[Federal Register Volume 67, Number 201 (Thursday, October 17, 2002)]
[Notices]
[Pages 64298-64306]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-26421]



[[Page 64297]]

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Part VI





Department of Commerce





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National Telecommunications and Information Administration



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Public Telecommunications Facilities Program: Closing Date; Notice

  Federal Register / Vol. 67, No. 201 / Thursday, October 17, 2002 / 
Notices  

[[Page 64298]]


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DEPARTMENT OF COMMERCE

National Telecommunications and Information Administration

[Docket No. 000410097-2225-06]
[RIN 0660-ZA11]


Public Telecommunications Facilities Program: Closing Date

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

ACTION: Notice of Closing Date for Solicitation of Television 
Applications.

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SUMMARY: Subject to the availability of fiscal year (FY) 2003 funds, 
the National Telecommunications and Information Administration (NTIA), 
U.S. Department of Commerce, announces the solicitation of applications 
for planning and construction grants for public television facilities 
under the Public Telecommunications Facilities Program (PTFP).

DATES: Pursuant to 15 CFR 2301.8(b), the NTIA Administrator hereby 
establishes the following closing date for the filing of television 
applications for PTFP grants. The closing date selected for the 
submission of all television applications for FY 2003 is Tuesday, 
November 19, 2002. Applications must be received prior to 6 p.m. 
Tuesday, November 19, 2002. Applications submitted by facsimile or 
electronic means are not acceptable.

ADDRESSES: Application materials may be obtained electronically via the 
Internet (http://www.ntia.doc.gov/ptfp). To obtain a printed 
application package, submit completed applications, or send any other 
correspondence, write to: NTIA/PTFP, Room H-4625, U.S. Department of 
Commerce, 1401 Constitution Avenue, NW., Washington, DC 20230.

FOR FURTHER INFORMATION CONTACT: William Cooperman, Director, Public 
Broadcasting Division, telephone: (202) 482-5802; fax: (202) 482-2156. 
Information about the PTFP can also be obtained electronically via the 
Internet (http://www.ntia.doc.gov/ptfp).

SUPPLEMENTARY INFORMATION:

I. Closing Date

    In order to assist as many public television stations as possible 
in meeting the Federal Communications Commission (FCC) May 2003 
deadline to begin digital broadcasting, NTIA announces that all 
television applicants for matching grants under the PTFP must file 
their applications on or before 6 p.m., Tuesday, November 19, 2002. 
Issuance of grants is subject to the availability of FY 2003 funds. At 
this time, the Congress is considering the President's request to 
appropriate $43.5 million for the PTFP. NTIA intends to divide any 
funds appropriated by the Congress into two parts. One portion of the 
appropriation will be set aside to fund television applications 
submitted in response to this Notice and radio and nonbroadcast 
applications submitted in response to a future Notice to be published 
by NTIA. A second portion of the appropriation will be set aside to 
fund additional phases of multi-phase projects initially funded in FY 
2000, FY 2001 and FY 2002. At the appropriate time, notice will be 
published in the Federal Register about the final status of funding for 
the PTFP. In awarding grants, NTIA will strive to maintain an 
appropriate balance between traditional grants and those to stations 
converting to digital broadcasting. Information regarding digital 
television Broadcast Other projects is included in Section VII of this 
document. Section VII also describes revisions of the PTFP Rules which 
will be applicable for the FY 2003 Grant Round for television 
applications in the Broadcast Other category. The amount of any grants 
awarded by NTIA will vary, depending on the approved project. For FY 
2002, NTIA awarded $37.4 million in funds to 59 television projects. 
The television awards ranged from $21,447 to $1,800,000.
    Any applications submitted in response to this Notice which are for 
radio or nonbroadcast projects will be returned to the applicant 
without review. Applications so returned may be resubmitted at the 
appropriate time pursuant to a future Notice establishing a closing 
date for radio and nonbroadcast applications. NTIA intends to publish a 
Notice announcing the closing date for receipt of radio and 
nonbroadcast applications at a later time and anticipates that the 
closing date for these applications will be after February 1, 2003.
    All television applications will be reviewed as a group according 
to the Evaluation Process discussed in Section XI. Because of the FCC 
digital conversion deadline, NTIA anticipates that awards for 
television digital conversion applications submitted in response to 
this Notice will be issued during the second quarter of FY 2003 
(January-March 2003). Applications submitted for television replacement 
or signal extension projects will be awarded in the fourth quarter of 
FY 2003 (July-September 2003) and will compete with applications 
submitted in response to the future Notice announcing a closing date 
for radio and nonbroadcast applications.

II. Application Forms

    All applicants must use the official application form for the FY 
2003 grant cycle. This form expires on October 31, 2003, and no 
previous versions of the form may be used. Each page of the application 
form has the expiration date of 10/31/2003 printed on the bottom line. 
To apply for a PTFP grant, an applicant must file an original and five 
copies of a timely and complete application on the application form. 
Applicants for television projects are requested to supply one 
additional copy of their application (an original and six copies), if 
this does not create a hardship on the applicant. The current 
application form is available on the Internet and will be provided to 
applicants as part of the application package upon request.
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the Paperwork Reduction Act (PRA), unless that 
collection displays a currently valid Office of Management and Budget 
(OMB) control number. The PTFP application form has been cleared under 
OMB control no. 0660-0003.

III. Authority

    The Public Telecommunications Facilities Program is authorized by 
the Communications Act of 1934, as amended, 47 U.S.C. 390-393, 397-
399(b).

IV. Catalog of Federal Domestic Assistance (CFDA)

    CFDA No. 11.550, Public Telecommunications Facilities Program.

V. Regulations

    The applicable Rules for the PTFP were published on November 8, 
1996 (61 FR 57966). In accordance with provisions provided in 15 CFR 
part 2301, section 2301.26, certain requirements of the PTFP are 
modified in this Notice for FY 2003. Copies of the 1996 Rules are 
posted on the NTIA Internet site and NTIA will make printed copies 
available to applicants upon request. Parties interested in applying 
for financial assistance should refer to these rules and to the 
authorizing legislation (47 U.S.C. 390-393, 397-399b) for additional 
information on the program's goals and objectives, eligibility 
criteria, evaluation criteria, and other requirements.

[[Page 64299]]

    Applicants sending applications must ensure that the carrier will 
be able to guarantee delivery of the application by the Closing Date 
and Time. Applicants should be aware that all material sent via the 
United States Postal Service (including ``overnight'' or ``Express 
Mail'') are subject to delivery delays due to increased mail security 
procedures at the Department of Commerce. NTIA will not accept 
applications posted on the Closing Date or later and received after the 
above deadline. However, if an application is received after the 
Closing Date due to (1) carrier error, when the carrier accepted the 
package with a guarantee for delivery by the Closing Date, or (2) 
significant weather delays or natural disasters, NTIA will, upon 
receipt of proper documentation, consider the application as having 
been received by the deadline.
    Applicants submitting applications by hand delivery are notified 
that, due to security procedures in the Department of Commerce, all 
packages must be cleared by the Department's security office. Entrance 
to the Department of Commerce Building for security clearance is on the 
15th Street side of the building. Applicants whose applications are not 
received by the deadline are hereby notified that their applications 
will not be considered in the current Grant Round and will be returned 
to the applicant. See 15 CFR 2301.8(c); but see also 15 CFR 2301.26. 
NTIA will also return any application which is substantially 
incomplete, or when the Agency finds that either the applicant or 
project is ineligible for funding under 15 CFR 2301.3 or 2301.4. The 
Agency will inform the applicant of the reason for the return of any 
application.
    All persons and organizations on the PTFP's mailing list will be 
sent a notification of the FY 2003 Grant Round. Copies of the 
application forms, Final Rules, Closing Date notification and 
application guidelines will be available on the NTIA Internet site: 
www.ntia.doc.gov/ptfp. Those not on the mailing list or who desire a 
printed copy of these materials may obtain copies by contacting the 
PTFP at the telephone and fax numbers, at the Internet site, or at 
mailing address listed above. Prospective applicants should read the 
Final Rules carefully before submitting applications. Television 
applicants whose applications were deferred in FY 2002 will be mailed 
information regarding the reactivation of their applications. 
Applicants whose television projects were deferred from FY 2002 should 
carefully review Section VII. Television Broadcasting and Digital 
Conversion, regarding policies which apply to the reactivation of their 
applications.
    Indirect costs for construction applications are not supported by 
this program. The total dollar amount of the indirect costs proposed in 
a planning application under this program must not exceed the indirect 
cost rate negotiated and approved by a cognizant Federal agency prior 
to the proposed effective date of the award.

VI. Radio Broadcasting

    NTIA is not accepting applications for radio projects at this time 
and will publish a Notice in the Federal Register announcing a Closing 
Date for radio applications in the future. NTIA will take great care to 
ensure that its funding of radio applications reflects its 
responsibilities under 47 U.S.C. 393(c) that ``a substantial amount'' 
of each year's PTFP funds should be awarded to public radio.

VII. Television Broadcasting and Digital Conversion

    The FCC's adoption of the Fifth Report and Order in April 1997 
requires that all public television stations begin the broadcast of a 
digital signal by May 1, 2003.
    This deadline is only seven months from the publication date of 
this Notice. In FY 2000, NTIA instituted several new policies regarding 
applications for projects to convert public television stations to 
digital transmission capability. NTIA believes that the policies worked 
well and have permitted PTFP to assist in the digital conversion of 
over 200 public television stations. These policies are being continued 
for the FY 2003 Grant Round and are included in full in this document.
    NTIA recognizes that meeting the FCC's deadline is one of the 
greatest challenges facing America's public television stations. Over 
350 stations must overcome both technical and financial challenges in 
order to complete conversion to digital broadcasting within the FCC's 
timetable.
    In February, the Administration proposed an appropriation of $43.5 
million to the PTFP for FY 2003. This proposal is currently before the 
Congress. These funds would primarily be used to assist public 
television stations in meeting the FCC's deadline. While these sums are 
significant, NTIA anticipates that the majority of funds required to 
convert all the nation's public television stations will actually come 
from non-federal sources.
    For FY 2002, NTIA awarded $36.2 million in funds to 52 projects 
which assisted public television stations in the conversion to digital 
technologies. The awards ranged from $21,447 to $1,800,000 to assist in 
the digital conversion of 97 public television stations.
    NTIA has considered how best to distribute digital conversion funds 
to public television stations through the PTFP. One of NTIA's goals 
during the FY 2003 Grant Round is to ensure that PTFP's administrative 
procedures as well as its funds can support public television's needs 
in meeting the FCC's deadline. Another of NTIA's goals is to maintain 
an acceptable balance between equipment replacement projects and 
digital television conversion projects.
    NTIA is continuing the following policies/procedures instituted 
during the FY 2000 grant cycle which will assist public television 
stations in the application for and use of PTFP funds for digital 
conversion projects.
    These policies/procedures are summarized here and then are 
discussed fully in parts A through G later in this section.

(A) Digital Television Conversion Projects and Digital Equipment 
Replacement

    NTIA has established a ``Digital TV List'' which includes the 
equipment eligible for PTFP funding under the Broadcast Other category. 
NTIA will also use the ``Digital TV List'' for most television 
equipment replacement projects and will modify the way it views 
television replacement applications.

(B) Multi-Year Funding

    NTIA will accept applications under the Broadcast Other category 
for phased projects requesting funding for up to three years and which 
are intended to enable all of the applicant's public television 
stations to meet the FCC's digital broadcasting deadline.

(C) Effective Date for Expenditure of Local Matching Funds

    Applicants for digital conversion projects in the Broadcast Other 
category may include eligible equipment from the Digital TV List in 
their projects when that equipment is purchased with non-federal funds 
after July 1, 1999.

(D) Subpriorities for Digital Conversion Projects

    NTIA is creating three Subpriorities to aid in the processing of 
digital conversion applications.

(E) Funding Levels for Television Projects

    NTIA has revised the presumption of funding from 50% Federal share 
for

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most television projects to 40%. For digital television conversion 
applications, NTIA has established simplified procedures so stations 
can qualify for hardship grants up to a 67% Federal share, and will 
provide incentives for applicants who request only 25% Federal funding.

(F) Use of CPB Funds

    Applicants may use CPB funds as part of their local non-federal 
match in cases of clear and compelling need.

(G) Partnerships; Urgency

    NTIA encourages partnerships with commercial as well as 
noncommercial organizations and clarifies its consideration of urgency 
for digital conversion applications. NTIA believes that digital 
conversion applications should be afforded high urgency when they 
document time-sensitive partnerships, time-sensitive funding 
opportunities, or which include the replacement of equipment required 
to maintain existing service.
    NTIA intends to remain responsive to the equipment replacement 
needs of public television stations. NTIA's balancing of equipment 
replacement and digital conversion applications is discussed in the 
following sections.
    In order to assist public television stations in meeting the FCC's 
deadline and to facilitate a station's raising non-federal matching 
funds required for digital conversion projects, NTIA is modifying its 
application procedures in the following areas.

(A) Digital Television Conversion Projects and Digital Equipment 
Replacement

    For FY 2003, NTIA will support the equipment necessary for a public 
television station to comply with the FCC's deadline. This includes 
equipment required for digital broadcast of programs produced locally 
in analog format as well as the broadcast of digital programming 
received from national sources. NTIA is posting on its Internet site a 
listing of transmission and distribution equipment (as contained in the 
``Digital TV List'') which is eligible for PTFP digital television 
conversion funding. Printed copies of this list are also available from 
PTFP at the address shown in the Addresses section of this document. 
This list was developed in conjunction with the Public Broadcasting 
Service and is similar to equipment lists PTFP used during last year's 
Grant Round. The Digital TV List includes transmission equipment 
(transmitters, antennas, STLs, towers, etc.) as well as distribution 
equipment located in a station's master control (routing switchers, 
video servers, PSIP generators, digital encoders, etc.). Applications 
seeking funding for the equipment necessary to meet the FCC's deadline 
will be placed in the Broadcast Other category.
    NTIA believes that many stations must replace obsolete equipment in 
order to complete their digital conversion projects. NTIA is continuing 
its revised policies to permit the replacement of obsolete equipment as 
part of digital conversion projects. If the conversion to digital 
transmission includes the urgent replacement of an existing item of 
equipment, the application will be considered as a Broadcast Other, 
rather than as replacement under Priorities 2 or 4. Replacement of 
existing equipment then is a normal part of a digital conversion 
application.
    If the purpose of an application is just for replacement of 
urgently needed equipment, even though the equipment is drawn from the 
Digital TV List, the application will be classified as a Priority 2 or 
4, as appropriate.
    Any application which includes equipment replacement as a 
justification for the urgency criterion should submit documentation of 
downtime or other evidence in support of the urgency evaluation 
criterion as contained in Sec.  2301.17 of the PTFP Final Rules. The 
need to replace current equipment in order to maintain existing 
services will, in many cases, strengthen the urgency criterion of a 
digital conversion application.
    Because of the requirement that all public television stations 
begin digital broadcasts, all public television applications, whether 
submitted for Priority 2, Priority 4 or the Broadcast Other category, 
should include the station's comprehensive plan for digital conversion 
to meet the FCC's deadline and explain how the requested equipment is 
consistent with that plan. If the applicant is still developing its 
plan for digital conversion, the application should address how the 
requested equipment will be consistent with the overall objective of 
converting the facility for digital broadcasting. Failure to provide 
detailed information on the applicant's proposed or existing digital 
conversion plan will place a television application at a competitive 
disadvantage during the evaluation of the technical qualification 
criterion as described in 15 CFR 2301.17 of the PTFP Rules.
    NTIA calls applicants' attention to the fact that television 
production equipment is not included on the Digital TV List but will be 
found on other equipment lists posted on the NTIA Internet site or 
available from NTIA by mail. NTIA notes that while a television station 
must use digital transmission and distribution equipment to begin 
digital broadcasting, digital production equipment is not required to 
meet the FCC's deadline. As the FCC deadline approaches, NTIA has 
reluctantly concluded that, with the funds available to it in FY 2003, 
it cannot fund television production equipment at the same level as it 
has prior to the institution of these new digital conversion policies 
in FY 2000. Television production equipment will continue to be 
eligible for PTFP funding under Priority 2 and Priority 4, as 
appropriate. However, for the FY 2003 Grant Round NTIA will fund 
television production equipment replacement applications only for those 
projects that present a ``clear and compelling'' case for the urgency 
of such replacement. NTIA anticipates funding television production 
replacement projects in FY 2003, though fewer than before this change 
in policy.
    When making the final selection of awards under the procedures of 
Sec.  2301.17, NTIA will take care to ensure that there is an 
acceptable balance between projects awarded for equipment replacement 
projects and those awarded for digital conversion projects. Further, 
NTIA will consider as part of this balance those stations in the 
Broadcast Other category (1) which request digital conversion projects 
and (2) which also include elements of equipment replacement. NTIA will 
not fund applications in the Broadcast Other category requesting 
digital conversion to the exclusion of those Broadcast Other 
applications which include documentation supporting equipment 
replacement as part of their urgency justification. Further, in making 
funding decisions for FY 2003, NTIA will limit its support of 
television replacement applications for production equipment to those 
applications which present a ``clear and compelling'' justification for 
funding during the current Grant Round.
    A complete listing of equipment eligible for funding during the FY 
2003 Grant Round is posted on the NTIA Internet site and printed copies 
are available from PTFP.

(B) Multi-Year Funding

    NTIA anticipates that it will take many public television licensees 
several years to complete their digital conversion projects. The time 
required to complete a digital conversion project will be determined by 
several factors. In some instances, it will take a station several 
years to raise the local funds

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required to complete the project. Even if a station has accumulated all 
the funds required for its digital conversion project, the technical 
complexity of some projects (such as the construction of a 1,000-foot 
tower) will probably require several years to complete. Finally, many 
public television licensees operate several stations and are, 
therefore, responsible for the conversion of multiple broadcast 
facilities.
    NTIA recognizes that the construction period for many of these 
digital conversion projects must, of necessity, be longer than the 
typical one to two years of the usual PTFP grant. Further, NTIA 
acknowledges that, with the funds available for award, the PTFP would 
be unable to fully fund more than a few of the digital conversion 
applications it could receive in FY 2003.
    Therefore, for FY 2003, the PTFP will accept construction 
applications within the Broadcast Other category for digital television 
conversion projects which propose multi-year funding. Because of the 
FCC's approaching deadline, NTIA encourages applicants for digital 
conversion projects to file multi-year applications. NTIA anticipates 
that, in the early years of a multi-year project, applicants will 
request dissemination equipment necessary to meet the FCC's digital 
transmission requirement. Applicants including non-dissemination 
equipment in FY 2003 as part of their multi-year application should 
justify their need.
    Applicants may submit project plans and budgets for up to three 
years. A multi-year application must contain the applicant's entire 
digital conversion plan. The plan must be divided into severable 
phases, with a budget request for each phase of the project. The 
application must identify the Federal funds requested for each phase. 
Only one phase of the project will be funded in any grant cycle. Once a 
project is approved, applicants will not be required to compete each 
year for funding of subsequent phases. Funding of subsequent phases 
will be at the sole discretion of the Department of Commerce and will 
depend on satisfactory performance by the recipient and the 
availability of funds to support the continuation of the project(s).
    Projections based on previous experience indicate availability of 
between $10 million and $20 million to support multi-year digital 
television projects in FY 2003. The exact level of funding available 
for multi-year awards will be determined by NTIA after a review of 
applications submitted for multi-year awards and those radio, 
television and distance learning applications requesting a regular 
award.
    NTIA believes that multi-year funding for digital television awards 
has significant benefits for both public television licensees and NTIA.
    [sbull] Submission of a multi-year application particularly should 
help applicants which must convert multiple broadcast transmitters. 
NTIA understands that many stations have already begun to raise 
significant non-federal funds with which they can begin to implement 
their digital conversion plans. Upon submission of a multi-year 
application, an applicant could begin spending its local match--at its 
own risk. An applicant, therefore, might be able to complete a portion 
of its digital conversion project using its local non-federal funds for 
which Federal matching funds may not be available for several years. 
(For example, a future phase of a statewide project might be the 
conversion of two repeater stations; one might be constructed with 
available non-federal funds, the second constructed if Federal funds 
are received). Applicants are cautioned, however, that while 
expenditure of the local match is permitted, PTFP Rules (2301.6(d)) 
prohibit a grantee from obligating funds from the eventual Federal 
share of an award before a grant is actually awarded.
    [sbull] NTIA believes that a multi-year award will reduce the 
administrative burden on both grantees and the PTFP. Grant recipients 
will submit only one application to cover the multiple years of their 
award, saving both the grantee and the PTFP the administrative tasks 
required to process applications during the annual Grant Round.
    [sbull] Multi-year applications and awards will also assist both 
NTIA and public broadcasting licensees in the advance planning required 
to complete the conversion of almost 350 television facilities.
    [sbull] By issuing multi-year grants, NTIA would be able to fund 
the initial phases of more digital conversion projects with the monies 
available in FY 2003 than if PTFP funded fewer entire digital 
conversion plans.
    NTIA believes that multi-year funding through the Broadcast Other 
category also is appropriate for projects which include urgent 
replacement of equipment, since, as noted earlier, most television 
equipment replacement requests can be viewed as one phase of a 
station's conversion to digital broadcasting.
    Applications which are reactivated for the FY 2003 Grant Round must 
comply with the guidelines included in this notice, including the 
funding levels for television projects discussed later in this 
document.
    Applicants submitting projects for consideration under the 
Broadcast Other category have a choice and may request either multi-
year funding or a single-year grant. However, applications submitted 
for consideration under Priority 2 or Priority 4 may only request a 
single-year grant for a project, as in the past.

(C) Effective Date for Expenditure of Local Matching Funds for Digital 
Conversion Projects

    NTIA recognizes that many public television stations have begun to 
raise significant non-federal funds for their digital conversion 
projects. State or local governments may have appropriated funds to 
initiate digital conversion projects that, by local law, must be 
expended during the fiscal year in which they are awarded. Public 
television licensees that have raised significant non-federal funds may 
desire to take advantage of unique opportunities (such as partnering 
with other stations to share broadcast antennas or towers). Some 
stations may be anxious to begin digital conversion projects with long 
lead times for completion, or may desire to begin digital broadcasting 
on the same timetable as commercial stations in their market. Within 
the limitations of Federal regulations, NTIA supports efforts 
undertaken by public television stations which bring the benefits of 
digital television broadcasting to their communities as quickly as 
possible.
    In order to facilitate the raising of non-federal funds for digital 
television projects and to also permit stations to begin construction 
of their digital facilities as soon as possible, NTIA is revising 
section Sec.  2301.6(b)(2) of the PTFP Final Rules. This section states 
that ``Inclusion of equipment purchased prior to the closing date will 
be considered on a case-by-case basis only when clear and compelling 
justification is provided to PTFP.''
    NTIA will publish a final rule shortly to modify Sec.  2301.6(b)(2) 
to state the following: If eligible equipment for a Broadcast Other 
project was purchased with non-federal funds after July 1, 1999, NTIA 
will permit the applicant to include this equipment in a PTFP 
application. This date was selected to coincide with the beginning of 
the 2000 fiscal year used by many state and local governments and was 
announced at the beginning of this digital television conversion 
initiative in the Notice of Availability of Funds for the FY 2000 PTFP 
grant cycle (64 FR 72225-72234). NTIA also anticipates that July 1, 
1999

[[Page 64302]]

will be the effective date in the FY 2004 and FY 2005 Grant Rounds for 
the expenditure of non-federal funds for projects in the Broadcast 
Other category. Applicants who desire to use equipment purchased prior 
to July 1, 1999 as part of their local match must submit a ``clear and 
compelling justification'' supporting their request.

(D) Subpriorities for Digital Conversion Projects

    As almost 350 public television stations are required to convert to 
digital broadcasting, NTIA anticipates a significant increase in the 
number of applications in the Broadcast Other category for digital 
conversion projects. In order to process these applications in an 
orderly manner and to provide guidance to potential applicants for the 
FY 2003 Grant Round, NTIA will divide the Broadcast Other category into 
three subpriorities; Broadcast Other--A; Broadcast Other--B, and 
Broadcast Other--C.
    These three divisions are intended to reflect the priorities NTIA 
has used in the evaluation of traditional broadcast applications and to 
place a premium on projects either to assist stations providing sole 
service, to encourage cooperative efforts among different stations, or 
to support licensees facing the requirement to convert multiple 
transmission facilities in several television markets. NTIA notes that 
in the past it has been able to fund applications each year in most if 
not all of the five traditional broadcast Priorities and anticipates 
that it will be able to fund applications in FY 2003 in most if not all 
of the subpriorities under the Broadcast Other category.
    NTIA will assign the following applications for conversion of 
public broadcasting facilities to advanced digital technologies at the 
first subpriority level within the Broadcast Other category. These 
applications will receive equal consideration as subpriority A.

--A single applicant providing the sole service in an area unserved by 
a digital public television signal. This reflects PTFP's funding 
priority for equipment replacement projects for sole service stations 
(PTFP Priority 2).
--Cooperative applications by two or more licensees for the first 
digital public television service to an area. This is intended to 
encourage cooperation and efficiencies among stations in overlap 
markets (as listed by CPB) in constructing digital facilities. It would 
provide stations in overlap markets the opportunity, if they work 
collaboratively, to be eligible for the highest priority in funding 
within this category.

--A statewide staged plan for the conversion of multiple stations, 
whether a state network, or other appropriate statewide organization, 
or a staged plan from a licensee with stations in several markets. This 
is intended to encourage licensees that must convert multiple stations 
and also to encourage groups of stations to work collaboratively in 
developing a digital conversion project.

    NTIA will assign the following applications for conversion of 
public broadcasting facilities to advanced digital technologies at the 
second subpriority level within the Broadcast Other category. These 
applications will receive equal consideration as subpriority B.

--An applicant in a multi-PTV station market providing first public 
television service in an area. An applicant in a multi-PTV station 
market who chooses to file separately, rather than in conjunction with 
another licensee in the same area, receives a second priority for 
funding.

--A cooperative application by two or more licensees in an area already 
served by a digital public television station. The application is given 
a priority over Broadcast Other--C to encourage efficiency and 
cooperation. Since this is not the first service in the area, it is 
given a second priority.

    NTIA will assign the following applications for conversion of 
public broadcasting facilities to advanced digital technologies at the 
third subpriority level within the Broadcast Other category. These 
applications will receive equal consideration as subpriority C.

--Individual applicants proposing a second digital public television 
service in an area already receiving a digital public television 
signal. This reflects PTFP's funding priority for equipment replacement 
applications in served areas (Priority 4).

--All other public television digital conversion applications.

(E) Funding Levels for Television Projects

    The policy for PTFP support of equipment replacement applications 
has long been the presumption of a 50% Federal share, although 
applicants are permitted to submit justification for a Federal grant of 
up to 75% of project costs. Those policies are contained in Sec.  
2301.6(b) of the PTFP Final Rules.
    In reviewing the projected costs to convert all the public 
television stations in the country, NTIA has concluded that it cannot 
continue its 50% presumption of Federal funding for television 
equipment replacement or digital conversion projects. At the same time, 
NTIA believes that many public television facilities will be unable to 
raise 50% of the project costs. A significant number of stations may 
need Federal funding of up to a 67% of a project's cost, or even up to 
the legal maximum of 75% of a project's cost, in order for them to meet 
the FCC's deadline.
    In order to ensure that sufficient Federal funds are available to 
support the conversion of the nation's public television stations, NTIA 
is establishing a new policy regarding the presumed Federal funding 
level for television equipment. As noted earlier in this section, NTIA 
recognizes that equipment on the PTFP Digital TV List may be included 
in either Broadcast Other digital conversion applications or in 
Priority 2 or Priority 4 equipment replacement applications. In order 
to treat all applicants equitably, NTIA's new policy will be the 
presumption of a 40% Federal share of the eligible project costs for 
television equipment for digital conversion or equipment replacement, 
improvement or augmentation projects. This 40% presumption will apply 
whether the application requests consideration under the two equipment 
replacement priorities (Priority 2 or 4) or under the digital 
conversion category (Broadcast Other). As noted earlier, NTIA will fund 
the replacement of production equipment upon a showing of clear and 
compelling need. However, since the deadline for digital conversion is 
rapidly approaching and Federal funds are limited, NTIA will fund 
replacement of production equipment at the same level of Federal 
support as digital conversion or equipment replacement projects. The 
presumption of a 40% Federal share will extend to all television 
projects to replace or upgrade equipment. However, because of the 
emphasis NTIA places on the extension of broadcast services to unserved 
areas, NTIA has retained the 75% level of Federal funding applications 
proposing new television facilities in Priority 1 (Sec.  2301.4(b)(1)).
    As already noted, NTIA recognizes that many small stations, 
primarily in rural areas, will be unable to raise even a 50% local 
share of the funds required for their PTFP projects. NTIA has long 
permitted stations to request more than the standard level of Federal 
support upon a showing of ``extraordinary need'' per Sec.  
2301.6(b)(ii) of the PTFP Rules. NTIA will permit applicants to qualify

[[Page 64303]]

for hardship funding and receive up to a 67% Federal share of their 
project costs. An applicant can qualify for up to a 67% Federal funding 
by certifying that it is unable to match at least 60% of the eligible 
project costs, and either (a) by providing documentation that its 
average annual cash revenue for the previous four years is $2 million 
or less, or (b) by providing documentation that the eligible project 
costs are greater than the applicant's average annual cash revenue for 
the previous four years.
    In addition, NTIA will continue to permit any applicant to provide 
justification that it has an ``extraordinary need'' for Federal funding 
up to the legal limit of 75% of eligible project costs.
    In order to gather additional funds to award to stations which 
qualify under the hardship criteria, NTIA encourages financially able 
applicants to request a smaller share of Federal funds for digital 
equipment projects than the standard 40%. NTIA will add three 
additional points to the application evaluations from the independent 
review panel for applicants who request no more than 25% Federal 
funding. This provision will give extra credit to applications already 
highly reviewed, and, based on NTIA's previous experience, this extra 
credit is often sufficient to move highly rated applications into the 
range for funding.
    However, when making the final selection of awards, NTIA will take 
care to ensure that there is an acceptable balance between projects 
awarded to stations requesting a 25% Federal share and those requesting 
a higher Federal share. NTIA will not fund applications requesting a 
25% Federal share to the exclusion of applications meeting the hardship 
criteria or to the exclusion of those requesting the standard 40% 
Federal share.

(F) Use of CPB Funds

    Under the PTFP Rules, NTIA has limited the use of CPB funds for the 
non-federal share of PTFP projects to circumstances of ``clear and 
compelling need'' (15 CFR 2301.6(c)(2)). NTIA recognizes that it will 
be difficult for many public television stations to raise the funds 
required to meet the FCC's digital broadcasting deadline. Therefore, 
NTIA continues its past policy that applicants may submit justification 
under this section for the use of CPB funds as part of their local 
match. Any request for the use of CPB funds must be accompanied by a 
statement regarding any limitations that CPB has placed on the 
expenditure of those funds.

(G) Partnerships, Urgency

    As discussed earlier in this section, part (D) on New 
Subpriorities, NTIA encourages efforts which promote efficiency within 
the public television system in order to save both current conversion 
costs and future operating costs. NTIA, therefore, also encourages 
public television stations to partner with commercial entities when 
this is in the best interests of the public station and the Federal 
government. In cases of public television partnerships with commercial 
entities, the PTFP project will be limited to the public television 
station's ownership share or use rights in the equipment. NTIA believes 
that such partnerships with commercial organizations comply with 
current PTFP regulations and PTFP has funded several projects for joint 
use of towers and broadcast antennas.
    The urgency of an application is one of the criteria under which 
all PTFP applications are evaluated. (The evaluation criteria are 
listed in Sec.  2301.17 of the PTFP Rules). NTIA suggests that there 
are at least three situations in which Broadcast Other applications may 
present high degrees of urgency. As we have just noted, applications 
containing proposals for joint use/ownership partnerships with other 
organizations may demonstrate a high urgency due to a time-sensitive 
opportunity. NTIA encourages these applicants to document the time-
sensitive nature of the partnership opportunity in their response to 
the urgency criterion.
    NTIA also recognizes that some applicants may be presented with 
time-sensitive funding opportunities and, therefore, encourages these 
applicants to document the time-sensitive nature of these funding 
opportunities in their response to the urgency criterion. Finally, as 
already noted, NTIA expects that some applications will request urgent 
replacement of existing equipment as part of a Broadcast Other 
application. NTIA encourages such applicants to provide documentation 
of their need to replace their equipment during the current Grant 
Round. This documentation might include maintenance logs, letters from 
manufacturers, reports from independent engineers, photos, etc.
    NTIA will instruct the panels evaluating the FY 2003 Broadcast 
Other applications that they should award the highest score under the 
urgency criterion to those applications which fully justify and 
document either (1) the time sensitive nature of partnerships, (2) the 
time sensitive nature of funding opportunities, or (3) the need for 
equipment replacements that must be accomplished during this Grant 
Round in order to maintain existing services.

VIII. Distance Learning and Nonbroadcast Projects

    NTIA is not accepting applications for nonbroadcast projects at 
this time and will publish a Notice in the Federal Register announcing 
a Closing Date for nonbroadcast applications in the future.
    As discussed in Section VII of this document, NTIA anticipates 
that, in FY 2003, it will receive numerous digital conversion 
applications in the Broadcast/Other category. NTIA recognizes that, due 
to the multi-channel capability of digital television, distance 
learning components may well be a part of a digital conversion 
application. NTIA will, therefore, consider such broadcast distance 
learning proposals under the subpriorities established in Section VII. 
If NTIA determines that a broadcast distance learning project is not 
part of a digital conversion application, NTIA will evaluate the 
application pursuant to Sec. Sec.  2301.4(b)(6) and 2301.17 when all 
television applications are evaluated for possible funding during the 
fourth quarter of FY 2003.

IX. Eligible and Ineligible Costs

    Eligible equipment for the FY 2003 Grant Round includes the 
apparatus necessary for the production, interconnection, captioning, 
broadcast, or other distribution of programming, including but not 
limited to studio equipment; audio and video storage, processing, and 
switching equipment; terminal equipment; towers; antennas; 
transmitters; remote control equipment; transmission line; translators; 
microwave equipment; mobile equipment; satellite communications 
equipment; instructional television fixed service equipment; subsidiary 
communications authorization transmitting and receiving equipment; 
cable television equipment; and optical fiber communications equipment.
    A complete listing of equipment eligible for funding during the FY 
2003 Grant Round is posted on the NTIA Internet site and printed copies 
are available from PTFP.

Other Costs

    (1) Construction Applications: NTIA generally will not fund salary 
expenses, including staff installation costs, and pre-application legal 
and engineering fees. Certain ``pre-operational expenses'' are eligible 
for funding. (See 15 CFR 2301.2.) Despite this provision, NTIA regards 
its primary mandate to be funding the acquisition of equipment

[[Page 64304]]

and only secondarily funding of salaries. A discussion of this issue 
appears in the PTFP Final Rules under the heading Support for Salary 
Expenses in the introductory section of the document.
    (2) Planning Applications. (a) Eligible: Salaries are eligible 
expenses for all planning grant applications, but should be fully 
described and justified within the application. Planning grant 
applicants may lease office equipment, furniture and space, and may 
purchase expendable supplies under the terms of 47 U.S.C. 392 (c). (b) 
Ineligible: Planning grant applications cannot include the cost of 
constructing or operating a telecommunications facility.
    (3) Audit Costs. Audits shall be performed in accordance with audit 
requirements contained in Office of Management and Budget Circular A-
133, Audits of States, Local Governments, and Non-Profit Organizations, 
revised June 30, 1997. OMB Circular A-133 requires that non-profit 
organizations, government agencies, Indian tribes and educational 
institutions expending $300,000 or more in federal funds during a one-
year period conduct a single audit in accordance with guidelines 
outlined in the circular. Applicants are reminded that other audits may 
be conducted by the Office of Inspector General.
    NTIA recognizes that most of its grant recipients are divisions of 
state and local governments or are public broadcasting facilities, all 
of which routinely conduct annual audits. In order to make the maximum 
amount of monies available for equipment purchases and planning 
activities, NTIA will, therefore, fund audit costs only in exceptional 
circumstances.

X. Notice of Applications Received

    In accordance with 15 CFR 2301.13, NTIA will publish a listing of 
all applications received by the Agency. The listing will be placed on 
the NTIA Internet site and NTIA also will make this information 
available by mail upon request. The address of the NTIA Internet site 
is: www.ntia.doc.gov/ptfp. Listing an application merely acknowledges 
receipt of an application to compete for funding with other 
applications. This listing does not preclude subsequent return of the 
application for the reasons discussed under the Dates section above, or 
disapproval of the application, nor does it assure that the application 
will be funded. The listing will also include a request for comments on 
the applications from any interested party.

XI. Evaluation Process

    See 15 CFR 2301.16 for a description of the Technical Evaluation 
and 15 CFR 2301.17 for the Evaluation Criteria.

XII. Selection Process

    Based upon the above cited evaluation criteria, the PTFP program 
staff prepares summary recommendations for the PTFP Director. These 
recommendations incorporate outside reviewers rankings and 
recommendations, engineering assessments, and input from the National 
Advisory Panel, State Single Point of Contacts and state 
telecommunications agencies. Staff recommendations also consider 
project impact, the cost/benefit of a project and whether review panels 
have consistently applied the evaluation criteria. The PTFP Director 
will consider the summary recommendations prepared by program staff, 
will recommend the funding order of the applications, and will present 
recommendations to the OTIA (Office of Telecommunications and 
Information Applications) Associate Administrator for review and 
approval of the recommended slate. The PTFP Director recommends the 
funding order for applications in three categories: ``Recommended for 
Funding,'' ``Recommended for Funding if Funds Available,'' and ``Not 
Recommended for Funding.'' See 15 CFR 2301.18 for a description of the 
selection factors retained by the Director, OTIA Associate 
Administrator, and the Assistant Secretary for Communications and 
Information, the NTIA Administrator.
    Upon review and approval by the OTIA Associate Administrator, the 
Director's recommendations will then be presented to the Selection 
Official, the NTIA Administrator. The NTIA Administrator selects the 
applications for possible grant award taking into consideration the 
Director's recommendations and the degree to which the slate of 
applications, taken as a whole, satisfies the program's stated purposes 
set forth at 15 CFR 2301.1(a) and (c). Prior to award, applications may 
be negotiated between PTFP staff and the applicant to resolve whatever 
differences might exist between the original request and what PTFP 
proposes to fund. Some applications may be dropped from the proposed 
slate due to lack of FCC licensing authority, an applicant's inability 
to make adequate assurances or certifications, or other reasons. 
Negotiation of an application does not ensure that a final award will 
be made. The PTFP Director recommends final selections to the NTIA 
Administrator applying the same factors as listed in 15 CFR 2301.18. 
The Administrator then makes the final award selections taking into 
consideration the Director's recommendations and the degree to which 
the slate of applications, taken as a whole, satisfies the program's 
stated purposes in 15 CFR 2301.1(a) and (c).

XIII. Disposition of Unsuccessful Applications

    PTFP will retain unsuccessful applications through the Closing Date 
of the FY 2004 grant cycle. Applicants may reactivate their 
unsuccessful applications pursuant to Sec.  2301.9 of the PTFP Rules. 
Unsuccessful applications not reactivated by the Closing Date of the 
next grant cycle will be destroyed.

XIV. Project Period

    Planning grant award periods customarily do not exceed one year, 
whereas construction grant award periods for grants in the five 
broadcast Priorities and nonbroadcast Special Applications category 
commonly range from one to two years. Phases of multi-year construction 
projects funded in the Broadcast Other category would commonly be 
awarded for a one to two year period with the expectation that 
subsequent phases would be funded dependent on the availability of 
Federal funds. Although these time frames are generally applied to the 
award of all PTFP grants, variances in project periods may be based on 
specific circumstances of an individual proposal.

XV. NTIA Policies on Procedural Matters

    Based upon NTIA's experience during the PTFP 2002 Grant Round, NTIA 
has determined that it is in the best interest of NTIA and applicants 
to continue recent policies regarding three procedural matters. The 
following policies are applicable only to the FY 2003 PTFP Grant Round 
and resulting awards.

Applications Resulting From Catastrophic Damage or Emergency Situations

    Section 2301.10 provides for submission of applications resulting 
from catastrophic damage or emergency situations. NTIA would like to 
clarify its implementation of this provision. While the intent of this 
Notice is to address FY 2003 television applications, applicants for 
radio or television projects may submit applications resulting from 
catastrophic damage or emergency situations.

[[Page 64305]]

    For FY 2003 PTFP applicants, when an eligible broadcast applicant 
suffers catastrophic damage to the basic equipment essential to its 
continued operation as a result of a natural or manmade disaster, or as 
the result of significant equipment failure, and is in dire need of 
assistance in funding replacement of the damaged equipment, it may file 
an emergency application for PTFP funding at any time. NTIA limits this 
request to equipment essential to a station's continued operation such 
as transmitters, towers, antennas, STLs or similar equipment which, if 
the equipment failed, would result in a complete loss of service to the 
community.
    When submitting an emergency application, the applicant should 
describe the circumstances that prompt the request and should provide 
appropriate supporting documentation. NTIA requires that applicants 
claiming significant failure of equipment will document the 
circumstances of the equipment failure and demonstrate that the 
equipment has been maintained in accordance with standard broadcast 
engineering practices.
    NTIA will grant an award only if it determines that (1) the 
emergency satisfies this policy, and (2) the applicant either carried 
adequate insurance or had acceptable self-insurance coverage.
    Applications filed and accepted for emergency applications must 
contain all of the information required by the Agency application 
materials and must be submitted in the number of copies specified by 
the Agency.
    NTIA will evaluate the application according to the evaluation 
criteria set forth in Sec.  2301.17(b). The PTFP Director takes into 
account program staff evaluations (including the outside reviewers) the 
availability of funds, the type of project and broadcast priorities set 
forth at Sec.  2301.4(b), and whether the applicant has any current 
NTIA grants. The Director presents recommendations to the Office of 
Telecommunications and Information Applications (OTIA) Associate 
Administrator for review and approval. Upon approval by the OTIA 
Associate Administrator, the Director's recommendation will be 
presented to the Selecting Official, the NTIA Administrator. The NTIA 
Administrator makes final award selections taking into consideration 
the Director's recommendation and the degree to which the application 
fulfills the requirements for an emergency award and satisfies the 
program's stated purposes set forth at Sec.  2301.1(a) and (c).

Service of Applications

    FY 2003 PTFP applicants are not required to submit copies of their 
PTFP applications to the FCC, nor are they required to submit copies of 
the FCC transmittal cover letters as part of their PTFP applications. 
NTIA routinely notifies the FCC of projects submitted for funding which 
require FCC authorizations.
    FY 2003 PTFP applicants for distance learning projects are not 
required to notify every state telecommunications agency in a potential 
service area. Many distance learning applications propose projects 
which are nationwide in nature. NTIA, therefore, believes that the 
requirement to provide a summary copy of the application in every state 
telecommunications agency in a potential service area is unduly 
burdensome to applicants. NTIA, however, does expect that distance 
learning applicants will notify the state telecommunications agencies 
in the states in which they are located.

FCC Authorizations

    For the FY 2003 PTFP Grant Round, applicants may submit 
applications to the FCC after the closing date, but do so at their own 
risk. Applicants are urged to submit their FCC applications with as 
much time before the PTFP closing date as possible. No grant will be 
awarded for a project requiring FCC authorization until confirmation 
has been received by NTIA from the FCC that the necessary authorization 
will be issued.
    For FY 2003 PTFP applications, since there is no potential for 
terrestrial interference with Ku-band satellite uplinks, grant 
applicants for Ku-band satellite uplinks may submit FCC applications 
after a PTFP award is made. Grant recipients for Ku-band satellite 
uplinks will be required to document receipt of FCC authorizations to 
operate the uplink prior to the release of Federal funds.
    For FY 2003 PTFP applications, NTIA may accept FCC authorizations 
that are in the name of an organization other than the PTFP applicant 
in certain circumstances. Applicants requiring the use of FCC 
authorizations issued to another organization should discuss in the 
application Program Narrative why the FCC authorization must be in the 
other organization's name. NTIA believes that such circumstances will 
be rare and, in its experience, are usually limited to authorizations 
such as those for microwave interconnections or satellite uplinks.
    As noted above, for FY 2003 PTFP applications, NTIA does not 
require that the FCC applications be filed by the closing date. While 
NTIA is permitting submission of FCC applications after the closing 
date, applicants are reminded that they must continue to provide copies 
of FCC applications, as they were filed or will be filed, or equivalent 
engineering data, in the PTFP application so NTIA can properly evaluate 
the equipment request. These include applications for permits, 
construction permits and licenses already received for (1) construction 
of broadcast station, (including a digital broadcasting facility) or 
translator, (2) microwave facilities, (3) ITFS authorizations, (4) SCA 
authorizations, and (5) requests for extensions of time.
    For those applicants whose projects require authorization by the 
FCC, information about FCC filing procedures can be found on the 
Internet at: www.fcc.gov.

XVI. Intergovernmental Review

    Applicants should note that they must continue to comply with the 
provisions of Executive Order 12372, ``Intergovernmental Review of 
Federal Programs.'' The Executive Order requires applicants for 
financial assistance under this program to file a copy of their 
application with the Single Points of Contact (SPOC) of all states 
relevant to the project. Applicants are required to provide a copy of 
their completed application to the appropriate SPOC on or before the 
Closing Date. Applicants are encouraged to contact the appropriate SPOC 
well before their PTFP closing date. A listing of the state SPOC 
offices may be found with the PTFP application materials at the NTIA 
Internet site. A list of the SPOC offices is available from NTIA (see 
the Addresses section above).

XVII. Other Requirements

    The Department of Commerce Pre-Award Notification Requirements for 
Grants and Cooperative Agreements contained in the Federal Register 
notice of October 1, 2001 (66 FR 49917), are applicable to this 
solicitation, unless stated otherwise in this notice. However, please 
note that the Department of Commerce will not implement the 
requirements of Executive Order 13202 (66 FR 49921), pursuant to 
guidance issued by the Office of Management and Budget in light of a 
court opinion which found that the Executive Order was not legally 
authorized. See Building and Construction Trades Department v. 
Allbaugh, 172 F. Supp. 2d 138 (D.D.C. 2001). This decision is currently 
on appeal. When the case is resolved, the Department will provide 
further

[[Page 64306]]

information on implementation of Executive Order 13202.

XVIII. Executive Order 12866

    It has been determined that this notice is a ``not significant'' 
rule under Executive Order 12866.

XIX. Executive Order 13132

    It has been determined that this notice does not contain policies 
with Federalism implications as that term is defined in EO 13132.

XX. Regulatory Flexibility Analysis

    Because notice and comment are not required under 5 U.S.C. 553, or 
any other law, for this notice related to public property, loans, 
grants, benefits or contracts, 5 U.S.C. 553(a), Regulatory Flexibility 
Analysis is not required and has not been prepared for this notice. 5 
U.S.C. 601 et seq.

Bernadette McGuire-Rivera,
Associate Administrator, Office of Telecommunications and Information 
Applications.
[FR Doc. 02-26421 Filed 10-16-02; 8:45 am]
BILLING CODE 3510-60-P