[Federal Register Volume 77, Number 13 (Friday, January 20, 2012)]
[Rules and Regulations]
[Pages 2916-2923]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-967]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 73

[MB Docket No. 09-52; FCC 11-190]


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

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Commission adopted procedures designed 
to promote the initiation of commercial FM radio service by and to 
Native American tribes, by providing a procedure for such tribes to 
establish threshold qualifications when applying for commercial FM 
allotments added to the Table of Allotments using the Commission's 
Tribal Priority.

DATES: The rules and policies established in this order contain 
information collection requirements that have not been approved by OMB. 
The Commission will publish a document in the Federal Register 
announcing the effective date.

ADDRESSES: Peter Doyle or Thomas Nessinger, Federal Communications 
Commission, Media Bureau, Audio Division, 445 12th Street SW., Room 2-
B450, Washington, DC 20445.

FOR FURTHER INFORMATION CONTACT: Peter Doyle, Chief, Media Bureau, 
Audio Division, (202) 418-2700 or <a href="/cdn-cgi/l/email-protection#c595a0b1a0b7eb81aabca9a085a3a6a6eba2aab3"><span class="__cf_email__" data-cfemail="0757627362752943687e6b624761646429606871">[email protected]</span></a>; Thomas 
Nessinger, Attorney-Advisor, Media Bureau, Audio Division, (202) 418-
2700 or <a href="/cdn-cgi/l/email-protection#b4e0dcdbd9d5c79afad1c7c7dddad3d1c6f4d2d7d79ad3dbc2"><span class="__cf_email__" data-cfemail="3c685453515d4f1272594f4f55525b594e7c5a5f5f125b534a">[email protected]</span></a>.
    For additional information concerning the Paperwork Reduction Act 
information collection requirements contained in this document, contact 
Cathy Williams at (202) 418-2918, or via the Internet at 
<a href="/cdn-cgi/l/email-protection#470426332f3e69102e2b2b2e262a340721242469202831"><span class="__cf_email__" data-cfemail="054664716d7c2b526c69696c646876456366662b626a73">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's Third 
Report and Order (Third R&O), FCC 11-190, adopted December 28, 2011, 
and released December 29, 2011. The full text of the Third R&O is 
available for inspection and copying during regular business hours in 
the FCC Reference Center, 445 Twelfth Street SW., Room CY-A257, Portals 
II, Washington, DC 20554, and may also be purchased from the 
Commission's copy contractor, BCPI, Inc., Portals II, 445 Twelfth 
Street, SW., Room CY-B402, Washington, DC 20554. Customers may contact 
BCPI, Inc. via their Web site, http://www.bcpi.com, or call 1-(800) 
378-3160. This document is available in alternative formats (computer 
diskette, large print, audio record, and Braille). Persons with 
disabilities who need documents in these formats may contact the FCC by 
email: <a href="/cdn-cgi/l/email-protection#dd9b9e9ee8ede99dbbbebef3bab2ab"><span class="__cf_email__" data-cfemail="2a6c69691f1a1e6a4c4949044d455c">[email protected]</span></a> or phone: (202) 418-0530 or TTY: (202) 418-0432.

Paperwork Reduction Act of 1995 Analysis

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

Synopsis of Order

    1. In the Third R&O, the Commission addressed the proposals set 
forth in the Second Further Notice of Proposed Rule Making (Second 
FNPRM) that accompanied the Second Report and Order in this proceeding 
(76 FR 9797, March 4, 2010, FCC 11-28, rel. Mar. 3, 2011) (Second R&O). 
The Tribal Priority gives qualified Native American Tribes and Alaska 
Native Villages (Tribes) a priority under section 307(b) of the 
Communications Act when seeking to establish new radio stations that 
primarily cover tribal lands. Because applicants for new AM broadcast 
and FM noncommercial educational (NCE) broadcast stations submit 
showings under section 307(b) at the time of filing an application for 
construction permit, the Tribal Priority gives Tribes an advantage over 
applicants filing mutually exclusive proposals. However, in the case of 
commercial FM broadcast stations, there is a two-step application 
process: first, the FM channel is allotted at a selected community, and 
the section 307(b) evaluation is made at this stage of the process. 
Second, the FM allotment is auctioned, with any party desiring to do so 
participating in the auction. An application for an FM commercial 
construction permit is only filed after the auction is held, and only 
by the winning bidder.
    2. Recognizing ``the risks inherent in applying a section 307(b) 
preference at the allotment stage for auctionable non-reserved band 
spectrum,'' (First Report and Order, 75 FR 9797, Mar. 4, 2010, FCC 10-
24, rel. Feb. 23, 2010), the Commission sought comment in the Further 
Notice of Proposed Rule Making, 75 FR 9856, March 4, 2010, FCC 10-24, 
rel. Feb. 23, 2010 (FNPRM) in this proceeding on whether to establish 
an auction bidding credit for Tribes seeking to provide commercial FM 
radio service to their Tribal Lands and members. The Tribal bidding 
credit was originally proposed to mitigate concerns that, due to the 
two-step nature of the commercial FM licensing process, Tribes or 
Tribal entities that employ the Tribal Priority to obtain FM allotments 
might be outbid by competing, non-Tribal applicants. The only 
commenters to address this issue proposed a 35 percent bidding credit 
that would be available to Tribes or Tribal entities that participated 
in the allotment proceeding for the FM channel being auctioned, 
regardless of new entrant status, along with an additional 25 percent 
new entrant bidding credit to Tribes with no interests in media of mass 
communications, for a total maximum bidding credit of 60 percent.
    3. The Commission found the record inconclusive as to the 
effectiveness of tribal bidding credits. The Commission was unclear as 
to whether and how it could craft such credits so as to meaningfully 
advance its goals consistent with the competitive bidding mandate of 47 
U.S.C. 309(j). On further consideration, the Commission believed an 
alternative approach might be more effective to achieve its policy 
goals and would be more consistent with its statutory mandate to 
license spectrum in the public interest. The Commission thus sought 
comment, in the Second FNPRM, on whether to require, as a threshold 
qualification to apply for a commercial FM channel allotted pursuant to 
the Tribal Priority, that

[[Page 2917]]

applicants qualify for a Tribal Priority for the channel. Under this 
approach, a Tribe or Tribal entity applying for an FM channel allotted 
based on the Tribal Priority would be required to establish at the 
application stage its qualifications to provide the service for which 
the channel was specifically allotted.
    4. The Commission stated that the proposed threshold qualifications 
would be more effective than tribal bidding credits in advancing the 
Tribal Priority's goals. As set forth in the First R&O, the Priority is 
premised on the unique ability of Tribes and Tribal entities to serve 
their Tribal communities ``[b]ecause of their status as sovereign 
nations responsible for, among other things, `maintaining and 
sustaining their sacred histories, languages, and traditions.' '' 
(First R&O, 25 FCC Rcd at 1587-88). As the Commission previously noted, 
the identity of the service provider to Tribal areas is critical to 
Tribal Priority-based allocations. Whereas in AM and NCE radio services 
the Tribal Priority generally operates as a dispositive preference in 
the application process, guaranteeing that a qualified applicant will 
obtain the license, commercial FM licensing is a two-step process in 
which a dispositive preference at the initial, allotment stage does not 
guarantee the grant of a license in the second, application step. An 
unavoidable consequence of the auctions process is that Tribes and 
Tribal entities uniquely qualified to serve their communities may be 
outbid in the commercial FM application process by non-Tribal 
applicants that file mutually exclusive applications. At best, Tribal 
bidding credits could only enhance the competitive position of Tribal 
applicants. They could not, however, completely eliminate the risk of 
qualified Tribal applicants being outbid, thereby frustrating the 
Commission's goals in allocating the channel pursuant to the Tribal 
Priority. In contrast, the proposed threshold qualification requirement 
would ensure that only a Tribe or Tribal entity qualified to provide 
the unique service contemplated by the allocation is eligible for the 
license to provide that service. Such an approach would set the 
commercial FM service on the same footing as other radio services with 
regard to the Tribal Priority, and avoid undermining the Commission's 
policy goals in establishing the Tribal Priority.
    5. The Commission further stated that the proposed threshold 
qualifications would be consistent with its statutory mandate under 47 
U.S.C. 309(j)(6)(E), which provides, in pertinent part, that 
``[n]othing in this subsection, or in the use of competitive bidding, 
shall * * * be construed to relieve the Commission of the obligation in 
the public interest to continue to use * * * threshold qualifications * 
* * in order to avoid mutual exclusivity in application and licensing 
proceedings.'' The use of threshold qualifications would serve the 
public interest because the premise of the Tribal Priority is a Tribe's 
or Tribal entity's unique ability to serve the needs and interests of 
its local community. Unlike a prohibited ``pioneer's preference,'' 
which would favor the application of the party that petitioned to add 
an allotment using the Tribal Priority, the threshold qualification 
would be based on the Tribe's or Tribal entity's ability to fulfill the 
purpose for which the channel was allotted under the Tribal Priority, 
rather than on its participation in the allotment proceeding. Thus, 
eligible Tribes or Tribal entities may be eligible to apply for a 
channel allotted pursuant to the Tribal Priority even if they did not 
petition for the allotment. To the extent that mutually exclusive 
applications may still be filed under the proposed threshold 
qualifications approach, thus requiring competitive bidding, the 
bidders would initially be limited to qualified Tribes and Tribal 
entities, so the Commission's policy goals would not be frustrated. In 
the Second FNPRM, the Commission also asked whether to adopt an 
exception to the general prohibition of collusion set forth in 47 CFR 
1.2105(c), applicable to mutually exclusive applications in the 
commercial FM broadcast service, so that Tribes or Tribal entities that 
file mutually exclusive applications for a channel allotted pursuant to 
the Tribal Priority could have an opportunity to resolve any mutual 
exclusivities through engineering solutions or settlement.
    6. The Commission received two comments and one reply comment on 
these issues: NPM and NCAI again filed joint comments, and Gila River 
Telecommunications, Inc. (GRTI) filed comments and reply comments. All 
commenters supported the threshold qualifications approach as proposed 
in the Second FNPRM, and supported the proposal to allow settlements 
among qualifying mutually exclusive Tribal applicants. All commenters 
also concurred an FM allotment added by a qualified Tribe or Tribal-
owned entity using the Tribal Priority (Tribal Allotment) should be 
initially awarded only to a Tribe or Tribal entity, and should remain 
reserved for such an entity even if no Tribal applicants meeting such 
threshold qualifications express interest in a Tribal Allotment when 
initially offered. NPM/NCAI in particular believed that it would 
frustrate the purpose of the Tribal Priority to open, then abruptly 
close, a Tribal filing window, only to offer the Tribal Allotment to 
non-Tribal applicants, given that many financial, technical, and 
geographic obstacles exist to the rapid deployment of broadcast radio 
service to tribal lands. NPM/NCAI thus argued that any threshold 
qualifications plan should account for such obstacles, and should allow 
sufficient time for Tribes to finance and construct facilities. GRTI, 
while agreeing with NPM/NCAI on this point, added that some Tribes are 
prepared and eager to begin station construction quickly, but that such 
desires can be thwarted by what it perceives as Commission delays. GRTI 
thus suggested that the Commission implement an ``expedited 
processing'' system for Tribes meeting threshold qualifications and 
proposing new AM, full-power FM, and low-power FM facilities.
    7. Based on the Commission's examination of the record in this 
proceeding, it adopted the proposed threshold qualifications approach 
to commercial FM application processing as set forth below, including 
measures to address situations in which Tribes and Tribal entities 
require additional time to apply for a license. While committed to 
assisting Tribes in establishing radio service meeting the needs of 
their communities and citizens, the Commission was also mindful of its 
fundamental interest in expediting new radio service to communities and 
preventing the so-called ``warehousing'' of scarce spectrum. The latter 
concern militates against procedures that would unreasonably delay 
authorizing new stations, or tie up spectrum for indefinite periods of 
time. To some extent, a Tribe may time the award of a new FM commercial 
facility by petitioning for a new Tribal Allotment only when it is 
ready to commence construction (although, in certain areas where 
spectrum is more scarce, Tribes could also reasonably conclude that the 
risks of deferring application filing are too great). Moreover, while 
there do exist financial obstacles to initiating new broadcast service, 
the procedures proposed in the Second FNPRM apply only to commercial FM 
facilities, which by their nature are intended to be financially self-
sustaining. Finally, as GRTI pointed out in its comments, some Tribes 
are ready, willing, and able to commence construction immediately, and 
would be disserved by any process

[[Page 2918]]

that includes built-in delays. The adopted procedures are intended to 
balance these concerns by accommodating both those Tribes and Tribal 
entities that wish to initiate commercial FM service quickly and those 
that might need additional time to muster the resources needed to apply 
for a new station and complete construction.
    8. Under the threshold qualifications procedure adopted herein, 
once a Tribal Allotment is allocated, as set forth in the First R&O, 
within a reasonable period of time after publication of the new 
allotment in the Federal Register, the Commission will announce by 
Public Notice a Threshold Qualifications Window (TQ Window). During the 
TQ Window, any Tribe or Tribal entity that could qualify to add that 
particular Tribal Allotment, including the original proponent of the 
allotment, may file FCC Form 301 for the Tribal Allotment (the original 
Tribal Allotment proponent will already have filed FCC Form 301 
simultaneously with its Petition for Rule Making proposing the new 
allotment, under established Commission procedures; thus, the original 
Tribal Allotment proponent need only submit a notice stating that it 
wishes its pending Form 301 application to be processed immediately, or 
it may file an amendment to its pending Form 301 application during the 
TQ Window, as appropriate). Such an applicant must demonstrate that it 
meets all of the following eligibility criteria for grant of a Tribal 
Priority at the allotment stage:
    (A) The applicant is either a federally recognized Tribe or Tribal 
consortium, or an entity 51 percent or more of which is owned or 
controlled by a Tribe or Tribes. Qualifying Tribes or Tribal entities 
must be those at least a portion of whose Tribal Lands lie within the 
principal community contour of the proposed facility. Although the 51 
or greater percent Tribal control threshold need not consist of a 
single Tribe, the qualifying entity must be 51 percent or more owned or 
controlled by Tribes at least a portion of whose Tribal Lands lie 
within the proposed facility's principal community contour;
    (B)(1) At least 50 percent of the area within the proposed 
principal community contour is over that Tribe's Tribal Lands, or (2) 
the proposed principal community contour (a) encompasses 50 percent or 
more of that Tribe's Tribal Lands, (b) serves at least 2,000 people 
living on Tribal Lands, and (c) the total population on Tribal Lands 
residing within the proposed station's service contour (the class 
reference contour as set forth in 47 CFR 73.211(b), which is the 1mV/m 
[60 dB[mu]] contour) constitutes at least 50 percent of the total 
covered population (and, in the case of either (B)(1) or (B)(2), the 
proposed station's principal community contour does not cover more than 
50 percent of the Tribal Lands of a Tribe that is not a party to the 
application). To the extent that a Tribe lacks Tribal Lands, the 
applicant may demonstrate eligibility for waiver of the above-listed 
tribal land coverage provisions, by demonstrating a geographic area 
identified with the Tribe. See Second R&O, 26 FCC Rcd at 2561-63. 
Likewise, the Commission will consider requests for waiver of the other 
requirements where appropriate;
    (C) The proposed community of license must be located on Tribal 
Lands; and
    (D) The proposed service must constitute first or second aural 
(reception) service, or first local Tribal-owned commercial 
transmission service at the proposed community of license (see First 
R&O, 25 FCC Rcd 1583, 1596-97 (2010); Second R&O, 26 FCC Rcd at 2561-
63, 2586-87).
    9. If only one acceptable application is filed during the TQ 
Window, whether by the original Tribal Allotment proponent submitting 
notification to process its application immediately or by another 
qualified applicant, that application will be processed promptly, and 
the Tribal Allotment will not be auctioned. Absent an affirmative 
submission by the original Tribal Allotment proponent during the TQ 
Window notifying the Commission that it wishes its Form 301 application 
to be processed immediately, the allotment proponent's already-filed 
Form 301 application will not be considered an ``acceptable 
application'' at this stage of the threshold qualifications proceeding. 
In the event that two or more acceptable applications are filed during 
the TQ Window, the Commission will announce a limited period, after the 
close of the TQ Window but before the next FM auction, in which the 
parties may negotiate a settlement (including a time-sharing agreement) 
or bona fide merger, as a way of resolving the mutual exclusivity 
between their applications. Any such settlement or merger will be 
subject to the same limits and conditions as other agreements for 
resolving application conflicts (see 47 CFR 73.3525). Technical 
solutions will not be allowed as settlements. Unlike the case of 
competing new commercial AM applications (some groups of which are 
allowed to resolve their mutual exclusivity by means of engineering 
solutions), in which each mutually exclusive applicant has submitted a 
discrete engineering proposal in its application which may be amended, 
a Tribal Allotment will have been added to the Table of Allotments (47 
CFR 73.202) only after it has undergone the allocations rulemaking 
process. That process involves not only a complete engineering review 
of the proposed allotment, but also consideration of comments and, 
often, competing allotment proposals. Allowing a post-allocation 
technical solution that would result in grant of more than one FM 
allotment would effectively circumvent the FM allocations rulemaking 
process, and the right of parties to file comments and counter-
proposals that is inherent in that process. If there are other fully 
spaced channels that could accommodate another Tribal Allotment, one of 
the competing applicants could simply petition to add such an allotment 
through the normal allocations rulemaking process. If, however, there 
are no channels available, the Commission declined GRTI's suggestion 
that it relax its spacing or other rules designed to prevent 
interference among stations. A settlement that establishes technically 
deficient Tribal stations is not an effective means to establish viable 
and needed radio service to Tribal Lands.
    10. If a settlement or merger is reached, the parties shall so 
notify the Commission as set forth in the Public Notice announcing the 
TQ Window. The Commission's staff will promptly begin processing the 
surviving application pursuant to the settlement or merger. If a 
settlement or merger cannot be reached among the mutually exclusive 
applicants, the Tribal Allotment will be auctioned during the next 
scheduled FM auction. However, at that time only the applicants whose 
applications were accepted for filing during the TQ Window, as well as 
the original Tribal Allotment proponent, will be permitted to bid on 
that particular Tribal Allotment, i.e., bidding on that allotment will 
be closed to all other potential applicants. The closed group of 
mutually exclusive TQ Window applicants must comply with generally 
applicable auction procedures (e.g., by correctly completing Form 175 
and timely making an upfront payment; see 47 CFR 1.2105-1.2106, 
73.5002). In the event that only one Tribal applicant qualifies to bid 
in the first auction of a Tribal Allotment, it must submit an upfront 
payment and enter a bid during the auction in order to obtain the 
construction permit. The winning bidder for the Tribal Allotment must 
comply with all auction rules for winning bidders in order to be 
awarded the construction permit; that is, it must

[[Page 2919]]

timely make any required down and final payments, and must timely file 
FCC Form 301 (or, in the case of the original proponent of the Tribal 
Allotment, amend its pending Form 301 or advise the staff that its 
pending Form 301 application may be processed). See 47 CFR 1.2107, 
1.2109, 1.2112, 73.5003, 73.5005.
    11. In the NCE FM context, the Commission's rules impose a holding 
period on authorizations granted pursuant to a Tribal Priority, for a 
period beginning from the award of a construction permit through four 
years of on-air operations, prohibiting community of license changes 
and/or technical changes that would result in the modified facility no 
longer qualifying for a Tribal Priority. See First R&O, 25 FCC Rcd at 
1586, 1593, 1596-97. This is to discourage trafficking in 
authorizations granted pursuant to the Tribal Priority, which could 
frustrate the goals of the priority and potentially harm the 
communities that the Tribal Priority is intended to benefit. The same 
rationale applies in the commercial FM context with regard to 
authorizations awarded (1) to a singleton TQ Window applicant, (2) 
after a settlement among TQ Window applicants, and (3) after an auction 
among a closed group of bidders composed only of threshold qualified 
tribal applicants. Accordingly, the permittee or licensee of an 
authorization awarded to a TQ Window singleton, after a post-TQ window 
settlement, or after an auction to a closed group of threshold 
qualified tribal applicants, is prohibited from assigning or 
transferring the authorization, except to another party that qualifies 
for the Tribal Priority under which the Tribal Allotment was awarded in 
all respects, for a period beginning from the award of a construction 
permit through four years of on-air operations.
    12. In the event that no qualifying party applies during the TQ 
Window, and the Tribal Allotment proponent requests that its pending 
FCC Form 301 application not be immediately processed (by sending a 
letter to the Audio Division, Media Bureau, staff during the TQ 
Window), the Tribal Allotment will be placed in a queue to be auctioned 
in the normal course for vacant FM allotments. When the Tribal 
Allotment is offered at auction for the first time, only applicants 
meeting the threshold qualifications (those who would have qualified to 
add the Tribal Allotment, including the original proponent of the 
allotment, as detailed above) may specify that particular Tribal 
Allotment on FCC Form 175, Application to Participate in an FCC 
Auction. Any applicant not meeting threshold qualifications that 
selects the Tribal Allotment in its Form 175 application will be 
prohibited from entering a bid for the Tribal Allotment. Qualifying 
Tribal applicants must, as noted above, otherwise qualify to bid at 
auction, and must comply with all Commission rules relating to the 
conduct of auctions and award of construction permits to winning 
bidders, as discussed above.
    13. Should no qualifying party apply to bid on a Tribal Allotment 
in the first auction in which it is offered, or should no such party 
qualify to bid in the first auction in which a Tribal Allotment is 
offered, then the Tribal Allotment will be offered in a subsequent 
auction or auctions, and any applicant, whether or not a Tribe or 
Tribal entity, may apply for the Tribal Allotment. The Commission 
declined to adopt the commenters' suggestion that a Tribal Allotment 
only be offered for initial licensing to a qualifying Tribe or Tribal 
entity in perpetuity. Such a prohibition would frustrate the policies 
favoring expeditious initiation of radio service, and disfavoring the 
practice of allowing spectrum to lie fallow for indefinite periods.
    14. Due to the Commission's adoption of the threshold 
qualifications approach, it did not adopt its original proposal of a 
Tribal bidding credit. The Commission continues to believe that a 
bidding credit, of whatever magnitude, is insufficient to ensure that 
Tribal Allotments will end up in the hands of qualifying Tribal 
applicants. See Second R&O, 26 FCC Rcd at 2588-89. It is expected that, 
under the procedures adopted, the majority of FM commercial Tribal 
Allotments will be awarded through the TQ Window approach. Moreover, to 
the extent that multiple qualifying Tribes or Tribal entities would bid 
on a Tribal Allotment at auction, all would likely qualify for the same 
Tribal or new entrant bidding credits. Adding a bidding credit to the 
procedures adopted here would therefore serve no purpose.
    15. The procedures adopted here are designed to accommodate both 
those Tribes and Tribal entities seeking to establish new commercial FM 
services quickly, and those Tribes needing more time to marshal their 
resources. These procedures also align with Congress's direction that 
the Commission use threshold qualifications to avoid mutual exclusivity 
in application and licensing proceedings when it is in the public 
interest to do so. 47 U.S.C. 309(j)(6)(E). Most importantly, these 
procedures provide the best means of assuring that FM commercial 
allotments pursuant to the Tribal Priority will be awarded to 
qualifying Tribes or Tribal entities, thus achieving the goals of the 
Tribal Priority.
    16. The Commission realizes that any process leading to deployment 
of communications services on Tribal lands and removing barriers to 
entry must recognize Tribal sovereignty and self-determination, the 
unique needs and priorities of Native Nations and Tribal communities, 
and the importance of consultation and coordination with Tribal 
government and Native community leaders. It has historically 
acknowledged ``the rights of Indian Tribal governments to set their own 
communications priorities and goals for the welfare of their 
membership.'' See Establishing a Government-to-Government Relationship 
with Indian Tribes, Policy Statement, 16 FCC Rcd 4078, 4080-81 (2000). 
To that end, the Commission directed the Office of Native Affairs and 
Policy (ONAP) and the Audio Division of the Media Bureau (AD) to 
coordinate in establishing informational materials and training 
opportunities for Tribes and Tribal entities, in order to help them 
better understand the complexities of the threshold qualification and 
licensing processes established herein. Additionally, ONAP and AD were 
directed, as appropriate, to remain available to consult with Tribal 
applicants on any questions that they may have at any stage of the 
radio application and licensing processes, especially as they relate to 
Tribal licensing priorities. Id. at 4082.

Final Regulatory Flexibility Analysis

    17. As required by the Regulatory Flexibility Act of 1980, 5 U.S.C. 
603, as amended (RFA), an Initial Regulatory Flexibility Analysis 
(IRFA) was incorporated in the Second FNPRM to this proceeding. The 
Commission sought written public comment on the proposals in the Second 
FNPRM, including comment on the IRFA. The Commission received no 
comments on the IRFA. This present Final Regulatory Flexibility 
Analysis (FRFA) conforms to the RFA. See 5 U.S.C. 604.

Need for, and Objectives of, the Report and Order

    18. In the Third R&O, the Commission adopted new procedures under 
which commercial FM allotments added using the Commission's Tribal 
Priority may be awarded to tribal applicants meeting the threshold 
qualifications for adding such an allotment. The new procedures were 
adopted in order to provide a significant opportunity for the award of 
such tribal allotments to tribal applicants, in

[[Page 2920]]

keeping with the goals underlying the Commission's Tribal Priority.
    19. The further rulemaking proceeding leading to the Third R&O was 
initiated to obtain further comments concerning an alternative proposal 
to assist Native American Tribes and Alaska Native Villages (Tribes) 
seeking to establish new commercial FM service to Tribal communities. 
In the Further Notice of Proposed Rulemaking, the Commission proposed 
an auction bidding credit to Tribes and entities owned by Tribes. The 
Commission received only one proposal for a potential tribal bidding 
credit: To grant Tribes a 35 percent Tribal Bidding Credit (TBC), to be 
added to any new entrant bidding credit for which they may qualify, to 
a maximum of 60 percent. The Commission believed this record was 
inconclusive to adopt a TBC, and further believed it was unclear 
whether and how a TBC could be crafted to advance the dual goals of 
increasing Tribal ownership of radio facilities and maximizing the 
value of spectrum through competitive bidding, as mandated by 47 U.S.C. 
309(j). On further consideration, the Commission determined that an 
alternative approach would more effectively achieve the policy goals 
underlying the Tribal Priority adopted in the First R&O in this 
proceeding, 25 FCC Rcd at 15896-97, and be more consistent with its 
statutory mandate. See 47 U.S.C. 309(j)(6)(E).
    20. Specifically, in the Second FNPRM the Commission sought comment 
on whether to require, as a threshold qualification to apply for a 
commercial FM channel allotted pursuant to the Tribal Priority, that 
applicants qualify for a Tribal Priority for that channel. Such an 
approach is consistent with other procedures used by the Commission, 
such as those used to reserve vacant FM allotments for noncommercial 
educational (NCE) use. Additionally, while the Tribal Priority operates 
as a dispositive preference in the AM commercial and FM NCE application 
contexts, as currently formulated the priority is not dispositive for 
FM commercial stations, because a Tribe that adds an FM allotment using 
the Tribal Priority may still be outbid at auction by a non-Tribal 
applicant. The alternative approach proposed by the Commission would 
correct this asymmetry, and would also more effectively ensure that FM 
allotments added using the Tribal Priority are ultimately licensed to 
Tribes, who would use such FM channels for their intended purposes of 
promoting Tribal language, culture, and self-government. The Commission 
therefore sought comment on this alternative approach and its potential 
ramifications, including whether non-Tribal applicants should be 
allowed to apply for FM allotments added using the Tribal Priority, but 
for which no Tribe expresses interest. The Commission also sought 
additional input from commenters on the TBC, and on other ways in which 
the Commission could promote commercial Tribal radio service, including 
comment on potential barriers that may discourage Tribal participation 
in the broadcast auction and licensing processes.
    21. Commenters on these issues favored the adoption of the 
threshold qualifications procedure, as the best means of ensuring that 
Tribal-added FM allotments would ultimately be licensed to those whom 
the Tribal Priority was meant to benefit. Native Public Media and the 
National Congress of American Indians (NPM/NCAI), filing joint 
comments, expressed concern that expedited procedures would force 
Tribes to receive construction permits before they were financially and 
technically able to construct facilities. Another commenter, Gila River 
Telecommunications, Inc. (GRTI), agreed, but at the same time argued 
that there should be expedited threshold qualifications procedures for 
those Tribal applicants who are ready and able to begin station 
construction. All commenters agreed that Tribal allotments should not 
be made available to non-Tribal applicants at any time. Commenters also 
agreed that, if the threshold qualifications procedure were not 
adopted, a TBC of up to 60 percent should be afforded to Tribal 
applicants for FM allotments added using the Tribal Priority.
    22. In the Third R&O in this proceeding, the Commission adopted the 
threshold qualifications procedure proposed in the Second FNPRM. Under 
the threshold qualifications procedure, once a commercial FM allotment 
is allocated using the Tribal Priority (Tribal Allotment), within a 
reasonable time thereafter the Commission staff will announce by Public 
Notice a Threshold Qualifications Window (TQ Window). During the TQ 
Window, any Tribe or Tribal entity that could qualify to add that 
particular Tribal Allotment may file FCC Form 301 for the Tribal 
Allotment. The original Tribal Allotment proponent, which will already 
have filed Form 301 at the time it proposed the allotment, must submit 
to the staff a notice stating that it wishes its already-filed Form 301 
application to be processed immediately, or make that statement in an 
amendment to its Form 301. An applicant in the TQ Window must 
demonstrate that it meets all of the eligibility criteria for grant of 
a Tribal Priority at the allotment stage. See paragraph <8>, above.
    23. If only one acceptable application is filed during the TQ 
Window, whether by the original Tribal Allotment proponent submitting 
notification to process its application immediately or by another 
qualified applicant, that application will be processed promptly, and 
the Tribal Allotment will not be auctioned. In the event that two or 
more acceptable applications are filed during the TQ Window, the 
Commission will announce a limited period, after the close of the TQ 
Window but before the next FM auction, in which the parties may 
negotiate a settlement (including a time-sharing agreement) or bona 
fide merger, as a way of resolving the mutual exclusivity between their 
applications. There is precedent for such settlements or mergers in the 
AM auction context, involving certain mutually exclusive applicants for 
new and modified AM stations. See Implementation of Section 309(j) of 
the Communications Act--Competitive Bidding for Commercial Broadcast 
and Instructional Television Fixed Service Licenses, First Report and 
Order, 13 FCC Rcd 15920, 15927 (1998), (subsequent history omitted). If 
a settlement or merger is reached, the parties shall so notify the 
Commission as set forth in the Public Notice announcing the TQ Window. 
The staff will promptly begin processing the surviving application 
pursuant to the settlement or merger. If a settlement or merger cannot 
be reached among the mutually exclusive applicants, the Tribal 
Allotment will be auctioned during the next scheduled FM auction. 
However, at that time only the applicants whose applications were 
accepted for filing during the TQ Window, as well as the original 
Tribal Allotment proponent, will be permitted to bid on that particular 
Tribal Allotment, i.e., bidding on that allotment will be closed to all 
other potential applicants. The closed group of mutually exclusive TQ 
Window applicants must comply with generally applicable auction 
procedures. The winning bidder for the Tribal Allotment must comply 
with all auction rules for winning bidders in order to be awarded the 
construction permit; that is, it must timely make any required down and 
final payments, and must timely file FCC Form 301 (or, in the case of 
the original proponent of the Tribal Allotment, amend its pending Form 
301 or advise the staff that its pending Form 301 application may be 
processed).
    24. In the event that no qualifying party applies during the TQ 
Window,

[[Page 2921]]

and the original Tribal Allotment proponent requests that its pending 
FCC Form 301 application not be immediately processed, the Tribal 
Allotment will be placed in a queue to be auctioned in the normal 
course for vacant FM allotments. When the Tribal Allotment is offered 
at auction for the first time, only applicants meeting the threshold 
qualifications (those who would have qualified to add the Tribal 
Allotment, including the original proponent of the allotment) may 
specify that particular Tribal Allotment on FCC Form 175, Application 
to Participate in an FCC Auction. Any applicant not meeting threshold 
qualifications that selects the Tribal Allotment in its Form 175 
application will be prohibited from entering a bid for the Tribal 
Allotment. Qualifying Tribal applicants must, as noted above, otherwise 
qualify to bid at auction, and must comply with all Commission rules 
relating to the conduct of auctions and award of construction permits 
to winning bidders. Should no qualifying party apply to bid on a Tribal 
Allotment in the first auction in which it is offered, or should no 
such party qualify to bid in the first auction in which a Tribal 
Allotment is offered, then the Tribal Allotment will be offered in a 
subsequent auction or auctions, and any applicant, whether or not a 
Tribe or Tribal entity, may apply for the Tribal Allotment. A Tribal 
Allotment won in an open auction (that is, one open to non-threshold 
qualified applicants) will not be subject to the four-year prohibition 
on assignment or transfer (but will still be subject to a four-year 
prohibition on community of license or technical changes). Because of 
the similarity of the new threshold qualifications procedures to the 
procedures for awarding NCE construction permits based on the Tribal 
Priority (namely, to discourage trafficking in such permits so that 
they will be used to further the goals of the Tribal Priority by 
enabling Tribes or tribal entities to broadcast to Tribal Lands), the 
Commission will impose the same holding period prohibition on 
commercial FM permits awarded using the threshold qualifications 
procedures. The Commission will therefore prohibit the permittee or 
licensee of an authorization awarded to a TQ Window singleton, after a 
post-TQ window settlement, or after an auction to a closed group of 
threshold qualified tribal applicants, from assigning or transferring 
the authorization, except to another party that qualifies for the 
Tribal Priority under which the Tribal Allotment was awarded in all 
respects, for a period beginning from the award of a construction 
permit through four years of on-air operations.

Summary of Significant Issues Raised by Public Comments in Response to 
the IRFA

    25. There were no comments filed that specifically addressed the 
rules and policies proposed in the IRFA.

Description and Estimate of the Number of Small Entities to Which the 
Proposed Rules Will Apply

    26. The RFA directs the Commission to provide a description of and, 
where feasible, an estimate of the number of small entities that will 
be affected by the rules adopted herein. 5 U.S.C. 603(b)(3). The RFA 
generally defines the term ``small entity'' as having the same meaning 
as the terms ``small business,'' small organization,'' and ``small 
government jurisdiction.'' 5 U.S.C. 601(6). In addition, the term 
``small business'' has the same meaning as the term ``small business 
concern'' under the Small Business Act. 5 U.S.C. 601(3). 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). 15 U.S.C. 632.
    27. The rules and policies adopted in the Third R&O will primarily 
apply to Tribes, consortia of Tribes, and entities 51 or more percent 
owned by Tribes or consortia, that apply for commercial FM radio 
stations, but potentially will apply to all AM and FM radio 
broadcasting licensees and potential licensees, to the extent that they 
may ultimately be allowed to apply for Tribal Allotments in the event 
that qualified Tribal applicants do not do so. A radio broadcasting 
station is an establishment primarily engaged in broadcasting aural 
programs by radio to the public. 15 U.S.C. 632. Included in this 
industry are commercial, religious, educational, and other radio 
stations. Id. Radio broadcasting stations which primarily are engaged 
in radio broadcasting and which produce radio program materials are 
similarly included. Id. However, radio stations that are separate 
establishments and are primarily engaged in producing radio program 
material are classified under another NAICS number. Id. The SBA has 
established a small business size standard for this category, which is: 
firms having $7 million or less in annual receipts. 13 CFR 121.201, 
NAICS code 515112 (updated for inflation in 2008). According to BIA/
Kelsey, MEDIA Access Pro Database on November 1, 2011, 10,785 (97%) of 
11,127 commercial radio stations have revenue of $7 million or less. 
Therefore, the majority of such entities are small entities. Please 
note, however, that many radio stations are affiliated with much larger 
corporations having much higher revenue. This estimate, therefore, 
likely overstates the number of small entities that might be affected 
by any ultimate changes to the rules and forms.

Description of Projected Reporting, Recordkeeping and Other Compliance 
Requirements

    28. As described, certain rules and procedures will change, 
although the changes will not result in substantial increases in 
burdens on most applicants. The new procedures will only apply to 
Tribes and entities majority owned by Tribes, which do not constitute 
the majority of commercial FM applicants. Moreover, because of the 
geographic limits of commercial FM allotments, and the qualifying 
criteria for the Tribal Priority, the number of threshold qualified 
applicants for a given allotment will likely be small. Questions will 
be modified in FCC Form 301 to indicate whether the applicant is 
applying for a Tribal Allotment, and certifying that it qualifies for 
the Tribal Priority for that particular Tribal Allotment. These are 
largely self-identification questions reflecting the applicant's 
status, although in the case of eligibility for the Tribal Priority 
some geographic analysis may be required, and/or a showing may be 
needed to establish eligibility for the Tribal Priority in the absence 
of tribal lands as defined in the First R&O. Additionally, questions 
will have to be added to FCC Form 175, in the case of Tribal Allotments 
that proceed to competitive bidding, in order to establish the 
applicant's eligibility to apply for a Tribal Allotment in the first 
instance. However, these burdens should be moderate to minimal, as it 
is anticipated that a substantial number of commercial tribal FM 
allotments will be awarded before the auction stage, and many threshold 
qualified tribal applicants will have established their qualifications 
before auction, either at the allocations stage or during a TQ window. 
In any event, such burdens are needed in order to achieve the 
Commission's statutory mandate of fair, efficient, and equitable 
distribution of radio service (and, in the case of Tribal Priority 
claimants, are necessary in order to open up the Tribal Priority to 
greater numbers of Tribes seeking to establish new radio service). 
Certain notifications may also be required of some applicants, for 
example, notification that a Tribal

[[Page 2922]]

Allotment proponent wishes its already-filed FCC Form 301 application 
to be considered in the TQ Window, or a request for approval of a 
merger or settlement agreement among TQ Window applicants. The 
remaining procedural changes in the Third R&O are changes in Commission 
procedures, requiring no input from applicants. For example, under the 
new threshold qualifications procedure, the Commission will have to 
generate Public Notices setting forth procedures for TQ Windows, or 
modify auction Public Notices to set forth special procedures for 
Tribal Allotments being auctioned.

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

    29. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its proposed approach, 
which may include the following four alternatives (among others): (1) 
The establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance or reporting requirements under the rule for small entities; 
(3) the use of performance, rather than design, standards; and (4) an 
exemption from coverage of the rule, or any part thereof, for small 
entities. 5 U.S.C. 603(c)(1)-(c)(4).
    30. With regard to the proposals in the Second FNPRM, NPM/NCAI 
expressed concern about the ability of some Tribes to act quickly to 
construct and license new commercial FM stations. There is, according 
to NPM/NCAI, a significant and adverse economic impact that some Tribes 
face when seeking to initiate new radio service. Factors causing such 
an adverse economic impact include lack of capital or federal program 
support; short construction seasons in many Tribal areas; complications 
with regard to tower siting, due to factors such as preservation of 
sacred sites and Bureau of Indian Affairs land use policies; and lack 
of easy access to materials and engineering expertise. While not 
disagreeing with NPM/NCAI on this issue, GRTI pointed to what it 
perceives as Commission delays in allocating new FM allotments and 
making them available for auction, delaying the initiation of new 
service by Tribes ready and able to begin construction immediately. In 
order to accommodate these dual concerns, the Commission adopted a 
threshold qualifications approach to Tribal commercial FM allotments 
that provides an early opportunity for application for Tribes that are 
ready to commence construction, as well as a later opportunity (up to, 
but likely no more than, two years) for those Tribes that may lack the 
resources to commence construction soon after a channel is allotted 
using the Tribal Priority. In this way, the Commission's adopted 
procedure is designed to reduce the burdens on these groups of 
potential applicants, based on the concerns expressed in their 
comments. Although the Commission could have adopted strictly an 
expedited threshold qualifications procedure--awarding a construction 
permit for a Tribal Allotment through a TQ Window opened shortly after 
allocation of the Tribal Allotment--this would have forced those Tribes 
lacking the resources to commence construction immediately either to 
delay proposing an allotment or to risk expiration of the construction 
permit before construction could be completed. Accordingly, by adopting 
the TQ Window process over the proposed alternative of an expedited 
threshold qualifications procedure, the Commission has chosen the 
alternative that imposes a substantially less significant economic 
impact.

Report to Congress

    31. The Commission will send a copy of the Third R&O, including 
this FRFA, in a report to be sent to Congress and the Government 
Accountability Office pursuant to the Small Business Regulatory 
Enforcement Fairness Act of 1996 (5 U.S.C. 801(a)(1)(A)). In addition, 
the Commission will send a copy of the Third R&O, including the FRFA, 
to the Chief Counsel for Advocacy of the Small Business Administration. 
A copy of the Third R&O and FRFA (or summaries thereof) will also be 
published in the Federal Register (See 5 U.S.C. 604(b)).

Ordering Clauses

    32. Accordingly, it is ordered, pursuant to the authority contained 
in Sections 1, 2, 4(i), 303, 307, and 309(j) of the Communications Act 
of 1934, 47 U.S.C. 151, 152, 154(i), 303, 307, and 309(j), that this 
Third Report and Order is adopted.
    33. It is further ordered that, pursuant to the authority found in 
Sections 4(i), 303(r), and 628 of the Communications Act of 1934, as 
amended, 47 U.S.C. 154(i), 303(r), and 548, the Commission's Rules are 
hereby amended as set forth herein.
    34. It is further ordered that the rules adopted herein contain new 
or modified information collection requirements that require approval 
by the Office of Management and Budget (OMB) under the Paperwork 
Reduction Act (PRA), and which will become effective after the 
Commission publishes a notice in the Federal Register announcing such 
approval and the relevant effective date.

List of Subjects in 47 CFR Part 73

    Radio broadcast services.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR Part 73 to read as follows:

PART 73--RADIO BROADCAST SERVICES

0
1. The authority citation for part 73 continues to read as follows:

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


0
2. Section 73.3573 is amended by adding new paragraph (f)(6) and adding 
new Note 5 at the end of the section to read as follows:


Sec.  73.3573  Processing FM broadcast station applications.

* * * * *
    (f) * * *
    (6)(i) When a non-reserved channel FM allotment is added to the 
Table of FM Allotments using the Tribal Priority described in Note 5 to 
this section, the FCC will specify by Public Notice a window filing 
period during which only those applicants that satisfy all of the 
eligibility criteria listed in Note 5 to this section with regard to 
the specific Tribal Priority FM allotment(s) listed in the Public 
Notice may file a long-form application for the Tribal Priority FM 
allotment. Only applications from applicants meeting the ``threshold 
qualifications'' listed in Note 5 will be accepted during this window 
filing period.
    (ii) If only one application for the Tribal Priority FM allotment 
is accepted for filing during the threshold qualifications window, the 
long-form application will be processed. If two or more applications 
for the Tribal Priority FM allotment are accepted for filing during the 
threshold qualifications window, the FCC will specify by Public Notice 
a period of time, after the close of the threshold qualifications 
window but before the next FM auction, during which the parties may 
negotiate a settlement or bona fide merger, as a way of resolving the 
conflict between their applications. Parties to a settlement must 
comply with Sec.  73.3525 of the Commission's rules. If a settlement or 
bona fide merger is reached, the

[[Page 2923]]

surviving application will be processed. If no settlement or bona fide 
merger is reached among the threshold qualifications window applicants, 
the Tribal Priority FM allotment will be offered at auction as 
described in paragraphs (f)(2) through (f)(5) of this section, except 
that only those applicants whose applications were accepted for filing 
pursuant to paragraph (f)(6)(i) of this section may participate in the 
initial auction of the Tribal Priority FM allotment.
    (iii) If no application is accepted for filing during the threshold 
qualifications window, and the party that initially proposed the Tribal 
Priority FM allotment requests by letter to the Audio Division, Media 
Bureau, that its pending long-form application not be immediately 
processed, the Tribal Priority FM allotment will be auctioned as 
described in paragraphs (f)(2) through (f)(5) of this section in the 
normal course for vacant FM allotments. When a Tribal Priority FM 
allotment is offered at auction for the first time, only those 
applicants meeting the threshold qualifications for that specific 
Tribal Priority FM allotment, as described in Note 5 to this section, 
may participate in the auction of that allotment.
    (iv) Should no applicant meeting threshold qualifications, as 
described in Note 5 to this section, apply to bid on a Tribal Priority 
FM allotment in the first auction in which it is offered, or should no 
applicant meeting threshold qualifications qualify to bid in the first 
auction in which a Tribal Priority FM allotment is offered, then the 
Tribal Priority FM allotment will be offered in a subsequent auction. 
Any such subsequent auction of a Tribal Priority FM allotment shall 
proceed as described in paragraphs (f)(2) through (f)(5) of this 
section, and any qualified applicant may participate in the auction of 
the Tribal Priority FM allotment in such subsequent auction, regardless 
of whether it meets the threshold qualifications with regard to that 
specific Tribal Priority FM allotment.
* * * * *
    Note 5 to Sec.  73.3573. The ``Tribal Priority'' is that 
established by the Commission in Policies to Promote Rural Radio 
Service and to Streamline Allotment and Assignment Procedures, MB 
Docket 09-52. See First Report and Order and Further Notice of Proposed 
Rule Making, MB Docket 09-52, FCC 10-24, 75 FR 9797, 75 FR 9856, 75 FR 
73976; Second Report and Order, First Order on Reconsideration, and 
Second Further Notice of Proposed Rule Making, MB Docket 09-52, FCC 11-
28, 76 FR 14362, 76 FR 18942; Third Report and Order, MB Docket 09-52, 
FCC 11-190. To qualify for the Tribal Priority, and thus meet 
``threshold qualifications'' for a particular allotment, an applicant 
must demonstrate that it meets all of the following eligibility 
criteria: (a) The applicant is either a federally recognized Tribe or 
Tribal consortium, or an entity 51 percent or more of which is owned or 
controlled by a Tribe or Tribes. Qualifying Tribes or Tribal entities 
must be those at least a portion of whose Tribal Lands lie within the 
principal community contour of the proposed facility. Although the 51 
or greater percent Tribal control threshold need not consist of a 
single Tribe, the qualifying entity must be 51 percent or more owned or 
controlled by Tribes at least a portion of whose Tribal Lands lie 
within the facility's principal community contour; (b)(1) at least 50 
percent of the area within the proposed principal community contour is 
over that Tribe's Tribal Lands, or (2) the proposed principal community 
contour (i) encompasses 50 percent or more of that Tribe's Tribal 
Lands, (ii) serves at least 2,000 people living on Tribal Lands, and 
(iii) the total population on Tribal Lands residing within the proposed 
service contour constitutes at least 50 percent of the total covered 
population (and, in the case of either (b)(1) or (b)(2) the proposed 
principal community contour does not cover more than 50 percent of the 
Tribal Lands of a Tribe that is not a party to the application); (c) 
the proposed community of license must be located on Tribal Lands; and 
(d) the proposed service must constitute first or second aural 
(reception) service, or first local Tribal-owned commercial 
transmission service at the proposed community of license. For purposes 
of this section, the definition of ``Tribal Lands'' is the same as that 
set forth at footnote 15 of the First Report and Order and Further 
Notice of Proposed Rule Making, FCC 10-24, and as further set forth at 
paragraphs 8-10 and 59 of the Second Report and Order, First Order on 
Reconsideration, and Second Further Notice of Proposed Rule Making, FCC 
11-28.

[FR Doc. 2012-967 Filed 1-19-12; 8:45 am]
BILLING CODE 6712-01-P


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