**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

+----------------------------------+---+------------------------------+
| In the Matter of                 | * | MB Docket No. 04-312         |
|                                  | * |                              |
| Amendment of the Television      | ) | RM No. 11049                 |
| Table of                         | * |                              |
|                                  | * |                              |
| Allotments to Delete             |   |                              |
| Noncommercial                    | * |                              |
|                                  | * |                              |
| Reservation of Channel \*39,     | ) |                              |
| 620-626 MHz,                     | * |                              |
|                                  | * |                              |
| Phoenix, Arizona, and to Add     |   |                              |
| Noncommercial                    | * |                              |
|                                  | * |                              |
| Reservation on Channel 11,       | ) |                              |
| 198-204 MHz,                     | * |                              |
|                                  | * |                              |
| Holbrook, Arizona                |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
+----------------------------------+---+------------------------------+

**MEMORANDUM OPINION AND ORDER**

**AND NOTICE OF PROPOSED RULE MAKING**

**Adopted: August 3, 2004 Released: August 6, 2004**

**Comment Date: October 15, 2004**

**Reply Comment Date: November 30, 2004**

By the Chief, Video Division:

1.  The Video Division of the Media Bureau has before it for
    consideration a "Joint Petition to Amend the Television Table of
    Allotments\" filed on August 7, 2003 by NBC Telemundo Phoenix, Inc.
    (Telemundo), licensee of stations KPHZ(TV), Channel 11, Holbrook,
    Arizona and KDRX-CA, Phoenix, Arizona, and Community Television
    Educators, Inc. (CTE), licensee of noncommercial educational
    television station KDTP(TV), Channel \*39, Phoenix, Arizona. In
    their joint petition, Petitioners request that the Commission amend
    Section 73.606 of the Commission's rules, 47 C.F.R. § 73.606,
    pursuant to Section 1.420(h) of the rules, 47 C.F.R. § 1.420(h), to
    delete the noncommercial reservation of Channel \*39 in Phoenix and
    reserve Channel 11 in Holbrook. They further request that the
    Commission modify Telemundo\'s license to specify Channel 39 and
    CTE\'s license to specify Channel \*11, without opening the channels
    to competing applications.

2.  We hereby commence a rule making proceeding to determine
    whether: (1) the proposed reservation of Channel 11 at Holbrook and
    the dereservation of Channel \*39 at Phoenix will serve the public
    interest, convenience or necessity; (2) the channels, if their
    nature is changed, should be subject to competing applications, or
    whether modification of the license of KPHZ(TV) to specify operation
    on Channel 39 at Phoenix, and the license of KDTP(TV) to specify
    operation on Channel \*11 at Holbrook would better promote the
    public interest, convenience or necessity; and (3) CTE is qualified
    to become the licensee of a noncommercial educational television
    station at Holbrook.

    **BACKGROUND**

    3\. Section 73.606(b) of the Commission's rules set forth the
    Television Table of Allotments in which specific channels are
    allotted to specific communities.[^1] Channels designated with an
    asterisk are reserved for noncommercial educational use and are
    licensed only to nonprofit educational organizations or
    municipalities. A reserved channel was allotted to Holbrook in
    1965,[^2] and Channel 11 was allotted in 1986.[^3] The reserved
    channel was never applied for, and was deleted by the Commission in
    1996 with all other unapplied for NTSC channels in the TV Table of
    Allotments.[^4] There are nine commercial television stations
    allotted to Phoenix/Mesa, and two noncommercial educational
    channels, all of which are licensed. In addition, there are six
    Class A television stations licensed to Phoenix, including KDRX-CA,
    which carries Telemundo's programming.

    4\. In the instant petition filed August 7, 2003, Petitioners state
    that the Hispanic population of the United States is growing
    rapidly, and that Phoenix is the 9^th^ largest Hispanic DMA, with
    more than 18% of its households comprised of Hispanics. According to
    Telemundo, "no existing full-power television licensee in Phoenix
    has shown any willingness to enter the Spanish-language market in
    competition with Univision \[which\] owns two full-power television
    stations (one licensed to Phoenix and one licensed to Flagstaff) and
    soon will acquire five FM radio stations . . . while Telemundo is
    carried on a low-power Class A television station, KDRX-CA."
    Petitioners requests that the Commission dereserve Channel \*39 and
    reserve Channel 11, and modify the licenses of KPHZ(TV) and KDTP(TV)
    to change their authorized facilities to Channel 39 at Phoenix and
    Channel \*11 at Holbrook, respectively, so that Telemundo can better
    compete with Univision and create "real diversity in news,
    information, and entertainment programming for hundreds of thousands
    of Spanish-language speakers . . .."

    5\. In addition, Telemundo asserts that KPHZ(TV), licensed to
    Holbrook, is unable to provide service to urban Phoenix, where a
    substantial Latino population resides, and that absent the channel
    exchange, "it is virtually certain that KPHZ will fail as a
    commercial outlet and will go dark, thereby creating a white area in
    Holbrook and causing a loss of total television service available in
    the DMA."[^5] Conversely, Petitioners state that "as an NCE
    facility, however, the \[Holbrook\] station has a more promising
    outlook because it can be expected to draw on sources of funding
    independent of advertising revenues," and also has more potential to
    serve as a local outlet for expression. Petitioners further state
    that in addition to Telemundo paying CTE cash consideration for
    moving to Holbrook, it will also assign KDRX-CA to CTE, which will
    allow it to continue to provide over-the-air service to Phoenix.[^6]

    6\. Petitioners also contend that the Commission may grant the
    requested relief pursuant to Section 1.420(h) of the rules, which
    provides that:

    Where licensees (or permittees) of television broadcast stations
    jointly petition to amend § 73.606(b) and to exchange channels, and
    where one of the licensees (or permittees) operates on a commercial
    channel while the other operates on a reserved noncommercial
    educational channel within the same band, and the stations serve
    substantially the same market, then the Commission may amend §
    73.606(b) and modify the licenses (or permits) of the petitioners to
    specify operation on the appropriate channels upon a finding that
    such action will promote the public interest, convenience and
    necessity.

    Petitioners admit that their proposal does not meet all the criteria
    set forth in § 1.420(h), but assert that it is consistent with the
    underlying purpose of the rule, in that it would not result in the
    elimination of a reserved channel and would provide substantial
    financial benefits to a noncommercial licensee. Moreover, as is the
    case of § 1.420(h) channel exchanges, "these benefits could not be
    obtained if the modified allotments were opened to competing
    applications because CTE could not afford the risk of losing its
    existing station and therefore would not pursue the proposal if the
    result were to put its channel in jeopardy."

    **DISCUSSION**

    7\. At the outset, we disagree that the petitioners' proposal can be
    effectuated pursuant to § 1.420 of the Commission's rules,[^7]
    because KPHZ(TV) and KDTP(TV) do not serve "substantially the same
    market." Holbrook is located 228 miles from Phoenix and there is no
    overlap of the two stations' predicted Grade B contours. While
    KPHZ(TV) presently operates at only 1.6 kW, even operating at the
    allowed maximum of 316 kW, no overlap would occur.[^8] Moreover,
    when the Commission adopted procedures permitting intraband channel
    exchanges between commercial and noncommercial stations, it did so
    based in part on the fact that the exchange would enable the
    noncommercial educational station to improve the quality of its
    service. Here, CTE would be exchanging a UHF facility licensed to
    Phoenix, the 6^th^ largest city in the United States, with a
    population of 1,321,045, for a VHF facility operating at only 1.6
    kW, licensed to a community with a population of 4,917.[^9] Thus, we
    find Section 1.420 inapplicable here.

    8\. It may be possible, however to effectuate Petitioners' proposal
    through a rulemaking proceeding coupled with a license modification
    under Section 316 of the Communications Act, should the public
    interest be found to warrant dereservation of Channel \*39,
    reservation of Channel 11, and modification of Telemundo's and CTE's
    licenses. The Commission has repeatedly utilized rulemaking
    procedures to amend the table of allotments, and Section 316 to
    modify a station's license to conform to the change in allotment,
    where those actions have been found to serve the public interest,
    convenience and necessity. *See, e.g., Amendment of Section
    73.606(b), Buffalo, New York*, 14 FCC Rcd 11856 (1999), *aff'd*, 16
    FCC Rcd 4013 (2000); *Intraband Television Channel Exchanges,* 59 RR
    2d at 1461-62. We acknowledge that the *Sixth Report and Order*
    adopting the Television Table of Allotments contemplated that a
    noncommercial educational station operating on a reserved channel,
    which seeks to operate on a commercial basis, "would by appropriate
    rule making proceedings be required to petition for a change in the
    character of the channel assignment involved. It \[would\] then have
    to file an application for a new license, in competition with any
    others who may seek the channel." *Sixth Report and Order*, 41 FCC
    148, 212, n.51 (1952); *see also Intraband Television Channel
    Exchanges*, 59 RR 2d at 1458. However, the Commission may, in a
    rulemaking proceeding, limit potential applicants' ability to apply
    for the channels if, in the Commission's judgment, such action will
    promote the public interest, convenience and necessity. *Storer
    Broadcasting v. FCC*, 351 U.S. 192 (1956); *Malrite of New York,
    Inc*., FCC 84-338, released July 31, 1984. Assuming we decide that
    dereservation of Channel \*39 and reservation of Channel 11 is in
    the public interest, we seek comment on whether unique public
    interest considerations and benefits in this case outweigh the
    benefits of entertaining competing applications for a new commercial
    station in Phoenix (and a new noncommercial educational station in
    Holbrook), thus warranting a waiver of the uncodified rule set forth
    in the *Sixth Report and Order,* requiring that newly dereserved
    channels be made available for such applications.

    9\. Section 307(b) of the Communications Act of 1934, as amended,
    requires that the Commission make "distribution of licenses . . .
    among the several States and communities as to provide a fair,
    efficient and equitable distribution of radio service." 47 U.S.C. §
    307(b). In order to fulfill this mandate, the Commission has
    established certain television allotment priorities: (1) to provide
    at least one television service to all parts of the United
    States; (2) to provide each community with at least one television
    broadcast station; (3) to provide a choice of at least two
    television services to all parts of the United States; (4) to
    provide each community with at least two television stations;
    and (5) to assign any remaining channels to communities based on
    population, geographic location, and the number of television
    services available to the community from stations located in other
    communities."[^10] With respect to the allotment of reserved
    noncommercial educational channels, the Commission reserved an
    allotted channel for noncommercial use in each community having a
    total of three or more allotments, and in the very largest cities,
    endeavored to reserve a second noncommercial channel.[^11] Where a
    community had fewer than three allotted channels, no reservation was
    made except in 46 communities outside of metropolitan areas
    designated as "primary education centers." As noted above, Phoenix
    is now the 6^th^ largest city in the United States, and we seek
    comment on whether the dereservation of one of the two reserved
    channels allotted to Phoenix is consistent with the Commission's
    prior implementation of its mandate to ensure a "fair, efficient and
    equitable distribution of radio service." Similarly, we seek comment
    on whether the reservation of Holbrook's sole commercial channel is
    consistent with our long-standing allotment policies, given the fact
    that in the majority of communities, the Commission first ensured
    that the community would receive a commercial channel before a
    reserved channel was allotted.

    10\. We also seek comment on whether the Phoenix community no longer
    needs two noncommercial educational stations, and also, whether the
    need for a 9^th^ commercial allotment in Phoenix outweighs the need
    for a second noncommercial educational television station.
    Specifically, although Telemundo asserts that the needs of the
    Spanish-speaking population of Phoenix and its environs are
    underserved, we note that Univision, Telemundo, Telefutura and
    Azteca all provide a primary television service to the community,
    either via a full service or Class A television station. Thus, we
    seek comment regarding the extent to which the Spanish-speaking
    population is presently served by the Phoenix television stations,
    as well as cable and DBS, the extent to which unserved needs remain,
    and whether any unserved needs can be fully met by the commercial
    and noncommercial stations already serving the community. We also
    seek comment on Telemundo's assertion that allotment of an
    additional full service station is necessary to meet allegedly
    underserved needs. We note that the predicted coverage of
    Telemundo's Class A television station licensed to Phoenix is nearly
    identical to the coverage of station KDTP(TV), licensed to CTE and
    Phoenix station KTVW-TV, licensed to Univision.

    11\. With respect to Holbrook, we seek comment on whether there is a
    greater need at Holbrook for a noncommercial educational channel
    than for the presently allotted commercial channel. We also seek
    comment on whether Holbrook is capable of sustaining a noncommercial
    educational station. A reserved channel was allotted to Holbrook for
    educational use in 1965, and for over 30 years, the Commission
    received no expressions of interest in operating on that channel.
    Moreover, given the fact that Telemundo, a subsidiary of a large
    national network, asserts that KPHZ(TV) cannot exist as a
    stand-alone commercial facility, we seek comment on the continued
    viability of Telemundo's commercial operation on Channel 11, as well
    as the potential viability of a noncommercial operation on a
    reserved Channel 11 at Holbrook.

12\. We also seek comment on whether, in the event we determine that the
public interest would be served by reserving Channel 11 at Holbrook for
noncommercial educational use, we can modify CTE's license pursuant to
Section 316 of the Act to permit its operation on that channel,
consistent with our rules and policies regarding the licensing of
reserved channels. The channels reserved for educational use are
intended to serve the educational and cultural broadcast needs of the
entire community to which they are assigned. *Fostering Expanded Use of
UHF Television Channels*, 2 FCC 2d 527, 542 (1965). The Commission also
has recognized that Congress intended the noncommercial educational
service to be \"a service that is responsive to the overall public as
opposed to the sway of particular political, economic, social or
religious interests.\" *Noncommercial Nature of Educational Broadcast
Stations*, 90 FCC 2d 895, 900 (1982). Because of the intended nature of
the noncommercial educational broadcast service, the Commission requires
noncommercial television applicants which are non-profit organizations,
such as CTE, to submit \"evidence that officers, directors and members
of the governing board are broadly representative of the educational,
cultural and civic groups in the community.\" (FCC Form 340, Section II,
Paragraph 11(a)). The Commission has explained that:

> There is good reason for having a slightly higher standard for a
> noncommercial, educational television applicant than for an FM
> applicant, in light of the former\'s greater spectrum use. In that
> regard, all 20 reserved FM channels use spectrum that is equal to
> two-thirds of one television channel, television stations typically
> cover greater area than their FM counterparts, and fewer television
> than FM channels can be allocated in a given area.

*Way of the Cross*, 101 FCC 2d 1368, 1371, n.3 (1985); *see also Board
of Education of Jefferson County, Kentucky*, 80 FCC 2d 280 (1980);
*Report and Order* in MM Docket No. 95-31, 15 FCC Rcd 7386, 7409, n.38
(2000). At present, CTE's officers, directors and governing board
members are required to be broadly representative of educational,
cultural and civic groups in Phoenix, its community of license. Before
CTE's license may be modified, it must demonstrate that its officers,
directors and governing board members are also broadly representative of
the educational, cultural and civic groups in Holbrook. Thus, we seek
comment on whether CTE can meet this eligibility burden.

13\. Accordingly, we seek comments on the Joint Petition to Amend the
Television Table of Allotments proposing amendment to the TV Table of
Allotments, Section 73.606(b) of the Commission's rules, for the
communities listed below to read as follows:

[Channel Number]{.underline}[^12]

[City Present Proposed]{.underline}

Holbrook, Arizona 11+, \*18+ \*11+, \*18+

Phoenix, Arizona 3+, 5-, \*8+, 10-, 15-, 3+, 5-, \*8+, 10-, 15-, 21, 33,
\*39, 45, 61 21, 33, 39, 45, 61

14\. Interested parties may file comments on or before October 15, 2004
and reply comments on or before November 30, 2004. An original and four
copies of each filing must be sent to the Commission's Secretary,
Marlene H. Dortch, Office of the Secretary, Federal Communications
Commission, 445 Twelfth Street, S.W., TW-A325, Washington, D.C. 20554.
Additionally, a copy of such comments should be served on Telemundo's
and CTE's counsel, as follows:

Margaret L. Tobey, Esq.

Morrison & Foerster LLP

2000 Pennsylvania Avenue, N.W.

Suite 5500

Washington, D.C. 20006

(Counsel for NBC Telemundo Phoenix, Inc.)

Robert L. Olender, Esq.

Koerner & Olender, PC

5809 Nicholson Lane

Suite 124

North Bethesda, Maryland 20852

(Counsel for Community Television Educators, Inc.)

Any comment which is not served on the petitioners constitutes an *ex
parte* presentation and shall not be considered in the proceeding. Any
reply comment which is not served on the person(s) who filed the
comment, to which the reply is directed, constitutes an *ex parte*
presentation and shall not be considered in the proceeding.

15\. For further information concerning this proceeding, contact Joyce
Bernstein, Media Bureau, (202) 418-1600. For purposes of this restricted
notice and comment rule making proceeding, members of the public are
advised that no *ex parte* presentations are permitted from the time the
Commission adopts this Memorandum Opinion and Order and Notice of
Proposed Rule Making until the proceeding has been decided and such
decision is no longer subject to reconsideration by the Commission or
review by any court. An *ex parte* presentation is not prohibited if
specifically requested by the Commission or staff for the clarification
or adduction of evidence or resolution of issues in the proceeding.
However, any new written information elicited from such a request or a
summary of any new oral information shall be served by the person making
the representation upon the other parties to the proceeding unless the
Commission specifically waives this service requirement.

16\. Interested parties may view the Joint Petition to Amend the
Television Table of Allotments filed by Telemundo and CTE on August 7,
2003 at <http://www.fcc.gov/mb/video/Phoenix.pdf> and at the KPHZ(TV)
and KDTP(TV) main studios. The full text of the document, and comments
and reply comments filed in this proceeding, are available for public
inspection and copying during regular business hours at the FCC
Reference Center, Portals II, 445 Twelfth Street, S.W., Room 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, TTY
(202) 418-2555, or <bcline@fcc.gov>. The Joint Petition, as well as
comments and reply comments filed in this proceeding, may also be
purchased from the Commission's duplicating contractor, Best Copy and
Printing, Inc., Portals II, 445 Twelfth Street, S.W., Room CY-B402,
Washington, D.C. 20554, telephone 1-800-378-3160, or via email at
www.bcpiweb.com.

17\. This document is available in alternative formats (computer
diskettes, large print, audio cassette, and Braille). Persons who need
documents in such formats may contact Brian Miller at (202) 418-7426,
TTY (202) 418-7365, or <bmillin@fcc.gov>.

18\. The Commission has determined that the relevant provisions of the
Regulatory Flexibility Act of 1980 do not apply to rule making
proceedings to amend the TV Table of Allotments, Sections 73.606(b) and
73.622(b), of the Commission's rules. *See Certification that Sections
603 and 604 of the Regulatory Flexibility Act Do Not Apply to Rule
Making to Amend Sections 73.606(b) of the Commission's Rules*, 46 FR
11549, February 9, 1981.

**ORDERING CLAUSE**

19\. 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 of 1934, as amended, 47 U.S.C. §§ 151, 152(a),
154(I), 303, 307 and 309, the Memorandum Opinion and Order and Notice of
Proposed Rulemaking is ADOPTED.

FEDERAL COMMUNICATIONS COMMISSION

Barbara A. Kreisman

Chief, Video Division

Media Bureau

[^1]: Because a construction permit had not been issued for either
    station when the *Sixth Report and Order* in MM Docket 87-269 was
    adopted in 1997, neither station was assigned a paired digital
    channel*. See Advanced Television Systems and Their Impact upon the
    Existing Television Broadcast Service, Sixth Report and Order*, 12
    FCC Rcd 14588, 14639 (1997).

[^2]: *See Fostering Expanded Use of UHF Television Channels*, 41 FCC
    Rcd 1077, 1097 (1965).

[^3]: *Amendment of Section 73.606(b), Table of Assignments, TV
    Broadcast Stations (Holbrook, Arizona)*, 1 FCC Rcd 1065 (MMB 1986).

[^4]: *Sixth Report and Order*, 12 FCC Rcd at 14639.

[^5]: Telemundo further states that "the station has never operated
    profitably and could not do so in the foreseeable future. Thus, it
    is virtually certain that the station, operating commercially, will
    not survive."

[^6]: As a Class A television station, KDRX-CA is entitled to primary
    status vis-à-vis other television stations, including full power
    stations. *See Establishment of a Class A Television Service*, 15
    FCC Rcd 6355, 6381-87 (2000).

[^7]: *See Amendments to the Television Table of Assignments to Change
    Noncommercial Educational Reservations*, 59 RR 2d 1455 (1986),
    *recon. denied*, 3 FCC Rcd 2517 (1988), *aff\'d sub nom., Rainbow
    Broadcasting Co. v. FCC*, 949 F.2d 405 (D.C. Cir. 1991) (*Intraband
    Television Channel Exchanges*).

[^8]: *Compare Boca Raton and Lake Worth, Florida*, 8 FCC Rcd 6189
    (1993)(Communities are located approximately 20 miles apart);
    *Clermont and Cocoa, Florida*, 5 FCC Rcd 6566 (1990)(Communities
    located 64 miles apart and upon channel exchange, both stations
    would serve a substantial portion of the other station's service
    area).

[^9]: Phoenix is located in Maricopa County, which has a population of
    3,072,149. Holbrook is located in Navajo County, with a population
    of 97,470. *See* http://www.census.gov.

[^10]: *See Sixth Report and Order*, 41 FCC at 167-173.

[^11]: *Id*. at 169.

[^12]: As discussed above, and pursuant to the *Sixth Report and Order*,
    the allotment of Channel \*18+ in Holbrook cannot be applied for and
    will be deleted at the end of the digital transition.