`[Federal Register Volume 60, Number 79 (Tuesday, April 25, 1995)]
[Rules and Regulations]
[Pages 20241-20247]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-10024]



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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 74

[MM Docket No. 93-24, FCC 95-51]


Experimental, Auxiliary, and Special Broadcast and Other Program 
Distributional Services; ITFS Filing Window

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: This Report and Order adopts a window filing procedure for the 
processing of applications for new Instructional Television Fixed 
Service (ITFS) stations and major changes to existing stations. It 
further adopts rules affecting the four-channel rule, receive site 
interference protection, the protected service area, and other aspects 
of ITFS operation. The Report and Order responds to the comments 
received in response to the Notice of Proposed Rulemaking in this 
proceeding. Notice of Proposed Rulemaking in MM Docket No. 93-24, 
(Notice), Order and Further Notice of Proposed Rulemaking in MM Docket 
No. 93-24 (Further Notice). The action is required to hasten ITFS and 
wireless cable service to the public by streamlining the processing of 
ITFS applications.

EFFECTIVE DATE: Upon approval of the Office of Management and Budget of 
a modified FCC Form 330 to effectuate the modifications approved in 
this Report and Order. The FCC will published a document announcing the 
effective date in the Federal Register when OMB approval is imminent.

FOR FURTHER INFORMATION CONTACT:
Paul R. Gordon, Mass Media Bureau, Policy and Rules Division, (202) 
739-0773.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report 
and Order in MM Docket No. 93-24, adopted and released on February 7, 
1995. The complete text of this Report and Order is available for 
inspection and copying in the FCC Reference Center (room 239) at the 
Federal Communications Commission, 1919 M St., NW, Washington, DC 
20554, and may also be purchased from the Commission's copying 
contractor, International Transcription Service, at (202) 857-3800, 
2100 M St., NW, Suite 140, Washington, DC 20037.

Synopsis of Report and Order

    1. By this Report and Order, the Commission adopts rules that will 
increase the efficiency of our processing of applications for new ITFS 
stations, major amendments to such applications, and major changes to 
existing stations. The Commission also considers additional proposals 
intended to increase the efficiency, and curtail potential abuse, of 
the application processes.
    2. During the past decade, applicants for new ITFS stations or 
major changes in existing stations have been subject to an A/B cut-off 
procedure. This procedure involves placing the first application(s) 
accepted for filing and determined to be substantially complete on a 
public notice called an ``A'' cut-off list. This list notifies the 
public that the application has been accepted and gives interested 
parties 60 days to file competing applications or petitions to deny. An 
applicant placed on the ``A'' cut-off list is required to make any 
major changes to its proposal before the end of the ``A'' cut-off 
period. After the ``A'' period expires, the staff places all 
substantially complete applications which were filed during that period 
and found to be mutually exclusive with any listed ``A'' application on 
a ``B'' list. This list notifies the public that the specified 
applications have been accepted for filing, and it provides 30 days for 
the filing of petitions to deny or minor amendments to those 
applications.
    3. The telecommunications environment has changed substantially 
since 1985, when the Commission instituted this procedure. Also, in 
more than 90% of recently filed applications, ITFS licensees plan to 
lease their excess channel capacity to wireless cable operators, who 
almost always pays for the construction of the ITFS facilities. These 
changes have fostered a substantial increase in the rate of 
applications filed for new ITFS stations or major changes in existing 
stations, creating a significant backlog of applications. Therefore, in 
the Notice of Proposed Rulemaking in this proceeding, 58 FR 12011 
(March 2, 1993), we proposed a filing window procedure for the 
acceptance of applications, to allow us to better control the flow of 
applications and to improve processing efficiency.
    4. Pursuant to our proposal, we would accept applications for new 
facilities and applications for major changes in existing facilities 
only during limited periods (or ``windows''). We would place 
applications filed in the window that were not mutually exclusive with 
any other application, and that were found to be acceptable for filing, 
on a proposed grant list. We would then provide the immediately 
following 30 days for the submission of petitions to deny. Uncontested 
applications would then be granted, if in the public interest. With 
regard to mutually exclusive applications, we would similarly give 30-
day Public Notice for the submission of petitions to deny. Thereafter, 
we would evaluate those applications under the existing comparative 
selection process. Any applications currently tendered but not yet 
placed on an ``A'' cut-off list would be treated as having been filed 
and cut off as of the close of the first filing window.
    5. Currently, simply to allow the release of an ``A'' cut-off list, 
each application must undergo a substantive engineering analysis upon 
filing. No applications are granted or denied in this stage of 
processing. Subsequently, after the ``B'' cut-off period, each 
[[Page 20242]] application undergoes a second technical analysis in 
order to determine whether it is grantable. Because each of these 
analyses requires significant resources, eliminating the duplicative 
step would substantially improve processing efficiency.
    6. The Commission concludes that a window filing system, as 
enhanced by an electronic filing and processing system as proposed in 
our outstanding MDS rulemaking proceeding, 59 FR 63743 (Dec. 9, 1994), 
would serve the public interest. A window filing procedure would allow 
us to better control the flow of applications and it would prevent 
speculators from filing against applicants that had appeared on an 
``A'' cut-off list.
    7. A 60-day Public Notice period before each filing window will 
provide potential applicants adequate notice and opportunity to prepare 
their applications. As most commenters observe, this is the same period 
within which parties currently have to file an application in response 
to an ``A'' cut-off list. The window shall remain open for at least 
five business days. This period, when combined with the 60-day public 
notice, will provide all potential applicants time to prepare their 
applications.
    8. Potential inefficiencies caused by the submission of a large 
number of applications during a national (as opposed to a regional) 
window are significantly diminished by our likely adoption of the 
electronic filing system for ITFS applications. A regional window would 
unfairly require educators not located within the relevant area to 
delay their educational plans. Finally, a national window will allow 
all interested parties to commence or continue their ITFS and MDS plans 
as soon as possible. This will provide the certainty of an imminent 
filing opportunity to all wireless cable entities, not just those 
within a restricted geographic area.
    9. Frequency. Some commenters support a fixed schedule, arguing 
that this would allow educators to plan their proposals in advance of 
the Public Notice. They also advocate the non-discretionary opening of 
a window at least once each quarter, asserting that frequent filing 
periods are necessary to avoid unduly delaying the licensing of ITFS 
facilities that are essential to the growth of the wireless cable 
industry. However, we have never before utilized a window filing system 
with ITFS, and we therefore believe that we should take a more cautious 
approach as we structure the window filing system. The rate of the 
submission of applications could vary significantly in the future, and 
a fixed requirement could quickly and unpredictably become 
counterproductive or impracticable to meet. Also, we intend to open 
filing windows as frequently as is consistent with our goals of 
efficient and expeditious processing.
    10. Amendments. Some commenters propose that, after a filing window 
closes, the Commission should prohibit amendments that demonstrate 
eligibility, improve comparative standing, or seek rule waivers. 
Currently, they claim, many applicants impose an unnecessary burden on 
the Commission by filing such amendments, such as requests for waiver 
of the four-channel-per-market rule, Sec. 74.902(d) of the Commission's 
rules, 47 CFR 74.902(d).
    11. We agree that amendments that pertain either to improving 
comparative standing or to establishing eligibility, as set forth in 
Secs. 74.913(b) and 74.932(a) of the Commission's Rules, respectively, 
47 CFR 74.913(b) and 74.932(a) should not be filed outside the window 
period. Similarly, we shall prohibit the filing of amendments to a 
facility's proposed technical operations, including amendments to add 
any receive sites, outside the window. Such engineering amendments 
often require a time-consuming re-analysis by the staff of the 
amendment's effects on other applications and thus delay the processing 
of all pending applications. However, with the two exceptions noted 
above, such delay is not inherent in non-engineering amendments, 
including requests for waiver of the four-channel rule, and we will 
consequently permit their filing.
    12. We make a narrow exception to the window filing system. NTIA 
rules require a party seeking a grant to have already filed its 
application with the Commission, and those requests are subject to an 
annual deadline. Accordingly, in order not to obstruct these grants, we 
shall allow the tendering of applications that rely upon NTIA funding 
during the 30 days preceding the annual deadline. They shall be 
considered as having been filed during the current or immediately 
subsequent window, whichever is appropriate.
    13. In response to several commenters, we decline generally to 
exempt the filing of major change applications from the window filing 
process, and, as discussed above, we similarly decline to exempt 
amendments with similar effects. By definition, such changes can 
substantially impact both existing and proposed facilities. 
Accordingly, for the purpose of the window filing procedure, they 
should be treated the same as applications for new facilities. However, 
consistent with existing practice, we shall continue to make a narrow 
exception for amendments to pending applications that would resolve 
mutually exclusive applications without creating any additional 
interference. We will accept such amendments at any time, and we shall 
provide a 30-day period for the submission of petitions to deny those 
amendments. We believe that this will most efficiently bring new or 
improved service to the public. Further, to encourage market 
settlements, we shall now allow licensees of existing facilities to 
submit at any time applications for major changes, as long as the 
changes are essential components of a settlement involving mutually 
exclusive applications.
    14. The Commission declines to adopt several other exceptions that 
the commenters propose. These rules would significantly disrupt the new 
window filing system, while promoting no public interest that is not 
already being served by the filing procedure or other ITFS rules.

Proposals to Improve the Application Process

    15. As argued by the commenters, and noted in the Further Notice, 
the goals of the proposed window filing procedure could be maximized if 
we at the same time enacted additional rules that would increase its 
efficiency. Therefore, we set forth several proposals, many initially 
advanced by the commenters, that were intended to improve service to 
the public or otherwise enhance processing efficiency. Our analysis of 
each of the proposals will be affected by two factors. First, as noted 
above, is the proposed electronic filing and processing system for ITFS 
applications, which would diminish the negative impact that a large 
number of applications has had on our processing in the past. Second, 
implementation of the proposals adopted herein and strict enforcement 
of our existing rules will, we believe, eliminate many of the 
inefficiencies and alleged abuses of the existing processing system.

Financial Qualifications

    16. Proposal. Currently, applicants are required to certify their 
financial ability or their reliance upon NTIA funding. In response to 
the Notice, two commenters proposed to require applicants or their 
prospective wireless cable lessees to submit with their applications 
proof of their financial ability to construct. In the Further Notice, 
59 FR 35665 (July 13, 1994) we postulated that such a 
[[Page 20243]] requirement might deter a significant number of ITFS 
speculators. We also asked whether we should require separate financial 
documentation for each station applied for, and whether we should 
require the wireless cable lessee to submit the documentation when it 
is paying for construction of the facilities.
    17. The record does not indicate that our reliance on applicant 
certification has been ill-placed. Further, we believe that the 
submission of detailed financial information would in practice neither 
increase processing efficiency nor deter abuse. Collecting the data 
would impose significant costs on the wireless cable lessee, regardless 
of whether the supporting documents were kept on hand by the educator 
or submitted to the Commission. We believe that a sound analysis of all 
of the incoming detailed financial submissions would consume a great 
deal of the staff's time, severely slowing the rate of processing. 
Conversely, any reliance on the documents without our own rigorous 
independent analysis would enable us to detect only a small proportion 
of potential abuse.
    18. A financially unqualified educator would generally not be able 
to complete construction within the prescribed period. Because that 
educator would then need an extension of time within which to 
construct, it would have to submit an appropriate application to the 
Commission, explaining the reasons for its delay in construction. Thus, 
we already have a process in place by which we can monitor and assess 
ITFS licensees' progress in constructing their authorized facilities 
and forestall any dilatory conduct on their part. Should it become 
necessary in the future, we can revise this process accordingly.

Application Caps

    19. We now address two proposals, raised in response to the Notice 
by the Educational Parties: (1) To impose a cap of 25 applications 
associated with the same wireless cable entity, including any entity 
with direct or indirect common ownership or control; and (2) to limit 
an individual nonlocal ITFS entity to filing no more than three to five 
applications during a window. To support this restriction, the 
Educational Parties argued that nonlocal applicants often work with 
wireless cable entities as frequency speculators. The overwhelming 
majority of interested commenters oppose the adoption of either type of 
cap.
    20. To suddenly impose limits on the number of applications that 
particular parties may be affiliated with would slow both ITFS and 
wireless cable development. Further, it would artificially constrain 
MDS operators' business decisions as to the number of ITFS channels 
needed to establish economically viable wireless cable operations. 
Also, we can deter the speculation complained of by the less 
restrictive process of analyzing construction extension applications, 
as noted above.

Assignment of Unbuilt Facilities

    21. In the Further Notice, we proposed to formalize our current 
practice of limiting the allowable consideration for the assignment of 
authorizations for unbuilt ITFS facilities to out-of-pocket expenses, 
as we do with broadcast construction permits. Our stated goal was to 
diminish the incentive of frequency speculators to submit applications 
for authorizations that they intend to later assign for profit. Every 
commenter addressing this issue supports the proposal, agreeing that it 
would help deter abuse. We agree that this limitation, applicable to 
broadcast construction permits, will have similar deterrent effects on 
frequency speculation in the ITFS service, and we shall therefore adopt 
it.

Excess Capacity Lease Terms

    22. Proposal and Comments. Our existing policy does not authorize 
an educator to execute a lease agreement the term of which extends 
beyond the end of the educator's license term. Consequently, depending 
on how many years remain in the term, there may be situations in which 
our policy would prohibit a lease agreement to extend beyond one or two 
years. At most, MDS operators can have contractual access to ITFS 
channels for no more than ten years, the length of a full license 
period. Some commenters propose that we modify our policy to allow 
parties to negotiate lease agreements whose terms extend beyond the end 
of the license term, to demonstrate to potential investors their long-
term channel access. The proposal is unopposed.
    23. Discussion. The wireless cable industry requires substantial 
equity investment in order to become a viable competitor in the video 
marketplace. However, potential financiers are likely to exercise 
caution before investing in an MDS system, where there is uncertain 
long-term availability of the ITFS channels that provide the basic 
capacity for that system. Authorizing lease agreements that extend 
beyond the end of the license term would reduce the anxiety of 
potential investors that the MDS entity would shortly lose four 
channels, crippling the entire system. The increased confidence of 
investors will significantly accelerate the development of the wireless 
cable industry and provide competition to wired cable. Hence, we are 
revising our policy to permit an educator, if it chooses, to execute a 
10-year lease agreement without regard to the duration of the 
educator's current license term. ITFS lease agreements that extend 
beyond the end of the license term must note that such an extension is 
contingent on the renewal of the educator's license.

Application of the Four-Channel Rule

    24. Proposal. We seek to provide as many educators as possible with 
the opportunity to operate ITFS systems that meet their educational 
needs. Consequently, the four-channel limitation rule generally limits 
an ITFS licensee to four channels for use in a single area of 
operation. However, we have never clearly and formally defined what 
constitutes an ``area of operation.'' The Further Notice proposed to 
adopt the staff's informal policy of considering a single area of 
operation for this purpose to extend no farther than 20 miles from the 
transmitter site. Many commenters supported such a mileage-based 
proposal, while others preferred one based on predicted interference.
    25. Discussion. We adopt the 20-mile standard. Our experience has 
demonstrated that this standard is efficient and easily understood and 
implemented. Determining a station's area of operation by use of the 
interference approach would require a considerable amount of technical 
analysis by the staff. As a consequence, adoption of this proposal 
could inordinately slow processing and delay service to the public. We 
recognize that any mileage standard will be imprecise, because there 
will always be educators that serve sites beyond the designated 
distance. However, the bright-line test we are adopting today has the 
important advantage of being easy for applicants to comprehend and 
apply. Further, the Commission staff can process applications far more 
efficiently using this standard. Moreover, staff, educators, and 
wireless cable entities are extremely familiar with this standard, 
having utilized it for a number of years.

Protected Service Areas

    26. Proposal. The Further Notice also solicited comment on a 
proposed change in the application of protected service areas for 
wireless cable lessees. Currently, we provide a 15-mile interference 
protection for a service area regardless of receive site locations, but 
solely at the request of the ITFS [[Page 20244]] applicant or licensee. 
The Further Notice observed that an applicant for new facilities often 
requests and receives interference protection that restricts an 
existing licensee lacking such protection from pursuing certain 
modifications to its facilities. At the same time, an existing facility 
that has not requested such protection, upon learning that an 
application for a nearby operation has been filed, often requests 
interference protection and possibly obstructs the new applicant. We 
therefore proposed to apply interference protection only prospectively, 
making it effective solely with regard to applications filed after the 
protection request. We asked commenters whether our proposal would 
sufficiently diminish the disruption and delay resulting from the 
current system. We also asked commenters to address a specific 
application of the proposed rule: If two applications are (1) submitted 
during the same filing window, (2) otherwise grantable, and (3) 
mutually exclusive only because both applicants request a protected 
service area, we proposed to consider them as mutually exclusive. Most 
commenters addressing the proposal express support.
    27. Discussion. We conclude that the public interest will be served 
by adoption of the proposal to apply protected service area protection 
only prospectively. Adoption of the proposal will diminish disruption 
to existing and proposed facilities. Only one commenter expressed 
opposition to the proposed specific application of the rule involving 
mutual exclusivity, and we shall adopt it, with a slight exception. 
There is no public interest benefit in protecting an uninhabitable 
area. To do so would needlessly restrict neighboring facilities, unduly 
depriving the area of both ITFS and wireless cable programming. Thus, 
if an applicant shows that interference will occur solely over water, 
we shall not consider the applications to be mutually exclusive. 
However, in order to avoid future conflicting interpretations and 
confusion, we will not extend the exception to cover any area in which 
no subscribers or potential subscribers would be affected by the 
interference.

Receive Site Interference Protection

    28. Proposal. The Commission's rules currently provide interference 
protection to an educator's receive sites, regardless of their distance 
from the transmitter. The Further Notice cited instances in which 
interference protection was requested for receive sites apparently 
beyond an educational institution's reasonable coverage area. We stated 
in the Further Notice that such requests could be an abuse of our 
processes, designed to artificially increase the service area of the 
wireless cable lessee. We also opined that eliminating this practice 
would significantly increase the efficiency of our processing of 
applications, thereby hastening service to the public. We tentatively 
concluded that an educational institution is generally unlikely to 
reasonably serve a receive site located more than 35 miles from the 
transmitter. Thus, absent a showing of unique circumstances, we 
proposed to protect only those receive sites 35 miles or less from the 
transmitter. Further, we proposed that an applicant not be able to 
claim basic eligibility for a license by use of any receive site more 
than 35 miles from the transmitter. With regard to the 35-mile standard 
generally, the commenters are nearly evenly divided.
    29. Discussion. We acknowledge the concerns of some commenters that 
educators may at times serve receive sites beyond the proposed 
boundary. In fact, however, under the proposed rule, a licensee could 
protect two receive sites that were as far as 70 miles apart, depending 
on the location of the transmitter. Thus, we find that the 35-mile 
standard is not unduly restrictive, and we adopt the proposal as it 
regards both interference protection and basic eligibility for receive 
sites not more than 35 miles from the transmitter. However, we will 
waive the rule for a particular site if an applicant can demonstrate 
that it is located within the educator's reasonable coverage area.

Major Modifications

    30. Proposal. We turn now to our proposal to reclassify certain 
types of modifications to existing ITFS facilities. As stated in the 
Further Notice, we have classified these as either major or minor, 
attaching different procedural rules to each. In the Further Notice, we 
expressed our belief that our consideration of certain changes as minor 
does not realistically take into account the impact that they would 
have on the facilities in question, nearby facilities, or proposed 
facilities. Consequently, we proposed to reclassify as a major change 
any application involving: (1) Any polarization change; (2) the 
addition of any receive site that would experience interference from 
any licensee or applicant on file prior to the submission of the 
application; (3) an increase in the EIRP in any direction by more than 
1.5 dB; (4) an increase of 25 feet or more in the transmitting antenna 
height; or (5) any change that would cause interference to any 
previously proposed application or existing facility. We additionally 
proposed to formalize our policy of considering proposals to relocate a 
facility's transmitter site by ten miles or more as a major change. We 
also proposed to exempt from the new rule any change that would resolve 
mutually exclusive applications without creating new frequency 
conflicts. Most of the commenters that addressed this issue generally 
supported the proposal. Also, the supporting comments assert that the 
adoption of the MDS modification rules would be desirable, due to the 
technical and regulatory relationship that exists between the two 
services.
    31. Discussion. Our experience, as supported by many of the 
comments, warrants the need to modify the current classification system 
to increase processing efficiency, and we do not believe that the 
reclassification of certain amendments as major will diminish 
processing efficiency. Also, adoption of the MDS classification system 
would not be appropriate. Its definition of a major change is 
significantly broader than that previously used or now adopted for 
ITFS. However, the MDS rolling one-day filing window is structured to 
accommodate such an expansive definition, and it does not significantly 
restrict the submission of applications to change existing facilities. 
The ITFS window filing system, on the other hand, is not compatible 
with such an expansive classification that would needlessly restrict 
the filing of many ITFS technical modifications. Thus, we shall 
classify as major any application involving: (1) Any polarization 
change; (2) an increase in the EIRP in any direction by more than 1.5 
dB; (3) an increase of 25 feet or more in the transmitting antenna 
height; and (4) relocation of a facility's transmitter site by ten 
miles or more. We shall, however, accept such applications at any time, 
if their grant would resolve mutually exclusive applications without 
creating new conflicts. Adoption of the proposal will significantly 
expedite the processing of ITFS applications.
    32. We do not incorporate into the new rule two types of changes 
that we had earlier listed: (1) The addition of any receive site that 
would experience interference from any licensee or applicant on file 
prior to the submission of the application; and (2) any change that 
would cause interference to any previously proposed application or 
existing facility. By eliminating the cut-off system, the window filing 
system will prevent parties from requesting changes that are mutually 
exclusive with a tendered but not yet cut-off 
application. [[Page 20245]] 

Reasonable Assurance of Receive Sites

    33. Proposal. The Further Notice requested comment on how best to 
ensure the accuracy of each applicant's list of receive sites. We seek 
to deter applicants from listing receive sites that have in fact not 
agreed to participate in the proposed ITFS system. We therefore 
proposed requiring a letter of assurance from the applicant, listing 
each receive site's contact person, title, and telephone number. Most 
interested commenters support a stricter requirement than we proposed, 
and two commenters oppose the proposal in any form. Supporters argue 
that for adequate deterrence, we should require a verification letter 
from an authorized official of each receive site listed in an 
application.
    34. Discussion. To better ensure the accuracy of receive site lists 
submitted both by local and nonlocal applicants, we adopt a modified 
version of the proposal. Processing efficiency will be enhanced because 
the additional data would allow for rapid confirmation of a site's 
participation. However, requiring a separate letter of verification 
from each receive site would involve the submission of potentially 
dozens of separate letters. We believe, though, that we can expedite 
processing to the same degree on the application form: where we already 
ask for information about each of the applicant's receive sites, we 
shall simply add a column asking for a contact person's name, title, 
and telephone number. The contact person should be the person (or one 
of the people) responsible for implementation of the ITFS program at 
that receive site.

Accreditation of Applicants

    35. Proposal. While applicants seeking to construct a new ITFS 
station must indicate their accreditation or that of the schools or 
other institutions that intend to utilize the proposed ITFS service, we 
noted in the Further Notice that the extent to which the specified 
receive sites are being utilized by students from accredited 
institutions is not called for. Accordingly, we proposed to require 
applicants to state whether and by whom each listed receive site is 
accredited. We also asked whether having only one proposed receive site 
out of many as accredited defeats the fundamental purpose of ITFS: To 
serve the educational needs of accredited institutions. Thus, we 
invited commenters to address whether we should require a majority of 
receive sites to be accredited in order for the application to be 
grantable, or if we should deny interference protection for any 
unaccredited receive site. The proposed changes are generally opposed 
by the commenters. Many of them argue that receive sites are 
increasingly being used for distance learning without regard to whether 
they are accredited.
    36. Discussion. The record does not demonstrate that serving one 
accredited receive site among other unaccredited receive sites is 
incompatible with serving the formal, for-credit educational needs of 
students enrolled at accredited institutions, and we therefore decline 
to adopt either proposal. To do otherwise would artificially restrict 
those enrolled students' accessibility to formal ITFS educational 
programming, while depriving others of worthwhile programming, such as 
in-service training and instruction in special skills and safety 
programs. As most commenters note, while the essential purpose of the 
ITFS service is to provide formal educational programming to students 
enrolled in accredited schools, colleges and universities, the 
Commission has long recognized the value of transmitting ``other visual 
and aural educational, instructional and cultural material to selected 
receiving locations * * *'' 47 CFR 74.931(a)-(b). We find no evidence 
on the record that persuades us to now significantly alter the existing 
relationship between the provision of formal, for-credit educational 
ITFS programming and the offering of other educational, instructional, 
and cultural material, Indeed, we reaffirm our commitment to our 
longstanding objective, one that permits ITFS licensees to transmit 
educational and cultural programs for use in other than a classroom 
setting or to persons other than students enrolled at accredited 
institutions. However, we take this opportunity to modify and make 
clearer our requirements regarding the need for further specification 
with respect to the accreditation of the parties utilizing the proposed 
ITFS services.
    37. To attain eligibility, an ITFS applicant must, among other 
things, be accredited in its own right and serve its own students or 
serve accredited institutional or governmental organizations. It has 
come to our attention that some applicants accredited in their own 
right propose service only to receive sites which will not be used by 
their own students. Such applicants do not satisfy the eligibility 
requirements. They must, therefore, as Item 3 of Section II in the FCC 
Form 330 now requires, indicate the name of the ``school/institution'' 
it will serve, the accreditation date and the accrediting agency or 
organization. However, we have found, in processing applications, that 
the name of the school or institution often does not match with any 
receive site specified in Section VI of the Form 330. For ease of 
processing, we shall require, for applicants accredited in their own 
right and serving their own students, to identify in Section II, Item 
3(a), the receive sites in Section VI which fall under their 
jurisdiction. For other applicants, that is, those which are accredited 
and not serving their own students and those applicants which are 
unaccredited and establishing their eligibility by serving accredited 
institutions, we shall require that they specify in Section II, Item 
3(b), the receive sites belonging to or being used by the accredited 
institution. This additional information will enable the staff and all 
interested parties to immediately determine the accreditation status of 
an applicant.

Other Proposals

    38. Offset. The Further Notice proposed requiring the use of offset 
when all affected transmitters are capable of handling frequency offset 
stability requirements. This proposal is supported by most of the 
commenters. However, we believe that voluntary agreements to utilize 
frequency offsets better serve the public interest. The use of 
frequency offsets represents a balancing of the need to prevent co-
channel interference with our desire to allow an increase in the number 
of stations in a geographic area. As such, frequency offsets are not a 
substitute for the standard of interference protection, a desired-to-
undesired signal ratio of 45dB, that our technical rules are designed 
to ensure. Indeed, the efficacy of frequency offsets, which is not 
universally acclaimed by the engineering society, is largely determined 
by the exigencies of the situation at hand, requiring affected 
applicants and licensees to engage in cooperative efforts to construct 
and adjust their respective technical operations to successfully avail 
themselves of this engineering technique, if possible. Under these 
circumstances, we are not persuaded to require the mandatory 
specification of frequency offsets.
    39. Expedited Consideration of Applications. In the Further Notice, 
we asked for comments on the Educational Parties and WCA's proposal 
that we expedite consideration of certain ITFS applications in return 
for the applicant's agreeing to an accelerated construction schedule. 
The stated purpose was to rapidly authorize facilities that would most 
likely become part of an operating wireless cable system. Most 
commenters are supportive of the proposal, although [[Page 20246]] they 
disagree on the details of its implementation. Opponents of expedited 
consideration argue that it would not in fact accelerate the 
construction of viable MDS systems, because processing the likely high 
number of requests would delay service to the public. We agree. Rapid 
authorization of ITFS facilities is essential to providing unique 
educational programming to greater numbers of people, and to 
accelerating the ability of MDS systems to compete with wired cable 
operators. The more rapid processing sought by the commenters will 
likely be achieved by implementation of the filing window, as enhanced 
by the proposed electronic filing and processing system and the other 
modifications adopted in this proceeding Hence, we do not believe that 
adoption of the commenters' proposal is warranted.
    40. FAA Authorization. As mentioned in the Further Notice, we do 
not grant or modify a license until the Federal Aviation Administration 
(FAA) has determined that the proposed transmitter site and receive 
sites will pose no hazard to air navigation. To prevent needless delay 
in processing applications, we proposed to require applicants to inform 
the Commission of the FAA's determination. The record clearly supports 
our belief that enactment of this policy would speed processing at 
minimal cost to applicants. Therefore, to expedite processing, we 
require applicants to inform the Commission of the FAA's determination 
on a timely basis.
    41. Interference Studies. The Further Notice noted that applicants 
frequently make technical claims that lack adequate supporting data. To 
address this problem, we proposed requiring the submission of terrain 
profiles and a quantitative analysis of any additional signal loss 
calculated by using the Longley-Rice propagation model, Version 1.2.2, 
in the point-to-point mode. Most of the commenters that addressed this 
issue generally support the proposal, but advocate various exceptions 
to the rule, allowing the use of less rigorous models under a variety 
of circumstances.
    42. Based on the information before us, we shall not adopt the 
proposal. The record demonstrates that our concern will be met by the 
submission of any valid profile maps or sufficient data that takes 
terrain shielding into account and supports the validity of each claim, 
regardless of whether the study involves the Model. Also, for each 
instance where terrain shielding is relied upon to protect ITFS 
facilities, applicants will be required to submit the quantitative 
amount of signal attenuation, in dB, attributable to terrain shielding. 
Any study must use generally acceptable engineering practices, and 
applicants must state the specific model they have used in their 
analysis.
    43. Construction of Facilities. Some commenters express concern 
that the Commission has extended construction periods for parties with 
no intention to construct. Hence, they request strict guidelines for 
granting such extensions. One proposes decreasing the period within 
which an ITFS licensee must construct its facilities from 18 months to 
12 months. It alleges that, if its proposal were adopted, frequency 
speculators would quickly lose their licenses and their channels would 
consequently become available during the next window. In both cases, 
however, our existing rules already address these matters. We have set 
forth the requirements an educator must meet in order to obtain an 
extension of time within which to construct: (1) Construction is 
complete and testing of the facilities has begun; (2) substantial 
progress has been made; or (3) reasons clearly beyond the applicant's 
control, which applicant has taken all possible steps to resolve, have 
prevented construction. We have no specific evidence that these rules 
have not operated sufficiently to prevent abuses by frequency 
speculators. Therefore, we decline to modify the period of time to 
construct.

Administrative Matters

A. Regulatory Flexibility Analysis

    44. These rules are not major rules for the purposes of Executive 
Order 12291 of February 17, 1981. As required by the Regulatory 
Flexibility Act, it is hereby certified that these rules will not have 
a significant impact on small business entities.

B. Final Regulatory Flexibility Analysis

    45. Pursuant to the Regulatory Flexibility Act of 1980, 5 U.S.C. 
605, it is certified that this decision will have an impact on ITFS 
stations by establishing a window filing procedure for the processing 
of such applications and applications for major changes to existing 
ITFS stations, and by adopting rules affecting the four-channel ruleee, 
receive site interference protection, the protected service area, and 
other aspects of ITFS operation. As detailed in the full text of the 
Report and Order, the Commission has attempted, wherever possible 
within the statutory constraints, to establish regulations which, to 
the extent possible, minimize the burdens of ITFS stations. The full 
text of the Commission's final regulatory flexibility analysis may be 
found in Appendix A of the full text of this Report and Order.

C. Ordering Clauses

    46. It is ordered that this Report and Order is adopted.
    47. It is further ordered that, pursuant to authority contained in 
sections 4(i) and 303 of the Communications Act of 1934, as amended, 47 
CFR 74 is amended as set forth below. The change to the rules adopted 
in this Report and Order will become effective upon approval of the 
Office of Management and Budget of a modified FCC Form 330 to 
effectuate the modifications approved in this Report and Order.
    48. It is further ordered that MM Docket No. 93-24 is terminated.

List of Subjects in 47 CFR Part 74

    Television broadcasting, Instructional television fixed service.

Federal Communications Commission.
William F. Caton,
Acting Secretary.

Rules

    Part 74 of title 47 of the Code of Federal Regulations is amended 
as follows:

PART 74--EXPERIMENTAL AUXILIARY, AND SPECIAL BROADCAST DISTRIBUTION 
SERVICES

    1. The authority citation for part 74 continues to read as follows:

    Authority: Secs. 4, 303, 48 Stat. 1066, as amended, 1082, as 
amended; 47 U.S.C. 154, 303, unless otherwise noted. Interpret or 
apply secs. 301, 303, 307, 48 Stat. 1081, 1082, as amended, 1083, as 
amended; 47 U.S.C. 301, 303, 307.

    2. Section 74.902 is amended by revising the second sentence of 
paragraph (d)(1) to read as follows:


Sec. 74.902  Frequency assignments.

* * * * *
    (d)(1) * * * An area of operation is defined as the area 20 miles 
or less from the ITFS transmitter.* * *
* * * * *
    3. Section 74.903 is amended by adding a new paragraph (a)(5), by 
adding a final sentence to paragraph (e), and by adding a new paragraph 
(f), to read follows:


Sec. 74.903  Interference.

    (a) * * *
    (5) No receive site more than 35 miles from the transmitter shall 
be entitled to interference protection.
* * * * * [[Page 20247]] 
    (e) * * * Such protection shall be applied solely with regard to 
applications filed subsequent to the request for a protected service 
area.
    (f) With respect to protected service area proposals, two 
applications will be regarded as mutually exclusive if they are:
    (1) Submitted during the same filing window;
    (2) Otherwise grantable;
    (3) Mutually exclusive only because either or both applicants 
request a protected service area. However, if an applicant in such a 
situation shows that the resulting interference would occur solely over 
water, the applications will not be considered to be mutually 
exclusive.


Sec. 74.910  [Amended]

    4. Section 74.190 is amended by removing the entry Section 
73.3564(a), (b) Acceptance of applications, and adding in its place, 
73.3597(c)(2) Procedures on transfer and assignment applications.
    5. Section 74.911 is amended by revising the third sentence of 
paragraph (a)(1), and by revising paragraph (c) to read as follows:


Sec. 74.911  Processing of ITFS station applications.

    (a) * * *
    (1) * * * A major change for an ITFS station will be any proposal 
to add new channels, change from one channel (or channel group) to 
another, change polarization, increase the EIRP in any direction by 
more than 1.5dB, increase the transmitting antenna height by 25 feet or 
more, or relocate a facility's transmitter site by 10 miles or more.* * 
*
* * * * *
    (c)(1) New and major change applications for ITFS stations will be 
accepted only on dates specified by the Commission. Filing periods will 
be designated by the Commission in a Public Notice, to be released not 
fewer than 60 days before the commencement of the filing period. 
Qualified parties will have no fewer than 5 business days within which 
to submit their applications. After termination of the filing period, 
the Commission shall release a Public Notice with a list of 
applications filed in the window and provide no fewer than 30 days for 
the submission of petitions to deny. Uncontested applications that are 
not mutually exclusive with any other application or licensed facility, 
and are found to be acceptable, shall be granted. Mutually exclusive 
applications shall be evaluated pursuant to the comparative selection 
process set forth in Sec. 74.913 as herein amended.
    (2) The requirements of this section apply to a wireless cable 
entity requesting to be licensed on ITFS frequency pursuant to 
Sec. 74.990. The application of such a wireless cable entity shall be 
included in the Public Notice released after the termination of the 
filing period.
* * * * *
    6. Section 74.913 is amended by revising the first sentence of 
paragraph (d)(1), and adding a new paragraph (d)(5), to read as 
follows:


Sec. 74.913  Selection procedure for mutually exclusive ITFS 
applications.

* * * * *
    (d) * * * 
    (1) Enrollment will be considered as of the last date of the filing 
window during which the applications were filed, as provided by 
Sec. 74.911(c).* * *
* * * * *
    (5) A receive site not receiving interference protection may not be 
utilized by an applicant for tie-breaking purposes.
* * * * *
    7. Section 74.932 is amended by adding a new paragraph (e), to read 
as follows:


Sec. 74.932  Eligibility and licensing requirements.

* * * * *
    (e) No receive site more than 35 miles from the transmitter site 
shall be used to establish basic eligibility.
* * * * *
    8. Section 74.991 is amended by revising the last two sentences of 
paragraph (a) to read as follows:


Sec. 74.991  Wireless cable application procedures.

    (a) * * * A wireless cable application for available instructional 
television fixed service channels will be subject to Sec. 21.914 of 
this chapter with respect to other wireless cable applicants, and to 
the ITFS window filing period with respect to instructional television 
fixed service applications. All lists of accepted applications for ITFS 
frequencies, regardless of the nature of the applicant, will be 
published as ITFS public notices.
* * * * *
[FR Doc. 95-10024 Filed 4-24-95; 8:45 am]
BILLING CODE 6712-01-M`