[Federal Register Volume 63, Number 176 (Friday, September 11, 1998)]
[Rules and Regulations]
[Pages 48615-48633]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-23963]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1, 73 and 74

[MM Docket No. 97-234, GC Docket No. 92-52, and GEN Docket No. 90-264; 
FCC 98-194]


Implementation of Competitive Bidding for Commercial Broadcast 
and Instructional Television Fixed Service Licenses

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: This First Report and Order (First R&O) implements the Federal 
Communications Commission's amended auction authority. Specifically, 
the First R&O adopts rules and procedures for auctioning pending and 
future mutually exclusive applications for construction permits in the 
various commercial broadcast services; determines that competing 
Instructional Television Fixed Service (ITFS) applications are subject 
to auction; and adopts procedures for resolving pending broadcast 
comparative renewal cases, in which the Commission is not authorized to 
use auctions. To further the goals of the designated entity provisions 
of the Commission's auction authority, the First R&O adopts a tiered 
``new entrant'' bidding credit for entities with controlling interests 
in either no, or less than four, other media entities. The First R&O 
notes that the Commission intends to continue its review of the 
barriers to entry or growth that may exist for small, minority- and 
women-owned businesses in broadcasting, and to make adjustments to its 
designated entity provisions, as appropriate, in light of these 
studies.

EFFECTIVE DATE: November 10, 1998.

FOR FURTHER INFORMATION CONTACT: Jerianne Timmerman, Video Services 
Division, Mass Media Bureau at (202) 418-1600; Lisa Scanlan, Audio 
Services Division, Mass Media Bureau at (202) 418-2720; Lee Martin, 
Office of General Counsel at (202) 418-1720.

SUPPLEMENTARY INFORMATION:

Summary

    This First R&O implements: (1) amended Section 309(j) of the 
Communications Act (Act), which requires that the Commission use 
auctions to select from among virtually all mutually exclusive 
applications for initial licenses and construction permits, including 
broadcast construction permits, and (2) new Section 309(l) of the Act, 
which

[[Page 48616]]

authorizes auctions to resolve pending comparative licensing cases 
involving applications for full-service commercial radio or television 
stations filed before July 1, 1997. As proposed in this proceeding, the 
First R&O amends the disparate application procedures for the various 
broadcast services to establish a uniform window filing approach that 
should facilitate the determination of mutually exclusive groups of 
applications for auction purposes, and also establishes rules and 
procedures for auctioning mutually exclusive applications for broadcast 
construction permits that follow, as closely as possible, the 
Commission's general part 1 auction rules.

General Authority to Use Competitive Bidding to Award Secondary and 
Primary Commercial Broadcast Licenses

    2. Under amended Section 309(j)(1), the Commission found that 
auctions are mandatory for all secondary commercial broadcast services 
(e.g., LPTV, FM translator and television translator services). 
Similarly, the Commission found that, except for certain pending 
applications that are subject to new Section 309(l), its auction 
authority is mandatory, rather than permissive, for all full power 
commercial radio and analog television stations. Nothing in the 
statutory language or in the accompanying legislative history indicates 
that the requirement to use competitive bidding for ``any initial 
license or construction permit'' is limited to full power radio and 
analog television stations, or that Congress intended such a 
limitation. Nor are secondary commercial broadcast service licenses 
exempted from the auction requirement under Section 309(j)(2), which 
enumerates the certain types of spectrum licenses that are not subject 
to competitive bidding.
    3. The Commission stated further that all pending mutually 
exclusive applications for these secondary broadcast services must be 
resolved through a system of competitive bidding. Nothing in Section 
309(j)(1) suggests that the requirement to use auctions applies only to 
applications filed in the future. The only statutory reference to 
pending applications is contained in Section 309(l), and the Commission 
determined that Congress did not intend to include pending secondary 
broadcast applications within Section 309(l).

Statutory Authority to Use Competitive Bidding for Modification 
Applications

    4. The Commission concluded that it is not precluded by the terms 
of Section 309(j) from auctioning mutually exclusive modification 
applications. The Commission recognized, however, that competing major 
modification applications can often be resolved by changes to the 
engineering proposals submitted by applicants and may raise special 
considerations where settlements are particularly appropriate. The 
Commission will therefore allow applicants who have, under the window 
filing procedures adopted in the First R&O for new station applications 
and major modification applications, filed either competing major 
modification applications, or competing major modification and new 
station applications, to resolve their mutual exclusivities by means of 
engineering solutions or settlements during a limited period after the 
filing of short-form applications but before the start of the auction. 
The Commission stated that it would apply competitive bidding 
procedures to resolve mutual exclusivities among major modification 
applications and between major modification and initial applications, 
if the parties are unable to resolve their mutual exclusivities during 
a limited period, as established by public notice, following the filing 
of short-form applications.
    5, The Commission determined that it would not, however, generally 
subject competing minor modification applications to auction 
procedures. Given the infrequency with which minor modification 
applications are mutually exclusive and the less significant changes 
usually proposed in minor modification applications, the Commission 
will encourage parties ``to use engineering solutions, negotiation * * 
* and other means'' to resolve any mutual exclusivities. 47 U.S.C. 
309(j)(6)(E).

Statutory Exemption for Noncommercial Educational and Public 
Broadcast Stations

    6. The Commission determined that it had not received sufficiently 
focused comment to finally resolve in this proceeding the issues 
relating to noncommercial educational and public broadcast stations. 
While the exemption in Section 309(j)(2)(C) for noncommercial 
educational broadcasters clearly precludes the Commission from using 
competitive bidding to award broadcast station licenses on the reserved 
noncommercial frequencies, there are difficult issues as to how the 
Commission should apply this provision when noncommercial educational 
and public broadcasters apply for frequencies in the commercial band. 
The Commission found that its decision on these issues would be aided 
by a further round of comment. Therefore, the Commission stated that it 
would not proceed to auction at this time any pending cases where both 
noncommercial and commercial applicants have filed competing 
applications for nonreserved channels; these cases will be resolved 
following the release of a report and order in our noncommercial 
proceeding, MM Docket No. 95-31.

Discretion to Use Auctions in Pending Cases Involving pre-July 1, 
1997 Applications

    7. The Commission found that it has discretion under new Section 
309(l) to resolve comparative licensing proceedings that involve pre-
July 1, 1997 applications for full service commercial radio and 
television stations by either competitive bidding procedures or through 
the comparative hearing process. The explicit language of Section 
309(l)(1) provides that the Commission ``shall have the authority to 
conduct a competitive bidding proceeding,'' in contrast to the 
mandatory language of Section 309(j)(1) providing that ``the Commission 
shall grant the license . . . through a system of competitive 
bidding.'' The Commission concluded that the language of Section 309(l) 
unambiguously addresses a situation in which auctions are permissible, 
but are not required.

Public Interest Considerations Favoring Resolution of Pending Cases 
by Competitive Bidding

    8. The Commission stated that auctions will generally be fairer and 
more expeditious than deciding the pending mutually exclusive 
applications filed before July 1, 1997 through the comparative hearing 
process. Auctions will generally expedite service and better serve the 
public interest in these cases, because competitive bidding is a more 
efficient and cost-effective method of assigning spectrum in cases of 
mutual exclusivity than any previously employed method. The Commission 
concluded that there is no inherent unfairness in using auctions, 
rather than comparative hearings, to resolve mutual exclusivity among 
these pre-July 1, 1997 applications, as most of these applicants filed 
after Bechtel v. FCC, 10 F.3d 875 (D.C. Cir. 1993), which made it clear 
that some change in the existing selection criteria was inevitable. The 
Commission also found that changing the selection process for pending 
applications filed before July 1, 1997 is not impermissibly retroactive 
or

[[Page 48617]]

otherwise unlawful. The pre-July 1, 1997 applicants, whether their 
applications are pending on the processing line or have been designated 
for hearing, have no vested right to a comparative hearing that is 
abridged by the Commission's decision to award such authorizations by a 
system of competitive bidding. The Commission moreover noted that the 
impact of this regulatory change is ameliorated somewhat by the 
statutory requirement that auctions to resolve these pre-July 1 pending 
cases be closed to other participants.

Treatment of Pending Hearing Cases

    9. The Commission concluded that, even for the small number of 
pending cases involving pre-July 1, 1997 applications that have 
progressed at least through an Initial Decision by an Administrative 
Law Judge, auctions better serve the public interest than comparative 
hearings. While these pending applicants have spent considerable time 
and money prosecuting their applications and have experienced 
significant delays in obtaining a final decision as to the selection of 
the licensee, these circumstances do not, the Commission determined, 
outweigh the additional delays, uncertainty and administrative costs 
that would be incurred by resolving these cases through the comparative 
hearing process.

Scope of Section 309(l)

    10. The Commission found that, where post-June 30th applications 
are mutually exclusive with two or more pre-July 1, 1997 applications, 
it is compelled by the express language of Section 309(l)(2) to dismiss 
them and conduct a competitive bidding procedure that is restricted to 
the pre-July 1, 1997 applications. The Commission also stated that, 
given the express reference to ``competing applications'' in Section 
309(l), this provision does not apply to a single pre-July 1, 1997 
application. Under Section 309(l)(2), the Commission is statutorily 
precluded from permitting post-June 30th applicants to participate as 
qualified bidders in a competitive bidding procedure conducted to 
resolve mutual exclusivity among two or more pre-July 1, 1997 competing 
applications. The First R&O notes that the practical effect of this 
distinction between applications filed before July 1st and after June 
30th will be limited, as the Commission believes that settlement 
agreements have been filed in connection with the small number of cases 
involving post-June 30th applications mutually exclusive with two or 
more pre-July 1, 1997 applications.

Pending Applications Not Subject to Section 309(l)

    11. The most significant issue with regard to the pending 
applications falling outside the scope of Section 309(l) concerns the 
pool of bidders who will be eligible for any auction of these mutually 
exclusive applications. Specifically, the Commission has the discretion 
to restrict the class of eligible bidders to those with applications 
already filed, or to reopen the filing period for additional applicants 
that would be eligible to participate in the auction. The Commission 
concluded that, in cases of pending mutually exclusive applications not 
subject to Section 309(l) where the relevant period or window for 
filing applications under the existing procedures has expired, the 
public interest would not be served by reopening the filing period for 
additional mutually exclusive applications. The Commission found no 
compelling reason to reopen filing windows that have already expired to 
permit the filing of additional applications by applicants who failed 
to file during the Commission's previously clearly delineated filing 
periods.
    12. The Commission noted, however, that there are pending a number 
of broadcast applications (primarily AM and FM translator) that have 
never been subjected to competition because periods or windows for the 
filing of competing applications have not yet been opened by the 
Commission. Rather than open individual filing windows or issue 
individual cut-off lists for each of these pending broadcast 
applications, the Commission decided that it would be more efficient to 
simply include these applications in the first general auction 
conducted for new applicants in the relevant service.

Competitive Bidding Design

    13. The Commission announced that it would conduct all auctions of 
mutually exclusive broadcast applications in conformity with the 
general competitive bidding rules set forth in part 1 of the 
Commission's rules. However, because the same type of auction 
methodology may not be appropriate for all mutually exclusive broadcast 
and secondary broadcast applications, different approaches may be 
warranted to resolve mutual exclusivity among certain categories of 
broadcast applications and for ``daisy chain'' situations. The 
Commission concluded that the appropriate auction design will vary 
depending on the type of service involved, the number of construction 
permits at stake, how many bidders are likely to participate, and the 
degree to which interdependence may be important to those likely to bid 
on a particular type of permit. The Commission delegated authority to 
the Mass Media Bureau and the Wireless Telecommunications Bureau (the 
Bureaus) to seek comment on and establish an appropriate auction design 
methodology prior to the start of each broadcast auction or group of 
broadcast auctions. The Commission also delegated to the Bureaus 
authority to seek comment on and, as appropriate, to establish upfront 
payments, minimum opening bids and/or reserve prices for each broadcast 
auction or group of broadcast auctions.

Auction Application Procedures

    14. The Commission will follow for all broadcast service auctions 
the procedural and payment rules set forth in the general part 1 
auction rules, with certain modifications. Specifically, the First R&O 
replaces the Commission's disparate filing procedures for the various 
broadcast services with a specific time period, or auction window, 
during which all applicants seeking to participate in an auction must 
file their applications for new broadcast facilities or for major 
changes to existing facilities. Applicants will be required to submit 
only a short-form application (FCC Form 175) prior to any auction, and 
only winning bidders will need to file complete long-forms (FCC Form 
301 for AM, FM and television stations, FCC Form 346 for LPTV and 
television translators, or FCC Form 349 for FM translators). 
Specifically, in response to a public notice announcing a window for 
the filing of broadcast and/or secondary broadcast applications for new 
stations and for major changes to existing facilities, applicants will 
be required to file a short-form application, along with any 
engineering data necessary to determine mutual exclusivity in a 
particular service. The Commission stated that, prior to auction, it 
would examine the engineering data submitted by applicants for the non-
table services (AM, LPTV, and television and FM translators) only to 
the extent necessary to determine the mutually exclusive groups of 
applications for auction purposes. Applicants for FM stations need not 
submit any engineering data in addition to their FCC Form 175 
applications, as such data is not needed to make determinations of 
mutual exclusivity in the FM service.
    15. The Commission determined to follow the general auction rule 
mandating electronic filing, and will

[[Page 48618]]

require all applicants for broadcast auctions to file their FCC Form 
175 applications electronically beginning January 1, 1999, unless it is 
not operationally feasible. Applicants for non-table services, who must 
submit engineering information with their short-forms, will be required 
to file the engineering section of the electronic versions of the FCC 
Forms 301, 346 and 349, which are currently being developed.
    16. Consistent with the part 1 anti-collusion rule, the Commission 
announced that applicants in broadcast auctions will be required to 
identify on their short-form applications any parties with whom they 
have entered into any consortium arrangements, joint ventures, 
partnerships or other agreements or understandings which relate in any 
way to the competitive bidding process. In addition, applicants will be 
required to certify on their short-form applications that they have not 
entered into any explicit or implicit agreements, arrangements or 
understandings of any kind with any parties, other than those 
identified, regarding the amount of their bids, bidding strategies, or 
the particular construction permits on which they will or will not bid. 
After short-form applications are filed and prior to the time that the 
winning bidder has made its required down payment, all bidders will be 
prohibited from cooperating, collaborating, discussing or disclosing in 
any manner the substance of their bids or bidding strategies with other 
bidders that have applied to bid in the same geographic license area, 
unless such bidders are members of a bidding consortium or other joint 
bidding arrangement identified on the bidder's short-form application.
    17. The Commission also determined to follow in broadcast auctions 
the general part 1 auction rules with regard to post-auction 
procedures, including the payment by winning bidders of their bids and 
the withdrawal, default and disqualification of winning bidders. The 
First R&O additionally adopted a shortened 10-day period for the filing 
of petitions to deny against the long-form applications filed by 
auction winners.

Designated Entities

    18. Due to the insufficiency of the record in this proceeding, the 
First R&O does not make a final determination regarding the adoption of 
bidding credits or other special measures to enhance participation by 
various designated entities, including small, minority- and women-owned 
businesses, in broadcast service and ITFS auctions. The First R&O does 
adopt a tiered new entrant bidding credit to further the goals of the 
designated entity provisions of Section 309(j); specifically, 
applicants with no controlling interests in any media outlets will 
receive a 35% bidding credit, and applicants with controlling interests 
in no more than three media outlets, none of which serve the same area 
as the proposed station, will receive a 25% bidding credit. Following 
the completion of certain pending evidentiary studies, the Commission 
anticipates the release of a further report and order in this 
proceeding addressing designated entity issues in the broadcast 
context. If additional or alternative designated entity measures are 
ultimately adopted in this further order following the completion of 
the Commission's evidentiary studies, then any such measures will be 
applicable to the auction of any broadcast and ITFS applications then 
on file with the Commission. To prevent any unjust enrichment by 
designated entities utilizing the new entrant bidding credit, we will 
follow the general part 1 auction rules in requiring, under certain 
circumstances involving assignments or transfers, the reimbursement of 
bidding credits utilized in obtaining broadcast licenses via auction.

Auction Authority for Instructional Television Fixed Service

    19. The Commission determined that, because Section 309(j) 
generally requires the use of competitive bidding to resolve mutually 
exclusive applications with only certain specified exemptions, it does 
not have the discretion to create another exemption from competitive 
bidding for ITFS. When Congress explicitly enumerates certain 
exceptions to a general requirement, additional exceptions should not 
be implied, and the list of exemptions from the Commission's general 
auction authority set forth in Section 309(j)(2) is clearly exhaustive, 
rather than merely illustrative, of the types of licenses or permits 
that may not be awarded through a system of competitive bidding. 
Because ITFS is not one of the services exempted from competitive 
bidding in Section 309(j)(2), the First R&O concludes that competing 
ITFS applications must be subjected to competitive bidding procedures. 
The Commission declined to interpret the exemption from competitive 
bidding for noncommercial educational broadcast stations contained in 
Section 309(j)(2)(C) to include ITFS. As the Commission has stated and 
the courts have recognized, ITFS is not a broadcast service, and 
therefore it does not fall within the scope of the Section 309(j)(2)(C) 
exemption from competitive bidding for noncommercial broadcasters.
    20. The Commission stated, however, that it will request that 
Congress amend Section 309(j) so that the statute clearly reflects its 
intent with regard to ITFS. Absent a clear statement from Congress that 
it means to exempt ITFS from competitive bidding, then the Commission 
will proceed with the auction of mutually exclusive ITFS applications. 
The Commission stated that it will not commence ITFS auctions 
immediately so as to allow sufficient time to obtain Congressional 
guidance.
    21. The Commission found that pending ITFS applications are outside 
the scope of new Section 309(l) of the Act, which provides that the 
Commission has discretion regarding the resolution of pending 
comparative licensing proceedings involving pre-July 1, 1997 
applications for commercial radio and television stations. Accordingly, 
pending mutually exclusive ITFS applications must be resolved by 
competitive bidding pursuant to Section 309(j)(1). However, the 
Commission determined that it would not serve the public interest to 
accept additional competing ITFS applications despite its authority to 
do so; thus, the eligible bidders in any auction of the pending ITFS 
applications will be limited to those with applications already on 
file.

Resolution of Pending Comparative Renewal Proceedings

    22. With regard to the very small number of pending comparative 
renewal proceedings, the Commission determined that the most equitable 
and expeditious approach would be simply to permit the renewal 
applicants and their challengers, within the confines of the generally 
phrased standard comparative issue, to present the factors and evidence 
they believe most appropriate. If the renewal applicant can demonstrate 
substantial performance and thus an entitlement to a renewal 
expectancy, this will continue to be the most important factor and can 
be expected in most cases to outweigh other considerations in favor of 
the challenger.
    23. The complete text of this First R&O, including any statements, 
is available for inspection and copying during normal business hours in 
the Federal Communications Commission Reference Center (Room 239), 1919 
M Street, N.W., Washington, D.C., and it may be purchased from the 
Commission's copy contractor, International Transcription Service,

[[Page 48619]]

Inc., 1231 20th Street, N.W., Washington, D.C. 20036, (202)857-3800.

Final Regulatory Flexibility Analysis (FRFA)

Summary

    24. As required by the Regulatory Flexibility Act (RFA), 5 U.S.C. 
603, an Initial Regulatory Flexibility Analysis (IRFA) was incorporated 
in the Notice of Proposed Rulemaking (NPRM) in this proceeding. The 
Commission sought written public comments on the proposals in the NPRM, 
including on the IRFA. The Commission's Final Regulatory Flexibility 
Analysis (FRFA) in this First R&O conforms to the RFA, as amended by 
the Contract With America Advancement Act of 1996, Public Law 104-121, 
110 Stat. 847 (1996).

Need For and Objectives of Action

    25. This First R&O adopts rules to implement the Balanced Budget 
Act of 1997 (Budget Act), Public Law 105-33, 111 Stat. 251 (1997), 
which amended Section 309(j) and adopted new Section 309(l) of the 
Communications Act to expand the Commission's competitive bidding 
authority to include, inter alia, the commercial broadcast and 
secondary broadcast services.

Significant Issues Raised by the Public in Response to the Initial 
Analysis

    26. No comments were received specifically in response to the IRFA 
contained in the NPRM. However, some comments did address certain small 
business issues. A number of commenters called for the adoption of 
bidding credits for small businesses to ensure their participation in 
broadcast spectrum auctions. To promote diversification of ownership of 
broadcast stations, a number of commenters also supported the adoption 
of bidding credits for non-group owners, who would likely be small 
businesses. Some commenters argued that upfront payments should be 
small enough to allow small businesses to compete effectively. 
Commenters generally opposed the use of competitive bidding for 
selecting among mutually exclusive Instructional Television Fixed 
Service (ITFS) applicants, who are primarily educational institutions 
and governmental educational entities.
    27. Small business-related issues were also raised by commenters 
more indirectly. A small number of commenters opposed requiring 
prospective bidders in broadcast auctions to file their short-form 
applications (FCC Form 175) electronically, contending that electronic 
filing would be a barrier to participation by those not computer 
literate or by low power television (LPTV) and translator applicants 
(many of whom are small businesses). Several commenters also asked the 
Commission to reconfirm its support for certain previously-adopted 
special measures to protect LPTV and television translator stations 
that are displaced during the transition to digital television. A small 
number of commenters additionally contended that it was unfair or 
inequitable to auction secondary broadcast services (LPTV and 
television and FM translators), the licensees of which tend to be small 
businesses.

Description and Number of Small Entities Involved

    28. Under the RFA, small entities include small organizations, 
small businesses, and small governmental jurisdictions. 5 U.S.C. 
601(6). The RFA, 5 U.S.C. 601(3), defines the term ``small business'' 
as having the same meaning as the term ``small business concern'' under 
the Small Business Act. See 15 U.S.C. 632. A small business concern is 
one which: (1) is independently owned and operated; (2) is not dominant 
in its field of operation; and (3) satisfies any additional criteria 
established by the Small Business Administration (SBA). Pursuant to the 
RFA, the statutory definition of a small business applies when 
considering the impact of an agency's action(s) ``unless an agency 
after consultation with the Office of Advocacy of the SBA and after 
opportunity for public comment, established one or more definitions of 
such term which are appropriate to the activities of the agency and 
publishes such definition(s) in the Federal Register.''
    29. In the NPRM we stated that we tentatively believe that the 
SBA's definition of ``small business'' greatly overstates the number of 
radio and television broadcast stations that are small businesses and 
is not particularly suitable for the Commission's purposes, and we 
sought comment on how we should define small business for this purpose. 
While we utilized the SBA's definition to determine the number of small 
businesses to which any auction procedures would apply, we reserved the 
right to adopt a more suitable definition of ``small business'' as 
applied to radio and television broadcast stations. We received no 
comment in response to the IRFA on how to define radio and television 
broadcast ``small businesses.'' Therefore, we will continue to utilize 
the SBA's definitions for the purposes of this FRFA.
    30. Radio Broadcasting Stations. The SBA defines a radio 
broadcasting station that has no more than $5 million in annual 
receipts as a small business. A radio broadcasting station is an 
establishment primarily engaged in broadcasting aural programs by radio 
to the public. Included in this industry are commercial, religious, 
educational, and other radio stations. Radio broadcasting stations 
which primarily are engaged in radio broadcasting and which produce 
radio program materials are similarly included. Official Commission 
records indicate that 11,334 individual radio stations were operating 
in 1992. The 1992 Census indicates that 96 percent of radio station 
establishments (5,861 of 6,127) produced less than $5 million in 
revenue in 1992. As of May 31, 1998, official Commission records 
indicate that 4,724 AM radio stations, 7,595 FM radio stations and 
3,011 FM translator/booster stations were licensed. We conclude a 
similarly high percentage (96 percent) of current radio broadcasting 
licensees are small entities.
    31. Television Broadcasting Stations. The SBA defines a television 
broadcasting station that is independently owned and operated, is not 
dominant in its field of operation, and has no more than $10.5 million 
in annual receipts as a small business. Television broadcasting 
stations consist of establishments primarily engaged in broadcasting 
visual programs by television to the public, except cable and other pay 
television services. Included in this industry are commercial, 
religious, educational, and other television stations. Also included 
are establishments primarily engaged in television broadcasting and 
which produce taped television program materials. There were 1,509 
television stations operating in the nation in 1992. In 1992, there 
were 1,155 television station establishments that produced less than 
$10.0 million in revenue (76.5 percent). As of May 31, 1998, official 
Commission records indicate that 1,579 full power television stations, 
2089 low power television stations, and 4924 television translator 
stations were licensed. We conclude that a similarly high percentage of 
current television broadcasting licensees are small entities (76.5 
percent).
    32. ITFS. In addition, there are presently 2032 ITFS licensees. All 
but 100 of these licenses are held by educational institutions. 
Educational institutions may be included in the definition of a small 
entity. ITFS is a non-pay, non-commercial educational microwave service 
that, depending on

[[Page 48620]]

SBA categorization, has, as small entities, entities generating either 
$10.5 million or less, or $11.0 million or less, in annual receipts. 
However, we do not collect, nor are we aware of other collections of, 
annual revenue data for ITFS licensees. Thus, we conclude that up to 
1932 of these licensees are small entities.
    33. Pending and Future Applicants Affected by Rulemaking. The 
auction procedures set forth in the First R&O will affect pending and 
future competing applicants for the various commercial broadcast 
services and for ITFS. We estimate that, as of the adoption date of the 
First R&O, there are approximately: (1) 700 mutually exclusive pending 
applications for commercial radio stations; (2) 200 pending competing 
applications for full power commercial analog television stations; (3) 
100 mutually exclusive pending applications for low power television 
stations and television translator stations; (4) 30 competing 
applications for FM translator stations; and (5) 200 or more mutually 
exclusive pending applications for ITFS stations. The Commission has no 
data on file as to whether entities with pending permit applications, 
which are subject to the new auction rules adopted for the broadcast 
services, meet the SBA's definition of a small business concern. 
However, we conclude that, given the smaller size of the markets at 
issue in the pending applications, most of the entities with pending 
applications for a permit to construct a new primary or secondary 
broadcast station are small entities, as defined by the SBA rules. It 
is not possible, at this time, to estimate the number of markets for 
which mutually exclusive applications will be received in the future, 
nor the number of entities that in the future may seek a construction 
permit for a new broadcast station. Given the fact that fewer new 
stations (particularly fewer analog television stations) will be 
licensed in the future and that these stations generally will be 
located in smaller, more rural areas, we conclude that most of the 
entities applying for these stations will be small entities, as defined 
by the SBA rules.

Summary of Projected Reporting, Recordkeeping and Other Compliance 
Requirements

    34. The First R&O adopts a number of rules that include reporting, 
recordkeeping, and compliance requirements. These requirements will 
apply to all applicants subject to the new competitive bidding 
procedures, as more fully detailed in the First R&O (referred to in 
this section more generally as ``applicants'').
    35. Applicants will be required to submit a short-form application 
(FCC Form 175) prior to any auction. Only winning bidders will need to 
file complete long-forms (FCC Form 301 for AM, FM and television 
stations, FCC Form 346 for LPTV and television translators, or FCC Form 
349 for FM translators). Specifically, in response to a public notice 
announcing a window for the filing of broadcast and/or secondary 
broadcast applications for new stations and for major changes in 
existing facilities, applicants will be required to file a short-form 
application, along with any engineering data necessary to determine 
mutual exclusivity in a particular service. Applicants for broadcast 
auctions will be required to follow the general auction rules, 47 CFR 
1.2105, with regard to completion of the short form and exhibits to be 
submitted with the short form. Also consistent with the Commission's 
general part 1 auction rules, all applicants for broadcast auctions 
must file their FCC Form 175 applications electronically beginning 
January 1, 1999.
    36. Applicants may be subject to upfront payments, minimum opening 
bids and/or reserve prices in order to participate in broadcast service 
auctions. The Mass Media Bureau in conjunction with the Wireless 
Telecommunications Bureau shall seek public comment on and, as 
appropriate, shall establish these mechanisms for each auction, or 
group of auctions, in the broadcast services.
    37. Following the close of bidding in an auction, winning bidders 
will be required to submit a down payment, file an appropriate long-
form application for each construction permit for which it was the high 
bidder, and pay the balance of their winning bids in a timely manner. 
Broadcast auction participants will also be subject to the bid 
withdrawal, default and disqualification payments set forth in the 
general part 1 auction rules.
    38. A licensee, or holder of a construction permit, who utilized a 
new entrant bidding credit will be required to reimburse the government 
for the amount of the bidding credit, plus interest, as a condition for 
Commission approval of the assignment or transfer of the license or 
permit to an entity that would not have qualified for the new entrant 
credit, as generally provided in the Commission's part 1 rules.

Steps Taken to Minimize Significant Economic Impact on Small Entities, 
and Significant Alternatives Considered

    39. Due to the insufficiency of the record in this proceeding, the 
First R&O does not make a final determination regarding the adoption of 
bidding credits or other special measures to enhance participation by 
various designated entities, including small businesses, in broadcast 
service and ITFS auctions. Such measures will be considered in a 
further report and order to be issued at a later time. For all auctions 
held prior to ultimate resolution of the designated entity issue, the 
First R&O adopts a tiered new entrant bidding credit for entities with 
controlling interests in either no, or less than four, other media 
entities so as to enhance participation by small businesses and other 
designated entities, including small businesses owned by women and 
minority group members. Following the completion of certain pending 
evidentiary studies, the Commission may, in a further report and order 
in this proceeding, adopt additional or alternative bidding credits or 
other measures that more directly alleviate any adverse impact on small 
businesses (including those owned by women or by minority group 
members) of the requirement to participate in an auction to obtain a 
construction permit to provide commercial broadcast service. If 
additional or alternative designated entity measures are ultimately 
adopted, then any such measures will be applicable to the auction of 
any broadcast and ITFS applications then on file with the Commission.
    40. Moreover, even if further special measures are not ultimately 
adopted, we believe that some of the competitive bidding procedures 
adopted in this First R&O reduce the time and cost of securing 
commercial broadcast and ITFS licenses to the ultimate benefit of small 
businesses. For example, entities interested in bidding for broadcast 
station permits will not be required to submit a long-form application 
prior to auction. We will require only that a short-form application be 
submitted prior to auction, although applicants in the non-table 
services will be required to submit the engineering data necessary to 
make determinations of mutual exclusivity. The procedures adopted here 
further expedite service to the public, thereby reducing the cost to 
small entities of participating in these auctions, by limiting our pre-
auction application processing to what is necessary to determine mutual 
exclusivity.

[[Page 48621]]

    41. After careful consideration and in light of Congress' directive 
in the Budget Act, we found that a shortened period of 10 days is 
appropriate for the filing of petitions to deny against the long-form 
applications filed by broadcast auction winners. We have also 
eliminated the requirement that applicants affirmatively certify their 
financial qualifications and the availability of their proposed tower 
locations in their applications.
    42. We recognize that, despite the efficiency of auctions and the 
resulting reduction in the costs associated with filing an application, 
having to participate in an auction may limit the opportunities 
available to small businesses. However, except for certain commercial 
broadcast applications filed before July 1, 1997, Section 309(j)(1) 
requires that the Commission use competitive bidding procedures to 
award virtually all construction permits for commercial broadcast 
stations where mutually exclusive applications are filed. After 
carefully considering the comments, we determined that auctions are 
statutorily required to resolve mutually exclusive secondary broadcast 
service applications, as nothing in the statute or in the legislative 
history reflects an intention to limit Section 309(j)(1) to full power 
radio and television applications.
    43. Relying on the fact that the exemption from competitive bidding 
set forth in Section 309(j)(2) is expressly limited to noncommercial 
educational and public broadcast stations, we also determined that the 
exemption does not apply to ITFS, which is a non-broadcast service. 
Thus, although we agreed with commenters that ITFS is similar to 
noncommercial educational broadcast service and that Section 309(j) may 
not reflect on its face Congress's intent regarding the treatment of 
competing ITFS applications, we found that auctions are statutorily 
required to resolve all pending and future mutually exclusive ITFS 
applications. However, we will request that Congress amend Section 
309(j) so that the statute clearly reflects its intent with regard to 
ITFS. Absent a clear statement from Congress that it means to exempt 
ITFS from competitive bidding, we will proceed to auction mutually 
exclusive ITFS applications. ITFS auctions will not commence 
immediately, however, in order to allow sufficient time for the 
Commission to obtain Congressional guidance.
    44. We also determined to use competitive bidding to resolve 
mutually exclusive major modification applications. Although some 
commenters opposed the auctioning of modification applications, 
commenters did not suggest another method of resolving mutually 
exclusive major modification applications that is as efficient as 
competitive bidding. We will, however, allow applicants who have filed 
competing major modification applications, or competing major 
modification and new station applications, to resolve their mutual 
exclusivity by means of engineering solutions or settlement before 
proceeding to auction. We saw less utility to be gained from subjecting 
minor change applications to competitive bidding procedures; thus, in 
accord with the comments, the parties will be expected to work together 
to resolve any mutual exclusivities between minor modification 
applications.
    45. Section 309(l) governs the resolution of approximately 130 
pending comparative licensing proceedings involving pre-July 1, 1997, 
applications for new commercial radio or television stations that did 
not settle within the 180-day waiver period prescribed by Congress. For 
settlements executed within that period, we waived our settlement 
rules, including the prohibition against ``white knight'' settlement 
agreements where a full-market settlement was involved. Based upon the 
express language of Section 309(l), we concluded that in cases that did 
not settle, we have discretion to resolve applications subject to that 
provision by either auction or comparative hearings. Some commenters 
favored the use of comparative hearings for these pending pre-July 1, 
1997 cases and expressed concern that the switch to auctions would 
detrimentally affect the quality of broadcast service. We found that 
Congress itself has made the judgment that auctions are generally 
preferable to comparative hearings, and concluded that, by providing us 
with the discretion to determine whether or not to use auctions in 
pending pre-July 1st cases, Congress intended the Commission to focus 
on any special circumstances in these cases that would tip the policy 
balance in favor of comparative hearings, not to re-visit the general 
congressional determination that broadcast auctions serve the public 
interest.
    46. In exercising this discretion, we concluded that, even for the 
few pre-July 1, 1997 cases that had already progressed through an 
Initial Decision by an Administrative Law Judge, auctions will 
generally be fairer and more expeditious than deciding these pending 
cases through the comparative hearing process, particularly since the 
court's invalidation of the key comparative criterion prevents us from 
deciding any of these cases according to the applicants' reasonable 
expectation when they filed their applications. We found that for the 
Commission's Administrative Law Judges to adjudicate and decide the 
approximately 130 pending proceedings would take many years while 
auctions can be carried out much more quickly.
    47. We rejected arguments raised by commenters that changing the 
selection process for pending applications filed before July 1, 1997 is 
impermissibly retroactive or otherwise unlawful. We found that none of 
the pre-July 1, 1997 applicants subject to the new Section 309(l) have 
a vested right to a comparative hearing that is abridged by our 
decision to resolve such applications by competitive bidding. And, in 
any event, the economic impact of this regulatory change is ameliorated 
somewhat by the statutory requirement that auctions to decide these 
pending cases be closed to other participants.
    48. Based upon the express language of Section 309(l)(2), we found 
that, where post-June 30, 1997 applications are mutually exclusive with 
two or more pre-July 1, 1997 applications, we must dismiss them and 
conduct a competitive bidding procedure that is restricted to the pre-
July 1, 1997 applications. We rejected arguments by some commenters 
that the distinction between pre-July 1st and post June 30th 
applications is arbitrary. We found that Congress adopted a bright line 
distinction and that this distinction operates to exclude some 
applicants but to include others does not make it unlawful. Moreover, 
the practical effect of this bright line distinction will be limited, 
as we believe that settlement agreements have been filed in connection 
with the small number of cases involving post-June 30th applications 
mutually exclusive with two or more pre-July 1st applications.
    49. Except for applications subject to Section 309(l), there is no 
statutory bar to reopening new filing periods for applications that 
would be mutually exclusive with pending applications. We agreed with 
commenters that reopening already closed filing periods would not serve 
the public interest since it would delay, rather than expedite, the 
resolution of the pending applications, and would defeat the reasonable 
expectations of applicants who timely filed long-form applications.
    50. As a matter of fairness to pending applicants, we determined to 
refund all hearing and certain filing fees paid by all pending 
applicants. But we declined the suggestion of various commenters

[[Page 48622]]

that we also reimburse the legitimate and prudent expenses of pending 
pre-July 1st applicants subject to the comparative freeze, who either 
do not participate in the auction or are outbid in the auction. We are 
aware of no legal authority to make such additional reimbursement and 
concluded we have no obligation to do so.
    51. We concluded that, consistent with our approach in most of the 
Commission's previous auctions, broadcast and ITFS applicants should be 
required to submit upfront payments with their short-form applications 
prior to auction. We also reserved the right to adopt minimum opening 
bid and/or reserve prices for each license. Establishing upfront 
payments, minimum opening bid and/or reserve prices may have a 
significant economic impact on small businesses interested in applying 
for commercial broadcast and ITFS licenses. However, upfront payments 
have been required in our general part 1 auction rules since they were 
first promulgated, and Congress has directed us to prescribe minimum 
opening bids or reserve prices unless we specifically determine that 
this will not serve the public interest. While we were unpersuaded by 
generalized assertions that reserve prices or minimum opening bids 
would contravene the public interest, we directed the staff to seek 
comment on, and as appropriate, establish upfront payments, opening 
bids and/or reserve prices for each auction or group auctions.
    52. A number of commenters opposed our proposal to apply the anti-
collusion rule to broadcast service auctions, believing instead that 
auction applicants should be permitted to conclude settlement 
agreements following the short-form filing deadline with those 
applicants with whom they are mutually exclusive. We noted that we 
adopted the anti-collusion rule to both prevent and to facilitate the 
detection of collusive conduct, thereby enhancing the competitiveness 
of the auction process and the post-auction market structure. We found 
that the rule has proven effective in the numerous spectrum auctions 
conducted to date, and concluded to apply the rule to broadcast 
auctions, although a limited exception to the anti-collusion rule will 
be made, as discussed above, in the context of mutually exclusive major 
modification applications.
    53. For the pending comparative renewal proceedings (which may not 
be resolved by auction), we determined that the most equitable and 
expeditious approach would be simply to permit the renewal applicants 
and their challengers, within the confines of the generally phrased 
standard comparative issues, to present whatever factors and evidence 
they believe most appropriate.

Report to Congress

    54. The Commission will send a copy of the First R&O, including 
this FRFA, in a report to be sent to Congress pursuant to the Small 
Business Regulatory Enforcement Fairness Act of 1996. 3See 5 U.S.C. 
801(a)(1)(A). In addition, the Commission will send a copy of the First 
R&O, including the FRFA, to the Chief Counsel for Advocacy of the Small 
Business Administration.
    55. Authority for issuance of this First R&O is contained in 
Sections 4(i) and (j), 301, 303(f), 303(g), 303(h), 303(j), 303(r), 
307(c), 308(b), 309(j), 309(l) and 403 of the Communications Act of 
1934, as amended, 47 U.S.C. 154(i), 154(j), 301, 303(f), 303(g), 
303(h), 303(j), 303(r), 307(c), 308(b), 309(j), 309(l) and 403.

List of Subjects in 47 CFR parts 1, 73 and 74

    Radio broadcasting, Reporting and recordkeeping requirements, 
Television broadcasting.

Federal Communications Commission.
William F. Caton,
Deputy Secretary.

Rule Changes

    Parts 1, 73 and 74 of Chapter 1 of Title 47 of the Code of Federal 
Regulations are amended as follows:

PART 1--PRACTICE AND PROCEDURE

    1. The authority for part 1 continues to read as follows:

    Authority: 15 U.S.C. 79 et seq.; 47 U.S.C. 151, 154(i), 154(j), 
155, 225, and 303(r).

    2. Section 1.65 is amended by revising paragraphs (a) and (b) to 
read as follows:


Sec. 1.65  Substantial and significant changes in the information 
furnished by applicants to the Commission.

    (a) Each applicant is responsible for the continuing accuracy and 
completeness of information furnished in a pending application or in 
Commission proceedings involving a pending application. Whenever the 
information furnished in the pending application is no longer 
substantially accurate and complete in all significant respects, the 
applicant shall as promptly as possible and in any event within 30 
days, unless good cause is shown, amend or request the amendment of his 
application so as to furnish such additional or corrected information 
as may be appropriate. Whenever there has been a substantial change as 
to any other matter which may be of decisional significance in a 
Commission proceeding involving the pending application, the applicant 
shall as promptly as possible and in any event within 30 days, unless 
good cause is shown, submit a statement furnishing such additional or 
corrected information as may be appropriate, which shall be served upon 
parties of record in accordance with Sec. 1.47. Where the matter is 
before any court for review, statements and requests to amend shall in 
addition be served upon the Commission's General Counsel. For the 
purposes of this section, an application is ``pending'' before the 
Commission from the time it is accepted for filing by the Commission 
until a Commission grant or denial of the application is no longer 
subject to reconsideration by the Commission or to review by any court.
    (b) Applications in ITFS and broadcast services subject to 
competitive bidding will be subject to the provisions of 
Secs. 1.2105(b), 73.5002 and 73.3522 regarding the modification of 
their applications.
* * * * *
    3. Section 1.1601 is amended by reserving paragraph (a) to read as 
follows:


Sec. 1.1601  Scope.

* * * * *
    (a) [Reserved]
* * * * *
    4. Section 1.604 is amended by revising paragraph (a) to read as 
follows:


Sec. 1.1604  Post-selection hearings.

    (a) Following the random selection, the Commission shall announce 
the ``tentative selectee'' and, where permitted by Sec. 73.3584 invite 
Petitions to Deny its application.
* * * * *

PART 73--RADIO BROADCAST SERVICES

    5. The authority for part 73 is revised to read as follows:

    Authority: 47 U.S.C. 154, 303, 334 and 336.

    6. Section 73.1010 is amended by adding paragraph (a)(8) to read as 
follows:


Sec. 73.1010  Cross reference to rules in other parts.

* * * * *
    (a) * * *
    (8) Subpart Q, ``Competitive Bidding Proceedings'' (Secs. 1.2101-
1.2112).
* * * * *
    7. Section 73.3500 is amended by adding the following new entry in 
numerical order to read as follows:

[[Page 48623]]

Sec. 73.3500  Application and report forms.

------------------------------------------------------------------------
           Form  number                             Title               
------------------------------------------------------------------------
175...............................  Application to Participate in an FCC
                                     Auction                            
                                                                        
                *         *         *         *         *               
------------------------------------------------------------------------

    8. Section 73.3522 is revised to read as follows:


Sec. 73.3522  Amendment of applications.

    (a) Broadcast services subject to competitive bidding. (1) 
Applicants in all broadcast services subject to competitive bidding 
will be subject to the provisions of Secs. 73.5002 and 1.2105(b) 
regarding the modification of their short-form applications.
    (2) Subject to the provision of Sec. 73.5005, if it is determined 
that a long form application submitted by a winning bidder or a non-
mutually exclusive applicant for a new station or a major change in an 
existing station in all broadcast services subject to competitive 
bidding is substantially complete, but contains any defect, omission, 
or inconsistency, a deficiency letter will be issued affording the 
applicant an opportunity to correct the defect, omission or 
inconsistency. Amendments may be filed pursuant to the deficiency 
letter curing any defect, omission or inconsistency identified by the 
Commission, or to make minor modifications to the application, or 
pursuant to Sec. 1.65. Such amendments should be filed in accordance 
with Sec. 73.3513. If a petition to deny has been filed, the amendment 
shall be served on the petitioner.
    (3) Subject to the provisions of Secs. 73.3571, 73.3572 and 
73.3573, deficiencies, omissions or inconsistencies in long-form 
applications may not be cured by major amendment. The filing of major 
amendments to long-form applications is not permitted. An application 
will be considered to be newly filed if it is amended by a major 
amendment.
    (4) Paragraph (a) of this section is not applicable to applications 
for minor modifications of facilities in the non-reserved FM broadcast 
service, nor to any application for a reserved band FM station.
    (b) Reserved band FM and reserved noncommercial educational 
television stations.--(1) Predesignation amendments. Subject to the 
provisions of Secs. 73.3525, 73.3572, 73.3573 and 73.3580, mutually 
exclusive broadcast applications for reserved band FM stations and 
television stations on a reserved channel may be amended as a matter of 
right by the date specified (not less than 30 days after issuance) in 
the FCC's Public Notice announcing the acceptance for filing of the 
last-filed mutually exclusive application. Subsequent amendments prior 
to designation of the proceeding for hearing will be considered only 
upon a showing of good cause for late filing or pursuant to Sec. 1.65 
or Sec. 73.3514. Unauthorized or untimely amendments are subject to 
return by the FCC's staff without consideration.
    (2) Postdesignation amendments. (i) Except as provided in paragraph 
(ii) of this section, requests to amend an application after it has 
been designated for hearing will be considered only upon written 
petition properly served upon the parties of record in accordance with 
Sec. 1.47 and, where applicable, compliance with the provisions of 
Sec. 73.3525, and will be considered only upon a showing of good cause 
for late filing. In the case of requests to amend the engineering 
proposal (other than to make changes with respect to the type of 
equipment specified), good cause will be considered to have been shown 
only if, in addition to the usual good cause consideration, it is 
demonstrated:
    (A) That the amendment is necessitated by events which the 
applicant could not reasonably have foreseen (e.g., notification of a 
new foreign station or loss of transmitter site by condemnation); and
    (B) That the amendment does not require an enlargement of issues or 
the addition of new parties to the proceeding.
    (ii) In comparative broadcast cases (including comparative renewal 
proceedings), amendments relating to issues first raised in the 
designation order may be filed as a matter of right within 30 days 
after that Order or a summary thereof is published in the Federal 
Register, or by a date certain to be specified in the Order.
    (iii) Notwithstanding the provisions of paragraphs (b)(2)(i) and 
(b)(2)(ii) of this section, and subject to compliance with the 
provisions of Sec. 73.3525, a petition for leave to amend may be 
granted, provided it is requested that the application as amended be 
removed from the hearing docket and returned to the processing line. 
(c) Minor modifications of facilities in the non-reserved FM broadcast 
service.
    (1) Subject to the provisions of Secs. 73.3525, 73.3573, and 
73.3580, for a period of 30 days following the FCC's issuance of a 
Public Notice announcing the tender of an application for minor 
modification of a non-reserved band FM station, (other than Class D 
stations), minor amendments may be filed as a matter of right.
    (2) For applications received on or after August 7, 1992, an 
applicant whose application is found to meet minimum filing 
requirements, but nevertheless is not complete and acceptable, shall 
have the opportunity during the period specified in the FCC staff's 
deficiency letter to correct all deficiencies in the tenderability and 
acceptability of the underlying application, including any deficiency 
not specifically identified by the staff. [For minimum filing 
requirements see Sec. 73.3564(a). Examples of tender defects appear at 
50 FR 19936 at 19945-46 (May 13, 1985), reprinted as Appendix D, Report 
and Order, MM Docket No. 91-347, 7 FCC Rcd 5074, 5083-88 (1992). For 
examples of acceptance defects, see 49 FR 47331.] Prior to the end of 
the period specified in the deficiency letter, a submission seeking to 
correct a tender and/or acceptance defect in an application meeting 
minimum filing requirements will be treated as an amendment for good 
cause if it would successfully and directly correct the defect. Other 
amendments submitted prior to grant will be considered only upon a 
showing of good cause for late filing or pursuant to Sec. 1.65 or 
Sec. 73.3514.
    (3) Unauthorized or untimely amendments are subject to return by 
the Commission without consideration. However, an amendment to a non-
reserved band application will not be accepted if the effect of such 
amendment is to alter the proposed facility's coverage area so as to 
produce a conflict with an applicant who files subsequent to the 
initial applicant but prior to the amendment application. Similarly, an 
applicant subject to ``first come/first serve'' processing will not be 
permitted to amend its application and retain filing priority if the 
result of such amendment is to alter the facility's coverage area so as 
to produce a conflict with an applicant which files subsequent to the 
initial applicant but prior to the amendment.

    Note 1 to Sec. 73.3522: When two or more broadcast applications 
are tendered for filing which are mutually exclusive with each other 
but not in conflict with any previously filed applications which 
have been accepted for filing, the FCC, where appropriate, will 
announce acceptance of the earliest tendered application and place 
the later filed application or applications on a subsequent public 
notice of acceptance for filing in order to establish a deadline for 
the filing of amendments as a matter of right for all applicants in 
the group.

    9. Section 73.3525 is amended by revising paragraphs (c) and (d) 
and adding paragraph (l) to read as follows:

[[Page 48624]]

Sec. 73.3525  Agreements for removing application conflicts.

* * * * *
    (c) Except where a joint request is filed pursuant to paragraph (a) 
of this section, any applicant filing an amendment pursuant to 
Secs. 73.3522(b)(1) and (c), or a request for dismissal pursuant to 
Secs. 73.3568(b)(1) and (c), which would remove a conflict with another 
pending application; or a petition for leave to amend pursuant to 
Sec. 73.3522(b)(2) which would permit a grant of the amended 
application or an application previously in conflict with the amended 
application; or a request for dismissal pursuant to Sec. 73.3568(b)(2), 
shall file with it an affidavit as to whether or not consideration 
(including an agreement for merger of interests) has been promised to 
or received by such applicant, directly or indirectly, in connection 
with the amendment, petition or request.
    (d) Upon the filing of a petition for leave to amend or to dismiss 
an application for broadcast facilities which has been designated for 
hearing or upon the dismissal of such application on the FCC's own 
motion pursuant to Sec. 73.3568, each applicant or party remaining in 
hearing, as to whom a conflict would be removed by the amendment or 
dismissal shall submit for inclusion in the record of that proceeding 
an affidavit stating whether or not he has directly or indirectly paid 
or promised consideration (including an agreement for merger of 
interests) in connection with the removal of such conflict.
* * * * *
    (l) The prohibition of collusion as set forth in Secs. 1.2105(c) 
and 73.5002 of this section, which becomes effective upon the filing of 
short-form applications, shall apply to all broadcast services subject 
to competitive bidding.
    10. Section 73.3564 is revised to read as follows:


Sec. 73.3564  Acceptance of applications.

    (a)(1) Applications tendered for filing are dated upon receipt and 
then forwarded to the Mass Media Bureau, where an administrative 
examination is made to ascertain whether the applications are complete. 
Except for applications for minor modifications of facilities in the 
non-reserved FM band, as defined in Sec. 73.3573(a)(2), long form 
applications subject to the provisions of Sec. 73.5005 found to be 
complete or substantially complete are accepted for filing and are 
given file numbers. In the case of minor defects as to completeness, a 
deficiency letter will be issued and the applicant will be required to 
supply the missing or corrective information. Applications that are not 
substantially complete will not be considered and will be returned to 
the applicant.
    (2) In the case of minor modifications of facilities in the non-
reserved FM band, applications will be placed on public notice if they 
meet the following two-tiered minimum filing requirement as initially 
filed in first come/first served proceedings:
    (i) The application must include:
    (A) Applicant's name and address,
    (B) Applicant's original signature,
    (C) Principal community,
    (D) Channel or frequency,
    (E) Class of station, and
    (F) Transmitter site coordinates; and
    (ii) The application must not omit more than 3 of the second tier 
items specified in appendix C, Report and Order, MM Docket No. 91-347, 
FCC 92-328, 7 FCC Rcd 5074 (1992). Applications found not to meet 
minimum filing requirements will be returned to the applicant. 
Applications found to meet minimum filing requirements, but that 
contain deficiencies in tender and/or acceptance information, shall be 
given an opportunity for corrective amendment pursuant to Sec. 73.3522. 
Applications found to be substantially complete and in accordance with 
the Commission's core legal and technical requirements will be accepted 
for filing. Applications with uncorrected tender and/or acceptance 
defects remaining after the opportunity for corrective amendment will 
be dismissed with no further opportunity for corrective amendment.
    (b) Acceptance of an application for filing merely means that it 
has been the subject of a preliminary review by the FCC's 
administrative staff as to completeness. Such acceptance will not 
preclude the subsequent dismissal of the application if it is found to 
be patently not in accordance with the FCC's rules.
    (c) At regular intervals, the FCC will issue a Public Notice 
listing all long form applications which have been accepted for filing. 
Pursuant to Secs. 73.3571(h), 73.3572, and 73.3573(f), such notice 
shall establish a cut-off date for the filing of petitions to deny. 
With respect to reserved band FM applications, the Public Notice shall 
also establish a cut-off date for the filing of mutually exclusive 
applications pursuant to Sec. 73.3573(e). However, no application will 
be accepted for filing unless certification of compliance with the 
local notice requirements of Sec. 73.3580(h) has been made in the 
tendered application.
    (d) The FCC will specify by Public Notice, pursuant to 
Sec. 73.5002, a period for filing applications for new stations or for 
major modifications in the facilities of an existing station. Except 
for reserved band FM stations and TV stations on reserved noncommercial 
educational channels, applications for new and major modifications in 
facilities will be accepted only during these window filing periods 
specified by the Commission.
    (e) Applications for minor modification of facilities may be 
tendered at any time, unless restricted by the FCC. These applications 
will be processed on a ``first come/first served'' basis and will be 
treated as simultaneously tendered if filed on the same day. Any 
applications received after the filing of a lead application will be 
grouped according to filing date, and placed in a queue behind the lead 
applicant. The FCC will periodically release a Public Notice listing 
those minor modification of facilities applications accepted for 
filing.
    (f) If a non-reserved band FM channel allotment becomes vacant, 
after the grant of a construction permit becomes final, because of a 
lapsed construction permit or for any other reason, the FCC will, by 
Public Notice, announce a subsequent filing window for the acceptance 
of new applications for such channels.
    (g) Applications for operation in the 1605-1705 kHz band will be 
accepted only if filed pursuant to the terms of Sec. 73.30(b).
    11. Section 73.3568 is revised to read as follows:


Sec. 73.3568  Dismissal of applications.

    (a) (1) Failure to prosecute an application, or failure to respond 
to official correspondence or request for additional information, will 
be cause for dismissal.
    (2) Applicants in all broadcast services subject to competitive 
bidding will be subject to the provisions of Secs. 73.5002 and 
1.2105(b) regarding the dismissal of their short-form applications.
    (3) Applicants in all broadcast services subject to competitive 
bidding will be subject to the provisions of Secs. 73.5004, 73.5005 and 
1.2104(g) regarding the dismissal of their long-form applications and 
the imposition of applicable withdrawal, default and disqualification 
payments.
    (b) (1) Subject to the provisions of Sec. 73.3525, dismissal of 
applications for channels reserved for noncommercial educational use 
will be without prejudice where an application has not yet been 
designated for hearing, but may

[[Page 48625]]

be made with prejudice after designation for hearing.
    (2) Subject to the provisions of Sec. 73.3525, requests to dismiss 
an application for a channel reserved for noncommercial educational 
use, without prejudice, after it has been designated for hearing, will 
be considered only upon written petition properly served upon all 
parties of record. Such requests shall be granted only upon a showing 
that the request is based on circumstances wholly beyond the 
applicant's control which preclude further prosecution of his 
application.
    (c) Subject to the provisions of Secs. 73.3523 and 73.3525, any 
application for minor modification of facilities may, upon request of 
the applicant, be dismissed without prejudice as a matter of right.
    (d) An applicant's request for the return of an application that 
has been accepted for filing will be regarded as a request for 
dismissal.
    12. Section 73.3571 is revised to read as follows:


Sec. 73.3571  Processing of AM broadcast station applications.

    (a) Applications for AM broadcast facilities are divided into three 
groups.
    (1) In the first group are applications for new stations or for 
major changes in the facilities of authorized stations. A major change 
for an AM station authorized under this part is any increase in power, 
except where accompanied by a complimentary reduction of antenna 
efficiency which leads to the same amount, or less, radiation in all 
directions (in the horizontal and vertical planes when skywave 
propagation is involved, and in the horizontal plane only for daytime 
considerations), relative to the presently authorized radiation levels, 
or any change in frequency, hours of operation, or community of 
license. A major change in ownership is a situation where the original 
party or parties to the application do not retain more than 50% 
ownership interest in the application as originally filed.
    (2) The second group consists of applications for licenses and all 
other changes in the facilities of authorized stations.
    (3) The third group consists of applications for operation in the 
1605-1705 kHz band which are filed subsequent to FCC notification that 
allotments have been awarded to petitioners under the procedure 
specified in Sec. 73.30.
    (b)(1) The FCC may, after acceptance of an application for 
modification of facilities, advise the applicant that such application 
is considered to be one for a major change and therefore is subject to 
the provisions of Secs. 73.3522, 73.3580 and 1.1111 of this chapter 
pertaining to major changes. Such major modification applications will 
be dismissed as set forth in paragraph (h)(1)(i) of this section.
    (2) An amendment to an application which would effect a major 
change, as defined in paragraph (a)(1) of this section, will not be 
accepted except as provided for in paragraph (h)(1)(i) of this section.
    (c) An application for changes in the facilities of an existing 
station will continue to carry the same file number even though 
(pursuant to FCC approval) an assignment of license or transfer of 
control of said licensee or permittee has taken place if, upon 
consummation, the application is amended to reflect the new ownership.
    (d) If, upon examination, the FCC finds that the public interest, 
convenience and necessity will be served by the granting of an 
application, the same will be granted. If the FCC is unable to make 
such a finding and it appears that a hearing may be required, the 
procedure set forth in Sec. 73.3593 will be followed.
    (e) Applications proposing to increase the power of an AM station 
are subject to the following requirements:
    (1) In order to be acceptable for filing, any application which 
does not involve a change in site must propose at least a 20% increase 
in the station's nominal power.
    (2) Applications involving a change in site are not subject to the 
requirements in paragraph (e)(1) of this section.
    (3) Applications for nighttime power increases for Class D stations 
are not subject to the requirements of this section and will be 
processed as minor changes.
    (4) The following special procedures will be followed in 
authorizing Class II-D daytime-only stations on 940 and 1550 kHz, and 
Class III daytime-only stations on the 41 regional channels listed in 
Sec. 73.26(a), to operate unlimited-time.
    (i) Each eligible daytime-only station in the foregoing categories 
will receive an Order to Show Cause why its license should not be 
modified to specify operation during nighttime hours with the 
facilities it is licensed to start using at local sunrise, using the 
power stated in the Order to Show Cause, that the Commission finds is 
the highest nighttime level--not exceeding 0.5 kW--at which the station 
could operate without causing prohibited interference to other domestic 
or foreign stations, or to co-channel or adjacent channel stations for 
which pending applications were filed before December 1, 1987.
    (ii) Stations accepting such modification shall be reclassified. 
Those authorized in such Show Cause Orders to operate during nighttime 
hours with a power of 0.25 kW or more, or with a power that, although 
less than 0.25 kW, is sufficient to enable them to attain RMS field 
strengths of 141 mV/m or more at 1 kilometer, shall be redesignated as 
Class II-B stations if they are assigned to 940 or 1550 kHz, and as 
unlimited-time Class III stations if they are assigned to regional 
channels.
    (iii) Stations accepting such modification that are authorized to 
operate during nighttime hours at powers less than 0.25 kW, and that 
cannot with such powers attain RMS field strengths of 141 mV/m or more 
at 1 kilometer, shall be redesignated as Class II-S stations if they 
are assigned to 940 or 1550 kHz, and as Class III-S stations if they 
are assigned to regional channels.
    (iv) Applications for new stations may be filed at any time on 940 
and 1550 kHz and on the regional channels. Also, stations assigned to 
940 or 1550 kHz, or to the regional channels, may at any time, 
regardless of their classifications, apply for power increases up to 
the maximum generally permitted. Such applications for new or changed 
facilities will be granted without taking into account interference 
caused to Class II-S or Class III-S stations, but will be required to 
show interference protection to other classes of stations, including 
stations that were previously classified as Class II-S or Class III-S, 
but were later reclassified as Class II-B or Class III unlimited-time 
stations as a result of subsequent facilities modifications that 
permitted power increases qualifying them to discontinue their ``S'' 
subclassification.
    (f) Applications for minor modifications for AM broadcast stations, 
as defined in paragraph (a)(2) of this section, may be filed at any 
time, unless restricted by the FCC, and, generally will be processed in 
the order in which they are tendered. The FCC will periodically release 
a Public Notice listing those applications accepted for filing. Any 
such applications found to be mutually exclusive must be resolved 
through settlement or technical amendment.
    (g) Applications for change of license to change hours of operation 
of a Class C AM broadcast station, to decrease hours of operation of 
any other class of station, or to change station location involving no 
change in transmitter site will be considered without reference to the 
processing line.

[[Page 48626]]

    (h) Processing new and major AM broadcast station applications. 
(1)(i) The FCC will specify by Public Notice, pursuant to Sec. 73.5002, 
a period for filing AM applications for a new station or for major 
modifications in the facilities of an authorized station. AM 
applications for new facilities or for major modifications will be 
accepted only during these specified periods. Applications submitted 
prior to the appropriate filing period or ``window'' opening date 
identified in the Public Notice will be returned as premature. 
Applications submitted after the specified deadline will be dismissed 
with prejudice as untimely.
    (ii) Such AM applicants will be subject to the provisions of 
Secs. 1.2105 and 73.5002 regarding the submission of the short-form 
application, FCC Form 175, and all appropriate certifications, 
information and exhibits contained therein. To determine which AM 
applications are mutually exclusive, AM applicants must submit the 
engineering data contained in FCC Form 301 as a supplement to the 
short-form application. Such engineering data will not be studied for 
technical acceptability, but will be protected from subsequently filed 
applications as of the close of the window filing period. 
Determinations as to the acceptability or grantability of an 
applicant's proposal will not be made prior to an auction.
    (iii) AM applicants will be subject to the provisions of 
Secs. 1.2105 and 73.5002 regarding the modification and dismissal of 
their short-form applications.
    (2) Subsequently, the FCC will release Public Notices:
    (i) identifying the short-form applications received during the 
window filing period which are found to be mutually exclusive;
    (ii) establishing a date, time and place for an auction;
    (iii) providing information regarding the methodology of 
competitive bidding to be used in the upcoming auction, bid submission 
and payment procedures, upfront payment procedures, upfront payment 
deadlines, minimum opening bid requirements and applicable reserve 
prices in accordance with the provisions of Sec. 73.5002;
    (iv) identifying applicants who have submitted timely upfront 
payments and, thus, are qualified to bid in the auction.
    (3) If, during the window filing period, the FCC receives non-
mutually exclusive AM applications, a Public Notice will be released 
identifying the non-mutually exclusive applicants, who will be required 
to submit the appropriate long form application within 30 days of the 
Public Notice and pursuant to the provisions of Sec. 73.5005(d). These 
non-mutually exclusive applications will be processed and the FCC will 
periodically release a Public Notice listing such non-mutually 
exclusive applications determined to be acceptable for filing and 
announcing a date by which petitions to deny must be filed in 
accordance with the provisions of Secs. 73.5006 and 73.3584. If the 
applicant is duly qualified, and upon examination, the FCC finds that 
the public interest, convenience and necessity will be served by the 
granting of the non-mutually exclusive long form application, the same 
will be granted.
    (4)(i) The auction will be held pursuant to the procedures set 
forth in Secs. 1.2101 et seq. and 73.5000 et seq. Subsequent to the 
auction, the FCC will release a Public Notice announcing the close of 
the auction and identifying the winning bidders. Winning bidders will 
be subject to the provisions of Secs. 1.2107 and 73.5003 regarding down 
payments and will be required to submit the appropriate down payment 
within 10 business days of the Public Notice. Pursuant to Secs. 1.2107 
and 73.5005, a winning bidder that meets its down payment obligations 
in a timely manner must, within 30 days of the release of the Public 
Notice announcing the close of the auction, submit the appropriate 
long-form application for each construction permit for which it was the 
winning bidder. Long-form applications filed by winning bidders shall 
include the exhibits identified in Sec. 73.5005(a).
    (ii) These applications will be processed and the FCC will 
periodically release a Public Notice listing such applications that 
have been accepted for filing and announcing a date by which petitions 
to deny must be filed in accordance with the provisions of 
Secs. 73.5006 and 73.3584. If the applicant is duly qualified, and upon 
examination, the FCC finds that the public interest, convenience and 
necessity will be served by the granting of the winning bidder's long-
form application, a Public Notice will be issued announcing that the 
construction permit is ready to be granted. Each winning bidder shall 
pay the balance of its winning bid in a lump sum within 10 business 
days after release of the Public Notice, as set forth in 
Secs. 1.2109(a) and 73.5003. Construction permits will be granted by 
the Commission following the receipt of the full payment.
    (iii) All long-form applications will be cutoff as of the date of 
filing with the FCC and will be protected from subsequently filed long-
form applications. Applications will be required to protect all 
previously filed commercial and noncommercial applications. Winning 
bidders filing long-form applications may change the technical 
proposals specified in their previously submitted short-form 
applications, but such change may not constitute a major change. If the 
submitted long-form application would constitute a major change from 
the proposal submitted in the short-form application, the long-form 
application will be returned pursuant to paragraph (h)(1)(i) of this 
section.
    (i) In order to grant a major or minor change application made 
contingent upon the grant of another licensee's request for a facility 
modification, the Commission will not consider mutually exclusive 
applications by other parties that would not protect the currently 
authorized facilities of the contingent applicants. Such major change 
applications remain, however, subject to the provisions of 
Secs. 73.3580 and 1.1111. The Commission shall grant contingent 
requests for construction permits for station modifications only upon a 
finding that such action will promote the public interest, convenience 
and necessity.
    13. Section 73.3572 is revised to read as follows:


Sec. 73.3572  Processing of TV broadcast, low power TV, TV translator 
and TV booster station applications.

    (a) Applications for TV stations are divided into two groups:
    (1) In the first group are applications for new stations or major 
changes in the facilities of authorized stations. A major change for TV 
broadcast stations authorized under this part is any change in 
frequency or community of license which is in accord with a present 
allotment contained in the Table of Allotments (Sec. 73.606). Other 
requests for change in frequency or community of license for TV 
broadcast stations must first be submitted in the form of a petition 
for rulemaking to amend the Table of Allotments. In the case of low 
power TV, TV translator, and TV booster stations authorized under part 
74 of this chapter, a major change is any change in:
    (i) Frequency (output channel) assignment (does not apply to TV 
boosters);
    (ii) Transmitting antenna system including the direction of the 
radiation, directive antenna pattern or transmission line;
    (iii) Antenna height;
    (iv) Antenna location exceeding 200 meters; or
    (v) Authorized operating power.
    (2) However, if the proposed modification of facilities, other than 
a

[[Page 48627]]

change in frequency, will not increase the signal range of the low 
power TV, TV translator or TV booster station in any horizontal 
direction, the modification will not be considered a major change.
    (i) Provided that in the case of an authorized low power TV, TV 
translator or TV booster which is predicted to cause or receive 
interference to or from an authorized TV broadcast station pursuant to 
Sec. 74.705 or interference with broadcast or other services under 
Sec. 74.703 or Sec. 74.709, that an application for a change in output 
channel, together with technical modifications which are necessary to 
avoid interference (including a change in antenna location of less than 
16.1 km), will not be considered as an application for a major change 
in those facilities.
    (ii) Provided further, that a low power TV, TV translator or TV 
booster station: authorized on a channel from channel 60 to 69, or 
which is causing or receiving interference or is predicted to cause or 
receive interference to or from an authorized DTV station pursuant to 
Sec. 74.706, or which is located within the distances specified below 
in paragraph (iii) of this section to the coordinates of co-channel DTV 
authorizations (or allotment table coordinates if there are no 
authorized facilities at different coordinates), may at any time file a 
displacement relief application for a change in output channel, 
together with any technical modifications which are necessary to avoid 
interference or continue serving the station's protected service area. 
Such an application will not be considered as an application for a 
major change in those facilities. Where such an application is mutually 
exclusive with applications for new low power TV, TV translator or TV 
booster stations, or with other nondisplacement relief applications for 
facilities modifications, priority will be afforded to the displacement 
application(s) to the exclusion of the other applications.
    (iii)(A) The geographic separations to co-channel DTV facilities or 
allotment reference coordinates, as applicable, within which to qualify 
for displacement relief are the following:
    (1) Stations on UHF channels: 265 km (162 miles)
    (2) Stations on VHF channels 2-6: 280 km (171 miles)
    (3) Stations on VHF channels 7-13: 260 km (159 miles)
    (B) Engineering showings of predicted interference may also be 
submitted to justify the need for displacement relief.
    (iv) Provided further, that the FCC may, within 15 days after 
acceptance of any other application for modification of facilities, 
advise the applicant that such application is considered to be one for 
a major change and therefore subject to the provisions of 
Secs. 73.3522, 73.3580, and 1.1111 of this chapter pertaining to major 
changes. Such major modification applications filed for low power TV, 
TV translator, TV booster stations, and for a non-reserved television 
allotment, are subject to competitive bidding procedures and will be 
dismissed if filed outside a specified filing period. See 47 CFR 
73.5002(a).
    (b) A new file number will be assigned to an application for a new 
station or for major changes in the facilities of an authorized 
station, when it is amended so as to effect a major change, as defined 
in paragraph (a)(1) of this section, or result in a situation where the 
original party or parties to the application do not retain more than 
50% ownership interest in the application as originally filed and 
Sec. 73.3580 will apply to such amended application. An application for 
change in the facilities of any existing station will continue to carry 
the same file number even though (pursuant to FCC approval) an 
assignment of license or transfer of control of such licensee or 
permittee has taken place if, upon consummation, the application is 
amended to reflect the new ownership.
    (c) Amendments to low power TV, TV translator, TV booster stations, 
or non-reserved television applications, which would require a new file 
number pursuant to paragraph (b) of this section, are subject to 
competitive bidding procedures and will be dismissed if filed outside a 
specified filing period. See 47 CFR 73.5002(a). When an amendment to an 
application for a reserved television allotment would require a new 
file number pursuant to paragraph (b) of this section, the applicant 
will have the opportunity to withdraw the amendment at any time prior 
to designation for a hearing if applicable; and may be afforded, 
subject to the discretion of the Administrative Law Judge, an 
opportunity to withdraw the amendment after designation for a hearing.
    (d) Applications for TV stations on reserved noncommercial 
educational channels will be processed as nearly as possible in the 
order in which they are filed. Such applications will be placed in the 
processing line in numerical sequence, and will be drawn by the staff 
for study, the lowest file number first. In order that those 
applications which are entitled to be grouped for processing may be 
fixed prior to the time processing of the earliest filed application is 
begun, the FCC will periodically release a Public Notice listing 
applications which have been accepted for filing and announcing a date 
(not less than 30 days after issuance) on which the listed applications 
will be considered available and ready for processing and by which all 
mutually exclusive applications and petitions to deny the listed 
applications must be filed.
    (e)(1) The FCC will specify by Public Notice, pursuant to 
Sec. 73.5002, a period for filing applications for a new non-reserved 
television, low power TV and TV translator stations or for major 
modifications in the facilities of such authorized station.
    (2) Such applicants shall be subject to the provisions of 
Secs. 1.2105 and competitive bidding procedures. See 47 CFR 73.5000 et 
seq.
    (f) Applications for minor modifications for television broadcast, 
low power television and TV translator stations, as defined in 
paragraph (a)(2) of this section, may be filed at any time, unless 
restricted by the FCC, and, generally, will be processed in the order 
in which they are tendered.
    (g) TV booster station applications may be filed at any time. 
Subsequent to filing, the FCC will release a Public Notice accepting 
for filing and proposing for grant those applications which are not 
mutually exclusive with any other TV translator, low power TV, or TV 
booster application, and providing for the filing of Petitions To Deny 
pursuant to Sec. 73.3584.
    14. Section 73.3573 is revised to read as follows:


Sec. 73.3573  Processing FM broadcast station applications.

    (a) Applications for FM broadcast stations are divided into two 
groups:
    (1) In the first group are applications for new stations or for 
major changes in the facilities of authorized stations. A major change 
for an FM station authorized under this part is any change in frequency 
or community of license which is in accord with a present allotment 
contained in the Table of Allotments (Sec. 73.202(b)). A licensee or 
permittee may seek the higher or lower class adjacent channel, 
intermediate frequency or co-channel or the same class adjacent channel 
of its existing FM broadcast station authorization by filing a minor 
change application. Other requests for change in frequency or community 
of license for FM stations must first be submitted in the form of a 
petition for rulemaking to amend the Table of Allotments. Long-form 
applications submitted pursuant to Sec. 73.5005 for a new FM broadcast 
service may propose a higher or lower class adjacent channel, 
intermediate frequency or co-channel. For

[[Page 48628]]

noncommercial educational FM stations, a major change is any change in 
frequency or community of license or any change in power or antenna 
location or height above average terrain (or combination thereof) which 
would result in a change of 50% or more in the area within the 
station's predicted 1 mV/m field strength contour. (A change in area is 
defined as the sum of the area gained and the area lost as a percentage 
of the original area.) A major change in ownership is a situation where 
the original party or parties to the application do not retain more 
than 50% ownership interest in the application as originally filed.
    (2) The second group consists of applications for licenses and all 
other changes in the facilities of authorized stations.
    (b)(1) The FCC may, after the acceptance of an application for 
modification of facilities, advise the applicant that such application 
is considered to be one for a major change and therefore subject to the 
provisions of Secs. 73.3522, 73.3580 and 1.1111 of this chapter 
pertaining to major changes. Such major modification applications in 
the non-reserved band will be dismissed as set forth in paragraph 
(f)(2)(i) of this section.
    (2) An amendment to a non-reserved band application which would 
effect a major change, as defined in paragraph (a)(1) of this section, 
will not be accepted, except as provided for in paragraph (f)(2)(i) of 
this section.
    (3) A new file number will be assigned to a reserved band 
application for a new station or for major changes in the facilities of 
an authorized station, when it is amended so as to effect a major 
change, as defined in paragraph (a)(1) of this section. Where an 
amendment to a reserved band application would require a new file 
number, the applicant will have the opportunity to withdraw the 
amendment at any time prior to designation for hearing, if applicable; 
and may be afforded, subject to the discretion of the Administrative 
Law Judge, an opportunity to withdraw the amendment after designation 
for hearing.
    (c) An application for changes in the facilities of any existing 
station will continue to carry the same file number even though 
(pursuant to FCC approval) an assignment of license or transfer of 
control of such licensee or permittee has taken place if, upon 
consummation, the application is amended to reflect the new ownership.
    (d) If, upon examination, the FCC finds that the public interest, 
convenience and necessity will be served by the granting of an 
application for FM broadcast facilities, the same will be granted. If 
the FCC is unable to make such a finding and it appears that a hearing 
may be required, the procedure given in Sec. 73.3593 will be followed.
    (e) Applications for reserved band and Class D FM broadcast 
stations will be processed as nearly as possible in the order in which 
they are filed. Such applications will be placed in the processing line 
in numerical sequence, and will be drawn by the staff for study, the 
lowest file number first. In order that those applications which are 
entitled to be grouped for processing may be fixed prior to the time 
processing of the earliest filed application is begun, the FCC will 
periodically release a Public Notice listing applications which have 
been accepted for filing and announcing a date (not less than 30 days 
after publication) on which the listed applications will be considered 
available and ready for processing and by which all mutually exclusive 
applications and/or petitions to deny the listed applications must be 
filed.
    (f) Processing non-reserved FM broadcast station applications. (1) 
Applications for minor modifications for non-reserved FM broadcast 
stations, as defined in paragraph (a)(2) of this section, may be filed 
at any time, unless restricted by the FCC, and, generally, will be 
processed in the order in which they are tendered. The FCC will 
periodically release a Public Notice listing those applications 
accepted for filing. Processing of these applications will be on a 
``first come/first serve'' basis with the first acceptable application 
cutting off the filing rights of subsequent applicants. All 
applications received on the same day will be treated as simultaneously 
tendered and, if they are found to be mutually exclusive, must be 
resolved through settlement or technical amendment. Applications 
received after the tender of a lead application will be grouped, 
according to filing date, behind the lead application in a queue. The 
priority rights of the lead applicant, as against all other applicants, 
are determined by the date of filing, but the filing date for 
subsequent applicants for that channel and community only reserves a 
place in the queue. The rights of an applicant in a queue ripen only 
upon a final determination that the lead applicant is unacceptable and 
if the queue member is reached and found acceptable. The queue will 
remain behind the lead applicant until a construction permit is finally 
granted, at which time the queue dissolves.
    (2) (i) The FCC will specify by Public Notice, pursuant to 
Sec. 73.5002(a), a period for filing non-reserved band FM applications 
for a new station or for major modifications in the facilities of an 
authorized station. FM applications for new facilities or for major 
modifications will be accepted only during the appropriate filing 
period or ``window.'' Applications submitted prior to the window 
opening date identified in the Public Notice will be returned as 
premature. Applications submitted after the specified deadline will be 
dismissed with prejudice as untimely.
    (ii) Such FM applicants will be subject to the provisions of 
Secs. 1.2105 and 73.5002 regarding the submission of the short-form 
application, FCC Form 175, and all appropriate certifications, 
information and exhibits contained therein. FM applicants may submit a 
set of preferred site coordinates as a supplement to the short-form 
application. Any specific site indicated by FM applicants will not be 
studied for technical acceptability, but will be protected from 
subsequently filed applications as a full-class facility as of the 
close of the window filing period. Determinations as to the 
acceptability or grantability of an applicant's proposal will not be 
made prior to an auction.
    (iii) FM applicants will be subject to the provisions of 
Secs. 1.2105 and 73.5002(c) regarding the modification and dismissal of 
their short-form applications.
    (3) Subsequently, the FCC will release Public Notices:
    (i) identifying the short-form applications received during the 
window filing period which are found to be mutually exclusive;
    (ii) establishing a date, time and place for an auction;
    (iii) providing information regarding the methodology of 
competitive bidding to be used in the upcoming auction, bid submission 
and payment procedures, upfront payment procedures, upfront payment 
deadlines, minimum opening bid requirements and applicable reserve 
prices in accordance with the provisions of Sec. 73.5002;
    (iv) identifying applicants who have submitted timely upfront 
payments and, thus, are qualified to bid in the auction.
    (4) If, after the close of the appropriate window filing period, a 
non-reserved FM allotment remains vacant, the window remains closed 
until the FCC, by Public Notice, specifies a subsequent period for 
filing non-reserved band FM applications for a new station or for major 
modifications in the facilities of an authorized station pursuant to 
paragraph (f)(2)(i) of this section. If,

[[Page 48629]]

during the window filing period, the FCC receives only one application 
for any non-reserved FM allotment, a Public Notice will be released 
identifying the non-mutually exclusive applicant, who will be required 
to submit the appropriate long-form application within 30 days of the 
Public Notice and pursuant to the provisions of Sec. 73.5005. These 
non-mutually exclusive applications will be processed and the FCC will 
periodically release a Public Notice listing such non-mutually 
exclusive applications determined to be acceptable for filing and 
announcing a date by which petitions to deny must be filed in 
accordance with the provisions of Secs. 73.5006 and 73.3584 of this 
chapter. If the applicant is duly qualified, and upon examination, the 
FCC finds that the public interest, convenience and necessity will be 
served by the granting of the non-mutually exclusive long-form 
application, it will be granted.
    (5)(i) The auction will be held pursuant to the procedures set 
forth in Secs. 1.2101 et seq. and 73.5000 et seq. Subsequent to the 
auction, the FCC will release a Public Notice announcing the close of 
the auction and identifying the winning bidders. Winning bidders will 
be subject to the provisions of Secs. 1.2107 and 73.5003 regarding down 
payments and will be required to submit the appropriate down payment 
within 10 business days of the Public Notice. Pursuant to Secs. 1.2107 
and 73.5005, a winning bidder that meets its down payment obligations 
in a timely manner must, within 30 days of the release of the public 
notice announcing the close of the auction, submit the appropriate 
long-form application for each construction permit for which it was the 
winning bidder. Long-form applications filed by winning bidders shall 
include the exhibits identified in Sec. 73.5005(a).
    (ii) These applications will be processed and the FCC will 
periodically release a Public Notice listing such applications that 
have been accepted for filing and announcing a date by which petitions 
to deny must be filed in accordance with the provisions of 
Secs. 73.5006 and 73.3584 of this chapter. If the applicant is duly 
qualified, and upon examination, the FCC finds that the public 
interest, convenience and necessity will be served by the granting of 
the winning bidder's long-form application, a Public Notice will be 
issued announcing that the construction permit is ready to be granted. 
Each winning bidder shall pay the balance of its winning bid in a lump 
sum within 10 business days after release of the Public Notice, as set 
forth in Secs. 1.2109(a) and 73.5003(c). Construction permits will be 
granted by the Commission following the receipt of the full payment.
    (iii) All long-form applications will be cut-off as of the date of 
filing with the FCC and will be protected from subsequently filed long-
form applications and rulemaking petitions. Applications will be 
required to protect all previously filed commercial and noncommercial 
applications. Winning bidders filing long-form applications may change 
the technical proposals specified in their previously submitted short-
form applications, but such change may not constitute a major change. 
If the submitted long-form application would constitute a major change 
from the proposal submitted in the short-form application or the 
allotment, the long-form application will be returned pursuant to 
paragraph (f)(2)(i) of this section.

    Note 1 to Sec. 73.3573: Applications to modify the channel and/
or class of an FM broadcast station to an adjacent channel, 
intermediate frequency (IF) channel, or co-channel shall not require 
any other amendments to the Table of Allotments. Such applications 
may resort to the provisions of the Commission's Rules permitting 
short spaced stations as set forth in Sec. 73.215 as long as the 
applicant shows by separate exhibit attached to the application the 
existence of an allotment reference site which meets the allotment 
standards, the minimum spacing requirements of Sec. 73.207 and the 
city grade coverage requirements of Sec. 73.315. This exhibit must 
include a site map or, in the alternative, a statement that the 
transmitter will be located on an existing tower. Examples of 
unsuitable allotment reference sites include those which are 
offshore, in a national or state park in which tower construction is 
prohibited, on an airport, or otherwise in an area which would 
necessarily present a hazard to air navigation.

    Note 2 to Sec. 73.3573: Processing of applications for new low 
power educational FM applications: Pending the Commission's restudy 
of the impact of the rule changes pertaining to the allocations of 
10-watt and other low power noncommercial educational FM stations, 
applications for such new stations, or major changes in existing 
ones, will not be accepted for filing. Exceptions are: (1) In 
Alaska, applications for new Class D stations or major changes in 
existing ones are acceptable for filing; and (2) applications for 
existing Class D stations to change frequency are acceptable for 
filing. In (2), upon the grant of such application, the station 
shall become a Class D (secondary) station. (See First Report and 
Order, Docket 20735, FCC 78-386, 43 FR 25821, and Second Report and 
Order, Docket 20735, FCC 78-384, 43 FR 39704.) Effective date of 
this FCC imposed ``freeze'' was June 15, 1978. Applications which 
specify facilities of at least 100 watts effective radiated power 
will be accepted for filing.

    Note 3 to Sec. 73.3573: For rules on processing FM translator 
and booster stations, see Sec. 74.1233 of this chapter.

    15. Add Subpart I, which includes Secs. 73.5000 through 73.5009, to 
read as follows:

PART 73--RADIO BROADCAST SERVICES

Subpart I--Competitive Bidding Procedures

Sec.
73.5000  Services subject to competitive bidding.
73.5001  Competitive bidding procedures.
73.5002  Bidding application and certification procedures; 
prohibition of collusion.
73.5003  Submission of upfront payments, down payments and full 
payments.
73.5004  Bid withdrawal, default and disqualification.
73.5005  Filing of long-form applications.
73.5006  Filing of petitions to deny against long-form applications.
73.5007  Designated entity provisions.
73.5008  Definitions applicable for designated entity provisions.
73.5009  Assignment or transfer of control.

Subpart I--Competitive Bidding Procedures


Sec. 73.5000  Services subject to competitive bidding.

    (a) Mutually exclusive applications for new facilities and for 
major changes to existing facilities in the following broadcast 
services are subject to competitive bidding: AM; FM; FM translator; 
analog television; low power television; and television translator. 
Mutually exclusive applications for new facilities and for major 
changes to existing facilities in the Instructional Television Fixed 
Service (ITFS) are also subject to competitive bidding. The general 
competitive bidding procedures found in 47 CFR Part 1, Subpart Q will 
apply unless otherwise provided in 47 CFR Part 73 and Part 74.
    (b) Mutually exclusive applications for broadcast channels in the 
reserved portion of the FM band (Channels 200-220) and for television 
broadcast channels reserved for noncommercial educational use are not 
subject to competitive bidding procedures.


Sec. 73.5001  Competitive bidding procedures.

    (a) Specific competitive bidding procedures for broadcast service 
and ITFS auctions will be set forth by public notice prior to any 
auction. The Commission may also design and test alternative 
procedures, including combinatorial bidding and real time bidding. See 
47 CFR 1.2103 and 1.2104.
    (b) The Commission may utilize the following competitive bidding 
mechanisms in broadcast service and ITFS auctions:

[[Page 48630]]

    (1) Sequencing. The Commission will establish and may vary the 
sequence in which broadcast service construction permits and ITFS 
licenses will be auctioned.
    (2) Grouping. In the event the Commission uses either a 
simultaneous multiple round competitive bidding design or combinatorial 
bidding in broadcast service or ITFS auctions, the Commission will 
determine which construction permits or licenses will be auctioned 
simultaneously or in combination.
    (3) Reservation price. The Commission may establish a reservation 
price, either disclosed or undisclosed, below which a broadcast 
construction permit or ITFS license subject to auction will be not 
awarded.
    (4) Minimum and maximum bid increments. The Commission may, by 
announcement before or during broadcast service or ITFS auctions, 
require minimum bid increments in dollar or percentage terms. The 
Commission may, by announcement before or during broadcast service or 
ITFS auctions, establish maximum bid increments in dollar or percentage 
terms.
    (5) Minimum opening bids. The Commission may establish a minimum 
opening bid for each broadcast construction permit or ITFS license 
subject to auction.
    (6) Stopping rules. The Commission will establish stopping rules 
before or during multiple round broadcast service or ITFS auctions in 
order to terminate the auction within a reasonable time.
    (7) Activity rules. The Commission will establish activity rules 
which require a minimum amount of bidding activity. In the event that 
the Commission establishes an activity rule in connection with a 
simultaneous multiple round auction, each bidder will be entitled to 
request and will be automatically granted a certain number of waivers 
of such rule during the auction.


Sec. 73.5002  Bidding application and certification procedures; 
prohibition of collusion.

    (a) Prior to any broadcast service or ITFS auction, the Commission 
will issue a public notice announcing the upcoming auction and 
specifying the period during which all applicants seeking to 
participate in an auction must file their applications for new 
broadcast or ITFS facilities or for major changes to existing 
facilities. Broadcast service or ITFS applications for new facilities 
or for major modifications will be accepted only during these specified 
periods. This initial and other public notices will contain information 
about the completion and submission of applications to participate in 
the broadcast or ITFS auction, any materials that must accompany the 
applications, and any filing fee that must accompany the applications 
or any upfront payments that will need to be submitted. Such public 
notices will also, in the event mutually exclusive applications are 
filed for broadcast construction permits or ITFS licenses, contain 
information about the method of competitive bidding to be used and more 
detailed instructions on submitting bids and otherwise participating in 
the auction. In the event applications are submitted that are not 
mutually exclusive with any other application in the same service, such 
applications will be identified by public notice and will not be 
subjected to auction.
    (b) To participate in broadcast service or ITFS auctions, all 
applicants must timely submit short-form applications (FCC Form 175), 
along with all required certifications, information and exhibits, 
pursuant to the provisions of 47 CFR 1.2105(a) and any Commission 
public notices. So determinations of mutual exclusivity for auction 
purposes can be made, applicants for non-table broadcast services or 
for ITFS must also submit the engineering data contained in the 
appropriate FCC form (FCC Form 301, FCC Form 346, FCC Form 349 or FCC 
Form 330). Beginning January 1, 1999, all short-form applications must 
be filed electronically.
    (c) Applicants in all broadcast service or ITFS auctions will be 
subject to the provisions of 47 CFR 1.2105(b) regarding the 
modification and dismissal of their short-form applications. 
Notwithstanding the general applicability of Section 1.2105(b) to 
broadcast and ITFS auctions, applicants who file mutually exclusive 
major modification applications, or mutually exclusive major 
modification and new station applications, will be permitted to make 
amendments to their engineering submissions following the filing of 
their short-form applications so as to resolve their mutual 
exclusivity.
    (d) The prohibition of collusion set forth in 47 CFR 1.2105(c), 
which becomes effective upon the filing of short-form applications, 
shall apply to all broadcast service or ITFS auctions. Notwithstanding 
the general applicability of Section 1.2105(c) to broadcast and ITFS 
auctions, applicants who file mutually exclusive major modification 
applications, or mutually exclusive major modifications and new station 
applications, will be permitted to resolve their mutual exclusivities 
by means of engineering solutions or settlements during a limited 
period after the filing of short-form applications. Such period will be 
further specified by Commission public notices.


Sec. 73.5003  Submission of upfront payments, down payments and full 
payments.

    (a) To be eligible to bid, each bidder in every broadcast service 
or ITFS auction shall submit an upfront payment prior to the 
commencement of bidding, as set forth in any public notices and in 
accordance with 47 CFR 1.2106.
    (b) Within ten (10) business days following the close of bidding 
and notification to the winning bidders, each winning bidder in every 
broadcast service or ITFS auction shall make a down payment in an 
amount sufficient to bring its total deposits up to twenty (20) percent 
of its high bid(s), as set forth in 47 CFR 1.2107(b).
    (c) Each winning bidder in every broadcast service or ITFS auction 
shall pay the balance of its winning bid(s) in a lump sum within ten 
(10) business days after release of a public notice announcing that the 
Commission is prepared to award the construction permit(s) or 
license(s), as set forth in 47 CFR 1.2109(a). If a winning bidder fails 
to pay the balance of its winning bid in a lump sum by the applicable 
deadline as specified by the Commission, it will be allowed to make 
payment within ten (10) business days after the payment deadline, 
provided that it also pays a late fee equal to five (5) percent of the 
amount due. Broadcast construction permits and ITFS licenses will be 
granted by the Commission following the receipt of full payment.


Sec. 73.5004  Bid withdrawal, default and disqualification.

    (a) The Commission shall impose the bid withdrawal, default and 
disqualification payments set forth in 47 CFR 1.2104(g) upon bidders 
who withdraw high bids during the course, or after the close, of any 
broadcast service or ITFS auction, who default on payments due after an 
auction closes, or who are disqualified. Bidders who are found to have 
violated the antitrust laws or the Commission's rules in connection 
with their participation in the competitive bidding process may also be 
subject to the remedies set forth in 47 CFR 1.2109(d).
    (b) In the event of a default by or the disqualification of a 
winning bidder in any broadcast service or ITFS auction, the Commission 
will follow the procedures set forth in 47 CFR 1.2109

[[Page 48631]]

(b)-(c) regarding the reauction of the construction permit(s) or 
license(s) at issue.


Sec. 73.5005  Filing of long-form applications.

    (a) Within thirty (30) days following the close of bidding and 
notification to the winning bidders, each winning bidder must submit an 
appropriate long-form application (FCC Form 301, FCC Form 346, FCC Form 
349 or FCC Form 330) for each construction permit or license for which 
it was the high bidder. Long-form applications filed by winning bidders 
shall include the exhibits required by 47 CFR 1.2107(d) (concerning any 
bidding consortia or joint bidding arrangements); Sec. 1.2110(i) 
(concerning designated entity status, if applicable); and Sec. 1.2112 
(a) and (b) (concerning disclosure of ownership and real party in 
interest information, and, if applicable, disclosure of gross revenue 
information for small business applicants).
    (b) The long-form application should be submitted pursuant to the 
rules governing the service in which the applicant is a high bidder and 
according to the procedures for filing such applications set out by 
public notice. When electronic procedures become available for the 
submission of long-form applications, the Commission may require all 
winning bidders to file their long-form applications electronically.
    (c) An applicant that fails to submit the required long-form 
application under this section, and fails to establish good cause for 
any late-filed submission, shall be deemed to have defaulted and shall 
be subject to the payments set forth in 47 CFR 1.2104(g).
    (d) An applicant whose short-form application, submitted pursuant 
to 47 CFR 73.5002(b), was not mutually exclusive with any other short-
form application in the same service and was therefore not subject to 
auction, shall submit an appropriate long-form application within 
thirty (30) days following release of a public notice identifying any 
such non-mutually exclusive applicants. The long-form application 
should be submitted pursuant to the rules governing the relevant 
service and according to any procedures for filing such applications 
set out by public notice. The long-form application filed by a non-
mutually exclusive applicant need not contain the additional exhibits, 
identified in Sec. 73.5005(a), required to be submitted with the long-
form applications filed by winning bidders. When electronic procedures 
become available, the Commission may require any non-mutually exclusive 
applicants to file their long-form applications electronically.


Sec. 73.5006  Filing of petitions to deny against long-form 
applications.

    (a) As set forth in 47 CFR 1.2108, petitions to deny may be filed 
against the long-form applications filed by winning bidders in 
broadcast service or ITFS auctions and against the long-form 
applications filed by applicants whose short-form applications to 
participate in a broadcast or ITFS auction were not mutually exclusive 
with any other applicant.
    (b) Within ten (10) days following the issuance of a public notice 
announcing that a long-form application has been accepted for filing, 
petitions to deny that application may be filed. Any such petitions 
must contain allegations of fact supported by affidavit of a person or 
persons with personal knowledge thereof.
    (c) An applicant may file an opposition to any petition to deny, 
and the petitioner a reply to such opposition. Allegations of fact or 
denials thereof must be supported by affidavit of a person or persons 
with personal knowledge thereof. The time for filing such oppositions 
shall be five (5) days from the filing date for petitions to deny, and 
the time for filing replies shall be five (5) days from the filing date 
for oppositions.
    (d) If the Commission denies or dismisses all petitions to deny, if 
any are filed, and is otherwise satisfied that an applicant is 
qualified, a public notice will be issued announcing that the broadcast 
construction permit(s) or ITFS license(s) is ready to be granted, upon 
full payment of the balance of the winning bid(s). See 47 CFR 
73.5003(c). Construction of broadcast stations or ITFS facilities shall 
not commence until the grant of such permit or license to the winning 
bidder.


Sec. 73.5007  Designated entity provisions.

    New entrant bidding credit. A winning bidder that qualifies as a 
``new entrant'' may use a bidding credit to lower the cost of its 
winning bid on any broadcast construction permit. A thirty-five (35) 
percent bidding credit will be given to a winning bidder if it and/or 
its owners have no recognizable interest (more than fifty (50) percent 
or de facto control) in the aggregate, in any other media of mass 
communications. A twenty-five (25) percent bidding credit will be given 
to a winning bidder if it and/or its owners, in the aggregate, have a 
recognizable interest in no more than three mass media facilities. No 
bidding credit will be given if any of the commonly owned mass media 
facilities serves the same area as the proposed broadcast station, or 
if the winning bidder and/or its owners have recognizable interests in 
more than three mass media facilities.
    (a) The new entrant bidding credit is not available to applicants 
that control, or whose owners control, in the aggregate, more than 
fifty (50) percent of any other media of mass communications in the 
same area as the proposed broadcast facility. The facilities will be 
considered in the ``same area'' if the following defined areas wholly 
encompass, or are encompassed by, the proposed broadcast or secondary 
broadcast facility's relevant contour:
    (1) AM broadcast station--predicted or measured 2mV/m groundwave 
contour (see 47 CFR 73.183 or 73.186);
    (2) FM broadcast or FM translator station--predicted 1.0 mV/m 
contour (see 47 CFR 73.313);
    (3) Television broadcast station--Grade A contour (see 47 CFR 
73.684);
    (4) Low power television or television translator station--the 
predicted, protected contour (see 47 CFR 74.707(a));
    (5) Cable television system--the franchised community of a cable 
system;
    (6) Daily newspaper--community of publication; and
    (7) Multipoint Distribution Service station--protected service area 
(see 47 CFR 21.902(d) or 21.933).
    (b) Unjust enrichment. If a licensee or permittee that utilizes a 
new entrant bidding credit under this subsection seeks to assign or 
transfer control of its license or construction permit to an entity not 
meeting the eligibility criteria for the bidding credit, the licensee 
or permittee must reimburse the U.S. Government for the amount of the 
bidding credit, plus interest based on the rate for ten-year U.S. 
Treasury obligations applicable on the date the construction permit was 
originally granted, as a condition of Commission approval of the 
assignment or transfer. If a licensee or permittee that utilizes a new 
entrant bidding credit seeks to assign or transfer control of a license 
or construction permit to an entity that is eligible for a lower 
bidding credit, the difference between the bidding credit obtained by 
the assigning party and the bidding credit for which the acquiring 
party would qualify, plus interest based on the rate for ten-year U.S. 
Treasury obligations applicable on the date the construction permit was 
originally granted, must be paid to the U.S. Government as a condition 
of Commission approval of the assignment or transfer. The amount of the

[[Page 48632]]

reimbursement payments will be reduced over time. An assignment or 
transfer in the first two years after issuance of the construction 
permit to the winning bidder will result in a forfeiture of one hundred 
(100) percent of the value of the bidding credit; during year three, of 
seventy-five (75) percent of the value of the bidding credit; in year 
four, of fifty (50) percent; in year five, twenty-five (25) percent; 
and thereafter, no payment. If a licensee or permittee who utilized a 
new entrant bidding credit in obtaining a broadcast license or 
construction permit acquires within this five-year reimbursement period 
an additional broadcast facility or facilities, such that the licensee 
or permittee would not have been eligible for the new entrant credit, 
the licensee or permittee will not be required to reimburse the U.S. 
Government for the amount of the bidding credit.


Sec. 73.5008  Definitions applicable for designated entity provisions.

    (a) Scope. The definitions in this section apply to 47 CFR 73.5007, 
unless otherwise specified in that section.
    (b) A medium of mass communications means a daily newspaper; a 
cable television system; or a license or construction permit for a 
television station, a low power television or television translator 
station, an AM, FM or FM translator broadcast station, a direct 
broadcast satellite transponder, or a Multipoint Distribution Service 
station.
    (c) The owners of a winning bidder shall include the winning 
bidder, in the case of a sole proprietor; partner, including limited or 
``silent'' partners, in the case of a partnership; the beneficiaries, 
in the case of a trust; any member, in the case of a nonstock 
corporation or unincorporated association with members; any member of 
the governing board (including executive boards, boards of regents, 
commissions, or similar governmental bodies where each member has one 
vote), in the case of nonstock corporation or unincorporated 
association without members; and owners of voting shares, in the case 
of stock corporations.


Sec. 73.5009  Assignment or transfer of control.

    (a) The reporting requirement contained in 47 CFR 1.2111(a) shall 
apply to an applicant seeking approval for a transfer of control or 
assignment of a broadcast construction permit or license within three 
years of receiving such permit or license by means of competitive 
bidding.
    (b) The ownership disclosure requirements contained in 47 CFR 
1.2112(a) shall apply to an applicant seeking consent to assign or 
transfer control of a broadcast construction permit or license awarded 
by competitive bidding.

PART 74--EXPERIMENTAL RADIO, AUXILIARY, SPECIAL BROADCAST AND OTHER 
PROGRAM DISTRIBUTIONAL SERVICES

    16. The authority for part 74 continues to read as follows:

    Authority: 47 U.S.C. 154, 303, 307, and 554.

    17. Section 74.910 is amended by adding the two new entries in 
numerical order to read as follows:


Sec. 74.910  Part 73 application requirements pertaining to ITFS 
stations.

* * * * *


Sec. 73.3522(a)  Amendment of applications.

* * * * *


Sec. 73.5000-73.5006  Competitive Bidding Procedures.

* * * * *
    18. Section 74.911 is amended by revising paragraph (c) and 
removing paragraph (d) to read as follows:


Sec. 74.911  Processing of ITFS station applications.

* * * * *
    (c)(1)(i) The FCC will specify by Public Notice, pursuant to 
Sec. 73.5002, a period for filing ITFS applications for a new station 
or for major modifications in the facilities of an authorized station. 
(ii) Such ITFS applicants shall be subject to the provisions of 
Secs. 1.2105 and the ITFS competitive bidding procedures. See 47 CFR 
73.5000 et seq.
    (2) [Reserved]


Sec. 74.912  [Removed]

    19. Section 74.912 is removed.


Sec. 74.913  [Removed]

    20. Section 74.913 is removed.
    21. Section 74.1233 is revised to read as follows:


Sec. 74.1233  Processing FM translator and booster station 
applications.

    (a) Applications for FM translator and booster stations are divided 
into two groups:
    (1) In the first group are applications for new stations or for 
major changes in the facilities of authorized stations. In the case of 
FM translator stations, a major change is any change in frequency 
(output channel), or change (only the gain should be included in 
determining amount of change) or increase (but not decrease) in area to 
be served greater than ten percent of the previously authorized 1 mV/m 
contour. All other changes will be considered minor. All major changes 
are subject to the provisions of Secs. 73.3580 and 1.1104 of this 
chapter pertaining to major changes.
    (2) In the second group are applications for licenses and all other 
changes in the facilities of the authorized station.
    (b) Applications for booster stations and reserved-band FM 
translator stations will be processed as nearly as possible in the 
order in which they are filed. Such applications will be placed in the 
processing line in numerical sequence, and will be drawn by the staff 
for study, the lowest file number first. In order that those 
applications which are entitled to be grouped for processing may be 
fixed prior to the time processing of the earliest filed application is 
begun, the FCC will periodically release a Public Notice listing 
reserved-band applications that have been accepted for filing and 
announcing a date (not less than 30 days after publication) on which 
the listed applications will be considered available and ready for 
processing and by which all mutually exclusive applications and/or 
petitions to deny the listed applications must be filed.
    (c) In the case of an application for an instrument of 
authorization, other than a license pursuant to a construction permit, 
grant will be based on the application, the pleadings filed, and such 
other matters that may be officially noticed. Before a grant can be 
made it must be determined that:
    (1) There is not pending a mutually exclusive application filed in 
accordance with paragraph (b) of this section.
    (2) The applicant is legally, technically, financially and 
otherwise qualified;
    (3) The applicant is not in violation of any provisions of law, the 
FCC rules, or established policies of the FCC; and
    (4) A grant of the application would otherwise serve the public 
interest, convenience and necessity.
    (d) Processing non-reserved band FM translator applications. (1) 
Applications for minor modifications for non-reserved FM translator 
stations, as defined in paragraph (a)(2) of this section, may be filed 
at any time, unless restricted by the FCC, and, generally, will be 
processed in the order in which they are tendered. The FCC will 
periodically release a Public Notice listing those applications 
accepted for filing. All minor modification applications found to be 
mutually

[[Page 48633]]

exclusive, must be resolved through settlement or technical amendment.
    (2)(i) The FCC will specify by Public Notice, pursuant to 
Sec. 73.5002(a), a period for filing non-reserved band FM translator 
applications for a new station or for major modifications in the 
facilities of an authorized station. FM translator applications for new 
facilities or for major modifications will be accepted only during 
these specified periods. Applications submitted prior to the window 
opening date identified in the Public Notice will be returned as 
premature. Applications submitted after the specified deadline will be 
dismissed with prejudice as untimely.
    (ii) Such FM translator applicants will be subject to the 
provisions of Secs. 1.2105 and 73.5002(a) regarding the submission of 
the short-form application, FCC Form 175, and all appropriate 
certifications, information and exhibits contained therein. To 
determine which FM translator applications are mutually exclusive, FM 
translator applicants must submit the engineering data contained in FCC 
Form 349 as a supplement to the short-form application. Such 
engineering data will not be studied for technical acceptability, but 
will be protected from subsequently filed applications as of the close 
of the window filing period. Determinations as to the acceptability or 
grantability of an applicant's proposal will not be made prior to an 
auction.
    (iii) FM translator applicants will be subject to the provisions of 
Sec. 1.2105 regarding the modification and dismissal of their short-
form applications.
    (iv) Consistent with Sec. 1.2105(a), beginning January 1, 1999, all 
short-form applications must be filed electronically.
    (3) Subsequently, the FCC will release Public Notices:
    (i) identifying the short-form applications received during the 
appropriate filing period or ``window'' which are found to be mutually 
exclusive;
    (ii) establishing a date, time and place for an auction;
    (iii) providing information regarding the methodology of 
competitive bidding to be used in the upcoming auction, bid submission 
and payment procedures, upfront payment procedures, upfront payment 
deadlines, minimum opening bid requirements and applicable reserve 
prices in accordance with the provisions of Sec. 73.5002;
    (iv) identifying applicants who have submitted timely upfront 
payments and, thus, are qualified to bid in the auction.
    (4) If, during the window filing period, the FCC receives non-
mutually exclusive applications for a non-reserved FM translator 
station, a Public Notice will be released identifying the non-mutually 
exclusive applicants, who will be required to submit the appropriate 
long form application within 30 days of the Public Notice and pursuant 
to the provisions of Sec. 73.5005. These non-mutually exclusive 
applications will be processed and the FCC will periodically release a 
Public Notice listing such non-mutually exclusive applications 
determined to be acceptable for filing and announcing a date by which 
petitions to deny must be filed in accordance with the provisions of 
Secs. 73.5006 and 73.3584 of this chapter. If the applicants are duly 
qualified, and upon examination, the FCC finds that the public 
interest, convenience and necessity will be served by the granting of 
the non-mutually exclusive long-form application, the same will be 
granted.
    (5)(i) The auction will be held pursuant to the procedures set 
forth in Sec. 1.2101. Subsequent to the auction, the FCC will release a 
Public Notice announcing the close of the auction and identifying the 
winning bidders. Winning bidders will be subject to the provisions of 
Sec. 1.2107 regarding down payments and will be required to submit the 
appropriate down payment within 10 business days of the Public Notice. 
Pursuant to Sec. 1.2107, a winning bidder that meets its down payment 
obligations in a timely manner must, within 30 days of the release of 
the public notice announcing the close of the auction, submit the 
appropriate long-form application for each construction permit for 
which it was the winning bidder. Long-form applications filed by 
winning bidders shall include the exhibits identified in Sec. 73.5005.
    (ii) These applications will be processed and the FCC will 
periodically release a Public Notice listing such applications that 
have been accepted for filing and announcing a date by which petitions 
to deny must be filed in accordance with the provisions of Sec. 73.3584 
of this chapter. If the applicants are duly qualified, and upon 
examination, the FCC finds that the public interest, convenience and 
necessity will be served by the granting of the winning bidder's long-
form application, a Public Notice will be issued announcing that the 
construction permit is ready to be granted. Each winning bidder shall 
pay the balance of its winning bid in a lump sum within 10 business 
days after release of the Public Notice, as set forth in 
Sec. 1.2109(a). Construction permits will be granted by the Commission 
following the receipt of the full payment.
    (iii) All long-form applications will be cut-off as of the date of 
filing with the FCC and will be protected from subsequently filed long-
form translator applications. Applications will be required to protect 
all previously filed applications. Winning bidders filing long-form 
applications may change the technical proposals specified in their 
previously submitted short-form applications, but such change may not 
constitute a major change. If the submitted long-form application would 
constitute a major change from the proposal submitted in the short-form 
application or the allotment, the long-form application will be 
returned pursuant to paragraph (d)(2)(i) of this section.
    (e) Selection of mutually exclusive reserved band FM translator 
applications.
    (1) Applications for FM translator stations proposing to provide 
fill-in service (within the primary station's protected contour) of the 
commonly owned primary station will be given priority over all other 
applications.
    (2) Where applications for FM translator stations are mutually 
exclusive and do not involve a proposal to provide fill-in service of 
commonly owned primary stations, the FCC may stipulate different 
frequencies as necessary for the applicants.
    (3) Where there are no available frequencies to substitute for a 
mutually exclusive application, the FCC will base its decision on the 
following priorities:
    (i) first-full-time aural services;
    (ii) second full-time aural services; and
    (iii) other public interest matters including, but not limited to 
the number of aural services received in the proposed service area, the 
need for or lack of public radio service, and other matters such as the 
relative size of the proposed communities and the growth rate.
    (4) Where the procedures in paragraphs (e)(1), (e)(2) and (e)(3) of 
this section fail to resolve the mutual exclusivity, the applications 
will be processed on a first-come-first-served basis.

[FR Doc. 98-23963 Filed 9-10-98; 8:45 am]
BILLING CODE 6712-01-P