[Federal Register Volume 61, Number 218 (Friday, November 8, 1996)]
[Rules and Regulations]
[Pages 57966-57981]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-28771]



[[Page 57965]]

_______________________________________________________________________

Part IV





Department of Commerce





_______________________________________________________________________



National Telecommunications and Information Administration



_______________________________________________________________________



15 CFR Part 2301



Public Telecommunications Facilities Program; Final Rule and Notice of 
Availability of Funds

  Federal Register / Vol. 61, No. 218 / Friday, November 8, 1996 / 
Rules and Regulations  

[[Page 57966]]



DEPARTMENT OF COMMERCE

National Telecommunications and Information Administration

15 CFR Part 2301

[Docket No. 960524148-6243-02]
RIN 0660-AA09


Public Telecommunications Facilities Program

AGENCY: National Telecommunications and Information Administration 
(NTIA), Commerce.

ACTION: Final rule.

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SUMMARY: This document revises and clarifies the rules governing 
administration of the Public Telecommunications Facilities Program 
(PTFP). The PTFP is authorized to provide matching grants to plan and 
construct public telecommunications facilities.1
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    \ 1\ See 47 U.S.C. Secs. 390-393, and 397-399b (1994), The 
Communications Act of 1934, as amended. Unless otherwise noted, all 
statutory citations are to title 47 of the United States Code.

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EFFECTIVE DATE: November 8, 1996.

FOR FURTHER INFORMATION CONTACT: Dennis Connors, Director, Public 
Broadcasting Division, NTIA, Department of Commerce, 14th Street and 
Constitution Avenue, NW., Room 4625, Washington, DC 20230. Telephone: 
(202) 482-5802; Fax (202) 482-2156. Internet address: 
[email protected].

SUPPLEMENTARY INFORMATION: In 61 FR 27230, the National 
Telecommunications and Information Administration (NTIA) announced 
proposed revisions of the rules that govern the PTFP and requested 
public comments on those revisions. In response to the notice of 
proposed rulemaking NTIA received comments from 7 different 
organizations.2
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     2 Comments were submitted by the following organizations: 
Association of America's Public Television Stations (APTS); Indiana 
University Radio and Television Services, operator of WFIU-FM/WTIU-
TV (IURTS); the National Federation of Community Broadcasters 
(NFCB); National Public Radio (NPR); the National Technological 
University, Ft. Collins, CO (NTU); the Public Broadcasting Service 
(PBS); and the Rocky Mountain Corporation for Public Broadcasting, 
Albuquerque, NM (RMCPB).
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    There was general support for the overall direction of the proposed 
revision. APTS, NPR, and NFCB supported the general thrust of the 
proposed clarifications and the reorganization of the rules. No 
opposition was received to many of NTIA's proposed changes to the rules 
including the incorporation of the priorities from the Appendix into 
the body of the rules and the changes proposed in the following 
sections: Sec. 2301.1 Program Purposes; Sec. 2301.3 Applicant 
Eligibility; Sec. 2301.6 Amount of Federal Funding; Sec. 2301.7 
Eligible and Ineligible Project Costs; Sec. 2301.9 Deferred 
Applications; Sec. 2301.12 Federal Communications Commission 
Authorizations; Sec. 2301.13 Public Comments; Sec. 2301.14 Supplemental 
Application Information; Sec. 2301.15 Withdrawal of Applications; 
Sec. 2301.16 Technical Evaluation Process; Sec. 2301.18 Selection 
Process; Sec. 2301.19 General Conditions Attached to the Federal Award; 
Sec. 2301.20 Schedules and Reports; Sec. 2301.21 Payment of Federal 
Funds; Sec. 2301.22 Protection, Acquisition and Substitution of 
Equipment; Sec. 2301.23 Completion of Projects; Sec. 2301.24 Final 
Federal Payment; Sec. 2301.25 Retention of Records and Annual Status 
Reports; and Sec. 2301.26 Waivers.
    Comments on the proposed rules were mainly focused on two sections: 
Sec. 2301.4 Scope of Projects and Sec. 2301.17 Evaluation Criteria. The 
subject that prompted the most public comments, however, was not a 
section of the proposed rules, but rather a discussion in the 
Supplemental Information section of the Notice regarding the conversion 
of public broadcasting to advanced digital technologies.3 We 
discuss each of these three subjects and several other issues raised by 
the public in the following sections.
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     3 See NPRM at 27230.
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Section 2301.4  Scope of Projects

    Section 2301.4 relates to the scope of projects eligible for PTFP 
funding and moved a section that was an Appendix in prior years into 
the body of the Rules. APTS supported the incorporation of the 
priorities in the Rules as part of its general support for the 
reorganization of the PTFP Rules.
    There were several comments on the proposed changes to this 
section. RMCPB suggested that the title of this section was 
nondescriptive of the content. RMCPB recommended this section be titled 
``Types of Projects, Priorities.'' We agree that this is an improvement 
and so have modified the title to ``Types of Projects and Broadcast 
Priorities'' in the Final Rules.
    Three organizations, NFCB, NTU and RMCPB, commented on NTIA's 
proposal to place all broadcast applications within the five funding 
priorities and revise the scope of the Special Applications category to 
consist solely of nonbroadcast projects. NFCB supported NTIA's proposal 
and thought that reserving the Special Applications category for non-
broadcast would be useful for considering applications utilizing new 
technologies. NTU hoped that the proposed reorganization did not change 
the priority status that PTFP has developed for distance learning 
projects over the past decade. RMCPB questioned whether, under the 
proposed rules, NTIA continued to possess the discretionary authority 
to award grants to eligible broadcast as well as nonbroadcast 
applicants with unique/innovative proposals. NTIA encourages the 
submission of applications that propose unique and innovative 
telecommunications projects, whether using broadcast or nonbroadcast 
technologies. We have therefore clarified this position through the 
creation of Sec. 2301.4(b)(6) Other Cases within the Broadcast 
Applications section. This section provides broadcast applicants the 
same opportunities for submission of unique or innovative applications 
as contained in the Special Applications Sec. 2301.4(a) for 
nonbroadcast applicants.
    RMCPB proposed that, if NTIA were to place broadcast and 
nonbroadcast applications in different categories, NTIA should 
establish a set of priority distinctions for the nonbroadcast 
applications similar to that of the broadcast applications. While NTIA 
has established specific priorities for broadcast applications and 
continues to refine those priorities in the current regulations, we 
have chosen not to establish a fixed set of priorities for nonbroadcast 
applications for two reasons. The first reason is that under the Act, 
NTIA can only fund construction applications that establish or expand a 
nonbroadcast facility,4 which are comparable to Priority 1A and 1B 
broadcast applications. Nonbroadcast applications are not eligible for 
equipment replacement, improvement or augmentation, which are 
Priorities 2, 4 and 5 of the broadcast applications. Priority 3 in the 
broadcast priorities, first local origination, is not applicable for 
nonbroadcast since NTIA considers the service provided by a 
nonbroadcast facility rather than the service area and recognizes that 
different technologies and services may provide a unique service in a 
particular service area. In effect, nonbroadcast applications are 
already grouped into a single category, Special Applications, which is 
comparable to Priority 1. NTIA has not broken the Special Applications 
category into different priorities for a second reason. We recognize 
that nonbroadcast applicants propose many

[[Page 57967]]

different technologies, each technology with its own strengths in 
meeting the needs of a particular community, whether that community is 
a city, state, region or the nation. In encouraging the submission of 
innovative and unique applications, NTIA prefers not to establish rigid 
priorities but to let applicants propose projects which identify and 
serve needs in their chosen service area. We have, therefore, not 
published a set of priorities for Special Applications but have made 
minor changes to the Special Applications category to further clarify 
the intent of this category.
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     4 Section 390 of the Act, which is included as Sec. 2301.1 
of these final rules.
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    NFCB and APTS commented on NTIA's proposal to consider projects to 
construct public broadcast stations to address underserved needs in an 
area already served by other public broadcasting facilities within the 
Priority 4A, Improvement of Public Broadcasting Services. APTS 
supported the proposal to place these ``second station'' applications 
within the broadcast priorities but suggested that a lower priority--
Priority 5A--would be more appropriate. APTS noted that given limited 
Federal funding, it was important to support existing public 
broadcasting facilities that are serving distinct and unserved needs 
before supporting new facilities. APTS indicated that stations in 
multi-station markets are treated as Priority 4A and that treating 
applicants for new second stations under Priority 5A would insure that 
existing facilities receive support before applications for new 
facilities to serve underserved needs.
    NFCB, however, supported NTIA's placement of projects to construct 
public broadcast stations to address underserved needs in an area 
already served by other public broadcasting facilities within the 
Priority 4A. NFCB noted that public radio is a targeted medium and that 
even the best stations can only hope to serve a portion of their 
communities of license. NFCB felt that placement of second stations 
within Priority 4A recognized the need for such stations in an 
increasingly multicultural American society.
    In the Notice of Proposed Rulemaking, NTIA proposed that projects 
to construct public broadcast stations to address underserved needs in 
an area already served by other public broadcasting facilities would be 
considered in Priority 4A so they could be considered with other 
applications from stations in areas already served by another public 
broadcasting facility. NTIA believes that not only is it important to 
maintain the existing services of second stations, but it is also 
important that communities with underserved needs have the opportunity 
to receive additional service from new facilities. We expect that new 
second service stations will be radio facilities that serve 
demonstrated needs in their community, and we do not anticipate that 
this provision will have a major impact on television facilities. We 
recognize that there is a delicate balance between supporting 
applications for new such services and maintaining those second 
stations already in place, but we believe that there is no clear reason 
to favor one type of application over the other. Therefore, we believe 
that Priority 4A is the appropriate placement for these applications.
    In a related matter, RMCPB raised an issue under Secs. 2304.4(b) 
(2) and (4), regarding those instances where two full-service public 
radio stations serve the same area with two discrete and distinct 
program services. RMCPB noted that even when utilizing different 
national program services and distinctive local programming, neither 
station can qualify as ``essential'' (existing broadcast stations that 
provide either the only public telecommunications signal or the only 
locally originated public telecommunications signal to a geographical 
area) and therefore neither may be eligible for Priority 2 replacement. 
These applications are accordingly placed in Priority 4A. RMCPB 
suggested that ``PTFP discretionary consideration differing from that 
given either of two such stations without discrete service'' be 
given.5 NTIA appreciates RMCPB's concern regarding the priority of 
stations in multi-station areas. NTIA notes that some stations in a 
multi-station area may in fact qualify for Priority 2 as an 
``essential'' station as the term is used in the PTFP regulations. 
Applicants are encouraged to provide information as part of their 
applications documenting whether they provide either the only public 
telecommunications signal or the only locally originated public 
telecommunications signal to a geographical area. NTIA, however, is 
reluctant to distinguish between stations on the basis of their 
programming services as proposed by RMCPB. NTIA has been able to fund 
Priority 4A applications in the past and expects to be able to do so in 
the future, dependent on the availability of funds.
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     5 Comments of RMCPB, p. 3.
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    RMCPB supported NTIA's clarification of how PTFP considers the 
presence of AM daytime only stations in determining the Priority for 
proposed FM facilities serving a similar coverage area. RMCPB raised 
the question regarding the priority for a public radio FM station 
serving an area covered by a student noncommercial educational station 
that does not operate full-time or year-round. NTIA's long-time 
practice is not to consider student noncommercial educational stations 
that do not operate full-time or year-round as providing a public 
telecommunications service. The presence of a student noncommercial 
educational radio station in an area, therefore, does not preclude 
Priority 1 consideration of an application for a public radio FM 
station proposing to provide a public telecommunications service.

Section 2301.17  Evaluation Criteria for Construction and Planning 
Applications.

    Four organizations addressed the issue of evaluation criteria and 
each supported the combination of construction and planning into a 
single set of evaluation criteria.6 The four organizations 
supported the criteria proposed by NTIA, though APTS and IURTS both 
opposed deleting the community support criterion from the past 
evaluation criteria.
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     6 APTS, and NPR specifically supported a common set of 
criteria for evaluation of planning and construction applications 
and NFCB and RMCPB supported the common evaluation criteria by 
reference.
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    APTS noted that public broadcasting stations exist to serve their 
local communities and that NTIA should not make grants to applicants 
who cannot demonstrate significant ties to their community. APTS 
suggested that financial support is the clearest objective evidence 
that an applicant is providing service valued by their community and 
that NTIA continue to require that applicants demonstrate that they 
receive local financial support. IURTS suggested that demonstration of 
community support is a good check to insure that the purposes of the 
PTFP program are being served.
    NTIA agrees with the thrust of both the APTS and IURTS comments. We 
believe that demonstration of community support is an important element 
in the evaluation of an application. Indeed, we intend to incorporate 
demonstration of community support into the evaluation of several of 
the evaluation criteria proposed. As noted by APTS, community support 
is an important element in an applicant's ability to raise funds. This 
is true both for determining whether an applicant can raise both the 
short-term local match required by the PTFP application and the long-
term funds necessary to operate the system

[[Page 57968]]

during the Federal interest period. NTIA believes that demonstration of 
community support, therefore, is important for the financial 
qualifications criterion but also believes the demonstration of 
community support will be useful in evaluating other criteria as well. 
In most applications, demonstration of community support will be useful 
in documenting an applicant's fulfillment of the project objectives 
criterion. In many applications, demonstration of community support can 
be used to document urgency, applicant qualifications and special 
consideration. Rather than making community support an independent 
criterion, we have chosen to give applicants the opportunity to 
document community support for those criteria that are most appropriate 
to their application. Information on how this documentation can be 
included in the application will be contained in the Application 
Guidelines distributed to each applicant.
    In a similar manner, we will include information within the 
Guidelines on another matter which was not included on the list of new 
criteria in the proposed rules--coordination of the application with 
other telecommunications organizations. NTIA continues to believe that 
coordination of a project with other telecommunications organizations 
is an important issue but as with demonstration of community support, 
this information could support several evaluation criteria, depending 
on the nature of the applicant's project.
    The four organizations each addressed the question raised by NTIA 
in the Notice which solicited comments on the appropriate weight to be 
assigned to each criteria.7 Three of the four organizations 
presented suggestions on how the criteria should be weighted and all 
three suggested that ``project objectives'' and ``urgency'' be given 
the greatest weight.8 NFCB and RMCPB each suggested that 
``urgency'' and ``project objectives'' be given the greatest weight. 
NPR indicated that ``urgency'' and ``project objectives'' (proposed 
criteria #3 and #1) have traditionally distinguished the most worthy 
applications. NPR cautioned, however, that ``the most urgent need may 
not warrant a grant if the applicant lacks sufficient financial or 
other qualifications to implement the project.'' 9 Likewise, RMCPB 
suggested that the ``financial qualifications'' and ``applicant 
qualifications'' (proposed criteria #2 and #4) are in effect threshold 
criteria and should be given minimal weight but that NTIA might 
disqualify applications that did not meet a minimum on these two 
criteria. NFCB also felt that these two criteria would have to be met 
for a project to succeed but cautioned that there should be some 
evaluative process on these criteria which enables small public radio 
stations with limited staff and budget to compete equally for PTFP 
funds against larger stations. NFCB indicated that the ``technical/
planning qualification'' (criterion 5(a) or 5(b)) should be a criterion 
that indicates whether a project is a go or a no-go. RMCPB recommended 
that criterion 5 and ``special consideration'' (criterion 6) should be 
equally weighted.
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     7 See NPRM at 27230.
     8 APTS opposed giving the criteria different weights, 
indicating it was not clear which criterion was more important than 
the others. APTS also felt NTIA had already decided what factors it 
considers most significant by establishing priorities for grants and 
that applicants would tailor their proposals to match the weighting.
     9 Comments of National Public Radio, p. 3.
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    NTIA appreciates the thoughtful responses received on this issue. 
We agree that ``project objectives'' and ``urgency'' are the most 
significant of the criteria and so these criteria will be given the 
greatest weight during evaluation. We also agree that NTIA should not 
award a grant for a proposal, no matter how well the application meets 
the ``project objectives'' and ``urgency'' criteria, if the applicant 
is not financially qualified or otherwise able to complete the project. 
Therefore, the applicant's qualifications and financial qualifications 
will each serve as qualifying criteria. An application must meet a 
minimum threshold as defined in each of these criteria for further 
consideration during the evaluation process. The two remaining 
criteria, technical/planning qualifications and special consideration 
will be given lesser weight in evaluation than that awarded to 
``urgency'' and ``project objectives.''
    NTIA has, therefore, modified this section to reflect the 
evaluation weighting adopted. The criteria in Sec. 2301.17(b) have been 
reordered to list first the two qualifying criteria, ``applicant 
qualifications'' and ``financial qualifications'' as numbers 1 and 2. 
``Project objectives'' will be criterion number 3 and ``urgency'' has 
been placed as criterion number 4. Since the financial qualification 
criterion has been made a qualifying criterion, the requirement that 
applicants ``adequately justify the need for Federal funds in excess of 
fifty (50) percent of total project costs (see Sec. 2301.6(b)(2)), if 
requested for equipment replacement, improvement, or augmentation 
projects'' has been relocated to the project objectives criterion. The 
justification for more than 50% Federal funding only relates to the 
level of potential Federal funding and should not be a part of a 
criterion which is used to qualify the application for further 
consideration. A sentence has also been added to the project objective 
criterion which clarifies that evaluation of the applicant's proposal 
includes evaluation of the applicant's ability to implement the 
proposal, if funded. A sentence reading ``that the condition of 
existing equipment justifies its prompt replacement'' has been 
relocated from criterion 5(a) ``technical qualifications'', to 
criterion 2 ``urgency'' to reflect the weight given this criterion. 
Several new phrases have been added to clarify the ``urgency'' and 
``applicant qualifications'' criteria. Finally, new language has been 
added to Sec. 2301.17(a) which incorporates the weighting adopted by 
NTIA.

Conversion to Digital Technology

    Although not a part of the proposed rules itself, six of the seven 
organizations commented on the statement in NTIA's Notice which 
welcomed applications which will assist in planning for the digital 
conversion of public broadcasting facilities.10 Five of these six 
organizations supported NTIA's interest in supporting projects to plan 
for digital conversion of public broadcasting facilities. NFCB 
supported the concept in general, as did NPR, which cautioned that NTIA 
should bear in mind the program's broader objectives so that the 
funding of digital conversion planning projects promotes, rather than 
undermines, the availability of public telecommunications services, 
particularly in rural areas. RMCPB was supportive of NTIA's recognition 
of the issue of conversion to digital technologies but suggested that 
public broadcasters capable of practicable conversion are also capable 
of planning without PTFP grants. RMCPB concluded that NTIA funds might 
better be devoted to funding acquisition of digital components through 
construction grants.
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     10 See NPRM at 27230. The only organization not addressing 
this issue was NTU.
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    Both APTS and PBS suggested changes in NTIA policy to encourage 
digital conversion. APTS expressed concern that the number of 
applications for planning grants for ATV conversion could swamp the 
PTFP funds if a large number of public television stations seek 
planning grants. APTS noted that

[[Page 57969]]

it and PBS have launched efforts to coordinate public television's 
transition to digital technology. APTS urged NTIA to clarify that these 
coordinated efforts, such as reducing the cost of digital transition by 
pooling engineering resources, establishing model planning programs for 
different types of stations, and consolidating buying power in order to 
obtain volume discounts, would be eligible for PTFP planning funds. 
APTS requested that these coordinated efforts be afforded a high 
priority in receiving Federal grants. APTS also urged that NTIA make it 
clear that planning for capital campaigns to finance the transition to 
ATV at individual public television stations will be eligible for 
planning grants. APTS noted that for a number of stations, the cost of 
planning capital campaigns will itself be a significant drain on their 
finances.
    PBS addressed two issues in its comments regarding digital 
conversion: fund allocation priority and the percentage of costs that 
may be funded. Because digital television is intended to replace, 
rather than to supplement, analog television and because the FCC plans 
to mandate a transition to digital and abandonment of analog operation, 
PBS urged that NTIA consider the coordinated planning of digital 
facilities as a first service to an unserved area, with no diminution 
of priority because of the existence of analog service. PBS also urged 
that such applications be considered new or extended service, thereby 
qualifying the proposals for 75% rather than only 50% funding.
    PBS also suggested that some aspects of the proposed regulations 
may require modification after the FCC adopts its digital television 
regulations. PBS noted as an example that the FCC may not require the 
filing of applications for digital conversion or may establish 
timetables which may not conform to that required under the PTFP 
regulations. NTIA recognizes that the FCC has the lead in establishing 
policy regarding television's transition to digital technology and will 
indeed be mindful of FCC requirements for digital conversion. NTIA will 
ensure that the PTFP regulations do not restrict public television's 
ability to seek Federal funding or FCC authorizations during the 
conversion to digital technology. NTIA will also keep an open mind on 
the use of ancillary data streams on NTIA-funded facilities.
    PBS suggested that NTIA should be flexible in releasing the Federal 
interest in analog equipment that becomes obsolete because of the 
transition to digital equipment. PBS further noted that a ten-year 
Federal interest period may be inappropriate for digital equipment, 
since the useful life span of this equipment is as yet unknown. In a 
similar comment, IURTS noted that even traditional broadcast-grade 
products cannot remain current for the duration of the ten-year Federal 
interest period. IURTS commented that PTFP should consider reducing the 
federal interest period from ten years. IURTS is concerned that due to 
the rapid advancements in computer platforms and operating systems in 
today's market, the hardware and software will be obsolete in about 
half the Federal interest period described by PTFP. IURTS recommended 
that NTIA expand its support of computer-based PC-type technology in 
place of traditional broadcast products. Specific reference was made to 
PC based character generators, still-store devices, digital special 
effects devices, replacement for audio carts, digital audio 
workstations, etc. With the development of PC-based technology, IURTS 
noted that these less-expensive solutions can reduce station's costs 
while still providing service to the community. Acknowledging that 
these PC-based solutions will not last the ten-year Federal interest 
period, IURTS recommended both a shortening of the Federal interest 
period and a corresponding reduction in the recommended funding level. 
IURTS gave an example of a dual channel still-store normally funded by 
PTFP at a $50,000 level which could be reduced to $25,000 and provide 
many stations with digital options they could not otherwise afford or 
support.
    NTIA acknowledges the problem in a rapidly changing technical 
environment that some analog or digital broadcast equipment may not 
have a useful life of ten years. PTFP is mandated by statute to 
maintain a ten-year Federal interest period. See 47 U.S.C. 392(g). 
While we appreciate the concerns expressed by PBS and IURTS, until such 
time as the statute is changed, NTIA is bound to maintain this 
requirement. NTIA notes that grantees may have alternatives in 
satisfying NTIA's Federal interest in equipment and calls grantees 
attention to Sec. 2301.22(g) Transfer of Federal interest to different 
equipment of the final rules. Under this provision, a grantee may 
request that the Agency transfer the remaining Federal interest in a 
piece of equipment to another item of equipment presently owned or to 
be purchased by the grantee with non-Federal funds. Grantees may also 
dispose of the equipment at any time in accordance with the Uniform 
Administrative Requirements under OMB Circular A-110, section 34 and 15 
CFR 24.32. The recipient may request disposition of the equipment from 
the agency; and, if the fair market value of the equipment at the time 
of disposition is under $5,000, there is no further obligation to the 
Federal Government.
    NTIA appreciates the support shown by the public comments for its 
interest in participating in the digital conversion of public 
broadcasting facilities. We have carefully considered the suggestions 
for changes in the proposal offered by the respondents, including 
changes to priorities and funding levels. We believe that it is 
premature to make those changes at this time since so much about the 
transition to digital technology is still unknown. The FCC has neither 
adopted technical standards for digital television nor established its 
digital television regulations. It has yet to set a timetable for the 
transition of television facilities from analog to digital technology. 
NTIA will work with the public broadcasting community and closely 
monitor the development and transition to digital technologies. As 
conditions warrant, NTIA can revise its policies towards digital 
conversion through publication of the annual closing date notice or 
through other publications. For the moment, we will adopt the 
suggestion of RMCPB, which noted that, despite the Agency's recognition 
of the issue of digital conversion, there was no provision in the 
proposed rules for addressing the issue or welcoming applications to 
plan for conversion. We have modified the language in Sec. 2301.4(b)(6) 
Other Cases within the Broadcast Applications section to specifically 
reference planning applications for digital conversion as a unique or 
innovative project. NTIA has been routinely funding digital equipment 
for replacement which is compatible with the proposed standards for 
digital television. Under Other Cases, NTIA would also accept 
applications for construction of digital facilities that could be 
considered unique or innovative.
    In addition to the comments on these three major sections, there 
were public comments on several other changes in the Notice of Proposed 
Rulemaking.

Section 2301.2 Definitions

    APTS expressed concern about its perceived change to the Federal 
interest period to the useful life of the equipment under the 
definition contained in Sec. 2301.2 of the proposed rule. We did not 
change the federal interest period, as mandated in 47 U.S.C. 392(g), 
from ten years to the useful life. The federal interest period remains 
at ten years and is primarily a

[[Page 57970]]

financial interest within which PTFP must collect a proportionate share 
of the Federal funds expended under an award if a grantee ceases to be 
a public telecommunications entity or the facilities cease to be used 
for the provision of public telecommunications services. We intended to 
clarify that Federal Constitutional interests, for example, the First 
Amendment's protections under the Establishment of Religion and the 
Freedom of Speech Clauses, and the Fourteenth Amendment's equal rights 
protections, extend for the useful life of the facilities. Even where a 
grant program statute establishes a federal interest period, the 
Supreme Court has ruled that certain Constitutional guarantees remain 
for the useful life of Federally-funded facilities.11 We have 
inserted ``Constitutional'' to clarify what federal interests extend 
for the useful life of property.
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    \11\ See Tilton v. Richardson, 403 U.S. 672 (1971).
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    RMCPB suggested we define the term ``useful life.'' A definition of 
``useful life'' has been added as the last defined term in Sec. 2301.2.

Section 2301.5 Special Consideration

    As mandated by Congress under Sec. 392(f) of the Act, the Agency 
will give special consideration to applications that foster ownership 
of, operation of, and participation in public telecommunications 
entities by minorities and women. This statutory provision remains and 
over the past nine years, the Corporation for Public Broadcasting has 
assembled a report to Congress on the provision of services to minority 
and diverse audiences by public telecommunications entities, which 
evidences the continued need for these services. NTIA is particularly 
concerned with the provision of services to minorities, women, and 
diverse audiences by public telecommunications entities. Therefore, 
NTIA will continue to evaluate how well applicants demonstrate 
significant diversity in the ownership of, operation of, and 
participation in public telecommunications facilities. Special 
consideration, therefore, remains as one of several evaluation criteria 
contained in the regulation, specifically, at 15 CFR 2301.17(b)(6).
    NFCB expressed concern over the elimination of the 50% minimum 
participation of minorities an/or women in order to qualify for special 
consideration. NFCB argued that the elimination of the 50% minimum 
requirement may open up special consideration to such a degree that it 
becomes useless as a factor in evaluating applications. NTIA does not 
believe that it is necessary to establish any minimum minority or women 
participation requirements for special consideration in PTFP 
evaluations in order to carry out the objectives of the statute. 
Rather, NTIA believes that the congressional intent can be achieved in 
a fair and flexible manner by taking into account all factual 
circumstances that might lead to special consideration.
    PTFP applies special consideration to encourage all applicants to 
assist the program to achieve one of its statutory purposes, to 
increase the amount of public telecommunications facilities owned by, 
operated by and participated in by minorities and women. Employment of 
minorities or women is not the only way in which NTIA may assess 
whether an application promotes significant diversity in the ownership 
of, operation of, and participation in by minorities and women. NTIA is 
also interested in outreach efforts, audience development, and 
programming strategies. One stated purpose of this program is to 
respond to the educational, cultural and related programming needs of 
diverse groups. If an applicant can demonstrate to the NTIA that its 
application is furthering the statutory objective, that application 
will be more highly rated under the special consideration factor.
    The language of this section has been modified to clarify NTIA's 
policy on special consideration and an accompanying modification has 
been made in the Special Consideration evaluation criterion in 
Sec. 2301.17(b)(6). To the degree there is any discrepancy of 
interpretation, this final rule will take precedence and is intended to 
describe special consideration as required by 47 U.S.C. 392(f).

Section 2301.6 Amount of Federal Funding

    RMCPB observed that Sec. 2301.6(a) permits 100% Federal funding of 
planning grants and noted that this provision is permissive and not 
obligatory. Since NTIA has limited funds for the PTFP program, RMCPB 
suggested that 75% be the general presumption for planning purposes. 
NTIA appreciates this suggestion and notes that most of the planning 
grants awarded by PTFP in recent years include matching in-kind 
services and funds contributed by the grantee. Modifying Sec. 2301.6(a) 
as suggested by RMCPB would codify what already has become PTFP 
practice. We are, however, mindful that planning grants are sometimes 
the only resource that emerging community groups have with which to 
initiate the planning of new facilities in unserved areas. We have, 
therefore, included a provision at Sec. 2301.(6)(a)(2) that NTIA will 
continue to award up to 100% of total project costs in cases of 
extraordinary need. We have also modified the evaluation criteria with 
a new section at Sec. 2301.17(b)(3) to reflect the need for applicants 
to justify a request for more than 75% Federal funding for planning 
projects.

Section 2301.8 Submission of Applications

    RMCPB expressed concern in a change in the proposed Sec. 2301.8(d) 
which removed the number of copies of applications required by NTIA 
from the specific number ``2'' to the more flexible ``the number of 
copies specified by the Agency.'' RMCPB pointed out that any increase 
in the number required will be an added burden on the small station and 
community broadcaster applicants. We note that under 5 CFR 
1320.5(d)(2)(iii), an agency can only require an original plus two 
copies of an application. Any request for additional copies would have 
to be justified to and cleared by the Office of Management and Budget. 
The flexibility in the number of applications which NTIA can request 
is, therefore, extremely limited. For the first time in FY 1996, NTIA 
requested three copies of an application to permit concurrent 
processing of the applications by NTIA reviewers and thereby enable 
issuance of timely awards.
    APTS expressed its concern about NTIA's proposal to delete from the 
rules the specific showings required of applicants and to specify those 
requirements in the application form in the bid solicitation. APTS 
indicated that, while the deletion of this information is intended to 
give NTIA flexibility to reduce application burdens, the proposal can 
create uncertainty as to the showing required of applicants. APTS 
continued that the flexibility conferred would also permit NTIA to 
impose additional burdensome requests without affording public 
broadcasters the opportunity to comment meaningfully.
    NTIA appreciates the concerns expressed by APTS. It was NTIA's 
intention in removing the specific requirements from the Rules to give 
NTIA the flexibility of future reductions in requirements on the 
application form to lessen the burden on applicants. We believe that 
this flexibility will be beneficial to applicants in several ways. 
First, it will permit NTIA to lessen the burden on applicants during 
the FY 97 grant cycle while using the existing PTFP application form. 
These

[[Page 57971]]

improvements will include several changes supported by APTS which are 
contained in the proposed rules, such as the proposal to modify the 
requirement that an applicant report changes in its board structure and 
to require applicants to provide only summaries of their application to 
the State Single Point of Contact rather than complete copies of the 
application. Second, flexibility in these final rules will permit NTIA 
to further lessen the burden on applicants through modification of the 
PTFP application form in 1997 without having to promulgate another set 
of accompanying PTFP rules.12 Promulgation of a set of PTFP rules 
is a lengthy administrative process and one that cannot be done every 
year. The average PTFP rules are in force for a period of three to five 
years. Therefore, removing the specific application requirements from 
the final rules also gives NTIA the flexibility of continually making 
improvements in lessening applicant burdens during the periods between 
formal revisions of the PTFP rules. NTIA supports a continuing dialog 
with members of the public telecommunications community to improve the 
responsiveness of the PTFP. PTFP continually solicits comments on the 
application process from those who are sent the application packet, 
both from applicants and those who choose not to submit an 
application.13 NTIA will also discuss application guidelines with 
members of NTIA's National Advisory Panel of Public Broadcasting 
Organizations at its annual meetings.
---------------------------------------------------------------------------

    \12\ The current PTFP application form expires October 1, 1997. 
The new form will be adopted after public comment in conjunction 
with Office of Management and Budget review pursuant to the 
Paperwork Reduction Act, 44 U.S.C. 3501., et. seq.
    \13\ See for example the ``Special Note'' on the inside back 
cover of the FY 96 PTFP Guideline for Preparing Applications.
---------------------------------------------------------------------------

    APTS felt that NTIA's proposal could create uncertainty as to the 
showing required of applicants since, ``the solicitation of bids is 
typically published with only a few weeks notice before applications 
are due.'' 14 NTIA has typically published formal announcements of 
the acceptance of applications approximately 3 months before the 
closing date.15 We believe that this is sufficient time for 
preparation of applications since the major objectives and priorities 
of the program are well known and have not significantly changed in 
these final rules. PTFP distributes a detailed set of Guidelines to 
assist applicants in the preparation of applications, and applicants 
may contact PTFP for technical assistance in the preparation of 
application during the period prior to the application deadline.
---------------------------------------------------------------------------

     14 Comments from APTS, p. 4.
     15  For fiscal year 1996, the Department of Commerce did 
not receive a final appropriation until April 26, 1996. See  
Department of Commerce and Related Agencies Appropriations Act, 
1966, P.L. 104-134. This, in turn, left PTFP with five months to 
review, evaluate and make awards.
---------------------------------------------------------------------------

    APTS also commented on the financial responsibility requirements 
contained in Secs. 2301.8 (g), (h) and (i). APTS believes that the 
financial responsibility requirements ``confers virtually unfettered 
discretion on NTIA as to which applicants will be subject to the 
request for data,'' ``the scope of the inquiry is astonishingly 
broad,'' can be ``potentially burdensome'' and contain ``vague 
provisions''.16
---------------------------------------------------------------------------

    \16\ Comments from APTS, p. 5-7.
---------------------------------------------------------------------------

    Sections 2301.8 (g) and (h) are based on the ``Department of 
Commerce Financial Assistance Name Check Procedures.'' This policy has 
been in effect since 1988, has served as a reasonable attempt to 
protect the public interest, and has not proven to be overburdensome. 
NTIA does not intend to use the ``responsibility determination'' 
process in a punitive or detrimental manner against potential award 
recipients. As an agency which has been provided authority to make 
discretionary decisions for the Federal Government, it is reasonable 
for NTIA to make every effort to determine that potential award 
recipients are responsible. To the extent possible, the regulation is 
intended to ensure that there are no matters facing potential award 
recipients that might significantly and negatively impact on their 
business honesty, financial integrity and/or ability to successfully 
perform the proposed grant activity. We think that the trust vested in 
NTIA demands that it makes a reasonable attempt to protect the public 
interest by trying to ensure that it deals with only responsible 
parties. Therefore, no changes have been made to this section.
    Based on ``a reasonable person'' standard which is employed 
throughout these regulations, we feel that Sec. 2301.8(i) is clear. 
Unsatisfactory performance essentially means that one does not 
substantially achieve his or her project goals and objectives. As 
project goals and objectives vary from one project to another, 
unsatisfactory performance must, to some extent, be situationally 
determined. It would be unreasonable to attempt to precisely define 
``unsatisfactory performance'' in the regulation for all projects, all 
circumstances and for all times.

Section 2301.10  Applications Resulting From Catastrophic Damage or 
Emergency Situations

    APTS and RMCPB commented on NTIA's addition of a phrase regarding 
``complete equipment failure'' to this section on applications 
resulting from catastrophic damage or emergency situations. RMCPB 
characterized the proposal as being ``a box of Pandoras''. APTS warned 
that NTIA may inadvertently create a loophole in the funding priorities 
by creating incentives for applicants to claim that the imminent loss 
of an essential piece of equipment warrants an immediate grant. APTS 
continued that unlike a catastrophic loss, a clearly defined 
unanticipated event, the complete loss of essential equipment lacks any 
clearly defining moment. APTS concluded that, in many cases, the 
``loss'' may have been avoided by a timely request for funding.
    NTIA believes that APTS and RMCPB raise valid concerns, which are 
shared by the Agency. NTIA's intent in making this proposal was to be 
able to quickly respond to the emergency of a complete failure of basic 
equipment essential to a station's continued operation, whether that 
failure was caused by natural or manmade causes. This section is 
limited to equipment essential to a station's continued operation. We 
do not believe this section would include most program origination 
equipment but rather would be applicable to equipment such as 
transmitters, tower, antennas, STL's or similar equipment which, if the 
equipment failed, would result in a complete loss of service to the 
community. For example, NTIA recently received an emergency request 
from an applicant regarding the strengthening of a tower. A recent 
engineering study on the tower indicated that the tower was dangerously 
overloaded and in danger of imminent collapse. NTIA felt that it was 
both prudent and good business sense to make the modest investment in 
strengthening the tower on an emergency grant basis rather than risking 
loss of service to a community and incur the greater expense of 
replacing a collapsed tower.
    NTIA will, therefore, retain the originally proposed language in 
this section but will add clarifying language in regarding the nature 
of the equipment eligible for emergency applications, as well as 
language indicating that an applicant claiming complete equipment 
failure must document the circumstances of the equipment failure and 
demonstrate that the equipment has

[[Page 57972]]

been maintained in accordance with standard engineering practice.

Section 2301.11  Service of Applications

    NPR and RMCPB supported NTIA's proposal in Sec. 2301.11 that the 
applicant's notification to the SPOC, the FCC and the state 
telecommunications agencies need only be a summary of the application, 
rather than the full application required in prior PTFP Rules. Both 
organizations cautioned, however, that if selecting/compiling excerpt 
materials is too complicated, it will be an added burden on applicants 
instead of a benefit. RMCPB noted that the New Mexico Commission on 
Public Broadcasting only needs to review pages 1 and 2 of the PTFP 
application form and the narrative. NTIA's intent in proposing that 
applicants submit a summary of the application rather than the full 
application to the SPOC and other appropriate agencies was intended to 
reduce the paperwork burden on applicants. We did not intend this 
summary to be a burdensome exercise and the information suggested by 
RMCPB appears to be reasonable notification. In making notification to 
the appropriate agencies, applicants should make clear that additional 
information regarding their PTFP application is available upon request. 
Future application materials will provide guidance as to what should be 
included in the summary to provide adequate notification to the 
requisite agencies while reducing the notification burden on all 
applicants.

Section 2301.18  Selection Process

    NTIA is making two revisions to this section to clarify internal 
procedures in the selection process for the public. At Sec. 2301.18(a) 
and the new Sec. 2301.18(b), we have added language which clarifies 
that the PTFP Director presents recommendations to the OTIA Associate 
Administrator for review and approval prior to their submission to the 
NTIA Administrator. We have also clarified in the new 
Sec. 2301.18(a)(4) that NTIA may consider in the selection of a grant 
recipient whether the applicant has any current NTIA grants. This 
provision recognizes that in some instances the presence of a current 
NTIA grant is relevant in the decision to make a new award and does not 
prohibit the award of new grants to current grant recipients.

Restatement of Existing Policies

    We are also taking this opportunity to restate several long-
standing PTFP policies which were published in the preambles of 
previous PTFP rules or as a separate policy statement. The following 
policies remain in effect:

Evidence of Tax-exempt Status

    Applicants who are eligible for a section 501(c)(3) exemption from 
the IRS or the equivalent exemption from the Commonwealth of Puerto 
Rico must submit a copy of that exemption. Applicants who are 
ineligible for section 501(c)(3) exemption but who can demonstrate 
nonprofit status by showing an applicable State tax exemption will be 
considered on a case-by-case basis. They must submit: (a) Evidence of 
their State tax-exempt status; (b) citation to, and a copy of, the 
State statutory provisions governing that exemption; and (c) a brief 
statement explaining why they lack a section 501(c)(3) exemption. (Fed. 
Reg. Vol. 44, No. 104, p. 30899)

Equipment Which Becomes Obsolete Before the End of the Ten-year Period 
of Federal Interest

    In the case of equipment which becomes obsolete or wears out before 
the ten-year period of Federal interest expires, we will permit the 
trade-in or sale of the equipment and application of the remaining 
portion of the ten-year period to the new equipment. (Fed. Reg. Vol. 
44, No. 104, p. 30910)

Selection of Priority

    In preparing the narrative portions of its application, each 
applicant should state under which priority it desires NTIA to consider 
its application. In doing so, each applicant makes sure that its 
application contains sufficient documentation to justify its 
qualification under the selected priority. NTIA will then evaluate the 
application with the selected priority unless the Agency determines 
that the priority selected by the applicant is not supported by the 
documentation provided. Each applicant will be notified of any change 
in the priority under which its application is to be considered. Such 
notifications will be in writing and will not be subject to appeal. 
(Fed. Reg. Vol. 47, No. 228, p. 53653)

Award of Deferred Applications

    The Administrator retains the discretion to award grants to 
deferred applications at any time where the Administrator can determine 
with reasonable certainty that the particular project is exceptionally 
meritorious (on the basis of the Agency's preliminary determination of 
all other applications within the priority) and that the Agency would 
fund the project after completing the evaluation of all the 
applications in the priority (on the basis of the Agency's prior 
experience in making grants.) Under this process, the Agency will be 
able to fund applications that the Agency had deferred in the prior 
year because of technical problems (such as the inability to obtain the 
necessary FCC authorizations) which have since been eliminated. (Fed. 
Reg. Vol. 47. No. 50, p. 11232.)

Support for Salary Expenses

    NTIA regards its primary mandate to be funding the acquisition of 
equipment and only secondarily the funding of salary expenses, even 
when allowed by law. Moreover, NTIA notes that the competition for PTFP 
funding remains intense. To ensure that PTFP monies are distributed as 
effectively as possible in this competitive atmosphere, NTIA must weigh 
carefully its support for any project cost not directly involved with 
the purchase of equipment.
    Therefore, NTIA generally will not fund salary expenses, including 
staff installation costs, pre-application legal and engineering fees, 
and pre-operational expenses of new entities. NTIA will support such 
costs only when the applicant demonstrates that exceptional need exists 
or that substantially greater efficiency would result from the use of 
staff installation instead of contractor installation.
    As regards the installation of transmission equipment, NTIA 
strongly favors the use of either manufacturer or professional 
contractor personnel and commonly funds these costs. NTIA believes that 
the value of transmission equipment and the complicated nature of its 
installation require expertise beyond that normally found on station 
staffs.
    NTIA will rarely support requests for assistance for the 
installation of studio and test equipment, whether that installation is 
by staff or by contract employees. Such installation is normally of 
minimum difficulty, and the associated installation costs should be 
absorbed in the recipient's normal operating budget. Again, NTIA will 
take into account demonstrations of exceptional need. (Fed. Reg. Vol. 
56, No. 226, p. 59172)

Sectarian Activities

    Applicants are advised that on December 22, 1995, NTIA issued a 
notice and an amendment to the PTFP regulations in the Federal Register 
on its policy with regard to sectarian activities. Under NTIA's prior 
policy, NTIA funds could not be used for any sectarian purposes. Under 
the revised policy, while religious activities cannot be the essential 
thrust of a grant, an

[[Page 57973]]

application will not be ineligible where sectarian activities are only 
incidental or attenuated to the overall project purposes for which 
funding is requested. (60 Fed. Reg. 66491).
    It has been determined that this rule is not significant for 
purposes of Executive Order (E.O.) 12866.
    A Regulatory Flexibility Analysis is not required under The 
Regulatory Flexibility Act (5 U.S.C. 601 et seq.) because the rules 
were not required to be promulgated as proposed rules before issuance 
as final rules by section 553 of the Administrative Procedures Act (5 
U.S.C. 553) or by any other law. This rule does not contain policies 
with Federalism implications sufficient to warrant preparation of a 
Federalism assessment under Executive Order 12612.
    The Department has determined that these rules will not 
significantly affect the quality of the human environment. Therefore, 
no draft or final Environmental Impact Statement has been or will be 
prepared. Notwithstanding any other provision of law, no person is 
required to respond to nor shall a person be subject to a penalty for 
failure to comply with a collection of information subject to the 
requirements of the Paperwork Reduction Act unless that collection of 
information displays a currently valid OMB Control Number.
    The Office of Management and Budget has approved the information 
collection requirements contained in these rules pursuant to the 
Paperwork Reduction Act under OMB Control Nos. 0660-0003, 0660-0001 and 
0605-0001. The public reporting burden for the application requirements 
vary from 16 hours to 200 hours with an estimated average of 125 hours 
per application, including associated exhibits; the reporting and 
record keeping burden for the grant monitoring reports vary from 1 to 
24 hours depending on the respective requirement; and, the reporting 
burden for the name-check form (CD-346) is estimated at 15 minutes. 
These estimates include the time for reviewing instructions, searching 
existing data sources, gathering and maintaining the data needed, and 
completing and reviewing the collections of information. Send comments 
regarding these burden estimates, or any other aspects of the 
collections of information, including suggestions for reducing this 
burden, to the Office of Policy and Coordination and Management, NTIA, 
U.S. Department of Commerce, Washington, DC 20230; and to the Office of 
Information and Regulatory Affairs, Office of Management and Budget, 
Washington, DC 20503 (Attention: NTIA Desk Officer).

(Catalogue of Federal Domestic Assistance No. 11.550)

List of Subjects in 15 CFR Part 2301

    Administrative procedure, Grant programs-communications, Reporting 
and recordkeeping requirements, Telecommunications.
Larry Irving,
Administrator.
    For the reasons set out above, part 2301 of title 15, Code of 
Federal Regulations, is revised to read as follows:

PART 2301--PUBLIC TELECOMMUNICATIONS FACILITIES PROGRAM

Subpart A--General

2301.1  Program purposes.
2301.2  Definitions.

Subpart B--Application Requirements

2301.3  Applicant eligibility.
2301.4  Types of projects and broadcast priorities.
2301.5  Special consideration.
2301.6  Amount of Federal funding.
2301.7  Eligible and ineligible project costs.
2301.8  Submission of applications.
2301.9  Deferred applications.
2301.10  Applications resulting from catastrophic damage or 
emergency situations.
2301.11  Service of applications.
2301.12  Federal communications commission authorizations.
2301.13  Public comments.
2301.14  Supplemental application information.
2301.15  Withdrawal of applications.

Subpart C--Evaluation and Selection Process

2301.16  Technical evaluation process.
2301.17  Evaluation criteria for construction and planning 
applications.
2301.18  Selection process.

Subpart D--Post-Award Requirements

2301.19  General conditions attached to the Federal award.
2301.20  Schedules and reports.
2301.21  Payment of Federal funds.
2301.22  Protection, acquisition, and substitution of equipment.

Subpart E--Completion of Projects

2301.23  Completion of projects.
2301.24  Final Federal payment.
2301.25  Retention of records and annual status reports.

Subpart F--Waivers

2301.26  Waivers.

    Authority: 47 U.S.C. 390-393 and 397-399b.

Subpart A--General


Sec. 2301.1  Program Purposes.

    Pursuant to section 390 of the Act, (The Communications Act of 
1934, as amended), the purpose of the Public Telecommunications 
Facilities Program (PTFP) is to assist, through matching grants, in the 
planning and construction of public telecommunications facilities in 
order to achieve the following objectives:
    (a) Extend delivery of public telecommunications services to as 
many citizens in the United States as possible by the most efficient 
and economical means, including the use of broadcast and nonbroadcast 
technologies;
    (b) Increase public telecommunications services and facilities 
available to, operated by, and owned by minorities and women; and
    (c) Strengthen the capability of existing public television and 
radio stations to provide public telecommunications services to the 
public.


Sec. 2301.2  Definitions.

    Act means Part IV of Title III of the Communications Act of 1934, 
47 U.S.C. 390-393 and 397-399b, as amended.
    Administrator means the Assistant Secretary for Communications and 
Information of the United States Department of Commerce who is also 
Administrator of the National Telecommunications and Information 
Administration.
    Agency means the National Telecommunications and Information 
Administration of the United States Department of Commerce.
    Broadcast means the distribution of electronic signals to the 
public at large using television (VHF or UHF) or radio (AM or FM) 
technologies.
    Closing date means the date and time which the Administrator sets 
as the deadline for the receipt of applications during a grant cycle.
    Construction (as applied to public telecommunications facilities) 
means acquisition (including acquisition by lease), installation, and 
improvement of public telecommunications facilities and preparatory 
steps incidental to any such acquisition, installation or improvement.
    Department means the United States Department of Commerce.
    FCC means the Federal Communications Commission.
    Federal interest period means the period of time during which the 
Federal government retains a reversionary interest in all facilities 
constructed with Federal grant funds. This period begins with the 
purchase of the facilities and

[[Page 57974]]

continues for ten (10) years after the official completion date of the 
project. Although OMB Circular A-110, sections 33 and 34 (58 FR 62992, 
Nov. 29, 1993) and 15 CFR 24.31 and 24.32, specify that the Federal 
government maintains a reversionary interest in the facilities for as 
long as the facilities are needed for the originally authorized 
purpose, PTFP's authorizing statute (47 U.S.C. 392(g)) limits the 
reversionary period for ten years for purposes of this program. 
However, Federal Constitutional limitations on the use of the 
facilities survive for the useful life of the facilities whether or not 
this period extends beyond the ten-year Federal interest period.
    Minorities means American Indians, Alaska Natives, Asian or Pacific 
Islanders, Hispanics, and Blacks, not of Hispanic Origin.
    Nonbroadcast means the distribution of electronic signals by a 
means other than broadcast technologies. Examples of nonbroadcast 
technologies are Instructional Television Fixed Service (ITFS), 
satellite systems, and coaxial or fiber optic cable.
    Noncommercial educational broadcast station or public broadcast 
station means a television or radio broadcast station that is eligible 
to be licensed by the FCC as a noncommercial educational radio or 
television broadcast station and that is owned (controlled) and 
operated by a state, a political or special purpose subdivision of a 
state, public agency or nonprofit private foundation, corporation, 
institution, or association, or owned (controlled) and operated by a 
municipality and transmits only noncommercial educational, cultural or 
instructional programs.
    Noncommercial telecommunications entity means any enterprise that 
is owned (controlled) and operated by a state, a political or special 
purpose subdivision of a state, a public agency, or a nonprofit private 
foundation, corporation, institution, or association; and that has been 
organized primarily for the purpose of disseminating audio or video 
noncommercial educational, cultural or instructional programs to the 
public by means other than a primary television or radio broadcast 
station, including, but not limited to, coaxial cable, optical fiber, 
broadcast translators, cassettes, discs, satellite, microwave or laser 
transmission.
    Nonprofit (as applied to any foundation, corporation, institution, 
or association) means a foundation, corporation, institution, or 
association, no part of the net earnings of which inures, or may 
lawfully inure, to the benefit of any private shareholder or 
individual.
    Operational cost means those approved costs incurred in the 
operation of an entity or station such as overhead labor, material, 
contracted services (such as building or equipment maintenance), 
including capital outlay and debt service.
    Planning (as applied to public telecommunications facilities) means 
activities to form a project for which PTFP construction funds may be 
obtained.
    Pre-operational costs means all nonconstruction costs incurred by 
new public telecommunications entities before the date on which they 
began providing service to the public, and all nonconstruction costs 
associated with the expansion of existing stations before the date on 
which such expanded capacity is activated, except that such costs shall 
not include any portion of the salaries of any personnel employed by an 
operating public telecommunications entity.
    PTFP means the Public Telecommunications Facilities Program, which 
is administered by the Agency.
    PTFP Director means the Agency employee who recommends final action 
on public telecommunications facilities applications and grants to the 
Administrator.
    Public telecommunications entity means any enterprise which is a 
public broadcast station or noncommercial telecommunications entity and 
which disseminates public telecommunications services to the public.
    Public telecommunications facilities means apparatus necessary for 
production, interconnection, captioning, broadcast, or other 
distribution of programming, including but not limited to studio 
equipment, cameras, microphones, audio and video storage or processors 
and switchers, terminal equipment, towers, antennas, transmitters, 
remote control equipment, transmission line, translators, microwave 
equipment, mobile equipment, satellite communications equipment, 
instructional television fixed service equipment, subsidiary 
communications authorization transmitting and receiving equipment, 
cable television equipment, optical fiber communications equipment, and 
other means of transmitting, emitting, storing, and receiving images 
and sounds or information, except that such term does not include the 
buildings to house such apparatus (other than small equipment shelters 
that are part of satellite earth stations, translators, microwave 
interconnection facilities, and similar facilities).
    Public telecommunications services means noncommercial educational 
and cultural radio and television programs, and related noncommercial 
instructional or informational material that may be transmitted by 
means of electronic communications.
    Sectarian means that which has the purpose or function of advancing 
or propagating a religious belief.
    State includes each of the fifty states, the District of Columbia, 
the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American 
Samoa, and the Northern Mariana Islands.
    System of public telecommunications entities means any combination 
of public telecommunications entities acting cooperatively to produce, 
acquire or distribute programs, or to undertake related activities.
    Useful life means the normal operating life of equipment.

Subpart B--Application Requirements


Sec. 2301.3  Applicant eligibility.

    (a) To apply for and receive a PTFP Construction or Planning Grant, 
an applicant must be:
    (1) A public or noncommercial educational broadcast station;
    (2) A noncommercial telecommunications entity;
    (3) A system of public telecommunications entities;
    (4) A nonprofit foundation, corporation, institution, or 
association organized primarily for educational or cultural purposes 
(see also 60 FR 66491 (Dec. 22, 1995)); or
    (5) A state, local, or Indian tribal government (or agency 
thereof), or a political or special purpose subdivision of a state.
    (b) An applicant whose proposal requires an authorization from the 
FCC must be eligible to receive such authorization.
    (c) If an applicant does not meet the above eligibility 
requirements, the application may be rejected and returned without 
further consideration.
    (d) An applicant may request a preliminary determination of 
eligibility any time prior to the closing date.


Sec. 2301.4  Types of Projects and Broadcast Priorities.

    An applicant may file an application with the Agency for a planning 
or construction grant. To achieve the objectives set forth at 47 U.S.C. 
393(b), the Agency has developed the following categories. Each 
application shall be identified as a broadcast or nonbroadcast project 
and must fall

[[Page 57975]]

within at least one of the following categories:
    (a) Special applications. NTIA possesses the discretionary 
authority to recommend awarding grants to eligible nonbroadcast 
applicants whose proposals are unique or innovative and which address 
demonstrated and substantial community needs (e.g., service to the 
blind or deaf and nonbroadcast projects offering educational or 
instructional services).
    (b) Broadcast applications. The Broadcast Priorities are set forth 
in order of priority for funding.
    (1) Priority 1--Provision of Public Telecommunications Facilities 
for First Radio and Television Signals to a Geographic Area. Within 
this category, NTIA establishes three subcategories:
    (i) Priority 1A--Projects that include local origination capacity. 
This subcategory includes the planning or construction of new 
facilities that can provide a full range of radio and/or television 
programs, including material that is locally produced. Eligible 
projects include new radio or television broadcast stations, new cable 
systems, or first public telecommunications service to existing cable 
systems, provided that such projects include local origination 
capacity.
    (ii) Priority 1B--Projects that do not include local origination 
capacity. This subcategory includes projects such as increases in tower 
height and/or power of existing stations and construction of 
translators, cable networks, and repeater transmitters that will result 
in providing public telecommunications services to previously unserved 
areas.
    (iii) Priority 1C--Projects that provide first nationally 
distributed programming. This subcategory includes projects that 
provide satellite downlink facilities to noncommercial radio and 
television stations that would bring nationally distributed programming 
to a geographic area for the first time.
    (iv) Priority 1 and its subcategories apply only to grant 
applicants proposing to plan or construct new facilities to bring 
public telecommunications services to geographic areas that are 
presently unserved, i.e., areas that do not receive public 
telecommunications services. (It should be noted that television and 
radio are considered separately for the purposes of determining 
coverage. In reviewing applications from FM stations that propose to 
serve, or that already serve, areas covered by AM-daytime only 
stations, PTFP will evaluate the amount of service provided via the AM-
daytime only station in determining whether the FM proposal qualifies 
for a Priority 1 or Priority 2, as appropriate.)
    (v) An applicant proposing to plan or construct a facility to serve 
a geographical area that is presently unserved should indicate the 
number of persons who would receive a first public telecommunications 
signal as a result of the proposed project.
    (2) Priority 3--Replacement of Basic Equipment of Existing 
Essential Broadcast Stations. (i) Projects eligible for consideration 
under this category include the urgent replacement of obsolete or worn 
out equipment at ``essential stations'' (i.e., existing broadcast 
stations that provide either the only public telecommunications signal 
or the only locally originated public telecommunications signal to a 
geographical area).
    (ii) To show that the urgent replacement of equipment is necessary, 
applicants must provide documentation indicating excessive downtime, or 
a high incidence of repair (i.e., copies of repair records, or letters 
documenting non-availability of parts). Additionally, applicants must 
show that the station is the only public telecommunications station 
providing a signal to a geographical area or the only station with 
local origination capacity in a geographical area.
    (iii) The distinction between Priority 2 and Priority 4 is that 
Priority 2 is for the urgent replacement of basic equipment for 
essential stations. Where an applicant seeks to ``improve'' basic 
equipment in its station (i.e., where the equipment is not ``worn 
out''), or where the applicant is not an essential station, NTIA would 
consider the applicant's project under Priority 4.
    (3) Priority 3--Establishment of a First Local Origination Capacity 
in a Geographical Area. (i) Projects in this category include the 
planning or construction of facilities to bring the first local 
origination capacity to an area already receiving public 
telecommunications services from distant sources through translators, 
repeaters, or cable systems.
    (ii) Applicants seeking funds to bring the first local origination 
capacity to an area already receiving some public telecommunications 
services may do so, either by establishing a new (and additional) 
public telecommunications facility, or by adding local origination 
capacity to an existing facility. A source of a public 
telecommunications signal is distant when the geographical area to 
which the source is brought is beyond the grade B contour of the 
origination facility.
    (4) Priority 4 Improvement of Public Broadcasting Services.
    (i) Projects eligible for consideration under this category are 
intended to improve the delivery of public broadcasting services to a 
geographic area. These projects include the establishment of a public 
broadcast facility to serve a geographic area already receiving public 
telecommunications services, projects for the replacement of basic 
obsolete or worn-out equipment at existing public broadcasting 
facilities and the upgrading of existing origination or delivery 
capacity to current industry performance standards (e.g., improvements 
to signal quality, and significant improvements in equipment 
flexibility or reliability). As under Priority 2, applicants seeking to 
replace or improve basic equipment under Priority 4 should show that 
the replacement of the equipment is necessary by including in their 
applications data indicating excessive downtime, or a high incidence of 
repair (such as documented in repair records). Within this category, 
NTIA establishes two subcategories: Priority 4A and Priority 4B.
    (ii) Priority 4A. (A) Applications to replace urgently needed 
equipment from public broadcasting stations that do not meet the 
Priority 2 criteria because they do not provide either the only public 
telecommunications signal or the only locally originated public 
telecommunications signal to a geographic area. NTIA will also consider 
applications that improve as well as replace urgently needed 
production-related equipment at public radio and television stations 
that do not qualify for Priority 2 consideration but that produce, on a 
continuing basis, significant amounts of programming distributed 
nationally to public radio or television stations.
    (B) The establishment of public broadcasting facilities to serve a 
geographic area already receiving public telecommunications services. 
The applicant must demonstrate that it will address underserved needs 
in an area which significantly differentiates its service from what is 
already available in its service area.
    (C) The acquisition of satellite downlinks for public radio 
stations in areas already served by one or more full-service public 
radio stations. The applicant must demonstrate that it will broadcast a 
program schedule that does not merely duplicate what is already 
available in its service area.
    (D) The acquisition of the necessary items of equipment to bring 
the inventory of an already-operating station to the basic level of 
equipment requirements established by PTFP. This

[[Page 57976]]

is intended to assist stations that went on the air with a complement 
of equipment well short of what the Agency considers as the basic 
complement.
    (iii) Priority 4B. The improvement and non-urgent replacement of 
equipment at any public broadcasting station.
    (5) Priority 5 Augmentation of Existing Broadcast Stations. 
Projects in this category would equip an existing station beyond a 
basic capacity to broadcast programming from distant sources and to 
originate local programming.
    (i) Priority 5A Projects to equip auxiliary studios at remote 
locations, or to provide mobile origination facilities. An applicant 
must demonstrate that significant expansion in public participation in 
programming will result. This subcategory includes mobile units, 
neighborhood production studios, or facilities in other locations 
within a station's service area that would make participation in local 
programming accessible to additional segments of the population.
    (ii) Priority 5B--Projects to augment production capacity beyond 
basic level in order to provide programming or related materials for 
other than local distribution. This subcategory would provide equipment 
for the production of programming for regional or national use. Need 
beyond existing capacity must be justified.
    (6) Other cases. NTIA possesses the discretionary authority to 
recommend awarding grants to eligible broadcast applicants whose 
proposals are so unique or innovative that they do not clearly fall 
within the five Priorities listed in this section. Innovative projects 
submitted under this category must address demonstrated and sub 
stantial community needs or must address issues related to the 
conversion of public broadcasting facilities to advanced digital 
technologies.
    (c) An applicant may request a preliminary determination of whether 
a proposed project fits within at least one of the above listed 
categories any time prior to the closing date.
    (d) All applications will be reviewed after the closing date. If an 
application does not fall within one of the listed categories, it may 
be rejected and returned without further consideration.


Sec. 2301.5  Special consideration.

    In accordance with section 392(f) of the Act, the Agency will give 
special consideration to applications that foster ownership of, 
operation of, and participation in public telecommunications entities 
by minorities and women. Ownership and operation of includes the 
holding of management and other positions in the entity, especially 
those concerned with programming decisions and day-to-day operation and 
management. Participation may be shown by the entity's involvement of 
women and minorities in public telecommunications through its 
programming strategies as meeting the needs and interests of those 
groups. Minorities include American Indians or Alaska natives; Asian or 
Pacific Islanders, Hispanics, and Blacks, not of Hispanic Origin. The 
special consideration element is provided as one of several evaluation 
criteria contained in the regulations at 15 CFR 2301.17(b)(6).


Sec. 2301.6  Amount of Federal funding.

    (a) Planning grants. The Agency may provide up to one hundred (100) 
percent of the funds necessary for the planning of a public 
telecommunications construction project.
    (1) Seventy-five (75) percent Federal funding will be the general 
presumption for projects to plan for a public telecommunications 
construction project.
    (2) A showing of extraordinary need (e.g., small community group 
proposing to initiate new public telecommunication service) will be 
taken into consideration as justification for grants of up to 100% of 
the total project cost.
    (b) Construction grants. (1) A Federal grant for the construction 
of a public telecommunications facility may not exceed seventy-five 
(75) percent of the amount determined by the Agency to be the 
reasonable and necessary cost of such project.
    (i) Seventy-five (75) percent Federal funding will be the general 
presumption for projects to activate stations or to extend service.
    (ii) Fifty (50) percent Federal funding will be the general 
presumption for the replacement, improvement or augmentation of 
equipment. A showing of extraordinary need (i.e. small community-
licensee stations or a station that is licensed to a large institution 
[e.g., a college or university] documenting that it does not receive 
direct or in-kind support from the larger institution), or an emergency 
situation will be taken into consideration as justification for grants 
of up to 75% of the total project cost for such proposals.
    (2) Since the purpose of the PTFP is to provide financial 
assistance for the acquisition of public telecommunications facilities, 
total project costs do not normally include the value of eligible 
apparatus owned or acquired by the applicant prior to the closing date. 
Inclusion of equipment purchased prior to the closing date will be 
considered on a case-by-case basis only when clear and compelling 
justifications are provided to PTFP. Obligating funds--either in whole 
or in part--for equipment before the closing date is considered 
ownership or acquisition of equipment. In like manner, accepting title 
to donated equipment prior to the closing date is considered ownership 
or acquisition of equipment.
    (c) No part of the grantee's matching share of the eligible project 
costs may be met with funds:
    (1) Paid by the Federal government, except where the use of such 
funds to meet a Federal matching requirement is specifically and 
expressly authorized by the relevant Federal statute; or
    (2) Supplied to an applicant by the Corporation for Public 
Broadcasting, except upon a clear and compelling showing of need.
    (d) No funds from the Federal share of the total project cost may 
be obligated until the award period start date. If an applicant or 
recipient obligates anticipated Federal Award funds before the start 
date, the Department may refuse to offer the award or, if the award has 
already been granted, disallow those costs of the grant. After the 
closing date, the applicant may, at its own risk, obligate non-Federal 
matching funds for the acquisition of proposed equipment.


Sec. 2301.7  Eligible and ineligible project costs.

    (a) Each year the Agency reviews its list of eligible and 
ineligible equipment, supplies, and costs. The list is published in the 
Federal Register as part of the solicitation for applications and a 
copy is provided with every application package for PTFP grants.
    (b) All broadcast equipment that a grantee acquires under this 
program shall be of professional broadcast quality. An applicant 
proposing to utilize nonbroadcast technology shall propose and purchase 
equipment that is compatible with broadcast equipment wherever the two 
types of apparatus interface.
    (c) Total project costs do not include the value of eligible 
apparatus owned or acquired by the applicant prior to the closing date 
unless approved by PTFP on a case-by-case basis in writing pursuant to 
Sec. 2301.6(b)(2).


Sec. 2301.8  Submission of applications.

    (a) Applications can be obtained from the following address: Public 
Telecommunications Facilities Program,

[[Page 57977]]

NTIA/DOC, 14th Street and Constitution Avenue, NW., Room H-4625, 
Washington, DC 20230.
    (b) The Administrator shall select and publish in the Federal 
Register a closing date by which applications for funding in a current 
fiscal year are to be filed.
    (c) All applications, whether mailed or hand delivered, must be 
received by the Agency at the address listed in the annual Federal 
Register announcement requesting applications at or before 5:00 P.M. on 
the closing date. Applications received after the closing date shall be 
rejected and returned without further consideration (but see 
Sec. 2301.26).
    (d) A complete application must include all of the information 
required by the Agency application materials and must be submitted in 
the number of copies specified by the Agency.
    (e) Each copy of the Agency application must contain an original 
signature of an officer of the applicant who is legally authorized to 
sign for the applicant.
    (f) Applicants must certify whether they are delinquent on any 
Federal debt.
    (g) Applicants may be required to submit Name Check forms (Form CD-
346) which may be used to ascertain background information on key 
individuals associated with potential grantees as part of the 
application, per Department Pre-Award Administrative Requirements and 
Policies.
    (h) Applicant organizations may also be subject to a responsibility 
determination by the Department which may include but not be limited to 
reviews of financial and other business activities. Responsibility 
determinations are intended to ascertain whether potential grantee 
organizations or their key personnel have been involved in or are 
facing any matters that might significantly and negatively impact on 
their business honesty, financial integrity and/or ability to 
successfully perform the proposed grant activities.
    (i) Unsatisfactory performance by the applicant under prior Federal 
awards may result in the application not being funded.


Sec. 2301.9  Deferred applications.

    (a) An applicant may reactivate an application deferred by the 
Agency in a prior year during the two consecutive years following the 
application's initial filing with the Agency; provided the applicant 
has not substantially changed the stated purpose of the application.
    (b) To reactivate a deferred application, the applicant must file 
an updated application, whether mailed or hand delivered, at or before 
5:00 P.M. on the closing date.
    (c) An updated application must include all of the information 
required by the Agency application materials and must be submitted in 
the number of copies specified by the Agency.
    (d) Deferred applications that are resubmitted under this section 
and contain substantial changes will be considered as new applications.
    (e) All deferred applications may be subject to a determination of 
eligibility during subsequent grant cycles.


Sec. 2301.10  Applications resulting from catastrophic damage or 
emergency situations.

    (a) An application may be filed with a request for a waiver of the 
closing date, as provided in Sec. 2301.26, when an eligible broadcast 
applicant suffers catastrophic damage to the basic equipment essential 
to its continued operation as a result of a natural or manmade 
disaster, or as the result of complete equipment failure, and is in 
dire need of assistance in funding replacement of the damaged 
equipment. This section is limited to equipment essential to a 
station's continued operation such as transmitters, tower, antennas, 
STL's or similar equipment which, if the equipment failed, would result 
in a complete loss of service to the community.
    (b) The request for a waiver must set forth the circumstances that 
prompt the request and be accompanied by appropriate supporting 
documentation.
    (c) A waiver will be granted only if it is determined that the 
applicant either carried adequate insurance or had acceptable self-
insurance coverage.
    (d) Applicants claiming complete failure of equipment must document 
the circumstances of the equipment failure and demonstrate that the 
equipment has been maintained in accordance with standard broadcast 
engineering practices.
    (e) Applications filed and accepted pursuant to this section must 
contain all of the information required by the Agency application 
materials and must be submitted in the number of copies specified by 
the Agency.
    (f) The application will be subject to the same evaluation and 
selection process followed for applications received in the normal 
application cycle, although the Administrator may establish a special 
timetable for evaluation and selection to permit an appropriately 
timely decision.


Sec. 2301.11  Service of applications.

    On or before the closing date, all new or deferred applicants must 
serve a summary copy of the application on the following agencies:
    (a) In the case of an application for a construction grant for 
which FCC authorization is necessary, the Secretary, Federal 
Communications Commission, 1919 M Street, NW., Washington, DC 20554;
    (b) The state telecommunications agency(-ies), if any, having 
jurisdiction over the development of broadcast and/or nonbroadcast 
telecommunications in the state(s) and the community(-ies) to be served 
by the proposed project; and
    (c) The state office established to review applications under 
Executive Order 12372, 47 FR 30959, 3 CFR, 1982 Comp., p. 197, as 
amended by Executive Order 12416, 48 FR 15587, 3 CFR, 1983 Comp., p. 
186, in all states where equipment requested in the application will be 
located and where the state has established such an office and wishes 
to review these applications.


Sec. 2301.12  Federal Communications Commission authorizations.

    (a) Each applicant whose project requires FCC authorization must 
file an application for that authorization on or before the closing 
date. NTIA recommends that its applicants submit PTFP-related FCC 
applications to the FCC at least 60 days prior to the PTFP closing 
date. The applicant should clearly identify itself to the FCC as a PTFP 
applicant.
    (b) In the case of FCC authorizations where it is not possible or 
practical to submit the FCC license application with the PTFP 
application, such as C-band satellite uplinks, low-power television 
stations and translators, remote pickups, studio-to-transmitter links, 
and Very Small Aperture Terminals, a copy of the FCC application as it 
will be submitted to the FCC, or the equivalent engineering data, must 
be included in the PTFP application.
    (c) Applications requesting C-band downlinks are not required to 
submit the FCC application or equivalent engineering data as part of 
the PTFP application. When such a project is funded, however, grantees 
will be required to submit evidence of FCC registration of the C-band 
downlink prior to the release of Federal funds.
    (d) Any FCC authorization required for the project must be in the 
name of the applicant for the PTFP grant.
    (e) If the project is to be associated with an existing station, 
the FCC operating authority for that station must be current and valid.
    (f) For any project requiring new authorization(s) from the FCC, 
the applicant must file a copy of each FCC application and any 
amendments with the Agency.

[[Page 57978]]

    (g) If the applicant fails to file the required FCC application(s) 
by the closing date, or if the FCC returns, dismisses, or denies an 
application required for the project or any part thereof, or for the 
operation of the station with which the project is associ ated, the 
Agency may reject and return the application.
    (h) No grant will be awarded until confirmation has been received 
from the FCC that any necessary authorization will be issued.


Sec. 2301.13  Public comments.

    (a) After the closing date, the Agency will publish a list of all 
applications received.
    (b) The applicant shall make a copy of its application available at 
its offices for public inspection during normal business hours.
    (c) A copy of the application will be available in the PTFP offices 
for public inspection during normal business hours.
    (d) Any interested party may file comments with the Agency 
supporting or opposing an application and setting forth the grounds for 
support or opposition. Any opposing comments must contain a 
certification that a copy of the comments has been delivered to the 
applicant. Comments must be sent to the address listed in 
Sec. 2301.8(a).
    (e) The Agency shall incorporate all comments from the public and 
any replies from the applicant in the applicant's official file for 
consideration during the evaluation of the application.


Sec. 2301.14  Supplemental application information.

    (a) The Agency may request from the applicant any additional 
information that the Agency deems necessary to clarify the application. 
Applicants must provide to the Agency additional information that the 
Agency requests within fifteen (15) days of the date of the Agency's 
notice. Applicants must submit a copy of the requested information for 
each copy of the application submitted by the closing date.
    (b) Applicants must immediately provide to the Agency information 
received after the closing date that materially affects the 
application, including:
    (1) State Single Point of Contact and State Telecommunications 
Agency comments on applications;
    (2) FCC file numbers and changes in the status of FCC applications 
necessary for the proposed project;
    (3) Changes in the status of proposed local matching funds, 
including notification of the passage (including reduction or 
rejection) of a proposed state appropriation or receipt (or denial) of 
a proposed substantial matching gift;
    (4) Changes that affect the applicant's eligibility under 
Sec. 2301.3;
    (5) Changes in the status of proposed production, participation, or 
distribution agreements (if relevant to the proposed project);
    (6) Changes in lease or site rights agreements; and
    (7) Complete failure of major items of equipment for which 
replacement costs have been requested or changes in the status of the 
need for the equipment requested.
    (c) Applicants must place copies of any additional information 
submitted to the Agency in the copy of the application made available 
for public inspection pursuant to Sec. 2301.13.
    (d) Neither the Department nor the Agency will discuss the merits 
of an application when it is under review.


Sec. 2301.15  Withdrawal of applications.

    (a) Applicants may request withdrawal of an application from 
consideration for funding without affecting future consideration. 
Withdrawn applications will be returned by the Agency.
    (b) A request that the Agency defer an application for 
consideration in a subsequent year will be treated as a request for 
withdrawal.

Subpart C--Evaluation and Selection Process


Sec. 2301.16  Technical evaluation process.

    (a) In determining whether to approve or defer a construction or 
planning grant application, in whole or in part, and the amount of such 
grant, the Agency will evaluate all the information in the application 
file.
    (b) PTFP grants are awarded on the basis of a competitive review 
process. The evaluation of the applications is based upon the 
evaluation criteria provided under Sec. 2301.17.
    (c) The competitive review process may include the following: 
evaluation by PTFP staff; technical assessment by engineers; an 
evaluation by outside reviewers, all of whom have demonstrated 
expertise in either public broadcasting or distance learning; and 
rating by a national advisory panel, composed of representatives of 
major national public radio and television organizations.
    (d) In acting on applications and carrying out other 
responsibilities under the Act, the Agency shall consult (as 
appropriate) with the FCC, the Corporation for Public Broadcasting, 
state telecommunications agencies, public broadcasting agencies, 
organizations, and other agencies administering programs that may be 
coordinated effectively with Federal assistance provided under the Act; 
and, the state office established to review applications under 
Executive Order 12372, as amended by Executive Order 12416.
    (e) Based upon the evaluation criteria contained in Sec. 2301.17, 
the PTFP program staff will prepare summary evaluations. These will 
incorporate the outside reviewers' recommendations, engineering 
assessments, and program staff evaluations.


Sec. 2301.17  Evaluation criteria for construction and planning 
applications.

    (a) For each application that is filed in a timely manner by an 
applicant, is materially complete, and proposes an eligible project, 
the Agency will consider the evaluation criteria listed in 
Sec. 2301.17(b):
    (1) The criteria in paragraphs (b)(1), Applicant qualifications, 
(b)(2), Financial qualifications, of this section are qualifying 
criteria. Applications meeting the minimum qualifications on these 
criteria will be considered for further review.
    (2) The remaining four criteria listed in Sec. 2301.17(b) will be 
weighted in the evaluation as follows:
    (i) Criteria in paragraph (b)(3), Project objectives, and (b)(4), 
Urgency, of this section will be given the most weight in the 
evaluation.
    (ii) The remaining criteria in paragraph (b)(5), Technical/Planning 
qualifications, and (b)(4), Special consideration, of this section will 
be given less weight and are listed in descending order.
    (b) Evaluation criteria
    (1) Applicant qualifications: Documentation that the applicant has 
or will have the ability to complete the project, including having 
sufficient qualified personnel to operate and maintain the facility, 
and to provide services of professional quality.
    (2) Financial qualifications: Documentation reflecting the 
applicant's ability to provide non-Federal funds required for the 
project, including funds for the local match and funds to cover any 
ineligible costs required for completion of the project; and to ensure 
long-term financial support for the continued operation of the facility 
during the Federal interest period.
    (3) Project objectives: The degree to which the application 
documents that the proposed project fulfills the objectives and 
specific requirements of one or more of the categories set forth

[[Page 57979]]

in Sec. 2301.4, documents the applicant's ability to implement the 
proposed project and adequately justify the need for Federal funds in 
excess of fifty (50) percent of total project costs (see 
Sec. 2301.6(b)(2)), if requested for equipment replacement, 
improvement, or augmentation projects; and, in the case of planning, 
adequately justifies the need for Federal funds in excess of seventy 
five (75) percent of total project costs (see Sec. 2301.6(a)(2)), if 
requested.
    (4) Urgency: Documentation that justifies funding the proposed 
project during the current grant cycle or, when appropriate, that the 
condition of existing equipment justifies its prompt replacement.
    (5)(i) Technical qualifications (construction applicants only). 
Documentation that the eligible equipment requested is necessary to 
achieve the objectives of the project; that the proposed costs reflect 
the most efficient use of Federal funds in achieving project 
objectives; that the equipment requested meets current industry 
performance standards (and FCC standards, if appropriate) and that an 
evaluation of alternative technologies has been completed that 
justifies the selection of the requested technology (where alternative 
technologies are possible).
    (ii) Planning Qualifications (planning applicants only). 
Documentation of the feasibility of the proposed planning process and 
timetable for achieving the expected results; that costs proposed 
reflect the most efficient use of Federal funds; that the applicant has 
sufficient qualified staff or consultants to complete the planning 
project with professional results; and that an evaluation of 
alternative technologies will be incorporated into the plan, if 
appropriate.
    (6) Special Consideration: For this evaluation criterion, 
applicants should demonstrate that its broadcast or non-broadcast 
application will achieve significant diversity in the ownership of, 
operation of, and participation in public telecommunications 
facilities. Applicants may demonstrate how their project will better 
serve the characteristics, values and attitudes of diverse listeners by 
promoting the development of more effective programming strategies, 
conducting station outreach projects, through audience development 
efforts, and through the participation of minorities and women on the 
Board of Directors, and in other policy making positions.
    (c) The Agency will provide each applicant with guidance in the 
application materials on the type of documentation necessary to meet 
each of the above evaluation criteria.


Sec. 2301.18  Selection process.

    (a) The PTFP Director will consider the summary evaluations 
prepared by program staff, rank the applications, and present 
recommendations to the OTIA Associate Administrator for review and 
approval. The Director's recommendations and the OTIA Associate 
Administrator's review and approval will take into account the 
following selection factors:
    (1) The program staff evaluations, including the outside reviewers.
    (2) The type of projects and broadcast priorities set forth at 
Sec. 2301.4.
    (3) Whether the application is for broadcast or a nonbroadcast 
project.
    (4) Whether the applicant has any current NTIA grants.
    (5) The geographic distribution of the proposed grant awards.
    (6) The availability of funds.
    (b) Upon approval by the OTIA Associate Administrator, the 
Director's recommendations will then be presented to the Selecting 
Official, the NTIA Administrator.
    (c) The Administrator makes final award selections taking into 
consideration the Director's recommendations and the degree to which 
the slate of applications, taken as a whole, satisfies the program's 
stated purposes set forth at Sec. 2301.1 (a) and (c).
    (d) No grant will be awarded until confirmation has been received 
from the FCC that any necessary authorization will be issued.
    (e) After final award selections have been made, the Agency will 
notify the applicant of one of the following actions:
    (1) Selection of the application for funding, in whole or in part;
    (2) Deferral of the application for subsequent consideration;
    (3) Rejection of the application with an explanation and the 
reason, if an applicant is not eligible or if the proposed project does 
not fall within at least one of the categories enumerated at 
Sec. 2301.4; or
    (4) Return of applications that were deferred by the Agency after 
consideration during three grant cycles.
    (f) The Agency will notify the following organizations of those 
applications selected for funding:
    (1) The state educational telecommunications agency(ies), if any, 
in any state any part of which lies within the service area of the 
applicant's facility;
    (2) The FCC; and
    (3) The Corporation for Public Broadcasting and, as appropriate, 
other public telecommunications entities.

Subpart D--Post-Award Requirements


Sec. 2301.19  General conditions attached to the Federal award.

    (a) During the project award period and the remainder of the 
Federal interest period, the grantee must:
    (1) Continue to be an eligible organization as described in 
Sec. 2301.3;
    (2) Obtain and continue to hold any necessary FCC authorization(s);
    (3) Use the Federal funds for which the grant was made for the 
equipment and other expenditure items specified in the application for 
inclusion in the project, except that the grantee may substitute other 
items where necessary or desirable to carry out the purpose of the 
project if approved in advance by the Department in writing. These 
changes include but are not limited to the following:
    (i) Costs (including planning costs);
    (ii) Essential specifications of the equipment;
    (iii) The engineering configuration of the project;
    (iv) Extensions of the approved grant award period; and
    (v) Transfers of a grant award to a successor in interest, pursuant 
to Sec. 2301.19(c);
    (4) Use the facilities and any monies generated through the use of 
the facilities primarily for the provision of public telecommunications 
services and ensure that the use of the facilities for other than 
public telecommunications purposes does not interfere with the 
provision of the public telecommunications services for which the grant 
was made;
    (5) Not make its facilities available to any person for the 
broadcast or other transmission intended to be received directly by the 
public, of any advertisement, unless such broadcast or transmission is 
expressly and specifically permitted by law or authorized by the FCC; 
and
    (6) State when advertising for bids for the purchase of equipment 
that the Federal government has an interest in facilities purchased 
with Federal funds under this program that begins with the purchase of 
the facilities and continues for ten (10) years after the completion of 
the project.
    (b) During the period in which the grantee possesses or uses the 
Federally funded facilities, the grantee may not use or allow the use 
of the Federally funded equipment for purposes the essential thrust of 
which are sectarian for the useful life of the equipment even when this 
extends beyond the ten-year Federal interest period. (See NTIA's policy 
on sectarian activities at 60 FR 66491, Dec. 22, 1995.)

[[Page 57980]]

    (c) If necessary to further the purpose of the Act, the Agency may 
reassign a grant to a successor in interest or subsidiary corporation 
of a grantee in cases where a similar operational entity remains in 
control of the grant and the original objectives of the grant remain in 
effect. Each party must provide, in writing, its assent to the 
substitution. Any substituted party must meet the eligibility 
requirements.


Sec. 2301.20  Schedules and reports.

    (a) Within thirty (30) calendar days of the award date the grantee 
shall submit to the Agency, in duplicate, a construction schedule or a 
revised planning timetable that will include the information requested 
in the grant terms and conditions in the award package.
    (b) During the project period of this grant, the grantee shall 
submit performance reports, in duplicate, on a calendar year quarterly 
basis for the period ending March 31, June 30, September 30, and 
December 31, or any portions thereof. The Quarterly Performance Reports 
should contain the following information:
    (1) A comparison of actual accomplishments during the reporting 
period with the goals and dates established in the Construction or 
Planning Schedule for that reporting period;
    (2) A description of any problems that have arisen or reasons why 
established goals have not been met;
    (3) Actions taken to remedy any failures to meet goals; and
    (4) Construction projects must also include a list of equipment 
purchased during the reporting period compared with the equipment 
authorized. This information must include manufacturer, make and model 
number, brief description, number and date of the items purchased, and 
cost.


Sec. 2301.21  Payment of Federal funds.

    (a) The Department will not make any payment under an award, unless 
and until the recipient complies with all relevant requirements imposed 
by this Part. Additionally:
    (1) The Department will not make any payment until it receives 
confirmation that the FCC has granted any necessary authorization;
    (2) The Department may not make any payment under an award unless 
and until all special award conditions stated in the award documents 
that condition the release of Federal funds are met; and
    (3) An agreement to share ownership of the grant equipment (e.g., a 
joint venture for a tower) must be approved by the Agency before any 
funds for the project will be released.
    (b) As a general matter, the Agency expects grantees to expend 
local matching funds at a rate at least equal to the ratio of the local 
match to the Federal grant as stipulated in the grant award.


Sec. 2301.22  Protection, acquisition, and substitution of equipment.

    (a) To assure that the Federal investment in public 
telecommunications facilities funded under the Act will continue to be 
used to provide public telecommunications services to the public during 
the Federal interest period, the Agency may require a grantee to:
    (1) Execute and record a document establishing that the Federal 
government has a priority lien on any facilities purchased with funds 
under the Act during the period of continuing Federal interest. The 
document shall be recorded where liens are normally recorded in the 
community where the facility is located and in the community where the 
grantee's headquarters are located; and
    (2) File a certified copy of the recorded lien with the 
Administrator ninety (90) days after the grant award is received.
    (b) The grantee shall maintain protection against common hazards 
through adequate insurance coverage or other equivalent undertakings, 
except that, to the extent the applicant follows a different policy of 
protection with respect to its other property, the applicant may extend 
such policy to apparatus acquired and installed under the project. The 
grantee shall purchase flood insurance (in communities where such 
insurance is available) if the facilities will be constructed in any 
area that has been identified by the Federal Emergency Management 
Agency as having special flood hazards.
    (c) The grantee shall not dispose of or encumber its title or other 
interests in the equipment acquired under this grant during the Federal 
interest period.
    (d) The grantee shall demonstrate that the grantee has obtained 
appropriate title or lease satisfactory to protect the Federal interest 
to the site or sites on which apparatus proposed in the project will be 
operated. The grantee must have the right to occupy, construct, 
maintain, operate, inspect, and remove the project equipment without 
impediment to assure the sufficient continuity of operation of the 
facility; and nothing must prevent the Federal government from entering 
the property and reclaiming or securing PTFP-funded property.
    (e) The Agency will allow the acquisition of facilities by lease; 
however, the following requirements apply:
    (1) The lease must be of benefit to the Federal government;
    (2) The actual amount of the lease must not be more than the 
outright purchase price would be; and
    (3) The lease agreement must state that in the event of anticipated 
or actual termination of the lease, the Federal government has the 
right to transfer and assign the leasehold to a new grantee for the 
duration of the lease contract.
    (f) Transfer of equipment. Where the grant equipment is no longer 
needed for the original purposes of the project, the Department may 
transfer the equipment to the Federal government or an eligible third 
party, in accordance with Office of Management and Budget guidelines.
    (g) Transfer of Federal interest to different equipment. The 
Department may transfer the Federal interest in PTFP-funded equipment 
to other eligible equipment presently owned or to be purchased by the 
grantee with non-Federal monies, provided the following conditions are 
met:
    (1) If the Federal interest is to be transferred to other equipment 
presently owned or to be purchased by a grantee, the Federal interest 
in the new equipment must be at least equal to the Federal interest in 
the original equipment.
    (2) Equipment previously funded by PTFP that is within the Federal 
interest period may not be used in a transfer request as the designated 
equipment to which the Federal interest is to be transferred.
    (3) The same item can be used only once to substitute for the 
Federal interest. However, the Federal interest in several items of 
equipment from different grants may be transferred to a single item if 
the request for all such transfers is submitted at the same time.
    (4) A lien on equipment transferred to the Federal interest may be 
required by PTFP and must be recorded in accordance with 
Sec. 2301.23(b)(8). A copy of the lien document must be filed with the 
PTFP within sixty (60) days of the date of approval of the transfer of 
Federal interest.
    (h) Termination by buy-out. A grantee may terminate the Federal 
revisionary interest in a PTFP grant by buying out the Federal interest 
with non-Federal monies. Buy-outs may be requested at any time.

Subpart E--Completion of Projects


Sec. 2301.23  Completion of projects.

    (a) Upon completion of a planning project, the grantee must 
promptly provide to the Agency two copies of any

[[Page 57981]]

report or study conducted in whole or in part with funds provided under 
this program.
    (1) This report shall meet the goals and objectives for which the 
grant is awarded and shall follow the written instructions and guidance 
provided by the Agency. The grant award goals and objectives are stated 
in the planning narrative as amended and are incorporated by reference 
into the award agreement.
    (2) The Agency shall review this report for the extent to which 
those goals and objectives are addressed and met, for evidence that the 
work contracted for under the grant award was in fact performed, and to 
determine whether the written instructions and guidance provided by the 
Agency, if any, were followed.
    (3) If the Agency determines that the report fails to address or 
meet any grant award goals or objectives, or if there is no evidence 
that the work contracted for was in fact performed, or if this report 
clearly indicates that the written instructions and guidance provided 
by the Agency, if any, were disregarded, then the Agency may pursue 
remedial action.
    (4) An unacceptable final report may result in the disallowance of 
claimed costs and the establishment of an account receivable by the 
Department.
    (b) Upon completion of a construction project, the grantee must:
    (1) Certify that the grantee has acquired, installed, and begun 
operating the project equipment in accordance with the project as 
approved by the Agency, and has complied with all terms and conditions 
of the grant as specified in the Grant Award document;
    (2) Certify that the grantee has obtained any necessary FCC 
authorizations to operate the project apparatus following the 
acquisition and installation of the apparatus and document the same;
    (3) Certify and document that the facilities have been acquired, 
that they are in operating order, and that the grantee is using the 
facilities to provide public telecommunications services in accordance 
with the project as approved by the Agency;
    (4) Certify that the grantee has obtained adequate insurance to 
protect the Federal interest in the project in the event of loss 
through casualty;
    (5) Certify, if not previously provided, that the grantee has 
acquired all necessary leases or other site rights required for the 
project;
    (6) Certify, if appropriate, that the grantee has qualified for 
receipt of funds from the Corporation for Public Broadcasting;
    (7) Provide a complete and accurate final inventory of equipment 
acquired under the project and a final accounting of all project 
expenditures, including non-equipment costs (e.g., installation costs); 
and
    (8) Execute and record a final priority lien, if required by PTFP, 
reflecting the completed project and assuring the Federal government's 
reversionary interest in all equipment purchased under the grant 
project for the duration of the Federal interest period.
    (c) When an applicant completes a construction project, the Agency 
will assign a completion date that the Agency will use to calculate the 
termination date of the Federal interest period. The completion date 
will usually be the date on which the project period expires unless the 
grantee certifies in writing prior to the project period expiration 
date that the project is complete and in accord with the terms and 
conditions of the grant, as required under Sec. 2301.23(b)(1). If the 
PTFP Director determines that the grantee improperly certified the 
project to be complete, the PTFP Director will amend the completion 
date accordingly.


Sec. 2301.24  Final Federal payment.

    If the total allowable, allocable, and reasonable costs incurred in 
completing the planning or construction project are less than the total 
project award amount, the Agency shall reduce the amount of the final 
Federal share on a pro rata basis. If, however, the actual costs 
incurred in completing the project are more than the estimated total 
project costs, in no case will the final Federal funds paid exceed the 
grant award.


Sec. 2301.25  Retention of records and annual status reports.

    (a) All grantees shall keep intact and accessible all records 
specified in Office of Management and Budget Circular A-110 (for 
educational institutions, hospitals, and nonprofit organizations), or 
15 CFR part 24 (for State and Local Governments).
    (b) Recipients of construction grants:
    (1) Are required to submit an Annual Status Report for each grant 
project that is in the Federal interest period. The Reports are due no 
later than April 1 in each year of the Federal interest period. 
Information about what is to be included in the Annual Status Report is 
supplied to grant recipients at the time grants are closed out.
    (2) Shall retain an inventory of the equipment for the duration of 
the ten-year Federal interest period and shall mark project apparatus 
in a permanent manner to assure easy and accurate identification and 
reference to inventory records. The marking shall include the PTFP 
grant number and an inventory number assigned by the grantee.
    (3) May also be required to take whatever steps may be necessary to 
ensure that the Federal government's reversionary interest continues to 
be protected for the 10-year period by recording, when and where 
required, a lien continuation statement and reporting that fact in the 
Annual Status Report.

Subpart F--Waivers


Sec. 2301.26  Waivers.

    It is the general intent of NTIA not to waive any of its 
regulations. However, under extraordinary circumstances and when it is 
in the best interests of the Federal government, NTIA, upon its own 
initiative or when requested, may waive the regulations adopted 
pursuant to section 392(e) of the Act. Waivers may only be granted for 
regulatory requirements that are discretionary.

[FR Doc. 96-28771 Filed 11-7-96; 8:45 am]
BILLING CODE 3510-60-P #