65392 Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Proposed Rules

12,000 foot standard and the 18,000 foot

standard: Florida, Georgia, Maryland,

Missouri, and Montana.

E. Proprietary or Confidential

Information

In light of the Commission’s

requirement in the Order that ‘‘all

underlying data, formulae,

computations, and software associated

with the model must be available to

interested parties for review and

comment,’’ the Bureau recommends that

each model proponent submit detailed

descriptions of all information or

software alleged to be confidential,

proprietary, or otherwise unavailable to

the public that is used either in the

model or in a preprocessing module.

The descriptions should include

estimates of the costs and procedures

that may be associated with making the

information or software available to the

Commission and to the administrator of

the universal service support

mechanisms.

III. Follow-Up Requirements

The Commission established criteria

for its forward-looking economic cost

mechanism in the Order. The Bureau

recommends that model proponents

ensure that their modules for

determining the location of customers

and estimating outside plant investment

comply with all of the criteria set out in

the Order, in addition to the

recommendations in this Public Notice.

The Bureau recognizes that

proponents of models may need to make

certain changes to their models to bring

them into conformity with the guidance

provided in this public notice. Within

four weeks from the release date of this

public notice, any proponents of models

should submit their models for

consideration by the Commission. To

facilitate that process and the

Commission’s review, models should be

accompanied by a cover letter

providing: (1) A list of the items

discussed above with which their model

already is in conformity and a

description of how their model is in

conformity with those items, and; (2) a

listing of the items with which their

model is not yet in conformity. The

Bureau anticipates that the models

submitted at that time will be evaluated

by the Commission in selecting the

platform for the federal mechanism.

IV. Procedural Matters

Within four weeks of the release date

of this Public Notice, proponents of a

model should file an original and three

(3) copies of their submission,

referencing CC Dockets Nos. 96–45 and

97–160, with the Office of the Secretary,

Federal Communications Commission,

1919 M Street, N.W., Room 222,

Washington, DC 20554. Proponents

should also provide four (4) copies of

their submission to Chuck Keller of the

Universal Service Branch, 2100 M

Street, N.W., Room 8918, Washington,

D.C. 20554.

Federal Communications Commission.

Timothy A. Peterson,

Deputy Division Chief, Common Carrier

Bureau.

[FR Doc. 97–31117 Filed 12–11–97; 8:45 am]

BILLING CODE 6712–01–P

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Parts 73 and 74

[MM Docket No. 97–234; GC Docket No.

92–52; GEN Docket No. 90–264, FCC 97–

397]

Competitive Bidding for Commercial

Broadcast and Instructional Television

Fixed Service Licenses; Comparative

Broadcast Hearings

AGENCY: Federal Communications

Commission.

ACTION: Proposed rule.

SUMMARY: The Federal Communications

Commission (FCC) seeks comment on

proposed competitive bidding

procedures that will apply to mutually

exclusive applications for licenses to

provide commercial AM radio, FM

radio, analog television, low power

television, and FM or TV translator

service. The proposed auction

procedures implement the Balanced

Budget Act of 1997, which expanded

the FCC’s auction authority to require

that it use auctions to award virtually all

licenses. The FCC also proposes to use

auctions to resolve certain pending

commercial broadcast applications filed

before July 1, 1997, which under the

statute may be resolved by either

auction or comparative hearings.

Auctions allow the FCC to award

licenses more efficiently than

comparative hearings, and using

auctions to decide the pre-July 1, 1997

applications for new commercial radio

or television broadcast stations allows

the FCC to end the stay in effect since

1994 on comparative broadcast initial

licensing cases. But the FCC seeks

comment on whether there are special

equitable considerations that warrant

using comparative hearings to decide

some of the pre-July 1 applications.

Comment is also sought on whether the

FCC must or should use auctions to

award licenses in the Instructional

Television Fixed Service, and on how to

resolve pending comparative renewal

cases, which are beyond the FCC’s

auction authority.

DATES: Comments are due January 26,

1998; Reply Comments are due February

17, 1998. Written comments by the

public on the proposed and/or modified

information collections are due January

26, 1998. Written comments must be

submitted by the Office of Management

and Budget (OMB) on the proposed and/

or modified information collections on

or before February 10, 1998.

ADDRESSES: Comments and reply

comments should be sent to the Office

of the Secretary, Federal

Communications Commission, Room

222, 1919 M Street, N.W., Washington,

D.C. 20554. Copies of these pleadings

should also be sent to the Mass Media

Bureau, Video Services Division (Room

702) and Audio Services Division

(Room 302), 1919 M St., N.W.,

Washington, D.C. 20554, and the Office

of General Counsel, Room 610, 1919 M

St., N.W., Washington, D.C. 20554. In

addition to filing comments with the

Secretary, a copy of any comments on

the information collections contained

herein should be submitted to Judy

Boley, Federal Communications

Commission, Room 234, 1919 M Street,

N.W., Washington, DC 20554, or via the

Internet to jboley@fcc.gov, and to

Timothy Fain, OMB Desk Officer, 10236

NEOB, 725—17th Street, N.W.,

Washington, DC 20503 or via the

Internet to fainlt@al.eop.gov.

FOR FURTHER INFORMATION CONTACT: John

Riffer and S. Lee Martin, Office of

General Counsel, (202) 418–1720,

Jerianne Timmerman, Video Services

Division, Mass Media Bureau, (202)

418–1643, and Lisa Scanlan, Audio

Services Division, Mass Media Bureau,

(202) 418–2720. For additional

information concerning the information

collections contained in this Notice

contact Judy Boley at 202–418–0214, or

via the Internet at jboley@fcc.gov.

SUPPLEMENTARY INFORMATION: This is a

summary of the Commission’s Notice of

Proposed Rulemaking, in MM Docket

No. 97–234, GC Docket No. 92–52, and

GEN Docket No. 90–264, adopted

November 25, 1997 and released

November 26, 1997. The complete text

of this Notice of Proposed Rulemaking

is available for inspection and copying

during normal business hours in the

FCC Reference Center (Room 239), 1919

M St., N.W., Washington, D.C. 20554,

and may also be purchased from the

Commission’s copy contractor,

International Transcription Service,

(202) 857–3800 (phone), (202) 857–3805

(facsimile), 1231 20th Street, N.W.,

Washington, D.C. 20036.
Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Proposed Rules 65393

Paperwork Reduction Act

This Notice contains either a

proposed or modified information

collection, subject to the Paperwork

Reduction Act of 1995 (PRA), Pub. L.

104–13. It has been submitted to the

Office of Management and Budget

(OMB) for review under section 3507(d)

of the PRA. OMB, the general public,

and other federal agencies are invited to

comment on the proposed or modified

information collections contained in

this proceeding. Public and agency

comments are due at the same time as

other comments on this Notice; OMB

comments are due February 10, 1998.

Comments should address: (a) whether

the proposed collection of information

is necessary for the proper performance

of the functions of the Commission,

including whether the information shall

have practical utility; (b) the accuracy of

the Commission’s burden estimates; (c)

ways to enhance the quality, utility, and

clarity of the information collected; and

(d) ways to minimize the burden of the

collection of information on the

respondents, including the use of

automated collection techniques or

other forms of information technology.

OMB Approval Number: New.

Title: Notice of Proposed Rulemaking,

Implementation of Section 309(j) of the

Communications Act of 1934

(Competitive Bidding for Commercial

Broadcast and Instructional Television

Fixed Service Licenses) (MM Docket No.

97–234).

Form No.: FCC Form 175, FCC Form

301, FCC Form 346, FCC Form 349.

Type of Review: New collection.

Respondents: Business or other forprofit.

Number of Respondents: 7,289.

Estimated Time Per Response: Ranges

from 45 minutes to 95 hours depending

on the type of application filed.

Total Annual Burden: 20,051 hours.

Needs and Uses: The information

contained on FCC Form 175, as well as

any supplemental engineering

information from FCC Forms 301, 346,

or 349 required for various non-Table

services (including new AM stations),

will be used to determine mutual

exclusivity for purposes of using

competitive bidding procedures to

award commercial broadcast licenses.

And, in the event the Commission

adopts bidding preferences or other

measures to foster participation by small

businesses, rural telephone companies,

businesses owned by minority group

members or women, and non-group

owners, the proposed annual

certification of continuing eligibility for

such special measures will be used to

prevent unjust enrichment resulting

from the use of competitive bidding to

award licenses.

Synopsis of Notice of Proposed

Rulemaking

Background

1. The Commission has traditionally

used comparative hearings to resolve

mutually exclusive applications for new

commercial full service broadcast

stations. In 1992, the Commission

initiated a rulemaking to reexamine the

comparative criteria for resolving such

applications, and two further notices of

proposed rulemaking were adopted after

the court in Bechtel v. FCC, 10 F.3d 875

(D.C. Cir. 1993) (Bechtel II), invalidated

the central criterion used to decide such

cases.

2. As part of the Balanced Budget Act

of 1997, Congress: (1) amended section

309(j) of the Communications Act (Act)

to require that the Commission award

virtually all spectrum licenses,

including commercial broadcast

licenses, by competitive bidding

proceedings if mutually exclusive

applications are accepted; (2) amended

section 309(i) of the Act to terminate

Commission’s authority to award

commercial broadcast licenses by

random selection after July 1, 1997; and

(3) adopted new section 309(l) which

authorizes (but does not require) the

Commission to use auctions to resolve

pending comparative licensing cases

involving applications for new

commercial radio or television stations

filed before July 1, 1997.

Proposals to Resolve Comparative Initial

Licensing Cases

3. Citing the advantages of using

auctions to award spectrum licenses in

terms of expediting service to the

public, the Commission tentatively

found that using auctions to resolve the

narrow group of pending cases in which

auctions are not statutorily required

would better serve the public interest

than comparative hearings. It asked

commenters advocating continued use

of comparative hearings for these cases

to explain how their proposed criteria

would be implemented in an

administratively workable and

judicially sustainable manner and how

the proposed criteria would predict

good or better service or serve some

independent public interest goal. The

Commission also sought comment on

whether, even if auctions are used to

resolve mutual exclusivity among most

pre-July 1, 1997 applications, equitable

concerns warrant comparative hearings

in the few cases that had progressed to

either a decision by an Administrative

Law Judge, the former Review Board or

the Commission before the court in

Bechtel II found that the integration

criterion was unlawful. Commenters

should describe the equitable

considerations that they believe would

support the use of comparative hearings

and the specific criteria they believe

should be used, and explain how these

criteria would further the equitable

interests they have identified.

4. The Commission proposes to

refund, upon request, hearing fees

actually paid by applicants for

applications that are ultimately decided

by competitive bidding; and, as a matter

of fairness, it proposes to refund, upon

request, filing fees paid by applicants

that do not participate in the auction.

Auction Procedures for Pending

Applications Subject to Section 309(l)

5. Section 309(l) provides that, if the

Commission decides to use auctions to

resolve competing applications for

commercial radio or television stations

filed before July 1, 1997, it shall treat

such persons as the only eligible bidders

qualified to participate in the auction.

The Commission tentatively found that

this provision applies only if two or

more mutually exclusive applications

were filed before July 1, 1997. Thus,

auctions are mandated by section 309(j)

if all pending applications were filed

after June 30, 1997, or if only one of a

group of mutually exclusive

applications was filed before July 1,

1997. Where two or more competing

applications are filed before July 1,

1997, however, the Commission

tentatively interpreted the provision to

prohibit the opening of an additional

filing window for new mutually

exclusive applications or including, as

eligible bidders, applicants who filed

mutually exclusive applications after

June 30, 1997. Recognizing that this

could lead to a harsh result, particularly

if it requires the dismissal of timely

filed applications, the Commission

asked for comment on whether there is

any other legally permissible

interpretation of the statute.

6. The Commission also concluded

that only pre-July 1, 1997 applicants

could take advantage of the provision

requiring waiver of certain regulations

for settlements filed within 180 days

after enactment of the statute (i.e., by

February 1, 1998). It indicated that it

was also inclined to waive certain

settlement policies, such as the

prohibition against third party

settlements set forth in Rebecca Radio

of Marco, 5 FCC Rcd 937 (1990).

7. Following the expiration of the

settlement period on February 1, 1998

and once the auction rules are effective,

the Commission tentatively proposed to
65394 Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Proposed Rules

announce those competing pre-July 1

applications eligible for resolution by

competitive bidding procedures under

section 309(l). It tentatively proposed to

terminate the hearing proceeding if

there are unresolved basic qualifying

issues against any applicant. It further

proposed to allow pending applicants to

participate in the auction despite any

unresolved qualifying issues, and to do

so by filing a short-form application. But

it asked whether it would be more

efficient to decide basic qualifying

issues before the auction for the small

number of hearing cases. Also, the

Commission would accept amendments

to the long-form applications after the

auction and then only if filed by the

winning bidders. It proposed to accept

petitions raising new issues only after a

Public Notice announced any

amendments to the winning bidder’s

application. It tentatively proposed to

afford the winning bidder 30 days to file

any amendments to its long-form

application and 15 days to respond to

any new petitions raising new issues.

8. After submission of the required

down payment by the winning bidder in

accordance with the general auction

procedures and any special rules

adopted for broadcast auctions in this

proceeding, the ALJ or the Commission

(in cases pending before the

Commission) would resolve any

unresolved issues in hearing cases, and

if appropriate, grant the application and

dismiss the long-form applications filed

by the unsuccessful bidders. Where the

hearing proceeding has terminated

(because there are no outstanding

hearing issues against any pending

applicant), the Mass Media Bureau

would rule on any new issues raised in

petitions filed after termination of the

hearing proceeding and either grant the

application or designate it for hearing.

9. In non-hearing cases, the

Commission proposed that all questions

as to a pending applicant’s basic

qualifications, including questions

involving the acceptability and

tenderability of the application, would

be resolved after the auction and only

with respect to the winning bidder. If

pending applicants fail to file short-form

applications, the Commission proposed

to dismiss their previously filed longform applications. It proposed to accept

petitions to deny or amendments to the

long-form application after the auction,

and asked for comment on affording the

winning bidder 30 days to file any

amendment to its long-form application.

After the amendment period, it

proposed to place the winning bidders’

long-form applications on public notice,

which would trigger the filing window

for petitions to deny and to dismiss the

previously filed long-form applications

of the unsuccessful competing bidders

following the grant of the winning

bidder’s construction permit. And, for

these non-hearing comparative initial

licensing proceedings it proposed to

follow all other post-auction rules and

procedures set forth in part 1 of the

Commission’s Rules and any servicespecific rules adopted in this

proceeding.

Auction Procedures for Other Pending

Applications

10. Based upon the broad language of

section 309(j) requiring the use of

competitive bidding procedures to

award initial licenses whenever

mutually exclusive applications are

accepted, the Commission tentatively

found that section 309(l) is limited to

mutually exclusive applications for new

commercial full service radio or

television stations filed before July 1,

1997. Thus, it tentatively concluded that

auctions were required under section

309(j) for pending mutually exclusive

applications for various secondary

commercial broadcast services, even if

filed before July 1, 1997, and for

mutually exclusive applications for full

service commercial radio and television

stations filed after June 30, 1997.

11. Under this tentative

interpretation, none of these pending

applicants may take advantage of the

provision requiring waiver of

regulations for settlements filed before

February 1, 1998. The Commission

noted that these pending applicants

could enter into settlements that comply

with the statute and all applicable

Commission rules, but it tentatively

concluded that such agreements must

predate the filing of any short-form

applications because of the anticollusion rules (which restrict

communications among auction

participants). The Commission asked for

comment on whether it should further

restrict settlement agreements, given

that Congress, through the Balanced

Budget Act, may have established

auctions as the preferred method of

awarding licenses where mutually

exclusive applications are filed.

12. The Commission tentatively

concluded that it was not required to

restrict the class of bidders qualified to

participate in auctions involving these

other pending commercial broadcast

applicants that are not subject to section

309(l). It asked for comment on how it

should exercise its discretion under the

statute, i.e., whether it should open a

new filing window for additional

applications that could be mutually

exclusive with pending applications or

whether it should keep the window

closed.

13. The Commission proposed to

conduct auctions in accordance with its

general auction procedures and any

service-specific procedures adopted in

this proceeding. It proposed to

announce by Public Notice the groups of

pending mutually exclusive (long-form)

broadcast applications eligible for

resolution by competitive bidding, and

the date by which those applicants must

file short-form applications in order to

participate in the auction. It proposed to

dismiss the previously-filed, long-form

application of any pending applicant

who fails to file a short-form

application. In the interest of efficiency,

it tentatively proposed to conduct a

single auction of all pending mutually

exclusive broadcast applications that are

not subject to the special provisions of

new section 309(l) (and any application

for any of these services filed in

response to the Public Notice that is

mutually exclusive with previously

filed long-form applications). It asked

for comment on this proposal, and on

whether any changes are warranted in

the proposed post-auction procedures

for these applicants.

General Auction Procedures

14. The Commission did not propose

to modify its existing licensing

procedures, under which it grants a

construction permit and the permittee

subsequently applies for a license after

constructing the broadcast facility. It

cautioned that a permittee, who obtains

a construction permit through an

auction, must still satisfy the

requirements for a license. Prospective

bidders for various secondary broadcast

services (i.e., low power television

stations, television translators, FM

translators) were also warned that a

licensee does not have increased rights

vis-a-vis any full service broadcaster

because it received its authorization

through an auction.

15. It asked for comments on whether

to treat applications for modifications of

existing broadcast facilities as ‘‘initial’’

applications that are subject to auction

if mutually exclusive applications are

filed, and on whether there are any

legal, equitable or other considerations

that would militate against using

competitive bidding procedures for

certain types of modification

applications. Comment is also sought on

whether to adopt any special

procedures, such as bidding credits, for

applicants proposing significant service

to unserved or underserved areas, to

accommodate section 307(b), 47 U.S.C.

307(b), of the Communications Act.
Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Proposed Rules 65395

16. The Commission tentatively

proposed to conduct broadcast auctions

in conformity with the general

competitive bidding rules set forth in

part 1, subpart Q of the Commission’s

rules, subject to any changes that it

ultimately makes in those rules in the

ongoing part 1 rulemaking (or this

proceeding), and substantially

consistent with the bidding procedures

used in previous Commission auctions.

It proposed that such general

competitive bidding rules should govern

all future auctions. Amendment of Part

1 of the Commission’s Rules—

Competitive Bidding Proceeding (Notice

of Proposed Rulemaking), 62 FR 13570,

13570–71, March 21, 1997, 12 FCC Rcd

5686, 5698 ¶ 18 (1997). Commenters

should review the proposed rules

changes, as well as the issues raised

there, and propose alternatives to any

rules or proposed rules they believe to

be inappropriate in the context of

broadcast auctions. Comment is

specifically sought on the advisability in

the broadcast context of applying the

Commission’s anti-collusion rule, which

strictly limits communications between

competing bidders once a short-form

application is filed, see 47 CFR

1.2105(c), and the bid withdrawal/

default payment rules, which penalize

the post-auction withdrawal of a high

bid and the failure to submit a long form

application or to pay a winning bid. See

47 CFR 1.2104(g); 1.2109.

17. The Commission tentatively

proposed to use the simultaneous

multiple-round competitive bidding

design for broadcast auctions

successfully used in previous auctions.

But it seeks comment on alternate

bidding designs that might be

appropriate in the broadcast context,

such as (1) sequential multiple-round

auctions, using either oral ascending,

remote or on-site electronic bidding;

and (2) sequential or simultaneous

single round auctions, using either

remote and/or on site electronic

bidding, or sealed bids. See generally 47

CFR 1.2103, as amended by Amendment

of Part 1 of the Commission’s Rules—

Competitive Bidding Proceeding (Order),

62 FR 13540, March 21, 1997, 12 FCC

Rcd 5686, 5691 ¶ 6 & nn.9–12 (1997).

It also noted the possibility of using

combinatorial bidding, which permits

bidders to bid on combinations or

groups of licenses in a single bid and to

enter multiple alternative bids within a

single bidding round. Comment is also

sought on whether different bidding

methodologies are warranted for

auctions that, pursuant to section 309(l),

must be restricted to pre-July 1

applications, than for auctions that may

be open to all qualified bidders, and

whether the type of auction should vary

depending on the type of service

involved, the number of licenses at

stake, how many bidders are likely to

participate, and the degree to which

interdependence may be important to

qualified bidders. The Commission does

not propose on-site bidding, and it seeks

comment on whether to require bidders

to bid electronically via computer, on

whether this would be a hardship for

certain bidders, and on whether bidders

should have the option of bidding by

telephone.

18. The Commission proposed that

the Mass Media Bureau work in

conjunction with the Wireless

Telecommunications Bureau in setting

the upfront payment, which will be

announced by Public Notice before the

time for filing short-form applications. It

proposed to adhere to the part 1 rules

on upfront payments, but sought

comment on the appropriate amount,

and method for determining the

appropriate amount, of the upfront

payment for bidders in broadcast

auctions. It also proposed that the Mass

Media Bureau work in conjunction with

the Wireless Telecommunications

Bureau to consider the use of reserve

prices or minimum opening bids to be

announced prior to the time for filing

short-form applications for auctionable

commercial broadcast services, unless it

is determined, based on comments filed

in this proceeding, that reserve prices or

minimum opening bids would not serve

the public interest. The Commission

also sought comment on the appropriate

methodology for establishing each of

these mechanisms, and on alternative

methods for estimating the value of the

license, such as (1) using data on station

transactions that are comparable in

terms of station class and market

characteristics, and (2) utilizing a

financial model derived from data on

the performance of operating stations (a)

in the market that an applicant hopes to

serve or (b) from a relevant comparable

market.

19. The Commission also seeks

comment on how it should deal with

any ‘‘daisy chains’’ presented in

auctions of AM radio, LPTV, or

television or FM translator applications.

Daisy chains occur when an application

is mutually exclusive (i.e., would cause

interference) with a second application,

which is mutually exclusive with a

third application in the same or adjacent

community, and so on, even though the

first application may not be directly

mutually exclusive with any application

except the second. Depending on which

applicant is the winning bidder among

a mutually exclusive group, another

application (in addition to the auction

winner) may become grantable, or

another smaller mutually exclusive

group may still exist and need to be

resolved. Comment is requested on the

appropriate methods, such as

combinatorial bidding, to resolve any

daisy chains in the auction context.

20. To promote the orderly filing of

applications for different services and to

facilitate the determination of mutually

exclusive groups for auction purposes,

the Commission tentatively proposes to

establish a specific time period or

auction window during which

applicants for AM, FM, television,

LPTV, and television or FM translators

must file applications in order to

participate in an upcoming auction.

Comment is sought on this more

uniform window filing approach, which

would replace the current disparate

filing procedures for applications in all

of these services.

21. Under the proposed auction

procedures, prior to the auction

applicants would file short-form

applications (FCC Form 175),

supplemented by any engineering data

necessary to determine mutual

exclusivity in non-table services, and

only winning bidders would file longform applications. To relieve

prospective applicants of the time and

expense associated with filing long-form

applications (which would be reviewed

only if an applicant were the high

bidder), the Commission announced a

temporary freeze, effective November

26, 1997, on the filing of all commercial

broadcast and secondary broadcast

applications pursuant to our existing

procedures. Applications timely filed in

response to an outstanding AM (or FM

translator) cut-off list or an open FM

window are exempt from the freeze.

During the freeze, the Commission

would continue to accept and process

petitions for rulemaking requesting the

allotment of new FM channels to the

FM Table of Allotments, and applicants

could apply for any such allotments

during subsequently announced FM

auction filing windows. Minor

modification applications, and all

applications for the reserved portion of

the FM broadcasting band (Channels

200–220) are not subject to the freeze.

22. The Commission tentatively

proposes to announce the auction and

the window for filing short-form

applications in a Public Notice. It also

proposes to announce the window at

least 30 days in advance, and to keep it

open for at least five business days.

Comment is sought on this proposal and

on whether to have a combined filing

window or separate filing windows for

each type of broadcast or secondary
65396 Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Proposed Rules

broadcast service. Except for the FM

service, where applicants may only file

for vacant FM channels reflected in the

Commission’s Table of Allotments, the

Commission does not propose to limit

filing windows on a geographic basis. It

proposes to open filing windows for

applications for commercial broadcast

and secondary broadcast services as

often as its resources allow, and may

include certain auctions of construction

permits for commercial broadcast

facilities in the Commission’s proposed

quarterly auctions process. See

Amendment of Part 1 of the

Commission’s Rules—Competitive

Bidding Proceeding (Order), 62 FR

13540, March 21, 1997, 12 FCC Rcd

5686, 5691–92 ¶ 7 (1997). But it did not

make a commitment to include

auctionable broadcast licenses in every

quarterly auction.

23. Under the proposed window filing

approach, applicants would file shortform applications (FCC Form 175),

along with any engineering data

necessary to determine mutual

exclusivity in a particular service, only

during an announced filing window.

This procedure would apply to all

applications for AM, FM, television, low

power television, and FM or television

translator stations, except for minor

change applications. Thus, prospective

applicants could no longer tender new

FM applications on a ‘‘first come/first

serve’’ basis, as they may do under

current procedures. Minor modification

applicants in these services would not

be subject to the window filing

requirement even if the Commission

ultimately decides to use auctions to

resolve mutually exclusivity among

major change applications. But two or

more FM, AM, television or LPTV minor

modification applications can be

mutually exclusive under current rules.

The Commission seeks comment on

how to resolve such applications.

24. The Commission proposes that

FM applicants would apply by

submitting during the announced filing

window an FCC Form 175 application

for any vacant allotment specified in the

public notice announcing the opening of

the window. Applications specifying

the same vacant FM allotment(s) would

be mutually exclusive, and no

supplemental engineering data would

be necessary to make this

determination. Applicants for new AM

stations, LPTV stations, and television

and FM translators would file shortform applications specifying a

frequency or channel upon which the

applicant could operate in accordance

with the Commission’s existing

interference standards for these services,

see 47 CFR 73.37, 73.182 and 73.187

(AM interference rules); 47 CFR 74.703,

74.705, 74.707 and 74.709 (LPTV and

television translator interference rules);

and 47 CFR 74.1203 and 74.1204 (FM

translator interference rules). The

Commission does not propose to change

these interference standards. To

determine which AM, LPTV, and

television and FM translator

applications are mutually exclusive for

auction purposes, the Commission

expects to require applicants for these

services to file, in addition to their

short-form applications, the engineering

data contained in the pertinent FCC

Form (i.e., FCC Form 301, FCC Form

346 or FCC Form 349). And, if the

Commission ultimately decides to

auction mutually exclusive applications

for major modifications of existing

facilities, analog television licensees

filing such applications would be

required to file both an FCC Form 175

and the engineering data contained in

an FCC Form 301.

25. The Commission proposes to

require that all FCC Form 175

applications for broadcast auctions be

filed electronically, and asks for

comment on whether this would be

burdensome for applicants for the

secondary broadcast services. It also

seeks comment on its proposal to

require, as necessary to determine

mutual exclusivity in non-table services,

the filing of the engineering data

contained in the FCC Form 301, FCC

Form 346 or FCC Form 349, at the same

time that the short-form is filed.

26. Pre-Auction Processing: The

Commission seeks comment on whether

to limit its pre-acceptance review of any

engineering data submitted with the

FCC Form 175 to only what is necessary

to determine which applications are

mutually exclusive with each other, or

whether to engage in more extensive

pre-auction processing, whereby it

would return as unacceptable

applications with technical problems

that cannot be resolved by amendment.

It noted that the first approach would

save considerable Commission

resources, but had a significant

downside in that it may result in

technically unacceptable applicants

participating and perhaps prevailing in

the auction. This, in turn, could require

that the Commission reauction the

license and afford new parties an

opportunity to file applications. It noted

that a more extensive pre-auction

review could slow the auction, but that

the auction could proceed with the

understanding that the rights of any

winning bidders would be subject to the

outcome of any petitions for

reconsideration of the return of

unacceptable applications.

27. Once it determines mutual

exclusivity among the short-form

applications filed in response to a

window, the Commission would

identify by public notice(s) the

applicants in each group of mutually

exclusive applications who are eligible

to bid on construction permits for the

allotments or channels identified in

their short-form applications. Such

public notices would provide more

detail on the time, place and method of

competitive bidding to be used, as well

as applicable bid submission and

payment procedures, the deadline for

submitting the upfront payments, the

amounts of the upfront payments and

any minimum opening bid or reserve

price, all pursuant to the auction rules

then in place. A Public Notice would

also identify any applications submitted

in response to an announced window

not subject to auction (because such

applications were not mutually

exclusive with any other application in

the same service), and the date by which

such applicants must file their longform applications (FCC Form 301, FCC

Form 346 or FCC Form 349). The

Commission tentatively proposes to

afford such applicants 30 days to file

their complete long-form applications,

and seeks comment on that proposal.

28. Post-Auction Procedures: The

Commission proposes to follow as

closely as possible its general postauction procedures and payment

requirements set forth in part 1 of the

rules, and seeks comment on their

applicability to auctions of mutually

exclusive broadcast applications.

Specifically, it would announce the

high bidder by Public Notice and afford

it 10 business days to make the required

down payment and 30 days to file a

complete FCC Form 301, FCC Form 346

or FCC Form 349 long-form application

for each construction permit for which

it was the high bidder. Comment is

sought on these proposals and on

whether it should follow 47 CFR 1.1207,

which requires that the down payment

(plus the upfront payment) must be at

least 20% of the winning bid. The

Commission also seeks comment on

whether it would be appropriate to

establish a period, such as 5 days, for

the filing of petitions to deny against the

winning bidder’s long-form application,

as is permitted by section 3008 of the

Balanced Budget Act of 1997. It also

proposes to require full payment of the

balance of the winning bid within 10

business days of the Public Notice

announcing the grant of the

construction permit. It seeks comment

on this proposal and on whether to

modify any existing service-specific
Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Proposed Rules 65397

rules relating to the processing and

reviewing of FCC Form 301, FCC Form

346 and FCC Form 349 applications.

29. To facilitate the auction process,

the Commission proposes to relax

certain rules limiting the number and

the timing of filing of curative

amendments to long-form applications,

see 47 CFR 73.3522, 73.3564, but it does

not propose to change the definition of

‘‘major amendment’’ in the various

services. See 47 CFR 73.3571 (AM

radio), 47 CFR 73.3572 (television,

LPTV, television translators), 47 CFR

73.3573 (FM radio), or propose that

deficiencies in long-form applications

would be curable by major amendment.

Thus, it proposes that winning bidders

must file major amendments to longform applications within an announced

filing window.

30. To avoid new instances of

mutually exclusivity, which may arise if

a long-form FM application proposes a

site other than one protected pursuant

to the Table of Allotments, the

Commission proposes that applicants

not be allowed to file FM long-form

applications in conflict with any

previously filed commercial or noncommercial application. It proposes

further that long-form FM applications

would have ‘‘cut-off’’ protection as of

the date they are filed with the

Commission, and that commercial FM

modification applications must protect

any previously or simultaneously filed

application in the reserved band, in

order to eliminate the possibility of

creating a cross-band mutually

exclusive situation. In addition, the

Commission seeks comment on how the

auction process for FM translators

would work in relation to the specific

provisions of 47 CFR 74.1203(a) & (b)

and 74.1232(h), and other rules

providing for the cancellation of a

construction permit under certain

circumstances and affording FM

broadcasters the right to object to

proposed FM translators likely to

interfere with the reception of a

regularly received existing service, even

if there is no prohibited contour

overlap.

31. The Commission requests

comment on whether any existing

requirements contained in the FCC

Form 301, FCC Form 346 and FCC Form

349 applications may be eliminated. It

proposes to delete the ‘‘reasonable

assurance’’ of site certification from the

FCC Forms 301, 346 and 349, and to

rely on strict enforcement of the existing

construction requirements to ensure that

winning bidders in future broadcast

auctions construct their facilities in a

timely manner, see 47 CFR 73.3598

(establishing two-year construction

period for television stations and 18-

month construction period for AM, FM

and LPTV stations, as well as television

and FM translators).

Designated Entities

32. Small Businesses/Rural Telephone

Companies. To fulfill its statutory

responsibilities under section

309(j)(4)(D), the Commission seeks

comments on whether it should adopt

bidding credits or other tools to ensure

the participation of small businesses

and rural telephone companies in the

provision of these services, and on how

we should define small business for any

special provisions we may adopt. It

specifically seeks comment on which of

the small business size standards based

on gross revenue ceilings of $3 million,

$15 million, or $40 million used in

other services is most applicable to

auctions of commercial broadcast

licenses, or whether an alternative size

standard would be more appropriate.

33. Minority Ownership. The

Commission is concerned about the

underepresentation of minorities as

owners of broadcast stations and the

implications for program diversity, and

tentatively concludes that, to the extent

that it complies with applicable

constitutional standards, it should take

steps to further the longstanding goal of

increasing minority ownership of

broadcast stations, as well as

implementing the designated entity

provisions of section 309(j)(4) of the

Act. See Metro Broadcasting, Inc. v.

FCC, 497 U.S. 547 (1990), finding that

broadcast diversity is an important

governmental objective and upholding

our treatment of minority ownership in

comparative proceedings under an

intermediate scrutiny standard. It asks

for comment on how to do this,

consistent with the standards set forth

in Adarand Constructors, Inc. v. Pena,

515 U.S. 200 (1995), a subsequent

Supreme Court decision establishing

that policies that take race into account

are reviewed under a strict (as opposed

to intermediate) scrutiny standard.

34. In the event special provisions are

adopted for businesses owned by

minorities, the Commission must

develop eligibility standards to ensure

that the scope of its program is

appropriate. It thus seeks comment on

appropriate eligibility standards to

further its goal specifically. The

alternatives include (1) requiring that

minorities have de facto and de jure

control of the applicant, own more than

50 percent of the equity on a fully

diluted basis, and meet the eligibility

standards set forth in 47 CFR

1.2110(b)(2); and (2) a standard similar

to what was adopted but never

implemented for the broadband PCS

auctions (i.e., minorities must have the

right to receive at least 50.1 percent of

the annual distribution of any dividends

paid on the voting stock and the right

to receive dividends, profits and other

distributions from the business in

proportion to their equity interests). The

Commission also seeks comment on

whether, to determine eligibility, it

should attribute fully (a) options or

conversion rights held by nonminorities unless the decision to

exercise the option or conversion rights

is beyond the control of the ostensibly

passive non-minority owner; (b) the

interests of any individual or entity that

played a significant role as a promoter

in forming the applicant; and (c) any

non-voting stockholder unless the

corporate documents unequivocally

require insulation of the non-voting

stockholder from participation in the

licensee’s affairs to the same extent that

a limited partner must be insulated.

35. Female Ownership: The

Commission also asks for comments on

whether special policies are warranted

for female-owned applicants, and

whether there is sufficient evidence to

justify special provisions for womenowned businesses under applicable

constitutional standards. See United

States v. Virginia Military Institute, 116

S.Ct 2264, 2274–76 (1996) requiring an

‘‘exceedingly persuasive justification’’

to support a state program that made

distinctions based upon gender.

36. Diversification of Ownership.

Diversification of ownership is one of

the two primary objectives of the

Commission’s current licensing system

and remains a viable public interest

consideration. Given the significant

advantage that group owners are likely

to have over newcomers in auctions, the

Commission seeks comment on whether

to adopt some measure in the

competitive bidding process that is

specifically designed to promote

diversification of ownership.

37. To the extent bidding credits are

adopted for small businesses,

minorities, women, non-group owners

or others, the Commission asks for

comment on what those credits should

be and whether, and to what extent, any

such bidding credits should be tiered, as

it has done in other auction contexts.

38. To fulfill its statutory obligation to

prescribe rules to ‘‘prevent unjust

enrichment as a result of the methods

employed to issue licenses and

permits,’’ 47 U.S.C. 309(j)(4)(E), the

Commission tentatively proposes to

require that, for a period of five years

following Program Test Authority,

broadcast licensees granted a new

license through any designated entity or
65398 Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Proposed Rules

1See 5 U.S.C. 603. The RFA, see 5 U.S.C. 601 et.

seq., has been amended by the Contract With

America Advancement Act of 1996, Pub. L. 104–

121, 110 Stat. 847 (1996) (CWAAA). Title II of the

CWAAA is the Small Business Regulatory

Enforcement Act of 1996 (SBREFA).

2We tentatively 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 particularly suitable for

our purposes, and we specifically seek comment on

how we should define small business for this

diversification bidding credits or other

special provision must certify annually

their continuing eligibility for such

credit or provision, under the rules in

effect at the time the license was

awarded, and report within 30 days any

change affecting such eligibility. It seeks

comment on this proposal.

Alternatively, the Commission seeks

comment on granting a one-time

bidding credit, requiring the licensee to

hold the station for five years but

allowing licensees to bid for additional

licenses during the five-year period.

39. And, as a condition for

Commission approval for the transfer or

assignment of the license to an entity

ineligible for the bidding credit or other

special provision obtained by the

licensee, or for other ownership changes

rendering the licensee ineligible for a

previously awarded bidding credit or

other provision during that five-year

period, the Commission tentatively

proposes to require a monetary

reimbursement to the Treasury for the

previously awarded bidding credit. It

seeks comment on how to calculate the

unjust enrichment payment, on whether

there are any mitigating circumstances

that would justify excusing altogether or

reducing the unjust enrichment

payment, and on whether measures

other than monetary penalties and

reporting requirements are necessary.

Auction Authority for Instructional

Television Fixed Service

40. The Instructional Television Fixed

Service (ITFS) is a point-to-point

microwave service whose licensees have

certain characteristics in common with

the noncommercial educational and

public broadcast stations which are

specifically exempted from our section

309(j) auction authority. There is,

however, no express exemption for ITFS

licenses from the requirement that the

Commission must use competitive

bidding procedures to award licenses if

mutually exclusive applications are

filed, and the Commission seeks

comment on whether it must, and if not,

whether it should, apply competitive

bidding to mutually exclusive ITFS

applications. If it concludes that it must,

or should, auction mutually exclusive

ITFS applications, the Commission

tentatively proposes to apply the general

auction rules adopted in this proceeding

for broadcast applications to ITFS

applications as well. Comment is sought

on this proposal.

Proposals for Pending Broadcast

Comparative Renewal Proceedings

41. The Commission does not believe

that auctions are a legally available

option in pending comparative renewal

proceedings, and it seeks comment on

how to resolve pending comparative

renewal cases. It tentatively proposes

that, if it decides to use auctions to

resolve the pending comparative initial

licensing cases and if the few remaining

comparative licensing cases do not

settle, it will adopt the two-step renewal

procedure previously developed for

comparative cellular renewal

proceedings. Commenters should

address whether this approach, which

would be analogous to the procedures

for new renewal cases set forth in

section 309(k), which eliminates

comparative renewal proceedings for

renewal applications filed after May

1995, is judicially sustainable. The

Commission also asks for comment on

whether, as an alternative to the twostep procedure, or in conjunction with

the two-step hearing that reaches the

second stage, it should consider any

comparative factors raised by the

applicants on a case-by-case basis.

Procedural Matters

42. This is a permit-but-disclose

notice and comment rulemaking. Ex

parte presentations are permitted,

except during the Sunshine Agenda

period, provided they are disclosed, as

specified in the Commission’s rules.

43. Authority for this rulemaking is

contained in 47 U.S.C. 154(i), 154(j),

303(r), 309(g), 309(i), 309(j), 309(l), 403.

Initial Regulatory Flexibility Analysis

44. As required by the Regulatory

Flexibility Act (RFA),1 the Commission

has prepared this Initial Regulatory

Flexibility Analysis (IRFA) of the

expected significant economic impact

on small entities by the policies and

procedures proposed in this Notice of

Proposed Rulemaking. Written public

comments are requested on the IRFA.

Comments must be identified as

responses to the IRFA and must be filed

by the deadlines for comments on the

Notice. The Secretary shall send a copy

of the Notice, including the IRFA, to the

Chief Counsel for Advocacy of the Small

Business Administration. See 5 U.S.C.

603(a). In addition, the Notice and IRFA

(or summaries thereof) will be

published in the Federal Register. See

id.

I. Need for and Objectives of the

Proposed Rules

45. This rulemaking is initiated to

implement the Balanced Budget Act of

1997, Pub. L. 105–33, 111 Stat. 251

(1997), which amended section 309(j)

and adopted new section 309(l) of the

Communications Act. Comments are

sought on: (1) proposed auction

procedures to award initial licenses in

the broadcast services and secondary

broadcast services; (2) whether the

Commission should use auctions or

comparative hearings to resolve pending

comparative initial licensing

proceedings involving competing

applications for commercial radio and

television stations filed before July 1,

1997, as authorized by new section

309(l); (3) whether amended section

309(j) requires the use of auctions to

award initial licenses for Instructional

Television Fixed Services; and (4) how

to resolve pending comparative renewal

proceedings, which cannot be resolved

by auction pursuant to amended section

309(j).

II. Legal Basis

46. This Notice is authorized under

the Balanced Budget Act of 1997, Pub.

L. 105–33, 111 Stat. 251, Title III,

Section 3002, and Sections 4(i), 4(j), 303

(r), 309(g), 309(i), 309(j), 309(l), and 403

of the Communications Act of 1934, as

amended, 47 U.S.C. 154(i), 154(j),

303(r), 309(g), 309(i), 309(j) 309(l), and

403.

III. Description and Estimate of the

Number of Small Entities To Which the

Proposed Rule Will Apply

47. Under the RFA, small entities

include small organizations, small

businesses, and small governmental

jurisdictions. 5 U.S.C. 601(6). The RFA,

5 U.S.C. 601(3), 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 which are appropriate to the

activities of the agency and publishes

such definition(s) in the Federal

Register.’’ 2
Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Proposed Rules 65399

purpose. However, for purposes of this Notice we

are utilizing the SBA’s definition in determining the

number of small businesses to which any auction

procedures or revised comparative criteria would

apply. In this regard, we reserve the right to adopt

a more suitable definition of ‘‘small business’’ as

applied to radio and television broadcast stations.

See Fifth Report and Order in MM Docket No. 87–

268 (Advanced Television Systems and their Impact

upon the Existing Television Broadcast Service),

FCC 97–116 at 62 (April 27, 1997), 62 FR 26996,

May 16, 1997 ; Report and Order in MM Docket No.

93–48 (Children’s Educational and Informational

Programming), 61 FR 43981, 43992 (August 27,

1996), citing 5 U.S.C. 601 (3). See also Order and

Notice of Proposed Rulemaking in MM Docket No.

96–16 (Streamlining Broadcast EEO Rule and

Policies, Vacating the EEO Forfeiture Policy

Statement and Amending Section 1.80 of the

Commission’s Rules to Include EEO Forfeiture

Guidelines), 61 FR 9964, March 12, 1996, 11 FCC

Rcd 5154 (1996), requesting comment as to whether

relief should be afforded to the stations: (1) based

on staff size and what size should be considered

sufficient for relief (e.g., 10 or fewer full-time

employees); (2) based on operation in a small

market; or (3) based on operation in a market with

a small minority work force.

3 13 CFR 121.201, Standard Industrial Code (SIC)

4832 (1996).

4Economics and Statistics Administration,

Bureau of Census, U.S. Department of Commerce,

supra note 78, Appendix A–9.

5 Id.

6 Id.

7The Census Bureau counts radio stations located

at the same facility as one establishment. Therefore,

each co-located AM/FM combination counts as one

establishment.

8FCC News Release No. 31327, Jan. 13, 1993.

9FCC News Release No. 80286, Nov. 6, 1997.

10 13 CFR 121.201, SIC 4833.

11Economics and Statistics Administration,

Bureau of Census, U.S. Dep’t of Commerce, 1992

Census of Transportation, Communications and

Utilities, Establishment and Firm Size, Series

UC92–S–1, Appendix A–9 (1995).

12 Id.

13 Id.

14FCC News Release No. 31327, Jan. 13, 1993;

Economics and Statistics Administration, Bureau of

Census, U.S. Dep’t of Commerce, supra note ,

Appendix A–9.

15FCC News Release 80286, Nov. 6, 1997.

16Census for communications establishments are

performed every five years, during years that end

with a ‘‘2’’ or ‘‘7’’. See Economics and Statistics

Administration, Bureau of Census, U.S. Dep’t of

Commerce, 1992 Census of Transportation,

Communications and Utilities, Establishment and

Firm Size, Series UC92–S–1, Appendix A–9, III

(1995).

17The amount of $10 million was used to

estimate the number of small business

establishments because the relevant Census

categories stopped at $9,999,999 and began at

$10,000,000. No category for $10.5 million existed.

Thus, the number is as accurate as it is possible to

calculate with the available information.

48. The SBA defines a radio

broadcasting station that has no more

than $5 million in annual receipts as a

small business.3 A radio broadcasting

station is an establishment primarily

engaged in broadcasting aural programs

by radio to the public.4 Included in this

industry are commercial, religious,

educational, and other radio stations.5

Radio broadcasting stations which

primarily are engaged in radio

broadcasting and which produce radio

program materials are similarly

included.6 The 1992 Census indicates

that 96 percent of radio station

establishments (5,861 of 6,127)

produced less than $5 million in

revenue in 1992.7 Official Commission

records indicate that 11,334 individual

radio stations were operating in 1992.8

As of September 30, 1997, official

Commission records indicate that

12,227 radio stations and 2836 FM

translator/booster stations were

licensed.9

49. Additionally, the Small Business

Administration defines a television

broadcasting station that is

independently owned and operated, is

not dominant in its field of operation,

and has no more than $10.5 million in

annual receipts as a small business.10

Television broadcasting stations consist

of establishments primarily engaged in

broadcasting visual programs by

television to the public, except cable

and other pay television services.11

Included in this industry are

commercial, religious, educational, and

other television stations.12 Also

included are establishments primarily

engaged in television broadcasting and

which produce taped television program

materials.13 There were 1,509 television

stations operating in the nation in

1992.14 That number has remained fairly

constant, as indicated by the

approximately 1,563 full power

television stations, 2027 low power

television stations, and 4994 television

translator stations licensed as of

September 30, 1997.15 In 1992,16 there

were 1,155 television station

establishments that produced less than

$10.0 million in revenue.17

50. In addition, there are presently

2032 ITFS licensees. All but 100 of

these licenses are held by educational

institutions. Educational institutions

may be included in the definition of a

small entity. ITFS is a non-pay, noncommercial educational microwave

service that, depending on SBA

categorization, has, as small entities,

entities generating either $10.5 million

or less, or $11.0 million or less, in

annual receipts. However, we do not

collect, nor are we aware of other

collections of, annual revenue data for

ITFS licensees. Thus, we tentatively

conclude that up to 1932 of these

licensees are small entities. We seek

comment on this conclusion.

51. In the event the Commission

decides, for equitable considerations or

other reasons, to hold comparative

hearings to resolve certain mutually

exclusive pending applications for new

commercial radio and television stations

filed before July 1, 1997 or for a subset

of such pending cases, any new

comparative criteria developed in this

proceeding will apply to these pending

pre-July 1, 1997 applications. We

estimate that there are approximately

1475 pending applicants for a new

commercial radio or full power

television station filed before July 1,

1997 that might be decided by

comparative hearing rather than by

auctions.

52. Any auction procedures

developed in this proceeding for all

licenses to provide commercial

broadcast service or secondary

broadcast service that are presently

subject to auction will affect: (1) any

entity with a pending application for a

construction permit for a new

commercial radio or full power

television broadcast station, if all

mutually exclusive applications were

filed after June 30, 1997; (2) any entity

with a pending application for a

construction permit for a new

commercial radio or full power

television station filed before July 1,

1997, if mutually exclusive applications

were filed and none of the competing

applications is a renewal application

and if the Commission decides that such

initial license applications should be

subject to auction; (3) any entity that

files an application in the future for a

new commercial radio or full power

analog television station if mutually

exclusive applications are accepted; (4)

any entity having a pending application

on file, or filing an application in the

future, for a new low power television

station, or a television or FM translator

station, if mutually exclusive

applications are accepted; (5) any entity

that has a pending or future application

to make a major change in an existing

facility in any commercial broadcast or

secondary broadcast service, if mutually

exclusive applications are accepted and

if the Commission decides to auction

such major change applications; and (6)

any entity that has a pending or future

ITFS application, if mutually exclusive

applications are accepted and if the

Commission decides that it must, or

should, auction mutually exclusive

ITFS applications.

53. If auction procedures are adopted

in this proceeding, all entities that file

applications for construction permits to

provide commercial broadcast service

before the effective date of any such

auction procedures must submit a

completed short-form application (FCC

Form 175) and any engineering

information necessary to determine

mutual exclusivity, if resolution of their

applications is subject to competitive
65400 Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Proposed Rules

bidding procedures. This requirement

would also apply to entities that file

applications for construction permits to

make major changes in existing

commercial broadcast stations during

this period if the Commission ultimately

decides to resolve mutual exclusivity

among competing major change

applications by competitive bidding. In

the event that an applicant is the

winning bidder, it must submit a longform application that would then be

reviewed by the agency. We estimate

that, as of October 31, 1997 there are

approximately 1475 pending applicants

for a new commercial radio or full

power television station filed before July

1, 1997; approximately 315 pending

applications for new radio and full

power television stations filed after June

30, 1997 that are mutually exclusive

with permit applications filed after that

date; approximately 100 pending

applications for new low power

television stations/television translator

stations; and approximately 24 pending

applications for translator stations. All

of these pending mutually exclusive

applications will be subject to any

auction procedures for analog broadcast

service adopted in this proceeding.

54. Applicants for construction

permits are required to demonstrate

sufficient financing to construct and

initially operate the proposed station.

However, we do not require the filing of

financial information concerning the

entity seeking a construction permit.

Thus, except for those applicants

already owning a broadcast station that

seek a permit to construct additional

stations, we have no data on file as to

whether entities with pending permit

applications, which are subject to the

new auction rules for analog broadcast

service, meet the Small Business

Administration’s definition of small

business concern. We assume for the

purposes of this IRFA that most of the

entities formed for the purpose of

applying for a permit to construct a new

radio broadcast station or a television

station are small entities, as defined by

the SBA rules.

55. In addition to the pending

applicants that may be affected by the

proposed auction procedures for analog

broadcast service, any entity that

applies for a construction permit for a

new radio or television station in the

future will be subject to the proposed

auction procedures if mutually

exclusive applications are filed. The

number of entities that in the future may

seek a construction permit for a new

analog broadcast station is unknown.

We anticipate, however, that due to the

passage of the Telecommunications Act

of 1996 and corresponding changes in

our multiple ownership and attribution

rules, the characteristics of future

broadcast applicants may be somewhat

different from those of pending

applicants. We invite comment as to the

number and characteristics of future

applicants for new commercial analog

broadcast stations, and for commercial

facilities in the various secondary

broadcast services.

56. The new auction procedures

would not apply to entities that filed

applications for construction permits

after June 30, 1997 for new commercial

radio and full power television stations

that are mutually exclusive with two or

more pending initial license

applications filed before July 1, 1997.

We estimate that as of October 31, 1997,

there were approximately 7 such

applications (5 radio and 2 TV) that will

be ineligible to participate in an auction

to choose among mutually exclusive

pre-July 1 applications for new

commercial broadcast stations.

57. In addition, any competitive

bidding procedures developed for

analog broadcast service will not apply

to the few pending comparative renewal

cases. Resolution of these cases will

depend on any comparative criteria,

two-step renewal process or other basis

adopted in this proceeding for deciding

these comparative renewal cases. This

will affect broadcast station licensees

that filed their applications for renewal

of license on or before May 1, 1995 and

any pending initial license applications

that are mutually exclusive with such

renewal applications. We estimate that

there are approximately 9 initial license

applications that are mutually exclusive

with 8 pending renewal applications.

This includes approximately 15

television applicants and 2 radio

applicants.

IV. Description of Projected Reporting,

Recordkeeping and Other Compliance

Requirements

58. Comment is sought on what filing

and compliance requirements should be

associated with any competitive bidding

procedures consistent with the

Commission’s statutory obligations to

require such transfer disclosures and

other measures necessary to prevent

unjust enrichment and the court’s

concerns in Bechtel regarding reliance

on purely ephemeral licensing

considerations. The Notice tentatively

proposes that, if bidding credits or other

special provisions are adopted for any

designated entities and/or non-group

owners, licensees benefitting from such

special provisions must annually certify

for five years their continuing eligibility

for such bidding credit or special

provision under the rules in effect at the

time the license was awarded, and

report any changes in such eligibility

within 30 days. In addition,

applications for construction permits,

short-form auction applications, and

other submissions will be required of

those falling within any proposed

competitive bidding procedures, as

described in Section III of this analysis.

V. Significant Alternatives To Proposed

Rule Which Minimize Significant

Economic Impact on Small Entities and

Accomplish Stated Objectives

59. This Notice contains no

significant alternatives because

amended section 309(j) requires that the

Commission use competitive bidding

procedures to award virtually all

licenses, including construction permits

for new commercial broadcast facilities,

and this requirement applies to most

pending broadcast applications, except

for comparative licensing cases that

involve applications for new full service

radio and television stations filed before

July 1, 1997. See ¶¶39–82. As to that

narrow category of applications, see

¶¶23–28, in which the Commission has

the authority to resolve mutually

exclusivity by comparative hearings

rather than by competitive bidding

procedures, the Commission’s

discretion is nevertheless constrained

by the court’s decision in Bechtel v.

FCC, 10 F.3d 875 (D.C. Cir. 1993), and

the potential difficulty of devising

judicially sustainable comparative

criteria. Although the Notice tentatively

concludes that, from a public interest

standpoint competitive bidding

procedures are preferable in these cases,

see ¶¶ 13–20, it asks for comment on

whether there are equitable reasons to

decide these cases, or a subset of these

cases, by comparative hearings.

Moreover, we believe that the proposed

competitive bidding procedures for all

future, and, potentially, all pending,

applications for construction permits to

provide commercial broadcast service

that are presently auctionable under the

statute will have a minimal impact on

small entities who apply for and obtain

broadcast licenses. Also, to minimize

any possible impact on small

businesses, the Notice asks for comment

on whether bidding credits or other

special provisions are warranted for

small businesses, including those

owned by members of a minority group

or women and for rural telephone

companies. The Notice further

concludes that, to the extent that it is

permissible under applicable

constitutional standards, the

Commission should take steps to further

its longstanding goal of increasing

minority ownership of broadcast
Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Proposed Rules 65401

stations and implementing the

designated entity provisions of section

309(j)(4) of the Act.

VI. Federal Rules That May Duplicate,

Overlap, or Conflict With the Proposed

Rule

60. None.

Ordering Clauses

61. Accordingly, It is Ordered, That

Notice is Hereby Given of the proposed

regulatory changes described above, and

that Comment is Sought on these

proposals.

62. It Is Further Ordered, That

pursuant to applicable procedures set

forth in sections 1.415 and 1.419 of the

Commission’s Rules, 47 CFR 1.415 and

1.419, comments Shall Be Filed on or

before January 26, 1998 and reply

comments Shall Be filed on or before

February 17, 1998. To file formally in

this proceeding, commenters must file

an original and four copies of all

comments, reply comments, and

supporting documents filed in this

proceeding. If commenters want each

Commissioner to receive a personal

copy of their comments, they must file

an original plus nine copies. Comments

and reply comments should be sent to

the Office of the Secretary, Federal

Communications Commission, Room

222, 1919 M Street, N.W., Washington,

D.C. 20554. In addition, commenters

should file copies of any such pleadings

with the Mass Media Bureau, Video

Services Division, Room 702, and Audio

Services Division, Room 302, 1919 M

St., N.W., Washington, D.C. 20554, and

with the Office of General Counsel,

Room 610, 1919 M St., N.W.,

Washington, D.C. 20554. Comments and

reply comments will be available for

public inspection during regular

business hours in the FCC Reference

Center, 1919 M St., N.W., Washington,

D.C. 20554.

63. It Is Further Ordered, That written

comments by the public on the

proposed and/or modified information

collections are due January 26, 1998.

Written comments must be submitted by

the Office of Management and Budget

(OMB) on the proposed and/or modified

information collections on or before

February 10, 1998. In addition to filing

comments with the Secretary, a copy of

any comments on the information

collections contained herein should be

submitted to Judy Boley, Federal

Communications Commission, Room

234, 1919 M Street, N.W., Washington,

DC 20554, or via the Internet to

jboley@fcc.gov, and to Timothy Fain,

OMB Desk Officer, 10236 NEOB, 725—

17th Street, N.W., Washington, DC

20503 or via the Internet to fain—

t@al.eop.gov.

64. It is Further Ordered, That,

effective upon the close of business on

the date of release of this Notice of

Proposed Rulemaking, the Commission

Will Not Accept applications for

construction permits for new stations or

for major changes to existing facilities in

any commercial broadcast or secondary

broadcast service. However, the

Commission Will Accept applications

timely filed in response to an

outstanding cut-off list or an open filing

window.

Federal Communications Commission.

Magalie Roman Salas,

Secretary.

[FR Doc. 97–32520 Filed 12–11–97; 8:45 am]

BILLING CODE 6712–01–P

DEPARTMENT OF TRANSPORTATION

Federal Railroad Administration

49 CFR Part 213

[Docket No. RST–90–1, Notice No. 7]

RIN 2130–AA75

Track Safety Standards; Miscellaneous

Proposed Revisions

AGENCY: Federal Railroad

Administration (FRA), Department of

Transportation (DOT).

ACTION: Notice of proposed rulemaking,

request for additional comments.

SUMMARY: This notice contains

information about a document entitled,

‘‘Evaluation of Proposed High Speed

Track Surface Geometry Specification’’

which addresses proposed track safety

standards for high speed rail and was

submitted to FRA by the Volpe National

Transportation Systems Center

(VNTSC). The document was submitted

after the close of the comment period for

the Notice of Proposed Rulemaking to

revise the Federal track safety standards,

published July 3, 1997 at 62 FR 36138.

Because the contents of the submission

may affect the outcome of the final rule

in this proceeding, this notice solicits

comments on the document.

DATES: The deadline for submission of

comments to the VNTSC document is

December 22, 1997.

ADDRESSES: To view the VNTSC

document: The VNTSC document for

which FRA is soliciting comments may

be reviewed in Room 7051 of FRA

headquarters at 1120 Vermont Avenue,

N.W., Washington, D.C.

Written comments: Written comments

should identify the docket number and

the notice number and should be

submitted in triplicate to: Docket Clerk,

Office of Chief Counsel, Federal

Railroad Administration, 400 Seventh

Street, S.W., Mail Stop 10, Washington,

D.C. 20590. Persons desiring to be

notified that their written comments

have been received by FRA should

include with their comments a stamped,

self-addressed postcard. The Docket

Clerk will indicate on the postcard the

date on which the comments were

received and will return the card to the

addressee. Written comments will be

available for examination during regular

business hours in Room 7051 of FRA

headquarters at 1120 Vermont Avenue,

N.W., Washington, D.C.

FOR FURTHER INFORMATION CONTACT:

David W. Jamieson, Office of Safety

Enforcement, Federal Railroad

Administration, 400 Seventh Street,

S.W., Mail Stop 25, Washington, D.C.

20590 (telephone: 202–632–3341), or

Nancy Lummen Lewis, Office of Chief

Counsel, Federal Railroad

Administration, 400 Seventh Street,

S.W., Mail Stop 10, Washington, D.C.

20590 (telephone: 202–632–3174).

SUPPLEMENTARY INFORMATION: This

notice summarizes a working paper

issued recently by the VNTSC entitled,

‘‘Evaluation of Proposed High Speed

Track Surface Geometry Specification,’’

dated December 1, 1997. The working

paper has been placed in the docket for

this proceeding. The working paper

evaluates the response of different high

speed locomotive designs to track

profile geometry variations. It focuses

on a comparative analysis of high speed

locomotive designs with carbodymounted traction motors and

locomotive designs with truck-mounted

traction motors. The minimum

amplitudes of track profile variations

required to cause excessive vertical

accelerations in the operator’s cab and

to cause suspension bottoming are

compared with the maximum

amplitudes prescribed in the proposed

high speed track safety standards

published in a Notice of Proposed

Rulemaking on July 3, 1997. The

analysis shows that a locomotive

designed with truck-mounted traction

motors requires an approximately 33

percent smaller track profile variation

amplitude to cause excessive vertical

accelerations than a locomotive

designed with carbody-mounted

traction motors.

The analysis contained in the VNTSC

working paper may affect the outome of

the final rule for this proceeding.

Therefore, FRA invites comments

relevant to the information included in

the working paper.