[Federal Register Volume 80, Number 211 (Monday, November 2, 2015)]
[Rules and Regulations]
[Pages 67344-67346]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-27632]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 73

[GN Docket No. 12-268 and MB Docket No. 15-137; FCC 15-139]


Channel Sharing by Full Power and Class A Stations Outside the 
Broadcast Television Spectrum Incentive Auction Context

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this Second Order on Reconsideration, the Federal 
Communications Commission (Commission) provides more flexibility to 
broadcasters interested in the channel sharing option in the broadcast 
incentive auction by clarifying that back-up channel sharing agreements 
(``CSAs'') are permitted under its rules and providing more time for 
successful bidders to transition to shared facilities after the 
auction. The Commission also provides guidance regarding how the CSA 
exception to the prohibited communications rule applies with respect to 
back-up CSAs.

DATES: Effective December 2, 2015.

FOR FURTHER INFORMATION CONTACT: Shaun Maher, [email protected] of 
the Media Bureau, Video Division, (202) 418-2324.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Second 
Order on Reconsideration, FCC 15-139, adopted October 21, 2015, in MB 
Docket No. 15-137. The full text of the Second Order on Reconsideration 
is available for inspection and copying during regular business hours 
in the FCC Reference Center, 445 12th Street SW., Room CY-A257, Portals 
II, Washington, DC 20554. This document is available in alternative 
formats (computer diskette, large print, audio record, and Braille). 
Persons with disabilities who need documents in these formats may 
contact the FCC by email: [email protected] or phone: 202-418-0530 or TTY: 
202-418-0432.
    Paperwork Reduction Act of 1995 Analysis: This Second Order on 
Reconsideration does not contain any additional new or modified 
information collection requirements subject to the Paperwork Reduction 
Act of 1995 (``PRA''), Public Law 104-13, beyond those that were 
already in the Commission's Incentive Auction Report and Order, 79 FR 
48442-01 (Aug. 15, 2014) (``Incentive Auction R&O''). In addition, 
therefore, it does not contain any additional new or modified 
information collection burden for small business concerns with fewer 
than 25 employees, pursuant to the Small Business Paperwork Relief Act 
of 2002, Public Law 107-198, beyond those that were already in the 
Incentive Auction R&O.
    The Commission is seeking separate OMB approval for FCC Form 2100, 
Schedule B (for a full power station) and F (for a Class A station) and 
FCC Form 177.

Synopsis

    1. The Commission adopted rules for the broadcast incentive auction 
in the Incentive Auction R&O including rules for parties interested in 
entering into CSAs. The Commission recently modified those channel 
sharing rules to provide greater flexibility to stations considering 
that option. In this Second Order on Reconsideration, the Commission 
announces that the availability of back-up channel sharing arrangements 
would provide additional flexibility for stations considering channel 
sharing. In particular, it would enable both parties to a CSA to 
participate in the auction while mitigating the risk that the auction 
system could freeze both stations in the same round and thus deprive 
both stations of a post-auction host or ``sharer'' station. For some, 
the risk of being left without any spectrum on which to share may be 
too great and foreclose that kind of participation. The Commission 
concludes that a back-up CSA could mitigate that risk and encourage 
greater participation.
    2. The Commission clarifies that, if both parties to a CSA 
participate in the auction, the rules allow either or both parties to 
also enter into a back-up CSA with one other station in the same DMA to 
act as the back-up host or sharer station. By allowing the parties to 
secure a fallback arrangement in the event that both parties relinquish 
their spectrum usage rights in the auction, this clarification will 
help promote wider participation in the auction by broadcasters that 
require assurance that they will remain on the air in the DMA. The 
Commission reminds parties that all of their auction-related activity 
and communications, including with respect to back-up CSAs, must adhere 
to the antitrust laws as well as the rules.
    3. In the Second Order on Reconsideration, the Commission rejects 
the Broadcaster Representatives' request to allow ``contingent multi-
party CSAs across multiple markets.'' The Commission concludes that 
multi-market back-up CSAs are not necessary to address the uncertainty 
created if multiple parties to a particular CSA participate in the 
auction. Such a result would undermine the general goal of the rules 
prohibiting certain communications, which are intended to reinforce 
existing antitrust laws, facilitate the detection of collusive conduct, 
and assure incentive auction participants that the auction process will 
be fair and objective. The Commission restated that it crafted the CSA 
exception to apply on an agreement-by-agreement basis in order to 
encourage channel sharing relationships without undermining these 
objectives.
    4. The Commission also clarifies that, consistent with the 
foregoing, the CSA exception to the reverse auction rule prohibiting 
certain communications applies only to communications between parties 
to a single CSA at any given time. Further, the CSA exception only 
applies to a CSA, including back-up CSAs, if the CSA was entered into 
and filed with the Commission by the application deadline. If both 
stations pursuant to the primary CSA have a bidding status of 
``frozen--provisional winner,'' i.e., the auction system determines 
that the station can never be assigned a feasible channel in its pre-
auction band in the current stage, then parties to a back-up CSA may 
communicate regarding bids and bidding strategy and must cease 
communication of this type with the party to the original CSA. Prior to 
that point, the rationale for the CSA exception--that parties to a CSA 
should be able to ``fully engage as various options are presented 
during the auction process''--is inapplicable with respect to the back-
up CSA. Once the relinquishment bid of the prospective host of the CSA 
is provisionally accepted by the auction system in a given stage of the 
auction, the CSA exception may be utilized for otherwise prohibited 
communications involving the parties to the back-up agreement, and can 
no longer be utilized for parties to the primary agreement in that 
stage.
    5. The Commission notes that under the reverse auction bidding 
procedures, the bidding status of a ``frozen--provisional winner'' may 
change to ``bidding in the current round'' if the auction enters a 
subsequent stage. Accordingly, if the host in the primary CSA, which 
was no longer operative because its bidding status became ``frozen--
provisional winner'' in the

[[Page 67345]]

previous stage, is designated as ``bidding in the current round'' in a 
subsequent stage of the auction, and that CSA expressly provides that 
it becomes the operative sharing agreement under such circumstances, 
the host may notify the sharee in the primary CSA of that change in 
status and the CSA exception will again apply to communications between 
the parties to the primary agreement rather than with the back-up host.
    6. The Commission also finds that the attractiveness of the channel 
sharing option would be enhanced if sharees were given additional time 
to plan and execute their transition to the host's facilities. 
Currently, the rules require that all winning go off-air bidders in the 
reverse auction, including winning channel sharees, must terminate 
operations on their pre-auction channels within three months of when 
they receive auction proceeds. While three months for termination of 
operations is sufficient for go off-air winners who intend to 
relinquish their licenses and cease broadcasting altogether, the 
Commission recognizes that winning bidders that plan to share a channel 
will remain in operation and may therefore need more time to implement 
the move to the sharer's facility. For instance, a channel sharee may 
need time to deal with technical issues associated with transitioning 
to its shared location. If it is changing its community of license, it 
may also need to negotiate modifications to carriage agreements or 
finalize new must-carry arrangements with multichannel video 
programming distributors.
    7. For these reasons, the Commission modifies section 
73.3700(b)(4)(ii) of the rules to extend the amount of time a sharee in 
a pre- or post-auction CSA will have to relinquish its pre-auction 
channel to six months after receipt of its reverse auction proceeds. As 
the Commission decided in the Incentive Auction R&O, winning channel 
sharing bidders may request a waiver of up to an additional three 
months to cease operations on their pre-auction channel, pursuant to 
section 1.3 of the rules, and the Commission will view these requests 
most favorably. Further, winning channel sharing bidders may request an 
additional three-months, and the Commission will view the additional 
requests favorably as well so long as it determines that grant of the 
extension will not delay the post-auction transition. The Commission 
finds that this extension of the transition period to six months, and 
the availability of waivers of up to an additional six months, is 
unlikely to adversely affect the Commission's post-auction transition 
timeline.

Initial Regulatory Flexibility Act Analysis

    The Regulatory Flexibility Act of 1980, as amended (RFA), requires 
that a regulatory flexibility analysis be prepared for notice-and-
comment rule making proceedings, unless the agency certifies that ``the 
rule will not, if promulgated, have a significant economic impact on a 
substantial number of small entities.'' The RFA generally defines the 
term ``small entity'' as having the same meaning as the terms ``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 U.S. Small 
Business Administration (SBA).
    In 2012, Congress mandated that the Commission conduct an incentive 
auction of broadcast television spectrum as set forth in the Middle 
Class Tax Relief and Job Creation Act of 2012 (``Spectrum Act''). The 
incentive auction will have three major pieces: (1) A ``reverse 
auction'' in which full power and Class A broadcast television 
licensees submit bids to voluntarily relinquish certain broadcast 
rights in exchange for payments; (2) a reorganization or ``repacking'' 
of the broadcast television bands in order to free up a portion of the 
ultra-high frequency (``UHF'') band for other uses; and (3) a ``forward 
auction'' of licenses for flexible use of the newly available spectrum. 
In the Incentive Auction R&O, the Commission adopted rules to implement 
the broadcast television spectrum incentive auction. Among other 
things, the Commission adopted rules for broadcast stations that choose 
to channel share. Pursuant to the RFA, a Final Regulatory Flexibility 
Analysis (``FRFA'') was incorporated into the Incentive Auction R&O.
    This Second Order on Reconsideration reflects clarifications and 
modifications to the Commission's rules arising in response to comments 
filed by Fox, ION, Tribune, and Univision (the ``Broadcaster 
Representatives''). The Commission generally responds favorably to the 
Broadcaster Representatives' requests, finding that providing these 
clarifications will increase broadcasters' flexibility to use the 
channel sharing bid option and will make the option more attractive. 
Specifically, this Second Order on Reconsideration clarifies the 
Commission's rules to permit broadcasters to enter into back-up channel 
sharing agreements (``CSAs'') with an additional partner to mitigate 
the risk that stations that intend to channel share could be left 
without spectrum after the auction, if both partners receive a status 
of ``frozen-provisionally winning'' in the same round of the reverse 
auction. The Commission also clarified that the CSA exception to the 
general prohibition on communications regarding bids and bidding 
strategy will apply to that back-up CSA, so long as the back-up CSA was 
filed before the application deadline, is the requirement for all CSAs. 
This Second Order on Reconsideration also permits back-up agreements 
based on price or other contingencies, but declines to extend the CSA 
exception to them as introducing unacceptable risk of becoming a 
vehicle for collusion. Finally, this Second Order on Reconsideration 
extends the transition period for channel sharing winning bidders from 
three months to six months, and extends the possibility for additional 
waivers from three months to six months, barring any delay this would 
cause other transitioning broadcasters.
    Neither of these changes adopted in this Second Order on 
Reconsideration will impose additional costs. The changes provide 
greater flexibility for both stations that wish to pursue channel 
sharing agreements pre-auction and those that become channel sharing 
stations post-auction. Therefore, the Commission certifies that the 
changes adopted in this Second Order on Reconsideration will not have a 
significant economic impact on a substantial number of small entities.
    The Commission will send a copy of the Second Order on 
Reconsideration, including a copy of this Final Regulatory Flexibility 
Certification, in a report to Congress pursuant to the Congressional 
Review Act. In addition, the Second Order on Reconsideration and this 
certification will be sent to the Chief Counsel for Advocacy of the 
Small Business Administration, and will be published in the Federal 
Register.
Federal Rules Which Duplicate, Overlap, or Conflict With the 
Commission's Proposals
    None.

List of Subjects in 47 CFR Part 73

    Television and reporting and recordkeeping requirements.


[[Page 67346]]


Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Final Rules

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR part 73 as follows:

PART 73--RADIO BROADCAST SERVICES

0
1. The authority citation for part 73 continues to read as follows:

    Authority:  47 U.S.C. 154, 303, 334, 336 and 339.

0
2. Section 73.3700 is amended by revising paragraphs (b)(3) and 
(b)(4)(ii) to read as follows:


Sec.  73.3700  Post-incentive auction licensing and operation.

* * * * **
    (b) * * *
    (3) License applications for channel sharing stations. The licensee 
of each channel sharee station and channel sharer station must file an 
application for a license for the shared channel using FCC Form 2100 
Schedule B (for a full power station) or F (for a Class A station) 
within six months of the date that the channel sharee station licensee 
receives its incentive payment pursuant to section 6403(a)(1) of the 
Spectrum Act.
    (4) * * *
    (ii) The licensee of a channel sharee station and a licensee of a 
license relinquishment station that has indicated in its Form 177 an 
intent to enter into a post-auction channel sharing agreement must 
comply with the notification and cancellation procedures in Sec.  
73.1750 and terminate operations on its pre-auction channel within six 
months of the date that the licensee receives its incentive payment 
pursuant to section 6403(a)(1) of the Spectrum Act.
* * * * *
[FR Doc. 2015-27632 Filed 10-30-15; 8:45 am]
 BILLING CODE 6712-01-P