Before the

**Federal Communications Commission**

**Washington, D.C. 20554**

In the Matter of )

)

Applications of ) Fee Control Nos. 9701108195067002 &

Wade Communications, Inc., ) 9511288195347001 &

Ellen R. Evans d/b/a Heartland ) 9304268195092005

Communications, and )

B.R. Clayton and Martha S. Clayton d/b/a )

Middleton Radio )

**MEMORANDUM OPINION AND ORDER**

Adopted: November 9, 2001 Released: November 16, 2001

By the Commission:

## I. INTRODUCTION

1\. The Commission has before it a joint Application for Review, filed
by Wade Communications, Inc., Ellen R. Evans d/b/a Heartland
Communications, and B.R. Clayton and Martha S. Clayton d/b/a Middleton
Radio (collectively, "Applicants"). The Applicants seek review of three
decisions of the Office of Managing Director denying the Applicants'
requests for refunds of filing fees.[^1] For the reasons below, we deny
the Application for review.

######### II. BACKGROUND

2\. Each of the three Applicants, in separate proceedings, had filed an
application for an FM radio station construction permit, located
respectively in New York, Missouri, and Tennessee. Each application was
mutually exclusive with other applications.[^2] All of the applications
had been filed prior to the enactment of the Balanced Budget Act of
1997, which amended section 309(j) of the Communications Act ("Act"), 47
U.S.C. 309(j), to require competitive bidding, rather than comparative
hearings, to award licenses to mutually exclusive applicants for
commercial broadcast licenses.[^3] However, the Balanced Budget Act also
amended the Act to add a new section 309(l) that authorized the
Commission, in its discretion, to use competitive bidding or comparative
hearings to award licenses to pending mutually exclusive broadcast
applicants if the competing applications had been filed prior to July 1,
1997.[^4] In addition, section 309(l) provided for an 180-day period
during which such pre-July 1 broadcast applicants could enter into
settlement agreements that would resolve mutual exclusivity and be
entitled to mandatory waivers of FCC rules limiting the amount of
settlement payments between the applicants.[^5] Each of the instant
Applicants took advantage of these provisions, and in January 1998,
filed settlement agreements with the Commission. The agreements were
subsequently approved and resulted in dismissal of the Applicants'
applications in April and September 1998, and award of each license to a
remaining applicant.[^6]

3\. Subsequent to the filing of the Applicants' settlement agreements,
the Commission completed a rulemaking proceeding in August, 1998, in
which it determined that any remaining pre-July 1, 1997 broadcast
applications should be awarded by competitive bidding.[^7] Specifically,
it noted that "despite the 180-day period during which we waived our
settlement rules as required by Section 309(l)(3), there are
approximately 150 proceedings involving more than 600 pre-July 1, 1997
mutually exclusive applications that remain to be decided."[^8]
Concluding that the use of auctions would "generally expedite service
and better serve the public interest in these cases, the Commission
concluded that "auctions will generally be fairer and more expeditious
than deciding the pending mutually exclusive applications filed before
July 1, 1997 through the comparative hearing process."[^9] The
Commission stated, however, that "pending applicants in all comparative
licensing cases subject to resolution by competitive bidding pursuant to
Section 309(l) may file a pleading disavowing intent to participate in
the auction and seek dismissal of their applications."[^10] The
Commission further stated that, "\[o\]nce dismissal of any such
application is final, we will entertain requests for refunds of any
hearing and filing fees actually paid by such applicants."[^11] Finally,
in contrast to the *NPRM*, which had proposed that such refunds would be
paid "once the grant of the construction permit to the winning bidder is
final and the license has been paid for in full,"[^12] the Commission
determined that refunds would be paid "once dismissal of any such
application is final ...."[^13]

4\. On December 4, 1998, Applicants filed requests for refund of their
filing fees. Applicants stated that their applications were "subject to
section 309(l)" and they "elected not to have the disposition of their
applications determined by competitive bidding."[^14] Applicants stated
that they were therefore entitled to refunds under the *First Report and
Order*.[^15]

5\. The Office of Managing Director, by the Chief Financial Officer,
denied Applicants' requests. The Chief Financial Officer found that the
Applicants were not entitled to refunds because their applications had
been resolved by negotiated settlements and thus did not qualify for the
refunds authorized in the *First Report and Order*.[^16]

######### III. DISCUSSION

6\. In the Application for Review, Applicants argue that the Office of
Managing Director erred in not refunding the filing fees in these
matters and the decisions should be reversed.[^17] For the reasons
below, we deny the Application for Review.

7\. The Applicants first argue that nothing in the *First Report and
Order* suggests they are not eligible for the refunds of filing fees
that they have requested.[^18] Applicants further argue that "the *First
Report and Order* gave no hint that entering into a settlement agreement
would preclude an applicant of obtaining a refund of its filing
fee."[^19] We disagree. As indicated in paragraph 3 above, both the
general context and specific language of the *First Report and Order*
clearly state our intention that refunds of filing fees would only apply
to the remaining pre-July 1, 1997 applicants for licenses or permits who
had not resolved mutual exclusivity through negotiated agreements during
the 180-day period and whose pending mutually exclusive applications
would therefore be resolved pursuant to our decision to use competitive
bidding.[^20] The permits for which Applicants applied, in contrast,
were not awarded by auction but pursuant to the settlement agreements
into which the Applicants separately entered prior to the Commission's
decision in the *First Report and Order*.

8\. Similarly, Applicants argue that their requests for refunds should
be granted because they "anticipated receiving such refunds, based on
the clear language of the *First Report and Order*, and took that
expectation into consideration in determining to request dismissal of
their applications."[^21] At the outset, none of the Applicants could
have so relied on the *First Report and Order* because they entered into
and filed their settlement agreements with the Commission before we
adopted it on August 6, 1998.[^22] In any event, as discussed above,
nothing in the *First Report and Order* indicated that refunds of filing
fees would be granted to applicants that had already settled and
resolved mutual exclusivity during the 180-day period; rather the
relevant language refers only to remaining, pending mutually exclusive
application proceedings for which it was necessary to award the licenses
by auction. Nor could Applicants or others have relied on the *Notice of
Proposed Rulemaking* in that proceeding ("*NPRM*"), 12 FCC Rcd 22363
(1997). As noted above, in the *NPRM,* our tentative proposal was to
refund filing fees to applicants choosing not to participate in the
related auction, with "*all* such refunds \[to\] be paid once the grant
of the construction permit to the *winning bidder* is final."[^23] Our
proposed relief was clearly limited to situations in which the
construction permit at issue was awarded by auction, not pursuant to a
settlement agreement.

9\. Finally, the Applicants argue that the Commission's rationale for
granting refunds applies with equal weight to the Applicants, pointing
to the Commission's statement in the First Report and Order that the
"extraordinary step" of refunding filing fees was "in recognition of the
fact that these applicants might not have filed their applications if
they had known the permit would be awarded by competitive bidding."[^24]
We note, however, that any applicants that settled within the 180-day
period were entitled to negotiate payments from the other mutually
exclusive applicants that would cover their costs, including their
filing fees, and moreover, pursuant to the statutorily mandated waiver
requirement in section 309(l), could also negotiate payment amounts that
exceeded their costs.[^25] Therefore, any equities that might apply to
non-settling applicants and warrant refund of filing fees do not apply
with the same force to these applicants.[^26]

10\. After careful review of the issues raised in the Application for
Review, we do not find any basis for modifying the decision of the
Office of Managing Director denying Applicants' requests for refunds of
filing fees.

######### IV. ORDERING CLAUSES

ACCORDINGLY, IT IS ORDERED that the Application for Review, filed on
December 20, 1999, by Wade Communications, Inc., Ellen R. Evans d/b/a
Heartland Communications, and B.R. Clayton and Martha S. Clayton d/b/a
Middleton Radio IS DENIED.

FEDERAL COMMUNICATIONS COMMISSION

Magalie Roman Salas

Secretary

[^1]: *See* letters dated November 18, 1999, from Mark A. Reger, Chief
    Financial Officer, to Timothy K. Brady, Esq.

[^2]: *See* Request for Refund of Filing Fee filed on December 2, 1998,
    by Timothy K. Brady, attorney for Wade Communications, Inc, ("Wade
    Request") at p.1; Request for Refund of Filing Fee filed on December
    2, 1998, by Timothy K. Brady, attorney for Ellen R. Evans d/b/a
    Heartland Communications, ("Evans Request") at p.1; Request for
    Refund of Filing Fee filed on December 2, 1998, by Timothy K. Brady,
    attorney for B.R. Clayton and Martha S. Clayton d/b/a Middleton
    Radio, ("Clayton Request") at p.1.

[^3]: *Id*.

[^4]: 47 U.S.C. § 309(l).

[^5]: *Id*.

[^6]: *See* Wade Request, at p.2 (settlement agreement filed for
    Commission approval on January 30, 1998; approval granted March 3,
    1998); Evans Request, at p.2 (settlement agreement filed for
    Commission approval on January 28, 1998; approval granted April 16,
    1998); Clayton Request, at p.2 (settlement agreement filed for
    Commission approval on January 30, 1998; approval granted September
    21, 1998).

[^7]: *See* *First Report and Order in the matter of* *Implementation of
    Section 309(j) of the Communications Act \-- Competitive Bidding for
    Commercial Broadcast and Instructional Television Fixed Service
    Licenses* ("*First Report and Order*"), 13 FCC Rcd 15920, 15931-32
    (1998).

[^8]: *See First Report and Order*, 13 FCC Rcd at 15933.

[^9]: *Id*.

[^10]: *Id*. at 15957.

[^11]: *Id*.

[^12]: 12 FCC Rcd 22363, 22370-71 (1997).

[^13]: 13 FCC Rcd 15920, 15957.

[^14]: Wade Request, at p.1; Evans Request, at p.1; Clayton Request, at
    p.1.

[^15]: *Id*. at 2.

[^16]: *See* letters dated November 18, 1999, from Mark A. Reger, Chief
    Financial Officer, to Timothy K. Brady, Esq.

[^17]: Application for Review at 5.

[^18]: *Id*. at 3.

[^19]: *Id*. at 4-5

[^20]: 13 FCC Rcd 15920, 15957.

[^21]: Application for Review at 5.

[^22]: *See* Wade Request, at p.2 (settlement agreement filed on January
    30, 1998); Evans Request, at p.2 (settlement agreement filed on
    January 28, 1998); Clayton Request, at p.2 (settlement agreement
    filed on January 30, 1998).

[^23]: 12 FCC Rcd 22363, 22370-71 (1997) (emphasis added).

[^24]: 13 FCC Rcd 15920, 15957-58.

[^25]: 12 FCC Rcd 22363, 22375.

[^26]: *See* *also* Federal Communications Commission, Public Notice,
    Report No. 44629A, Notice of Mass Media Bureau Action on AM and FM
    Broadcast Settlement Agreements and Applications (Dec. 10, 1999)
    (granting request of short-form applicants to settle, but rejecting
    request for refund of filing fees as outside scope of First Report
    and Order refund provisions and noting that parties to settlement
    are permitted to reimburse dismissing applicants for previously paid
    application filing fees.)