Before the

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matter of                 | * | MM Docket No. 00-105         |
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**NOTICE OF PROPOSED RULE MAKING**

**Adopted: June 5, 2000 Released: June 20, 2000**

By the Commission:

Comment date: September 1, 2000

Reply Comment date: October 2, 2000

# Introduction

1.  By this *Notice of Proposed Rule Making* the Commission proposes to
    eliminate the multiple ownership rule for experimental broadcast
    stations which now provides that no entity may control more than one
    experimental license absent a showing of need.[^1] We seek comment
    on whether this rule remains necessary to achieve goals of
    competition and diversity in the broadcast market. The Commission
    stated in the Biennial Review *Notice of Inquiry*[^2] a tentative
    belief that this rule has a negligible impact on these goals and
    sought comment on whether this rule remains necessary in the public
    interest. The Biennial Review Report issued in that proceeding
    tentatively concludes that this rule may no longer be necessary.[^3]
    Accordingly, this *Notice* seeks comment on the repeal of § 74.134.
    Commenters advocating less than the outright repeal of the rule are
    encouraged to propose alternatives to the current restriction.

# BACKGROUND

2.  The multiple ownership rule for experimental broadcast stations was
    adopted in 1946 and generally limited ownership to one station. In
    1963 this rule was redesignated as Part 74 (74.134) with no changes.
    In 1984 the Commission combined Parts 74 A (Experimental TV), 74 B
    (Experimental Facility) and 74 C (Developmental Broadcast Stations)
    into the present subpart 74 A (Experimental Broadcast Stations)
    without changing the ownership limit.

3.  By Section 202(h) of the Telecommunications Act of 1996,[^4]
    Congress directed the Commission to review its broadcast ownership
    rules as part of the biennial ownership review. That section
    requires the Commission to review its broadcast ownership rules
    biennially and to determine whether any of these rules are necessary
    in the public interest as the result of competition. Furthermore, it
    requires the Commission to "repeal or modify any regulation it
    determines to be no longer in the public interest."[^5]

4.  Subpart A of Part 74 of the Commission's Rules[^6] sets forth the
    rules for licensing "experimental broadcast stations," which are
    defined as stations "licensed for experimental or developmental
    transmission of radio telephony, television, facsimile, or other
    types of telecommunication services intended for reception and use
    by the general public."[^7] Experimental broadcast facilities are
    used to carry on "research and experimentation for the development
    and advancement of new broadcast technology, equipment, systems or
    services which are more extensive or require other modes of
    transmission than can be accomplished by using a licensed broadcast
    station under an experimental authorization."[^8] The rules
    governing experimental broadcast stations encourage innovation while
    protecting existing services from interference. Licensees are
    subject to operating and reporting requirements and are prohibited
    from using the experimental broadcast facility in a commercial
    manner.[^9]

5.  Currently, § 74.134 states that "\[n\]o persons (including all
    persons under common control) shall control, directly or indirectly,
    two or more experimental broadcast stationed unless a showing is
    made that the program of research requires a licensing of two or
    more separate stations."[^10] As a result of the 1998 Biennial
    Review of our broadcast ownership rules we concluded that § 74.134
    appears to no longer be necessary in the public interest. This
    *Notice of Proposed Rule Making* proposes the repeal of this
    limitation on ownership.

# Discussion

6.  It appears that Section 74.134 was intended to limit experimental
    licensees to the minimum spectrum use necessary and to prevent them
    from aggregating a sufficient number of stations under the guise of
    experimentation to enable them to operate a commercial service on
    these stations. We believe, however, that other rules and
    requirements will adequately assure these ends and that the
    ownership limitation may, therefore, no longer be necessary.

7.  Because licensees are prohibited from commercial use of experimental
    broadcast stations, such a licensee may not charge, directly or
    indirectly, for the production or transmission of any programming or
    information used for experimental broadcast purposes.[^11] ). Nor
    may it transmit program material unless it is necessary to the
    experiments being conducted, and no regular program service may be
    broadcast unless specifically authorized.[^12] Several other
    sections of Subpart A help to ensure that stations licensed under
    this Subpart are used only for the experimental purposes for which
    they are intended. Supplementary reports are required with
    applications for license renewals[^13] and experimental licensees
    are required to make a satisfactory showing of compliance with the
    general requirements of the Communications Act of 1934, as
    amended.[^14]

8.  Thus, repeal of the multiple ownership rule would not appear to
    affect the Commission's ability to ensure that experimental stations
    are used solely for *bona fide* experimental purposes. Furthermore,
    because a license for an experimental broadcast station does not
    grant the exclusive use of a frequency, no licensee is able to
    control multiple frequencies.[^15] The Commission believes that
    these other sections of our experimental broadcast station rules
    provide sufficient protection to prevent entities from operating on
    a commercial basis while functioning under the guise of an
    experimental authorization. Since experimental broadcast facilities
    do not exert influence on the competitive market we believe
    ownership limits are unduly restrictive. Allowing a party to have
    more than one experimental broadcast station license, however, may
    permit efficiencies to be realized in the operation of such
    stations, permitting resources to be devoted to research more
    efficiently. This will promote the Commission's statutory charge to
    "\[s\]tudy new uses for radio, provide for experimental uses of
    frequencies, and generally encourage the larger and more effective
    use of radio in the public interest."[^16]

9.  In the only comment filed in response to our [Notice of
    Inquiry]{.underline}[^17] with regard to the instant rule, the
    National Association of Broadcasters (NAB) recommended repeal of
    this rule. It contended that broadcast auxiliary facilities are
    facing regulatory change and dislocation and, accordingly, there is
    now an even greater need for responsible use of experimental
    stations to develop solutions to these problems. NAB supported
    elimination of what it characterized as an "arbitrary
    restriction,"[^18] and urged the Commission to ensure that such
    stations do not endanger the interference-free service provided by
    broadcasters.[^19] We tentatively agree with the NAB's assessment of
    § 74.134.

10. Accordingly, we tentatively conclude that elimination of § 74.134
    will have no adverse impact on our diversity and competition goals.
    We also tentatively conclude that the protections afforded by our
    operations, non-interference, and reporting rules are sufficient to
    assure such stations are used for the purposes for which they are
    intended and use no more spectrum than needed. Accordingly, we
    believe that the multiple ownership rule governing experimental
    broadcast stations is no longer necessary in the public interest and
    propose its repeal. We invite comment on this matter.

# ADMINISTRATIVE MATTERS

11. [Comments and Reply Comments]{.underline}. Pursuant to sections
    1.415 and 1.419 of the Commission's rules, 47 C.F.R. §§ 1.415,
    1.419, interested parties may file comments on or before September
    1, 2000, and reply comments on or October 2, 2000. 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 Fed. Reg. 24,121 (1998).

12. 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, Postal Service mailing address, and the applicable docket
    or rulemaking number. Parties may also submit an electronic comment
    via e-mail. To get filing instructions for e-mail comments,
    commenters should send an e-mail to <ecfs@fcc.gov>, 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.

13. 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
    Secretary, Magalie Roman Salas, Office of the Secretary, Federal
    Communications Commission, 445 Twelfth Street, S.W., TW-A325,
    Washington, D.C. 20554.

14. Parties who choose to file paper should also submit their comments
    on diskette. These diskettes should be addressed to: Wanda Hardy,
    Paralegal Specialist, Mass Media Bureau, Policy and Rules Division,
    Federal Communications Commission, 445 Twelfth Street, S.W., 2-C221,
    Washington, D.C. 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, proceeding
    (including the lead docket number in this case (MM Docket No.
    00-105), 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 pleadings,
    preferably in a single electronic file. In addition, commenters must
    sent diskette copies to the Commission's copy contractor,
    International Transcription Service, Inc., 445 Twelfth Street, S.W.,
    CY-B402, Washington, D.C. 20554.

15. Comments and reply comments will be available for public inspection
    during regular business hours in the FCC Reference Center, Federal
    Communications Commission, 445 Twelfth Street, S.W., CY-A257,
    Washington, D.C. 20554. Persons with disabilities who need
    assistance in the FCC Reference Center may contact Bill Cline
    at (202) 418-0270, (202) 418-2555 TTY, or <bcline@fcc.gov>. Comments
    and reply comments also will be available electronically at the
    Commission's Disabilities Issues Task Force web site:
    [www.fcc.gov/dtf](http://www.fcc.gov/dtf). Comments and reply
    comments are available electronically in ASCII text, Word 97, and
    Adobe Acrobat.

16. This document is available in alternative formats (computer
    diskette, large print, audio cassette, and Braille). Persons who
    need documents in such formats may contact Martha Contee at (202)
    4810-0260, TTY (202) 418-2555, or <mcontee@fcc.gov>.

17. [*Ex Parte* Rules]{.underline}. This proceeding will be treated as a
    "permit-but-disclose" proceeding, subject to the
    "permit-but-disclose" requirements under section 1.1206(b) of the
    rules. 47 C.F.R. § 1.1206(b), as revised. *Ex parte* presentations
    are permissible if disclosed in accordance with Commission rules,
    except during the Sunshine Agenda period when presentations, *ex
    parte* or otherwise, are generally prohibited. Persons making oral
    *ex parte* presentations are reminded that a memorandum summarizing
    a presentation must contain a summary of the substance of the
    presentation and not merely a listing of the subjects discussed.
    More than a one or two sentence description or the views and
    arguments presented is generally required. *See* 47 C.F.R. §
    1.1206(b)(2), as revised. Additional rules pertaining to oral and
    written presentations are set forth in section 1.1206(b).

18. [Initial Regulatory Flexibility Analysis]{.underline}. With respect
    to this *Notice*, an Initial Regulatory Flexibility Analysis
    ("IRFA") is contained in Appendix B. As required by the Regulatory
    Flexibility Act, *see* 5 U.S.C. § 603, the Commission has prepared
    an IRFA of the possible economic impact on small entities of the
    proposals contained in this *Notice*. Written public comments are
    requested on the IFRA. In order to fulfill the mandate of the
    Contract with America Advancement Act of 1996 regarding the Final
    Regulatory Flexibility Analysis, we ask a number of questions in our
    IRFA regarding the prevalence of small businesses in the television
    broadcasting industry. Comments on the IRFA must be filed in
    accordance with the same filing deadlines as comments on the
    *Notice*, and must have a distinct heading designating them as a
    response to the IRFA. The Reference Information Center, Consumer
    Information Bureau, will send a copy of this *Notice*, including the
    IRFA, to the Chief Counsel for Advocacy of the Small Business
    Administration.

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19. [Initial Paperwork Reduction Act Analysis]{.underline}. This
    *Notice* may contain either proposed or modified information
    collections. As part of our continuing effort to reduce paperwork
    burdens, we invite the general public to take this opportunity to
    comment on the information collections contained in this *Notice*,
    as required by the Paperwork Reduction Act of 1996. Public and
    agency comments are due at the same time as other comments on the
    *Notice*. 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 clarity of the information collected; and (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 the
    information collections contained herein should be submitted to Judy
    Boley, Federal Communications Commission, 445 Twelfth Street, S.W.,
    Room C-1804, Washington, DC 20554, or via the Internet to
    <jboley@fcc.gov> and to Edward C. Springer, OMB Desk Officer, 10236
    NEOB, 725 17^th^ Street, NW, Washington, DC 20503 or via the
    Internet to
    [Edward.Springer@omb.eop.gov.](../Edward.Springer@omb.eop.gov)

20. [[Additional
    Information]{.underline}](../Edward.Springer@omb.eop.gov). For
    additional information on this proceeding, please contact Roger
    Holberg, Policy and Rules Division, Mass Media Bureau, (202)
    418-2130, or Dan Bring (202) 418-2164, (202) 418-1169 TTY.

**VII. ORDERING CLAUSES**

21. Accordingly, IT IS ORDERED that, pursuant to the authority contained
    in sections 1, 2(a), 4(i), 303, 307, 309, and 310 of the
    Communications Act, as amended, 47 U.S.C. §§ 151, 152(a), 154(i),
    303, 307, 309, and 310, and Section 202(h) of the Telecommunications
    Act of 1996, this *Notice of Proposed Rulemaking* is ADOPTED.

22. IT IS FURTHER ORDERED that the Commission's Consumer Information
    Bureau, Reference Information Center, shall send a copy of this
    *Notice*, including the Initial Regulatory Flexibility Analysis, to
    the Chief Counsel for Advocacy of the Small Business Administration
    in accordance with the Regulatory Flexibility Act.

> FEDERAL COMMUNICATIONS COMMISSION
>
> Magalie Roman Salas
>
> Secretary

**APPENDIX A**

**Proposed Rule Changes**

Part 74 of Title 47 of the Code of Federal Regulations is proposed to be
amended to read as follows:

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

### 1. The authority citation for Part 74 is proposed to continue reading as follows: {#the-authority-citation-for-part-74-is-proposed-to-continue-reading-as-follows .unnumbered}

Authority: 47 U.S.C. 154, 303, 307 and 554.

2.  Section 74.134 is proposed to be amended as follows:

    § 74.134 \[Removed\]

**APPENDIX B**

**INITIAL REGULATORY FLEXIBILITY ANALYSIS**

As required by the Regulatory Flexibility Act ("RFA"),[^20] the
Commission has prepared this present Initial Regulatory Flexibility
Analysis (IRFA) of the possible significant economic impact on small
entities by the policies and rules proposed in this *Notice of Proposed
Rulemaking* (*Notice*). 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 *Notice* provided above in
paragraph 11. The Commission will send a copy of the *Notice*, including
this IRFA, to the Chief Counsel for Advocacy of the Small Business
Administration. *See* 5 U.S.C. § 603(a). In addition, the *Notice* and
the IRFA (or summaries thereof) will be published in the Federal
Register. *See id*.

## Need for, and Objectives of, the Proposed Rules

Section 202(h) of the Telecom Act requires the Commission to review its
broadcast ownership rules every two years, beginning in 1998, and to
"determine whether any of such rules are necessary in the public
interest as the result of competition." It instructs the Commission to
repeal or modify any regulation it determines to be no longer in the
public interest. In its first Biennial Report, issued as a result of
Section 202(h) of the Telecom Act, the Commission tentatively determined
that the experimental broadcast multiple ownership rule appeared to no
longer be in the public interest. Accordingly, in compliance with the
provisions of Section 202(h) of the Telecom Act, the Commission is
commencing this proceeding in order to repeal or to examine the need to
retain Section 74.134 of its Rules.

## Legal Basis

This *Notice* is adopted pursuant to sections 1, 2(a), 4(i), 303, 307,
309, 310, of the Communications Act, 47 U.S.C. §§ 151, 152(a), 154(i),
303, 307, 309, 310, and Section 202(h) of the Telecommunications Act of
1996.

> C. Description and Estimate of the Number of Small Entities To Which
> the Proposed Rules Will Apply

The RFA directs agencies to provide a description of, and, where
feasible, an estimate of the number of small entities that may be
affected by the proposed rules, if adopted.[^21] The Regulatory
Flexibility Act defines the term "small entity as having the same
meaning as the terms "small business," "small organization," and "small
business concern" under section 3 of the Small Business Act.[^22] 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.[^23]

Pursuant to 5 U.S.C. § 601(3), the statutory definition of a small
business applies \"unless an agency after consultation with the Office
of Advocacy of the SBA and after opportunity for public comment,
establishes one or more definitions of such term which are appropriate
to the activities of the agency and publishes such definition(s) in the
Federal Register. A "small organization" is generally "any
not-for-profit enterprise which is independently owned and operated and
is not dominant in its field."[^24] Nationwide, as of 1992, there were
approximately 275,801 small organizations.[^25] "Small governmental
jurisdiction" generally means "governments of cities, counties, towns,
townships, villages, school districts, or special districts with a
population of less than 50,000."[^26] As of 1992, there were
approximately 85,006 such jurisdictions in the United States.[^27] This
number includes 38,978 counties, cities, and towns; of these, 37,566, or
96 percent, have populations of fewer than 50,000.[^28] Thus, of the
85,006 governmental entities, we estimate that 81,600 (91 percent) are
small entities.

The Small Business Administration defines a radio broadcasting station
that has \$5 million or less in annual receipts as a small
business.[^29] A radio broadcasting station is an establishment
primarily engaged in broadcasting aural programs by radio to the
public.[^30] Included in this industry are commercial, religious,
educational, and other radio stations.[^31] The 1992 Census indicates
that 96 percent (5,861 of 6,127) radio station establishments produced
less than \$5 million in revenue in 1992. Official Commission records
indicate that 11,334 individual radio stations were operating in
1992.[^32] As of September 30, 1999, Commission records indicate that
12,615 radio stations (both commercial and noncommercial) were operating
of which 2,066 were noncommercial educational FM radio stations.[^33]
Applying the 1992 percentage of station establishments producing less
than \$5 million in revenue ([i.e]{.underline}., 96 percent) to the
number of radio stations in operation, ([i.e]{.underline}., 12,615)
indicates that 12,109 of these radio stations would be considered "small
businesses" or "small organizations."

The SBA defines small television broadcasting stations as television
broadcasting stations with \$10.5 million or less in annual
receipts.[^34] There are currently 1,243 commercial television stations
and 373 non-commercial educational television stations on the air.[^35]
According to Commission staff review of the BIA Publications, Inc.,
Master Access Television Analyzer Database, fewer than 800 commercial TV
broadcast stations (65%) have revenues of less than \$10.5 million
dollars. We note, however, that under SBA's definition, revenues of
affiliates that are not television stations should be aggregated with
the television station revenues in determining whether a concern is
small. Our estimate may thus overstate the number of small entities
since the revenue figure on which it is based does not include or
aggregate revenues from non-television affiliated companies.
Accordingly, it appears that the proposed revisions would affect no more
than 800 television stations that might be considered "small businesses"
or "small organizations."

The *Notice* proposes to eliminate the bar on the ability of licensees
to hold licenses for more than one experimental broadcast station. We
seek comment and data regarding the number of small entities that may be
affected by the proposed elimination of our experimental broadcast
station multiple ownership rule.

## D. Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements {#d.-description-of-projected-reporting-recordkeeping-and-other-compliance-requirements .unnumbered}

There currently are no recordkeeping or other compliance requirements
associated with the subject rule. The *Notice* proposes no new
recordkeeping or other compliance requirements.

E.  Steps Taken to Minimize Significant Impact on Small Entities, and
    Significant Alternatives Considered

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: (1) the establishment of differing
compliance or 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.

As indicated above, the *Notice* proposes to eliminate the subject rule
and to allow licensees to have more than a single experimental broadcast
license irrespective of their reason for seeking such multiple licenses.
Significant alternatives were recently considered in the Commission's
1998 biennial review of its broadcast ownership rules (MM Docket No.
98-35). Those alternatives were: (1) retention of the current rule; (2)
modification of the current rule; (3) elimination of the current rule.
In that proceeding the Commission determined that elimination of the
subject provision would be in the public interest. The Commission
considered the results of this top-to-bottom review of the subject rule
in its consideration of alternatives to the course proposed herein in
the instant proceeding. Under the proposal in this *Notice*, small
entities will be able to obtain multiple experimental broadcast station
licenses, as will all broadcast licensees.

## Federal Rules that May Duplicate, Overlap, or Conflict With the Proposed Rules

None.

[^1]: 47 C.F.R. § 74.134

[^2]: [Notice of Inquiry]{.underline}, In the Matter of 1998 Biennial
    Regulatory Review, Review of the Commission's Broadcast Ownership
    Rules and Other Rules Adopted Pursuant to Section 202 of the
    Telecommunications Act of 1996, 13 F.C.C.R. 11276, 11293-94
    (1998)(hereinafter "[Notice of Inquiry]{.underline}").

[^3]: [Biennial Review Report]{.underline}, FCC 00-191 (adopted May 26,
    2000), at para. 114.

[^4]: Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56
    (1996).

[^5]: Section 202(h).

[^6]: 47 C.F.R. §§ 74.101 -- 74.184.

[^7]: 47 C.F.R § 74.101.

[^8]: 7 C.F.R § 74.102.

[^9]: 47 C.F.R. § 74.162 -- 74.183.

[^10]: 47 C.F.R. § 74.134.

[^11]: 47 C.F.R § 74.182(b).

[^12]: 47 C.F.R. § 74.182(a).

[^13]: 47 C.F.R § 74.113.

[^14]: 47 C.F.R § 74.131.

[^15]: [Id.]{.underline}

[^16]: 47 U.S.C. § 303(g).

[^17]: [Notice of Inquiry]{.underline}, [supra]{.underline}.

[^18]: NAB Comments at 16.

[^19]: [Id.]{.underline} at 16.

[^20]: S*ee* 5 U.S.C. § 603. The RFA, *see* 5 U.S.C. § 601 *et seq.*,
    has been amended by the Contract With America Advancement Act of
    1996, Pub. L. No. 104-121, 110 Stat. 847 (1996) (CWAAA). Title II of
    the CWAAA is the Small Business Regulatory Enforcement Fairness Act
    of 1996 (SBREFA).

[^21]: 5 U.S.C. § 603(b)(3).

[^22]: *Id.* § 601(3).

[^23]: *Id*. § 632.

[^24]: 5 U.S.C. § 601(4).

[^25]: 1992 Economic Census, U.S. Bureau of the Census, Table 6 (special
    tabulation of data under contract to Office of Advocacy of the U.S.
    Small Business Administration).

[^26]: 5 U.S.C. § 601(5).

[^27]: U.S. Dept. of Commerce, Bureau of the Census, "1992 Census of
    Governments."

[^28]: [Id]{.underline}.

[^29]: 13 CFR § 121.201, SIC code 4832.

[^30]: 1992 Census, Series UC92-S-1, at Appendix A-9.

[^31]: [Id.]{.underline} The definition used by the SBA also includes
    radio broadcasting stations which also produce radio program
    materials. Separate establishments that are primarily engaged in
    producing radio program material are classified under another SIC
    number, however. [Id]{.underline}.

[^32]: FCC News Release, No. 31327 (Jan. 13, 1993).

[^33]: FCC Press Release, [Broadcast Station Totals as of September 30,
    1999]{.underline}, (issued November 22, 1999).

[^34]: 13 C.F.R. § 121.201 (SIC Code 4833)

[^35]: FCC Press Release, [Broadcast Station Totals as of September 30,
    1999]{.underline}, (issued November 22, 1999).