`[Federal Register Volume 65, Number 111 (Thursday, June 8, 2000)]
[Rules and Regulations]
[Pages 36375-36382]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-14439]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 73 and 74

[MM Docket No. 95-31; FCC 00-120]


Reexamination of Comparative Standards for Noncommercial 
Educational Applicants

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: The Commission adopted new methods to select among competing 
applications to construct noncommercial educational (NCE) broadcast 
stations or to make changes in existing facilities of such stations. 
The Commission will use a point system to select among mutually 
exclusive applicants on reserved channels, to streamline the current 
selection process and make it faster and simpler for applicants and for 
the Commission. The Commission will use existing auction procedures to 
select among mutually exclusive applications on non-reserved 
(``commercial'') channels, even if one or more of the applicants 
proposes to operate noncommercially. To facilitate the transition to 
new ``filing window'' procedures, the Commission implemented a freeze 
on the filing of new applications for reserved channel noncommercial 
educational broadcast stations.

DATES: Effective August 7, 2000, except for Secs. 73.202, 73.3527, and 
73.3572 which contain information collection requirements that have not 
been approved by the Office of Management and Budget (OMB). The 
Commission will publish a document in the Federal Register announcing 
the effective date of these sections. The filing freeze became 
effective April 21, 2000 (See FCC News Releases, April 14, 2000 at 
www.fcc.gov).

ADDRESSES: Secretary, Federal Communications Commission, 445 12th 
Street, S.W., Washington, D.C. 20554, http://www.fcc.gov.

FOR FURTHER INFORMATION CONTACT: Irene Bleiweiss, Federal 
Communications Commission, Mass Media Bureau, Audio Services Division, 
445 12th Street, S.W., Washington, D.C. 20554 (202) 418-2780, Internet 
address:[email protected] (inquiries about this proceeding other than 
information collection) or Edward C. Springer, OMB Desk Officer, Office 
of Management and Budget, Room 10236 NEOB, 725 17th Street, NW., 
Washington, DC 20503, Internet address: [email protected] 
(inquiries about information collection).

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's 
Report and Order adopted April 4, 2000, and released April 21, 2000. 
The complete text of this Report and Order is available for inspection 
and copying during normal business hours in the FCC Reference Center 
(Room CY-A257), 445 12th Street, S.W., Washington, D.C., and also may 
be purchased from the Commission's copy contractor, International 
Transcription Service, (202) 857-3800, 1231 20th Street, NW., 
Washington, DC 20036. The text can be obtained over the internet by 
going to the FCC web site, www.fcc.gov, and following the link entitled 
``FCC Adopts Comparative Standards for Noncommercial Educational 
Broadcast Stations, 4/27/00, under the ``headlines'' section.

Synopsis of Order

    1. The Commission issued a Notice of Proposed Rule Making in this 
proceeding in 1995 [60 FR 15275 March 23, 1995] proposing to change the 
process used to select noncommercial educational applicants, because 
the existing process was cumbersome and no longer making meaningful 
distinctions among applicants. Subsequently, Congress addressed related 
issues in the Balanced Budget Act of 1997, and the Commission issued a 
Further Notice of Proposed Rule Making [63 FR 58358 October 30, 1998], 
seeking additional comments. After considering the comments received, 
the Commission now adopts new simpler filing procedures and selection 
methods for applications seeking to construct new noncommercial 
educational (NCE) FM, FM translator, and television stations and to 
make major changes to such existing stations.
    2. Applications for new and major changes to NCE stations will be 
filed only within ``filing windows'' to be announced by the Commission. 
The Commission will study applications filed during the window for 
mutual exclusivity. This replaces a system in which applications were 
accepted at any time, and ``cut-off'' lists were issued to invite 
competing applications.
    3. If mutually applications are received within a filing window, 
and for existing mutually exclusive applications that have already been 
``cut off,'' the Commission will first determine as a threshold issue, 
whether any application should be granted or dismissed on the basis of 
fair distribution of service pursuant to 47 U.S.C. 307(b) (FM stations 
proposing service to different communities) or on the basis of 
translator fill-in service as compared to non-fill-in service. If 
mutually exclusive applicants remain after these threshold issues, the 
Commission will proceed to a point system.
    4. Points will be awarded as follows: (a) 3 points to an 
established local entity (a government applying for a station within 
its area of jurisdiction or any applicant that for at least the two 
years prior to application has had one of the following within 25 miles 
of the reference coordinates for the community of license: its 
headquarters, its campus, or the primary residences of 75% of its board 
members); (b) 1 to 2 points to the applicant with the best technical 
proposal (covering the largest area and population) depending on 
comparison to the next best technical proposal; and either (c) 2 points 
to applicants with local diversity of ownership (no overlap of 
attributable station principal community contours); or (d) 2 points to 
an applicant that does not claim local diversity of ownership points, 
if it is a state-wide network serving 50 accredited full-time 
elementary/

[[Page 36376]]

secondary schools or 5 accredited full-time college/university 
campuses. Points are determined by the applicant's qualifications at 
the time of application, provided that the applicant must still qualify 
for those points at the time of point analysis. In determining points, 
the interests of attributable parties such as parent organizations, 
officers, board members, and parties with significant financial 
influence that also will supply substantial programming to the station 
will be considered.
    5. To break ties, the Commission will select the applicant with the 
fewest authorizations (existing stations and construction permits). If 
that standard fails to break the tie, the Commission will select the 
applicant with the fewest pending applications. If these tie breakers 
do not result in selection of a prevailing applicant, the Commission 
will implement mandatory time sharing for full service applicants. For 
FM translator applicants only, the final tie breaker will select the 
first applicant to file, similar to existing translator-only rules. The 
Commission will permit settlements at any time under current settlement 
rules, which limit reimbursement to an applicant's reasonable and 
prudent expenses.
    6. The new procedures will apply to applications already on file 
and applications filed in the future. The Commission will issue a 
Public Notice in the future providing existing applicants with 
information about how to supplement their applications to claim the 
points for which they qualify. Existing applicants may file settlements 
at any time.
    7. Until a successful applicant selected through a point system has 
completed four years of on-air operations, it will be permitted to 
assign or transfer control of the station's license only to a party 
eligible to receive the same number of points, and for consideration 
not to exceed reasonable and prudent expenses application and 
construction expenses.
    8. The Commission will not use the point system for channels that 
are available commercially (non-reserved channels), even if one or more 
noncommercial organizations apply for the channel. Such applications 
will be resolved by auction. In reaching this conclusion, the 
Commission conducted an in-depth analysis of conflicting directives in 
the enabling statute, and Commission policies concerning allocation and 
use of the reserved and non-reserved channels.

Final Regulatory Flexibility Analysis (FRFA)

Summary

    As required by the Regulatory Flexibility Act (``RFA''), 5 U.S.C. 
603, an Initial Regulatory Flexibility Analysis (``IRFA'') was 
incorporated in the Further Notice of Proposed Rulemaking for the 
docket in this proceeding. The Commission sought written public 
comments on the proposals set forth in the Notice, including comment on 
the IRFA. The Commission's Final Regulatory Flexibility Analysis 
(``FRFA'') in this Report and Order (``Order'') conforms to the RFA, as 
amended by the Contract With America Advancement Act of 1996, Public 
Law 104-121, 110 Stat. 847 (1996).

Need for and Objectives of Action

    The Commission previously determined that traditional hearings, the 
method used to select among competing applicants for new noncommercial 
educational broadcast construction permits, were time consuming and 
burdensome, and that the criteria used in those hearings were vague and 
difficult to apply. This Order amends the Commission's rules to 
establish a simpler, clearer, and more streamlined process for 
selecting among competing noncommercial educational applicants. 
Specifically, it (1) establishes a point system, a type of simplified 
paper hearing on channels reserved for NCE use; (2) clarifies that 
auctions will apply on non-reserved broadcast channels; and (3) 
provides additional circumstances in which an NCE entity can have a 
non-reserved channel allocated as reserved.

Significant Issues Raised by Public Comments in Response to the Initial 
Analysis

    No comments were received specifically in response to the IRFA in 
MM Docket No. 95-31. However, one commenter, in expressing support for 
the use of lotteries, an option not selected, stated that it thought 
lotteries would have a positive effect on small businesses.

Description and Estimate of the Number of Small Entities Involved

    Under the RFA, small entities may include small organizations, 
small businesses, and small governmental jurisdictions. 5 U.S.C. S 
601(6). The RFA, 5 U.S.C. 601(3), generally defines the term ``small 
business'' as having the same meaning as the term ``small business 
concern'' under the Small Business Act, 15 U.S.C. 632. 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''). Pursuant to 5 U.S.C. 601(3), the statutory definition of a 
small business applies ``unless an agency after consultation with the 
Office of Advocacy of the SBA and after opportunity for public comment, 
establishes one or more definitions of such term that are appropriate 
to the activities of the agency and publishes such definition(s) in the 
Federal Register.\1\ We received no comment in response to either IRFA 
on how to define radio and television broadcast ``small businesses.'' 
Therefore, we will continue to utilize SBA's definitions for the 
purpose of this FRFA.
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    \1\ While we believe that the SBA's definition of ``small 
business'' greatly overstates the number of radio and television 
broadcast stations that are small businesses and is not suitable for 
purposes of determining the impact of the proposals on small 
television and radio stations, for purposes of this FRFA, we utilize 
the SBA's definition in determining the number of small businesses 
to which the proposed rules would apply, but we reserve the right to 
adopt a more suitable definition of ``small business'' as applied to 
radio and television broadcast stations or other entities subject to 
these rules and to consider furher the issue of the number of small 
entities that are radio and television broadcasters or small media 
entities in the future. See Report and Order in MM Docket No. 93-48 
(Children's Television Programming), 11 FCC Rcd 10660, 10737-38 
(1996), citing 5 U.S.C. S 601(3).
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    The rules adopted in this Order will apply to television and radio 
stations licensed to operate on channels reserved as ``noncommercial 
educational.'' With respect to television stations, the Small Business 
Administration defines a television broadcasting station that has no 
more than $10.5 million in annual receipts as a small business. 
Television broadcasting stations consist of establishments primarily 
engaged in broadcasting visual programs by television to the public, 
except cable and other pay television services. Television stations 
that the Federal Communications Commission (FCC) would consider 
commercial, as well as those that the FCC would consider noncommercial 
educational, are included in this industry. Also included are other 
establishments primarily engaged in television broadcasting and which 
produce taped television program materials. Separate establishments 
primarily engaged in producing taped television program materials are 
classified under another SIC number.
    For 1992 the total number of television stations that produced less 
than $10.0 million in revenue was 1,155 of the 1,509 television 
stations then operating, both commercial and

[[Page 36377]]

noncommercial, or 77 percent. As of July 31, 1999, of the 1,599 total 
television stations, 370 are noncommercial educational. Thus, we 
estimate that the proposed rules will potentially affect 285 (77 
percent of 370) noncommercial educational television stations that are 
small businesses. These existing stations would only be affected if 
they file an application for major modification of their existing 
facilities, and if another applicant files a mutually exclusive 
application. These estimates may overstate the number of small entities 
since the revenue figures on which they are based do not include or 
aggregate revenues from non-television affiliated companies. On the 
other hand they may understate the number of small entities, because we 
believe that a larger percentage of noncommercial educational stations 
are small businesses than the percentage applicable to the television 
industry as a whole. We recognize that the proposed rules may also 
affect minority and women owned stations, some of which may be small 
entities. In 1997, minorities owned and controlled 38 (3.2%) of 1,193 
commercial television stations in the United States. Comparable figures 
are not available for noncommercial stations. According to the U.S. 
Bureau of the Census, in 1987 women owned and controlled 27 (1.9%) of 
1,342 commercial and noncommercial television stations in the United 
States. The proposal would also affect pending and future mutually 
exclusive applications for noncommercial television stations. As of 
August 1999, there are currently 67 pending applications for 22 
channels reserved for noncommercial educational television usage.
    The rule changes would also affect noncommercial educational radio 
stations. The SBA defines a radio broadcasting station that has no more 
than $5 million in annual receipts as a small business. A radio 
broadcasting station is an establishment primarily engaged in 
broadcasting aural programs by radio to the public. Radio stations that 
the Federal Communications Commission (FCC) would consider commercial, 
as well as those that the FCC would consider noncommercial educational, 
are included in this industry. Also included are entities which 
primarily are engaged in radio broadcasting and which produce radio 
program materials. However, radio stations which are separate 
establishments and are primarily engaged in producing radio program 
material are classified under another SIC number. The 1992 Census 
indicates that 96 percent of radio station establishments produced less 
than $5 million in revenue in 1992. Official Commission records 
indicate that 11,334 individual radio stations were operating in 1992. 
As of July 31, 1999, official Commission records indicate that 12,582 
radio stations are currently operating. Of the current radio station 
total, 2,055 stations are noncommercial educational. Thus, we estimate 
that 1,923 (96%) of these noncommercial educational stations are small 
businesses, possibly more because we believe that a greater percentage 
of noncommercial educational stations are small businesses than of the 
radio industry overall. These existing stations would only be affected 
by the proposal if they choose to file applications for major 
modification of facilities and if their applications are mutually 
exclusive with the application of another noncommercial entity. 
Applicants for new NCE radio stations would also potentially be 
affected. As of August 1999 there were 371 pending mutually exclusive 
groups of 1,102 applications, for new noncommercial FM radio stations. 
We also note that this proposal will affect future applications. With 
respect to minority ownership of radio stations, no information is 
available for noncommercial stations, but it is available for 
commercial stations. In 1997, minorities owned 284 (2.8%) of 10,282 
commercial radio stations.

Description of Projected Reporting, Recordkeeping and Other Compliance 
Requirements

    The measures adopted in the Order are anticipated to reduce the 
overall administrative burden of the Commission's application processes 
on applicants and the Commission. Use of a point system will eliminate 
the expense of preparing for and appearing at lengthy traditional 
hearings. Applicants should also receive decisions faster, because the 
Commission will make numerical calculations instead of preparing 
detailed hearing decisions. These savings should more than offset the 
time that would be required for applicants to gather and submit 
documentation supporting the points claimed. No additional professional 
services are required by applicants filing under these revised rules. 
Further, the cost of compliance will not vary between large and small 
entities.

Steps Taken To Minimize Significant Economic Impact on Small Entities, 
and Significant Alternatives Considered

    This Order sets forth the Commission's new streamlined procedures 
for selecting among competing noncommercial educational applicants. All 
significant alternatives presented in the comments were considered. 
Small entities participating in auctions for non-reserved channels may 
be eligible for a new entrant auction credit. Small entities may be 
eligible for points in the point system based on diversity of 
ownership, established local entity, and in a tie breaker for number of 
existing authorizations and applications.

Report to Congress

    The Commission will send a copy of the Reexamination of the 
Comparative Standards for Noncommercial Educational Applicants, 
including this FRFA, in a report to be sent to Congress pursuant to the 
Small Business Regulatory Enforcement Fairness Act of 1996. See 5 
U.S.C. 801(a)(1)(A). In addition, the Commission will send a copy of 
this Order, including this FRFA, to the Chief Counsel for Advocacy of 
the Small Business Administration. Further, the Commission's Office of 
Public Affairs, Reference Operations Division, shall send a copy of 
this Order, including FRFA, to the Chief Counsel for Advocacy of the 
Small Business Administration.

List of Subjects in 47 CFR Parts 73 and 74

    Radio broadcasting, Television broadcasting.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.

    Parts 73 and 74 of Chapter 1 of Title 47 of the Code of Federal 
Regulations are amended as follows:

Regulatory Text

PART 73--RADIO BROADCAST SERVICES

    1. The authority citation for part 73 continues to read:

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


    2. Section 73.202 is amended by revising paragraph (a)(1) to read 
as follows:


Sec. 73.202  Table of Allotments.

    (a) * * *
    (1) Channels designated with an asterisk may be used only by 
noncommercial educational broadcast

[[Page 36378]]

stations. The rules governing the use of those channels are contained 
in part 73, subpart C of this chapter. An entity that would be eligible 
to operate a noncommercial educational broadcast station can, in 
conjunction with an initial petition for rulemaking filed pursuant to 
part 1, subpart C of this chapter, request that a nonreserved FM 
channel (channels 221 through 300) be allotted as reserved only for 
noncommercial educational broadcasting by demonstrating the following:
    (i) No reserved channel can be used without causing prohibited 
interference to TV channel 6 stations or foreign broadcast stations; or
    (ii) The applicant is technically precluded from using the reserved 
band by existing stations or previously filed applications and the 
proposed station would provide a first or second noncommercial 
educational radio service to 2,000 or more people who constitute 10% of 
the population within the proposed allocation's 60 dBu (1 mV/m) service 
contour.
* * * * *


Sec. 73.502   [Removed and reserved]

    3. Section 73.502 is removed and reserved.

    4. Section 73.503 is amended by adding a new paragraph (e) to read 
as follows:


Sec. 73.503  Licensing requirements and service.

* * * * *
    (e) Mutually exclusive applications for noncommercial educational 
radio stations operating on reserved channels will be resolved pursuant 
to the point system in subpart K.
* * * * *

    5. Section 73.513 is amended by designating the undesignated text 
as paragraph (a) and adding a new paragraph (b) to read as follows:


Sec. 73.513  Noncommercial educational FM stations operating on 
unreserved channels.

* * * * *
    (b) When a noncommercial educational applicant is among mutually 
exclusive applications for an unreserved FM channel, the mutually 
exclusive applications will be considered pursuant to Subpart I--
Competitive Bidding Procedures and not Subpart K--Application and 
Selection Procedures On Reserved Noncommercial Educational Channels.
    6. Section 73.621 is amended by adding a new paragraph (h) to read 
as follows:


Sec. 73.621  Noncommercial educational TV stations.

* * * * *
    (h) Mutually exclusive applications for noncommercial educational 
TV stations operating on reserved channels shall be resolved pursuant 
to the point system in subpart K.

    7. Section 73.622 is amended by adding two new sentences 
immediately preceeding the last sentence of paragraph (a) to read as 
follows:


Sec. 73.622  Digital television table of allotments.

    (a) * * * Rules governing noncommercial educational TV stations are 
contained in Sec. 73.621. Where there is only one technically available 
channel available in a community, an entity that would be eligible to 
operate a noncommercial educational broadcast station may, prior to 
application, initiate a rulemaking proceeding requesting that an 
unoccupied or new channel in the community be changed or added as 
reserved only for noncommercial educational broadcasting upon 
demonstrating that the noncommercial educational proponent would 
provide a first or second noncommercial educational TV service to 2,000 
or more people who constitute 10% of the population within the proposed 
allocation's noise limited contour. * * *
* * * * *

    8. Section 73.1150 is amended by adding a new paragraph (d) to read 
as follows:


Sec. 73.1150  Transferring a station.

* * * * *
    (d) Authorizations awarded pursuant to the noncommercial 
educational point system in subpart K are subject to the holding period 
in Sec. 73.7005. Applications for an assignment or transfer filed prior 
to the end of the holding period must demonstrate the factors 
enumerated therein.

    9. Section 73.3522 is amended by revising paragraph (b) to read as 
follows:


Sec. 73.3522  Amendment of applications.

* * * * *
    (b) Reserved Channel FM and reserved noncommercial educational 
television stations. Applications may be amended after Public Notice 
announcing a period for filing amendments. Amendments, when applicable, 
are subject to the provisions of Secs. 73.3514, 73.3525, 73.3572, 
73.3573, 73.3580, and Sec. 1.65 of this chapter. Unauthorized or 
untimely amendments are subject to return by the FCC's staff without 
consideration. Amendments will be accepted as described below and 
otherwise will only be considered upon a showing of good cause for late 
filing or pursuant to Sec. 1.65 of this chapter or Sec. 73.3514:
    (1) A Sec. 73.7002 Selectee. A Public Notice will announce that the 
application of a Sec. 73.7002 Selectee (selected based on fair 
distribution) has been found acceptable for filing. If any Selectee's 
application is determined unacceptable the application will be returned 
and the Selectee will be provided one opportunity for curative 
amendment by filing a petition for reconsideration requesting 
reinstatement of the application. All amendments filed in accordance 
with this paragraph must be minor and must not alter the Sec. 73.7002 
preference.
    (2) A Sec. 73.7003 Tentative Selectee. A Public Notice will 
announce that the application of a Sec. 73.7003 Tentative Selectee 
(selected through a point system) has been found acceptable for filing. 
If any Tentative Selectee's application is determined unacceptable the 
application will be returned and the Tentative Selectee will be 
provided one opportunity for curative amendment by filing a petition 
for reconsideration requesting reinstatement of the application. All 
amendments filed in accordance with this paragraph must be minor and 
must claim the same number of qualitative points as originally claimed, 
or more points than claimed by the applicant with the next highest 
point total.
    (3) A Public Notice will identify all other reserved channel 
applications, such as non-mutually exclusive applications and the sole 
remaining application after a settlement among mutually exclusive 
applications. If any such application is determined unacceptable the 
application will be returned and the applicant will be provided one 
opportunity for curative amendment by filing a petition for 
reconsideration requesting reinstatement of the application. All 
amendments filed in accordance with this paragraph must be minor.

    10. Section 73.3527 is amended by revising the first sentence of 
paragraph (e)(2) to read as follows:


Sec. 73.3527  Local public inspection file of noncommercial educational 
stations.

* * * * *
    (e) * * *
    (2) Applications and related materials. A copy of any application 
tendered for filing with the FCC, together with all related material, 
including supporting documentation of any points claimed in the 
application

[[Page 36379]]

pursuant to Sec. 73.7003, and copies of FCC decisions pertaining 
thereto. * * *
* * * * *

    11. Section 73.3555 is amended by revising paragraph (f) to read as 
follows:


Sec. 73.3555  Multiple ownership.

* * * * *
    (f) The ownership limits of this section are not applicable to 
noncommercial educational FM and noncommercial educational TV stations. 
However, the attribution standards set forth in the Notes to this 
section are relevant to evaluation of mutually exclusive noncommercial 
educational FM and TV applicants pursuant to subpart K of this part.
* * * * *

    12. Section 73.3572 is amended by revising paragraph (d) to read as 
follows:


Sec. 73.3572  Processing of TV broadcast, low power TV, TV translator 
and TV booster station applications.

* * * * *
    (d)(1) The FCC will specify by Public Notice, a period for filing 
applications for new television stations on reserved noncommercial 
educational channels or for major modifications in the facilities of an 
authorized station on reserved channels. TV reserved channel 
applications for new facilities or for major modifications will be 
accepted only during the appropriate filing period or ``window.'' 
Applications submitted prior to the window opening date identified in 
the Public Notice will be returned as premature. Applications submitted 
after the specified deadline will be dismissed with prejudice as 
untimely. Mutually exclusive applications for reserved channel 
television stations will be resolved using the point system in subpart 
K of this part.
    (2) Concurrently with the filing of a new or major modification 
application for a reserved noncommercial educational channel, the 
applicant shall submit to the FCC's public reference room and to a 
local public inspection file consistent with Sec. 73.3527(e)(2), 
supporting documentation of points claimed, as described in the 
application form.
* * * * *

    13. Section 73.3573 is amended by revising paragraphs (d) and (e) 
to read as follows:


Sec. 73.3573  Processing FM broadcast station applications.

* * * * *
    (d) If, upon examination, the FCC finds that the public interest, 
convenience and necessity will be served by the granting of an 
application for FM broadcast facilities, the same will be granted. If 
the FCC is unable to make such a finding and it appears that a hearing 
may be required, the procedure given in Sec. 73.3593 will be followed. 
In the case of mutually exclusive applications for reserved channels, 
the procedures in subpart K of this part will be followed. In the case 
of mutually exclusive applications for unreserved channels, the 
procedures in subpart I of this part will be followed.
    (e) Processing reserved channel FM broadcast station applications. 
(1) Applications for minor modifications for reserved channel FM 
broadcast stations, as defined in paragraph (a)(2) of this section, may 
be filed at any time, unless restricted by the FCC, and will be 
processed on a ``first come/first served'' basis, with the first 
acceptable application cutting off the filing rights of subsequent, 
competing applicants. The FCC will periodically release a Public Notice 
listing those applications accepted for filing. Conflicting 
applications received on the same day will be treated as simultaneously 
filed and mutually exclusive. Conflicting applications received after 
the filing of the first acceptable application will be grouped, 
according to filing date, behind the lead application in the queue. The 
priority rights of the lead applicant, against all other applicants, 
are determined by the date of filing, but the filing date for 
subsequent conflicting applicants only reserves a place in the queue. 
The right of an applicant in a queue ripens only upon a final 
determination that the lead applicant is unacceptable and that the 
queue member is reached and found acceptable. The queue will remain 
behind the lead applicant until the construction permit is finally 
granted, at which time the queue dissolves.
    (2) The FCC will specify by Public Notice a period for filing 
reserved channel FM applications for a new station or for major 
modifications in the facilities of an authorized station. FM reserved 
channel applications for new facilities or for major modifications will 
be accepted only during the appropriate filing period or ``window.'' 
Applications submitted prior to the window opening date identified in 
the Public Notice will be returned as premature. Applications submitted 
after the specified deadline will be dismissed with prejudice as 
untimely.
    (3) Concurrently with the filing of a new or major modification 
application for a reserved noncommercial educational channel, the 
applicant shall submit to the FCC's public reference room and to a 
local public inspection file consistent with Sec. 73.3527(e)(2), 
supporting documentation of points claimed, as described in the 
application form.
    (4) Timely filed applications for new facilities or for major 
modifications for reserved FM channels will be processed pursuant to 
the procedures set forth in subpart K of this part (Sec. 73.7000 et 
seq.) Subsequently, the FCC will release Public Notices identifying: 
mutually exclusive groups of applications; applications selected 
pursuant to the fair distribution procedures set forth in Sec. 73.7002; 
applications received during the window filing period which are found 
to be non-mutually exclusive; tentative selectees determined pursuant 
to the point system procedures set forth in Sec. 73.7003; and 
acceptable applications. The Public Notices will also announce: 
additional procedures to be followed for certain groups of 
applications; deadlines for filing additional information; and dates by 
which petitions to deny must be filed in accordance with the provisions 
of Sec. 73.3584. If the applicant is duly qualified, and upon 
examination, the FCC finds that the public interest, convenience and 
necessity will be served by the granting of the application, it will be 
granted. If an application is determined unacceptable for filing, the 
application will be returned, and subject to the amendment requirements 
of Sec. 73.3522.
* * * * *

    14. Section 73.3584 is amended by adding a new first and second 
sentence to paragraph (a) immediately preceding ``Except'' to read as 
follows:


Sec. 73.3584  Procedure for filing petitions to deny.

    (a) For mutually exclusive applications subject to selection by 
competitive bidding (non-reserved channels) or fair distribution/point 
system (reserved channels), petitions to deny may be filed only against 
the winning bidders or tentative selectee(s), and such petitions will 
be governed by Secs. 73.5006 and 73.7004, respectively. For all other 
applications the following rules will govern. * * *
* * * * *

    15. Section 73.3593 is revised to read as follows:


Sec. 73.3593  Designation for hearing.

    If the FCC is unable, in the case of any application for an 
instrument of authorization, to make the findings specified in 
Sec. 73.3591(a), it will formally designate the application for hearing 
on the grounds or reasons then obtaining

[[Page 36380]]

and will forthwith notify the applicant and all known parties in 
interest of such action and the grounds and reasons therefor, 
specifying with particularity the matters and things in issue but not 
including issues or requirements phrased generally. If, however, the 
issue to be resolved is limited to the mutual exclusivity of 
applications for initial authorizations or for major changes to 
existing stations, that mutual exclusivity shall be resolved pursuant 
to competitive bidding procedures identified in subpart I (unreserved 
channels) or point system procedures identified in subpart K (reserved 
channels).

    16. Add subpart K to part 73 to read as follows:
Subpart K--Application and Selection Procedures on Reserved 
Noncommercial Educational Channels
Sec.
73.7000   Definition of terms (as used in subpart K only).
73.7001   Services subject to evaluation by point system.
73.7002   Fair distribution of service on reserved band FM channels.
73.7003   Point system selection procedures.
73.7004   Petitions to deny tentative selectee(s).
73.7005   Holding period.


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

    Attributable interest. An interest of an applicant, its parent, 
subsidiaries, their officers, and members of their governing boards 
that would be cognizable under the standards in the notes to 
Sec. 73.3555. Also an interest of an entity providing more than 33 
percent of an applicant's equity and/or debt that also either (1) 
supplies more than 15% of the station's weekly programming, or (2) has 
an attributable interest pursuant to Sec. 73.3555 in media in the same 
market.
    Established local applicant. An applicant that has, for at least 
the two years (24 months) immediately preceding application, met the 
definition of local applicant.
    Local applicant. An applicant physically headquartered, having a 
campus, or having 75% of board members residing within 25 miles of the 
reference coordinates for the community to be served.
    Nonreserved (Unreserved) channels. Channels which are not reserved 
exclusively for noncommercial educational use, and for which commercial 
entities could thus be eligible to operate full power stations. Such 
channels appear without an asterisk designation in the FM Table of 
Allotments (Sec. 73.202) and TV Table of Allotments (Sec. 73.606). In 
the event of a request to allocate a nonreserved channel as reserved 
pursuant to Secs. 73.202(a) or 73.606(a), the channel remains 
classified as nonreserved until release of a Commission decision 
granting such request.
    On-air operations. Broadcast of program material to the public 
pursuant to Commission authority, generally beginning with program test 
authority, for periods of time that meet any required minimum operating 
schedule, e.g. Sec. 73.561(a).
    Population. The number of people calculated using the most recent 
census block data provided by the United States Census Bureau.
    Reserved channels. Channels reserved exclusively for noncommercial 
educational use, whether by the portion of the spectrum in which they 
are located (i.e. FM channels 200 to 220) or by a case-by-case 
Commission allotment decision (channels that appear with an asterisk 
designation in the FM Table of Allotments (Sec. 73.202) or TV Table of 
Allotments (Sec. 73.606)).


Sec. 73.7001  Services subject to evaluation by point system.

    (a) A point system will be used to evaluate mutually exclusive 
applications for new radio, television, and FM translator facilities, 
and for major changes to existing facilities, on reserved channels.
    (b) Mutually exclusive applications for nonreserved broadcast 
channels are not subject to a point system, even if one or more of the 
applicants would be eligible to and intends to operate in a 
noncommercial educational manner. Mutually exclusive applications for 
nonreserved broadcast channels will be resolved by the competitive 
bidding procedures in subpart I of this part regardless of the 
noncommercial or commercial nature of the applicants.


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

    (a) If timely filed applications for full service stations on 
reserved FM channels are determined to be mutually exclusive, and will 
serve different communities, the Commission will first determine, as a 
threshold issue, whether grant of a particular application would 
substantially further the fair distribution of service goals enunciated 
in section 307(b) of the Communications Act, 47 U.S.C. 307(b).
    (b) An applicant for a full service FM radio station that will 
provide the first or second noncommercial educational (NCE) aural 
signal to at least 10% of the population within the 60 dBu (1mV/m) 
service contours of a noncommercial educational FM station 
substantially furthers fair service goals and will be considered 
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 new service will be 
awarded a construction permit, if it will provide such service to 5,000 
or more people than the next best applicant. Otherwise, the mutually 
exclusive applications will proceed to examination under 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.


Sec. 73.7003  Point system selection procedures.

    (a) If timely filed applications for reserved FM channels or 
reserved TV channels are determined to be mutually exclusive, 
applications will be processed and assessed points to determine the 
tentative selectee for the particular channels. The tentative selectee 
will be the applicant with the highest point total under the procedure 
set forth in this section, and will be awarded the requested permit if 
the Commission determines that an award will serve the public interest, 
convenience, and necessity.
    (b) Based on information provided in each application, each 
applicant will be awarded a predetermined number of points under the 
criteria listed:
    (1) Established local applicant. Three points for local applicants 
as defined in Sec. 73.7000 who have been local continuously for no 
fewer than the two years (24 months) immediately prior to application, 
if the applicant's own governing documents (e.g. by-laws, constitution, 
or their equivalent) require that such localism be maintained.
    (2) Local diversity of ownership. Two points for applicants with no 
attributable interests as defined in Sec. 73.7000, in any other 
broadcast station or authorized construction permit

[[Page 36381]]

(comparing radio to radio and television to television) whose principal 
community (city grade) contour overlaps that of the proposed station, 
if the applicant's own governing documents (e.g. by-laws, constitution, 
or their equivalent) require that such diversity be maintained. The 
principal community (city grade) contour is the 5 mV/m for AM stations, 
the 3.16 mV/m for FM stations calculated in accordance with 
Sec. 73.313(c), and the contour identified in Sec. 73.685(a) for TV.
    (3) State-wide network. Two points for an applicant that does not 
qualify for the credit for local diversity of ownership, if it is:
    (i) An entity, public or private, with authority over a minimum of 
50 accredited full-time elementary and/or secondary schools within a 
single state, encompassed by the combined primary service contours of 
the proposed station and its existing station(s), if the existing 
station(s) are regularly providing programming to the schools in 
furtherance of the school curriculum and the proposed station will 
increase the number of schools it will regularly serve; or
    (ii) An accredited public or private institution of higher learning 
with a minimum of five full time campuses within a single state 
encompassed by the combined primary service contours of the proposed 
station and its existing station(s), if the existing station(s) are 
regularly providing programming to campuses in furtherance of their 
curriculum and the proposed station will increase the number of 
campuses it will regularly serve; or
    (iii) An organization, public or private, with or without direct 
authority over schools, that will regularly provide programming for and 
in coordination with an entity described in paragraph (b)(3) (i) or 
(ii) of this section for use in the school curriculum.
    (iv) No entity may claim both the diversity credit and the state-
wide network credit in any particular application.
    (4) Technical Parameters. One point to the applicant covering the 
largest geographic area and population with its relevant contour (60 
dBu for FM and Grade B for TV), provided that the applicant covers both 
a ten percent greater area and a ten percent greater population than 
the applicant with the next best technical proposal. The top applicant 
will receive two points instead of one point if its technical proposal 
covers both a 25 percent greater area and 25 percent greater population 
than the next best technical proposal.)
    (c) If the best qualified (highest scoring) two or more applicants 
have the same point accumulation, the tentative selectee will be 
determined by a tie-breaker mechanism as follows:
    (1) Each applicant's number of attributable existing authorizations 
(licenses and construction permits, commercial and noncommercial) in 
the same service (radio or television) nationally, as of the time of 
application shall be compared, and the applicant with the fewest 
authorizations will be chosen as tentative selectee;
    (2) If a tie remains after the tie breaker in paragraph (c)(1) of 
this section, the tentative selectee will be the remaining applicant 
with the fewest pending new and major change applications in the same 
service at the time of filing;
    (3) If a tie remains after the tie breaker in paragraph (c)(2) of 
this section, each of the remaining applicants will be identified as a 
tentative selectee, with the time divided equally among them.
    (d) Settlements. At any time during this process, the applicants 
may advise the Commission that they are negotiating or have reached 
settlement, and the Commission will withhold further comparative 
processing for a reasonable period upon such notification. Settlement 
may include an agreement to share time on the channel voluntarily or 
other arrangement in compliance with Commission rules. Parties to a 
settlement shall comply with Sec. 73.3525, limiting any monetary 
payment to the applicant's reasonable and prudent expenses.


Sec. 73.7004  Petitions to deny tentative selectee(s).

    (a) For mutually exclusive applicants subject to the selection 
procedures in subpart K of this part, Petitions to Deny will be 
accepted only against the tentative selectee(s).
    (b) Within thirty (30) days following the issuance of a public 
notice announcing the tentative selection of an applicant through fair 
distribution (Sec. 73.7002) or point system (Sec. 73.7003) procedures, 
petitions to deny that application may be filed. Any such petitions 
must contain allegations of fact supported by affidavit of a person or 
persons with personal knowledge thereof.
    (c) An applicant may file an opposition to any petition to deny, 
and the petitioner a reply to such opposition. Allegations of fact or 
denials thereof must be supported by affidavit of a person or persons 
with personal knowledge thereof. The time for filing such oppositions 
shall be 10 days from the filing date for petitions to deny, and the 
time for filing replies shall be 5 days from the filing date for 
oppositions.
    (d) If the Commission denies or dismisses all petitions to deny, if 
any are filed, and is otherwise satisfied that an applicant is 
qualified, the application will be granted. If the Commission 
determines that the points originally claimed were higher than 
permitted, but that there is no substantial and material question of 
fact of applicant qualifications, it will compare the revised point 
tally of the tentative selectee to the other mutually exclusive 
applicants and, either grant the original application or announce a new 
tentative selectee, as appropriate. If an applicant is found 
unqualified, the application shall be denied, and the applicant(s) with 
the next highest point tally named as the new tentative selectee.


Sec. 73.7005  Holding period.

    (a) Assignments/Transfers. NCE stations awarded by use of the point 
system in Sec. 73.7003 shall be subject to a holding period. From the 
grant of the construction permit and continuing until the facility has 
achieved four years of on-air operations, an applicant proposing to 
assign or transfer the construction permit/license to another party 
will be required to demonstrate the following two factors: that the 
proposed buyer would qualify for the same number of or greater points 
as the assignor or transferor originally received; and that 
consideration received and/or promised does not exceed the assignor's 
or transferor's legitimate and prudent expenses. For purposes of this 
section, legitimate and prudent expenses are those expenses reasonably 
incurred by the assignor or transferor in obtaining and constructing 
the station (e.g. expenses in preparing an application, in obtaining 
and installing broadcast equipment to be assigned or transferred, 
etc.). Costs incurred in operating the station are not recoverable 
(e.g. rent, salaries, utilities, music licensing fees, etc.). Any 
successive applicants proposing to assign or transfer the construction 
permit/license prior to the end of the aforementioned holding period 
will be required to make the same demonstrations.
    (b) Technical. In accordance with the provisions of Sec. 73.7002, 
an NCE applicant receiving a decisive preference for fair distribution 
of service is required to construct and operate technical facilities 
substantially as proposed, and can not downgrade service to the area on 
which the preference is based for a period of four years of on-air 
operations. (c) The holding period in this section does not

[[Page 36382]]

apply to construction permits that are awarded on a non-comparative 
basis, such as those awarded to non-mutually exclusive applicants or 
through settlement.

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

    17. The authority citation for part 74 continues to read:

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


    18. Section 74.1233 is amended by adding paragraphs (b)(3) and 
(b)(4); revising paragraph (c)(1); removing paragraph (e)(4) and 
revising paragraphs (e)(3) introductory text, (e)(3), (i), (e)(3) (ii), 
and (e)(3)(iii) to read as follows:


Sec. 74.1233  Processing FM translator and booster station 
applications.

* * * * *
    (b) * * *
    (3) Applications for reserved band FM translator stations will be 
processed using filing window procedures. The FCC will specify by 
Public Notice, a period for filing reserved band FM translator 
applications for a new station or for major modifications in the 
facilities of an authorized station. FM translator applications for new 
facilities or for major modifications will be accepted only during 
these specified periods. Applications submitted prior to the window 
opening date identified in the Public Notice will be returned as 
premature. Applications submitted after the specified deadline will be 
dismissed with prejudice as untimely.
    (4) Timely filed applications for new facilities or for major 
modifications for reserved band FM Translators will be processed 
pursuant to the procedures set forth in subpart K of Part 73 
(Sec. 73.7000 et seq.) Subsequently, the FCC will release Public 
Notices identifying: mutually exclusive groups of applications; 
applications received during the window filing period which are found 
to be non-mutually exclusive; tentative selectees determined pursuant 
to the point system procedures set forth in Sec. 73.7003 of this 
chapter; and acceptable applications. The Public Notices will also 
announce: additional procedures to be followed for certain groups of 
applications; deadlines for filing additional information; and dates by 
which petitions to deny must be filed in accordance with the provisions 
of Sec. 73.7004 of this chapter. If the applicant is duly qualified, 
and upon examination, the FCC finds that the public interest, 
convenience and necessity will be served by the granting of the 
application, it will be granted. If an application is found not to be 
acceptable for filing, the application will be returned, and subject to 
the amendment requirements of Sec. 73.3522 of this chapter.
    (c) * * *
    (1) There is not pending a mutually exclusive application.
* * * * *
    (e) * * *
    (3) Where there are no available frequencies to substitute for a 
mutually exclusive application, the FCC will apply the same point 
system identified for full service reserved band FM stations in 
Sec. 73.7003(b) of this chapter. In the event of a tie, the FCC will 
consider:
    (i) Each applicant's number of existing FM translator 
authorizations (licenses and construction permits) of the same type 
(fill-in or non fill-in as defined in paragraphs (e)(1) and (e)(2) of 
this section) as of the time of application shall be compared, and the 
applicant with the fewest authorizations will be chosen as tentative 
selectee;
    (ii) If a tie remains, after the tie breaker in paragraph (c)(3)(i) 
of this section, the remaining applicant with the fewest pending new 
and major change applications for FM translators of the same type 
(fill-in or non fill-in) will be chosen as tentative selectee;
    (iii) Where the procedures in paragraphs (e)(1), (e)(2) and 
(e)(3)(i) and (e)(3)(ii) of this section fail to resolve the mutual 
exclusivity, the applications will be processed on a first-come-first-
served basis.

[FR Doc. 00-14439 Filed 6-7-00; 8:45 am]
BILLING CODE 6712-01-U`