**Released:** May 24, 2001

**DEADLINE FOR NCE SETTLEMENTS AND SUPPLEMENTS EXTENDED TO JULY 19,
2001; DATE FOR CALCULATING COMPARATIVE QUALIFICATIONS REMAINS JUNE 4,
2001**

**MASS MEDIA BUREAU PROVIDES EXAMPLES OF APPLICATION OF NCE SECTION
307(b) CRITERIA**

By this Public Notice, the Mass Media Bureau provides additional
information regarding the processing of pending closed group
applications for reserved channel noncommercial educational ("NCE")
broadcast stations.[^1]

**Settlement and Supplement Deadline Extended but Date for Determining
Qualifications Unchanged:** The Bureau previously issued a Public Notice
announcing a deadline of June 4, 2001 by which applicants in closed
groups of NCE broadcast applications must file either settlements/minor
technical amendments to resolve application conflicts, or supplements to
claim points under the new NCE comparative standard. [See]{.underline}
[Public Notice]{.underline}, DA 01-729 (March 22, 2001). That Public
Notice also established June 4, 2001 as the date on which applicants'
comparative qualifications would be generally fixed. On May 11, 2001,
seven NCE organizations (collectively "Joint Petitioners") filed a joint
motion for extension of time with the Commission.[^2] The Joint
Petitioners request a 45-day extension of the settlement/supplement
deadline to July 19, 2001 to provide additional time to negotiate and
file settlement requests. However, to avoid any potential unfairness to
applicants, the joint motion proposes that June 4, 2001 remain the date
for determining comparative qualifications, such as whether applicants
qualify for points as established local entities.

We find that an extension of the June 4, 2001 deadline is warranted.
First, Joint Petitioners report that software developers are still in
the process of incorporating data from the 2000 Census into programs
that calculate populations within proposed station service areas. They
state that without updated software, it is difficult for NCE applicants
to assess the comparative strength of competing applications. Second,
they note that on May 4, 2001 the Bureau released an *Errata* which
added 16 applicants to various settlement groups. The Joint Petitioners
also describe several unforeseen difficulties in initiating settlement
agreements. In a number of cases application contacts have changed. In
others, obtaining various required approvals from college administrators
and public officials has proven difficult within the time frame
established for this purpose.

Accordingly, we announce that we will accept settlements, engineering
solutions, and point supplements through July 19, 2001. We also extend
until July 19, 2001 the period during which we will allow settlements
that propose payments in excess of expenses. We believe that these
extensions will provide needed additional time to complete settlement
agreements without unduly delaying the processing of remaining
applications. However, we will not adopt a suggestion of several
commenters who support the joint motion, to extend the period for filing
settlements involving payments in excess of expenses to August 20, 2001.
We believe that it would be inappropriate to permit settlements in
excess of expenses beyond the deadline for filing comparative
supplements. Such an extension would defeat the Commission's underlying
purpose for providing that extraordinary relief - - to provide an
incentive to settle and to make unnecessary the filing and consideration
of point supplements. Accordingly, settlements filed after July 19, 2001
will be subject to the monetary limits in our rules.

In sum, applicants will have an extra 45 days, until July 19, 2001, to
negotiate settlements that exceed expenses. In the event that settlement
negotiations fail, applicants must file supplements with a June 4, 2001
"snap shot" date for determining an applicant's maximum non-technical
qualifications, as announced previously. Thus, applicants filing
supplements on July 19, 2001, may not claim non-technical points in
excess of those for which they would have qualified on June 4, 2001.
Also remaining unchanged are the dates set by the Commission in
paragraph 31 of the Memorandum Opinion and Order in this proceeding for
comparing technical proposals.

**Application of NCE §** **307(b) Criteria:** In cases where mutually
exclusive NCE applications specify different communities, the Commission
must first consider whether to award a decisive § 307(b) preference. 47
C.F.R. § 73.7002(b); [Report and Order]{.underline}, MM Docket 95-31, 15
FCC Rcd 7386, 7397-98 (2000). An NCE applicant will be eligible for the
preference if it will provide a first or second NCE aural service (in
the aggregate) to 10 percent of the people within the proposed station's
60 dBu contour, provided that the number of people receiving such
service is at least 2,000. [Id.]{.underline} If two or more applicants
meet this standard, the applicant providing the greatest number of
people with the highest level of service will be awarded a construction
permit, if it will provide such service to at least 10 percent of the
people within the station's 60 dBu contour and to at least 5,000 more
people than the next best applicant. [Id.]{.underline} First service
will be preferred over second service. [Id.]{.underline} Thus, the
Commission will first examine the applicants' first service levels alone
to determine whether one of the proposals is superior and should receive
a decisive preference. If such applicants are equivalent with respect to
first service alone, the Commission will compare proposals by
aggregating new first and second service population totals. Applicants
providing equivalent service overall will be considered under the point
system, while any applicants not deserving a § 307(b) preference or
deserving a lesser § 307(b) preference than the next best applicant will
be dismissed. [Id]{.underline}. The Mass Media Bureau has prepared the
following examples to clarify the Commission's application of these new
criteria.

Contacts: Irene Bleiweiss 418-2700 (legal); Edward P. De La Hunt
418-2700 (engineering).

**Examples**

In each example applicants propose to serve different communities. All
mutually exclusive applicants are identified. Assume that each
applicant's 60 dBu contour encompasses 40,000 people, making the 10%
threshold for each applicant equal to 4,000 people (which exceeds the
2,000 minimum).

**[EXAMPLE 1:]{.underline}**

[PRINCIPLE ILLUSTRATED:]{.underline} Standard analysis, including
aggregation as part of second service analysis when first service alone
is not dispositive.

Community 1/Applicant A Community 2/Applicant B

First Service 4,000 7,000

Second Service 5,000 7,500

[ANALYSIS]{.underline}: Applicant B is selected pursuant to § 307(b). A
and B are both eligible for consideration under § 307(b) because each
provides a new first or second service to 10% of the population within
their respective service areas. Both applicants are entitled to a first
service preference. However, B would not provide a new first service to
at least 5,000 more persons than would A, and thus is not entitled to a
comparative preference. Next, we consider whether A or B would provide
total first or second service to 5,000 more people than the other
applicant. A would provide a first or second service to 9,000 people
(4,000 plus 5,000). B would provide a first or second service to 14,500
people (7,000 plus 7,500). B is superior to A because B is providing
first or second service to at least 5,000 more people than A, in this
example 5,500 more people (14,500 -- 9,000 = 5,500)

**[EXAMPLE 2]{.underline}:**

[PRINCIPLES ILLUSTRATED]{.underline}: An applicant meeting the 10%
minimum new service threshold prevails over an applicant that does not.
In such circumstances, the prevailing applicant need not satisfy the
5,000 person differential threshold. A first service preference will
prevail over a second service preference of any magnitude.

Community 1/Applicant A Community 2/Applicant B

First Service 4,750 3,000

Second Service 5,000 15,000

[ANALYSIS:]{.underline} Applicant A receives a decisive § 307(b)
preference. Applicants A and B are both eligible for consideration under
§ 307(b) because each provides a new first or second service to 10% of
the population within their respective service areas. First service is
compared, and Applicant A is the only applicant to meet the minimum new
first service threshold. B does not qualify for a first service
preference because it does not propose to provide a first service to at
least 4,000 people (i.e. 10% of the people within its 60 dBu contour).
Because B does not qualify for a first service preference, A's first
service need not exceed B's first service by 5,000. Because Applicant A
prevails under the first service criterion, no second service analysis
is undertaken.

**[EXAMPLE 3]{.underline}:**

[PRINCIPLE ILLUSTRATED]{.underline}: Point system applies to §
307(b)-preferred but materially equivalent applicants.

Assume five applicants A through E each serving a different community:

A B C D E

First Service 100 6,000 20,000 20,250 21,000

Second Service 20,000 15,000 0 5,000 4,000

[ANALYSIS:]{.underline} Applicants D and E will be considered under the
point system. All applicants are eligible for consideration under §
307(b) since all provide first or second service to 10% of the people
within their respective 60 dBu contours. First service is compared and A
is eliminated because it does not meet the minimum NCE § 307(b) first
service threshold (10%/2,000 people). B also is eliminated, because its
first service is inferior (by at least 5,000 people) to the next best
applicant, C (20,000 --6,000 = 14,000). C, D, and E proceed to second
service consideration. C is eliminated because it provides total first
or second service that is inferior by at least 5,000 people to the first
or second service provided by the next best applicant, E (25,000 --
20,000 = 5,000). D and E will be considered under the point system
because they provide materially equivalent first and second service.

**[EXAMPLE 4:]{.underline}**

[PRINCIPLE ILLUSTRATED]{.underline}: For purposes of comparing a group
of three or more applicants, equivalency is determined by comparing each
applicant to the applicant proposing the next best service, not by
comparing each applicant to the top applicant.

Community 1 Community 2

A 5,000 second service B 7,500 second service

C 11,000 second service

[ANALYSIS:]{.underline} All applicants will proceed to point system
comparison. All applicants are eligible for § 307(b) consideration. No
dispositive § 307(b) preference can be awarded because, in the
progression from A through C, no applicant exceeds the next best
applicant by at least 5,000 people. A is not eliminated even though its
proposal is more than 5,000 people inferior to C (11,000 -- 5,000 =
6,000) because it is not clear who will represent Community 2, and if B
were to prevail, B would not be superior to A with respect to § 307(b).

**[EXAMPLE 5]{.underline}:**

[PRINCIPLE ILLUSTRATED]{.underline}: First and second service totals are
aggregated for the purpose of establishing eligibility for the § 307(b)
preference.

Community 1/Applicant A Community 2/Applicant B Community 2/Applicant C

First Service 3,000 0 100

Second Service 2,500 5,000 500

[ANALYSIS]{.underline}: Applicants A and B are compared using the point
system. Applicants A and B are eligible for § 307(b) consideration, but
C is not because even combined, C's first and second service level (600)
is below the 10%/2,000 people minimum. For purpose of initial
eligibility, A can rely on its combined new first and second service to
meet the 10% threshold. (See FCC Form 340-Supplement, Worksheet #6 ,
Lines 5 and 6). Applicant A would report this eligibility by answering
"yes" to Question III(2) on the Form 340 Point Supplement (concerning
second local service) and by providing an exhibit to that question
showing that it is relying on its first and second service combined to
establish eligibility. Neither A nor B meets the minimum first service
threshold, and thus first service is not dispositive. Applicant A
provides first or second service to 5,500 people (3,000 plus 2,500).
Applicant B provides first or second service to 5,000 people. Thus A and
B are equivalent. Had the group consisted only of A and C, however, A
would have received a decisive § 307(b) preference because A would have
been the only §307(b)-eligible applicant based on its first and second
service aggregated for determining eligibility.

**[EXAMPLE 6]{.underline}**:

[PRINCIPLE ILLUSTRATED]{.underline}: If §307(b)-preferred new first or
second service proposals specify the same community, the point system is
used to determine the comparatively superior proposal.

Community 1 Community 2

Applicant A Applicant B Applicant C

First Service 1,000 8,000 7,000

Second Service 5,000 0 6,000

[ANALYSIS]{.underline}: Applicants B and C will be compared using the
point system. All of the applicants are eligible for § 307(b)
consideration by providing a first or second service to 10% of their
populations. Applicant A is eliminated because, looking at first service
alone, fewer than 10% of A's population receives new first service, in
contrast to B and C which both provide an equivalent level of first
service to 10% of their populations. The elimination of Applicant A
eliminates Community 1 from consideration. The remaining applicants, B
and C, both propose the same community. Section 307(b) analysis ends.
The equivalent applicants B and C proceed to comparative consideration
in a point system.

[^1]: Currently pending are several petitions for reconsideration of
    Memorandum Opinion and Order, [Reexamination of Comparative
    Standards for Noncommercial Educational Applicants]{.underline}, MM
    Docket 95-31. The procedures outlined herein are without prejudice
    to any action the Commission may take on reconsideration.

[^2]: The Joint Petitioners are Station Resource Group, Educational
    Media Foundation, National Public Radio, CSN International, the
    National Federation of Community Broadcasters, Positive Alternative
    Radio, Inc. and Calvary Chapel of Twin Falls, Inc. We also received
    supporting comments from California State University at Sacramento,
    Lane Community College, Mohave Community College, the University of
    Kansas, WVTF Public Radio, Virginia Tech Foundation, Bridge
    Broadcasting, Central Florida Christian Radio, Howell Mountain
    Broadcasting, LifeTalk Broadcasting, the Mary V. Harris Foundation,
    Southern Idaho Corporation of Seventh-day Adventists, and the Upper
    Columbia Media Association.