[Federal Register Volume 74, Number 55 (Tuesday, March 24, 2009)]
[Rules and Regulations]
[Pages 12274-12279]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-6432]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 73

[MM Docket No. 95-31; FCC 08-219]


Reexamination of the Comparative Standards for Noncommercial 
Educational Applicants

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Commission addresses eight petitions for 
reconsideration of the Second Report & Order, in the closed ``mixed 
groups'' proceeding. The ``mixed groups'' proceeding sought to 
establish rules for resolving the situation when an application for an 
NCE broadcast station is mutually exclusive with an application for a 
commercial broadcast station. The Second Report & Order decided to 
accept applications for NCE stations on non-reserved channels in 
``closed, mixed groups,'' but to dismiss those applications if they are 
mutually exclusive with applications for commercial stations. This 
document now affords a discrete group of pending applicants for NCE 
stations on non-reserved channels in closed, mixed groups that have 
been pending since the date of the Second Report & Order, a one-time 
opportunity to amend their applications to apply for a commercial 
broadcast station in order to avoid dismissal of their applications. 
This document reaffirms the other decisions in the Second Report & 
Order.

DATES: Effective April 23, 2009.

ADDRESSES: Federal Communications Commission, 445 12th Street, SW., 
Room TW-A325, Washington, DC 20554. For additional information, see the 
SUPPLEMENTARY INFORMATION section of this document.

FOR FURTHER INFORMATION CONTACT: For additional information on this 
proceeding, contact Evan Baranoff, of the Media Bureau, Policy Division 
at <a href="/cdn-cgi/l/email-protection#8dc8fbece3a3cfecffece3e2ebebcdebeeeea3eae2fb"><span class="__cf_email__" data-cfemail="cd88bbaca3e38facbfaca3a2abab8dabaeaee3aaa2bb">[email protected]</span></a>, 418-7142.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
Memorandum Opinion and Third Order on Reconsideration, MM Docket No. 
95-31, FCC 08-219, adopted on September 24, 2008 and released on 
December 2, 2008. The full text of this document is available on the 
Internet at the Commission's Web site: http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-08-219A1.doc . It is also available for 
inspection and copying during regular business hours in the FCC 
Reference Information Center, Portals II, 445 12th Street, SW., Room 
CY-A257, Washington, DC 20554. The complete text may be purchased from 
the Commission's copy and duplicating contractor, Best Copy & Printing, 
Inc. (BCPI), 445 12th Street, SW., Room CY-B402, Washington, DC 20554. 
BCPI can be contacted at 202-488-5300 (phone), 202-488-5563 
(facsimile), or http://www.BCPIWEB.com. Please be prepared to provide 
the appropriate FCC document number (FCC 08-219). To request this 
document in accessible formats (computer diskettes, large print, audio 
recording, and Braille), send an e-mail to <a href="/cdn-cgi/l/email-protection#197f7a7a2c292d597f7a7a377e766f"><span class="__cf_email__" data-cfemail="8ceaefefb9bcb8cceaefefa2ebe3fa">[email protected]</span></a> or call the 
Commission's Consumer and Governmental Affairs Bureau at (202) 418-0530 
(voice), (202) 418-0432 (TTY).

Summary of the Memorandum Opinion & Third Order on Reconsideration

I. Introduction

    1. In this Memorandum Opinion & Third Order on Reconsideration, we 
resolve eight petitions for reconsideration of the Second Report & 
Order, 68 FR 26220, May 15, 2003. The Second Report & Order, among 
other things, established ``new policies for licensing spectrum that 
the Commission has not reserved for the exclusive use of broadcast 
stations that provide or intend to provide noncommercial educational 
(NCE) service.'' These new policies included the decision to permit 
applicants for NCE stations to apply for non-reserved channels, but to 
dismiss such applications should they conflict with applications for 
commercial stations. One petitioner seeks reconsideration of this 
decision, which was codified in Sec.  73.5002(b) of the Commission's 
rules. For the reasons discussed below, we decline to reconsider 
establishment of this rule and affirm our decision to dismiss 
applicants for NCE stations for non-reserved channels that conflict 
with applications for commercial stations. Several other petitioners 
seek reconsideration of our decision not to accept any amendments to a 
discrete group of long-pending NCE applications, including amendments 
to change an applicant's status from NCE to commercial, and request 
that we not dismiss this specific group of applicants. For the reasons 
discussed below, we will reconsider the immediate dismissal of this 
discrete group of applicants for NCE stations, and will afford them a 
one-time opportunity to amend their long-pending applications to apply 
for commercial stations to avoid dismissal. Accordingly, we grant 
reconsideration of our decision not to accept any amendments to the 
discrete group of long-pending applications for NCE stations, but 
otherwise deny the petitions and reaffirm our earlier conclusions.

II. Background

    2. The Second Report & Order established standards to resolve the 
situation when an application for an NCE broadcast station is mutually 
exclusive with an application for a commercial broadcast station (i.e. 
, ``mixed groups''). NCE stations can operate both on (1) channels 
reserved by the Commission specifically for NCE service and (2) non-
reserved channels, which are also available to applicants for 
commercial stations. The Commission has long used different standards 
to resolve application conflicts for reserved channels, on the one 
hand, and non-reserved channels, on the other.
    3. The Commission initiated this proceeding in 1995 to revise the 
criteria it used to select among competing applicants for new NCE 
stations. Subsequently, the Balanced Budget Act of 1997, Public Law 
105-33, 111 Stat. 251 (1997) amended section 309(j) of the 
Communications Act of 1934 (the Act), to require the Commission to use 
competitive bidding to resolve application conflicts, but exempted NCE 
stations from this process, see 47 U.S.C. 309(j) (exempting stations 
described in Section 397(6) of the Act). As a result, the Commission in 
the Report & Order, 65 FR 36375, June 8, 2000, decided to use a non-
auction, point system to resolve application conflicts for reserved 
channels, and use competitive bidding to resolve conflicts for non-
reserved channels. In National Public Radio, Inc. v. FCC, 254 F.3d 226, 
229 (D.C. Cir. 2001), parties challenged the procedures for non-
reserved channels,

[[Page 12275]]

and the court concluded that the Act did not authorize the Commission 
to require applicants for NCE stations to compete at auction for non-
reserved channels.
    4. After notice and comment on the impact of the court decision, 
the Commission announced, in the Second Report & Order, new procedures 
for resolving conflicts between NCE and commercial applications for 
non-reserved channels and frequencies. In that order, the Commission 
held that although it will accept applications for NCE stations on non-
reserved channels and frequencies, those that are mutually exclusive 
with applications for commercial stations will be dismissed. Applicants 
for AM and secondary service construction permits, however, will have a 
prior opportunity for settlement.
    5. The Commission also reaffirmed that it will reserve a channel in 
the Table of Allotments (used for full-power FM and TV broadcast 
stations) for the exclusive use of NCE stations if a proponent for 
reservation demonstrates that an NCE station is technically precluded 
from using already-reserved channels, and that it will provide needed 
NCE service in a given area, according to certain defined standards. 
The Commission indicated that it would entertain requests for 
reservation using these criteria not only in future allocation 
proceedings, but also for allotments for which the Commission had 
adopted a Notice of Proposed Rulemaking before August 7, 2000, and for 
which it had not yet opened a filing window prior to the release of the 
Second Report & Order. As to channels or frequencies for which the 
Commission had already accepted long-form applications for construction 
permits, the Commission concluded that it would best promote the public 
interest to dismiss the long-pending competing applications for NCE 
stations so that the applications for commercial stations could proceed 
to auction. The Commission held that applicants for NCE stations in 
these pending, closed mixed groups would not have further opportunity 
to reserve the channels they had applied for, nor to amend their 
previously filed applications to propose commercial service in order to 
avoid dismissal.

III. Discussion

A. Licensing of Non-Reserved Spectrum
    6. Under procedures adopted in the Second Report & Order, 
applicants for NCE stations may submit applications for non-reserved 
spectrum in auction filing windows. These applications are subject to 
dismissal if there is any mutually exclusive application for a 
commercial station. These procedures are codified in Sec.  73.5002(b) 
of the Commission's rules. University of Missouri asks us to reconsider 
this decision, contending that it is tantamount to a ban on NCE 
stations' use of the non-reserved spectrum. University of Missouri 
argues that applications for NCE stations are highly likely to be 
mutually exclusive with those for commercial stations, and so will 
almost always be dismissed. In addition, University of Missouri states 
that the opportunities we afford NCE stations to reserve FM and TV 
channels and to settle application conflicts in the AM and translator 
services are unlikely to be helpful.
    7. In the Second Report & Order, the Commission fully considered 
and rejected University of Missouri's claim that this decision is 
tantamount to a ban on NCE stations' use of the non-reserved spectrum. 
University of Missouri offers no new evidence or changed circumstances 
in its petition to cause us to reconsider our decision. Moreover, 
University of Missouri suggests no lawfully permissible alternative to 
our decision. We thus reaffirm our decision, and reject University of 
Missouri's petition for reconsideration.
    8. As explained at the outset of the Second Report & Order, ``we 
are constrained by a number of court decisions, regulations, and 
statutory provisions that, taken together, limit our options.'' Again, 
the entirety of section 309(j)(1), 47 U.S.C. 309(j)(1), states: ``If, 
consistent with the obligations described in paragraph (6)(E), mutually 
exclusive applications are accepted for any initial license or 
construction permit, then, except as provided in paragraph (2), the 
Commission shall grant the license or permit to a qualified applicant 
through a system of competitive bidding * * * '' Paragraph 2 sets forth 
the relevant exemptions: ``The competitive bidding authority granted by 
this subsection shall not apply to licenses or construction permits 
issued by the Commission * * * for stations described in section 397(6) 
of this Act,'' i.e., NCE stations.
    9. Taken together, the statutory provisions sharply limit the 
Commission's authority in this area. In the past, the Commission 
allowed applicants for NCE stations to compete for non-reserved 
spectrum under the standards that applied to applicants for commercial 
stations. The Commission attempted to continue that longstanding policy 
after the 1997 Balanced Budget Act by allowing NCE stations to compete 
at auction for non-reserved channels and frequencies. As recognized by 
the NPR case, the statute mandates that we resolve mutually exclusive 
applications for commercial stations by competitive bidding, prohibits 
us from using that same system to resolve applications for NCE 
stations, but does not require us to follow any particular alternative 
procedure for applications for NCE stations. Accordingly, in the Second 
Further Notice, 67 FR 9945, March 5, 2002, the Commission outlined two 
possible courses of action: (1) Prohibit applications for NCE stations 
on non-reserved channels or frequencies, just as the Commission 
prohibits applications for commercial stations on reserved channels or 
frequencies, or (2) continue to allow the filing of applications for 
NCE station, which would be subject to dismissal if any conflict with 
applications for commercial stations could not be resolved. In the 
Second Report & Order, the Commission opted for the latter course of 
action. No commenting party suggested a workable alternative. The 
Commission believed that these two options were the most 
straightforward solutions to the problem and chose the one that was 
least harsh to applicants for NCE stations.
    10. The reservation and settlement opportunities are not as limited 
as University of Missouri suggests, and thus our rule is not tantamount 
to a ban on NCE stations' use of non-reserved spectrum. As the 
Commission noted in the Second Report & Order, ``several parties have 
asked the Commission to allocate particular FM channels as reserved 
pursuant to the relaxed reservation standards [adopted in the Report & 
Order in the proceeding], and we have done so.'' Since the Commission 
released the Second Report & Order, the Media Bureau opened a window 
accepting reservation showings for nearly 500 additional FM channels. 
In response, 129 petitioners sought to reserve 91 vacant FM allotments. 
University of Missouri was one of the petitioners that took advantage 
of this opportunity. To date, 56 vacant FM allotments have been 
successfully reserved for NCE use. With respect to the effectiveness of 
settlement opportunities, as the Commission explained in the Second 
Report & Order, the Commission received approximately 4,700 
applications for LPTV and TV translator stations during an auction 
filing window, but processed more than one third of them prior to 
auction because either only one application was filed, or the 
applicants reached a settlement. We fully recognize that the 
opportunities for reservation

[[Page 12276]]

and settlement are limited, and may not be as plentiful as University 
of Missouri prefers. We continue to believe, however, that the 
Commission's decision, given the statutory constraints, best serves the 
public interest, and again note that University of Missouri has failed 
to suggest any alternative approach that would comport with the legal 
restrictions on our authority in this area. Consequently, we decline to 
reconsider the decisions to accept applications for NCE stations on 
non-reserved channels and frequencies and to dismiss such applications 
if they remain mutually exclusive with applications for commercial 
stations after the expiration of any applicable opportunity for 
settlement.
B. Pending Applications
    11. As discussed in the Second Report & Order, there remain pending 
closed groups of non-reserved channel mutually exclusive construction 
permit applications for NCE and commercial stations (i.e., ``mixed 
groups''). Applications in these mixed groups were identified in 
Attachment A to ``Window Opened to Permit Settlements for Closed Groups 
of Mutually Exclusive Broadcast Applications,'' Public Notice, 16 FCC 
Rcd 17091 (2001). In the Second Report & Order, the Commission decided 
to dismiss the long-pending applications for NCE stations in mixed 
groups without providing these applicants an opportunity to avoid 
dismissal by amending their applications to change their status from 
NCE to commercial. Approximately 19 mixed groups of mutually exclusive 
applications for non-reserved channels remain pending; these include 13 
FM mixed groups, two FM translator mixed groups, and four TV mixed 
groups. For the reasons discussed below, we will now reconsider the 
Commission's decision in the Second Report and Order and afford each of 
these applicants for NCE stations in the pending, closed mixed groups a 
one-time opportunity to amend their applications to apply for a 
commercial broadcast station in order to avoid dismissal.
    12. Four petitioners ask us to reconsider the Commission's decision 
to dismiss these long-pending applications for NCE stations. Several 
petitioners contend that the decision is arbitrary and capricious. 
Black Hawk also claims that the decision is impermissibly retroactive. 
Marist College contends that the decision is inconsistent with the 1997 
Balanced Budget Act. In addition, Fatima Response argues that the 
decision is not in the public interest. As alternatives, Black Hawk 
suggests that we give applicants with pending applications for NCE 
stations an opportunity to use the reservation procedures we 
established for future applicants; likewise, Fatima Response and 
Renaissance Community suggest that we permit applicants with pending 
applications for NCE stations in mixed groups to amend their 
applications to apply for commercial broadcast stations. Jack Garter 
opposes Black Hawk's petition, and argues that the Second Report & 
Order is not arbitrary and capricious or impermissibly retroactive and 
did not violate any processing ``rights.''
    13. The Commission's primary rationale for previously opting to 
dismiss the pending applications for NCE stations in mixed groups was 
that some of these applications had been filed a decade ago, and that 
the Commission had provided numerous settlement opportunities to these 
mixed group applicants. In the Second Report & Order, the Commission 
was ``not persuaded that the equities favoring the applicants for NCE 
stations in these pending proceedings outweigh the delay in initiating 
new broadcast service to the public as well as the unfairness to 
applicants for commercial stations.''
    14. We now are persuaded that the unfairness of immediate dismissal 
to this discrete group of long-pending applications for NCE stations 
outweighs any delay to those applicants for commercial stations that 
are mutually exclusive with these applicants. Unlike prospective 
applicants for NCE stations, these applicants for NCE stations in the 
mixed groups sought to be licensed as NCE stations before adoption of 
the Second Report & Order and thus without knowledge of the 
consequences of this decision. Moreover, we believe that we can 
expeditiously afford mixed group applicants for NCE stations a one-time 
opportunity to amend their pending applications to apply for a 
commercial station, while avoiding unnecessary delay to the pending 
commercial applicants, which initially dissuaded the Commission from 
providing such an opportunity.
    15. Shortly after release of this Order, the Media Bureau will 
announce an amendment window to permit all applicants in the 
approximately 19 pending, closed mixed groups (1) that had filed 
applications for NCE stations as of the date of the Second Report & 
Order and that remain pending, and (2) that were mutually exclusive 
with those for commercial stations as of the date of the Second Report 
& Order, to amend their pending applications for the sole purpose of 
applying for a commercial station. After the close of this window, any 
application for an NCE station that remains mutually exclusive with any 
application for a commercial station will be dismissed with prejudice. 
There will be no additional opportunity for applicants in these 
pending, closed mixed groups to further amend their long-form 
applications. We believe that this processing policy will provide 
fairer treatment to pending applicants and better serve the public 
interest. It will give applicants for NCE stations one opportunity to 
reevaluate their long-pending plans in the context of full and complete 
information about how the licensing process will work and, as designed, 
it should not appreciably delay the introduction of new service. This 
approach will avoid the harsh result of dismissing applicants based on 
subsequently adopted processing rules in a manner that is consistent 
with the Act and with our commercial and NCE licensing schemes.
C. Vacant Allotments
    16. Bible Broadcasting states that it agrees with the Commission's 
decision to accept reservation showings for certain vacant FM 
allotments and requests that we award three points to the successful 
reservation proponent in the subsequent application of the point system 
for that FM allotment. In essence, Bible Broadcasting asks us to award 
a ``finder's preference'' to the successful proponent of a reservation 
showing. Bible Broadcasting explains that many applicants for NCE 
stations have limited resources, and will be unwilling to undertake the 
expense of preparing a reservation showing without receiving such a 
preference at the licensing stage.
    17. We deny Bible Broadcasting's petition. As a preliminary matter, 
the Commission does not award a finder's preference to successful 
proponents of allocations for commercial stations. Moreover, in 
adopting the current point system for NCE stations on reserved 
channels, the Commission explicitly declined to give any kind of 
finder's preference to the first entity or individual to file an 
application for a given frequency. We recognize that such a preference 
would create an incentive for any entity or individual to pursue a new 
allocation or to reserve it for NCE use. We believe, however, the 
existing factors in our current point system best serve the public 
interest in selecting a licensee. As the Commission said when it 
selected the point system over other methodologies to resolve 
application conflicts, favoring those who file first is not ``the 
optimal way to select applicants who will provide 'diversity and 
excellence' in educational

[[Page 12277]]

broadcasting to the public.'' Accordingly, we decline to award points 
to the successful proponent of a reservation showing.
D. Miscellaneous Issues
    18. MMTC Pleadings Withdrawn. On June 16, 2003, MMTC filed a 
petition for reconsideration of the Second Report & Order, seeking 
changes in the eligibility requirements for the new entrant bidding 
credit used in broadcast auctions. In its petition, MMTC specifically 
requested that applicants in FM Auction No. 37 ``immediately'' report 
changes that cause a loss of, or reduction in, eligibility for a new 
entrant bidding credit. The Commission subsequently established such a 
requirement in FM Auction No. 37, and, as a result, MMTC withdrew its 
petition for reconsideration by a letter dated October 19, 2004. 
Accordingly, this matter is no longer before the Commission in this 
proceeding.
    19. Licenses Formerly Held by Michael Rice-Controlled Entities. By 
Public Notice, 16 FCC Rcd 12832, released July 3, 2001, the Media 
Bureau and the Wireless Telecommunications Bureau collectively gave 
notice of filing procedures for applications for interim and permanent 
authority to operate the two AM (Rice AM Stations) and five FM stations 
(Rice FM Stations) (collectively, the Rice Stations) formerly licensed 
to entities controlled by Michael Rice. Because the filing window for 
AM Auction No. 32 had been completed, the Rice Public Notice announced 
a supplemental AM Auction No. 32 filing window for the Rice AM 
Stations. Seven entities timely filed applications for the AM facility 
at 640 KHz, Terre Haute, IN; six entities timely filed applications for 
the AM facility at 1230 KHz, Terre Haute, IN. One of the entities 
applying for both of the Rice AM stations, Word Power, Inc., indicated 
that it was applying for NCE stations. The Rice Public Notice also 
announced that the now-vacant allotments for the Rice FM Stations would 
be included in FM Auction No. 37 and interested parties could file Form 
175 applications in the then-upcoming auction filing window. The 
allotments for the five Rice FM Stations were also included in the 
Public Notice, described supra, listing 500 vacant FM allotments for 
which NCE reservation showings could be filed. Four of the five Rice FM 
Station allotments received reservation showings.
    20. University of Missouri now expresses concern about the impact 
of the Second Report & Order on the licenses for the Rice Stations and, 
in particular, the Channel 252C2 allotment in Columbia, Missouri--
formerly licensed as KFMZ-FM. University of Missouri asks us to clarify 
whether the policies and rules established in the Second Report & Order 
apply to interim licensing for this channel. University of Missouri 
also contends that it should have an opportunity to reserve this 
channel for exclusive NCE use according to the criteria discussed in 
the Second Report & Order. Ultimately, University of Missouri suggests, 
the Commission should adopt unique procedures to license KFMZ-FM to 
avoid the litigation that it anticipates will result from the 
allotment's auction.
    21. As previously discussed, the Media Bureau opened a window to 
permit interested parties an opportunity to reserve any of 
approximately 500 vacant FM allotments. Channel 252C2 in Columbia, 
Missouri was among these FM allotments, as were the four other FM 
channels previously used by Mr. Rice. University of Missouri, in fact, 
filed a reservation showing for the FM channel it seeks. Thus, insofar 
as it seeks this opportunity in its petition, the issue is now moot. To 
the extent University of Missouri seeks a non-auction mechanism to 
award a license for the channel on a permanent basis, we see no grounds 
for doing so. We find unpersuasive University of Missouri's argument 
that ineligible parties may attempt to acquire the license, and that 
such efforts will result in time-consuming litigation. This possibility 
applies to all broadcast auctions. A petitioner may raise such 
arguments post-auction when a prevailing applicant's long-form 
application is filed. Thus, this concern is insufficient to overcome 
the clear imperative of section 309(j) of the Act.
    22. Applications filed in the supplemental AM Auction No. 32 filing 
window for the two Rice AM Stations also predated the release of the 
Second Report & Order. As a result of the Second Report & Order, any of 
the applications for NCE stations filed during this window that are 
mutually exclusive with applications for commercial stations are to be 
dismissed. The application of Word Power, Inc. was the only application 
for an NCE station. We, therefore, offer Word Power, Inc. the same 
relief offered to the applicants for NCE stations in mixed groups, 
discussed above, and will afford it the same time-limited opportunity 
to amend its application(s) to apply for commercial stations, in 
accordance with the procedures set forth above. After this limited 
amendment opportunity, all remaining mutually exclusive applications 
for commercial stations for the Rice AM Stations will proceed to 
auction.

IV. Conclusion

    23. In this Memorandum Opinion & Third Order on Reconsideration, we 
reaffirm all decisions in the Second Report & Order, except that we 
will now permit parties with applications for NCE stations on non-
reserved channels in closed mixed groups that have been pending since 
the date of the Second Report & Order, and were then mutually exclusive 
with applications for commercial stations, a one-time opportunity to 
amend their applications. We believe that reaffirmation of our earlier 
conclusions, subject to this change, best serves the public interest.

V. Procedural Matters

    24. Accessibility Information. To request information in accessible 
formats (computer diskettes, large print, audio recording, and 
Braille), send an e-mail to <a href="/cdn-cgi/l/email-protection#d9bfbabaece9ed99bfbabaf7beb6af"><span class="__cf_email__" data-cfemail="95f3f6f6a0a5a1d5f3f6f6bbf2fae3">[email protected]</span></a> or call the FCC's Consumer 
and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-
0432 (TTY). This document can also be downloaded in Word and Portable 
Document Format (PDF) at: http://www.fcc.gov.
    25. Final Paperwork Reduction Act Analysis. This Memorandum Opinion 
& Third Order on Reconsideration contains no new or modified 
information collections subject to the Paperwork Reduction Act of 1995, 
Public Law 104-13, 109 Stat. 163 (1995) (codified in Chapter 35 of 
Title 44 U.S.C.). In addition, therefore, it does not contain any new 
or modified ``information collection burden for small business concerns 
with fewer than 25 employees,'' pursuant to the Small Business 
Paperwork Relief Act of 2002, Public Law 107-198, 116 Stat. 729 (2002) 
(codified in Chapter 35 of title 44 U.S.C.); see 44 U.S.C. 3506(c)(4).
    26. Supplemental Final Regulatory Flexibility Analysis. As required 
by the Regulatory Flexibility Act of 1980, 5 U.S.C. 603, as amended by 
the Small Business Regulatory Enforcement Fairness Act of 1996 
(SBREFA), Public Law 104-121, 110 Stat. 847 (1996), an Initial 
Regulatory Flexibility Analysis (IRFA) was incorporated in the Second 
Further Notice. The Commission sought written public comment on the 
proposals in the Second Further Notice, including comment on the IRFA. 
No comments addressed the IRFA. A Final Regulatory Flexibility Analysis 
(FRFA) was published in the Second Report & Order. This present 
Supplemental FRFA, which conforms to the RFA, supplements that FRFA. We 
note that

[[Page 12278]]

the Supplemental FRFA addresses only the matters considered on 
reconsideration in the Memorandum Opinion & Third Order on 
Reconsideration. Therefore, this Supplemental FRFA addresses only the 
one decision reversed from the Second Report & Order.
A. Need for, and Objectives of, the Memorandum Opinion & Third Order on 
Reconsideration
    27. The Commission adopts this Memorandum Opinion & Third Order on 
Reconsideration to reaffirm its earlier conclusions in the Second 
Report & Order, except for one decision. In the Second Report & Order, 
the Commission decided to dismiss a discrete group of applicants for 
NCE stations for non-reserved channels that were mutually exclusive 
with applications for commercial stations without providing these 
applicants an opportunity to avoid dismissal by amending their 
applications to change their status from NCE to commercial. This 
discrete group of long-pending applications for NCE stations consists 
of approximately 19 mixed groups of mutually exclusive applications for 
non-reserved channels filed between 1994 and 1997; these include 13 FM 
mixed groups, two FM translator mixed groups, and four TV mixed groups. 
On reconsideration, the Commission will now afford each of these 
applicants a one-time opportunity to amend their applications to apply 
for a commercial broadcast station before dismissing these 
applications. The Commission is persuaded that the unfairness of 
immediate dismissal to this discrete group of long-pending applications 
for NCE stations outweighs any delay to those applicants for commercial 
stations that are mutually exclusive with these applicants. Unlike 
prospective applicants for NCE stations, these applicants for NCE 
stations in the mixed groups sought to be licensed as NCE stations 
before adoption of the Second Report & Order and thus without knowledge 
of the consequences of this decision. Moreover, the Commission finds 
that it can expeditiously afford mixed group applicants for NCE 
stations a one-time opportunity to amend their pending applications to 
apply for a commercial station, while avoiding unnecessary delay to the 
pending commercial applicants, which initially dissuaded the Commission 
from providing such an opportunity.
B. Summary of Significant Issues Raised by the Public in Responses to 
the IRFA
    28. No comments addressed the IRFA, or otherwise discussed issues 
that may impact small entities.
C. Description and Estimate of the Number of Small Entities To Which 
the Rules Will Apply
    29. 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. The RFA defines the term ``small 
entity'' as having the same meaning as ``small business,'' ``small 
organization,'' and ``small governmental jurisdiction.'' In addition, 
the term ``small business'' has the same meaning as the term ``small 
business concern'' under the Small Business Act. A ``small business 
concern'' is one that: (1) Is independently owned and operated; (2) is 
not dominant in its field of operation; and (3) satisfies any 
additional criteria established by the SBA.
    30. The decision adopted in this Memorandum Opinion & Third Order 
on Reconsideration will affect only (1) the discrete group of 
applicants for NCE stations for non-reserved channels and (2) those 
applicants for commercial stations that are mutually exclusive with 
these NCE applicants. These groups may include small businesses, and 
were included in the description and estimate of small entities in the 
FRFA to the Second Report & Order.
    31. Radio. The applicants affected by this new decision may include 
existing radio stations. SBA defines as a small business those radio 
broadcasting stations that have no more than $7.0 million in annual 
receipts. The Commission has estimated the number of licensed radio 
stations to be 13,837, of which 4,754 are AM stations, 6,266 are 
commercial FM stations, and 2,817 are NCE FM stations. According to 
Commission staff review of the BIA Financial Network, MAPro Television 
Database (BIA) of March 30, 2007, about 10,420 commercial radio 
stations (or about 95 percent) of an estimated 11,000 commercial radio 
stations have revenue of $7.0 million or less. Many commercial radio 
stations, however, are affiliated with larger corporations with higher 
revenue, with the result that the estimated number of commercial radio 
stations overstates the number that qualify as small entities. The 
Commission does not compile and otherwise does not have access to 
information on the revenue of NCE stations that would permit it to 
determine how many such stations would qualify as small entities.
    32. Television. The applicants affected by this new decision may 
also include TV stations. The SBA defines a television broadcast 
station as a small business if such station has no more than $14.0 
million in annual receipts. Business concerns included in this industry 
are those ``primarily engaged in broadcasting images together with 
sound.'' The Commission has estimated the number of licensed commercial 
television stations to be 1,376. According to Commission staff review 
of the BIA Financial Network, MAPro Television Database (BIA) on March 
30, 2007, about 986 of an estimated 1,374 commercial television 
stations (or about 72 percent) have revenues of $14.0 million or less 
and thus qualify as small entities under the SBA definition. The 
Commission has estimated the number of licensed NCE television stations 
to be 380. We note, however, that, in assessing whether a business 
concern qualifies as small under the above definition, business 
(control) affiliations must be included. Our estimate, therefore, 
likely overstates the number of small entities that might be affected 
by our action, because the revenue figure on which it is based does not 
include or aggregate revenues from affiliated companies. The Commission 
does not compile and otherwise does not have access to information on 
the revenue of NCE stations that would permit it to determine how many 
such stations would qualify as small entities.
    33. In addition, an element of the definition of ``small business'' 
is that the entity not be dominant in its field of operation. We are 
unable at this time to define or quantify the criteria that would 
establish whether a specific television station is dominant in its 
field of operation. Accordingly, the estimate of small businesses to 
which rules may apply do not exclude any television station from the 
definition of a small business on this basis and are therefore over-
inclusive to that extent. Also as noted, an additional element of the 
definition of ``small business'' is that the entity must be 
independently owned and operated. We note that it is difficult at times 
to assess these criteria in the context of media entities and our 
estimates of small businesses to which they apply may be over-inclusive 
to this extent.
D. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements
    34. The decision adopted in this Memorandum Opinion & Third Order 
on Reconsideration will not result in a change in the existing 
compliance, reporting and recordkeeping

[[Page 12279]]

requirements, except with respect to the discrete group of applicants 
for NCE stations that were previously dismissed in the Second Report & 
Order because they were mutually exclusive with applications for 
commercial stations. As a result of this Order, the discrete group of 
applicants for NCE stations is being permitted a one-time opportunity 
to file an amendment to their applications to change their status from 
NCE to commercial, and thereby avoid dismissal of their applications.
E. Steps Taken To Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered
    35. The RFA requires an agency to describe any significant 
alternatives that it has considered in adopting its rules, 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.
    36. On reconsideration, the Commission determined it has two 
choices: (1) Reaffirm its decision in the Second Report & Order to 
immediately dismiss this discrete group of applicants for NCE stations 
or (2) give these applicants an opportunity to amend their applications 
to change their status from NCE to commercial, and thus avoid 
dismissal. In the Second Report & Order, we were not persuaded that the 
equities favoring the applicants for NCE stations outweighed the delay 
in initiating new broadcast service to the public as well as the 
unfairness to applicants for commercial stations. But we now believe 
that the unfairness of immediate dismissal to this discrete group of 
applicants for NCE stations outweighs any delay or unfairness to those 
applicants for commercial stations that are mutually exclusive with 
these applicants. Unlike future applicants for NCE stations, these 
applicants for NCE stations in the mixed groups sought to be licensed 
as an NCE station before adoption of the Second Report & Order and thus 
without full knowledge of the consequences of this decision. Moreover, 
we now believe that we can expeditiously afford applicants with pending 
applications a one-time opportunity to amend their applications to 
apply for a commercial station yet will avoid the delay and unfairness 
to applicants for commercial stations that initially dissuaded us from 
providing such an opportunity. After this filing opportunity, any 
application for an NCE station that remains mutually exclusive with any 
application for a commercial station will be dismissed with prejudice, 
in accordance with Sec.  73.5002(b) of the rules. There will be no 
additional opportunity for applicants in these pending, closed mixed 
groups to further amend their long-form applications. We believe that 
this processing policy will provide fairer treatment to pending 
applicants and better serve the public interest. It will give 
applicants for NCE stations one opportunity to reevaluate their long-
pending plans in the context of full and complete information about how 
the licensing process will work and, as designed, it should not 
appreciably delay the introduction of new service. This approach will 
avoid the extremely harsh result of dismissing applicants based on 
subsequently adopted processing rules in a manner that is consistent 
with our statutory commercial and NCE licensing schemes.
    37. Furthermore, our new decision will benefit the applicants for 
NCE stations that are small businesses by allowing them a chance to 
compete for licenses. While some of the applicants for commercial 
stations that are small businesses may be harmed by facing increased 
competition for licenses, the harm to these entities would not be as 
great as that to those small businesses applicants for NCE stations 
that would face dismissal of their applications. In addition, the 
public is better served by this enhanced competition.
F. Report to Congress
    38. The Commission will send a copy of this Memorandum Opinion & 
Third Order on Reconsideration, including this FRFA, in a report to be 
sent to Congress pursuant to the Congressional Review Act. In addition, 
the Commission will send a copy of this Memorandum Opinion & Third 
Order on Reconsideration, including this FRFA, to the Chief Counsel for 
Advocacy of the Small Business Administration. A copy of this 
Memorandum Opinion & Third Order on Reconsideration and this FRFA (or 
summaries thereof) will also be published in the Federal Register.
    39. Additional Information. For additional information, please 
contact Evan Baranoff, Media Bureau, Policy Division, (202) 418-2120, 
or <a href="/cdn-cgi/l/email-protection#f4b182959adab69586959a9b9292b4929797da939b82"><span class="__cf_email__" data-cfemail="d396a5b2bdfd91b2a1b2bdbcb5b593b5b0b0fdb4bca5">[email protected]</span></a>.

VI. Ordering Clauses

    40. Accordingly, it is ordered that, pursuant to the authority 
contained in sections 1, 2(a), 4(i), 303, 307, 309 and 405(a) of the 
Communications Act, as amended, 47 U.S.C. 151, 152(a), 154(i), 303, 
307, 309 and 405(a), and Sec.  1.429 of the Commission's rules, 47 CFR 
1.429, that the petitions for reconsideration filed by the parties 
listed in Appendix A are granted in part and denied in part as 
indicated above, and that this Memorandum Opinion & Third Order on 
Reconsideration is adopted.
    41. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Memorandum Opinion & Third Order on Reconsideration, 
including the Final Regulatory Flexibility Analysis, to the Chief 
Counsel for Advocacy of the Small Business Administration.
    42. It is further ordered that this proceeding is terminated.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
 [FR Doc. E9-6432 Filed 3-23-09; 8:45 am]
BILLING CODE 6712-01-P


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