[Federal Register Volume 67, Number 43 (Tuesday, March 5, 2002)]
[Proposed Rules]
[Pages 9945-9951]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-5165]


=======================================================================
-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 73

[MM Docket No. 95-31; FCC 02-44]


Reexamination of the Comparative Standards for Noncommercial 
Educational Applicants; Association of America's Public Television 
Stations' Motion for Stay of Low Power Television Auction (No. 81)

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: This document solicits comments on how the Commission should 
allocate and license ``non-reserved'' spectrum (i.e., spectrum that has 
not been set aside for exclusive use by noncommercial educational 
broadcast stations) in which both commercial and noncommercial entities 
have an interest. The document is in response to a court decision 
National Public Radio vs. FCC.

DATES: Comments are due April 15, 2002; Reply comments are due May 15, 
2002.

ADDRESSES: Federal Communications Commission, 445 12th Street, SW., 
Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Eric J. Bash, Mass Media Bureau, 
Policy and Rules Division, (202) 418-2130 or [email protected].

SUPPLEMENTARY INFORMATION: This is a synopsis of the Second Further 
Notice of Proposed Rule Making (``2FNPRM'') in MM Docket No. 95-31, FCC 
02-44, adopted February 14, 2002, and released February 25, 2002. The 
complete text of this 2FNPRM 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, Qualex International, Portals II, 445 
12th Street SW., Room CY-B-402, Washington, DC 20554, telephone (202) 
863-2893, facsimile (202) 863-2898, or via e-mail [email protected]. 
This document is available in alternative formats (computer diskette, 
large print, audio cassette, and Braille). Persons who need documents 
in such formats may contact Brian Millin at (202) 418-7426, TTY (202) 
418-7365, or [email protected].

I. Introduction

    1. We adopt this 2FNPRM to seek additional comment on the 
procedures the Commission should use to license ``non-reserved'' 
channels in which both commercial and noncommercial educational 
entities have an interest. In the year 2000, the Commission decided to 
resolve mutually exclusive applications between such entities by 
competitive bidding. The United States Court of Appeals for the D.C. 
Circuit has vacated that decision. We now seek additional comment to 
adopt new procedures to license non-reserved spectrum in which both 
commercial and noncommercial educational entities have an interest, 
consistent with the court's opinion, our statutory authority, and our 
responsibility to serve the public interest.

[[Page 9946]]

II. Backgound

    2. For some time, the Commission has reserved a portion of the 
broadcast spectrum for noncommercial educational (``NCE'') use only. In 
the FM service, the Commission currently reserves twenty specific 
channels (88.1 MHz to 91.9 MHz, the ``reserved band''), out of a total 
of one hundred channels, for FM full-power and FM translator NCE use. 
In the full power television service, the Commission has reserved a 
similar proportion of channels, but using different channels in 
different geographic areas across the country. The Commission has not 
reserved channels or frequencies in other services (i.e., AM, low power 
TV, TV translator), but the Commission has allowed NCE entities to 
operate on channels generally available in these services. When NCE 
entities have elected to apply for operation on non-reserved channels 
or to apply for operation in a service in which spectrum is not 
reserved for NCE use, however, they historically have competed for 
these channels under the same rules as commercial entities.
    3. Traditionally, the Commission resolved mutually exclusive 
applications filed by commercial or NCE entities through often lengthy, 
and litigious, comparative hearings. The Commission considered 
different comparative criteria for reserved and non-reserved spectrum. 
Both processes were called into question in the early 1990s. The 
Commission's former Review Board described the criteria used by the 
Commission to resolve competing applications for reserved channels as 
``meaningless'' and ``vague,'' and the United States Court of Appeals 
for the D.C. Circuit held the principal criterion used by the 
Commission to resolve competing applications for non-reserved channels 
to be ``arbitrary and capricious, and therefore unlawful.'' In 1992, 
the Commission initiated a rulemaking proceeding to reexamine its 
comparative licensing selection processes for both commercial and NCE 
entities. The Commission thereafter opened this separate docket and 
released a Notice of Proposed Rulemaking (``NPRM''), 60 FR 15275, March 
23, 1995, to consider revising the criteria used to select among 
competing applicants for new NCE broadcast facilities. One of the 
proposals on which the Commission sought comments was the use of a 
point system, instead of comparative hearings or lotteries, to award 
licenses.
    4. While the Commission was considering the record, the Balanced 
Budget Act of 1997 (``1997 Budget Act'') became law, amending certain 
provisions of the Communications Act (``Act'') relevant to the 
Commission's review of its licensing policies. Section 309(j), which 
had been adopted in 1993 to authorize the Commission to use competitive 
bidding systems to resolve mutually exclusive applications under 
certain circumstances, was amended by the 1997 Budget Act to require 
the Commission to use such systems subject to several exceptions. 
Specifically, section 309(j)(1) was revised as follows: If . . . 
mutually exclusive applications are accepted for any initial license or 
construction permit, then, except as provided in paragraph (2), the 
Commission shall grant the license or permit to a qualified applicant 
through a system of competitive bidding that meets the requirements of 
this subsection.'' Section 309(j)(2) sets forth the types of 
authorizations to which the competitive bidding authority of section 
309(j)(1) does not apply, including ``licenses or construction permits 
issued by the Commission * * * (C) for stations described in section 
397(6) of this Act,'' i.e., NCE stations. The 1997 Budget Act also 
amended section 309(i) of the Communications Act to restrict the 
Commission's authority to issue licenses or permits through a system of 
random selection to ``licenses or permits for stations described in 
section 397(6) of this Act.''
    5. The Commission sought comment on these statutory changes through 
a Further Notice of Proposed Rulemaking (``FNPRM''), 63 FR 58358, 
October 30, 1998, in this docket. Given the difference in treatment of 
licensing mechanisms for NCE and other stations, the FNPRM sought 
comment on how to resolve conflicts between commercial and NCE 
applicants for non-reserved spectrum. The Commission also sought 
comment on whether section 309 of the Act prohibited it from using 
competitive bidding to resolve any mutually exclusive applications when 
they included at least one NCE entity, or instead only when they 
involved reserved channels. The Commission sought comment on five 
specific policy options.
    6. In the year 2000, the Commission adopted a Report & Order 
(``R&O''), 65 FR 36375, June 8, 2000, and rules on the issue. On the 
matter of statutory construction, the Commission ``conclude[d] that the 
exemption of NCE applicants from our general mandatory auction 
authority does not prohibit us from auctioning non-reserved channels, 
even when NCE entities apply for those channels.'' As a result, the 
Commission decided to require NCE entities to compete with commercial 
entities for non-reserved channels via competitive bidding. Moreover, 
to mitigate any hardship that the auction process might impose on NCE 
entities, the Commission also decided to relax the criteria necessary 
to reserve a new channel in the otherwise non-reserved spectrum. 
Specifically, the Commission decided that, on a going-forward basis, 
NCE entities could seek to reserve a channel in the Table of Allotments 
for exclusive NCE use, based on two new conditions. If NCE entities 
could not make this showing, the Commission would not reserve the 
channel, but NCEs could still compete with commercial entities for the 
channel at auction.
    7. Several parties sought review in court of the Commission's 
decision to require NCE entities to compete for channels in the non-
reserved spectrum via competitive bidding. In NPR v. FCC (``NPR''), 254 
F.3d 226 (D.C. Cir. 2001), the U.S. Court of Appeals for the D.C. 
Circuit rejected the Commission's construction of section 309. The 
court held that ``nothing in the Act authorizes the Commission to hold 
auctions for licenses issued to NCEs to operate in the unreserved 
spectrum,'' because section 309(j)(2) denied the Commission the 
authority to use competitive bidding ``based on the nature of the 
station that ultimately receives the license, and not on the part of 
the spectrum in which the station operates.''

III. Options

    8. Given the court's decision in NPR, we seek additional comment on 
the mechanisms we should use to resolve the competing interests of 
commercial and NCE entities for non-reserved spectrum. We outline 
several specific options: (1) Holding NCE entities ineligible for 
licenses for non-reserved channels and frequencies; (2) permitting NCE 
entities opportunities to acquire licenses for non-reserved channels 
and frequencies when there is no conflict with commercial entities; and 
(3) providing NCE entities opportunities to reserve additional channels 
in the Table of Allotments. We could adopt one of these options, or we 
could adopt several of them to work in tandem with one another in order 
to expand opportunities and mitigate any hardship for applicants for 
licenses for NCE stations. For example, we could allow entities that 
seek to operate an NCE FM or TV station the opportunity to reserve a 
channel at the allocation stage, and even if they fail, still permit 
them to apply and compete for the channel at the licensing stage, 
subject to certain caveats. We invite comment on these options, as well 
as the submission of

[[Page 9947]]

any others that would be consistent with the court's decision.
    9. Before turning to a discussion of these options, however, we 
seek comment on the breadth of the statutory language that describes 
the entities that are exempt from auctions. Section 309(j)(2)(C) states 
that the Commission's competitive bidding authority does not apply to 
``licenses or construction permits issued by the Commission * * * for 
stations described in section 397(6) of this Act.'' Section 397(6) of 
the Communications Act defines the terms ``noncommercial educational 
broadcast station'' and ``public broadcast station'' as a radio or 
television broadcast station which ``(A) under the rules and 
regulations of the Commission in effect on the effective date of this 
paragraph, is eligible to be licensed by the Commission as a 
noncommercial educational radio or television broadcast station and 
which is owned and operated by a public agency or nonprofit private 
foundation, corporation, or association; or (B) is owned and operated 
by a municipality and which transmits only noncommercial programs for 
education purposes.'' Section 397(6) became effective November 2, 1978. 
Both at that time and currently, the Commission's rules for the FM 
service stated that NCE stations ``will be licensed only to a nonprofit 
educational organization and upon a showing that the station will be 
used for the advancement of an educational program.'' Likewise, the 
Commission's rules stated for the TV service that NCE stations ``will 
be licensed only to nonprofit educational organizations upon a showing 
that the proposed stations will be used primarily to serve the 
educational needs of the community; for the advancement of educational 
programs; and to furnish a nonprofit and noncommercial television 
service.'' Reading these eligibility requirements in the rules in 
tandem with the statutory exemption, we request comment on which 
applicants are exempt from competitive bidding and under what 
circumstances. Specifically, are all ``nonprofit educational 
organizations'' exempt from auctions whenever they apply for any 
broadcast license, or only when they make a ``showing that the station 
will be used for the advancement of an educational program''? In other 
words, is the ``showing'' of an ``educational program'' or ``service'' 
requirement that appears in Secs. 73.503 and 73.621 of the Commission's 
rules, part of the ``eligibility'' requirement that is incorporated by 
reference in section 397(6) of the Act? Or is the eligibility 
requirement referenced in section 397(6) only that the applicant be a 
``nonprofit educational organization''? If the latter is the case, a 
nonprofit educational organization could not participate in an auction 
for a broadcast license under any circumstances--even if it were 
applying to operate a commercial station. If the former is the case, a 
nonprofit educational organization could participate in an auction for 
a broadcast license if it does not make ``a showing that the station 
will be used for the advancement of an educational program.'' If a 
nonprofit educational organization may participate in an auction, is it 
precluded, once having obtained a broadcast license, from providing 
noncommercial educational service or from later converting to 
noncommercial educational operations? Is its transferee precluded from 
these activities?
    10. As we construe section 309(j)(2)(C), we note that certain other 
construction permits and licenses are also exempt from competitive 
bidding. Section 309(j)(2)(A) states that these construction permits 
and licenses include those ``for public safety radio services, 
including private internal radio services used by State and local 
governments and non-government entities and including emergency road 
services provided by not-for-profit organizations that (i) are used to 
protect the safety of life, health, or property, and (ii) are not made 
commercially available to the public.'' We seek to ensure that our 
construction of section 309(j)(2)(C) is consistent with our 
implementation of section 309(j)(2)(A), taking into account the 
differences in the statutory language between the two provisions, and 
the D.C. Circuit's interpretation of section 309(j)(2)(C) specifically.
    11. Option #1: Hold NCE entities ineligible for licenses for non-
reserved channels and frequencies. One option the Commission considered 
in the FNPRM that remains viable after the NPR decision is simply to 
hold NCE entities ineligible to apply for licenses for non-reserved 
channels and frequencies. In effect, this option would reserve that 
spectrum--i.e., non-reserved FM (including translators) channels, non-
reserved TV channels, all AM frequencies, and all secondary TV 
services--for commercial use. As the Commission stated in the FNPRM, 
``[s]uch an option would be a departure from current policy.'' This 
approach, however, is consistent with the statutory language, as 
interpreted by the court in the NPR case. We seek comment on this 
option. Do NCE entities have sufficient reserved spectrum available to 
them in the areas they wish to serve? Are future opportunities to 
obtain licenses disproportionately located in either the reserved or 
non-reserved bands?
    12. Option #2: Permit NCE entities to acquire licenses for non-
reserved channels and frequencies when there is no conflict with 
commercial entities. While a decision to hold NCE entities completely 
ineligible for non-reserved channels has the advantage of clarity and 
simplicity, such a decision would preclude NCE entities from applying 
for non-reserved channels even when commercial entities do not wish to 
do so. As an alternative to that approach, the Commission could open a 
filing window for both commercial and NCE entities, and resolve 
mutually exclusive applications as follows. If only NCE entities filed 
mutually exclusive applications, the Commission could resolve the 
conflict through the current NCE point system; if only commercial 
entities filed mutually exclusive applications, the Commission could 
resolve the conflict via competitive bidding. If both commercial and 
NCE entities filed applications for channels or frequencies that 
created a technical conflict, the NCE applicant would be ineligible for 
a license to operate on such channels or frequencies and the Commission 
would dismiss its unacceptable application. In services that use the 
Table of Allotments (i.e., FM or TV), the Commission could modify this 
approach by providing NCE entities a prior opportunity to reserve or 
acquire a license for a channel in order to mitigate any hardship to 
them.
    13. If both commercial and NCE entities file mutually exclusive 
applications for channels in services that do not utilize the Table of 
Allotments (i.e., AM, FM translators, LPTV, TV translators), such that 
there has not been an opportunity to reserve channels for exclusive NCE 
use, the Commission could allow the applicants an opportunity to settle 
the conflict. If the applicants could not resolve the conflict through 
settlement or technical resolution, the Commission would then simply 
reject the NCE applicant, and award the license to one of the remaining 
commercial applicants through competitive bidding. Under this approach, 
however, there would be little incentive for the commercial applicant 
to try to settle or reach an engineering solution in the first place. 
Is there anything the Commission could do, consistent with section 
309(j) as interpreted in the NPR decision, to encourage good faith 
resolution of such conflicts?
    14. Any decision to allow NCE entities to apply for non-reserved

[[Page 9948]]

channels through auction filing window procedures, and thereafter 
provide them a period of time in which to resolve any conflicts, 
implicates the Commission's anti-collusion rule. This rule provides 
that, after the filing deadline for FCC Form 175 (the ``short form'' 
application to participate in an auction), ``all applicants are 
prohibited from cooperating, collaborating, discussing or disclosing in 
any manner the substance of their bids or bidding strategies, or 
discussing or negotiating settlement agreements, with other applicants 
until after the down payment deadline, unless such applicants are 
members of a bidding consortium or other joint bidding arrangement 
identified on the bidder's short-form application * * *.'' 
Notwithstanding the general applicability of this rule to broadcast 
auctions, there are limited exceptions. For example, application groups 
consisting of either major modification applications that are mutually 
exclusive with each other, or major modification and new station 
applications that are mutually exclusive with each other, may submit 
settlement agreements or technical solutions during a limited period 
after the filing of short-form applications but before the start of an 
auction. Similarly, mutually exclusive applicants for secondary 
broadcast services, such as LPTV and FM & TV translators, may resolve 
their conflicts by means of engineering solutions or settlements during 
a limited period after the filing of short-form applications but before 
the start of an auction. The Commission noted that allowing competing 
applicants to settle following the filing of the short form application 
was not consistent with the general Part I anti-collusion rules, but 
nonetheless concluded that, in these particular contexts, doing so 
would serve the public interest. For competing broadcast application 
groups that are subject to the anti-collusion rules and therefore may 
not participate in a settlement, should the Commission revise the anti-
collusion rules to permit competing applications to pursue a settlement 
where at least one of the competing applicants is an NCE entity? In the 
interest of preserving the effectiveness of the anti-collusion rules in 
general, how can we accommodate settlements in this context? Should we 
amend our anti-collusion rules to accommodate engineering and other 
settlements to resolve mixed groups? Should we limit any such 
exceptions to engineering settlements, and prohibit financial and other 
types of settlements?
    15. Option #3: Provide NCE entities additional opportunities to 
reserve channels in the Table of Allotments. Another option the 
Commission considered in the FNPRM, and ultimately adopted in the R&O, 
is to provide opportunities to reserve additional FM and TV channels 
for NCE use through relaxed reservation criteria. Specifically, the 
Commission decided to reserve a channel, at the allocation stage, if a 
proponent for reservation could demonstrate two things: (1) in the case 
of radio, the proponent is technically precluded from using a reserved 
channel, or in the case of TV, there is no reserved channel available 
in the proponent's community, and (2) the proponent will provide a 
first or second radio or TV NCE service to 10% of the population 
within, in the case of radio, the 1mV/m contour, and in the case of TV, 
the Grade B contour. The Commission did not provide NCE entities an 
opportunity to reserve AM channels, nor did it provide pending 
applicants for FM and TV channels in ongoing proceedings an opportunity 
to use the relaxed reservation criteria. In order to provide NCE 
entities additional meaningful opportunities to reserve channels, the 
Commission now could further expand these criteria for future 
allocations, and apply and/or modify them for vacant allotments. (The 
Commission recently allowed pending applicants in the ongoing 
proceedings an opportunity to settle their conflicts. In the event not 
all settle, the Commission asks for comment in the instant proceeding 
on how to resolve the remaining conflicts.)
    16. Future Allocations. As adopted in the R&O, if NCE entities 
could not satisfy the relaxed reservation criteria and the Commission 
ultimately allocated the channel as non-reserved, they could still file 
applications for the channel, with mutual exclusivity resolved by 
competitive bidding. After the NPR decision, the Commission may not 
permit applicants for authorization to operate an NCE broadcast station 
on a non-reserved channel to compete in an auction. Given that the 
result of an NCE entity's failure to reserve a channel is now more 
severe, should the Commission further relax the reservation criteria? 
If so, what should the criteria be? How should we define when NCE 
entities are ``technically precluded'' from using a reserved channel, 
as required by our current relaxed reservation criteria? Should the 
definition turn on the availability of equivalent facilities, or will 
the availability of some minimum class of facilities suffice? In order 
to assess the burden such a showing may impose on NCE entities, we also 
seek comment on how much it will cost for them to make the showing 
necessary to take advantage of the relaxed reservation criteria. What 
variables affect the cost?
    17. Vacant Allotments. Also as adopted in the R&O, the opportunity 
to reserve additional channels is limited to future allocations, i.e., 
for channels that have not yet been placed in the Table of Allotments. 
Prior to the NPR decision, however, the Commission had scheduled 
Auction No. 37 for approximately 350 vacant FM allotments. The 
Commission has also allocated more than 100 additional FM non-reserved 
channels subsequent to scheduling the vacant FM allotments for Auction 
No. 37. The Commission added many of these channels to the FM Table of 
Allotments prior to adopting the relaxed reservation criteria, with the 
result that NCE entities have not had the opportunity to take advantage 
of the relaxed criteria for those channels. Even in circumstances where 
NCE entities have already had that opportunity, they might not have 
reasonably foreseen that the court's decision in the NPR case, coupled 
with the Commission's regulatory response to that decision, might 
affect their ability to compete for non-reserved channels, where 
commercial entities file competing applications.
    18. Should we establish a procedure for NCE entities to show that 
these vacant allotments should be reserved under the relaxed criteria? 
What reservation criteria should be used where the channel has already 
been allocated through a rulemaking? Should it be the same as the 
criteria to reserve a channel in a future allocation proceeding? While 
there is no ``finder's preference'' for a successful proponent in a 
channel allocation proceeding, is it fair to commercial entities to 
permit NCE entities at this point an additional opportunity effectively 
to remove a channel from the reach of a commercial proponent? Should we 
create any additional opportunity for NCE entities to attempt to 
reserve these allotments? If so, how can the Commission create such 
further reservation opportunities and at the same time accommodate the 
competing needs of commercial broadcasters in a manner that serves the 
public interest? Would it be appropriate to extend further reservation 
opportunities but require any NCE proponent to demonstrate a greater 
need for the channel before attempting to have it reallocated as 
reserved? For example, we could require NCE entities to show that there 
are no other channels available that would serve at least 50% of the 
area within the protected service contour of the subject allotment,

[[Page 9949]]

assuming full-class operation of a station at the allotment site. This 
approach would minimize reserving vacant allotments in areas where 
other non-reserved channels are available. The process could involve 
the Commission announcing a date by which interested entities must 
submit any required showings. The date would be prior to the Form 175 
auction filing window. Under this proposal, FM allotments for which no 
NCE entities have expressed an interest or for which NCE entities fail 
to satisfy the adopted reservation criteria would proceed to auction.
    19. Other Options. If we adopt one or more of the proposals, NCE 
entities could be accorded more flexible approaches to reserving 
additional FM and TV channels for NCE use, including channels that have 
been allocated but not yet licensed, and the ability to operate on non-
reserved channels and frequencies if no commercial entities apply for 
those channels and frequencies. We wish to ensure that NCE entities 
have reasonable opportunities to obtain the spectrum they need. Will 
these options satisfy that goal? Are there other options the Commission 
should consider that would be consistent with the NPR decision and the 
Communications Act? We invite commenters to submit additional proposals 
that are fully consistent with the governing legal standards and would 
otherwise serve the public interest.
    20. Additional Issue Concerning LPTV and TV Translators. As we 
reconsider our licensing policies for non-reserved spectrum, we also 
seek comment on issues unique to LPTV and TV translators. In the year 
2000, the Mass Media Bureau and the Wireless Telecommunications Bureau 
opened a limited filing window to auction the channels for certain LPTV 
stations. Thereafter, the Association of America's Public Television 
Stations (APTS) filed a motion to stay the LPTV auction. APTS argued 
that the NPR decision prevented the Commission from auctioning the 
licenses for channels that included a mixed group of applicants. In 
this 2FNPRM, we now consider the impact of the NPR decision upon 
mutually exclusive LPTV and TV translator applications. Given that the 
Commission never established a date for the LPTV auction, and that we 
will not do so until we resolve how the NPR decision affects our 
licensing of LPTV and TV translators, we dismiss APTS's motion as moot.
    21. While the Commission does not reserve channels in several 
services, it still licenses NCE entities to operate NCE broadcast 
stations on AM and FM translator channels, if they satisfy the 
eligibility criteria and licensing requirements set forth in our rules. 
The Commission, however, does not license NCE entities as such for LPTV 
and TV translator channels. Section 309(j)(2)(C) states that 
competitive bidding procedures shall not apply to ``licenses issued by 
the Commission * * * for stations described in section 397(6) of this 
Act.'' Section 397(6) of the Communications Act defines the terms 
``noncommercial educational broadcast station'' and ``public broadcast 
station'' as one which ``(A) under the rules and regulations of the 
Commission in effect on the effective date of this paragraph, is 
eligible to be licensed by the Commission as a noncommercial 
educational radio or television broadcast station and which is owned 
and operated by a public agency or nonprofit private foundation, 
corporation, or association; or (B) is owned and operated by a 
municipality and which transmits only noncommercial programs for 
education purposes.'' Given that the Commission has never licensed LPTV 
and TV translator facilities to operate as NCE stations, subject to the 
restrictions that apply to those stations, we seek comment on whether 
section 309(j)(2)(C) applies to LPTV and TV translators, and if not, 
whether we must use competitive bidding to resolve competing 
applications for these services, even if they include applications 
filed by entities that meet the general NCE eligibility criteria set 
forth in the rules. If licenses for LPTV and TV translators are within 
the scope of section 309(j)(2)(C), such licenses would not be available 
for NCE stations under the proposals in this 2FNPRM, except when the 
application of an entity for an NCE license is not in conflict with the 
application of an entity for a commercial license. Commenters who 
believe that these licenses are within the scope of section 
309(j)(2)(C) should address what changes, if any, the Commission could 
make to its procedures to ensure that entities that wish to operate NCE 
stations have opportunities to obtain these licenses. Commenters who 
believe that the LPTV and TV translator services are within the scope 
of section 309(j)(2)(C) should also address how to determine which 
applicants for these services are NCE entities, given that there are no 
NCE eligibility criteria in those services. While we are not inclined 
to establish NCE eligibility criteria specifically for LPTV and TV 
translator channels, should we do so in order to give full effect to 
the NPR decision and to implement the procedures outlined? Does the 
Commission have the statutory authority to adopt such eligibility 
criteria, and then use them to exempt applicants for NCE stations from 
auctions, given that the statutory exemption is based on the ``rules 
and regulations of the Commission in effect on the effective date of'' 
section 397(6), i.e., 1978? If the Commission has the authority to 
adopt eligibility rules and use them as a basis to exempt applicants 
for NCE stations from auctions, one approach could be to extend NCE 
status to any LPTV or TV translator applicant that the Commission has 
already licensed as an NCE entity in a full-power service. The 
Commission would then resolve mutually exclusive ``mixed'' groups 
through the same mechanism we establish for other services. In 
addition, if we do change our licensing practices in the LPTV and TV 
translator services to authorize NCE stations, we must address the 
issue of how to resolve mutually exclusive LPTV and TV translator 
groups that contain applications filed by only NCE entities. Should we 
resolve those mutually exclusive NCE-only groups through the NCE point 
system we have established for full-power broadcast services?

IV. Conclusion

    22. Through the record established in response to this 2FNPRM, we 
seek to create new licensing mechanisms for spectrum in which 
commercial and NCE entities have competing interests. We intend these 
policies and procedures to be fully consistent with the court's 
opinion, our statutory authority, and otherwise to fulfill our 
statutory duty to serve the public interest.

V. Administrative Matters

    23. Comments and Reply Comments. Pursuant to sections 1.415 and 
1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested 
parties may file comments on or before April 15, 2002, and reply 
comments on or before May 15, 2002. Comments may be filed using the 
Commission's Electronic Comment Filing System (ECFS) or by filing paper 
copies. See Electronic Filing of Documents in Rulemaking Proceedings, 
63 FR 24121, (May 1, 1998).
    24. Comments filed through ECFS can be sent as an electronic file 
via the Internet to http://www.fcc.gov/e-file/ecfs.html>. Generally, 
only one copy of an electronic submission must be filed. In completing 
the transmittal screen, commenters should include their full name, Post 
Service mailing address, and the applicable docket or rulemaking 
number. Parties may also submit an electronic comment by Internet e-
mail.

[[Page 9950]]

To get filing instructions for e-mail comments, commenters should send 
an e-mail to [email protected], and should include the following words in 
the body of the message, ``get form your e-mail address>.'' A sample 
form and directions will be sent in reply.
    25. Parties who choose to file by paper must file an original and 
four copies of each filing. All filings must be sent to the 
Commission's Acting Secretary, William F. Caton, Office of the 
Secretary, Federal Communications Commission, 445 Twelfth Street SW., 
TW-A325, Washington, DC 20554. Parties who choose to file by paper 
should also submit comments on diskette. These diskettes should be 
addressed to: Wanda Hardy, 445 Twelfth Street SW., 2-C221, Washington, 
DC 20554. Such a submission should be on a 3.5 inch diskette formatted 
in an IBM compatible format using Word 97 or compatible software. The 
diskette should be accompanied by a cover letter and should be 
submitted in ``read only'' mode. The diskette should be clearly labeled 
with the commenter's name, docket number of the proceeding, type of 
pleading (comment or reply comment), date of submission, and the name 
of the electronic file on the diskette. The label should also include 
the following phrase: ``Disk Copy `` Not an Original.'' Each diskette 
should contain only one party's pleading, preferably in a single 
electronic file. In addition, commenters must send diskette copies to 
the Commission's copy contractor, Qualex International, Portals II, 445 
12th Street SW., CY-B402, Washington, DC 20554.
    26. Ex Parte Rules. This is a permit-but-disclose notice-and-
comment rulemaking proceeding. Ex parte presentations are permitted 
except during the Sunshine Agenda period, provided they are disclosed 
as provided in the Commission's rules. See generally 47 CFR 1.1202, 
1.1203, 1.1206(a).
    27. Initial Regulatory Flexibility Analysis. With respect to this 
2FNPRM, an Initial Regulatory Flexibility Analysis (``IRFA'') is 
contained. As required by the Regulatory Flexibility Act, see 5 U.S.C. 
603, the Commission has prepared an IRFA of the possible significant 
economic impact on small entities of the proposals contained in this 
2FNPRM. Written public comments are requested on the IRFA. Comments on 
the IRFA must be filed in accordance with the same filing deadlines as 
comments on the 2FNPRM, and must have a distinct heading designating 
them as responses to the IRFA.
    28. Initial Paperwork Reduction Act Analysis. This 2FNPRM may 
contain either proposed or modified information collections. As part of 
our continuing effort to reduce paperwork burdens, we invite the public 
to take this opportunity to comment on the information collections 
contained in this 2FNPRM, as required by the Paperwork Reduction Act of 
1996. Public and agency comments are due at the same time as other 
comments on the 2FNPRM. Comments should address: (a) Whether the 
proposed collection of information is necessary for the proper 
performance of the functions of the Commission, including whether the 
information shall have practical utility; (b) ways to enhance the 
quality, utility, and clarify of the information collected; (c) ways to 
minimize the burden of the collection of information on the 
respondents, including the use of automated collection techniques or 
other forms of information technology. In addition to filing comments 
with the Secretary, a copy of any comments on information collections 
contained in this 2FNPRM should be submitted to Judy Boley, Federal 
Communications Commission, 445 Twelfth Street SW., 1-C804, Washington, 
DC 20554, or over the Internet to [email protected] and to Edward 
Springer, OMB Desk Officer, 10236 NEOB, 725 17th Street NW., 
Washington, DC 20503, or over the Internet to 
[email protected].

VI. Initial Regulatory Flexibility Analysis

    29. As required by the Regulatory Flexibility Act (``RFA''), the 
Commission has prepared this Initial Regulatory Flexibility Analysis 
(``IRFA'') of the possible significant economic impact on small 
entities by the policy and rules proposed in this 2FNPRM. Written 
public comments are requested on this IRFA. Comments must be identified 
as responses to the IRFA and must be filed by the deadlines for 
comments on the 2FNPRM. The Commission will send a copy of the 2FNPRM, 
including this IRFA, to the Chief Counsel for Advocacy of the Small 
Business Administration. See 5 U.S.C. 603(a). In addition, the 2FNPRM 
and IRFA (or summaries thereof) will be published in the Federal 
Register.

Need for, and Objectives of, the Proposed Rules

    30. The Commission adopts the 2FNPRM in response to National Public 
Radio v. FCC. This court decision vacated the Commission's earlier 
decision to require all entities, including those that are eligible to 
hold licenses for noncommercial educational (NCE) broadcast stations, 
to compete at auction for licenses for ``non-reserved'' spectrum, i.e., 
spectrum that the Commission has not reserved for use by NCE stations 
only. The Commission must revise its licensing mechanisms and policies, 
consistent with the court's opinion and the Communications Act, to 
manage conflicts between applicants for commercial stations and NCE 
stations for licenses for non-reserved spectrum. In the 2FNPRM, the 
Commission has proposed three specific options: (1) Holding NCE 
entities ineligible for licenses for non-reserved channels and 
frequencies; (2) permitting NCE entities opportunities to acquire 
licenses for non-reserved channels and frequencies when there is not a 
conflict with commercial entities; and (3) providing NCE entities 
opportunities to reserve additional channels in the Table of 
Allotments.

Legal Basis

    31. The Commission adopts the 2FNPRM pursuant to sections 1, 2(a), 
4(i), 303, 307, and 309 of the Communications Act, 47 U.S.C. 151, 
152(a), 154(i), 303, 307, and 309.

Description and Estimate of the Number of Small Entities to Which the 
Proposed Rules Will Apply

    32. 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 RFA defines the term 
``small entity'' as having the same meaning as ``small business,'' 
``small organization,'' and ``small governmental jurisdiction.'' In 
addition, the term ``small business'' has the same meaning as the term 
``small business concern'' under the Small Business Act. 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. A ``small 
organization'' is generally defined as ``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. A ``small governmental jurisdiction'' is generally 
defined as ``governments of cities, counties, towns, townships, 
villages, school districts, or special districts, with a population of 
less than fifty thousand * * *.'' 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 less than fifty thousand. The Census Bureau

[[Page 9951]]

estimates that this ratio is approximately accurate for all 
governmental entities. Thus, of the 85,006 governmental entities, we 
estimate that 81,600 (96 percent) are small entities.
    33. All of the proposals in the 2FNPRM will affect applicants for 
NCE stations on non-reserved channels and frequencies. Licenses for NCE 
stations are available only to nonprofit educational organizations upon 
a showing that they will use their proposed stations for educational 
purposes. The proposals could also affect applicants for commercial 
stations on non-reserved channels and frequencies. Applicants for non-
reserved channels and frequencies therefore could include ``small 
business concerns,'' ``small organizations,'' and ``small governmental 
jurisdictions.'' The number of possible applicants is unknown.

Radio

    34. Applicants could also include existing radio stations. As of 
September 30, 2001, the Commission had licensed a total of 13,012 radio 
stations, of which 4,727 were AM stations, 6,051 were FM commercial 
stations, and 2,234 NCE FM stations. As of the same date, the 
Commission had also licensed 3,600 FM translators and boosters 
(commercial and NCE). SBA defines a radio station that has less than $5 
million or less in annual receipts as a small business. According to 
the Commission staff review of BIA Publications Inc. Master Access 
Radio Analyzer Database on January 24, 2002, about 11,000 full-power 
commercial radio stations have revenue of $5 million or less. Many 
commercial radio stations, however, are affiliated with larger 
corporations with higher revenue, with the result that the estimate of 
11,000 commercial radio stations likely overstates the number that 
qualify as small entities. The Commission does not know how many of its 
NCE FM station licensees qualify as small entities.

Television

    35. Applicants could also include existing TV stations. As of 
September 30, 2001, the Commission had licensed a total of 1,686 full-
power TV stations, of which 1,309 were commercial TV stations, and 377 
were NCE TV stations. As of the same date, the Commission had also 
licensed 4,762 TV translators, 424 Class A TV stations, and 2,212 low-
power TV stations. SBA defines television broadcasting establishments 
that have $10.5 million or less in annual receipts as a small business. 
According to Commission staff review of the BIA Publications, Inc. 
Master Access Television Analyzer Database on January 24, 2002, fewer 
than 800 of the commercial TV stations have revenues of $10.5 million 
or less. SBA's definition, however, indicates that revenues of TV 
station affiliates that are not TV stations themselves should be 
aggregated with the revenues of the TV station to determine when a TV 
station is a small entity. The Commission's revenues figures for TV 
stations do not include the revenues of their affiliates that are not 
TV stations themselves, with the result that the estimate of 
approximately 800 TV stations likely overstates the number of TV 
stations that qualify as small entities. The Commission does not know 
how many of its NCE TV station licensees qualify as small entities.

Description of Projected Reporting, Recordkeeping, and Other Compliance 
Requirements

    36. The Commission anticipates that none of the proposals in the 
2FNPRM will result in an increase in the existing reporting and 
recordkeeping requirements of potential applicants.

Steps Taken To Minimize Significant Economic Impact on Small Entities, 
and Significant

Alternatives Considered

    37. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its proposed approach, 
which may include the following four alternatives (among others): (1) 
The establishment of differing compliance and reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance or reporting requirements under the rule for small entities; 
(3) the use of performance, rather than design, standards; and (4) an 
exemption from coverage of the rule, or any part thereof, for small 
entities.
    38. The 2FNPRM seeks comment on several specific proposals to 
resolve competing interests of commercial and NCE entities for non-
reserved channels and frequencies. Each of these would strike the 
balance between applicants for commercial and NCE stations at a 
somewhat different point. Proposals that expand opportunities for 
applicants for licenses for NCE stations would enhance opportunities 
for ``small organizations.'' Proposals that limit their opportunities 
would expand opportunities for commercial applicants, some of which may 
qualify as ``small businesses.'' For example, if the Commission decided 
to hold applicants for NCE stations ineligible for licenses in the non-
reserved spectrum, it would limit their opportunities to hold such 
licenses, but expand them for commercial applicants. Thus, adoption of 
any of the proposals in the 2FNPRM by the Commission is likely to have 
an insignificant and mixed impact overall on the economic opportunities 
for small entities. We seek comment from small entities on this issue.

Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rules

    39. None.

VII. Ordering Clauses

    40. Pursuant to the authority contained in sections 1, 2(a), 4(i), 
303, 307, and 309 of the Communications Act of 1934, as amended, 47 
U.S.C. 151, 152(a), 154(i), 303, 307, and 309, this 2FNPRM is adopted.
    41. America's Public Television Stations' Motion for Stay of Low 
Power Television Auction (No. 81) is dismissed.
    42. The Commission's Consumer Information Bureau, Reference 
Information Center, shall send a copy of this 2FNPRM, including the 
Initial Regulatory Flexibility Analysis, to the Chief Counsel for 
Advocacy of the Small Business Administration.

List of Subjects in 47 CFR Part 73

    Radio, Television.

Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 02-5165 Filed 3-1-02; 10:23 am]
BILLING CODE 6712-01-P