**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

+----------------------------------+----+------------------------------+
| In the Matter of                 | *  | File No. BPED-19941103MC     |
|                                  | *) |                              |
| **American Family Association**  | ** | Facility ID No. 1684         |
|                                  |    |                              |
| For a Construction Permit for a  | *  | File No. BPED-19951023IB     |
| New Noncommercial Educational FM | *) |                              |
| Station at                       | ** | Facility ID No. 19527        |
|                                  |    |                              |
| Bristol, Virginia                | *  | File No. BPED-19951108NC     |
|                                  | *) |                              |
| **Emory and Henry College**      | ** | Facility ID No 78467         |
|                                  |    |                              |
| For a Minor Modification to      | *  | NCE Group 94114E             |
| Noncommercial Educational FM     | *) |                              |
| Station WEHC(FM),                | ** |                              |
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| Emory, Virginia                  | *  |                              |
|                                  | *) |                              |
| **Virginia Tech Foundation,      | ** |                              |
| Inc.**                           |    |                              |
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| For a Construction Permit for a  | *) |                              |
| New Noncommercial Educational FM | ** |                              |
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| Bristol, Virginia                | *) |                              |
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+----------------------------------+----+------------------------------+

**MEMORANDUM OPINION AND ORDER**

**Adopted: December 8, 2006 Released: December 14, 2006**

By the Commission:

###  1. The Commission has before it the captioned, mutually exclusive applications of American Family Association ("AFA"), Emory & Henry College ("EHC"), and Virginia Tech Foundation, Inc. ("VTF") for a new noncommercial educational ("NCE") FM station construction permit. AFA and VTF propose to build new stations. EHC applied for a minor change to the licensed facilities of WEHC(FM), Emory, Virginia. The three applications are known collectively as NCE Group 94114E.

I.  **THRESHOLD FAIR DISTRIBUTION ANALYSIS**

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2.  When mutually exclusive applications for permits to construct new
    NCE FM stations propose to serve different communities, the rules
    require the Commission to make a threshold determination pursuant to
    Section 307(b) of the Communications Act of 1934, as amended of
    whether grant of any of the applications would best further the
    fair, efficient, and equitable distribution of radio service among
    communities.[^1] For the reasons below we determine that a fair
    distribution analysis is not decisive in the present proceeding.[^2]

3.  An NCE-FM applicant is eligible to receive a Section 307(b)
    preference if it would provide a first or second reserved channel
    NCE aural service (in the aggregate) to at least ten percent of the
    population, provided that this constitutes at least 2,000 people,
    within the proposed station's 60 dBu contour.[^3] If more than one
    applicant in a mutually exclusive group qualifies for a preference,
    we compare first service population coverage totals.[^4] An
    applicant will receive a dispositive fair distribution preference by
    proposing to provide a first NCE aural service to at least 5,000
    more potential listeners than the next highest applicant's first
    service total.[^5] If no applicant is entitled to a first service
    preference, we will consider combined first and second NCE aural
    service population totals and apply the same 5,000 listener
    threshold. AFA, EHC, and VTF each certifies that it would not
    qualify for a Section 307(b) preference because it would not provide
    a new first or second service to ten percent of the population
    within its respective service area. All applicants in this group
    must, therefore, proceed to a point hearing.

**II. POINT SYSTEM SELECTION PROCESS**

4.  The Commission compares mutually exclusive groups of NCE-FM
    applications under the point system set forth in Section 73.7003 of
    the Commission's Rules[^6] if, as a threshold matter, no applicant
    is entitled to a decisive preference under the fair distribution of
    service goals enunciated in Section 307(b). The NCE point system
    awards a maximum of seven merit points based on four distinct
    criteria.[^7] First, three points are awarded to applicants which
    have been local and established for at least two years. Applicants
    with a headquarters, campus, or 75 percent of board member
    residences within 25 miles of the reference coordinates of the
    community of license are considered local.[^8] Governmental units
    are considered local within their area of jurisdiction. Second, two
    points are awarded for local diversity of ownership if the principal
    community contours of an applicant's proposed station and any other
    station in which any party to the application holds an attributable
    interest do not overlap. The applicant's governing documents also
    must include a provision to maintain that diversity in the future.
    Third, two points will be awarded for certain state-wide networks
    providing programming to accredited schools, which cannot claim a
    credit for local diversity of ownership. Fourth, an applicant making
    the best technical proposal in the group may receive one or two
    points. An applicant receives one point if its proposed area and
    population coverage is ten percent greater than the next best
    proposal, or two points if it is 25 percent greater than the next
    best proposal. The tentative selectee is the applicant with the
    highest score. [^9] If there is a tie, the tiebreaker criteria in
    Section 73.7003(c) are applied.

5.  *Established Local Applicant.* AFA certifies that it is not entitled
    to any points for this criterion. Therefore, AFA receives no points
    under this criterion.

6.  EHC states that it is a college founded in 1836 with a campus in
    Emory, Virginia. EHC thus certifies that for a period of at least
    two years prior to the snap shot date, it has existed as an
    educational institution or organization and has been physically
    headquartered, has had a campus, or has had 75 percent of its board
    members residing within 25 miles of the coordinates of Emory,
    Virginia. It also certifies that it has placed documentation
    supporting its certification in a local public file and also has
    submitted that documentation to the Commission. EHC will receive
    three points as an established local applicant.

7.  VTF states that it is a non-profit corporation established as the
    "support organization" for the Virginia Polytechnic Institute and
    State University (the "University"). VTF states that the University
    is operated by the State of Virginia and therefore qualifies for
    localism points in Bristol, Virginia as a government entity
    operating within its own jurisdiction. VTF alternatively claims
    that, since 1998, the University has operated an extended campus at
    the Southwestern Virginia Higher Education Center in Abingdon,
    Virginia, within 25 miles of the reference coordinates for the
    proposed Bristol station. On these two bases, VTF certifies that it
    is eligible for points as an established local applicant. It also
    certifies that it has placed documentation supporting its
    certification in a local public file and also has submitted that
    documentation to the Commission.

8.  VTF recognizes that its certification is based on the qualifications
    of the University and that VTF would not independently qualify as an
    established local entity. Nevertheless, VTF maintains that the
    University's qualifications should be imputed to VTF due to the
    unique relationship between the two. Specifically, VTF states that
    its "[sole purpose for existence]{.underline} remains to financially
    support the University and its educational programs and
    campuses."[^10] VTF further explains that the U.S. Tax Code treats
    donations to educational foundations and to universities similarly
    and that educational foundations are used to ensure that charitable
    gifts to state universities do not become subject to the direction
    of state legislatures for purposes unintended by the donors.[^11]
    VTF argues the Commission would not dilute the local entity
    requirement by awarding localism points to VTF because the ruling
    would apply to a "very narrow" class of corporations, *i.e.,*
    corporations organized pursuant to Section 170(b)(1)(A)(iv) of the
    Tax Code to support public colleges and universities that rely on a
    state legislature for funding.

9.  We find that VTF does not qualify for points as an established local
    applicant, as defined by our rules, and will receive no points for
    this criterion.[^12] VTF is not local in Bristol because it is a
    corporation with headquarters located in the distant community of
    Roanoke, Virginia, and 75 percent of its board members have not been
    shown to reside within 25 miles of the reference coordinates of
    Bristol. Established local applicants receive the largest percentage
    of points, reflecting the importance of localism in NCE
    broadcasting. The Commission purposefully adopted a narrow
    definition of "local" entities to increase the likelihood that
    organizations most knowledgeable, responsive, and accountable to the
    local community would be awarded licenses, to keep localism points
    meaningful, and to avoid potential abuses.[^13] On reconsideration
    of the NCE point system rules, the Commission rejected proposals to
    expand that definition.[^14]

10. The Commission recognizes the close relationship between VTF and the
    University, the financial concerns underlying that relationship, and
    the centrality of the University to VTF's mission. Even if we assume
    that the University could have received points in its own right,
    however, the University is not the applicant in the present
    proceeding. We decline to impute localism qualifications to a
    separately organized, non-local corporation. VTF's taxation and
    fundraising arguments are not relevant to our localism
    determination. VTF relies on a tax provision which states that
    charitable donations to a variety of entities, including
    universities and corporations like VTF, are deductible. The tax code
    does not, however, establish that a university and a corporation
    organized to provide financial support to it are considered one and
    the same for purposes relevant to our determination here. Many NCE
    applicants are eligible to receive tax deductible donations, but
    that fact is immaterial to whether the organization is local. With
    respect to fundraising, VTF argues that, absent VTF's services, the
    University might run afoul of Commission fundraising policies. The
    scenario that it presents \-- that the state legislature could
    divert monies raised through fundraising activities \-- is simply
    not relevant to the criteria which the Commission has established to
    promote localism in NCE broadcasting.[^15]

11. *Diversity of Ownership.* AFA is currently the licensee of FM
    translator station W213AN, Bristol, Virginia which has a principal
    community contour which would overlap that of the proposed station.
    In accordance with policy enunciated when we adopted the point
    system[^16] and reflected as a choice on FCC Form 340-Supp*,* AFA
    seeks to exclude the translator based on a pledge that it will
    request cancellation of the translator authorization upon the
    commencement of operation of the proposed full service station.[^17]
    AFA certifies that, with the exception of the translator for which
    it will seek cancellation, the principal community contour of its
    proposed station does not overlap the principal community contour of
    any other radio station in which any party to the application has an
    attributable interest, that its governing documents require that
    such diversity be maintained, and that it has placed documentation
    of this diversity in its local public inspection file and submitted
    copies to the Commission. Accordingly, AFA will receive two points.

12. EHC and VTF each certifies that the principal community contour of
    its proposed station does not overlap the principal community
    contour of any other radio station in which any party to the
    application has an attributable interest, that its governing
    documents require that such diversity be maintained, and that it has
    placed documentation of this diversity in its local public
    inspection file and submitted copies to the Commission. Accordingly,
    EMF and VTF will receive two points each.

13. *Statewide Networks.* None of the applicants claim points as a
    statewide network.

14. *Technical Parameters.* AFA's proposed 60 dBu contour encompasses
    323 square kilometers with a population of 61,844. The new area
    within EHC's modified 60 dBu contour encompasses 190 square
    kilometers with a population of 4,855.[^18] VTF's proposed 60 dBu
    contour encompasses 360 square kilometers with a population of
    65,347. Technical points are awarded only to the applicant with the
    best technical proposal in the group, which must serve at least ten
    percent more area and population than the second best proposal. No
    applicant in the present group qualifies for points under this
    criterion.

15. *Total*. Accordingly, AFA and VTF are entitled to 2 points, and EHC
    is entitled to 5 points. EHC is the tentative selectee in group
    94114E. A tiebreaker analysis is not necessary.

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III. **ACCEPTABILITY STUDY**

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16. Once we select a tentative selectee pursuant to our comparative
    selection process, we consider whether the tentative selectee's
    application has defects.[^19] If found acceptable, the tentative
    selectee's application is placed on a Broadcast Applications Public
    Notice, and petitions to deny may be filed within 30 days following
    release of the public notice. EHC's application was already accepted
    for filing on March 1, 1996, pursuant to our former A/B cut-off
    procedures. EHC has made no subsequent engineering amendments.

17. Based on the record before us, EHC appears to be fully qualified to
    modify the license of its existing NCE-FM station at Emory,
    Virginia. We tentatively conclude that the grant of its application
    would serve the public interest, convenience and necessity.

**IV. ORDERING CLAUSE**

18. Accordingly, IT IS ORDERED, That Emory & Henry College is
    TENTATIVELY SELECTED to be awarded a construction permit to modify
    WEHC(FM), Emory, Virginia. We direct the staff to issue a public
    notice announcing that EHC is the tentative selectee in NCE Group
    94114E and establishing a deadline thirty (30) days thereafter for
    the filing of petitions to deny.[^20] If, after the petition to deny
    period has run, there is no substantial and material question
    concerning the grantability of the tentative selectee's application,
    we direct the staff TO DISMISS the other mutually exclusive
    applications and TO GRANT the application of Emory & Henry College
    (File No. BPED-19951023IB) CONDITIONED UPON its compliance with
    Section 73.7005 of the Commission's rules, which sets forth a
    holding period for applicants that are awarded permits by use of a
    point system.

FEDERAL COMMUNICATIONS COMMISSION

Marlene H. Dortch

Secretary

[^1]: *See* 47 U.S.C. § 307(b); 47 C.F.R. § 73.7002(a).

[^2]: A Section 307(b) analysis is ordinarily conducted at the staff
    level, because the Media Bureau has delegated authority to make
    307(b) determinations in NCE cases. *See* *Reexamination of the
    Comparative Standards for Noncommercial Educational Applicants*, 15
    FCC Rcd 7386, 7397 (2000), *partially reversed on other grounds*,
    *NPR v. FCC*, 254 F.3d 226 (DC Cir. 2001) ("*NCE Order*"). *See
    also* 47 C.F.R. § 0.283. In contrast, the *NCE Order* noted that the
    point system analysis conducted when Section 307(b) is not
    determinative is considered a simplified "hearing" for purposes of
    47 U.S.C. § 155(c)(1). *See NCE Order*, 15 FCC Rcd at 7420. In the
    instant proceeding, Section 307(b) factors do not entirely resolve
    all applications in the group and the Commission must consider the

    (continued from previous page)

    remaining applications in a point hearing. The staff therefore has
    referred the Section 307(b) issue to the Commission for consolidated
    analysis.

[^3]: *See* 47 C.F.R. § 73.7002(b). With respect to population
    information, applicants were to use the 2000 Census data, if
    available by June 4, 2001. *See* "Supplements and Settlements to
    Pending Closed Groups of Noncommercial Educational Broadcast
    Applications Due by June 4, 2001," *Public Notice*, 16 FCC Rcd 6893
    (MB Mar. 22, 2001). Applicants were also to base their "fair
    distribution" analysis on the "snap shot" date of June 4, 2001,
    which is applicable unless the applicant subsequently makes
    engineering changes that would diminish its comparative position.
    *Id.* In this case, none of the applicants has made such engineering
    changes. In addition, each applicant timely supplemented its
    application with a Section 307(b) showing; each purports to be based
    on 2000 census data and a "snap shot" date of June 4, 2001.

[^4]: *See* 47 C.F.R. § 73.7002(b). *See also* "Deadline for NCE
    Settlements and Supplements Extended to July 19, 2001; Date for
    Calculating Comparative Qualifications Remains June 4, 2001,"
    *Public Notice*, 16 FCC Rcd 10892, 10893 (MB May 24, 2001).

[^5]: *Id.*

[^6]: 47 C.F.R. § 73.7003.

[^7]: ^?^ *Id.* at § 73.7003(b).

[^8]: An applicant relying on local board residence to claim points as
    an established local applicant must demonstrate that its governing
    documents*, e.g.* by-laws, require that such localism be maintained
    despite board changes. *See* 47 C.F.R. § 73.7003(b)(1); *NCE Order,*
    15 FCC Rcd at 7426.

[^9]: The applicants supplemented their applications with point
    information by July 19, 2001, as required. *See Public Notice,*
    *Deadline for NCE Settlements and Supplements Extended to July
    19,2001,* 16 FCC Rcd 10892 (MMB May 24, 2001). All points are
    considered as of a June 4, 2001 "snap shot" date except for best
    technical proposal, which is calculated as of the group's cut-off
    date or April 21, 2000, whichever is earlier. *See Comparative
    Standards for Noncommercial Educational Applicants*, 16 FCC Rcd
    5074, 5086 (2001) (subsequent history omitted) ("*NCE MO&O*).

[^10]: *See* VTF's FCC Form 340-Supp., Exhibit B (emphasis in original).

[^11]: *Id.* (citing 26 U.S.C. § 170(b)(1)(A)(iv) and BRUCE R. HOPKINS,
    THE LAW OF TAX EXEMPT ORGANIZATIONS, sixth edition 369 (1992)). VTF
    states that "In the Commonwealth of Virginia, the Legislature's
    Appropriations Act takes precedence over the provisions of the
    Virginia Code." *Id.* It further states that it is "important that
    VTF is organized as an entity separate from the University" so that
    donations "are beyond the reach of the Commonwealth and its
    legislature." *Id.* VTF maintains that its relationship with the
    University fosters compliance with Commission on-air fundraising
    policies because on-air fundraising dollars might otherwise flow to
    the legislature for other purposes. *See Commission Policy
    Concerning the Noncommercial Nature of*

    (continued from previous page)

    *Educational Broadcasting Stations,* 97 FCC Rcd 255 (1984)
    ("noncommercial stations are prohibited from conducting any
    fundraising activity . . . designed to raise support for any entity
    other that the station itself.").

[^12]: *See* 47 C.F.R. § 73.7000.

[^13]: *Id.* at 5091.

[^14]: *See NCE MO&O*, 16 FCC Rcd at 5091-93.

[^15]: Even had we accepted VTF's position and considered it an
    established local applicant, VTF would not have been the tentative
    selectee in this proceeding. Under those circumstances, VTF would
    have been tied with EHC for 5 points. VTF would have lost the
    tiebreaker because it has more existing authorizations than EHC.
    *See* 47 C.F.R. § 73.7003(c).

[^16]: *See NCE MO&O,* 16 FCC Rcd at 5102-03 (an FM translator licensee
    "that, in the particular application involved, is seeking a full
    service station to replace its existing translator station(s) . . .
    may exclude, on that application, any existing translator station
    that will cease operating when the proposed full service station
    commences operation.").

[^17]: AFA's FCC Form 340-Supp., Question IV(2)(b) and Exhibit 2.

[^18]: Modification applications report only the new area proposed. They
    must exclude any area with the station's existing service area.

[^19]: If a tentative selectee's application is found unacceptable, it
    is returned to the applicant. The applicant is then given one
    opportunity to submit a minor curative amendment, provided that the
    amendment is minor and that the application, as amended, has the
    same number of points as originally claimed, or more than the points
    claimed by the next highest applicant. *See* 47 C.F.R. §
    73.3522(b)(1).

[^20]: *See* 47 C.F.R. § 73.7004. If any applicant previously raised
    issues against the tentative selectee, it must refile its objections
    within this thirty (30) day period.