Bureau of Indian Affairs land use policies; and lack
of easy access to materials and engineering expertise. While not
disagreeing with NPM/NCAI on this issue, GRTI pointed to what it
perceives as Commission delays in allocating new FM allotments and
making them available for auction, delaying the initiation of new
service by Tribes ready and able to begin construction immediately. In
order to accommodate these dual concerns, the Commission adopted a
threshold qualifications approach to Tribal commercial FM allotments
that provides an early opportunity for application for Tribes that are
ready to commence construction, as well as a later opportunity (up to,
but likely no more than, two years) for those Tribes that may lack the
resources to commence construction soon after a channel is allotted
using the Tribal Priority. In this way, the Commission's adopted
procedure is designed to reduce the burdens on these groups of
potential applicants, based on the concerns expressed in their
comments. Although the Commission could have adopted strictly an
expedited threshold qualifications procedure--awarding a construction
permit for a Tribal Allotment through a TQ Window opened shortly after
allocation of the Tribal Allotment--this would have forced those Tribes
lacking the resources to commence construction immediately either to
delay proposing an allotment or to risk expiration of the construction
permit before construction could be completed. Accordingly, by adopting
the TQ Window process over the proposed alternative of an expedited
threshold qualifications procedure, the Commission has chosen the
alternative that imposes a substantially less significant economic
impact.
Report to Congress
31. The Commission will send a copy of the Third R&O, including
this FRFA, in a report to be sent to Congress and the Government
Accountability Office pursuant to the Small Business Regulatory
Enforcement Fairness Act of 1996 (5 U.S.C. 801(a)(1)(A)). In addition,
the Commission will send a copy of the Third R&O, including the FRFA,
to the Chief Counsel for Advocacy of the Small Business Administration.
A copy of the Third R&O and FRFA (or summaries thereof) will also be
published in the Federal Register (See 5 U.S.C. 604(b)).
Ordering Clauses
32. Accordingly, it is ordered, pursuant to the authority contained
in Sections 1, 2, 4(i), 303, 307, and 309(j) of the Communications Act
of 1934, 47 U.S.C. 151, 152, 154(i), 303, 307, and 309(j), that this
Third Report and Order is adopted.
33. It is further ordered that, pursuant to the authority found in
Sections 4(i), 303(r), and 628 of the Communications Act of 1934, as
amended, 47 U.S.C. 154(i), 303(r), and 548, the Commission's Rules are
hereby amended as set forth herein.
34. It is further ordered that the rules adopted herein contain new
or modified information collection requirements that require approval
by the Office of Management and Budget (OMB) under the Paperwork
Reduction Act (PRA), and which will become effective after the
Commission publishes a notice in the Federal Register announcing such
approval and the relevant effective date.
List of Subjects in 47 CFR Part 73
Radio broadcast services.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
For the reasons discussed in the preamble, the Federal
Communications Commission amends 47 CFR Part 73 to read as follows:
PART 73--RADIO BROADCAST SERVICES
0
1. The authority citation for part 73 continues to read as follows:
Authority: 47 U.S.C. 154, 303, 334, 336, and 339.
0
2. Section 73.3573 is amended by adding new paragraph (f)(6) and adding
new Note 5 at the end of the section to read as follows:
Sec. 73.3573 Processing FM broadcast station applications.
* * * * *
(f) * * *
(6)(i) When a non-reserved channel FM allotment is added to the
Table of FM Allotments using the Tribal Priority described in Note 5 to
this section, the FCC will specify by Public Notice a window filing
period during which only those applicants that satisfy all of the
eligibility criteria listed in Note 5 to this section with regard to
the specific Tribal Priority FM allotment(s) listed in the Public
Notice may file a long-form application for the Tribal Priority FM
allotment. Only applications from applicants meeting the ``threshold
qualifications'' listed in Note 5 will be accepted during this window
filing period.
(ii) If only one application for the Tribal Priority FM allotment
is accepted for filing during the threshold qualifications window, the
long-form application will be processed. If two or more applications
for the Tribal Priority FM allotment are accepted for filing during the
threshold qualifications window, the FCC will specify by Public Notice
a period of time, after the close of the threshold qualifications
window but before the next FM auction, during which the parties may
negotiate a settlement or bona fide merger, as a way of resolving the
conflict between their applications. Parties to a settlement must
comply with Sec. 73.3525 of the Commission's rules. If a settlement or
bona fide merger is reached, the
[[Page 2923]]
surviving application will be processed. If no settlement or bona fide
merger is reached among the threshold qualifications window applicants,
the Tribal Priority FM allotment will be offered at auction as
described in paragraphs (f)(2) through (f)(5) of this section, except
that only those applicants whose applications were accepted for filing
pursuant to paragraph (f)(6)(i) of this section may participate in the
initial auction of the Tribal Priority FM allotment.
(iii) If no application is accepted for filing during the threshold
qualifications window, and the party that initially proposed the Tribal
Priority FM allotment requests by letter to the Audio Division, Media
Bureau, that its pending long-form application not be immediately
processed, the Tribal Priority FM allotment will be auctioned as
described in paragraphs (f)(2) through (f)(5) of this section in the
normal course for vacant FM allotments. When a Tribal Priority FM
allotment is offered at auction for the first time, only those
applicants meeting the threshold qualifications for that specific
Tribal Priority FM allotment, as described in Note 5 to this section,
may participate in the auction of that allotment.
(iv) Should no applicant meeting threshold qualifications, as
described in Note 5 to this section, apply to bid on a Tribal Priority
FM allotment in the first auction in which it is offered, or should no
applicant meeting threshold qualifications qualify to bid in the first
auction in which a Tribal Priority FM allotment is offered, then the
Tribal Priority FM allotment will be offered in a subsequent auction.
Any such subsequent auction of a Tribal Priority FM allotment shall
proceed as described in paragraphs (f)(2) through (f)(5) of this
section, and any qualified applicant may participate in the auction of
the Tribal Priority FM allotment in such subsequent auction, regardless
of whether it meets the threshold qualifications with regard to that
specific Tribal Priority FM allotment.
* * * * *
Note 5 to Sec. 73.3573. The ``Tribal Priority'' is that
established by the Commission in Policies to Promote Rural Radio
Service and to Streamline Allotment and Assignment Procedures, MB
Docket 09-52. See First Report and Order and Further Notice of Proposed
Rule Making, MB Docket 09-52, FCC 10-24, 75 FR 9797, 75 FR 9856, 75 FR
73976; Second Report and Order, First Order on Reconsideration, and
Second Further Notice of Proposed Rule Making, MB Docket 09-52, FCC 11-
28, 76 FR 14362, 76 FR 18942; Third Report and Order, MB Docket 09-52,
FCC 11-190. To qualify for the Tribal Priority, and thus meet
``threshold qualifications'' for a particular allotment, an applicant
must demonstrate that it meets all of the following eligibility
criteria: (a) The applicant is either a federally recognized Tribe or
Tribal consortium, or an entity 51 percent or more of which is owned or
controlled by a Tribe or Tribes. Qualifying Tribes or Tribal entities
must be those at least a portion of whose Tribal Lands lie within the
principal community contour of the proposed facility. Although the 51
or greater percent Tribal control threshold need not consist of a
single Tribe, the qualifying entity must be 51 percent or more owned or
controlled by Tribes at least a portion of whose Tribal Lands lie
within the facility's principal community contour; (b)(1) at least 50
percent of the area within the proposed principal community contour is
over that Tribe's Tribal Lands, or (2) the proposed principal community
contour (i) encompasses 50 percent or more of that Tribe's Tribal
Lands, (ii) serves at least 2,000 people living on Tribal Lands, and
(iii) the total population on Tribal Lands residing within the proposed
service contour constitutes at least 50 percent of the total covered
population (and, in the case of either (b)(1) or (b)(2) the proposed
principal community contour does not cover more than 50 percent of the
Tribal Lands of a Tribe that is not a party to the application); (c)
the proposed community of license must be located on Tribal Lands; and
(d) the proposed service must constitute first or second aural
(reception) service, or first local Tribal-owned commercial
transmission service at the proposed community of license. For purposes
of this section, the definition of ``Tribal Lands'' is the same as that
set forth at footnote 15 of the First Report and Order and Further
Notice of Proposed Rule Making, FCC 10-24, and as further set forth at
paragraphs 8-10 and 59 of the Second Report and Order, First Order on
Reconsideration, and Second Further Notice of Proposed Rule Making, FCC
11-28.
[FR Doc. 2012-967 Filed 1-19-12; 8:45 am]
BILLING CODE 6712-01-P