[Federal Register Volume 75, Number 42 (Thursday, March 4, 2010)]
[Rules and Regulations]
[Pages 9797-9808]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-3491]


-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 73

[MB Docket No. 09-52; FCC 10-24]


Policies To Promote Rural Radio Service and To Streamline 
Allotment and Assignment Procedures

AGENCY: Federal Communications Commission.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: In this document, the Commission adopted a number of 
procedures, procedural changes, and clarifications of existing rules 
and procedures, designed to promote ownership and programming 
diversity, especially by Native American tribes, and to streamline 
processing of AM and FM auction applications.

DATES: Effective April 5, 2010.

FOR FURTHER INFORMATION CONTACT: Peter Doyle, Chief, Media Bureau, 
Audio Division, (202) 418-2700 or <a href="/cdn-cgi/l/email-protection#4414213021366a002b3d2821042227276a232b32"><span class="__cf_email__" data-cfemail="f1a194859483dfb59e889d94b1979292df969e87">[email protected]</span></a>; Thomas 
Nessinger, Attorney-Advisor, Media Bureau, Audio Division, (202) 418-
2700 or <a href="/cdn-cgi/l/email-protection#7024181f1d11035e3e150303191e171502301613135e171f06"><span class="__cf_email__" data-cfemail="693d010604081a47270c1a1a00070e0c1b290f0a0a470e061f">[email protected]</span></a>. For additional information concerning 
the Paperwork Reduction Act information collection requirements 
contained in this document, contact Cathy Williams at 202-418-2918, or 
via the Internet at <a href="/cdn-cgi/l/email-protection#480b293c2031661f2124242129253b082e2b2b662f273e"><span class="__cf_email__" data-cfemail="a4e7c5d0ccdd8af3cdc8c8cdc5c9d7e4c2c7c78ac3cbd2">[email protected]</span></a>.

[[Page 9798]]


SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's First 
Report and Order (First R&O), FCC 10-24, adopted January 28, 2010, and 
released February 3, 2010. The full text of the First R&O is available 
for inspection and copying during regular business hours in the FCC 
Reference Center, 445 Twelfth Street, SW., Room CY-A257, Portals II, 
Washington, DC 20554, and may also be purchased from the Commission's 
copy contractor, BCPI, Inc., Portals II, 445 Twelfth Street, SW., Room 
CY-B402, Washington, DC 20554. Customers may contact BCPI, Inc. via 
their Web site, http://www.bcpi.com, or call 1-800-378-3160. This 
document is available in alternative formats (computer diskette, large 
print, audio record, and Braille). Persons with disabilities who need 
documents in these formats may contact Brian Millin at (202) 418-7426 
(voice), (202) 418-7365 (TTY), or via e-mail at <a href="/cdn-cgi/l/email-protection#e8aa9a818986c6a58184848186a88e8b8bc68f879e"><span class="__cf_email__" data-cfemail="7331011a121d5d3e1a1f1f1a1d331510105d141c05">[email protected]</span></a>.

Paperwork Reduction Act of 1995 Analysis

    This First Report and Order (First R&O) adopts new or revised 
information collection requirements, subject to the Paperwork Reduction 
Act of 1995 (PRA) (Pub. L. 104-13, 109 Stat. 163 (1995) (codified in 44 
U.S.C. 3501-3520)). These information collection requirements will be 
submitted to the Office of Management and Budget (OMB) for review under 
Section 3507(d) of the PRA. The Commission will publish a separate 
notice in the Federal Register inviting comment on the new or revised 
information collection requirements adopted in this document. The 
requirements will not go into effect until OMB has approved them and 
the Commission has published a notice announcing the effective date of 
the information collection requirements. In addition, we note that 
pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 
107-198, see 44 U.S.C. 3506(c)(4), we previously sought specific 
comment on how the Commission might ``further reduce the information 
collection burden for small business concerns with fewer than 25 
employees.''

Synopsis of Order

    With this First R&O, the Commission addresses some, but not all, of 
the proposals set forth in the Rural NPRM. It adopts, with 
modification, its proposal in the Rural NPRM for a Tribal Priority, as 
well as a number of other proposals codifying or clarifying auction 
procedures. The record provides ample support for immediate action on 
these matters. Accordingly, in this First R&O the Commission adopts the 
Tribal Priority with modifications. With regard specifically to AM 
application processing, the Commission adopts, with certain 
modifications, the proposal to prohibit the downgrading of proposed AM 
facilities that receive a dispositive preference under Section 307(b) 
and thus are not awarded through competitive bidding. It also adopts 
the proposal that technical proposals for AM facilities filed with Form 
175 applications meet certain minimum technical standards to be 
eligible for further auction processing, with some modifications, and 
adopts the proposal to grant the Media Bureau and the Wireless 
Telecommunications Bureau (collectively, the ``Bureaus'') delegated 
authority to cap the number of AM applications that may be filed in an 
AM auction filing window. The Commission also adopts proposals to 
streamline auction application processing; to codify the permissibility 
of non-universal engineering solutions and settlement proposals; to 
give the staff delegated authority and flexibility in setting the post-
auction long-form application filing deadline; to clarify application 
of the new entrant bidding credit unjust enrichment rule; and to 
clarify maximum new entrant bidding credit eligibility.
    In the Rural NPRM, Commission tentatively concluded that it would 
be in the public interest to provide federally recognized Native 
American Tribes and Alaska Native Villages (Tribes) with a priority 
under Section 307(b) of the Communications Act of 1934, as amended (47 
U.S.C. 307(b)), when proposing FM allotments, and when filing AM and 
noncommercial educational (NCE) FM filing window applications. As set 
forth in the Rural NPRM, an applicant would qualify for the Tribal 
Priority if: (1) The applicant (including a party filing a Petition for 
Rule Making to amend the FM Table of Allotments, 47 CFR 73.202) is 
either a federally recognized Tribe or tribal consortium, a member of a 
Tribe, or an entity more than 70 percent owned or controlled by members 
of a Tribe or Tribes; (2) at least 50 percent of the daytime principal 
community contour of the proposed facilities covers tribal lands; (3) 
the applicant proposed a first (Priority (1)) or second (Priority (2)) 
aural (reception) service to more than a de minimis population, or 
proposed a first local transmission service (Priority (3)) at the 
proposed community of license; and (4) the proposed community of 
license is located on tribal lands. The Commission further proposed 
that such a Tribal Priority rank between the current Priority (1) and 
co-equal Priorities (2) and (3), that is, the Tribal Priority would not 
take precedence over a proposal to provide first reception service to a 
greater than de minimis population, but would take precedence over a 
proposal to provide second local reception service or first local 
transmission service. The proposed Tribal Priority would apply only at 
the allotment stage of the commercial FM licensing procedures; as part 
of the threshold Section 307(b) analysis with respect to commercial or 
NCE AM applications filed during an AM filing window; and as the first 
part of the fair distribution analysis of applications filed in an NCE 
FM filing window, before application of the ``first or second reserved 
channel NCE service'' criterion set forth in 47 CFR 73.7002(b). NCE 
applicants also would be required to meet all NCE eligibility and 
licensing requirements (47 CFR 73.503 and 73.561). Certain ``holding 
period'' restrictions, commencing with the award of a construction 
permit until the completion of four years of on-air operation, would 
apply to any station or allotment awarded pursuant to the Tribal 
Priority. In the case of an AM or NCE FM construction permit awarded 
pursuant to a Tribal Priority, the permittee/licensee would be 
prohibited during this period from making any change in ownership that 
would lower tribal ownership below the required threshold, changing the 
station's community of license, or implementing a facility modification 
that would cause the principal community contour to cover less than 50 
percent of tribal lands. In the case of a commercial FM allotment, the 
restriction would apply only to any proposed change of community of 
license or technical change as described in the preceding sentence. 
However, even a non-tribal owner that is awarded a permit would still 
be required to provide broadcast service primarily to tribal lands for 
four years.
    Based on its examination of the record in this proceeding, the 
Commission adopts a Section 307(b) priority for Tribes or tribal 
consortia, and entities majority owned or controlled by Tribes, 
proposing service to tribal lands as proposed in the Rural NPRM. The 
Tribal Priority as adopted includes some modifications suggested by 
commenters. In addition, on its own motion the Commission clarifies the 
application of the Tribal Priority in commercial and NCE contexts, and 
modifies ownership requirements, eliminating the priority for 
individual members of Tribes or entities owned by such individuals, and

[[Page 9799]]

instead extending the Tribal Priority only to Tribes, consortia of 
Tribes, and to entities that are majority owned or controlled by a 
Tribe or Tribes.
    The Commission finds that application of its traditional allocation 
priorities has not realized Section 307(b)'s mandate to ``make such 
distribution of licenses * * * among the several States and communities 
as to provide a fair, efficient, and equitable distribution of radio 
service'' with regard to tribal lands.\1\ Tribal governments have a 
unique legal relationship with the federal government as domestic 
dependent nations with inherent sovereign powers over their members and 
territory. Because of their status as sovereign nations responsible 
for, among other things, maintaining and sustaining their sacred 
histories, languages, and traditions, tribal-owned radio stations have 
a vital role to play in serving the needs and interests of their local 
communities, yet only 41 radio stations currently are licensed to 
federally-recognized Indian Tribes or affiliated groups. The Commission 
concludes that the establishment of an allocation priority for the 
provision of radio service to tribal lands by Indian tribal government-
owned stations will advance its Section 307(b) goals and serve the 
public interest by enabling Indian tribal governments to provide radio 
service tailored to the needs and interests of their local communities 
that they are uniquely capable of providing. The Commission also finds 
that the Tribal Priority will advance the Commission's longstanding 
commitment, in accordance with the federal trust relationship, to 
ensure, through its regulations and policy initiatives, that Indian 
Tribes have adequate access to communications services. The new Tribal 
Priority will promote Tribes' sovereign rights by enabling them to 
provide vital radio services to their communities. Further, the 
Commission concludes that the establishment of a Tribal Priority will 
promote the policies and purposes of the Communications Act favoring 
diversity of media voices, and strengthening the diverse and robust 
marketplace of ideas that is essential to our democracy.
---------------------------------------------------------------------------

    \1\ As used here, ``tribal lands'' means both ``reservations'' 
and ``near reservation'' lands. ``Reservations'' is defined as any 
federally recognized Indian tribe's reservation, pueblo or colony, 
including former reservations in Oklahoma, Alaska Native regions 
established pursuant to the Alaska Native Claims Settlements Act (85 
Stat. 688), and Indian allotments. 47 CFR 54.400(e). ``Near 
reservation'' is defined as ``those areas or communities adjacent or 
contiguous to reservations which are designated by the Department of 
Interior's Commission of Indian Affairs upon recommendation of the 
Local Bureau of Indian Affairs Superintendent, which recommendation 
shall be based upon consultation with the tribal governing body of 
those reservations, as locales appropriate for the extension of 
financial assistance and/or social services on the basis of such 
general criteria as: Number of Indian people native to the 
reservation residing in the area; a written designation by the 
tribal governing body that members of their tribe and family members 
who are Indian residing in the area, are socially, culturally and 
economically affiliated with their tribe and reservation; 
geographical proximity of the area to the reservation and 
administrative feasibility of providing an adequate level of 
services to the area.'' Id. Thus, ``tribal lands'' includes American 
Indian Reservations and Trust Lands, Tribal Jurisdiction Statistical 
Areas, Tribal Designated Statistical Areas, Hawaiian Homelands, and 
Alaska Native Village Statistical Areas, as well as the communities 
situated on such lands.
---------------------------------------------------------------------------

    In response to the Commission's query regarding the 
constitutionality of the Tribal Priority, Native Public Media and the 
National Congress of American Indians (NPM/NCAI) concluded that the 
Tribal Priority would not trigger the strict scrutiny analysis of the 
case of Adarand Constructors, Inc. v. Pena, 515 U.S. 200 (1995), but 
rather a rational basis standard of review. This is because, as stated 
in the Supreme Court case of Morton v. Mancari, 417 U.S. 535 (1974), 
the proposed benefit would be granted to Tribes and their members not 
as a discrete racial group, but, rather, as members of quasi-sovereign 
tribal entities whose lives and activities are governed in a unique 
fashion. The Commission agrees that the priority established herein for 
the benefit of federally recognized Tribes is not constitutionally 
suspect because it is based on the unique legal status of Indian Tribes 
under Federal law. Accordingly, the Commission believes that the Tribal 
Priority is consistent with the Equal Protection Clause of the Fifth 
Amendment to the United States Constitution.
    As proposed, the Tribal Priority also tied the application 
preference to the needs of tribal communities by requiring that, to 
qualify for the priority, commercial applicants must propose either a 
first or second aural service, or a first local transmission service at 
a community located on tribal lands. The existence of a non-tribal 
commercial station or stations at a community located on tribal lands 
should not preclude the establishment of a first local transmission 
service owned by a Tribe or Tribes. Thus, the Commission modifies the 
service criterion for the Tribal Priority to require that a qualifying 
commercial applicant propose first or second aural (reception) service, 
or a first local tribal-owned transmission service at the proposed 
community. Thus, a commercial tribal-owned applicant may qualify for a 
Tribal Priority, notwithstanding the fact that a tribal-owned NCE 
station is licensed at the same community. As the Commission proposed 
in the Rural NPRM, however, the Tribal Priority will not take 
precedence over a bona fide proposal to provide first reception service 
to a significant population.
    The Commission makes certain modifications to the Tribal Priority 
suggested by commenters. First, the Commission will allow assignments 
or transfers within the four-year holding period provided that the 
assignee/transferee also qualifies for the Tribal Priority in all 
respects. Second, the Commission will permit gradual changes in the 
governing board of an NCE permittee or licensee during the four-year 
holding period, as is the case with other NCE holding period 
restrictions, as long as the majority tribal control threshold 
(discussed below) is maintained. Third, the Commission finds that the 
goals underlying the Tribal Priority are not undermined by allowing 
Tribes to claim the Tribal Priority for both commercial and NCE 
stations in the same community. A tribal-owned NCE applicant may 
qualify for a Tribal Priority, notwithstanding the fact that a tribal-
owned commercial station is licensed to the same community (in the same 
way that the existence of a tribal-owned NCE station does not preclude 
use of the priority by a commercial applicant, as discussed above). The 
Commission thus modifies the third prong of the test for tribal-owned 
NCE applicants to state that, to qualify for the Tribal Priority, a 
tribal applicant seeking NCE facilities will promote Section 307(b) 
goals by meeting the tribal lands 50 percent signal coverage and 
community of license requirements, and also by demonstrating that it 
will provide the first tribal-owned NCE transmission service at the 
proposed community of license. If a tribal NCE applicant meets these 
criteria, it will not be compared to other mutually exclusive 
applicants on a fair distribution basis, but will be the tentative 
selectee. As is the case with commercial applicants, the Tribal 
Priority for an NCE applicant will not take precedence over a bona fide 
proposal to provide first aural reception service to a significant 
population. If two or more mutually exclusive proposals from tribal NCE 
applicants qualify for a Tribal Priority, proposing first local tribal-
owned NCE service at the same community, the tentative selectee will be 
the applicant proposing service to the greatest population on tribal 
lands. The Commission will not

[[Page 9800]]

require the 5,000-person population differential that exists in the 
current NCE analysis, but adds the ``on tribal lands'' requirement so 
as to award the permit to the applicant most successfully meeting the 
Tribal Priority's goal of providing service to underserved tribal 
communities that meets their unique cultural needs. Moreover, the 
Commission will make this comparison even if the mutually exclusive 
tribal applicants propose first local NCE service at different 
communities, unlike the usual Priority (3) analysis, under which the 
most populous community receives a dispositive Section 307(b) 
preference. The goals of the Tribal Priority are better served by 
selecting a smaller community that provides greater reception service 
than by choosing a more remote, but slightly larger, community. Thus, 
the foregoing comparison will be applied between mutually exclusive NCE 
applicants claiming the Tribal Priority, whether they propose the same 
or different communities of license. For the same reason, mutually 
exclusive applicants claiming the Tribal Priority for commercial 
facilities, and proposing first local transmission service at the same 
community or at different communities, will be compared based on 
service to the greatest population on tribal lands.
    The Commission also modifies the Tribal Priority on its own motion. 
Upon its consideration of the Rural NPRM, and review of pertinent 
federal law, the Commission is no longer convinced that extending the 
Tribal Priority to individual members of Tribes, or entities owned by 
individuals without ownership by the Tribes themselves, advances the 
Commission's interest in helping promote tribal self-sufficiency and 
economic development, and endeavoring to ensure that Tribes and tribal 
communities have adequate access to communications services. It is well 
established that the Commission's trust relationship is with the Tribes 
and tribal governments themselves, rather than individual members of 
Tribes. As an independent federal agency, the Commission looks to the 
tribal governments, rather than to individual members of Tribes, to 
determine communications policies that best serve the unique needs of 
their respective communities, and fulfill the needs of all tribal 
citizens. Individual members of tribes are not necessarily bound to 
take such factors into account. By limiting the Tribal Priority to 
Tribes themselves, the Commission not only furthers the legitimate 
governmental objective of preserving Native American culture, but also 
promotes the federal government's interest in furthering tribal self-
government. Thus, the Commission concludes that the Tribal Priority 
should extend only to (1) Tribes; (2) tribal consortia; or (3) entities 
that are 51 percent or more owned or controlled by a Tribe or Tribes. 
The Commission's general attribution rules (found in 47 CFR 73.3555 and 
Notes 1 and 2 to that rule) shall determine the ownership or control of 
any such qualifying entities. Qualifying Tribes or tribal entities must 
be those at least a portion of whose tribal lands lie within the 
proposed station's principal community contour. The principal community 
contour must still cover at least 50 percent of tribal lands (subject 
to the provisos proposed in the Rural NPRM, including those on 
``checkerboarded'' tribal lands), but they need not all be the same 
Tribe's lands. Tribes whose lands are not covered by the proposed 
facility may invest or sit on controlling boards, but their investments 
or board membership will not count toward the 51 percent threshold.
    The Commission therefore adopts the Tribal Priority as proposed in 
the Rural NPRM with the following modifications: (1) It will allow 
assignments or transfers of permits or licenses obtained using the 
Tribal Priority during the four-year holding period, provided that the 
assignee/transferee also qualifies for the Tribal priority in all 
respects; (2) with regard to NCE permittees or licensees who obtained 
their authorization using the Tribal Priority, it will permit gradual 
changes in the governing board during the four-year holding period, as 
long as the 51 percent tribal control threshold is maintained; (3) 
eligibility to claim the Tribal Priority is limited to Tribes, tribal 
consortia, or entities 51 percent or more owned or controlled by a 
Tribe or Tribes; (4) with regard to entities 51 percent or more owned 
or controlled by Tribes, the 51 or greater percent need not consist of 
a single Tribe, but the qualifying entity must be 51 percent or more 
owned or controlled by Tribes at least a portion of whose tribal lands 
lie within the facility's principal community contour, as defined in 
the Commission's Rules; (5) the requirement of principal community 
coverage of 50 percent or more of tribal lands does not require that 
those lands belong to the same Tribe; (6) to qualify for the priority, 
a tribal commercial applicant must propose first or second aural 
(reception) service or first local commercial tribal-owned transmission 
service at the proposed community of license; and (7) to qualify for 
the priority, a tribal NCE applicant must propose a first local NCE 
tribal-owned transmission service at the proposed community of license.
    In the Rural NPRM, the Commission stated that when a mutually 
exclusive AM auction filing window applicant receives a dispositive 
preference under Section 307(b), it should not be allowed to downgrade 
that proposal to serve a smaller population, or otherwise negate the 
factors that led to the award of the dispositive preference, so as not 
to encourage ``gaming'' of the Section 307(b) process. The Commission 
tentatively concluded that AM licensees or permittees receiving Section 
307(b) preferences should be required, for a period of four years, to 
provide service substantially as proposed in their short-form tech box 
submissions. The Commission adopts a modified version of its proposal 
to limit the downgrading of proposed AM facilities that receive a 
dispositive Section 307(b) preference, recognizing that a certain level 
of flexibility in implementing AM proposals will help expedite the 
commencement of new service and reduce the possibility of unbuildable 
construction permits. Thus, to the extent underserved populations or 
service totals are relevant to a Section 307(b) analysis, the 
Commission adopts the proposal as follows: an AM licensee or permittee 
receiving a dispositive Section 307(b) preference may modify its 
facilities so long as it continues to provide the same priority service 
to substantially the same number of persons who would have received 
such service under the initial proposal, even if the population is not 
the same population that would have received service under the initial 
proposal. As used here, ``substantially'' means that any proposed 
modification must not result in a decrease of more than 20 percent of 
any population figure that was a material factor in obtaining the 
dispositive Section 307(b) preference. For example, if an AM licensee 
or permittee receives a dispositive Priority (4) preference for 
proposing to provide a third aural service to a population of 500 
persons and service to an overall population of 100,000, it may not 
file an FCC Form 301 application that would provide a third aural 
service to fewer than 400 persons or service to an overall population 
of less than 80,000. The same analysis applies to any party that 
receives a dispositive Priority (1) or Priority (2) preference. In some 
cases this may result in a reduction of service below that presented by 
a competing proposal in the Section 307(b) analysis, but there is no 
guarantee that the

[[Page 9801]]

competing proposal could have been effectuated as proposed in such 
cases. Additionally, a licensee or permittee that has received a 
dispositive preference under Priority (3) will be prohibited from 
changing its community of license. These restrictions will be imposed 
for a period of four years of on-air operations, consistent with 
Commission rules governing NCE FM stations. Construction permits and 
licenses issued to these parties will contain conditions delineating 
these restrictions.
    In the Rural NPRM, the Commission observed that its current auction 
processing rules limit technical review of basic engineering data filed 
with AM short-form applications only to the extent necessary to 
determine the mutually exclusive groups of applications. Originally 
designed to conserve staff resources and expedite auction processing, 
this practice has contributed to the filing of patently defective 
applications, potentially undermining the accuracy and reliability of 
mutual exclusivity and Section 307(b) determinations, and frustrate the 
staff's ability to manage the window filing process efficiently. Such 
defective applications may preclude the filing of meritorious 
modification applications by existing facilities, which must protect 
the prior-filed defective applications. In the Rural NPRM the 
Commission tentatively concluded that 47 CFR 73.3571(h)(1)(ii) should 
be modified to require that applicants in future AM broadcast auctions 
must, at the time of filing, meet the following basic technical 
eligibility criteria: community of license coverage (day and night); 
and protection of existing AM facilities and prior-filed proposed AM 
facilities (daytime and nighttime). It also tentatively concluded that 
the rules should be modified to prohibit the amendment of applications 
that, at time of filing, are technically ineligible to proceed with 
auction processing, and prohibit applicants that propose such 
technically ineligible applications from participating in the auction 
process. This would preclude attempts to amend or correct data 
submitted in Form 175 or the tech box, including proposals to change 
community of license before an applicant has been awarded a 
construction permit. The Commission adopts the proposed rule changes 
set forth in the Rural NPRM. To alleviate concerns raised by some 
commenters, the Commission will provide applicants with a one-time 
opportunity to file a curative amendment to its short-form application. 
Specifically, if the staff review shows that an application does not 
meet one or more of the eligibility criteria, it will be deemed 
``technically ineligible for filing'' and will be included on a Public 
Notice (Technically Ineligible Notice), which will list defective 
applications identified by the staff during their initial review of the 
application, identify which of the defects that the applicant must 
correct, and set the deadline for doing so. Only applicants whose 
applications are included in the Technically Ineligible Notice may file 
a curative amendment. Applicants may not modify any part of a proposal 
not directly related to an identified deficiency in their curative 
amendments. Applicants may only modify the AM technical parameters of 
the short-form application, such as power, class (within the limits set 
forth in 47 CFR 73.21), antenna site or other antenna data.
    Amendments seeking to change a proposed community of license or 
frequency will not be accepted. Notwithstanding this rule change, full 
technical review of applications will not occur until winning bidders 
file long-form applications after an auction. This opportunity to cure 
is not to be considered a settlement opportunity under 47 CFR 
73.5002(d). The opportunity to file a curative amendment will occur 
prior to the disclosure by the Commission of any information on 
applications submitted during the short-form filing window.
    Notwithstanding the broadcast anti-collusion rules, which generally 
apply upon the filing of a short-form application, 47 CFR 73.5002(d) 
provides applicants in certain mutually exclusive groups (MX Groups) a 
limited opportunity to communicate during specified settlement periods 
in order to resolve conflicts by means of technical amendment or 
settlement. This exception applies only to those MX Groups that include 
either (1) At least one AM major modification; (2) at least one NCE 
application; or (3) applications for new stations in the secondary 
broadcast services. Currently, the rule neither prohibits the 
Commission from accepting non-universal technical amendments or 
settlement proposals--which reduce the number of applicants in a group 
but do not completely resolve the mutual exclusivities of that group--
nor requires it to do so. Given the success of staff auction practice 
in accepting non-universal technical amendments and settlement 
proposals, the Commission adopts its proposal to codify the 
permissibility of non-universal engineering solutions and settlement 
proposals as proposed in the Rural NPRM, as long as this process 
results in at least one singleton application that proceeds to long-
form processing. Accordingly, the Commission revises its rules to 
permit non-universal technical amendments and settlement proposals that 
result in at least one singleton application from an MX Group. An 
applicant submitting a technical amendment pursuant to this policy is 
required only to resolve all mutual exclusivities for at least one 
application in the relevant MX Group, but need not resolve all 
technical conflicts among all applications in that group.
    The Commission observed in the Rural NPRM that the Rules currently 
do not limit the number of AM Tech Box applications that may be filed 
with FCC Form 175 during an AM short-form filing window. It noted that 
an increasing number of applicants had availed themselves of the 
opportunity to file multiple technical submissions, and questioned 
whether a significant percentage of AM short-form filing window 
applications were merely speculative. Accordingly, the Commission 
sought comment on whether (1) to delegate to the Bureaus authority to 
limit, in an AM short-form filing window, the number of tech box 
submissions that an applicant could file with its Form 175 and, if so, 
the appropriate limitation on this delegation; and (2) to apply 
Commission attribution standards to determine the number of filings 
submitted by any party, to guard against the use of affiliates or even 
sham entities to circumvent such a cap. The Commission finds that 
delegating authority to the Bureaus to impose application caps in AM 
short-form filing windows will help to prevent speculative 
applications, decreasing the likelihood of mutually exclusive 
applications, and in turn decreasing the likelihood of large, 
technically complex, and administratively burdensome MX Groups. A cap 
can also help expedite application processing and prevent abuses of 
licensing procedures, and will enable the Bureaus to open AM short-form 
filing windows more frequently, thereby promoting--rather than 
restricting--new entrant opportunities. Accordingly, the Commission 
delegates authority to the Bureaus to determine, for each AM short-form 
window, whether to limit the number of AM applications that may be 
filed by an applicant and, if so, the appropriate application cap based 
on the particular circumstances presented by future auctions. The 
Commission also delegates to the Bureaus authority to adopt attribution 
standards to effectuate

[[Page 9802]]

the goals of an application cap, and to ensure compliance with this 
restriction. It directs the Bureaus to provide notice and an 
opportunity for comment on a cap limit and attribution standards prior 
to imposing these potential filing restrictions. Any such cap limit and 
attribution standards will be announced in the Public Notice 
establishing the dates for the Form 175 filing window.
    The Commission's Rules currently provide, without exception, that 
each winning bidder in a broadcast auction must submit an appropriate 
long-form application within thirty (30) days following the close of 
bidding. In the Rural NPRM, the Commission observed that this 
inflexible 30-day time frame has, at times, proved to be problematic, 
for example, when the close of an auction causes the long-form 
application filing deadline to fall during the December holiday season, 
inconveniencing applicants and their consultants. The Commission 
therefore modifies 47 CFR 73.5005(a) as set forth in the Rural NPRM, to 
delegate authority to the Bureaus to extend the filing deadline for the 
post-auction submission of long-form applications.
    To promote the objectives of 47 U.S.C. 309(j) and further its long-
standing commitment to broadcast facility ownership diversity, the 
Commission adopted a tiered new entrant bidding credit (NEBC) for 
broadcast auction applicants with no, or very few, other media 
interests. To meet the statutory obligation to prevent unjust 
enrichment, and to ensure that the NEBC would aid eligible individuals 
and entities to participate in broadcast auctions, the Commission 
adopted rules requiring, under certain circumstances, reimbursement of 
bidding credits used to obtain broadcast licenses. In the Rural NPRM, 
the Commission proposed to clarify certain issues concerning the unjust 
enrichment provisions of the NEBC that had been raised during previous 
broadcast auctions. First, under 47 CFR 73.5007(b), a winning bidder is 
not eligible for the NEBC if it, or any party with an attributable 
interest in the winning bidder, has an attributable interest in any 
existing media facility in the ``same area'' as the proposed new 
facility, that is, if specified service contours of the two facilities 
overlap. In the FM service, in the pre-auction Form 175 application, an 
applicant may submit a set of ``preferred site coordinates'' as an 
alternative to the reference coordinates for the vacant FM allotment 
upon which it intends to bid. The preferred site coordinates specified 
by prospective auction participants would be entered into the 
Commission's database and protected from subsequent filings. In the 
Rural NPRM, the Commission sought to clarify that, for purposes of 
defining the ``same area'' restriction for the NEBC, the contour of the 
proposed FM facility would be identified by the maximum class 
facilities at the FM allotment site, so that applicants could not 
attempt to avoid the overlap of contours which defines ``same area,'' 
and thereby qualify for the bidding credit, by specifying preferred 
site coordinates in their Form 175 application. The Commission adopts 
this proposal, which will provide certainty to applicants and help 
safeguard the diversity and competition goals on which the NEBC is 
based by eliminating potential applicant manipulation of our ``new 
entrant'' standards. The Commission also clarifies, under 47 CFR 
73.5007(b)(3), that it will base this proposed FM facility contour 
standard on an assumption of uniform terrain, which results in a 
perfectly circular standard 70 dBu contour.
    Second, to prevent unjust enrichment by parties that acquire 
permits through the use of a NEBC, 47 CFR 73.5007(c) requires 
reimbursement to the Commission of all or part of the credit upon a 
subsequent assignment or transfer, if the proposed assignee or 
transferee is not eligible for the same percentage of bidding credit. 
The rule is routinely applied to ``long form'' assignment or transfer 
of control applications filed on FCC Forms 314 and 315, but does not 
distinguish between pro forma and non-pro forma assignments or 
transfers of control. In the Rural NPRM the Commission invited comment 
as to whether the unjust enrichment analysis should also apply to 
voluntary or involuntary pro forma assignments or transfers filed on 
Form 316. The Commission tentatively concluded that the unjust 
enrichment provisions should apply to pro forma assignment and transfer 
of control applications, thus eliminating any applicant confusion on 
the issue. The Commission finds it appropriate generally to apply the 
unjust enrichment provisions contained in 47 CFR 73.5007(c) to pro 
forma applications to assign or transfer broadcast licenses and 
permits, pursuant to 47 CFR 73.3540(f), in order to help preserve the 
integrity of the designated entity measures adopted in prior auction 
orders. A pro forma assignment or transfer can include new parties, 
including parties with attributable interest holdings that would 
nullify or diminish the eligibility of the assignee or transferee for 
the bidding credit. This is especially the case in transactions 
eligible for pro forma treatment involving corporate reorganizations 
where a new attributable interest holder with other media interests is 
added. Moreover, such an unjust enrichment analysis allows for 
consistency in the application of the rule. It further ensures that 
applicants do not use the summary pro forma assignment and transfer 
procedures to circumvent the unjust enrichment requirements. Thus, the 
Commission adopts the unjust enrichment analysis recommended in the 
Rural NPRM, but will only apply the unjust enrichment analysis to 
voluntary pro forma transactions, and not to involuntary pro forma 
transactions. Notwithstanding this decision, it will continue to 
address, on a case-by-case basis, any conduct engaged in by auction 
participants with the evident intention of manipulating the eligibility 
standards for, or frustrating the purpose of, the NEBC.
    As described in the Rural NPRM, applicants to participate in 
broadcast auctions are required to establish their qualifications for 
the NEBC on their short-form applications (FCC Form 175), Application 
to Participate in an FCC Auction, which is the sole opportunity for the 
applicant to claim bidding credit eligibility. Applicants meeting the 
eligibility criteria set forth in 47 CFR 73.5007 qualify for a bidding 
credit representing the amount by which a winning bidder's gross bid is 
discounted. The size of a NEBC depends on the number of ownership 
interests in other media of mass communications that are attributable 
to the bidder-entity and its attributable interest-holders. In 
accordance with 47 CFR 73.5008(c), when determining an applicant's 
eligibility for the NEBC, the interests of the applicant, and of any 
individuals or entities with an attributable interest in the applicant, 
in other media of mass communications are considered. An auction 
applicant's attributable interests, and therefore its maximum NEBC 
eligibility, are determined as of the Form 175 filing deadline. 
Consequently, the Commission has consistently held, and has announced 
in auction Public Notices, that bidders cannot qualify for a bidding 
credit, nor increase the size of a previously claimed bidding credit, 
based upon ownership or positional changes occurring after the Form 175 
filing deadline. Nonetheless, as noted in the Rural NPRM, certain 
parties have argued that their NEBC eligibility is maintained or 
``frozen'' as of the Form 175 application filing. Therefore, to prevent 
applicant confusion, the Commission proposed to

[[Page 9803]]

amend 47 CFR 73.5007(a) to codify the current policy, and state 
explicitly that the NEBC eligibility set forth in an applicant's Form 
175 application is the maximum NEBC eligibility for that auction, and 
that such bidding credit may be reduced or lost upon post-filing 
changes. The Commission adopts this change, and modifies 47 CFR 
73.5007(a) to state unequivocally that: (1) An applicant must specify 
its eligibility for the NEBC in its Form 175 application; (2) the NEBC 
specified in an applicant's Form 175 establishes that applicant's 
maximum NEBC eligibility for that auction; (3) any post-Form 175 filing 
(post-filing) change in the applicant's circumstances underlying its 
NEBC eligibility claim, or that of any attributable interest-holder in 
the applicant, must be reported immediately to the Commission, and no 
later than five business days after the change occurs; and (4) any such 
post-filing change may cause a reduction or elimination of the NEBC 
claimed in the applicant's Form 175 application, if the change would 
cause the applicant not to qualify for the originally claimed NEBC 
under the eligibility provisions of 47 CFR 73.5007, and the change 
occurred prior to grant of the construction permit to the applicant. 
Under no circumstances will a post-filing change increase an 
applicant's NEBC eligibility for that auction. The Commission also 
emphasizes that all of ways in which interests are attributed to 
individuals and entities (as set forth in 47 CFR 73.3555 and Note 2 to 
that Section) will be considered to affect NEBC eligibility when they 
occur after the Form 175 filing deadline.
    By auction Public Notices, bidders are also instructed that any 
change that results in the reduction or loss of the NEBC originally 
claimed on the Form 175 application, must be reported immediately, and 
no later than five business days after the change occurs. In the Rural 
NPRM the Commission proposed to adjust the standard reporting timeframe 
and codify this immediate reporting requirement. In keeping with the 
rule amendments it recently adopted in Procedural Amendments to 
Commission Part 1 Competitive Bidding Rules, Order, FCC 10-4 at 5 (rel. 
Jan. 7, 2010), the Commission codifies the practice that any changes 
affecting NEBC eligibility must be reported immediately, and in any 
event no later than five business days after the change occurs, and 
amends 47 CFR 73.5007(a) accordingly. The Commission will continue to 
make final determinations regarding an applicant's eligibility to hold 
a construction permit, including eligibility for and amount of the 
NEBC, when it is ready to grant the post-auction long form construction 
permit application.
    Final Regulatory Flexibility Analysis. As required by the 
Regulatory Flexibility Act of 1980, as amended (RFA), 5 U.S.C. 601-612, 
an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in 
the Rural NPRM. The Commission sought written public comment on the 
proposals in the Rural NPRM, including comment on the IRFA. The 
Commission received no comments on the IRFA. This present Final 
Regulatory Flexibility Analysis (FRFA) conforms to the RFA.
    Need for, and Objectives of, the Report and Order. This First R&O 
adopts rule changes and procedures to codify or clarify certain 
allotment, assignment, auction, and technical procedures. The rules 
adopted by this First R&O also create a new Tribal Priority to assist 
Tribes or tribal consortia, or entities controlled by Tribes, in 
obtaining radio broadcast stations designed to serve their tribal 
communities.
    We turn first to the Tribal Priority. The Commission noted the 
marked disparity in the Native American and Alaskan Native population 
of the United States, compared to the number of radio stations licensed 
to, or providing significant signal coverage to, lands occupied by 
members of Tribes. Tribal lands comprise 55.7 million acres, or 2.3 
percent of the area of the United States (exclusive of the State of 
Alaska). Roughly one-third of the 4.1 million American Indian and 
Alaska Native population of the United States lives in tribal lands, 
yet only 41 radio stations currently are licensed to Tribes or 
affiliated groups, representing less than one-third of one percent of 
the more than 14,000 radio stations in the United States. This service 
disparity belies the goal of fair distribution of radio service 
mandated by Section 307(b) of the Communications Act of 1934, as 
amended, as well as the Commission's commitment to promoting diversity 
of station ownership and programming. The Commission also noted its 
historic trust relationship with Tribes, and the federal policy goals 
of assisting Tribes in promoting tribal culture and self-government.
    To remedy these problems, the Commission concluded that Tribes 
seeking new radio stations to serve their citizens should receive a 
priority in the award of allotments and construction permits. To 
qualify for the Tribal Priority, an applicant must demonstrate that it 
meets all of the following eligibility criteria: (1) The applicant is 
either a federally recognized Tribe or tribal consortium, or an entity 
51 percent or more of which is owned or controlled by a Tribe or 
Tribes, at least part of whose tribal lands (as defined in note 30 of 
the Rural NPRM) are covered by the principal community contour of the 
proposed facility. Although the 51 or greater percent need not consist 
of a single Tribe, the qualifying entity must be 51 percent or more 
owned or controlled by Tribes at least a portion of whose tribal lands 
lie within the facility's principal community contour; (2) at least 50 
percent of the daytime principal community contour of the proposed 
facilities covers tribal lands; (3) the proposed community of license 
must be located on tribal lands; and (4) the applicant proposes first 
aural, second aural, or first local tribal-owned transmission service 
at the proposed community of license, in the case of proposed 
commercial facilities, or at least first local tribal-owned 
noncommercial educational transmission service, in the case of proposed 
NCE facilities. In the event that two or more applicants claiming the 
Tribal Priority are mutually exclusive, the one providing the highest 
level of service to the greatest population will prevail. The Tribal 
Priority ranks between the current Priority (1) and co-equal Priorities 
(2) and (3) in the case of commercial applicants. Thus, the Tribal 
Priority will not take precedence over a proposal to provide first 
reception service to a greater than de minimis population, but will 
take precedence over the provision of second local reception service, 
or over a proposal for first local non-tribal owned transmission 
service. Likewise, an NCE applicant qualifying for the Tribal Priority 
will take precedence over all mutually exclusive applications, except 
those that propose bona fide first reception service to a greater than 
de minimis population.
    The Tribal Priority will be applied only at the allotment stage of 
the commercial FM licensing procedures, to commercial AM applications 
filed during an AM filing window, as part of the threshold Section 
307(b) analysis, and to applications filed in an NCE FM filing window 
as the first part of the fair distribution analysis. NCE applicants 
must also meet all NCE eligibility and licensing requirements. Holding 
period restrictions, commencing with the award of a construction permit 
until the completion of four years of on-air operation, will apply to 
any authorization or allotment awarded pursuant to the Tribal Priority. 
In the

[[Page 9804]]

case of an AM or NCE FM authorization awarded to a tribal applicant, 
the permittee/licensee will be prohibited during this period from 
making any change that would lower tribal ownership below the 51 
percent threshold, a change of community of license, or a technical 
change that would cause less than 50 percent of the principal community 
contour to cover tribal lands. However, gradual changes in the 
composition of an NCE board that do not change the nature of the 
organization or break continuity of control will not violate the four-
year holding period restrictions. In the case of a commercial FM 
allotment, the restrictions will apply only to any proposed change of 
community of license or technical change as described above. The winner 
at auction of an FM allotment added to the Table of Allotments under a 
Tribal Priority, whether Tribal or non-Tribal, must still provide 
broadcast service primarily to tribal lands for the entire four-year 
holding period.
    Additionally, in the First R&O the Commission requires that 
applicants receiving dispositive preferences for AM facilities under 
section 307(b) of the Communications Act of 1934, as amended, be 
prohibited from substantially downgrading the facilities on which the 
Section 307(b) award was based. This prohibition was designed to 
provide basic fairness in the award of a dispositive preference to one 
proposal in a group of several mutually exclusive proposals. That is, 
it would be unfair to allow one member of a mutually exclusive group to 
be awarded a construction permit without auction, based on the superior 
population coverage in its proposal, only then to allow it to downgrade 
its proposal to the point where it would no longer be significantly 
different from the other mutually exclusive proposals.
    The First R&O also establishes procedures by which applicants in AM 
auction filing windows must submit technical proposals that meet 
minimum technical eligibility criteria. The Commission noted the number 
of incomplete or technically defective proposals filed in AM auction 
filing windows. Such proposals undermine the accuracy and reliability 
of our mutual exclusivity and Section 307(b) determinations, and 
frustrate the staff's ability to manage the window filing process 
efficiently. Moreover, such defective applications preclude the filing 
of meritorious modification applications by existing facilities, which 
must protect the prior-filed defective applications. In short, allowing 
the filing of technically defective proposals places a strain on the 
Commission's resources and, consequently, delays consideration of 
meritorious proposals and provision of new service to the public.
    Likewise, the First R&O contains two other proposals designed to 
streamline the AM auction process and speed new service to the public: 
The grant of delegated authority to the Media Bureau to allow AM 
auction filing window applicants to submit settlements or technical 
resolutions that do not resolve all the mutual exclusivities in a 
mutually exclusive group, as long as the proposal results in one 
``singleton'' application from the group; and the grant of delegated 
authority to the Media Bureau and Wireless Telecommunications Bureau to 
cap the number of AM applications that may be filed during a filing 
window. The Commission also grants the Media and Wireless 
Telecommunications Bureau's delegated authority to extend the deadline 
for filing post-auction long-form applications, as appropriate, thus 
providing successful auction applicants with greater flexibility in 
preparing such applications.
    Finally, in the First R&O the Commission clarifies certain aspects 
of the rules governing the new entrant bidding credit (NEBC): That for 
purposes of determining whether an auctioned allotment is in the ``same 
area'' as an applicant's other media properties, we will use the 
maximum class facilities at the allotment site, rather than applicant 
specified-preferred coordinates; that unjust enrichment payments by 
assignors who used the NEBC in paying for their permit apply even to 
pro forma assignments or transfers filed on FCC Form 316; and that an 
applicant's maximum NEBC eligibility is established as of the deadline 
for filing short-form applications, but that the eligibility may be 
lost or diminished based on post-filing changes in the applicant's 
situation. In clarifying these rules and policies, the Commission will 
provide greater certainty to applicants, reducing any confusion and, 
therefore, burden when preparing and filing auction applications.
    Summary of Significant Issues Raised by Public Comments in Response 
to the IRFA. There were no comments filed that specifically addressed 
the rules and policies proposed in the IRFA.
    Description and Estimate of the Number of Small Entities to Which 
the Proposed Rules Will Apply. The RFA directs the Commission to 
provide a description of and, where feasible, an estimate of the number 
of small entities that will be affected by the rules adopted herein. 
The RFA generally defines the term ``small entity'' as having the same 
meaning as the terms ``small business,'' ``small organization,'' and 
``small government jurisdiction.'' In addition, the term ``small 
business'' has the same meaning as the term ``small business concern'' 
under the Small Business Act. 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 Small Business Administration (SBA).
    The subject rules and policies potentially will apply to all AM and 
FM radio broadcasting licensees and potential licensees. A radio 
broadcasting station is an establishment primarily engaged in 
broadcasting aural programs by radio to the public. Included in this 
industry are commercial, religious, educational, and other radio 
stations. Radio broadcasting stations which primarily are engaged in 
radio broadcasting and which produce radio program materials are 
similarly included. However, radio stations that are separate 
establishments and are primarily engaged in producing radio program 
material are classified under another NAICS number. The SBA has 
established a small business size standard for this category, which is: 
Firms having $7 million or less in annual receipts (13 CFR 121.201, 
NAICS code 515112 (updated for inflation in 2008)). According to BIA 
Advisory Services, L.L.C., MEDIA Access Pro Database on March 17, 2009, 
10,884 (95%) of 11,404 commercial radio stations have revenue of $6 
million or less. Therefore, the majority of such entities are small 
entities. We note, however, that many radio stations are affiliated 
with much larger corporations having much higher revenue. Our estimate, 
therefore, likely overstates the number of small entities that might be 
affected by any ultimate changes to the rules and forms.
    Description of Projected Reporting, Recordkeeping and other 
Compliance Requirements. As described, certain rules and procedures 
will change, although the changes will not result in substantial 
increases in burdens on applicants. Questions will be added to FCC 
Forms 340, 314, and 315 to establish Section 307(b) eligibility for the 
Tribal Priority or compliance with holding period restrictions in the 
event of an assignment or transfer. Questions will also be added to FCC 
Form 316 based on the Commission's conclusion that the new entrant 
bidding credit unjust enrichment rules apply to pro forma assignment 
and transfer

[[Page 9805]]

applications. These are largely self-identification questions or 
questions regarding the duration of on-air operation, requiring minimal 
calculation. In certain cases (AM auction filing window applications 
and FM allotment proceedings), Section 307(b) information is already 
required, thus the information needed to be collected from applicants 
claiming the Tribal Priority is of the same character as that already 
collected, resulting in little or no increase in burden on such 
applicants. The remaining procedural changes in the First R&O are 
either changes in Commission procedures, requiring no input from 
applicants, or more stringent regulation of existing requirements. For 
example, AM auction filing window applicants need not submit more 
technical information than is already collected; the procedural change 
merely adds consequences when that information does not meet certain 
already extant technical standards.
    Steps Taken To Minimize Significant Impact of 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 (among others): (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 (5 
U.S.C. 603(c)(1)-(c)(4)).
    The Tribal Priority adopted in the First R&O was modified from the 
original proposal specified in the Rural NPRM, based on comments in the 
record and on the Commission's evaluation of the legal ramifications of 
the priority, especially with regard to the Commission's government-to-
government relationship with Tribes. As adopted, the Tribal Priority 
can disadvantage certain applicants whose applications or proposals are 
mutually exclusive with those of applicants qualifying for the Tribal 
Priority. However, after due consideration, the Commission believes 
that the priority is necessary to redress an imbalance in the number of 
Native American broadcasters vis-[agrave]-vis native populations and 
lands, and to further the Commission's interests in promoting diversity 
of ownership and programming, in assisting Tribes to promulgate tribal 
language and culture, and in helping to promote self-government by 
Tribes. Thus, the Commission has determined that the Tribal Priority as 
adopted is the least burdensome method to achieve its policy goals, 
consonant with constitutional and other legal requirements.
    With regard to the adopted rule limiting the downgrade of AM 
facilities awarded based on service proposals, initially the Commission 
proposed a standard allowing no reduction in population served, much as 
is done with NCE selectees. However, after consideration, and 
recognizing the technical complexity of the AM service and the burden 
such a rigid standard would impose on applicants, most of whom are 
small businesses, the Commission instead adopted the more flexible 
``equivalency'' standard, which allows a variance of up to 20 percent 
of the population initially proposed to be served.
    Likewise, in adopting the rule requiring that AM technical 
proposals be technically eligible for auction processing at time of 
filing, the Commission considered seeking further technical information 
from applicants. Moreover, as proposed the rule would not have allowed 
curative amendments. However, upon consideration of the record, the 
Commission opted not to require additional technical information from 
applicants, declining to increase the burden on such parties, and also 
mitigated the firm requirements of the proposed rule by allowing one 
opportunity for curative amendments.
    The remaining proposals adopted in the First R&O fall into one of 
two categories: Grant of delegated authority to modify certain rules on 
an as-needed basis, or codification or clarification of existing 
policies and rules. In the first category, the new authority granted 
the Commission to place a ``cap'' on AM filing window applications may 
deprive certain applicants of the ability to file all the applications 
they wish. However, application caps will deter speculation, 
eliminating superfluous applications and enabling faster processing of 
applications overall. Caps will cause applicants to focus on those 
facilities that they value most, and in conjunction with the 
requirement of technically eligible applications will encourage the 
filing of better and more quickly grantable applications, streamlining 
the AM auction and award process. Given that, in the most recent AM 
auction filing window, less than six percent of the applicants filed 
ten or more applications (accounting for approximately 40 percent of 
all technical proposals filed), a reasonable application cap will 
burden only that small percentage of potential applicants whose 
multiple applications take up disproportionate amounts of Commission 
time and resources, slowing down the auction process and impeding the 
authorization of new AM service to the public. The grant of delegated 
authority to the Media and Wireless Telecommunications Bureaus to 
extend post-auction filing deadlines will only benefit applicants: It 
gives the Bureaus the flexibility to provide additional time for 
parties that need it, while those who wish their applications to be 
considered sooner may file when they like. In these cases, because of 
the significant benefits to regulated parties and minimal to no 
burdens, it was not deemed necessary to consider other options.
    With regard to the adopted codifications and clarifications of 
existing rules, these also present no burden on applicants requiring 
consideration of less burdensome alternatives. The codification of the 
policy, used in prior auctions, allowing non-universal settlements that 
result in at least one singleton application from an MX Group, speeds 
auctions by simplifying MX groups, and expedites provision of new 
service by the singleton applicants. Similarly, the clarification of 
policies regarding new entrant bidding credit eligibility and the new 
entrant bidding credit unjust enrichment rule does not place any 
additional burdens on applicants or other parties. Rather, clarifying 
these policies will benefit applicants, permittees, and licensees by 
adding certainty to auction and post-auction procedures. As such, 
consideration of less burdensome alternatives was unnecessary.
    Report to Congress. The Commission will send a copy of the First 
R&O, including this FRFA, in a report to be sent to Congress and the 
Government Accountability Office pursuant to the Small Business 
Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801(a)(1)(A)). In 
addition, the Commission will send a copy of the First R&O, including 
the FRFA, to the Chief Counsel for Advocacy of the Small Business 
Administration. A copy of the First R&O and FRFA (or summaries thereof) 
will also be published in the Federal Register (See 5 U.S.C. 604(b)).

Ordering Clauses

    Accordingly, it is ordered, pursuant to the authority contained in 
Sections 1, 2, 4(i), 303, 307, and 309(j) of the Communications Act of 
1934, 47 U.S.C. 151, 152, 154(i), 303, 307, and 309(j),

[[Page 9806]]

that this First Report and Order is adopted.
    It is further ordered that, pursuant to the authority found in 
Sections 4(i), 303(r), and 628 of the Communications Act of 1934, as 
amended, 47 U.S.C. 154(i), 303(r), and 548, the Commission's Rules are 
hereby amended as set forth in Appendix E to the First R&O.
    It is further ordered that the rules adopted herein will become 
effective 30 days after the date of publication in the Federal 
Register, except for sections 73.3571(k), 73.7000, 73.7002(b), and 
73.7002(c), which contain new or modified information collection 
requirements that require approval by the Office of Management and 
Budget (OMB) under the Paperwork Reduction Act (PRA), and which will 
become effective after the Commission publishes a notice in the Federal 
Register announcing such approval and the relevant effective date.

List of Subjects in 47 CFR Part 73

    Radio broadcast services.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Rule Changes

0
For the reasons discussed in the preamble, the Federal Communications 
Commission amends 47 CFR part 73 as follows:
0
1. The authority citation for part 73 continues to read as follows:

    Authority:  47 U.S.C. 154, 303, 334, 336, and 339.


0
2. Section 73.3571 is amended by revising paragraphs (h)(1)(ii) and 
(h)(4)(iii), and adding new paragraph (k) to read as follows:


Sec.  73.3571  Processing of AM broadcast station applications.

* * * * *
    (h) * * *
    (1) * * *
    (ii) Such AM applicants will be subject to the provisions of 
Sec. Sec.  1.2105 and 73.5002 regarding the submission of the short-
form application, FCC Form 175, and all appropriate certifications, 
information and exhibits contained therein. Applications must include 
the following engineering data: community of license; frequency; class; 
hours of operations (day, night, critical hours); power (day, night, 
critical hours); antenna location (day, night, critical hours); and all 
other antenna data. Applications lacking data (including any form of 
placeholder, such as inapposite use of ``0'' or ``not applicable'' or 
an abbreviation thereof) in any of these categories will be immediately 
dismissed as incomplete without an opportunity for amendment. The staff 
will review the remaining applications to determine whether they meet 
the following basic eligibility criteria: community of license coverage 
(day and night) as set forth in Sec.  73.24(i), and protection of co- 
and adjacent-channel station licenses, construction permits and prior-
filed applications (day and night) as set forth in Sec. Sec.  73.37 and 
73.182. If the staff review shows that an application does not meet one 
or more of the basic eligibility criteria listed above, it will be 
deemed ``technically ineligible for filing'' and will be included on a 
Public Notice listing defective applications and setting a deadline for 
the submission of curative amendments. An application listed on that 
Public Notice may be amended only to the extent directly related to an 
identified deficiency in the application. The amendment may modify the 
proposed power, class (within the limits set forth in Sec.  73.21), 
antenna location or antenna data, but not the proposed community of 
license or frequency. Except as set forth in the preceding two 
sentences, amendments to short-form (FCC Form 175) applications will 
not be accepted at any time. Applications that remain technically 
ineligible after the close of this amendment period will be dismissed, 
and the staff will determine which remaining applications are mutually 
exclusive.
* * * * *
    (4) * * *
    (iii) All long-form applications will be cutoff as of the date of 
filing with the FCC and will be protected from subsequently filed long-
form applications. Applications will be required to protect all 
previously filed commercial and noncommercial applications. Subject to 
the restrictions set forth in paragraph (k) of this section, winning 
bidders filing long-form applications may change the technical 
proposals specified in their previously submitted short-form 
applications, but such change may not constitute a major change. If the 
submitted long-form application would constitute a major change from 
the proposal submitted in the short-form application, the long-form 
application will be returned pursuant to paragraph (h)(1)(i) of this 
section.
* * * * *
    (k)(1) An AM applicant receiving a dispositive Section 307(b) 
preference is required to construct and operate technical facilities 
substantially as proposed in its FCC Form 175. An AM applicant, 
licensee, or permittee receiving a dispositive Section 307(b) 
preference based on its proposed service to underserved populations 
(under Priority (1), Priority (2), and Priority (4)) or service totals 
(under Priority (4)) may modify its facilities so long as it continues 
to provide the same priority service to substantially the same number 
of persons who would have received service under the initial proposal, 
even if the population is not the same population that would have 
received such service under the initial proposal. For purposes of this 
provision, ``substantially'' means that any proposed modification must 
not result in a decrease of more than 20 percent of any population 
figure that was a material factor in obtaining the dispositive Section 
307(b) preference.
    (2) An AM applicant, licensee, or permittee that has received a 
dispositive preference under Priority (3) will be prohibited from 
changing its community of license.
    (3) The restrictions set forth in paragraphs (k)(1) and (k)(2) of 
this section will be applied for a period of four years of on-air 
operations. This holding period does not apply to construction permits 
that are awarded on a non-comparative basis, such as those awarded to 
non-mutually exclusive applicants or through settlement.

0
3. Section 73.5002 is amended by adding new paragraph (e) to read as 
follows:


Sec.  73.5002  Application and certification procedures; return of 
mutually exclusive applications not subject to competitive bidding 
procedures; prohibition of collusion.

* * * * *
    (e) Applicants seeking to resolve their mutual exclusivities by 
means of engineering solution or settlement during a limited period as 
specified by public notice, pursuant to paragraph (d) of this section, 
may submit a non-universal engineering solution or settlement proposal, 
so long as such engineering solution or settlement proposal results in 
the grant of at least one application from the mutually exclusive 
group. A technical amendment submitted under this subsection must 
resolve all of the applicant's mutual exclusivities with respect to the 
other applications in the specified mutually exclusive application 
group.

0
4. Section 73.5005 is amended by revising the first sentence of 
paragraph (a) to read as follows:

[[Page 9807]]

Sec.  73.5005  Filing of long-form applications.

    (a) Within thirty (30) days following the close of bidding and 
notification to the winning bidders, unless a longer period is 
specified by public notice, each winning bidder must submit an 
appropriate long-form application (FCC Form 301, FCC Form 346, or FCC 
Form 349) for each construction permit or license for which it was the 
high bidder. * * *
* * * * *

0
5. Section 73.5007 is amended by revising paragraph (a) and by adding 
Note 1 to read as follows:


Sec.  73.5007  Designated entity provisions.

    (a) New entrant bidding credit. A winning bidder that qualifies as 
a ``new entrant'' may use a bidding credit to lower the cost of its 
winning bid on any broadcast construction permit. Any winning bidder 
claiming new entrant status must have de facto, as well as de jure, 
control of the entity utilizing the bidding credit. A thirty-five (35) 
percent bidding credit will be given to a winning bidder if it, and/or 
any individual or entity with an attributable interest in the winning 
bidder, have no attributable interest in any other media of mass 
communications, as defined in Sec.  73.5008. A twenty-five (25) percent 
bidding credit will be given to a winning bidder if it, and/or any 
individual or entity with an attributable interest in the winning 
bidder, have an attributable interest in no more than three mass media 
facilities. No bidding credit will be given if any of the commonly 
owned mass media facilities serve the same area as the proposed 
broadcast or secondary broadcast station, or if the winning bidder, 
and/or any individual or entity with an attributable interest in the 
winning bidder, have attributable interests in more than three mass 
media facilities. Attributable interests held by a winning bidder in 
existing low power television, television translator or FM translator 
facilities will not be counted among the bidder's other mass media 
interests in determining eligibility for a bidding credit. Eligibility 
for the new entrant bidding credit must be specified in an applicant's 
FCC Form 175 application, and the new entrant bidding credit specified 
in an applicant's FCC Form 175 application establishes that applicant's 
maximum bidding credit eligibility for that auction. Any post-FCC Form 
175 filing change in the applicant's circumstances underlying its new 
entrant bidding credit eligibility claim, or that of any attributable 
interest-holder in the applicant, must be reported to the Commission 
immediately, and no later than five business days after the change 
occurs. Any such post-FCC Form 175 filing change may cause a reduction 
or elimination of the new entrant bidding credit claimed in the 
applicant's FCC Form 175 application, if the change would cause the 
applicant not to qualify for the originally claimed new entrant bidding 
credit under the eligibility provisions of Sec.  73.5007, and the 
change occurred prior to grant of the construction permit to the 
applicant. Final determinations regarding new entrant status will be 
made at the time of long form construction permit application grant. 
Applicants whose eligibility is lost or reduced subsequent to the FCC 
Form 175 filing must, before a construction permit will be issued, make 
such payments as are necessary to account for the difference between 
claimed and actual bidding credit eligibility.
* * * * *

    Note 1 to Sec.  73.5007: For purposes of paragraph (b)(3)(ii) of 
this section, the contour of the proposed new FM broadcast station 
is based on the maximum class facilities at the FM allotment site, 
which is defined as the perfectly circular standard 70 dBu contour 
distance for the class of station.


0
6. Section 73.7000 is amended by adding six new definitions to read as 
follows:


Sec.  73.7000  Definition of terms (as used in subpart K only).

* * * * *
    Near reservation lands. Those areas or communities adjacent or 
contiguous to reservation or other Trust lands which are designated by 
the Department of Interior's Commission of Indian Affairs upon 
recommendation of the Local Bureau of Indian Affairs Superintendent, 
which recommendation shall be based upon consultation with the tribal 
governing body of those reservations, as locales appropriate for the 
extension of financial assistance and/or social services on the basis 
of such general criteria as: Number of Indian people native to the 
reservation residing in the area; a written designation by the tribal 
governing body that members of their tribe and family members who are 
Indian residing in the area, are socially, culturally and economically 
affiliated with their tribe and reservation; geographical proximity of 
the area to the reservation and administrative feasibility of providing 
an adequate level of services to the area.
* * * * *
    Reservations. Any federally recognized Indian tribe's reservation, 
pueblo or colony, including former reservations in Oklahoma, Alaska 
Native regions established pursuant to the Alaska Native Claims 
Settlements Act (85 Stat. 688) and Indian allotments, for which a Tribe 
exercises regulatory jurisdiction.
* * * * *
    Tribe. Any Indian or Alaska Native tribe, band, nation, pueblo, 
village or community which is acknowledged by the federal government to 
constitute a government-to-government relationship with the United 
States and eligible for the programs and services established by the 
United States for Indians. See The Federally Recognized Indian Tribe 
List Act of 1994 (Indian Tribe Act), Public Law 103-454. 108 Stat. 4791 
(1994) (the Secretary of the Interior is required to publish in the 
Federal Register an annual list of all Indian Tribes which the 
Secretary recognizes to be eligible for the special programs and 
services provided by the United States to Indians because of their 
status as Indians).
    Tribal applicant. (1) A Tribe or consortium of Tribes, or
    (2) An entity that is 51 percent or more owned or controlled by a 
Tribe or Tribes that occupy Tribal Lands that receive Tribal Coverage.
    Tribal coverage. Coverage of Tribal Lands by at least 50 percent of 
a facility's 60 dBu (1 mV/m) contour. To the extent that Tribal Lands 
include fee lands not owned by Tribes or members of Tribes, the outer 
boundaries of such lands shall delineate the coverage area, with no 
deduction of area for fee lands not owned by Tribes or members of 
Tribes.
    Tribal Lands. Both Reservations and Near reservation lands. This 
definition includes American Indian Reservations and Trust Lands, 
Tribal Jurisdiction Statistical Areas, Tribal Designated Statistical 
Areas, Hawaiian Homelands, and Alaska Native Village Statistical Areas, 
as well as the communities situated on such lands.

0
7. Section 73.7002 is amended by revising paragraphs (b) and (c) to 
read as follows:


Sec.  73.7002  Fair distribution of service on reserved band FM 
channels.

* * * * *
    (b) In an analysis performed pursuant to paragraph (a) of this 
section, a full-service FM applicant that identifies itself as a Tribal 
Applicant, that proposes Tribal Coverage, and that proposes the first 
reserved channel NCE service owned by any Tribal Applicant at a 
community of license located on Tribal Lands, will be awarded a 
construction permit. If two or more full-service FM applicants identify

[[Page 9808]]

themselves as Tribal Applicants and meet the above criteria, the 
applicant providing the most people with reserved channel NCE service 
to Tribal Lands will be awarded a construction permit, regardless of 
the magnitude of the superior service or the populations of the 
communities of license proposed, if different. If two or more full-
service FM applicants identifying themselves as Tribal Applicants each 
meet the above criteria and propose identical levels of NCE aural 
service to Tribal Lands, only those applicants shall proceed to be 
considered together in a point system analysis. In an analysis 
performed pursuant to paragraph (a) of this section that does not 
include a Tribal Applicant, a full service FM applicant that will 
provide the first or second reserved channel noncommercial educational 
(NCE) aural signal received by at least 10% of the population within 
the station's 60dBu (1mV/m) service contours will be considered to 
substantially further fair distribution of service goals and to be 
superior to mutually exclusive applicants not proposing that level of 
service, provided that such service to fewer than 2,000 people will be 
considered insignificant. First service to 2,000 or more people will be 
considered superior to second service to a population of any size. If 
only one applicant will provide such first or second service, that 
applicant will be selected as a threshold matter. If more than one 
applicant will provide an equivalent level (first or second) of NCE 
aural service, the size of the population to receive such service from 
the mutually exclusive applicants will be compared. The applicant 
providing the most people with the highest level of service will be 
awarded a construction permit, if it will provide such service to 5,000 
or more people than the next best applicant. If none of the applicants 
in a mutually exclusive group would substantially further fair 
distribution goals, all applicants will proceed to examination under a 
point system. If two or more applicants will provide the same level of 
service to an equivalent number of people (differing by less than 
5,000), only those equivalent applicants will be considered together in 
a point system.
    (c) For a period of four years of on-air operations, an applicant 
receiving a decisive preference pursuant to this section is required to 
construct and operate technical facilities substantially as proposed 
and shall not downgrade service to the area on which the preference was 
based. Additionally, for a period beginning from the award of a 
construction permit through four years of on-air operations, a Tribal 
Applicant receiving a decisive preference pursuant to this section may 
not:
    (1) Assign or transfer the authorization except to another party 
that qualifies as a Tribal Applicant;
    (2) Change the facility's community of license; or
    (3) Effect a technical change that would cause the facility to 
provide less than full Tribal Coverage.

[FR Doc. 2010-3491 Filed 3-3-10; 8:45 am]
BILLING CODE 6712-01-P


</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>