[Federal Register Volume 66, Number 69 (Tuesday, April 10, 2001)]
[Rules and Regulations]
[Pages 18570-18572]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-8720]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 74

[MM Docket No. 00-105; FCC 01-99]
RIN 4566


Experimental Broadcast Station Multiple Ownership Rule

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: This document eliminates the Commission rule that prohibited a 
broadcast licensee from having more than one experimental radio station 
license without first making a showing that its program of research 
requires a licensing of two or more separate stations. The rule was 
eliminated because other Commission rules prohibit the harms this rule 
was meant to address. Additionally, elimination of the rule would allow 
licensees to devote their resources to research more efficiently during 
the operation of experimental broadcast stations.

DATES: Effective May 10, 2001.

FOR FURTHER INFORMATION CONTACT: Roger Holberg, Mass Media Bureau, 
Policy and Rules Division, (202) 418-2120.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Report and Order 
(``R&O'') in MM Docket No. 00-105, FCC 01-99, adopted March 22, 2001, 
and released March 28, 2001. The complete text of this document is 
available for inspection and copying during normal business hours in 
the FCC Reference Center, Room CY-A257, 445 12th Street, SW., 
Washington, DC and may also be purchased from the Commission's copy 
contractor, International Transcription Service (202) 857-3800, 445 
12th Street, SW., Room CY-B402, Washington, DC. This R&O is also 
available on the Internet at the Commission's website: http://www.fcc.gov.

Synopsis of Report and Order

    1. By this R&O we eliminate the experimental broadcast multiple 
ownership rule, 47 CFR 74.134. That rule provides that no entity may 
control more than one experimental license absent a showing of need. We 
are convinced that this rule is no longer necessary to achieve the 
goals of competition and diversity in the broadcast market, and that 
elimination of the rule would serve the public interest.
    2. Experimental stations are ``licensed for experimental or 
developmental transmissions of radio telephony, television, facsimile, 
or other types of telecommunication services intended for reception and 
use by the general public.'' (47 CFR 74.101) Under this licensing 
scheme, stations can carry on research and experimentation for the 
development of new broadcast technology, equipment, systems, or 
services that could not be accomplished using other licensed broadcast 
stations. Title 47 CFR 74.134 generally limits a licensee's ability to 
hold experimental station licenses to a single license, except in cases 
where a showing was ``made that the program of research requires a 
licensing of two or more separate stations.''
    3. The Commission initiated consideration of its rule concerning 
the ability of a broadcaster to hold more than one license for an 
experimental broadcast station when it issued a Notice of Inquiry 
(``NOI'') (MM Docket No. 98-35, 63 FR 15353, March 31, 1998) as the 
first step in its Biennial Ownership Review of the broadcast ownership 
and other rules as required by Section 202(h) of the Telecommunications 
Act of 1996 (Public Law No. 104-104, 110 Stat. 56 (1996) (``1996 
Act''). In the NOI, the Commission sought comment on whether the 
experimental broadcast station multiple ownership rule remained in the 
public interest.
    4. In response to the NOI, the Commission received one comment. The 
National Association of Broadcasters (``NAB'') recommended the

[[Page 18571]]

repeal of the experimental station multiple ownership rule.
    5. In its May 26, 2000 Biennial Review Report, the Commission 
addressed the continued need for the rule, focusing on the purposes for 
licensing experimental broadcast stations and the restrictions placed 
on them by our rules. After reviewing the experimental station multiple 
ownership rule, the Commission tentatively concluded that the rule, 
adopted in 1946 and re-designated in 1963 as 47 CFR 74.134, may no 
longer serve the public interest.
    6. As a consequence of the tentative conclusions reached in the 
Biennial Review Report, we issued the Notice of Proposed Rule Making 
(``NPRM''), 65 FR 41401 (July 5, 2000), in this proceeding proposing to 
eliminate the multiple ownership rule for experimental stations. There, 
we stated that the experimental broadcast station multiple ownership 
rule no longer appeared necessary because of safeguards established by 
other existing rules pertaining to experimental stations. These rules, 
we noted, prevent experimental licensees from charging for the 
production or transmission of any programming, from transmitting 
program material unless it is necessary to the experiments being 
conducted or, indeed, from providing any regular broadcast service. 
Additionally, we pointed out that other experimental broadcast station 
rules prohibit a licensee from making exclusive use of a single 
frequency. We stated that these stations, by their nature, do not exert 
influence on the competitive marketplace and that allowing a party to 
have more than one experimental broadcast station license might permit 
efficiencies to be realized in the operation of such stations. This 
would further our statutory charge pursuant to 47 U.S.C. 303(g) to 
``[s]tudy new uses for radio, provide for experimental uses of 
frequencies, and generally encourage the larger and more effective use 
of radio in the public interest.'' Accordingly, we issued the NPRM in 
this proceeding seeking comment on whether this rule remains in the 
public interest. Also, we encouraged commenters to offer alternative 
proposals involving less than the outright repeal of the rule.
    7. Title 47 CFR 74.134 was intended to limit experimental licensees 
to the minimum spectrum use necessary to enable them to carry out 
research and experimentation that might not otherwise be possible under 
regular broadcasting licensing schemes. The rule also prevented such 
licensees from aggregating enough stations to enable them to operate a 
commercial service under the guise of experimentation. The Commission 
believes the experimental station multiple ownership limitation is no 
longer necessary given that other rules and requirements will 
adequately assure the goals of 47 CFR 74.134 are met.
    8. NAB, the sole commenter responding to the NPRM, supports the 
Commission's proposal, urging it to eliminate what NAB characterizes as 
an ``unnecessary and outdated restriction on the multiple ownership of 
experimental broadcast stations.''
    9. Repeal of the experimental station multiple ownership rule will 
not affect the Commission's ability to ensure that experimental 
stations are used specifically for bona fide experimental purposes and 
not for commercial purposes, as the Commission can continue to do so 
under 47 CFR 74.182. Nor will experimental stations be able to tie up 
excessive spectrum even absent the rule because, under other Commission 
rules, experimental licensees are limited to the minimum frequencies 
necessary to conduct their experimental operations and an experimental 
license does not grant the licensee exclusive use of a frequency. (47 
CFR 74.103(b) and 74.131(b).) If interference would be caused by 
simultaneous operation of stations licensed experimentally, our rules 
require that the parties arrange a satisfactory time division of the 
frequency or frequencies involved. (47 CFR 74.131(b).) Accordingly, we 
have determined that these ownership limits for experimental broadcast 
stations are no longer necessary.
    10. We believe that granting more than one experimental broadcast 
station license to qualified applicants may, in fact, allow resources 
to be devoted to research more efficiently during the operation of such 
stations. As noted, such an expanded licensing scheme would also 
promote the Commission's statutory responsibilities under 47 U.S.C. 
303(g).
    11. In view of the foregoing, we conclude that the experimental 
station multiple ownership rule is unnecessary to achieving the 
purposes for which it was adopted. Other rules prevent the use of 
experimental licenses for commercial purposes or for controlling more 
spectrum than is needed for experimental purposes. It is hereby 
repealed.
    12. Paperwork Reduction Act of 1995 Analysis. This R&O has been 
analyzed with respect to the Paperwork Reduction Act of 1995 and found 
to impose no new reporting requirements on the public.
    13. Regulatory Flexibility Analysis. Pursuant to the Regulative 
Flexibility Act of 1980, as amended, 5 U.S.C. 601 et seq., the 
Commission's Final Regulatory Flexibility Analysis in R&O follows.
    14. As required by the Regulatory Flexibility Act (RFA), an Initial 
Regulatory Flexibility Analysis (IRFA) was incorporated in the NPRM in 
this proceeding. The Commission sought written public comment on the 
proposals in this Notice, including comment on the IRFA. The comments 
received are discussed below. This present Final Regulatory Flexibility 
Analysis (FRFA) conforms to the RFA.
    15. Need For, and Objectives of, Report and Order. In February 
1996, the Telecommunications Act of 1996 (``1996 Act'') was signed into 
law. Section 202 of the 1996 Act directed the Commission to make a 
number of significant revisions to its broadcast media ownership rules. 
Section 202(h) also requires us to review our broadcast ownership rules 
every two years commencing in 1998. One of the rules reviewed in our 
first such biennial reviews was 47 CFR 74.134, the experimental 
broadcast station multiple ownership rule. In our Biennial Review 
Report we tentatively concluded that this rule was no longer necessary 
in the public interest. Accordingly, we issued an NPRM proposing the 
elimination of this rule consistent with the goals of the 1996 Act. 
This R&O eliminates this rule on the basis that it is no longer 
necessary in the public interest and that other existing Commission 
rules are sufficient to preclude the abuse of experimental broadcast 
station authorizations in the absence of the rule.
    16. Significant Issues Raised by the Public in Response to the 
Initial Analysis. No comments were received concerning the Initial 
Regulatory Flexibility Analysis. Indeed, only the National Association 
of Broadcasters (``NAB'') submitted comments in this proceeding, and it 
did not specifically address the IRFA or the impact of the proposed 
rule change on small businesses more generally. It did, however, favor 
elimination of the subject rule.
    17. Description and Estimate of the Number of Small Entities to 
Which the Rules Will Apply. The RFA directs agencies to provide a 
description of, and, where feasible, an estimate of the number of small 
entities that may be affected by the proposed rules, if adopted. The 
Regulatory Flexibility Act defines the term ``small entity as having 
the same meaning as the terms ``small business,'' ``small 
organization,'' and

[[Page 18572]]

``small governmental jurisdiction. In addition, the term ``small 
business'' has the same meaning as the term ``small business concern'' 
under section 3 of the Small Business Act. 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 SBA.
    18. Pursuant to 5 U.S.C. 601(3), the statutory definition of a 
small business applies ``unless an agency after consultation with the 
Office of Advocacy of the SBA and after opportunity for public comment, 
establishes 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. A ``small organization'' is generally ``any not-for-
profit enterprise which is independently owned and operated and is not 
dominant in its field.'' Nationwide, as of 1992, there were 
approximately 275,801 small organizations. ``Small governmental 
jurisdiction'' generally means ``governments of cities, counties, 
towns, townships, villages, school districts, or special districts with 
a population of less than 50,000.'' As of 1992, there were 
approximately 85,006 such jurisdictions in the United States. This 
number includes 38,978 counties, cities, and towns; of these, 37,566, 
or 96 percent, have populations of fewer than 50,000. Thus, of the 
85,006 governmental entities, we estimate that 81,600 (91 percent) are 
small entities.
    19. The Small Business Administration defines a radio broadcasting 
station that has $5 million or less 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. The 1992 Census indicates that 96 percent (5,861 of 
6,127) radio station establishments produced less than $5 million in 
revenue in 1992. Official Commission records indicate that 11,334 
individual radio stations were operating in 1992. As of September 30, 
2000, Commission records indicate that 12,717 radio stations (both 
commercial and noncommercial) were operating of which 2,140 were 
noncommercial educational FM radio stations. Applying the 1992 
percentage of station establishments producing less than $5 million in 
revenue (i.e., 96 percent) to the number of radio stations in 
operation, (i.e., 12,717) indicates that 12,208 of these radio stations 
would be considered ``small businesses'' or ``small organizations.''
    20. The SBA defines small television broadcasting stations as 
television broadcasting stations with $10.5 million or less in annual 
receipts. As of September 30, 2000, there were 1,288 commercial 
television stations and 375 non-commercial educational television 
stations on the air. According to Commission staff review of the BIA 
Publications, Inc., Master Access Television Analyzer Database, fewer 
than 800 commercial TV broadcast stations (65%) have revenues of less 
than $10.5 million dollars. We note, however, that under SBA's 
definition, revenues of affiliates that are not television stations 
should be aggregated with the television station revenues in 
determining whether a concern is small. Our estimate may thus overstate 
the number of small entities since the revenue figure on which it is 
based does not include or aggregate revenues from non-television 
affiliated companies. Accordingly, it appears that the proposed 
revisions would affect no more than 800 television stations that might 
be considered ``small businesses'' or ``small organizations.''
    21. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements. The R&O imposes no reporting, recordkeeping, 
or compliance requirements.
    22. Steps Taken to Minimize Significant Economic Impact on Small 
Entities and Significant Alternatives Considered. We believe that the 
elimination of the experimental station multiple ownership rule strikes 
the appropriate balance between allowing broadcast stations to realize 
the efficiencies of conducting research via multiple ownership of 
experimental stations on the one hand, and preventing experimental 
facilities from being used for commercial purposes or to prevent other 
legitimate use of broadcast spectrum on the other. Repeal of the 
experimental station multiple ownership rule will not affect the 
Commission's ability to ensure that experimental stations are used 
specifically for bona fide experimental purposes and not for commercial 
purposes, as the Commission can continue to do so under 47 CFR 74.182. 
Nor will experimental stations be able to tie up excessive spectrum 
even absent 47 CRF 74.134 because, under other Commission rules, 
experimental licensees are limited to the minimum frequencies necessary 
to conduct their experimental operations and an experimental license 
does not grant the licensee exclusive use of a frequency. We believe 
that the elimination of the experimental multiple ownership rule aids 
all licensees, and it especially benefits small entities who will no 
longer incur the expensive of filing a special request should they need 
more than one experimental license, as would have been the case under 
the previous regulation. Since the elimination of the subject rule in 
this R&O will in all probability confer such a benefit on smaller 
entities within the group of small businesses affected, the alternative 
of retaining the rule was not selected.
    23. Report to Congress. The Commission will send a copy of this 
R&O, including this FRFA, in a report to be sent to Congress pursuant 
to the Small Business Regulatory Enforcement Fairness Act of 1996, see 
5 U.S.C. 801(a)(1)(A). In addition, the Commission will send a copy of 
this R&O, including FRFA, to the Chief Counsel for Advocacy of the 
Small Business Administration. A copy of this R&O and FRFA (or 
summaries thereof) will also be published in the Federal Register. See 
5 U.S.C. 604(b).
    24. Accordingly, pursuant to the authority contained in 47 U.S.C. 
154(i), 303(g) and 303(r), part 74 of the Commission's rules, 47 CFR 
part 74 is amended as set forth in this R&O.
    25. The amendment set forth in ``Rule Changes'' shall be effective 
30 days after publication in the Federal Register.
    26. The Commission's Office of Public Affairs, Reference Operations 
Division, shall send a copy of this R&O, including the Final Regulatory 
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small 
Business Administration.
    27. This proceeding is terminated.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.

Rule Change

    For the reasons discussed in the preamble the Federal 
Communications Commission amends 47 CFR part 74 as follows:

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

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

    Authority: 47 U.S.C. 154, 303, 307, 336(f) and 554.


Sec. 74.134  [Removed]

    2. Remove Sec. 74.134.

[FR Doc. 01-8720 Filed 4-9-01; 8:45 am]
BILLING CODE 6712-01-U