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

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Released: February 3, 2010

Federal Communications Commission FCC 10-24

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
)
)
Policies to Promote Rural Radio Service and to
)
MB Docket No. 09-52
Streamline Allotment and
)
RM-11528
Assignment Procedures
)

FIRST REPORT AND ORDER

AND

FURTHER NOTICE OF PROPOSED RULE MAKING

Adopted: January 28, 2010

Released: February 3, 2010

Comment Date: [60 days after date of publication in the Federal Register]
Reply Comment Date: [90 days after date of publication in the Federal Register]

By the Commission: Commissioners Copps, McDowell, and Clyburn issuing separate statements.

TABLE OF CONTENTS

Heading
Paragraph #
I.
INTRODUCTION .................................................................................................................................. 1
II. DISCUSSION......................................................................................................................................... 4
A. Establish Section 307(b) Priority for Native American and Alaska Native Tribal Groups Serving
Tribal Lands. .................................................................................................................................... 4
Background ...................................................................................................................................... 4
Discussion ........................................................................................................................................ 7
B. Limit the Downgrading of Proposed AM Facilities After Receiving Dispositive Section
307(b) Preference........................................................................................................................... 28
Background .................................................................................................................................... 28
Discussion ...................................................................................................................................... 29
C. Establish “Technically Eligible for Auction Processing at Time of Filing” Criteria for AM
New and Major Change Applications ............................................................................................ 32
Background .................................................................................................................................... 32
Discussion ...................................................................................................................................... 34
D. Codify the Permissibility of Non-Universal Engineering Solutions and Settlement
Proposals ........................................................................................................................................ 38
Background .................................................................................................................................... 38
Discussion ...................................................................................................................................... 40
E. Delegate Authority to Cap the Number of AM Applications That May Be Filed in a Short-
Form Filing Window...................................................................................................................... 42
Background .................................................................................................................................... 42
Discussion ...................................................................................................................................... 43
F. Modify Section 73.5005 to Provide Flexibility in the Deadline for Filing Post-Auction
Long-Form Applications................................................................................................................ 47

Federal Communications Commission FCC 10-24

Background .................................................................................................................................... 47
Discussion ...................................................................................................................................... 48
G. Clarify Application of the New Entrant Bidding Credit Unjust Enrichment Rule ......................... 49
Background .................................................................................................................................... 49
Discussion ...................................................................................................................................... 50
H. Clarify Maximum New Entrant Bidding Credit Eligibility ............................................................ 57
Background .................................................................................................................................... 57
Discussion ...................................................................................................................................... 60
III. FURTHER NOTICE OF PROPOSED RULE MAKING…………………………………...…….…64
A. Implement a Tribal Bidding Credit…………………….….………………………………...…....64
Background .................................................................................................................................... 64
Discussion ...................................................................................................................................... 65
B. Extend the Tribal Priority to Non-Landed Tribes……………………………...………...… ..….67
Background .................................................................................................................................... 67
Discussion ...................................................................................................................................... 68
IV. PROCEDURAL MATTERS................................................................................................................ 70
A. First Report and Order………………………………………………...……………………..……70
1. Final Regulatory Flexibility Analysis.…………… .... ………………………………………..70
2. Final Paperwork Reduction Act of 1995 Analysis.................................................................... 71
3. Congressional Review Act........................................................................................................ 73
B. Further Notice of Proposed Rule Making………………………………………………..………..74
1. Filing Requirements.................................................................................................................. 74
Ex Parte Rules ......................................................................................................................... 74
Comments and Reply Comments ............................................................................................ 75
Additional Information............................................................................................................ 79
2. Initial Regulatory Flexibility Analysis...................................................................................... 80
C. Paperwork Reduction Act Analysis ................................................................................................ 82
V. ORDERING CLAUSES....................................................................................................................... 85
APPENDIX A – Initial Regulatory Flexibility Analysis
APPENDIX B – Final Regulatory Flexibility Analysis
APPENDIX C – Comments Filed in Response to NPRM
APPENDIX D – Reply Comments Filed in Response to NPRM
APPENDIX E – Rule Changes

I. INTRODUCTION

1.
On April 20, 2009, the Commission released a Notice of Proposed Rule Making in
Policies to Promote Rural Radio Service and to Streamline Allotment and Assignment Procedures.1 The
Rural NPRM contained several proposals for changes to our assignment and allotment procedures,
including detailed proposals to adjust the manner in which we award preferences to applicants under the
provisions of Section 307(b) of the Communications Act of 1934, as amended (the “Communications
Act”).2 It also contained a proposal for a new Section 307(b) priority that would apply only to federally
recognized American Indian Tribes and Alaska Native Villages (collectively “Tribes”), as well as their
members and entities owned or controlled by such Tribes and their members, when they propose new


1 24 FCC Rcd 5239 (2009) (“Rural NPRM”).
2 47 U.S.C. § 307(b) (“Section 307(b)”).
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Federal Communications Commission FCC 10-24

radio services that primarily would serve tribal lands (the “Tribal Priority”). Several other proposals
would codify or clarify certain allotment, assignment, auction, and technical procedures.
2.
With this First Report and Order (“First R&O”), we address the Tribal Priority proposal,
as well as a number of other proposals set forth in the Rural NPRM. The record provides ample support
for immediate action on these matters. This approach will enable us to analyze comments on the
remaining proposals in depth, to research certain matters brought up in those comments, and to devote the
proper time and analysis to those major reforms without delaying action on a number of less complex but
also important matters. Accordingly, in this First R&O we make certain changes to our assignment and
allotment, auction, and technical procedures, as proposed in the Rural NPRM. In particular, we adopt the
Tribal Priority with modifications. We also release a Further Notice of Proposed Rule Making
(“FNPRM”) containing further proposals related to the Tribal Priority, but requiring further comment.
3.
With regard specifically to AM application processing, we adopt, with certain
modifications, the proposal to prohibit the downgrading of proposed AM facilities that receive a
dispositive preference under Section 307(b) and thus are not awarded through competitive bidding. We
also adopt our proposal that technical proposals for AM facilities filed with Form 175 applications meet
certain minimum technical standards to be eligible for further auction processing, with some
modifications, and adopt the proposal to grant the Media Bureau and the Wireless Telecommunications
Bureau (collectively, the “Bureaus”) delegated authority to cap the number of AM applications that may
be filed in an AM auction filing window. We also adopt proposals to streamline auction application
processing; to codify the permissibility of non-universal engineering solutions and settlement proposals;
to give the staff delegated authority and flexibility in setting the post-auction long-form application filing
deadline; to clarify application of the new entrant bidding credit unjust enrichment rule; and to clarify
maximum new entrant bidding credit eligibility.

II. DISCUSSION

A.

Establish Section 307(b) Priority for Native American and Alaska Native Tribal
Groups Serving Tribal Lands.


4.
Background. In the Rural NPRM, the Commission noted the marked disparity in the
Native American and Alaskan Native population of the United States, compared to the number of radio
stations licensed to, or providing significant signal coverage to, lands occupied by members of federally
recognized American Indian Tribes and Alaska Native Villages.3 The Commission also emphasized the
historic federal trust relationship between itself and the Tribes, as part of the relationship between the
United States government and the sovereign nations that are Tribes.4 More specifically, the Commission
noted that Tribes have an obligation to “maintain peace and good order, improve their condition, establish
school systems, and aid their people in their efforts to acquire the arts of civilized life,” within their
jurisdictions,5 and that the Commission has a longstanding policy of promoting tribal self-sufficiency and
economic development, as well as providing adequate access to communications services to Tribes.6


3 Rural NPRM, 24 FCC Rcd at 5247-48.
4 Id. at 5248-49.
5 S.Rep. No. 698, 45th Cong., 3d Sess. 1-2 (1879) (quoted in Merrion v. Jicarilla Apache Tribe, 455 U.S. 130, 140,
102 S.Ct. 894, 903, 71 L.Ed.2d 21 (1981)).
6 Statement of Policy on Establishing a Government-to-Government Relationship with Indian Tribes, Policy
Statement, 16 FCC Rcd 4078, 4080-81 (2000) (“Tribal Policy Statement”).
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Federal Communications Commission FCC 10-24

5.
Accordingly, the Commission tentatively concluded that it would be in the public interest
to provide Tribes with a Section 307(b) priority when proposing FM allotments, and filing AM and
noncommercial educational (“NCE”) FM filing window applications. As set forth in the Rural NPRM, an
applicant would qualify for the Tribal Priority if: (1) the applicant is either a federally recognized Tribe
or tribal consortium, a member of a Tribe, or an entity more than 70 percent owned or controlled by
members of a Tribe or Tribes; (2) at least 50 percent of the daytime principal community contour of the
proposed facilities covers tribal lands;7 (3) the applicant proposed a first (Priority (1)) or second (Priority
(2)) aural (reception) service to more than a de minimis population, or proposed a first local transmission
service (Priority (3)) at the proposed community of license; and (4) the proposed community of license is
located on tribal lands.8 The Commission further proposed that such a Tribal Priority rank between the
current Priority (1) and co-equal Priorities (2) and (3).9 In other words, the Tribal Priority would not take
precedence over a proposal to provide first reception service to a greater than de minimis population, but
would take precedence over the provision of second local reception service or, more importantly, over a
proposal for first local transmission service. The proposed Tribal Priority would apply only at the
allotment stage of the commercial FM licensing procedures; as part of the threshold Section 307(b)
analysis with respect to commercial or NCE AM applications filed during an AM filing window; and as
the first part of the fair distribution analysis of applications filed in an NCE FM filing window, before
application of the “first or second reserved channel NCE service” criterion set forth in Section 73.7002(b)
of the Commission’s Rules (the “Rules”).10 NCE applicants also would be required to meet all NCE
eligibility and licensing requirements.11 Certain “holding period” restrictions, commencing with the
award of a construction permit until the completion of four years of on-air operation, would apply to any
station or allotment awarded pursuant to the Tribal Priority. In the case of an AM or NCE FM
construction permit awarded pursuant to a Tribal Priority, the permittee/licensee would be prohibited
during this period from making any change in ownership that would lower tribal ownership below the 70
percent threshold, changing the station’s community of license, or implementing a facility modification
that would cause the principal community contour to cover less than 50 percent of tribal lands. In the
case of a commercial FM allotment, the restriction would apply only to any proposed change of
community of license or technical change as described in the preceding sentence. However, even a non-
tribal owner that is awarded a permit would still be required to provide broadcast service primarily to
tribal lands for four years.12
6.
The Commission sought comment as to the various components of the Tribal Priority as
proposed, e.g., the percentage of tribal member ownership of business entities and the percentage of tribal
lands to be covered to qualify for the priority. The Commission also sought comment on the


7 The principal community contours of AM, FM and NCE FM stations are defined in 47 C.F.R. §§ 73.24(i),
73.315(a), and 73.515, respectively.
8 For purposes of simplicity in reference, as used generally in this section the term “applicant” also refers to a party
filing a Petition for Rule Making to amend the FM Table of Allotments, 47 C.F.R. § 73.202.
9 See Revision of FM Assignment Policies and Procedures, Second Report and Order, 90 FCC2d 88, 91-93 (1982)
(“FM Assignment Policies”).
10 47 C.F.R. § 73.7002(b).
11 See id. §§ 73.503, 73.561.
12 Rural NPRM, 24 FCC Rcd at 5249.
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Federal Communications Commission FCC 10-24

constitutionality of providing such a priority to members of discrete groups such as Tribes, although it
also cited case law suggesting that adoption of the Tribal Priority would not trigger the strict scrutiny
analysis set forth in Adarand Constructors, Inc. v. Pena.13
7.
Discussion. Based on our examination of the record in this proceeding, we adopt a
Section 307(b) priority for Tribes or tribal consortia, and entities majority owned or controlled by Tribes,
proposing service to tribal lands as proposed in the Rural NPRM. We adopt some commenters’
suggestions for modification of the Tribal Priority. In addition, on our own motion we clarify the
application of the Tribal Priority in commercial and NCE contexts and modify ownership requirements,
eliminating the priority for individual members of Tribes or entities owned by such individuals, and
instead extend the Tribal Priority only to Tribes, consortia of Tribes, and to entities that are majority
owned or controlled by a Tribe or Tribes.
8.
We find that application of our traditional allocation priorities has not realized our
Section 307(b) mandate to “make such distribution of licenses … among the several States and
communities as to provide a fair, efficient, and equitable distribution of radio service”14 with regard to
tribal lands.15 Tribal lands comprise 55.7 million acres, or 2.3 percent of the area of the United States
(exclusive of the State of Alaska).16 Roughly one-third of the 4.1 million American Indian and Alaska
Native population of the United States live on tribal lands,17 which are governed by Indian tribal
governments that have a unique legal relationship with the federal government as domestic dependent
nations with inherent sovereign powers over their members and territory.18 Because of their status as
sovereign nations responsible for, among other things, “maintaining and sustaining their sacred histories,


13 515 U.S. 200, 227 (1995) (“Adarand”).
14 47 U.S.C. § 307(b).
15 As used here, “tribal lands” means both “reservations” and “near reservation” lands. “Reservations” is defined as
any federally recognized Indian tribe's reservation, pueblo or colony, including former reservations in Oklahoma,
Alaska Native regions established pursuant to the Alaska Native Claims Settlements Act (85 Stat. 688), and Indian
allotments. 47 C.F.R. § 54.400(e). “Near reservation” is defined as “those areas or communities adjacent or
contiguous to reservations which are designated by the Department of Interior's Commission of Indian Affairs upon
recommendation of the Local Bureau of Indian Affairs Superintendent, which recommendation shall be based upon
consultation with the tribal governing body of those reservations, as locales appropriate for the extension of financial
assistance and/or social services on the basis of such general criteria as: Number of Indian people native to the
reservation residing in the area; a written designation by the tribal governing body that members of their tribe and
family members who are Indian residing in the area, are socially, culturally and economically affiliated with their
tribe and reservation; geographical proximity of the area to the reservation and administrative feasibility of
providing an adequate level of services to the area.” Id. Thus, “tribal lands” includes American Indian Reservations
and Trust Lands, Tribal Jurisdiction Statistical Areas, Tribal Designated Statistical Areas, Hawaiian Homelands, and
Alaska Native Village Statistical Areas, as well as the communities situated on such lands.
16
Joint Reply Comments of Native Public Media and National Congress of American Indians (jointly
“NPM/NCAI”) at 4.
17 See id.; U.S. Census Bureau, We the People: American Indians and Alaska Natives in the United States at 13
(issued Feb. 2006), available at http://www.census.gov/prod/2006pubs/censr-28.pdf.
18 See Consultation and Coordination With Indian Tribal Governments, Executive Order No. 13175, 65 Fed.Reg.
67249 (Nov. 6, 2000). See also Tribal Policy Statement, 16 FCC Rcd at 4080.
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Federal Communications Commission FCC 10-24

languages, and traditions,”19 Tribes have a vital role to play in serving the needs and interests of their
local communities. A resolution submitted to the Commission by the National Congress of American
Indians, for example, provides that tribal-owned stations have the potential to “support several
fundamental missions of Tribal entities within their communities, which include increasing the
deployment of services, strengthening local programming, providing public safety, obtaining diversity of
viewpoint, creating cultural preservation and language revitalization, and prov[id]ing a modern
technological outlet to engage community members, especially youth, in the positive development of their
values, identity, and quality of life.”20 Despite this, only 41 radio stations currently are licensed to
federally-recognized Indian tribes or affiliated groups, representing less than one-third of one percent of
the more than 14,000 radio stations in the United States.21 We conclude that the establishment of an
allocation priority for the provision of radio service to tribal lands by Indian tribal government-owned
stations will advance our Section 307(b) goals and serve the public interest by enabling Indian tribal
governments to provide radio service tailored to the needs and interests of their local communities that
they are uniquely capable of providing.22
9.
We also find that the Tribal Priority adopted herein will advance the Commission’s
longstanding commitment, in accordance with the federal trust relationship, “to work with Indian Tribes
on a government-to-government basis … to ensure, through its regulations and policy initiatives, and
consistent with Section 1 of the Communications Act of 1934, that Indian Tribes have adequate access to
communications services.”23 Pursuant to that commitment, the Commission has recognized “the rights of
Indian Tribal governments to set their own communications priorities and goals for the welfare of their
membership.”24 The new Tribal Priority will promote those sovereign rights by enabling Tribes to
provide vital radio services to their communities.


19 NPM/NCAI Joint Comments at 7.
20 The National Congress of American Indians Resolution #NGF-09-007, Establishment of a Tribal Priority for
Broadcast Spectrum Allocations at the Federal Communications Commission, FCC Docket 09-30, at 2, attached to
NPM/NCAI Joint Comments. See NPM/NCAI Joint Comments at 4 (“Native radio stations play an important role
in supporting the Native American communities by providing programming and information that is critically
important to residents of various reservations. Given the overall lack of available telecommunications infrastructure
on most reservations, the important role of Native radio stations in relaying critical messages cannot be
overstated.”).
21 Rural NPRM, 24 FCC Rcd at 5248 ¶ 19. See NPM/NCAI Joint Comments at 6. See also Tribal Policy Statement,
16 FCC Rcd at 4078 (recognizing that, notwithstanding the Commission’s efforts to ensure that all Americans, in all
regions of the United States, have the opportunity to access telecommunications and information services, “certain
communities, particularly Indian reservations and Tribal lands, remain underserved, with some areas having no
service at all.”). Currently, there are 563 federally recognized tribal governments in the United States. NPM/NCAI
Joint Comments at 3.
22 See Winter Park Communications, Inc. v. FCC, 873 F.2d 347, 352 (D.C.Cir. 1989) (“The FCC has broad
discretion under section 307(b) to determine the public interest, and nothing in the Communications Act prevents the
FCC from defining the term ‘community’ differently in different contexts, or from adopting an interpretation that
strays considerably from political boundaries.”) (citations omitted).
23 Tribal Policy Statement, 16 FCC Rcd at 4079.
24 Id.
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Federal Communications Commission FCC 10-24

10.
Further, we conclude that the establishment of a Tribal Priority will promote the policies
and purposes of the Communications Act favoring diversity of media voices.25 As set forth above, Indian
tribal governments are uniquely capable of providing radio service tailored to the culture, language and
heritage of their local communities, yet they account for only a tiny percentage of the radio station
licenses in this country. By broadening the opportunities for Indian tribal governments to obtain
Commission licenses and provide new and diverse programming to often-underserved communities, “we
seek to strengthen the diverse and robust marketplace of ideas that is essential to our democracy.”26
11.
Turning to the constitutionality of a Tribal Priority, of the eleven commenters addressing
this issue,27 three argue that it constitutes, or might constitute, an illegal race-based preference. This
includes Booth, Freret, Imlay & Tepper, P.C. (“BFIT”), which provides no support for its argument.28
BFIT further argues that the Tribal Priority is designed to privilege a specific group, rather than serving
the Section 307(b) goal of fairly distributed service.29 Additionally, BFIT states that such a priority
would wreak technical “havoc” in the AM service due to nighttime mutual exclusivity.30 Instead, BFIT
argues that Tribes should receive a bidding credit akin to those awarded to new entrants.31 Catholic Radio
Association (“CRA”) opposes the Tribal Priority, likening it to one given to “any identity group –
whether tribal, Catholic, or (fill in the blank with any ethnic or faith group).”32 CRA further contends that
it is fallacious to assume that allowing such a priority would increase programming diversity.33 CRA


25 It is well established that the Commission’s public interest mandate encompasses the goal of fostering viewpoint
diversity. See Metro Broadcasting, Inc. v. FCC, 497 U.S. 547, 567 (1990) (“Metro Broadcasting”), reversed on
other grounds
, Adarand Constructors, Inc. v. Pena, 515 U.S. 200, 227 (1995); FCC v. National Citizens Committee
for Broadcasting
, 436 U.S. 775, 795 (1978); Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 409 (1969). See
also Turner Broadcasting Sys. v. FCC
, 512 U.S. 622, 663-64 (1994) (“[I]t has long been a basic tenet of national
communications policy that the widest dissemination of information from diverse and antagonistic sources is
essential to the welfare of the public,” quoting Midwest Video, 406 U.S. 649, 668 n.27 (plurality opinion) and
Associated Press v. United States, 326 U.S. 1, 20 (1945)). Section 257(b) of the 1996 Act also directs the
Commission to “promote the policies and purposes of this Act favoring diversity of media voices” in carrying out its
Section 257 responsibilities. 47 U.S.C. § 257(b). And Section 309(j) directs the Commission to promote the
dissemination of broadcast licenses to a wide variety of applicants as part of a broad policy of fostering economic
opportunity. 47 U.S.C. § 309(j)(4)(D). Section 309(j)(4)(D) requires the Commission to “consider the use of tax
certificates, bidding preferences, and other procedures” to achieve its goals.
26 Promoting Diversification of Ownership in the Broadcasting Services, Report and Order and Third Further Notice
of Proposed Rulemaking, 23 FCC Rcd 5922, 5924 (2008), quoting Metro Broadcasting, 497 U.S. at 567.
27 The eleven commenters filed nine comments, as Prometheus Radio Project and the National Federation of
Community Broadcasters (jointly “Prometheus/NFCB”) filed joint comments, as did NPM/NCAI. The National
Association of Broadcasters (“NAB”) mentioned the Tribal Priority in its Comments but did not substantively
comment on this specific issue. NAB Comments at 2.
28 BFIT Comments at 7-8.
29 Id. at 8.
30 BFIT Reply Comments at 4.
31 BFIT Comments at 8.
32 CRA Comments at 6.
33 Id. at 6-7.
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concludes that the Tribal Priority is only valid if the applicant’s proposal would solely serve members of a
Tribe and not other populations.34 Jorgenson Broadcast Brokerage, Inc. (“JBB”) merely questions the
constitutionality of the proposed Tribal Priority, without analysis.35
12.
In their Joint Comments, NPM/NCAI engage in a detailed analysis of the constitutional
issues presented by the proposed Tribal Priority, concluding that the priority would not trigger the strict
scrutiny analysis of Adarand, but rather a rational basis standard of review. This is because, as stated in
the seminal Supreme Court case of Morton v. Mancari,36 the proposed benefit would be granted to Tribes
and their members “not as a discrete racial group, but, rather, as members of quasi-sovereign tribal
entities whose lives and activities are governed by the [Bureau of Indian Affairs] in a unique fashion.”37
NPM/NCAI also cite more recent federal precedent for the proposition that benefits aimed at Indians and
Tribes do not constitute impermissible racial classifications.38 We agree with NPM/NCAI that the
priority established herein for the benefit of federally recognized Tribes is not constitutionally suspect
because it is based on “the unique legal status of Indian tribes under Federal law.”39 As the D.C. Circuit
explained in 2003, the Supreme Court’s decisions leave no doubt that federal government action directed
at Indian tribes, “although relating to Indians as such, is not based on impermissible racial
classifications.”40 As set forth above, the Tribal Priority established herein will further our Section 307(b)
mandate and other Commission policies by enabling Indian tribal governments to provide radio service


34 Id.
35 JBB Comments at 3 (“Such preferences have been found to be unconstitutional.”).
36 417 U.S. 535 (1974) (“Morton”).
37 Id. at 554. The Court went on to observe that the preference in question “is not directed towards a ‘racial’ group
consisting of ‘Indians’; instead, it applies only to members of ‘federally recognized’ tribes. This operates to exclude
many individuals who are racially to be classified as ‘Indians.’ In this sense, the preference is political rather than
racial in nature.” Id. at 554 n.24. As discussed below, the proposed Tribal Priority will apply only to Tribes or
entities that are majority owned by one or more Tribes.
38 NPM/NCAI Joint Comments at 6-10. Cases cited include United States v. Cohen, 733 F.2d 128, 139 (D.C. Cir.
1984) (en banc) (“[T]he Constitution itself provides support for legislation directed specifically at Indian tribes.”),
and the post-Adarand case American Federation of Government Works, and AFL-CIO v. U.S., 330 F.3d 513, 523
(D.C. Cir. 2003), cert. denied 540 U.S. 1088 (2003) (“AFGE”) (“The Court’s decisions ‘leave no doubt that federal
legislation with respect to Indian tribes, although relating to Indians as such, is not based on impermissible racial
classifications,’” quoting United States v. Antelope, 430 U.S. 641, 645 (1977)). NPM/NCAI also cite a Department
of Justice Memorandum of Legal Guidance from 1995 that cites Morton in concluding that “Adarand does not
require strict scrutiny review for programs benefiting Native Americans as members of federally recognized Indian
tribes.” Memorandum to General Counsels, Legal Guidance on the Implications of the Supreme Court’s Decision in
Adarand Constructors, Inc. v. Pena, at 8 (June 28, 1995).
39 Morton, 417 U.S. at 551-52.
40 AFGE, 330 F.3d at 520, quoting United States v. Antelope, 430 U.S. 641, 645 (1977) (“federal regulation of
Indian affairs is not based upon impermissible classifications. Rather, such regulation is rooted in the unique status
of Indians as ‘a separate people’ with their own political institutions.”). See United States Air Tour Assoc. v.
Federal Aviation Admin.
, 298 F.3d 997, 1012 n.8 (D.C. Cir. 2002) (refusing to apply strict scrutiny to agency
regulation imposing cap on total number of commercial air tours that operators could run in Grand Canyon National
Park because it exempted flights to and from the Hualapai Indian Reservation from each tour operator’s annual
allocation and upholding the exception against an equal protection challenge under rational basis review).
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tailored to the needs and interests of their local communities. Furthermore, as discussed above, we find
that Indian tribal governments are uniquely situated to provide such service to tribal lands. Accordingly,
we believe that the Tribal Priority is consistent with the Equal Protection Clause of the Fifth Amendment.
13.
While BFIT is correct in stating that Section 307(b) is designed to provide fair
distribution of radio service, the Tribal Priority we establish in this First R&O promotes this goal for the
reasons discussed above. As proposed, the Tribal Priority also ties the preference to the needs of tribal
communities by requiring that, to qualify for the priority, commercial applicants must propose either a
first or second aural service, or a first local transmission service at a community located on tribal lands.41
As discussed above, however, Tribes are uniquely situated to provide programming meeting their
members’ needs. The existence of a non-tribal commercial station or stations at a community located on
tribal lands should not, in our view, preclude the establishment of a first local transmission service owned
by a Tribe or Tribes.42 Thus, we modify the service criterion for the Tribal Priority to require that a
qualifying commercial applicant propose first or second aural (reception) service, or a first local tribal-
owned commercial transmission service at the proposed community. Currently, there are only a handful
of tribal-owned radio stations operating on a commercial basis. We recognize that the cost, complexity
and uncertainty of participating in the Commission’s FM allotment and radio auctions processes have
deterred tribal participation. We believe that it is important to provide a robust and meaningful
opportunity for Tribes to pursue commercial licensing opportunities and to determine, over time, how
commercial stations can best serve tribal needs. Thus, a commercial tribal-owned applicant may qualify
for a Tribal Priority, notwithstanding the fact that a tribal-owned NCE station is licensed at the same
community. We reiterate, as the Commission proposed in the Rural NPRM, that the Tribal Priority will
not take precedence over a bona fide proposal to provide first reception service to a significant
population, but will rank higher than a competing proposal to provide second reception service or a first
local non-tribal-owned transmission service.43
14.
As for the cited commenters’ other concerns, we find little merit. BFIT’s protestation of
technical “havoc” ignores the fact that the qualifying applicant is required to meet all other Commission
technical standards.44 As for CRA’s proposal to award the priority only if the proposed facility would
exclusively serve tribal lands, the laws of physics and the historical development of tribal lands make
such a suggestion impractical at best. We further reject CRA’s attempt to liken the situation of Tribes to
that of Catholics or other faith or ethnic groups. As explained in detail in the Rural NPRM, the federal
government has a relationship with Tribes that is unique, and not analogous to any relationship with the
groups CRA cites.45 We also disagree with CRA’s bare assertion that increasing tribal ownership of radio


41 Rural NPRM, 24 FCC Rcd at 5249. See also infra paras. 22-23, in which we set forth separate Section 307(b)
evaluation criteria for tribal NCE applicants.
42 See Cherokee Nation (“CN”) Comments at 1, 4-5 (Cherokee Nation is headquartered at Tahlequah, Oklahoma,
which already has two licensed commercial, non-tribal-owned radio stations).
43 Rural NPRM, 24 FCC Rcd at 5249. As the Commission has stated previously, first reception service is so widely
available that it will outweigh the Tribal Priority only in rare cases. See Amendment of the Commission’s Rules
Regarding Modifications of FM and TV Authorizations to Specify a New Community of License
, Memorandum
Opinion and Order, 5 FCC Rcd 7094, 7096 (1990).
44 Id.
45 Id. at 5248-49.
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stations will not increase program diversity with regard to Tribes. Our experience and the record suggest
otherwise.46
15.
Commenter Frank McCoy (“McCoy”) states that the proposed Tribal Priority is
“unnecessary,” due to what he perceives as a surfeit of FM spectrum in tribal areas of the western United
States.47 McCoy offers his consulting services to Tribes on a pro bono basis, to assist in finding available
channels; to the extent spectrum is not available, McCoy suggests we waive spacing requirements to
permit such allotments and assignments.48 In reply NPM/NCAI point out – correctly, in our estimation –
that the principal impediment to new radio service to tribal lands is not a lack of technical knowledge.
Rather, Tribes often find themselves unable to compete on an even playing field with other applicants for
new service, especially when tribal lands lie near to urbanized or suburban areas.49 While McCoy’s
intentions are laudable, we continue to believe that structural changes are needed.
16.
Some commenters do not oppose the Tribal Priority, but rather suggest changes to the
priority as proposed. Hatfield & Dawson (“H&D”) protests that the priority would be practically
unworkable in the commercial FM context, as the priority would be applied only at the allotment stage.
Thus, H&D contends that there is a real risk that the tribal applicant that went to the time, trouble, and
expense of prosecuting the allotment proceeding would still lose at auction to a high bidder that may not
provide tribal-oriented programming.50 Thus, H&D proposes that we limit the Tribal Priority to non-
tabled services such as AM, NCE FM, and low-power FM (“LPFM”). Mullaney Engineering, Inc.
(“MEI”) makes several suggestions: first, in lieu of the proposed holding period, that any facility
obtained using the Tribal Priority be permanently restricted to ownership by qualifying Tribes, tribal
members, or tribal-owned entities; second, that the proposed tower site be located on tribal lands unless
not permissible under Commission, FAA, or other federal rules; third, if less than 50 percent of the
principal community contour of such a station covers tribal lands, that the facility be permanently
operated on an NCE basis; and fourth, that Tribal entities should be granted the maximum permissible
bidding credit if they do not own any other commercial stations the principal community contours of
which overlap that of the proposed facility.51
17.
We recognize, as the Commission did in the Rural NPRM,52 the risks inherent in applying
a Section 307(b) preference at the allotment stage for auctionable non-reserved band spectrum. We
believe, however, that the fact that such allotments would be required to place a majority of their principal
community contours over tribal lands would make these allotments most attractive to tribal applicants.
Moreover, should a non-tribal applicant win the allotment at auction, market forces would tend to favor


46 See, e.g., Seminole Tribe of Florida, Letter, 24 FCC Rcd 2845, 2848 (MB 2009), in which the staff waived
community coverage requirements in part because the Seminole Tribe “made it clear that its proposed station would
be focused on programming of interest to the Seminole people.”
47 McCoy Comments at 13-14.
48 Id.
49 NPM/NCAI Joint Reply Comments at 3-4.
50 H&D Comments at 3-4.
51 MEI Comments at 6-7. We presume MEI refers to the “same area” definition of 47 C.F.R. § 73.5007(b).
52 Rural NPRM, 24 FCC Rcd at 5249.
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Federal Communications Commission FCC 10-24

programming appealing to the tribal audience even if not originated by Tribes or qualifying entities.
NPM/NCAI urge that, in order to address the concerns raised by H&D (and as suggested by MEI and
BFIT), we propose a tribal-specific bidding credit, separate from and additional to our current new entrant
bidding credits, as a way of helping to ensure tribal ownership of facilities added to the Table of
Allotments by qualifying Tribes or tribal-owned entities. We discuss the possibility of adding a tribal
bidding credit in the FNPRM, below.
18.
As for MEI’s other proposals, we believe, for the reasons discussed in the Rural NPRM,
that the four-year holding period is sufficient to discourage trafficking. We also believe that limiting the
Tribal Priority to Tribes and entities controlled by Tribes substantially reduces the potential for
trafficking. Further restrictions on alienability of radio facilities could potentially harm those
communities that the Tribal Priority is intended to benefit. For example, a Tribe that has an existing
facility, but is later able to move to another community or site that would provide superior signal
coverage to tribal lands, might wish to sell the original facility in order to raise capital to build the newer,
superior facility. We thus believe the proposed four-year holding period to be the wisest course, subject,
as always, to further review if it appears that it does not serve its intended function of deterring
trafficking. However, we will make one modification, suggested by NPM/NCAI, to allow assignments or
transfers within the four-year holding period provided that the assignee/transferee also qualifies for the
Tribal Priority in all respects.53 This modification would enable a qualified applicant that encounters
financial or other difficulties to assign the authorization to another qualified applicant, rather than lose the
allotment or assignment entirely. We further agree with NPM/NCAI’s suggestion to permit gradual
changes in the governing board of an NCE permittee or licensee during the four-year holding period, as is
the case with other NCE holding period restrictions, as long as the tribal control threshold is maintained.54
19.
We need not address MEI’s proposal for perpetual NCE operation by facilities covering
less than 50 percent of tribal lands with a principal community signal, as the Tribal Priority requires 50
percent or greater coverage of tribal lands.55 Finally, we reject restrictions on the siting of towers. As
long as signal coverage requirements are met, we find that further restrictions on transmitter site locations
are both unnecessary and ill-advised. We would not, for example, want to require a tribal NCE station to
erect a new tower if an existing tower, off tribal lands, would enable the station to provide the requisite
signal coverage.
20.
NPM/NCAI and CN, the only Native American-affiliated groups to file comments,
support the Tribal Priority, as do Prometheus/NFCB. Both NPM/NCAI and CN point out what they
perceive to be minor shortcomings in the priority as proposed in the Rural NPRM, and suggest
adjustments.
21.
NPM/NCAI would require, in addition to the eligibility criteria set forth in the Rural
NPRM, that qualifying individuals be enrolled with federally recognized Tribes or tribal consortia, and


53 NPM/NCAI Joint Comments at 11.
54 See, e.g., Reexamination of the Comparative Standards for Noncommercial Educational Applicants, Report and
Order, 15 FCC Rcd 7386, 7425-26 (2000) (“NCE R&O”), clarified and aff’d on recon. 16 FCC Rcd 5074 (2001)
(“NCE MO&O”).
55 See Rural NPRM, 24 FCC Rcd at 5248 n.30 (“To the extent that tribal lands are ‘checkerboarded’ with fee lands,
we will use the outer boundaries of such lands to delineate the coverage area, and will not deduct fee lands not
owned by members of Tribes from the coverage percentage.”).
11

Federal Communications Commission FCC 10-24

that qualifying entities be owned or controlled by individuals enrolled with federally recognized Tribes.56
While this suggestion is sensible when applied to the Tribal Priority as proposed, our elimination of
individual members and member-controlled entities from qualification for the priority renders this
suggestion moot. Also moot is NPM/NCAI’s request to clarify that the 70 percent ownership criterion
should not require that all owners be members of the same Tribe.57 However, as discussed below,
qualifying entities may be owned or controlled by more than one Tribe.
22.
CN, in its comments, specifically addresses issues concerning NCE stations. As
proposed, the Tribal Priority would be available only to an applicant proposing a first local transmission
service or better.58 As CN points out, in the NCE context, a fair distribution analysis does not include
credit for providing a first local transmission service at a particular community; rather, NCE FM
applicants only state whether they will provide either or both of first or second NCE reception service to a
specified percentage of its principal community contour and a significant population.59 CN is concerned
that certain communities located on tribal lands already have non-tribal-owned commercial transmission
services, and that the existence of such stations would unfairly preclude the initiation of tribal-owned
NCE service.60 We understand CN’s concern, given our observation that radio stations owned by Tribes
are not only scarce, but are necessary to provide specific programming developed to meet tribal needs.
Those needs may be met, in different ways, by commercial and NCE stations, and given the above-noted
under-representation of tribal radio ownership in both the commercial and NCE spheres, the goals
underlying the Tribal Priority are not undermined by allowing Tribes to claim the priority for both types
of station in the same community. That is, a tribal-owned NCE applicant may qualify for a Tribal
Priority, notwithstanding the fact that a tribal-owned commercial station is licensed at the same
community. We are convinced that such an accommodation should be made to recognize the unique
nature of tribal-owned radio services, and thus modify the third prong of the test for tribal-owned NCE
applicants as we did for commercial applicants.61 To qualify for the Tribal Priority, we conclude that a
tribal applicant seeking NCE facilities will promote Section 307(b) goals by meeting the tribal lands 50
percent signal coverage and community of license requirements, and also by demonstrating that it will
provide the first tribal-owned NCE transmission service at the proposed community of license. If a tribal
NCE applicant meets these criteria, it will not be compared to other mutually exclusive applicants on a
fair distribution basis, but will be the tentative selectee. As is the case with commercial applicants, the
Tribal Priority will not take precedence over a bona fide proposal to provide first aural reception service
to a significant population.
23.
If two or more mutually exclusive proposals from tribal NCE applicants qualify for a
Tribal Priority, proposing first local tribal-owned NCE service at the same community, the tentative
selectee will be the applicant proposing service to the greatest population on tribal lands. The goals of the


56 Id.
57 NPM/NCAI Joint Reply Comments at 9-10.
58 In other words, the Tribal Priority as proposed would be available to applicants claiming to provide first aural
(reception) service, second aural service, or first local transmission service, Priorities (1) through (3) of the four
priorities set out by the Commission in making Section 307(b) analysis. The Commission accords co-equal status to
the second and third allotment priorities. FM Assignment Policies, 90 FCC 2d at 91-93.
59 See NCE R&O, 15 FCC Rcd at 7396-99; NCE MO&O, 16 FCC Rcd at 5087-91. See also 47 C.F.R. § 73.7002(b).
60 See supra note 42.
61 See supra para. 13.
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Federal Communications Commission FCC 10-24

Tribal Priority would not be served if the priority were to be negated any time mutually exclusive tribal
NCE applicants propose the same community on tribal lands. We will not require the 5,000-person
differential that exists in the current NCE analysis, but we add the “on tribal lands” requirement so as to
award the permit to the applicant most successfully meeting the Tribal Priority’s goal of providing service
to underserved tribal communities. Moreover, we will make this comparison even if the mutually
exclusive tribal applicants propose first local NCE service at different communities, unlike the usual
Priority (3) analysis, under which the most populous community receives a dispositive Section 307(b)
preference.62 We believe the goals of the Tribal Priority are better served by selecting a smaller
community that provides greater reception service than by choosing a more remote, but slightly larger,
community. Thus, we will apply the foregoing comparison between mutually exclusive NCE applicants
claiming the Tribal Priority, whether they propose the same or different communities of license. For the
same reason, mutually exclusive applicants claiming the Tribal Priority for commercial facilities, and
proposing first local transmission service at the same community or at different communities, will be
compared based on service to the greatest population on tribal lands.
24.
We do not, however, adopt CN’s request that we open a supplemental filing window for
tribal NCE applicants with pending applications in mutually exclusive groups from the October 2007
NCE filing window that do not as yet have tentative selectees. CN argues that the Commission may
apply modified processing policies and rules to pending applications.63 However, the Media Bureau has
made tentative selections in a substantial majority of those mutually exclusive NCE groups that will be
determined under the fair distribution criterion. We do not believe it fair to subject the minority
remainder to the new rules. Thus, we will begin applying the Tribal Priority to NCE applicants beginning
with the next NCE filing window.
25.
Upon our own consideration of the Rural NPRM, and review of pertinent federal law, we
are no longer convinced that extending the Tribal Priority to individual members of Tribes, or entities
owned by individuals without ownership by the Tribes themselves, advances the Commission’s interest in
helping promote tribal self-sufficiency and economic development, and endeavoring to ensure that Tribes
and tribal communities have adequate access to communications services.64 It is well established that the
Commission deals with Tribes on a government-to-government basis, and that our trust relationship is
with the Tribes and tribal governments themselves, rather than individual members of Tribes.65 A reading
of the Tribal Policy Statement makes clear that, as an independent federal agency, we look to the tribal
governments, rather than to individual members of Tribes, to determine communications policies that best
serve the needs of their respective communities.66
This policy recognizes that Tribes and their


62 See Blanchard, Louisiana and Stephens, Arkansas, Report and Order, 10 FCC Rcd 9828, 9829 (1995) (when
comparing first local service proposals for two well-served communities, the Commission bases its decision on a
straight population comparison between the communities, even when the population differential is as small as 38
persons).
63 CN Comments at 5-6.
64 Rural NPRM, 24 FCC Rcd at 5248-49. See also Tribal Policy Statement, 16 FCC Rcd at 4080-81.
65 Id. at 4079-81.
66 See, e.g., id. at 4081 (“The Commission will endeavor to work with Indian Tribes on a government-to-
government basis consistent with the principles of Tribal self-governance to ensure, through its regulations and
policy initiatives, and consistent with Section 1 of the Communications Act of 1934, that Indian Tribes have
adequate access to communications services.”).
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Federal Communications Commission FCC 10-24

governments are primarily concerned with the needs of all tribal citizens. As explained by NPM and
NCAI:
As more Tribal broadcasters develop and broadcast culturally related content, unique to
their Tribal subject matter and often in Tribal languages, the Commission would be
advancing the important federal goal of providing for Tribal cultural and historic
preservation. Importantly, the Commission would also be rationally furthering the
laudable goal it has pursued since 2000, found in the very first and very last of its
enumerated Tribal Policy Statement Goals and Principles, by addressing in a
government-to-government manner with Tribes the development of policy to remove
regulatory barriers to the deployment of, and adequate access to, communications service
to Tribes and their communities.67
In contrast, individual members of tribes are not necessarily bound to take such factors into account, but
may make programming decisions based on their own preferences or business reasons. We therefore
believe that by limiting the Tribal Priority to Tribes themselves, we not only further “the legitimate
governmental objective of preserving Native American culture,”68 but we also promote the federal
government’s interest in furthering tribal self-government.69
26.
Thus, we conclude that the Tribal Priority should extend only to (1) Tribes; (2) tribal
consortia; or (3) entities that are 51 percent or more owned or controlled by a Tribe or Tribes. We will
use our general attribution rules to determine the ownership or control of any such qualifying entities.70
We also add the requirement that qualifying Tribes or tribal entities must be those at least a portion of
whose tribal lands lie within the proposed station’s principal community contour. The principal
community contour must still cover at least 50 percent of tribal lands (subject to the provisos proposed in
the Rural NPRM, including those on “checkerboarded” tribal lands),71 but they need not all be the same
Tribe’s lands. Tribes whose lands are not covered by the proposed facility may invest or sit on
controlling boards, but their investments or board membership will not count toward the 51 percent
threshold.
27.
Accordingly, we adopt the Tribal Priority as proposed in the Rural NPRM with the
following modifications: (1) we will allow assignments or transfers of permits or licenses obtained using
the Tribal Priority during the four-year holding period, provided that the assignee/transferee also qualifies
for the Tribal priority in all respects;72 (2) with regard to NCE permittees or licensees who obtained their
authorization using the Tribal Priority, we will permit gradual changes in the governing board during the


67 NPM/NCAI Joint Comments at 9. See also CN Comments at 2 (“The Cherokee Nation Proposed Stations will
educate with Cherokee language programming and provide Cherokee Nation citizens access to news about issues
and events important to the Cherokee community and culture, programming which is not otherwise easily
accessible.”).
68 Peyote Way Church of God, Inc. v. Thornburgh, 922 F.2d 1210, 1216 (5th Cir. 1991).
69 See, e.g., Morton, 417 U.S. at 555.
70 Our attribution rules are found in 47 C.F.R. § 73.3555 and Notes 1 and 2 to that rule.
71 Id. at 5248-49 and n.30.
72 See supra para. 18.
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Federal Communications Commission FCC 10-24

four-year holding period, as long as the 51 percent tribal control threshold is maintained;73 (3) eligibility
to claim the Tribal Priority is limited to Tribes, tribal consortia, or entities 51 percent or more owned or
controlled by a Tribe or Tribes;74 (4) with regard to entities 51 percent or more owned or controlled by
Tribes, the 51 or greater percent need not consist of a single Tribe, but 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;75 (5) the requirement of principal community coverage of 50
percent or more of tribal lands does not require that those lands belong to the same Tribe;76 (6) to qualify
for the priority, a tribal commercial applicant must propose first or second aural (reception) service or
first local commercial tribal-owned transmission service at the proposed community of license;77 and (7)
to qualify for the priority, a tribal NCE applicant must propose a first local NCE tribal-owned
transmission service at the proposed community of license.78 As did Prometheus/NFCB, NPM/NCAI
request that the Tribal Priority be implemented immediately. However, NPM/NCAI also request that we
promulgate an FNPRM addressed to two issues: (1) the implementation of a bidding credit to be
employed by qualifying Tribal applicants in auctions, and (2) a mechanism for non-landed Tribes to make
a showing qualifying them for the Tribal Priority. These issues are addressed at paragraph 64, below.

B.

Limit the Downgrading of Proposed AM Facilities After Receiving Dispositive
Section 307(b) Preference.

28.
Background. In the Rural NPRM, the Commission stated that when a mutually exclusive
AM auction filing window applicant receives a dispositive preference under Section 307(b), it should not
be allowed to downgrade that proposal to serve a smaller population, or otherwise negate the factors that
led to the award of the dispositive preference. Such actions, in the Commission’s view, would encourage
“gaming” of the Section 307(b) process.79 As such, it tentatively concluded that AM licensees or
permittees receiving Section 307(b) preferences should be required, for a period of four years, to provide
service substantially as proposed in their short-form tech box submissions, in the same manner that NCE
FM applicants who receive a decisive preference for fair distribution of service are precluded from
downgrading service to the area on which the preference is based for a period of four years of on-air
operations.80 In addition to seeking general comment on this proposal, the Commission sought specific
comment on the amount of time such a licensee or permittee should be precluded from downgrading, i.e.,
whether it should be four years, as with NCE FM applicants, or some other period of time.
29.
Discussion. For the reasons set forth below, based on an examination of the record, we
adopt a modified version of our proposal to limit the downgrading of proposed AM facilities that receive


73 Id.
74 See supra para. 26.
75 Id.
76 Id.
77 See supra para. 13.
78 See supra paras. 22-23.
79 Rural NPRM, 24 FCC Rcd at 5250.
80 47 C.F.R. § 73.7005(b).
15

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a dispositive Section 307(b) preference. We believe that this limitation will protect the integrity of the
application process while adequately addressing the challenges faced by AM broadcasters. Eight
commenters addressed this issue, voicing varying degrees of concern. H&D urges the Commission to
provide some level of flexibility for new AM stations that have received a dispositive Section 307(b)
preference, and notes that if applicants must operate facilities “substantially as proposed” then the
Commission should provide a bright-line definition of this phrase, to provide certainty for applicants and
Commission staff.81
Several commenters call the proposal “impractical,” stating that post-grant
transmitter site modifications (and resulting changes in coverage) are often necessary for business,
technical, and environmental reasons.82 MEI states that such an approach in the NCE context has proved
to be “overly burdensome,” while BFIT and AMS each contend that adoption of the proposal would result
in a reduction in the number of new AM stations licensed from each auction filing window.83 As an
alternative, AMS, MEI and Educational Media Foundation (“EMF”) suggest that we allow winning
applicants to change sites and coverage areas so long as they continue to serve substantially the same
number of underserved persons who would have received service under the initial proposal, such that the
modified coverage area would be essentially equivalent from a Section 307(b) perspective.84
30.
We continue to believe that certain procedural safeguards are necessary to protect the
integrity of our Section 307(b) analyses. However, we agree with commenters that, given the realities
faced by licensees and permittees in securing and maintaining transmitter sites, allowing a certain level of
flexibility in implementing AM proposals will help expedite the commencement of new service and
reduce the possibility of unbuildable construction permits. Thus, to the extent underserved populations
(under Priority (1), Priority (2), and potentially Priority (4)) or service totals (under Priority (4)) are
relevant to our analysis, we will adopt the “equivalency” proposal described above: an AM licensee or
permittee receiving a dispositive Section 307(b) preference may modify its facilities so long as it
continues to provide the same priority service to substantially the same number of persons who would
have received such service under the initial proposal, even if the population is not the same population
that would have received service under the initial proposal.85 As used here, “substantially” means that


81 H&D Comments at 4. H&D also suggests that we should more actively enforce the requirement that applicants
have reasonable site assurance at the time of filing, noting that lack of reasonable site assurance “can lead to a
situation where a subsequent amendment or modification cannot serve substantially the same area.” Id. However,
site availability is not relevant in the context of technical proposals submitted with a short-form application (FCC
Form 175), which are the foundation for our Section 307(b) determinations. Instead, the issue before us is whether
an applicant can receive a dispositive Section 307(b) preference over mutually exclusive auction applicants, but then
submit a different technical proposal, without the proposed Section 307(b) benefits, in its FCC Form 301
application. Up to this point, we have relied upon informal processing policies to prevent such a change.
82 American Media Services (“AMS”) Comments at 4; BFIT Comments at 7; Amador S. Bustos and Bustos Media
Holdings, LLC (“Bustos”) Comments at 4; Vir James Comments at 7. See also JBB Comments at 3 (“Commission
policies must reflect … economic reality”).
83 MEI Comments at 7; BFIT Comments at 7; AMS Comments at 4.
84 AMS Comments at 4; MEI Comments at 7; EMF Comments at 9. MEI further suggests that both AM and NCE
FM proposals should be permitted to change the original area served provided the raw Section 307(b) “population”
is not reduced by more than 15 percent, and provided that the resulting value would still result in the preference
awarded over other mutually exclusive applicants. MEI Comments at 8.
85 The Media Bureau bases its Section 307(b) determinations on its analysis of parties’ Section 307(b) showings,
submitted in response to a public notice announcing the mutually exclusive groups among the parties that submitted
(continued…)
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Federal Communications Commission FCC 10-24

any proposed modification must not result in a decrease of more than 20 percent of any population figure
that was a material factor in obtaining the dispositive Section 307(b) preference.86 Moreover, a licensee
or permittee that has received a dispositive preference under Priority (3) will be prohibited from changing
its community of license.87 Because we received no comments suggesting any alternative timeframes, we
will impose these restrictions for a period of four years of on-air operations, consistent with our rules
governing NCE FM stations. Construction permits and licenses issued to these parties will contain
conditions delineating these restrictions.
31.
We believe that the unique technical challenges involved in building a new AM station
justify our decision to adopt a more flexible standard than that which is currently applied in the NCE
context. Except in unusual cases, a new AM transmission system will be a directional (i.e., multi-tower)
array, rather than the single tower used for a new FM station.88 Such a system presents difficult issues of
cost, complexity and zoning/environmental compliance.89
Given these issues, coupled with our
commitment to help revitalize the AM band,90 we believe that such additional flexibility is warranted for
new AM stations, and find the “equivalency” proposal adopted herein both adequately addresses the
realities faced by AM broadcasters and furthers our goal of protecting the integrity of the application
process.

C.

Establish “Technically Eligible for Auction Processing at Time of Filing” Criteria
for AM New and Major Change Applications.

32.
Background. In the Rural NPRM, the Commission observed that our current auction
processing rules limit technical review of basic engineering data filed with AM short-form applications
“only to the extent necessary to determine the mutually exclusive groups of applications.”91 This practice,





(Continued from previous page)
FCC Forms 175 for a particular auction. The dispositive Section 307(b) preference is established in the Media
Bureau’s decision announcing such a preference within a mutually exclusive group.
86 For example, if an AM licensee or permittee receives a dispositive Priority (4) preference for proposing to provide
a third aural service to a population of 500 persons and service to an overall population of 100,000, it may not file an
FCC Form 301 application that would provide a third aural service to fewer than 400 persons or service to an overall
population of less than 80,000. The same analysis applies to any party that receives a dispositive Priority (1) or
Priority (2) preference. We recognize that in some cases this may result in a reduction of service below that
presented by a competing proposal in the Section 307(b) analysis, but there is no guarantee that the competing
proposal could have been effectuated as proposed in such cases.
87 See Rivers, L.P., Letter, 23 FCC Rcd 4521 (MB 2007).
88 See MEI Comments at 7.
89 Id.; see also AMS Comments at 4; Australian Communications and Media Authority, “AM radio issues” (January
2006) at 41-42 (http://www.acma.gov.au/webwr/_assets/main/lib100068/amradio_issues.pdf, accessed Dec. 7,
2009).
90 See, e.g., Review of Technical Assignment Criteria for the AM Broadcast Service, Report and Order, 6 FCC Rcd
6273 (1991) (subsequent history omitted).
91 Rural NPRM, 24 FCC Rcd at 5251. 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, 15996-97 (1998) (“Broadcast Auction First Report and Order”), on recon.,
(continued…)
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stated the Commission, has contributed to the filing of patently defective applications, which potentially
undermine the accuracy and reliability of mutual exclusivity and Section 307(b) determinations, and
frustrate the staff’s ability to manage the window filing process efficiently.92 The Commission further
stated that it believed that such defective applications may preclude the filing of meritorious modification
applications by existing facilities, which must protect the prior-filed defective applications. It noted that
in AM Auction No. 84, the Media Bureau appropriately determined that of the 1,311 tech box proposals
filed, 188 were ineligible for further processing. Moreover, applicants failed to submit long-form
applications for 91 of the 321 Form 175 singleton proposals. Finally, the staff found technical
deficiencies in 68 of the 230 singleton long-form applications.93
33.
Given the high percentage of defective filings, the Commission tentatively concluded that
Section 73.3571(h)(1)(ii) should be modified to require that applicants in future AM broadcast auctions
must, at the time of filing, meet the following basic technical eligibility criteria: (1) community of license
coverage (day); (2) community of license coverage (night);94 (3) daytime protection of existing AM
facilities and prior-filed proposed AM facilities; and (4) nighttime protection of existing AM facilities and
prior-filed proposed AM facilities.95 It also tentatively concluded that the rules should be modified to
prohibit the amendment of applications that, at time of filing, are technically ineligible to proceed with
auction processing, and prohibit applicants that propose such technically ineligible applications from
participating in the auction process. The Commission stated that the proposal would preclude attempts to
amend or correct data submitted in Form 175 or the tech box, including proposals to change community
of license before an applicant has been awarded a construction permit.96
34.
Discussion. Based on our examination of the record, we adopt the basic technical
eligibility criteria proposed in the Rural NPRM, but we will provide applicants with a one-time
opportunity to amend their short-form applications to conform to our rules pursuant to the procedures set
forth below. The commenters addressing this issue were largely supportive of the proposal, agreeing with
the Commission’s determination that requiring compliance with basic technical rules would deter patently
defective, frivolous, and speculative filings.97 EMF states that defective applications unnecessarily





(Continued from previous page)
Memorandum Opinion and Order, 14 FCC Rcd 8724 (1999) (“Broadcast Auction MO&O”), on further recon.,
Memorandum Opinion and Order, 14 FCC Rcd 14521 (1999). The basic engineering information, sometimes
referred to as the “tech box,” is a subset of the information required for the Form 301 long-form application
submitted in conjunction with Form 175. This short-form procedure is employed in the auctionable AM, FM, FM
translator, TV translator, and LPTV services, where mutual exclusivity is determined by analysis of engineering
data.
92 Rural NPRM, 24 FCC Rcd at 5251.
93 Id.
94 47 C.F.R. § 73.24(i).
95 Id. §§ 73.37, 73.182.
96 Rural NPRM, 24 FCC Rcd at 5252.
97 EMF Comments at 10; H&D Comments at 5; Bustos Reply Comments at 1-2; BFIT Comments at 8; Robert A.
Lynch (“Lynch”) Comments at 6 (noting that current system places well-researched technical proposals on same
footing as hasty, “slipshod” initiatives); Vir James Comments at ¶ 9 (stating that patently defective applications
should be culled from the filings).
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impact potential minor changes of existing stations and can have serious adverse public interest
consequences.98 H&D notes that defective proposals create larger and more cumbersome mutually
exclusive groups (“MX Groups”), and complicate engineering solutions and settlements.99 It further
observes that dismissal of a technically flawed application could split one large MX group into two or
more smaller MX groups, thus allowing the Commission to award additional construction permits.100
35.
Lynch emphasizes that “basic technical eligibility criteria” should include compliance
with community coverage standards, and daytime and nighttime interference protection of existing
stations and prior-filed proposals.101 MEI states that applications with proposed daytime facilities that
would result in prohibited contour overlap to outstanding authorizations or prior-filed pending domestic
applications should be considered patently defective if the “linear distance of said objectionable overlap
exceeds more than 25 percent of the distance to the pertinent interference contour. . . .”102 It further states
that nighttime proposals that “enter 50 percent RSS exclusion of those same types of stations should be
considered patently defective.”103 On the other hand, MEI asserts that AM applications being processed
as “singletons” or as “auction winners” that propose a change in city of license prior to grant of the initial
permit should be “routinely permitted to do so,” maintaining that these types of applications are not
subject to 307(b) analysis and thus “should be permitted to improve [their proposals] or even cure a lack
of principal community coverage in this way.”104 It maintains that to prohibit such changes “simply
denies additional radio service to the public.”105
36.
While generally supportive of the proposal, several commenters cautioned that subjecting
applicants to what they consider the functional equivalent of the former FM “hard look” doctrine106 is
impractical, because uncertainties created by the Commission’s purported use of unpublished technical
policies, the differences between the Commission’s computer programs and those used by consulting


98 EMF Comments at 10.
99 H&D Comments at 5. H&D also asks that we “extend this principle to the NCE FM service.” Id. Issues relating
to the FM reserved band are beyond the scope of this proceeding, and we therefore will not consider this proposal.
100 Id.
101 Lynch Comments at 6. Lynch goes on to state that “any pending application from AM Auctions Nos. 32 and 84
should be made subject to the pre-auction criterion, and that participants in these auctions should be given a
“reasonable opportunity to correct their proposals in ways that would not eliminate mutual exclusivities or constitute
major modifications,” thus ensuring that “only buildable stations would be subject to bid.” Id.
102 MEI Comments at 9.
103 Id.
104 Id. at 9-10.
105 Id. at 10.
106 Under the former “hard look” processing policies, the Commission would not accept nunc pro tunc curative
amendments to correct certain patent defects in commercial broadcast station application filings. See Amendment of
Sections 73.3572 and 73.3573 Relating to Processing of FM and TV Broadcast Applications
, Report and Order, MM
Docket No. 84-750, 50 FR 19936 (May 13, 1985), recon. denied, Memorandum Opinion and Order, 50 FR 43157
(Oct. 24, 1985), affirmed sub nom. Hilding v. FCC, 835 F.2d 1435 (9th Cir. 1987).
19

Federal Communications Commission FCC 10-24

engineers,107 and issues surrounding protection of international stations often necessitate the filing of
modifications.108
JBB states that retaining the “30-day letter” policy109 is critical, and urges the
Commission not to modify its policy regarding minor curative amendments.110
Other commenters
echoed this sentiment, urging the Commission to retain some measure of flexibility in its pre-auction
procedures.111
37.
For the reasons stated above, and as supported by the majority of commenters responding
to this issue, we adopt the proposed rule changes set forth in the Rural NPRM. As discussed above, there
are four “basic technical eligibility criteria” that must be met at the time of filing.112 However, to
alleviate concerns raised by some commenters, we will provide applicants with a one-time opportunity to
file curative amendments to their short-form applications. Specifically, if the staff review shows that an
application does not meet one or more of the four eligibility criteria, it will be deemed “technically
ineligible for filing” and will be included on a Public Notice (the “Technically Ineligible Notice”). The
Technically Ineligible Notice will list defective applications identified by the staff during their initial
review of the application, will identify which of the four defects that the applicant must correct, and will
set the deadline for doing so. Only applicants whose applications are included in the Technically
Ineligible Notice may file curative amendments.113 Applicants cannot modify any part of a proposal not
directly related to an identified deficiency in their curative amendments. Specifically, applicants may
only modify the AM technical parameters of the short-form application, such as power, class (within the
limits set forth in Section 73.21 of the Rules),114 antenna site or other antenna data. Amendments seeking


107 BFIT Comments at 8 (noting Commission’s use of “unpublished” technical policies and differences between the
Commission’s computer programs and those used by consulting engineers); JBB Comments at 4; Vir James
Comments at ¶ 9 (noting alleged discrepancies between the Commission’s computer programs and the formulas set
forth in Part 73 of the Rules).
108 MEI Comments at 9 (stating that because protection of foreign stations is hampered by problems with data
reliability, such evaluation by Commission staff should only be required prior to grant); Lynch Comments at 7
(stating that applications can be subject to policy changes or revisions of international agreements which can alter
the standing of Canadian or Mexican authorizations); BFIT Comments at 8 (discussing international considerations);
JBB Comments at 4 ; Vir James Comments at ¶ 9.
109 See 47 C.F.R. §§ 73.3522(c)(2) and 73.3564(a)(3).
110 JBB Comments at 4.
111 MEI Comments at 9 (protection of foreign stations should be evaluated only prior to grant); Lynch Comments at
7 (noting that sometimes a defect is not noted until the applications is in the processing line; proposing a two-stage
procedure where applicants first file their short-form application followed by a full engineering submission after the
Commission identifies competing proposals); Vir James Comments at ¶ 9 (urging some level of flexibility at early
auction proposal stage).
112 As a threshold matter, we note that all applications must contain the following data: (1) community of license; (2)
frequency; (3) class; (4) hours of operations (day, night, critical hours); (5) power (day, night, critical hours); (6)
antenna location (day, night, critical hours); and (7) antenna data (nondirectional or directional; day, night, critical
hours). Applications lacking any of these categories of data will be immediately dismissed without an opportunity
for amendment.
113 This one-time opportunity to file a curative amendment is restricted to the tech box submission portion of new
and major change AM broadcast applications and is distinct from the limited opportunity to cure defects provided
under Section 1.2105(b)(2), which occurs later in the pre-auction process.
114 47 C.F.R. § 73.21.
20

Federal Communications Commission FCC 10-24

to change a proposed community of license or frequency will not be accepted. We emphasize that by this
rule change we do not intend to disturb our determination that full technical review of applications will
not occur until winning bidders file long-form applications after an auction.115 We further note that this
opportunity to cure is not a settlement opportunity under Section 73.5002(d) of our Rules, and will occur
prior to the disclosure by the Commission of any information on applications submitted during the short-
form filing window.116 We believe that this approach will accomplish our administrative goals without
depriving applicants of needed flexibility. If we find that many MX groups are being delayed
significantly because of the dismissal/amendment process, or if it appears that many applicants are
attempting to use this process to gain an unfair advantage over those applicants initially filing technically
acceptable applications, the Commission may revisit the issue prior to subsequent AM windows.

D.

Codify the Permissibility of Non-Universal Engineering Solutions and Settlement
Proposals

38.
Background. In the Rural NPRM, the Commission noted that the broadcast anti-collusion
rules apply generally upon the filing of a short-form application.117 However, Section 73.5002(d) of the
Rules provides applicants in certain MX Groups a limited opportunity to communicate during specified
settlement periods in order to resolve conflicts by means of technical amendment or settlement.118 This
exception to the anti-collusion rules applies only to those MX Groups that include either (1) at least one
AM major modification; (2) at least one NCE application; or (3) applications for new stations in the
secondary broadcast services. Currently, the rule neither prohibits the Commission from accepting non-
universal technical amendments or settlement proposals – which reduce the number of applicants in a
group but do not completely resolve the mutual exclusivities of that group – nor requires it to do so.119 In
two previous AM auctions, the Media Bureau specifically accepted non-universal technical amendments
and settlement proposals in the “interest of expediting new service to the public,”120 provided that the
filing would result in the grant of at least one singleton application.
39.
Given the success of this established staff practice, the Commission tentatively concluded
that it should codify this processing policy. The Commission further proposed to limit technical
amendments filed pursuant to this policy to amendments that resolve all technical conflicts between the
amending application and each of the other applications in the particular MX Group. If the applicant did
not resolve all of its own application’s mutual exclusivities, its amendment would not be accepted.


115 See Broadcast Auction First Report and Order, 13 FCC Rcd at 15978.
116 Accordingly, under Sections 1.2105(c) and 73.5002(d) of the Commission’s Rules, which apply upon the filing
of short-form applications, applicants for construction permits in any of the same geographic license areas are
prohibited from communicating with each other about bids, bidding strategies, or settlements unless such applicants
have identified each other on their short-form applications. 47 C.F.R. §§ 1.1205(c) and 73.5002(d).
117 Rural NPRM, 24 FCC Rcd at 5252.
118 47 C.F.R. § 73.5002(d).
119 Rural NPRM, 24 FCC Rcd at 5252-53.
120 See, e.g., AM Auction No. 84 Mutually Exclusive Applicants Subject to Auction, Settlement Period Announced
for Certain Mutually Exclusive Application Groups
, Public Notice, 20 FCC Rcd 10563 (MB/WTB 2005).
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Federal Communications Commission FCC 10-24

40.
Discussion. Based on our examination of the record, we codify the permissibility of non-
universal engineering solutions and settlement proposals as proposed in the Rural NPRM. Each of the
five comments filed on this issue supported this proposal.121 These commenters agreed that this approach
was successful in the October 2007 NCE FM filing window,122 and would facilitate settlements.123 MEI
states that this processing policy could break large MX Groups into smaller groups and result in a greater
number of grants.124 EMF suggests that we allow applicants to file settlements as soon as applications are
on file, rather than only during designated windows.125 H&D proposes that the Commission codify the
policy employed in the October 2007 NCE FM filing window, which allowed an applicant to file an
amendment as long as at least one application becomes a singleton.126 Likewise, CRA states that the
Commission should permit technical amendments that would produce any singleton regardless of whether
the amendment produces singleton status for the amending applicant.127
41.
As the Commission tentatively concluded in the Rural NPRM, we agree with the
commenters that accepting non-universal technical amendments and settlement proposals is an effective
means for facilitating the introduction of new service, as long as this process results in at least one
singleton application that proceeds to long-form processing. This practice worked well in the October
2007 NCE window. In this regard, we are unpersuaded by commenters’ arguments to permit technical
amendments that do not result in the potential grant of at least one singleton application. We find that the
proposed restriction not only promotes the initiation of new service, but also fairly balances burdens
between applicants to resolve all conflicts with respect to at least one application and the Commission to
expeditiously process the thousands of applications typically submitted during a short-form or application
filing window for new radio stations. Accordingly, we will revise our rules to permit non-universal
technical amendments and settlement proposals that result in at least one singleton application from an
MX Group. Finally, we note that NPM/NCAI, apparently misunderstanding our proposal, express
concern that “creating a burden to resolve all mutual exclusivities with respect to the other applications in
the specified [MX] group may create significant technical difficulties that Tribes and small communities
with fewer resources will be less capable of meeting.”128 However, an applicant submitting a technical
amendment pursuant to this policy is required only to resolve all mutual exclusivities for at least one
application in the relevant MX Group, but need not resolve all technical conflicts among all applications
in that group.


121 CRA, EMF, H&D, MEI, and NPM/NCAI filed comments on this issue.
122 H&D Comments at 6.
123 CRA Comments at 7-8.
124 MEI Comments at 10.
125 EMF Comments at 10-11.
126 H&D Comments at 6-7.
127 CRA Comments at 8.
128 NPM/NCAI Joint Comments at 14.
22

Federal Communications Commission FCC 10-24

E.

Delegate Authority to Cap Number of AM Applications That May Be Filed in a
Short-Form Filing Window.

42.
Background. The Commission observed in the Rural NPRM that the Rules currently do
not limit the number of AM Tech Box applications129 that may be filed with the (non-feeable) FCC Form
175 during an AM short-form filing window.130 It noted that an increasing number of applicants had
availed themselves of the opportunity to file multiple technical submissions, and questioned whether a
significant percentage of AM short-form filing window applications were merely speculative.131
Accordingly, the Commission sought comment on whether (1) to delegate to the Bureaus authority to
limit, in an AM short-form filing window, the number of tech box submissions that an applicant could file
with Form 175 and, if so, the appropriate limitation on this delegation; and (2) to apply Commission
attribution standards to determine the number of filings submitted by any party, to guard against the use
of affiliates or even sham entities to circumvent such a cap. The Commission also sought comment on
how application caps could impact small business entities, and whether caps would be a useful
mechanism to balance the Commission’s competing interests in promoting new and expanded broadcast
services and its statutory obligation to prevent abuses of its licensing procedures.132
43.
Discussion. Based on examination of the record, we adopt our proposal to delegate
authority to the Bureaus to limit the number of Tech Box submissions that an applicant may file with
Form 175 in an AM short-form filing window. Commenters focused principally on application caps
rather than the delegated authority issue. Eight commenters favored specific AM auction application
caps, ranging from five to ten applications. BFIT and NPM/NCAI state that a five-application cap would
reduce the number of applications filed by speculators.133 Lynch states that a five-application cap would
diversify broadcast ownership and maximize opportunities for new entrants.134 H&D,135 JBB,136 and Vir
James137 each support adoption of a ten-application cap. MEI supports an application cap, but only to
applications that are located within 25 miles of another application by the same entity.138 Only H&D


129 The AM “Tech Box” is Section III-A of Form 301-AM. See, e.g., AM New Station and Major Modification
Auction Filing Window
, Public Notice, 18 FCC Rcd 23016 (MB 2003).
130 Rural NPRM at 5253 and n.55.
131 Specifically, in AM Auction No. 32, 171 applicants filed a total of 258 technical proposal, and in AM Auction
84, 460 discrete applicants filed a total of 1,311 technical proposals.
132 Rural NPRM at 5254.
133 BFIT Comments at 5; NPM Comments at 13-14. See also Bustos Comments at 4 (supporting a seven-application
cap, maintaining that a cap would prevent abuses during AM filing windows).
134 Lynch Comments at 8. See also NPM Comments at 13-14.
135 H&D Comments at 8.
136 JBB Comments at 2.
137 Vir James Comments at 4. Vir James also voices concern over the length of time between auction windows and
construction permit grants, noting that it requires applicants to guess where service will be desirable as much has
eight to 10 years in the future. Id.
138 Mullaney Comments at 10. Mullaney notes that if an applicant files only one application that turns out to be
mutually exclusive with another application, it could lose the opportunity to become an AM broadcaster altogether.
(continued…)
23

Federal Communications Commission FCC 10-24

commented on the issue of attribution, suggesting that the Commission adopt the attribution standards
utilized in the October 2007 NCE filing window.139
44.
Conversely, EMF states that an application cap would limit an applicant’s choices and
strategies in an application window.140 It further asserts that imposition of a cap would deter applicants
from submitting proposals that would serve smaller markets and rural areas.141 To the extent that a cap is
imposed, EMF asserts that it should only apply to applications that propose to serve larger markets, such
as the Top 100 Arbitron markets.
45.
Although we did not specifically seek comment on this issue, several commenters also
suggested that the Commission implement a filing fee for short-form applications. BFIT proposes that a
$3,000 application fee should be charged in order to cover the costs incurred in processing and evaluating
Section 307(b) criteria in mutual exclusivity situations.142 JBB and Bustos propose fees of several
thousand dollars, and further propose we require applicants to submit a full engineering showing with
each application.143
46.
We find that delegating authority to the Bureaus to impose application caps in AM short-
form filing windows will help to prevent speculative applications. This will decrease the likelihood of
mutually exclusive applications, which will in turn decrease the likelihood of large, technically complex,
and administratively burdensome MX Groups. By reducing the administrative burden on the Bureaus,
which have limited resources, a cap also can help expedite application processing and prevent abuses of
our licensing procedures. We believe the same considerations that led the Commission to impose an
application cap in the 2007 NCE FM window apply equally to AM application filing windows. We
anticipate that a cap on applications also will enable the Media Bureau to open AM short-form filing
windows more frequently, thereby promoting – rather than restricting – new entrant opportunities.144
Accordingly, we delegate authority to the Bureaus to determine, for each AM short-form window,
whether to limit the number of AM applications that may be filed by an applicant and, if so, the
appropriate application cap. This approach will permit tailoring of any limitations to the particular
circumstances presented by future auctions. We also delegate to the Bureaus authority to adopt
attribution standards to effectuate the goals of an application cap, and to ensure compliance with this
restriction. We direct the Bureaus to provide notice and an opportunity for comment on a cap limit and





(Continued from previous page)
It also urges the Commission to allow applicants to file amendments to a non-adjacent frequency, stating that this
would be beneficial in areas where multiple frequencies are available. Id.
139 H&D Comments at 8. In the October 2007 NCE filing window, the Bureau determined that a party to an
application could hold attributable interests in no more than ten applications filed in the window based on the NCE
attribution standards set forth at 47 C.F.R. § 73.3555(f) . See FCC Adopts Limits for NCE FM New Station
Application in October 12 – October 19, 2007 Window
, Public Notice, 22 FCC Rcd 18699, 18704 (2007) (“NCE
Cap Order
”).
140 EMF Comments at 11.
141 Id.
142 Id. See also Vir James Comments at 4 (stating that a filing fee would offset administrative costs).
143 JBB Comments at 2; Bustos Comments at 4 (proposing $2,500 filing fee).
144 See NCE Cap Order, 22 FCC Rcd at 18701.
24

Federal Communications Commission FCC 10-24

attribution standards prior to imposing these potential filing restrictions. In the event that the Bureaus
determine that an application cap is warranted, the cap limit and attribution standards will be announced
in the Public Notice establishing the dates for the Form 175 filing window. We decline, however, to
impose a filing fee, as suggested by some commenters, as we believe that the application cap, coupled
with the new requirement of technically acceptable submissions with applicants’ short-form applications,
will adequately deter speculative filings and prevent abuses of the Commission’s licensing processes.

F.

Modify Section 73.5005 to Provide Flexibility in the Deadline for Filing Post
Auction Long-Form Applications.


47.
Background. The Commission’s Rules currently provide, without exception, that each
winning bidder in a broadcast auction must submit an appropriate long-form application “[w]ithin thirty
(30) days following the close of bidding.”145 In the Rural NPRM, the Commission observed that this
inflexible 30-day time frame has, at times, proved to be problematic. For example, some FM auctions
have commenced during the first week of November, with bidding closing in mid- to late November. As
a result, the long-form application filing deadline has fallen during the holiday season, creating
predictable inconvenience both for applicants and their consultants.146
48.
Discussion. We adopt the Commission’s tentative conclusion in the Rural NPRM that
delegating authority to the Bureaus to extend the filing deadline for the submission of post-auction long-
form applications would benefit all involved in the auction process. Most commenters addressing the
issue agree that the current 30-day period does not allow time to compile the required technical data,
especially during holidays.147 MEI notes that giving applicants additional time to file reduces the need for
filing amendments with the Commission because applicants would have more time to incorporate the
required approvals (e.g., zoning and environmental) into the applications.148 McCoy, however, suggests
that instead of granting deadline extensions, auctions should be scheduled to avoid the holidays, stating
that permitting extensions will encourage requests for extensions and engender uncertainty.149 Although
the Commission remains sensitive to the burdens of imposing filing deadlines at certain times of the year,
we find that McCoy’s proposal would unreasonably limit the Commission’s ability to schedule and hold
auctions. H&D and MEI, while agreeing with the need for change, favored the predictability of amending
Section 73.5005 of the Rules150 to include a firm, longer deadline of 60 or 90 days.151 We decline to


145 47 C.F.R. § 73.5005(a). See 47 U.S.C. § 309(j)(15)(A) (authorizing the Commission to “determine the timing of
and deadlines for the conduct of competitive bidding under this subsection, including the timing of and deadlines for
qualifying for bidding; conducting auctions; collecting, depositing, and reporting revenues; and completing licensing
processes and assigning licenses.”).
146 See Rural NPRM, 24 FCC Rcd at 5254.
147 NPM/NCAI Joint Comments at 14, H&D Comments at 8-9 and MEI Comments at 12.
148 MEI Comments at 12.
149 McCoy Comments at 14. McCoy appears to believe that the Commission’s proposal was to provide ad hoc
extensions of time for individual auction applicants. A reading of the Rural NPRM and the proposed modification to
47 C.F.R. § 73.5005(a), however, should make it clear that the Commission proposed to delegate authority to staff to
extend the post-auction long-form application filing deadline for all applicants. See Rural NPRM, 24 FCC Rcd at
5254, 5267.
150 47 C.F.R. § 73.5005(a).
25

Federal Communications Commission FCC 10-24

adopt this proposal, because we are not persuaded that a longer filing period is necessary as a general
matter, and because this change would still not provide the flexibility to extend the deadline based on
particular circumstances. For example, if we were to take H&D and MEI’s suggestion and provide a firm
60-day post-auction filing deadline, we would still encounter the same problem when the 60th day fell in
late December or early January.152 Given the variable dates of auctions and holidays, we believe the
Commission’s proposal granting the staff delegated authority, on an auction-by-auction basis, to modify
the post-auction long-form filing deadline as needed provides optimal flexibility, enabling the staff to take
into account any and all factors that might impact auction winners.153 Accordingly, we will modify
Section 73.5005(a) of the Rules,154 as set forth in the Rural NPRM,155 to delegate authority to the Bureaus
to extend the filing deadline for the post-auction submission of long-form applications.156

G.

Clarify Application of the New Entrant Bidding Credit Unjust Enrichment Rule

.
49.
Background. To promote Section 309(j) objectives and further its long-standing
commitment to broadcast facility ownership diversity, the Commission adopted a tiered new entrant
bidding credit (“NEBC”) for broadcast auction applicants with no, or very few, other media interests.157
To meet the statutory obligation to prevent unjust enrichment, and to ensure that the NEBC had the
intended effect of aiding eligible individuals and entities to participate in broadcast auctions, the
Commission, following the general Part 1 auction rules, adopted rules in the Broadcast Auction First
Report and Order
requiring, under certain circumstances, reimbursement of bidding credits used to obtain
broadcast licenses.158
50.
Discussion. In the Rural NPRM, the Commission proposed to clarify certain issues
concerning the unjust enrichment provisions of the NEBC that had been raised during previous broadcast
auctions. Very few commenters addressed these specific issues. MEI pressed the Commission to take
this opportunity to revisit its implementation of the entire NEBC, calling for additional restrictions to be
put in force.159 For example, MEI recommends that the NEBC only be applied toward the four most





(Continued from previous page)
151 MEI Comments at 12. H&D Comments at 8-9.
152 This is not to suggest that there are not other times of year that could be similarly problematic, for example, the
Jewish High Holidays in the early autumn.
153 We also note that, in the initial Public Notice announcing an auction, the staff specifically seeks comment on
various auction procedures. At that time, potential applicants may offer their suggestions as to the post-auction
filing deadline they believe should apply to the auction.
154 47 C.F.R. § 73.5005(a).
155 Rural NPRM, 24 FCC Rcd at 5267.
156 We do not make any change here to the deadlines contained in the rule on auction payments, 47 C.F.R. §
73.5003.
157 Broadcast Auction First Report and Order, 13 FCC Rcd at 15992-97.
158
See 47 U.S.C. § 309(j)(4)(E) (in designing competitive bidding systems, Commission must require
“antitrafficking restrictions and payment schedules as may be necessary to prevent unjust enrichment”). See also 47
C.F.R. § 73.5007(c).
159 MEI Comments at 15.
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Federal Communications Commission FCC 10-24

expensive allotments that an entity acquires in an auction, and suggests that entities seeking the NEBC be
required to comply with the ownership restrictions at least 12 months prior to the auction. MEI offers no
explanation as to why such measures are needed to either preserve or advance the integrity of the current
designated entity policies. To the extent that MEI advocates a fundamental overhaul of specific NEBC
requirements, and their application in the broadcast auction processes in general, its requests are beyond
the scope of this rulemaking proceeding. Nor are we persuaded that a different approach is warranted at
this time. We find that the existing NEBC procedures best complement broadcast auctions, and provide
the optimum means for new entrants to successfully participate in broadcast service auctions, in
accordance with Section 309(j) of the Act.
51.
Definition of contour overlap for “same area” determination. Under Section 73.5007(b)
of the Rules,160 a winning bidder is not eligible for the NEBC if it, or any party with an attributable
interest in the winning bidder, has an attributable interest in any existing media facility in the “same area”
as the proposed new facility. The existing and proposed facilities are considered in the “same area” if
specified service contours of the two facilities overlap. In the FM service, in the pre-auction Form 175
application, an applicant may submit a set of “preferred site coordinates” as an alternative to the reference
coordinates for the vacant FM allotment upon which it intends to bid. The Commission recognized that
an applicant’s ability to protect its preferred site could be an important factor in establishing the monetary
value of a vacant FM allotment and a key consideration in its bidding strategy. Accordingly, the
Commission provided that the preferred site coordinates specified by prospective auction participants
would be entered into the Commission’s database and protected from subsequent filings.
52.
As described in the Rural NPRM, we sought to clarify that, for purposes of defining the
“same area” restriction for the NEBC, the contour of the proposed FM facility would be identified by “the
maximum class facilities at the FM allotment site
.”161 In that way, applicants could not attempt to avoid
the overlap of contours which defines “same area,” and thereby qualify for the bidding credit, by
specifying preferred site coordinates in their Form 175 application. Commenter H&D supported this rule
clarification.162 We adopt this proposal, which will provide certainty to applicants and help safeguard the
diversity and competition goals on which the NEBC is based by eliminating the potential for applicant
manipulation of our “new entrant” standards.
53.
H&D requested further clarification regarding the description of the contour of the
proposed FM facility, contending that it remains unclear whether the Commission intended that the
identified language (“the maximum class facilities at the FM allotment site”) means the perfectly circular
standard 70 dBµ contour distance for the class of station, or the 70 dBµ contour as calculated pursuant to
Section 73.313 of the Rules for a class standard facility at the allotment site coordinates.163 The
distinction between “circular” and “calculated” is a significant one, contends H&D, particularly in the
mountainous areas of the western United States. Normally, the Commission does not evaluate specific
terrain data in allotment proceedings. Instead, the Commission assumes that a station’s city grade
coverage contour is a circle with a defined radius based on maximum class facilities from the pertinent
allotment site.164 As in allotment proceedings, we will base this proposed FM facility contour standard on


160 47 C.F.R. § 73.5007(b).
161 Rural NPRM, 24 FCC Rcd at 5257 (emphasis in original).
162 H&D Comments at 14.
163 47 C.F.R. § 73.313.
164 See, e.g., Woodstock and Broadway, Virginia, Memorandum Opinion and Order, 3 FCC Rcd 6398, 6399 (1988).
27

Federal Communications Commission FCC 10-24

an assumption of uniform terrain, which results in a perfectly circular standard 70 dBµ contour.165 We
clarify Section 73.5007(b)(3) of the Rules accordingly.
54.
Pro forma assignments and transfers of control. To prevent unjust enrichment by parties
that acquire permits through the use of a NEBC, Section 73.5007(c) of the Rules requires reimbursement
to the Commission of all or part of the credit upon a subsequent assignment or transfer, if the proposed
assignee or transferee is not eligible for the same percentage of bidding credit.166 The rule is routinely
applied to “long form” assignment or transfer of control applications filed on FCC Forms 314 and 315.
The rule as written, however, does not distinguish between pro forma and non-pro forma assignments or
transfers of control. In the Rural NPRM the Commission raised the question and invited comment as to
whether the unjust enrichment analysis should also apply to assignments or transfers that are pro forma in
nature and filed on Form 316.167 Pro forma assignments and transfers of control may be either
voluntary168 or involuntary.169
The Commission tentatively concluded that the unjust enrichment
provisions should apply in the context of pro forma assignment and transfer of control applications, thus
eliminating any applicant confusion on the issue.
55.
Notwithstanding the disagreement of the one commenter who briefly addressed this
issue,170 we find it appropriate generally to apply the unjust enrichment provisions contained in Section
73.5007(c) of the Rules to pro forma applications to assign or transfer broadcast licenses and permits
pursuant to Section 73.3540(f) of the Rules. We believe that this policy will help preserve the integrity of
the designated entity measures adopted in the Broadcast Auction First Report and Order.171 The NEBC
and unjust enrichment rule provisions are formulated in terms of parties with attributable interests.172 A
pro forma assignment or transfer can include new parties, including parties with attributable interest


165 As a related clarification, since the facilities of “existing” FM stations are established, the principal community
contours of existing FM stations are defined by their authorized or licensed facilities and the prediction methodology
of 47 C.F.R. § 73.313.
166 47 C.F.R. § 73.5007(c).
167 Rural NPRM, 24 FCC Rcd at 5257. As a general rule, transactions for assignments or transfers of control that are
either involuntary or that do not involve a substantial change in ownership or control may file pro forma
applications. See generally 47 C.F.R. §§ 73.3540(f), 73.3541.
168 See 47 C.F.R. § 73.3540(f) (providing illustrative examples of voluntary assignments and transfers of control that
do not involve a substantial change in ownership).
169 See id. § 73.3541 (setting forth procedures following the death or legal disability of an individual permittee or
licensee, a member of a partnership, or a person directly or indirectly in control of an entity which is a permittee or
licensee).
170 Munbilla Broadcasting Services, LLC Comments at 14.
171 See Broadcast Auction First Report and Order, 13 FCC Rcd at 15992-96.
172 See 47 C.F.R. § 73.5007(a) (35 percent bidding credit given to winning bidder if it, and/or any individual or
entity with an attributable interest in the winning bidder, has no other attributable interests; 25 percent bidding credit
given to winning bidder if it, and/or any individual or entity with an attributable interest in the winning bidder, has
an attributable interest in no more than three mass media facilities). See also 47 C.F.R. § 73.5008(c) (an attributable
interest in a winning bidder or in a medium of mass communications shall be determined in accordance with 47
C.F.R. § 73.3555 and Note 2).
28

Federal Communications Commission FCC 10-24

holdings that would nullify or diminish the eligibility of the assignee or transferee for the bidding credit.
This is especially the case in transactions eligible for pro forma treatment involving corporate
reorganizations where a new attributable interest holder with other media interests is added.173
56.
Moreover, such an unjust enrichment analysis allows for consistency in the application of
the rule. It further ensures that applicants do not use the summary pro forma assignment and transfer
procedures to circumvent the unjust enrichment requirements. We clarify, however, that we will only
apply the unjust enrichment analysis to voluntary pro forma transactions, and not to involuntary pro
forma
transactions.174 Notwithstanding this decision, we will continue to address, on a case-by-case
basis, any conduct engaged in by auction participants with the evident intention of manipulating the
eligibility standards for, or frustrating the purpose of, the NEBC.175 We find it appropriate to make such a
change in our existing bidding credit reimbursement methodology at this time, and we therefore adopt the
unjust enrichment analysis recommended in the Rural NPRM.

H.

Clarify Maximum New Entrant Bidding Credit Eligibility.

57.
Background. As described in the Rural NPRM, applicants to participate in broadcast
auctions are required to establish their qualifications for the NEBC on their short-form applications (FCC
Form 175), “Application to Participate in an FCC Auction.”176 Applicants meeting the eligibility criteria
set forth in Section 73.5007 of the Rules qualify for a bidding credit representing the amount by which a
winning bidder's gross bid is discounted.177 The size of a NEBC depends on the number of ownership
interests in other media of mass communications that are attributable to the bidder-entity and its
attributable interest-holders.178 In accordance with Section 73.5008(c) of the Rules, when determining an
applicant’s eligibility for the NEBC, the interests of the applicant, and of any individuals or entities with
an attributable interest in the applicant, in other media of mass communications are considered.179


173 See, e.g., 47 C.F.R. § 73.3540(f)(4).
174 The rules require that the personal representative notify the Commission within 30 days of death or disability and
to request assignment or transfer to a successor in interest, such as a court-appointed receiver, executor, guardian or
trustee. Given both the involuntary nature of the triggering event and the temporary nature of the license transfer to
a fiduciary, we find that it is inappropriate to apply an unjust enrichment to an involuntary pro forma transaction.
Rather, in involuntary situations, the unjust enrichment analysis will apply to the subsequent “long form”
assignment or transfer to the person or entity legally qualified to succeed to the broadcast interests at issue. See 47
C.F.R. § 73.3541(b).
175 See Broadcast Auction MO&O, 14 FCC Rcd at 8767-68.
176 See 47 C.F.R. §§ 1.2105, 73.5007, 73.5008. All applicants, including those seeking a new entrant bidding credit,
must provide certifications under penalty of perjury in FCC Form 175.
177 Id. § 73.5007.
178 See id. at 73.5007. In the New Entrant Bidding Credit Reconsideration Order, the Commission further refined
the eligibility standards for the NEBC, judging it appropriate to attribute the media interests held by very substantial
investors in, or creditors of, a bidder claiming new entrant status. Specifically, the attributable mass media interests
held by an individual or entity with an equity and/or debt interest in a bidder shall be attributed to that bidder for
purposes of determining its eligibility for the credit, if the equity and debt interests, in the aggregate, exceed 33
percent of the total asset value of the bidder, even if such an interest is non-voting. New Entrant Bidding Credit
Reconsideration Order
, 14 FCC Rcd at 12543.
179 47 C.F.R. § 73.5008(c).
29

Federal Communications Commission FCC 10-24

58.
The Form 175 is the applicant’s sole opportunity to claim bidding credit eligibility.
Accordingly, an auction applicant’s attributable interests, and therefore its maximum NEBC eligibility,
are determined as of the Form 175 filing deadline. Consequently, bidders cannot qualify for a bidding
credit, nor increase the size of a previously claimed bidding credit, based upon ownership or positional
changes occurring after the Form 175 filing deadline.180
59.
In broadcast auctions, the Bureaus routinely announce by Public Notice that events
occurring after the Form 175 filing deadline, such as the acquisition of additional attributable interests in
media of mass communications, may cause diminishment or loss of the bidding credit as originally
claimed on Form 175.181 The Rural NPRM noted that, notwithstanding clear announcements of this
policy in broadcast auction Public Notices, certain parties have, for example, acquired attributable
interests after the Form 175 filing deadline and argued that their NEBC eligibility is maintained or
“frozen” as of the Form 175 application filing.182 Therefore, to prevent applicant confusion, in the Rural
NPRM
the Commission proposed to amend Section 73.5007(a) of the Rules to codify the current policy,
and state explicitly that the NEBC eligibility set forth in an applicant’s Form 175 application is the
maximum NEBC eligibility for that auction, and that such bidding credit may be reduced or lost upon
post-filing changes.183
60.
Discussion. Commenters addressing this issue supported the Commission’s proposal to
codify the current policy and clarify Section 73.5007(a).184 We therefore modify Section 73.5007(a) of
the Rules to state unequivocally that: (1) an applicant must specify its eligibility for the NEBC in its
Form 175 application; (2) the NEBC specified in an applicant’s Form 175 establishes that applicant’s
maximum NEBC eligibility for that auction; (3) any post-Form 175 filing (“post-filing”) change in the
applicant’s circumstances underlying its NEBC eligibility claim, or that of any attributable interest-holder
in the applicant, must be reported immediately to the Commission, and no later than five business days
after the change occurs;185 and (4) any such post-filing change may cause a reduction or elimination of the


180 See Liberty Productions, a Limited Partnership, Memorandum Opinion and Order, 16 FCC Rcd 12061, 12079,
stay denied, 16 FCC Rcd 18966 (2001), aff’d sub nom. Biltmore Forest Broadcasting FM, Inc. v. FCC, 321 F.3d
155 (D.C. Cir.), cert denied, 540 U.S. 981 (2003) (“Liberty Productions”) (subsequent changes can reduce or
eliminate the NEBC that the applicant originally claimed in its Form 175 application).
181 See, e.g., Auction of FM Broadcast Construction Permits Scheduled for September 1, 2009; Notice and Filing
Requirements, Minimum Opening Bids, Upfront Payments and Other Procedures for Auction 79
, DA 09-810, Public
Notice, 24 FCC Rcd 4448, 4463 (MB/WTB 2009) (“Auction 79 Procedures Public Notice”). Similarly, the
broadcast auction Public Notices unambiguously state that an applicant cannot qualify for a bidding credit, nor
upgrade a previously claimed bidding credit, based upon ownership or positional changes occurring after the Form
175 filing deadline.
182 See, e.g., Matinee Radio, LLC, Letter, 20 FCC Rcd 13713 (MB 2005), review pending. In an attempt to preserve
their maximum NEBC eligibility, and despite having acquired attributable interests that nullify their new entrant
status, these parties sought to factually distinguish precedent such as Liberty Productions.
183 Rural Radio NPRM, 24 FCC Rcd 5257-58.
184 H&D Comments at 14.
185 See Procedural Amendments to Commission Part 1 Competitive Bidding Rules, Order, FCC 10-4, at 5 (rel. Jan.
7, 2010) (“Procedural Amendments”) (under amended 47 C.F.R. § 1.2105(b)(4), amendments or modifications
required to maintain the accuracy and completeness of information furnished in pending auction applications “shall
be made as promptly as possible, and in no case more than five business days after applicants become aware of the
(continued…)
30

Federal Communications Commission FCC 10-24

NEBC claimed in the applicant’s Form 175 application, if the change would cause the applicant not to
qualify for the originally claimed NEBC under the eligibility provisions of Section 73.5007 of the Rules,
and the change occurred prior to grant of the construction permit to the applicant. Under no
circumstances will a post-filing change increase an applicant’s NEBC eligibility for that auction.
61.
The rules governing NEBC eligibility state that attributable interests shall be determined
in accordance with Section 73.3555 and Note 2 to that section.186 Section 73.3555 and Note 2 set forth
numerous means by which interests are attributed to individuals and entities.187 We emphasize that all of
these bases for attribution will be considered to affect NEBC eligibility when they occur after the Form
175 filing deadline. For example, for NEBC purposes, we do not distinguish between attribution triggered
by the post-filing procuring of a creditor with attributable interests (as was the case in Liberty),188 and
attribution triggered by an applicant’s attributable interest holders themselves acquiring additional media
interests subsequent to the Form 175 filing. We therefore reiterate that any change occurring subsequent
to the short form filing deadline could serve as the basis for reducing or eliminating the applicant’s
previously claimed NEBC eligibility.189
This policy codification clearly notifies broadcast auction
applicants of the NEBC eligibility consequences of their other business dealings.
62.
By auction Public Notices, bidders are also instructed that any change affecting eligibility
for the NEBC, insofar as it results in the reduction or loss of the credit originally claimed on the Form 175
application, must be reported immediately, and no later than five business days after the change occurs.190
Given the significance of this information in an auctions context, in the Rural NPRM we proposed to
adjust the standard reporting timeframe and codify this immediate reporting requirement. Our experience
shows that few bidders actually incur changes that result in adjustments to their bidding credit status. The
vast majority of those that do have promptly reported the change. Bidders are advised through Public
Notices that the Commission will post pertinent auction information throughout the entire auction event.
The past practice has been to post such announcements for auction participants, including messages
conveying a change in a bidder’s bidding credit eligibility.191 In such cases, the Commission then makes





(Continued from previous page)
need to make any amendment or modification, or five business days after the reportable event occurs, whichever is
later.”).
186 See 47 C.F.R. §§ 73.5007-5008.
187 Id., § 73.3555 and Note 2.
188 See supra notes 180 and 182.
189 It remains the case that an applicant may not qualify for a previously unclaimed NEBC, nor upgrade a previously
claimed bidding credit, based on changes occurring after the short form filing deadline. Liberty, 16 FCC Rcd at
12077.
190 See, e.g., Auction 79 Procedures Public Notice, 24 FCC Rcd at 4463; “Auction of FM Broadcast Construction
Permits- 77 Bidders Qualified to Participate in Auction 79
,” Public Notice, 24 FCC Rcd 10782, 10791 (MB/WTB
Aug. 19, 2009) (“Auction 79 Qualified Bidders Public Notice”). In Public Notices, the Bureaus also remind bidders
of their responsibility to maintain the accuracy and completeness of information furnished in their pending Form
175 applications. See, e.g., Auction 79 Qualified Bidders Public Notice, 24 FCC Rcd at 10791 (Applicants are
responsible for maintaining the accuracy and completeness of information furnished in their Form 175 and exhibits).
191 See, e.g., http://auctionresults.fcc.gov/Auction_37/Announcements/37_007.005 (announcing a bidder’s change
of NEBC eligibility in Auction 37); http://auctionresults.fcc.gov/Auction_53/Announcements/53_005.004
(announcing a bidder’s withdrawal of its small business bidding credit in Auction 53).
31

Federal Communications Commission FCC 10-24

the appropriate adjustments concerning the NEBC status in the computation of down and final payment
amounts due from any affected winning bidder. Therefore, and in keeping with the rule amendments we
recently adopted in Procedural Amendments,192 we codify the practice that any changes affecting NEBC
eligibility must be reported immediately, and in any event no later than five business days after the
change occurs, and we amend Section 73.5007(a) of the Rules accordingly. This codification, again,
clearly notifies auction applicants of their reporting obligations, and provides clarity and transparency in
the auction processes, both to the affected applicant itself and to those auction participants bidding against
that applicant.
63.
Finally, we restate that we will continue to make final determinations regarding an
applicant’s eligibility to hold a construction permit, including its eligibility for the NEBC, when we are
ready to grant the post-auction long form construction permit application. In the event that an applicant’s
eligibility for the NEBC changes between the final payment deadline and the date on which we grant the
construction permit application, the applicant would be required to make any additional payment prior to
the issuance of the construction permit authorization.193

III.

FURTHER NOTICE OF PROPOSED RULE MAKING

A.

Implement a Tribal Bidding Credit.

64.
Background. As noted above, some commenters have urged the Commission to adopt
some form of tribal bidding credit. Specifically, H&D notes that tribal applicants applying the priority to
add an allotment to the Table of FM Allotments might still lose at auction, suggesting for this reason that
the Tribal Priority be limited to non-tabled services.194 In response to this suggestion, NPM/NCAI
countered that the remedy for the problem H&D posed was not to eliminate the priority for commercial
FM auctions, but rather to implement a bidding credit for qualified tribal applicants.195
65.
Discussion. In the Rural NPRM, the Commission noted that there are more than 4.1
million Native Americans and Alaska Natives living in the United States, with 563 federally recognized
Tribes.196 The Commission further noted that, at the present time, there are approximately 41 full-power
NCE FM radio stations in the United States licensed to Tribes or affiliated groups, with another 31


192 See supra note 185.
193 See Implementation of the Commercial Spectrum Enhancement Act and the Modernization of the Commission’s
Competitive Bidding Rules and Procedures
, Report and Order, 21 FCC Rcd 891, 909 n.84 (2006).
194 H&D Comments at 4.
195 NPM/NCAI Joint Reply Comments at 5-6.
196 Rural NPRM, 24 FCC Rcd at 5247-48 and n.29 (“’The term “Indian Tribe[s]” or “Federally-Recognized Indian
Tribes” means any Indian or Alaska Native tribe, band, nation, pueblo, village or community which is
acknowledged by the federal government to constitute a government-to-government relationship with the United
States and eligible for the programs and services established by the United States for Indians. See The Federally
Recognized Indian Tribe List Act of 1994
(Indian Tribe Act), Pub. L. 103-454. 108 Stat. 4791 (1994) (the Secretary
of the Interior is required to publish in the Federal Register an annual list of all Indian Tribes which the Secretary
recognizes to be eligible for the special programs and services provided by the United States to Indians because of
their status as Indians).’ [Tribal Policy Statement, 16 FCC Rcd at 4080]”).
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Federal Communications Commission FCC 10-24

construction permits for full-power NCE FM stations having been granted to such Tribes or affiliates.197
Given the paucity of tribal-owned radio stations, it might be expected that the vast majority of tribal
applicants for commercial facilities would qualify for new entrant bidding credits, negating the need for a
special tribal bidding credit over and above the new entrant bidding credits. Moreover, the Commission
has previously rejected the implementation of “finder’s” or “pioneer’s” bidding credits for applicants that
add allotments to the FM Table of Allotments,198 finding that such applicants were not among the
categories specifically designated by Congress when it granted the Commission competitive bidding
authority.199
66.
We nevertheless believe it appropriate to consider various proposals for a special bidding
credit for tribal applicants. While not forwarding any one such proposal as a rule at this time, we seek
comment to assist our consideration as to whether to offer such a new bidding credit, either in lieu of or in
addition to the existing NEBCs. In this regard, two of the commenters in this proceeding have already
made suggestions along these lines. MEI suggests that tribal applicants be granted the “maximum
permissible bidding credit provided they do not own any other commercial facility with overlapping
principal community contours.”200 In other words, MEI appears to suggest that the Commission establish
a 35 percent bidding credit for tribal applicants, as long as they own no commercial facilities in the “same
area” as the proposed new facility.201 BFIT, as noted above, also suggests “the equivalent of a new
entrant credit,” rather than a Section 307(b) priority.202 We would also consider whether to give tribal
applicants the option to claim either the appropriate 25 or 35 percent new entrant bidding credit or, as
long as the conditions posed by MEI are met, a 25 or 35 percent tribal bidding credit. Still another
alternative to be considered would be to offer a choice of either the appropriate new entrant bidding credit
or a lesser credit, perhaps 15 or 20 percent, to tribal applicants who are not new entrants. In all of the
above cases, we would consider whether to limit the tribal bidding credit to allotments added using the
Tribal Priority, and further, whether to limit the credit to the Tribe(s) or entity adding the allotment to the
Table of Allotments.203 Should a qualifying bidder be able to employ a tribal bidding credit in addition to
a new entrant bidding credit (at least for qualifying tribal allotments) rather than in lieu of the new entrant
credit? Additionally, applicants using new entrant bidding credits are subject to the unjust enrichment
provisions of our Rules,204 which require that all or a portion of the bidding credit be reimbursed if the
authorization is assigned or transferred within five years of issuance to a party not qualifying for the


197 Rural NPRM, 24 FCC Rcd at 5248.
198 47 C.F.R. § 73.202(b).
199 See Broadcast Auction First Report and Order, 13 FCC Rcd at 15996-97.
200 MEI Comments at 7.
201 47 C.F.R. § 73.5007(b) (defining “same area” for purposes of new entrant bidding credit).
202 BFIT Comments at 8.
203 In other words, should the bidding credit be available to otherwise qualifying applicants that did not participate
in the Tribal allotment reservation process?
204 47 C.F.R. § 73.5007(c) (a licensee or permittee using a new entrant bidding credit, and assigning or transferring
control of the authorization to an entity not meeting the eligibility criteria for the bidding credit, must reimburse the
U.S. Government 100 percent of the bidding credit if the authorization is assigned or transferred in the first two
years after issuance; 75 percent in the third year; 50 percent in the fourth year; and 25 percent in the fifth year).
33

Federal Communications Commission FCC 10-24

credit. What impact would a tribal bidding credit have on the unjust enrichment rules, and what
adjustments (if any) should the Commission make to those rules to accommodate a tribal bidding credit?
We seek comment on these proposals, or any other proposals forwarded by commenters for a potential
tribal bidding credit.

B.

Extend the Tribal Priority to Non-Landed Tribes.

67.
Background. NPM/NCAI point out in their Joint Reply Comments that, while there are
563 Tribes in the United States, there are only 312 reservations, with some Tribes occupying more than
one reservation.205 The Tribal Priority as adopted in the First R&O is by its terms limited to what
NPM/NCAI term “landed” Tribes. They urge that we seek comment on ways in which “landless” Tribes
may nonetheless avail themselves of the Tribal Priority.
68.
Discussion. NPM/NCAI recognize that the Tribal Priority proposed in the Rural NPRM
was principally designed to enable Tribes to fulfill their obligations, as inherently sovereign Nations, to
aid the development, and perpetuate the language and culture of their members. It was not proposed
merely to give Tribes a blanket priority over other applicants for facilities that may not provide service
targeted at Tribal citizens or communities.206 Thus, any application of the Tribal Priority to non-landed
Tribes must take into account the policies underlying the Tribal Priority. NPM/NCAI, by way of
example, state that federal agencies such as the Census Bureau and the Department of Housing and Urban
Development utilize “service areas rather than strict definitions of Tribal Lands.”207 Service areas
include such categories as American Indian reservations, Off-reservation trust lands, and Oklahoma tribal
statistical areas, as well as tribal subdivisions and Census Designated Places on such lands.208 They
further suggest that provision could be made for tribal applicants to show that the proposed principal
community contour serves the functional equivalent of tribal lands, using factors such as Native American
population density, cultural links between the community of license and the Tribe or Tribes, or other
factors.
69.
We therefore consider, without proposing a specific rule, whether and how Tribes
without tribal lands as defined herein and in the Rural NPRM can qualify for the Tribal Priority. For
example, we consider whether a threshold tribal population, or tribal population density, could be taken
into account in determining whether a tribal applicant meets the tribal coverage and community of license
criteria of the Tribal Priority. We would also consider whether historical or contemporary cultural links
could be taken into account in making the tribal coverage and community determinations. Should the fact
that a currently landless Tribe or Tribes previously occupied the coverage area or proposed community of
license be taken into account? Are there other factors that should be considered? We invite comment on
these issues, and seek suggestions as to whether and how we might institute such a procedure.


205 NPM/NCAI Joint Reply Comments at 10.
206 Rural NPRM, 24 FCC Rcd at 5248-49; NPM/NCAI Joint Reply Comments at 11 n.33.
207 Id. at 11 and n.32.
208 Id.
34

Federal Communications Commission FCC 10-24

IV. ADMINISTRATIVE MATTERS

A.


First Report and Order.

1.

Final Regulatory Flexibility Analysis.

70.
As required by the Regulatory Flexibility Act of 1980 (“RFA”),209 the Commission has
prepared a Final Regulatory Flexibility Analysis (“FRFA”) relating to this First R&O. The FRFA is set
forth in Appendix B.
2.

Final Paperwork Reduction Act of 1995 Analysis.


71.
This First R&O adopts new or revised information collection requirements, subject to the
Paperwork Reduction Act of 1995 (“PRA”).210
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 requirement(s) adopted in this document. The requirement(s) will not
go into effect until OMB has approved it and the Commission has published a notice announcing the
effective date of the information collection requirement(s). In addition, we note that pursuant to the Small
Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), we previously
sought specific comment on how the Commission might “further reduce the information collection
burden for small business concerns with fewer than 25 employees.”211
72.
Further Information. For additional information concerning the information collection
requirements contained in this First Report and Order, contact Cathy Williams at 202-418-2918, or via
the Internet to Cathy.Williams@fcc.gov.
3. Congressional Review Act.
73.
The Commission will send a copy of this First Report and Order in a report to be sent to
Congress and the Government Accountability Office, pursuant to the Congressional Review Act.212

B.

Further Notice of Proposed Rule Making

1. Filing Requirements.
74.
Ex Parte Rules. This proceeding will be treated as a “permit-but-disclose” proceeding
subject to the “permit-but-disclose” requirements under Section 1.1206(b) of the Commission’s Rules.213


209 See 5 U.S.C. § 604. The RFA, see 5 U.S.C. § 601 et. seq., has been amended by the Small Business Regulatory
Enforcement Fairness Act of 1996 (“SBREFA”), Pub. L. No. 104-121, Title II, 110 Stat. 847 (1996). The SBREFA
was enacted as Title II of the Contract With America Advancement Act of 1996 (“CWAAA”).
210 The Paperwork Reduction Act of 1995 (“PRA”), Pub. L. No. 104-13, 109 Stat 163 (1995) (codified in 44 U.S.C.
§§ 3501-3520).
211 Rural NPRM, 24 FCC Rcd at 5261; 74 Fed. Reg. 22498, 22505 (May 13, 2009).
212 See 5 U.S.C. § 801(a)(1)(A).
213 Id. § 1.1206(b), as revised.
35

Federal Communications Commission FCC 10-24

Ex parte presentations are permissible if disclosed in accordance with Commission Rules, except during
the Sunshine Agenda period when presentations, ex parte or otherwise, are generally prohibited. Persons
making oral ex parte presentations are reminded that a memorandum summarizing a presentation must
contain a summary of the substance of the presentation and not merely a listing of the subjects discussed.
More than a one- or two-sentence description of the views and arguments presented is generally
required.214
Additional rules pertaining to oral and written presentations are set forth in Section
1.1206(b).
75.
Comments and Reply Comments. Pursuant to Sections 1.415 and 1.419 of the
Commission’s Rules,215 interested parties must file comments on or before the dates indicated on the first
page of this document. Comments may be filed using: (1) the Commission’s Electronic Comment Filing
System (“ECFS”); (2) the Federal Government’s eRulemaking Portal, or (3) by filing paper copies.216
76.
Electronic Filers: Comments may be filed electronically using the Internet by accessing
the ECFS: http://www.fcc.gov/cbg/ecfs, or the Federal eRulemaking Portal: http://www.regulations.gov.
Filers should follow the instructions provided on the Websites for submitting comments. For ECFS filers,
if multiple docket or rulemaking numbers appear in the caption of this proceeding, filers must transmit
one electronic copy of the comments for each docket or rulemaking number referenced in the caption. In
completing the transmittal screen, filers should include their full name, U.S. Postal Service mailing
address, and the applicable docket or rulemaking number. Parties may also submit an electronic comment
by Internet e-mail. To get filing instructions for e-mail comments, commenters should send an e-mail to
ecfs@fcc.gov, and should include the following words in the body of the message, “get form.” A sample
form and directions will be sent in response.
77.
Paper Filers: Parties who choose to file by paper must file an original and four copies of
each filing. If more than one docket or rulemaking number appears in the caption of this proceeding,
filers must submit two additional copies for each additional docket or rulemaking number. Filings can be
sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S.
Postal Service (although we continue to experience delays in receiving U.S. Postal Service mail). All
filings must be addressed to the Commission’s Secretary, Office of the Secretary, Federal
Communications Commission. The Commission’s contractor will receive hand-delivered or messenger-
delivered paper filings for the Commission’s Secretary at 236 Massachusetts Avenue, NE, Suite 110,
Washington, DC 20002. The filing hours at this location are 8:00 a.m. to 7:00 p.m. All hand deliveries
must be held together with rubber bands or fasteners. Any envelopes must be disposed of before entering
the building. Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail)
must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743. U.S. Postal Service first-class
mail, Express Mail, and Priority Mail should be addressed to 445 12th Street, SW, Washington, DC
20554.
78.
People with Disabilities: Contact the FCC to request materials in accessible formats
(Braille, large print, electronic files, audio format, etc.) by e-mail at FCC504@fcc.gov, or call the
Consumer & Governmental Affairs Bureau at 202-418-0531 (voice), 202-418-7365 (TTY).


214 See id. at § 1.1206(b)(2).
215 Id. §§ 1.415, 1.419.
216 See Electronic Filing of Documents in Rulemaking Proceedings, Memorandum Opinion and Order, 63 Fed. Reg.
24121 (1998).
36

Federal Communications Commission FCC 10-24

79.
Additional Information. For additional information on this proceeding, contact Thomas
S. Nessinger, Thomas.Nessinger@fcc.gov, of the Media Bureau, Audio Division, (202) 418-2700. 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 Brian Millin at (202) 418-
7426 (voice), (202) 418-7365 (TTY), or via e-mail at Brian.Millin@fcc.gov.
2. Initial Regulatory Flexibility Analysis.
80.
The Regulatory Flexibility Act of 1980, as amended (“RFA”), requires that a regulatory
flexibility analysis be prepared for notice and comment rule making proceedings, unless the agency
certifies that “the rule will not, if promulgated, have a significant economic impact on a substantial
number of small entities.” The RFA generally defines the term “small entity” as having the same
meaning as the terms “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 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).

81.
With respect to this Further Notice of Proposed Rule Making (“FNPRM”), an Initial
Regulatory Flexibility Analysis (“IRFA”) under the Regulatory Flexibility Act217 is contained in
Appendix A. Written public comments are requested in the IFRA, and must be filed in accordance with
the same filing deadlines as comments on the FNPRM, with a distinct heading designating them as
responses to the IRFA. The Commission will send a copy of this FNPRM, including the IRFA, in a
report to Congress pursuant to the Congressional Review Act. In addition, a copy of this FNPRM and the
IRFA will be sent to the Chief Counsel for Advocacy of the SBA, and will be published in the Federal
Register
.
3.

Paperwork Reduction Act Analysis.


82.
The FNPRM contains potential information collection requirements subject to the
Paperwork Reduction Act of 1995 (“PRA”), Public Law 104-13. OMB, the general public, and other
Federal agencies are invited to comment on the potential new and modified information collection
requirements contained in this FNPRM. If the information collection requirements are adopted, the
Commission will submit the appropriate documents to the Office of Management and Budget (OMB) for
review under Section 3507(d) of the PRA and OMB, the general public, and other Federal agencies will
again be invited to comment on the new and modified information collection requirements adopted by the
Commission. Comments should address: (a) Whether the proposed collection of information is necessary
for the proper performance of the functions of the Commission, including whether the information shall
have practical utility; (b) the accuracy of the Commission's burden estimates; (c) ways to enhance the
quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the
collection of information on the respondents, including the use of automated collection techniques or
other forms of information technology. Pursuant to the Small Business Paperwork Relief Act of 2002,
Public Law 107-198, see 44 U.S.C. § 3506(c)(4), the FCC seeks specific comment on how it might
“further reduce the information collection burden for small business concerns with fewer than 25
employees.”


217 See 5 U.S.C. § 603.
37

Federal Communications Commission FCC 10-24

83.
This document contains proposed modified information collection requirements. The
Commission, as part of its continuing effort to reduce paperwork burdens, invites the general public and
the Office of Management and Budget (OMB) to comment on the information collection requirements
contained in this document, as required by the Paperwork Reduction Act of 1995, Public Law 104-13. In
addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44
U.S.C. 3506(c)(4), we seek specific comment on how we might “further reduce the information collection
burden for small business concerns with fewer than 25 employees." Written comments on possible new
and modified information collections must be submitted on or before 60 days after date of publication in
the Federal Register. In addition to filing comments with the Secretary, a copy of any Paperwork
Reduction Act comments on the information collection(s) contained herein should be submitted to Cathy
Williams, Federal Communications Commission, Room 1-C823, 445 12th Street, SW, Washington, DC
20554, or via the Internet to Cathy.Williams@fcc.gov, and to Nicholas Fraser, OMB Desk Officer, Room
10234 NEOB, 725 17th Street, N.W., Washington, DC 20503 via the Internet to
Nicholas_A._Fraser@omb.eop.gov or by fax to 202-395-5167.
84.
For additional information concerning the information collection(s) contained in this
document, contact Cathy Williams at 202-418-2918, or via the Internet at Cathy.Williams@fcc.gov.

IV. ORDERING CLAUSES

85.
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 First Report and Order IS ADOPTED.
86.
IT IS FURTHER 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 Further Notice of Proposed Rulemaking IS ADOPTED.
87.
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 in Appendix E.
88.
IT IS FURTHER ORDERED that the rules adopted herein WILL BECOME
EFFECTIVE 30 days after the date of publication in the Federal Register, except for Sections
73.3571(k), 73.7000, 73.7002(b), and 73.7002(c), which 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.
89.
IT IS FURTHER ORDERED that the Consumer and Governmental Affairs Bureau,
Reference Information Center, SHALL SEND a copy of this Further Notice of Proposed Rulemaking,
including the Initial Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small
Business Administration, and shall cause it to be published in the Federal Register.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch

Secretary
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Federal Communications Commission FCC 10-24

APPENDIX A

Initial Regulatory Flexibility Analysis

1.
As required by the Regulatory Flexibility Act of 1980, as amended (“RFA”)1 the
Commission has prepared this Initial Regulatory Flexibility Analysis (“IRFA”) of the possible significant
economic impact on a substantial number of small entities by the policies and rules proposed in the
Further Notice of Proposed Rulemaking (“FNPRM”). Written public comments are requested on this
IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines for
comments on the FNPRM provided in paragraph 75. The Commission will send a copy of this entire
FNPRM, including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration
(“SBA”).2 In addition, the FNPRM and the IRFA (or summaries thereof) will be published in the Federal
Register.3
2.

Need For, and Objectives of, the Proposed Rules.

This further rulemaking proceeding is
initiated to obtain comments concerning commenters’ request that the Commission consider providing a
bidding credit to Native American Indian Tribes and Alaska Native Villages (“Tribes”) and entities
owned by Tribes, and also to obtain comments concerning a commenter’s proposal to provide a Tribal
Priority, as adopted in the First R&O in this proceeding, to Tribes that do not possess their own tribal
lands. The Commission has put out for consideration several proposals for a potential tribal bidding
credit: to grant Tribes the maximum permissible 35 percent bidding credit provided they do not own any
other facility in the “same area” as the proposed new facility;4 to give Tribes the option to claim either the
appropriate 25 or 35 percent new entrant bidding credit or, as long as the applicant owns no stations in the
same area as the proposed new station, a 25 or 35 percent tribal bidding credit; or to offer Tribes a choice
of either the appropriate new entrant bidding credit or a lesser credit, perhaps 15 or 20 percent, to tribal
applicants who are not new entrants. In all of the above cases, the Commission also considers whether to
limit the tribal bidding credit, in FM auctions, to allotments added using the Tribal Priority, and further,
whether to limit the credit to the Tribe(s) or entity adding the allotment to the Table of Allotments.5 The
Commission also considers herein whether a tribal bidding credit should be available in addition to a new
entrant bidding credit (at least for qualifying tribal FM allotments) or in lieu of the new entrant bidding
credit. The Commission believes these proposals, if adopted, will provide opportunities for Tribes and
tribal entities proposing new FM allotments better to compete at auction for those allotments.
3.
The Commission is also considering, without proposing a specific rule, whether and how
Tribes without tribal lands can qualify for the Tribal Priority. The proposals offered for consideration by
commenters are (1) whether an applicant or proponent is deemed to provide tribal area coverage if it
covers a certain threshold tribal population or population density, (2) whether historical or contemporary
cultural links between a Tribe and land or population covered should be taken into account in making the


1 See 5 U.S.C. § 603. The RFA, see 5 U.S.C. §§ 601-612, has been amended by the Small Business Regulatory
Enforcement Fairness Act of 1996 (SBREFA), Pub. L. No. 104-121, Title II, 110 Stat. 857 (1996).
2 See 5 U.S.C. § 603(a).
3 See id. § 603(a).
4 47 C.F.R. § 73.5007(b) (defining “same area” for purposes of new entrant bidding credit).
5 In other words, should the bidding credit be available to otherwise qualifying applicants that did not participate in
the Tribal allotment reservation process?
39

Federal Communications Commission FCC 10-24

tribal coverage and community of license determinations, and (3) whether the fact that a currently
landless Tribe or Tribes previously occupied the coverage area or proposed community of license should
be taken into account. The Commission considers these proposals, and seeks comment and suggestions
as to other ways to extend the benefits of the Tribal Priority to those Tribes that do not have reservations
or other tribal lands, allowing such “landless” Tribes to acquire radio stations to achieve the goals of
aiding tribal development, and perpetuating tribal language and culture.
4.

Legal Basis.

The authority for this proposed rulemaking is 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).
5.

Description and Estimate of the Number of Small Entities to Which the Proposed

Rules Will Apply.

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 proposed rules.6 The RFA generally
defines the term "small entity" as encompassing the terms "small business," "small organization," and
"small governmental entity."7 In addition, the term “small Business” has the same meaning as the term
“small business concern” under the Small Business Act.8 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").9
6.

Radio Stations.

The proposed rules and policies potentially will apply to all AM and FM
radio broadcasting applicants, and proponents for new FM allotments, who qualify for the Tribal Priority
adopted in the First R&O in this proceeding. The “Radio Stations” Economic Census category
“comprises establishments primarily engaged in broadcasting aural programs by radio to the public.
Programming may originate in their own studio, from an affiliated network, or from external sources.”10
The SBA has established a small business size standard for this category, which is: such firms having $7
million or less in annual receipts.11

According to BIA Advisory Services, L.L.C., MEDIA Access Pro
Database on March 17, 2009, 10,884 (95%) of 11,404 commercial radio stations have revenue of $6
million or less.

Therefore, the majority of such entities are small entities. We note, however, that in
assessing whether a business concern qualifies as small under the above size standard, business
affiliations must be included.12 In addition, to be determined to be a “small business,” the entity may not


6 Id. § 603(b)(3).
7 Id. § 601(6).
8 Id. § 601(3) (incorporating by reference the definition of “small business concern” in the Small Business Act, 15
U.S.C. § 632). Pursuant to 5 U.S.C. § 601(3), the statutory definition of a small business applies “unless an agency,
after consultation with the Office of Advocacy of the Small Business Administration and after opportunity for public
comment, establishes one or more definitions of such term which are appropriate to the activities of the agency and
publishes such definition(s) in the Federal Register.”
9 15 U.S.C. § 632.
10 U.S. Census Bureau, 2007 NAICS Definitions, “515112 Radio Stations”;
http://www.census.gov/naics/2007/def/ND515112.HTM#N515112.
11 13 C.F.R. § 121.201, NAICS code 515112 (updated for inflation in 2008).
12 “Concerns and entities are affiliates of each other when one controls or has the power to control the other, or a
third party or parties controls or has the power to control both. It does not matter whether control is exercised, so
long as the power to control exists.” 13 C.F.R. § 121.103(a)(1) (an SBA regulation).
40

Federal Communications Commission FCC 10-24

be dominant in its field of operation.13 We note that it is difficult at times to assess these criteria in the
context of media entities, and our estimate of small businesses may therefore be over-inclusive.
7.

Description of Projected Reporting, Recordkeeping and Other Compliance

Requirements.

The proposed rule and procedural changes may, in some cases, impose different
reporting requirements on existing and potential radio licensees and permittees, insofar as they would
require or allow certain applicants to file new technical and population coverage information on or after
filing the short form application (FCC 175) or in the noncommercial educational long form application
(FCC 340). However, the information to be filed is already familiar to broadcasters, and the information
requested to claim the Tribal Priority is similar to current Section 307(b) showings, so any additional
burdens would be minimal.
8.
To the extent that other applicants would be disadvantaged by Tribes qualifying for the
Tribal Priority, the Commission believes that such burdens would be offset by the fact that the Tribal
Priority is designed to redress inequities in the number of tribal radio licensees, compared to the
population of tribal citizens in the United States and the fact that some of these citizens were deprived of
their original tribal lands. The Tribal Priority, then, not only helps the Commission to meet its goals of
ownership and program diversity, but also furthers the federal government’s obligations toward Tribes to
assist them in promulgating tribal languages and cultures, and to support tribal self-government.
9.

Steps Taken to Minimize Significant Impact on Small Entities, and Significant

Alternatives Considered.

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.14
10.
In the Further Notice of Proposed Rulemaking, the Commission seeks to provide
additional opportunities for participation by Tribes in broadcast auctions, especially FM auctions, and to
open up the Tribal Priority to those Tribes who do not currently have tribal lands, and who therefore
cannot qualify under the Tribal Priority’s tribal coverage criterion. The Commission is open to
consideration of alternatives to the proposals under consideration, as set forth herein, including but not
limited to alternatives that will minimize the burden on broadcasters, most of whom are small businesses.
There may be unique circumstances these entities may face, and we will consider appropriate action for
small broadcasters when preparing a Report and Order in this matter.
11.

Federal Rules Which Duplicate, Overlap, or Conflict With, the Commission’s

Proposals.

None.


13 13 C.F.R. § 121.102(b) (an SBA regulation).
14 5 U.S.C. § 603(b).
41

Federal Communications Commission FCC 10-24

APPENDIX B

Final Regulatory Flexibility Analysis

1.
As required by the Regulatory Flexibility Act of 1980, as amended (“RFA”)1 an Initial
Regulatory Flexibility Analysis (“IRFA”) was incorporated in the Notice of Proposed Rule Making
(“Rural NPRM”) to this proceeding.2 The Commission sought written public comment on the proposals
in the Rural NPRM, including comment on the IRFA. The Commission received no comments on the
IRFA. This present Final Regulatory Flexibility Analysis (“FRFA”) conforms to the RFA.3

A. Need for, and Objectives of, the Report and Order

2.
This First Report and Order (“First R&O”) adopts rule changes and procedures to codify
or clarify certain allotment, assignment, auction, and technical procedures. The rules adopted by this
First R&O also create a new Tribal Priority to assist Native American Tribes and Alaska Native Villages
(“Tribes”) or tribal consortia, or entities controlled by Tribes, in obtaining radio broadcast stations
designed to serve their tribal communities.
3.
We turn first to the Tribal Priority. The Commission noted the marked disparity in the
Native American and Alaskan Native population of the United States, compared to the number of radio
stations licensed to, or providing significant signal coverage to, lands occupied by members of Tribes.
Tribal lands comprise 55.7 million acres, or 2.3 percent of the area of the United States (exclusive of the
State of Alaska).4 Roughly one-third of the 4.1 million American Indian and Alaska Native population of
the United States lives in tribal lands, yet only 41 radio stations currently are licensed to Tribes or
affiliated groups, representing less than one-third of one percent of the more than 14,000 radio stations in
the United States. This service disparity belies the goal of fair distribution of radio service mandated by
Section 307(b) of the Communications Act of 1934, as amended, as well as the Commission’s
commitment to promoting diversity of station ownership and programming. The Commission also noted
its historic trust relationship with Tribes, and the federal policy goals of assisting Tribes in promoting
tribal culture and self-government.
4.
To remedy these problems, the Commission concluded that Tribes seeking new radio
stations to serve their citizens should receive a priority in the award of allotments and construction
permits. To qualify for the Tribal Priority, an applicant must demonstrate that it meets all of the
following eligibility criteria: (1) 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, at least part of
whose tribal lands (as defined in note 30 of the Rural NPRM)5 are covered by the principal community
contour of the proposed facility. Although the 51 or greater percent need not consist of a single Tribe, the


1 See 5 U.S.C. § 603. The RFA, see 5 U.S.C. §§ 601-612, has been amended by the Small Business Regulatory
Enforcement Fairness Act of 1996 (“SBREFA”), Pub. L. No. 104-121, Title II, 110 Stat. 847 (1996). The SBREFA
was enacted as Title II of the Contract With America Advancement Act of 1996 (“CWAAA”).
2 24 FCC Rcd 5239 (2009).
3 See 5 U.S.C. § 604.
4 NPM/NCAI Joint Reply Comments at 4.
5 Rural NPRM, 24 FCC Rcd at 5248 n.30.
42

Federal Communications Commission FCC 10-24

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; (2) at least 50 percent of the daytime
principal community contour6 of the proposed facilities covers tribal lands; (3) the proposed community
of license must be located on tribal lands; and (4) the applicant proposes first aural, second aural, or first
local tribal-owned transmission service at the proposed community of license, in the case of proposed
commercial facilities, or at least first local tribal-owned noncommercial educational transmission service,
in the case of proposed NCE facilities. In the event that two or more applicants claiming the Tribal
Priority are mutually exclusive, the one providing the highest level of service to the greatest population
will prevail. The Tribal Priority ranks between the current Priority (1) and co-equal Priorities (2) and (3)
in the case of commercial applicants.7 Thus, the Tribal Priority will not take precedence over a proposal
to provide first reception service to a greater than de minimis population, but will take precedence over
the provision of second local reception service, or over a proposal for first local non-tribal owned
transmission service. Likewise, an NCE applicant qualifying for the Tribal Priority will take precedence
over all mutually exclusive applications, except those that propose bona fide first reception service to a
greater than de minimis population.
5.
The Tribal Priority will be applied only at the allotment stage of the commercial FM
licensing procedures, to commercial AM applications filed during an AM filing window, as part of the
threshold Section 307(b) analysis, and to applications filed in an NCE FM filing window as the first part
of the fair distribution analysis. NCE applicants must also meet all NCE eligibility and licensing
requirements.8 Holding period restrictions, commencing with the award of a construction permit until the
completion of four years of on-air operation, will apply to any authorization or allotment awarded
pursuant to the Tribal Priority. In the case of an AM or NCE FM authorization awarded to a tribal
applicant, the permittee/licensee will be prohibited during this period from making any change that would
lower tribal ownership below the 51 percent threshold, a change of community of license, or a technical
change that would cause less than 50 percent of the principal community contour to cover tribal lands.
However, gradual changes in the composition of an NCE board that do not change the nature of the
organization or break continuity of control will not violate the four-year holding period restrictions. In
the case of a commercial FM allotment, the restrictions will apply only to any proposed change of
community of license or technical change as described above. The winner at auction of an FM allotment
added to the Table of Allotments9 under a Tribal Priority, whether Tribal or non-Tribal, must still provide
broadcast service primarily to tribal lands for the entire four-year holding period.
6.
Additionally, in the First R&O the Commission requires that applicants receiving
dispositive preferences for AM facilities under Section 307(b) of the Communications Act of 1934, as
amended (“Section 307(b)”) be prohibited from substantially downgrading the facilities on which the
Section 307(b) award was based. This prohibition was designed to provide basic fairness in the award of
a dispositive preference to one proposal in a group of several mutually exclusive proposals. That is, it
would be unfair to allow one member of a mutually exclusive group to be awarded a construction permit
without auction, based on the superior population coverage in its proposal, only then to allow it to


6 The principal community contour is set forth in 47 C.F.R. §§ 73.24(i), 73.315(a), and 73.515.
7 See FM Assignment Policies, 90 FCC2d at 91-93.
8 See id. §§ 73.503, 73.561.
9 Id. § 73.202.
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downgrade its proposal to the point where it would no longer be significantly different from the other
mutually exclusive proposals.
7.
The First R&O also establishes procedures by which applicants in AM auction filing
windows must submit technical proposals that meet minimum technical eligibility criteria. The
Commission noted the number of incomplete or technically defective proposals filed in AM auction filing
windows. Such proposals undermine the accuracy and reliability of our mutual exclusivity and Section
307(b) determinations, and frustrate the staff’s ability to manage the window filing process efficiently.
Moreover, such defective applications preclude the filing of meritorious modification applications by
existing facilities, which must protect the prior-filed defective applications. In short, allowing the filing
of technically defective proposals places a strain on the Commission’s resources and, consequently,
delays consideration of meritorious proposals and provision of new service to the public.
8.
Likewise, the First R&O contains two other proposals designed to streamline the AM
auction process and speed new service to the public: the grant of delegated authority to the Media Bureau
to allow AM auction filing window applicants to submit settlements or technical resolutions that do not
resolve all the mutual exclusivities in a mutually exclusive group, as long as the proposal results in one
“singleton” application from the group; and the grant of delegated authority to the Media Bureau and
Wireless Telecommunications Bureau to cap the number of AM applications that may be filed during a
filing window. The Commission also grants the Media and Wireless Telecommunications Bureaus
delegated authority to extend the deadline for filing post-auction long-form applications, as appropriate,
thus providing successful auction applicants with greater flexibility in preparing such applications.
9.
Finally, in the First R&O the Commission clarifies certain aspects of the rules governing
the new entrant bidding credit (“NEBC”): that for purposes of determining whether an auctioned
allotment is in the “same area” as an applicant’s other media properties, we will use the maximum class
facilities at the allotment site, rather than applicant specified preferred coordinates; that unjust enrichment
payments by assignors who used the NEBC in paying for their permit apply even to pro forma
assignments or transfers filed on FCC Form 316; and that an applicant’s maximum NEBC eligibility is
established as of the deadline for filing short-form applications, but that the eligibility may be lost or
diminished based on post-filing changes in the applicant’s situation. In clarifying these rules and policies,
the Commission will provide greater certainty to applicants, reducing any confusion and, therefore,
burden when preparing and filing auction applications.

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

10.
There were no comments filed that specifically addressed the rules and policies proposed
in the IRFA.

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

11.
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.10 The RFA
generally defines the term “small entity” as having the same meaning as the terms “small business,” small
organization,” and “small government jurisdiction.”11 In addition, the term “small business” has the same


10 5 U.S.C. § 603(b)(3).
11 Id. § 601(6).
44

Federal Communications Commission FCC 10-24

meaning as the term “small business concern” under the Small Business Act.12 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).13
12.
The subject rules and policies potentially will apply to all AM and FM radio broadcasting
licensees and potential licensees. A radio broadcasting station is an establishment primarily engaged in
broadcasting aural programs by radio to the public.14 Included in this industry are commercial, religious,
educational, and other radio stations.15 Radio broadcasting stations which primarily are engaged in radio
broadcasting and which produce radio program materials are similarly included.16 However, radio
stations that are separate establishments and are primarily engaged in producing radio program material
are classified under another NAICS number.17 The SBA has established a small business size standard
for this category, which is: firms having $7 million or less in annual receipts.18 According to BIA
Advisory Services, L.L.C., MEDIA Access Pro Database on March 17, 2009, 10,884 (95%) of 11,404
commercial radio stations have revenue of $6 million or less. Therefore, the majority of such entities are
small entities. We note, however, that many radio stations are affiliated with much larger corporations
having much higher revenue. Our estimate, therefore, likely overstates the number of small entities that
might be affected by any ultimate changes to the rules and forms.

D. Description of Projected Reporting, Record Keeping and other Compliance Requirements

13.
As described, certain rules and procedures will change, although the changes will not
result in substantial increases in burdens on applicants. Questions will be added to FCC Forms 340, 314,
and 315 to establish Section 307(b) eligibility for the Tribal Priority or compliance with holding period
restrictions in the event of an assignment or transfer. Questions will also be added to FCC Form 316
based on the Commission’s conclusion that the new entrant bidding credit unjust enrichment rules apply
to pro forma assignment and transfer applications. These are largely self-identification questions or
questions regarding the duration of on-air operation, requiring minimal calculation. In certain cases (AM
auction filing window applications and FM allotment proceedings), Section 307(b) information is already
required, thus the information needed to be collected from applicants claiming the Tribal Priority is of the
same character as that already collected, resulting in little or no increase in burden on such applicants.
The remaining procedural changes in the First R&O are either changes in Commission procedures,
requiring no input from applicants, or more stringent regulation of existing requirements. For example,
AM auction filing window applicants need not submit more technical information than is already


12 Id. § 601(3) (incorporating by reference the definition of “small business concern” in 15 U.S.C. § 632). Pursuant
to 5 U.S.C. § 601(3), the statutory definition of a small business applies “unless an agency, after consultation with
the Office of Advocacy of the Small Business Administration and after opportunity for public comment, establishes
one or more definitions of such term which are appropriate to the activities of the agency and publishes such
definition(s) in the Federal Register.” 5 U.S.C. § 601(3).
13 15 U.S.C. § 632.
14 Id.
15 Id.
16 Id.
17 Id.
18 13 C.F.R. § 121.201, NAICS code 515112 (updated for inflation in 2008).
45

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collected; the procedural change merely adds consequences when that information does not meet certain
already extant technical standards.

E. Steps Taken to Minimize Significant Impact on Small Entities, and Significant Alternatives
Considered

14.
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.19
15.
The Tribal Priority adopted in the First R&O was modified from the original proposal
specified in the Rural NPRM, based on comments in the record and on the Commission’s evaluation of
the legal ramifications of the priority, especially with regard to the Commission’s government-to-
government relationship with Tribes. As adopted, the Tribal Priority can disadvantage certain applicants
whose applications or proposals are mutually exclusive with those of applicants qualifying for the Tribal
Priority. However, after due consideration, the Commission believes that the priority is necessary to
redress an imbalance in the number of Native American broadcasters vis-à-vis native populations and
lands, and to further the Commission’s interests in promoting diversity of ownership and programming, in
assisting Tribes to promulgate tribal language and culture, and in helping to promote self-government by
Tribes. Thus, the Commission has determined that the Tribal Priority as adopted is the least burdensome
method to achieve its policy goals, consonant with constitutional and other legal requirements.
16.
With regard to the adopted rule limiting the downgrade of AM facilities awarded based
on service proposals, initially the Commission proposed a standard allowing no reduction in population
served, much as is done with NCE selectees. However, after consideration, and recognizing the technical
complexity of the AM service and the burden such a rigid standard would impose on applicants, most of
whom are small businesses, the Commission instead adopted the more flexible “equivalency” standard,
which allows a variance of up to 20 percent of the population initially proposed to be served.
17.
Likewise, in adopting the rule requiring that AM technical proposals be technically
eligible for auction processing at time of filing, the Commission considered seeking further technical
information from applicants. Moreover, as proposed the rule would not have allowed curative
amendments. However, upon consideration of the record, the Commission opted not to require additional
technical information from applicants, declining to increase the burden on such parties, and also mitigated
the firm requirements of the proposed rule by allowing one opportunity for curative amendments.
18.
The remaining proposals adopted in the First R&O fall into one of two categories: grant
of delegated authority to modify certain rules on an as-needed basis, or codification or clarification of
existing policies and rules. In the first category, the new authority granted the Commission to place a
“cap” on AM filing window applications may deprive certain applicants of the ability to file all the
applications they wish. However, application caps will deter speculation, eliminating superfluous
applications and enabling faster processing of applications overall. Caps will cause applicants to focus on
those facilities that they value most, and in conjunction with the requirement of technically eligible
applications will encourage the filing of better and more quickly grantable applications, streamlining the


19 5 U.S.C. § 603(c)(1)-(c)(4)
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AM auction and award process. Given that, in the most recent AM auction filing window, less than six
percent of the applicants filed ten or more applications (accounting for approximately 40 percent of all
technical proposals filed), a reasonable application cap will burden only that small percentage of potential
applicants whose multiple applications take up disproportionate amounts of Commission time and
resources, slowing down the auction process and impeding the authorization of new AM service to the
public. The grant of delegated authority to the Media and Wireless Telecommunications Bureaus to
extend post-auction filing deadlines will only benefit applicants: it gives the Bureaus the flexibility to
provide additional time for parties that need it, while those who wish their applications to be considered
sooner may file when they like. In these cases, because of the significant benefits to regulated parties and
minimal to no burdens, it was not deemed necessary to consider other options.
19.
With regard to the adopted codifications and clarifications of existing rules, these also
present no burden on applicants requiring consideration of less burdensome alternatives. The codification
of the policy, used in prior auctions, allowing non-universal settlements that result in at least one
singleton application from an MX Group, speeds auctions by simplifying MX groups, and expedites
provision of new service by the singleton applicants. Similarly, the clarification of policies regarding new
entrant bidding credit eligibility and the new entrant bidding credit unjust enrichment rule does not place
any additional burdens on applicants or other parties. Rather, clarifying these policies will benefit
applicants, permittees, and licensees by adding certainty to auction and post-auction procedures. As such,
consideration of less burdensome alternatives was unnecessary.

F. Report to Congress

20.
The Commission will send a copy of the First 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 1996.20 In addition, the Commission will send a copy of the First R&O,
including the FRFA, to the Chief Counsel for Advocacy of the Small Business Administration. A copy of
the First R&O and FRFA (or summaries thereof) will also be published in the Federal Register.21


20 See id. § 801(a)(1)(A).
21 See id. § 604(b).
47

Federal Communications Commission FCC 10-24

APPENDIX C

Comments Filed in Response to Rural NPRM

Cameron University
Positive Alternative Radio, Inc.
Calvary Chapel of Twin Falls, Inc.
Booth, Freret, Imlay & Tepper, P.C.
Creative Educational Media Corp., Inc.
Amador S. Bustos and Bustos Media Holdings, L.L.C.
Priority Radio, Inc.
Vir James, P.C.
Hatfield & Dawson Consulting Engineers
Sacred Heart University, Inc.
American Media Services, LLC
Miller Communications, Inc., Kaskaskia Broadcasting, Inc., Virden Broadcasting Corp., Delta Radio
LLC, Contemporary Communications LLC, South Seas Broadcasting Inc., the Georgia-Carolina
Radiocasting Companies, WTUZ Radio Inc., Charisma Radio Corp., K95.5, Inc., Payne 5
Communications, LLC, Best Broadcasting, Inc., FM 105, Inc., Chirillo Electronics, Inc., Eastern
Shore Radio, Inc., Guadalupe Media, Ltd.
Communications Technologies, Inc.
National Association of Broadcasters
Educational Media Foundation
du Treil, Lundin & Rackley, Inc.
Glades Media Company, LLP
Native Public Media and National Congress of American Indians
Frank G. McCoy
William B. Clay
Brantley Broadcast Associates
Mullaney Engineering, Inc.
Munbilla Broadcasting Services, LLC
Cox Radio, Inc.
Prometheus Radio Project and National Federation of Community Broadcasters
Media Technology Ventures, LLC
Radio One, Inc., Minority Media and Telecommunications Council, Ace Radio Corporation, Auburn
Network, Inc., Cherry Creek Radio LLC, Chisholm Trail Broadcasting Co., Communications
Technologies, Inc., Radio K-T, Inc., Great South Wireless, LLC, Brantley Broadcast Associates,
LLC, RAMS, Broadcast One, Inc., Skytower Communications-E’town, Inc., Heritage
Communications, Inc., Anderson Associates, Holladay Broadcasting of Louisiana, Alatron Corp.,
Inc., Scott Communications, Inc., Alexander Broadcasting Company, LLC, Jackson Radio, LLC,
Main Line Broadcasting, LLC, Radiotechniques Engineering LLC, Signal Ventures LLC,
SMAHH Communications, Inc., Wagon Wheel Broadcasting, LLC, WRNJ, Inc., Dot Com Plus
LLC, Independence Broadcast Services, Provident Broadcasting Company, Inc., Radio Training
Network, Inc., Sacred Heart University, Inc., Hancock Broadcasting Corporation
Cherokee Nation
Carl T. Jones Corporation
Robert A. Lynch and Romar Communications, Inc.
Jorgenson Broadcast Brokerage, Inc.
Donald Manro
Charles Sumner
48

Federal Communications Commission FCC 10-24

Craig Kuehn
Thomas D. Bentley
Allen VanPliet
Jeff W. Bressler
Robert Feuer
Katie Finnigan
Christian McLaughlin
Don A. Sevilla
Craig Blomberg
Noel Yates
Nancy Bodily
Nancy Fullmer
Michael Niemann
Mark Woodward
David Kunian
Timothy Stone
Joe Shedlock
Bexley Public Radio Foundation
Scott Sanders
Jeff Shaw
Leigh Robartes
Jesse Drew
Jim Buchanan
Catholic Radio Association
Erubiel Valladares Carranza
Polnet Communications, Ltd. and Johnson Communications, Inc.
49

Federal Communications Commission FCC 10-24

APPENDIX D

Reply Comments Filed in Response to Rural NPRM

du Treil, Lundin & Rackley, Inc.
Booth, Freret, Imlay & Tepper, P.C.
Brantley Broadcast Associates
Media Technology Ventures, LLC
Educational Media Foundation
Cherokee Nation
William B. Clay
Radio One, Inc., Minority Media and Telecommunications Council, Ace Radio Corporation, Auburn
Network, Inc., Cherry Creek Radio LLC, Chisholm Trail Broadcasting Co., Communications
Technologies, Inc., Radio K-T, Inc., Great South Wireless, LLC, Brantley Broadcast Associates,
LLC, RAMS, Broadcast One, Inc., Skytower Communications-E’town, Inc., Heritage
Communications, Inc., Anderson Associates, Holladay Broadcasting of Louisiana, Alatron Corp.,
Inc., Scott Communications, Inc., Alexander Broadcasting Company, LLC, Jackson Radio, LLC,
Main Line Broadcasting, LLC, Radiotechniques Engineering LLC, Signal Ventures LLC,
SMAHH Communications, Inc., Wagon Wheel Broadcasting, LLC, WRNJ, Inc., Dot Com Plus
LLC, Independence Broadcast Services, Provident Broadcasting Company, Inc., Radio Training
Network, Inc., Sacred Heart University, Inc., Hancock Broadcasting Corporation
Native Public Media and National Congress of American Indians
National Association of Broadcasters
50

Federal Communications Commission FCC 10-24

APPENDIX E

Rule Changes

Part 73 of Chapter 1 of Title 47 of the Code of Federal Regulations is proposed to be amended as
follows:

1.
Section 73.3571 is amended by revising paragraphs (h)(1)(ii) and (h)(4)(iii), and adding new
paragraph (k), to read as follows:
§ 73.3571 Processing of AM broadcast station applications.
* * * * *
(h) Processing new and major AM broadcast station applications.
* * *
(1)(ii) Such AM applicants will be subject to the provisions of §§ 1.2105 and 73.5002 regarding
the submission of the short-form application, FCC Form 175, and all appropriate certifications,
information and exhibits contained therein. Applications must include the following engineering
data: (1) community of license; (2) frequency; (3) class; (4) hours of operations (day, night,
critical hours); (5) power (day, night, critical hours); (6) antenna location (day, night, critical
hours); and (7) all other antenna data. Applications lacking data (including any form of
placeholder, such as inapposite use of “0” or “not applicable” or an abbreviation thereof) in any
of these categories will be immediately dismissed as incomplete without an opportunity for
amendment. The staff will review the remaining applications to determine whether they meet the
following basic eligibility criteria: (1) community of license coverage (day and night) as set forth
in § 73.24(i), and (2) protection of co- and adjacent-channel station licenses, construction permits
and prior-filed applications (day and night) as set forth in §§ 73.37 and 73.182. If the staff review
shows that an application does not meet one or more of the basic eligibility criteria listed above, it
will be deemed “technically ineligible for filing” and will be included on a Public Notice listing
defective applications and setting a deadline for the submission of curative amendments. An
application listed on that Public Notice may be amended only to the extent directly related to an
identified deficiency in the application. The amendment may modify the proposed power, class
(within the limits set forth in Section 73.21 of the Rules), antenna location or antenna data, but
not the proposed community of license or frequency. Except as set forth in the preceding two
sentences, amendments to short-form (FCC Form 175) applications will not be accepted at any
time. Applications that remain technically ineligible after the close of this amendment period will
be dismissed, and the staff will determine which remaining applications are mutually exclusive.
* * *
(4)(iii) All long-form applications will be cutoff as of the date of filing with the FCC and will be
protected from subsequently filed long-form applications. Applications will be required to protect
all previously filed commercial and noncommercial applications. Subject to the restrictions set
forth in subsection (k) below, winning bidders filing long-form applications may change the
technical proposals specified in their previously submitted short-form applications, but such
change may not constitute a major change. If the submitted long-form application would
51

Federal Communications Commission FCC 10-24

constitute a major change from the proposal submitted in the short-form application, the long-
form application will be returned pursuant to paragraph (h)(1)(i) of this section.
* * * * *
(k)(i) An AM applicant receiving a dispositive Section 307(b) preference is required to construct
and operate technical facilities substantially as proposed in its FCC Form 175. An AM applicant,
licensee, or permittee receiving a dispositive Section 307(b) preference based on its proposed
service to underserved populations (under Priority (1), Priority (2), and Priority (4)) or service
totals (under Priority (4)) may modify its facilities so long as it continues to provide the same
priority service to substantially the same number of persons who would have received service
under the initial proposal, even if the population is not the same population that would have
received such service under the initial proposal. For purposes of this provision, “substantially”
means that any proposed modification must not result in a decrease of more than 20 percent of
any population figure that was a material factor in obtaining the dispositive Section 307(b)
preference.
(ii) An AM applicant, licensee, or permittee that has received a dispositive preference under
Priority (3) will be prohibited from changing its community of license.
(iii) The restrictions set forth in subsections (k)(i) and (k)(ii) will be applied for a period of four
years of on-air operations. This holding period does not apply to construction permits that are
awarded on a non-comparative basis, such as those awarded to non-mutually exclusive applicants
or through settlement.
2.
Section 73.5002 is amended by adding new paragraph (e), to read as follows:
§ 73.5002 Application and certification procedures; return of mutually exclusive
applications not subject to competitive bidding procedures; prohibition of collusion.

* * * * *
(e) Applicants seeking to resolve their mutual exclusivities by means of engineering solution or
settlement during a limited period as specified by public notice, pursuant to paragraph (d) of this
section, may submit a non-universal engineering solution or settlement proposal, so long as such
engineering solution or settlement proposal results in the grant of at least one application from the
mutually exclusive group. A technical amendment submitted under this subsection must resolve
all of the applicant’s mutual exclusivities with respect to the other applications in the specified
mutually exclusive application group.
3.
Section 73.5005 is amended by revising paragraph (a), to read as follows:
§ 73.5005 Filing of long-form applications.
(a) Within thirty (30) days following the close of bidding and notification to the winning bidders,
unless a longer period is specified by public notice, each winning bidder must submit an
appropriate long-form application (FCC Form 301, FCC Form 346, or FCC Form 349) for each
construction permit or license for which it was the high bidder. * * *
52

Federal Communications Commission FCC 10-24

* * * * *
4.
Section 73.5007 is amended by revising paragraph (a) and adding Note 1, to read as follows:
§ 73.5007 Designated entity provisions.
(a) New entrant bidding credit. A winning bidder that qualifies as a “new entrant” may use a
bidding credit to lower the cost of its winning bid on any broadcast construction permit. Any
winning bidder claiming new entrant status must have de facto, as well as de jure, control of the
entity utilizing the bidding credit. A thirty-five (35) percent bidding credit will be given to a
winning bidder if it, and/or any individual or entity with an attributable interest in the winning
bidder, have no attributable interest in any other media of mass communications, as defined in §
73.5008. A twenty-five (25) percent bidding credit will be given to a winning bidder if it, and/or
any individual or entity with an attributable interest in the winning bidder, have an attributable
interest in no more than three mass media facilities. No bidding credit will be given if any of the
commonly owned mass media facilities serve the same area as the proposed broadcast or
secondary broadcast station, or if the winning bidder, and/or any individual or entity with an
attributable interest in the winning bidder, have attributable interests in more than three mass
media facilities. Attributable interests held by a winning bidder in existing low power television,
television translator or FM translator facilities will not be counted among the bidder's other mass
media interests in determining eligibility for a bidding credit. Eligibility for the new entrant
bidding credit must be specified in an applicant’s FCC Form 175 application, and the new entrant
bidding credit specified in an applicant’s FCC Form 175 application establishes that applicant’s
maximum bidding credit eligibility for that auction. Any post-FCC Form 175 filing change in the
applicant’s circumstances underlying its new entrant bidding credit eligibility claim, or that of
any attributable interest-holder in the applicant, must be reported to the Commission immediately,
and no later than five business days after the change occurs. Any such post-FCC Form 175 filing
change may cause a reduction or elimination of the new entrant bidding credit claimed in the
applicant’s FCC Form 175 application, if the change would cause the applicant not to qualify for
the originally claimed new entrant bidding credit under the eligibility provisions of § 73.5007,
and the change occurred prior to grant of the construction permit to the applicant. Final
determinations regarding new entrant status will be made at the time of long form construction
permit application grant. Applicants whose eligibility is lost or reduced subsequent to the FCC
Form 175 filing must, before a construction permit will be issued, make such payments as are
necessary to account for the difference between claimed and actual bidding credit eligibility.
* * * * *
Note 1 to §73.5007: For purposes of paragraph (b)(3)(ii) of this section, the contour of the
proposed new FM broadcast station is based on the maximum class facilities at the FM allotment
site, which is defined as the perfectly circular standard 70 dBu contour distance for the class of
station.
53

Federal Communications Commission FCC 10-24

5.
Section 73.7000 is amended by adding six additional definitions, to read as follows:
§ 73.7000 Definition of terms (as used in subpart K only).
* * * * *
Near Reservation Lands. Those areas or communities adjacent or contiguous to reservation or
other Trust lands which are designated by the Department of Interior’s Commission of Indian
Affairs upon recommendation of the Local Bureau of Indian Affairs Superintendent, which
recommendation shall be based upon consultation with the tribal governing body of those
reservations, as locales appropriate for the extension of financial assistance and/or social services
on the basis of such general criteria as: Number of Indian people native to the reservation
residing in the area; a written designation by the tribal governing body that members of their tribe
and family members who are Indian residing in the area, are socially, culturally and economically
affiliated with their tribe and reservation; geographical proximity of the area to the reservation
and administrative feasibility of providing an adequate level of services to the area.
Reservations. Any federally recognized Indian tribe’s reservation, pueblo or colony, including
former reservations in Oklahoma, Alaska Native regions established pursuant to the Alaska
Native Claims Settlements Act (85 Stat. 688) and Indian allotments, for which a Tribe exercises
regulatory jurisdiction.
Tribe. Any Indian or Alaska Native tribe, band, nation, pueblo, village or community which is
acknowledged by the federal government to constitute a government-to-government relationship
with the United States and eligible for the programs and services established by the United States
for Indians. See The Federally Recognized Indian Tribe List Act of 1994 (Indian Tribe Act), Pub.
L. 103-454. 108 Stat. 4791 (1994) (the Secretary of the Interior is required to publish in the
Federal Register an annual list of all Indian Tribes which the Secretary recognizes to be eligible
for the special programs and services provided by the United States to Indians because of their
status as Indians).
Tribal Applicant. (1) a Tribe or consortium of Tribes, or (b) an entity that is 51 percent or more
owned or controlled by a Tribe or Tribes that occupy Tribal Lands that receive Tribal Coverage
Tribal Coverage. Coverage of Tribal Lands by at least 50 percent of a facility’s 60 dBu (1
mV/m) contour. To the extent that Tribal Lands include fee lands not owned by Tribes or
members of Tribes, the outer boundaries of such lands shall delineate the coverage area, with no
deduction of area for fee lands not owned by Tribes or members of Tribes.
Tribal Lands. Both Reservations and Near reservation lands. This definition includes American
Indian Reservations and Trust Lands, Tribal Jurisdiction Statistical Areas, Tribal Designated
Statistical Areas, Hawaiian Homelands, and Alaska Native Village Statistical Areas, as well as
the communities situated on such lands.
54

Federal Communications Commission FCC 10-24

6.
Section 73.7002 is amended by revising paragraphs (b) and (c), to read as follows:
§ 73.7002 Fair distribution of service on reserved band FM channels.
* * * * *
(b) In an analysis performed pursuant to paragraph (a) of this section, a full-service FM applicant
that identifies itself as a Tribal Applicant, that proposes Tribal Coverage, and that proposes the
first reserved channel NCE service owned by any Tribal Applicant at a community of license
located on Tribal Lands, will be awarded a construction permit. If two or more full-service FM
applicants identify themselves as Tribal Applicants and meet the above criteria, the applicant
providing the most people with reserved channel NCE service to Tribal Lands will be awarded a
construction permit, regardless of the magnitude of the superior service or the populations of the
communities of license proposed, if different. If two or more full-service FM applicants
identifying themselves as Tribal Applicants each meet the above criteria and propose identical
levels of NCE aural service to Tribal Lands, only those applicants shall proceed to be considered
together in a point system analysis. In an analysis performed pursuant to paragraph (a) of this
section that does not include a Tribal Applicant, a full service FM applicant that will provide the
first or second reserved channel noncommercial educational (NCE) aural signal received by at
least 10% of the population within the station's 60dBu (1mV/m) service contours will be
considered to substantially further fair distribution of service goals and to be superior to mutually
exclusive applicants not proposing that level of service, provided that such service to fewer than
2,000 people will be considered insignificant. First service to 2,000 or more people will be
considered superior to second service to a population of any size. If only one applicant will
provide such first or second service, that applicant will be selected as a threshold matter. If more
than one applicant will provide an equivalent level (first or second) of NCE aural service, the size
of the population to receive such service from the mutually exclusive applicants will be
compared. The applicant providing the most people with the highest level of service will be
awarded a construction permit, if it will provide such service to 5,000 or more people than the
next best applicant. If none of the applicants in a mutually exclusive group would substantially
further fair distribution goals, all applicants will proceed to examination under a point system. If
two or more applicants will provide the same level of service to an equivalent number of people
(differing by less than 5,000), only those equivalent applicants will be considered together in a
point system.
(c) For a period of four years of on-air operations, an applicant receiving a decisive preference
pursuant to this section is required to construct and operate technical facilities substantially as
proposed and shall not downgrade service to the area on which the preference was based.
Additionally, for a period beginning from the award of a construction permit through four years
of on-air operations, a Tribal Applicant receiving a decisive preference pursuant to this section
may not (1) assign or transfer the authorization except to another party that qualifies as a Tribal
Applicant, (2) change the facility’s community of license, or (3) effect a technical change that
would cause the facility to provide less than full Tribal Coverage.
55

Federal Communications Commission FCC 10-24

STATEMENT OF

COMMISSIONER MICHAEL J. COPPS

Re:
Policies to Promote Rural Radio Service and to Streamline Allotment and Assignment
Procedures
, MB Docket 09-52
I am delighted to add my vote of approval to this Order that sets us on a path to foster increased
ownership of radio broadcast stations by federally recognized American Indian Tribes and Alaska Native
Villages. I was pleased the Commission launched this proceeding during my Acting Chairmanship, and I
couldn’t be more pleased with the prompt action taken by the Commission to implement this priority for
Tribes and tribal consortia. The Order starts from our assessment that the current allocation priorities –
which are designed to provide a fair, efficient and equitable distribution of radio service among all States
and communities – have not worked as intended for tribal lands. Only 41 radio stations out of the
approximately 14,000 radio stations licensed in the United States – or less than one-third of one percent –
are currently licensed to federally recognized Indian tribes. This sad statistic testifies to a course much in
need of correcting. Thus, we adopt today a new Section 307 (b) priority that will apply to federally
recognized Native American Tribes that propose new radio services to serve tribal lands.
Increased tribal ownership of radio stations furthers the Commission’s core goals of competition,
localism and diversity. More tribally-owned stations will mean new opportunities for these rural
communities: economic advancement from construction activity to erect broadcast facilities;
advertisements for goods and services geared especially to tribal audiences and markets; career and
employment opportunities in media-related fields; outlets for the distribution of diverse cultural
programming and viewpoints, as well as public safety information for tribal lands. This initiative goes to
the heart of localism. There can be no doubt that radio stations owned by Tribes, for the benefit of those
residing on tribal lands, advance the FCC’s localism objective.
In addition, we seek further comment on whether the Commission should implement a special
bidding credit to tribal applicants in addition to or in lieu of our existing new entrant bidding credits, and
how Tribes without tribal lands can qualify for the Tribal priority we adopt today. The Order also adopts
additional measures to streamline auction application processing, including a procedure to cap the number
of applications a single applicant may file in an AM short-form window. These much needed reforms
will protect the integrity of the auctions process and promote opportunities for new entrants to bid for
radio broadcast construction permits.
I fully support today’s Order, and look forward to continuing to work on ways to enhance
broadcast ownership diversity among American Indian Tribes.
56

Federal Communications Commission FCC 10-24

STATEMENT OF

COMMISSIONER ROBERT M. MCDOWELL

Re:
Policies to Promote Rural Radio Service and to Streamline Allotment and Assignment
Procedures,
MB Docket No. 09-52
I am pleased to support this First Report and Order (“Order”), which affords a priority under
Commission rules to Native American Tribes, Alaska Native Villages, and tribal consortia (“Tribes”) to
assist them in obtaining new radio stations designed to serve their tribal communities. As of today, Tribal
lands and Alaska Native lands are some of the most under-served parts of America. Our rule change is
designed to be a solid first step in fostering the development of new stations owned and controlled by
Tribes to serve their communities on tribal lands.
By affording the Tribes an improved opportunity to provide news, information, entertainment and
public safety alerts to their members, this initiative comports well with the Commission’s charge under
Section 307(b) of the Communications Act to provide a “fair, efficient and equitable distribution of radio
service” across the nation. It also is consistent with the Commission’s longstanding recognition of tribal
sovereignty and the federal trust relationship between the U.S. government and federally recognized
Native peoples. Moreover, the new rule is tailored to advance the interests of the Tribes in a manner that
satisfies Supreme Court precedent concerning both tribal sovereignty and the Equal Protection Clause of
the Constitution.
On a more practical note, I also hope that the new stations that result – whether AM or FM,
commercial or noncommercial – help to promote tribal self-sufficiency and economic development. I
thank the staffs of the Media Bureau and the Office of the General Counsel for their work on the Order.
57

Federal Communications Commission FCC 10-24

STATEMENT OF

COMMISSIONER MIGNON L. CLYBURN

Re:
Policies to Promote Rural Radio Service and to Streamline Allotment and Assignment
Procedures,
MB Docket No. 09-52
The Commission is taking a step in the right direction today by establishing a priority for
American Indian Tribes and Alaska Native Villages proposing FM allotments, and submitting
AM and noncommercial educational FM filing window applications. The Tribes and Villages
have been woefully underrepresented among the radio ownership ranks, and for decades they
have suffered a lack of radio programming addressing issues of importance to them. As a result,
many Tribal members simply do not have access to a critical source of information that can
contribute significantly to the economic and community development of Native peoples.
The importance of the Tribal Priority is further highlighted by the unique responsibility
Tribal entities have as sovereign nations to govern, educate, and care for their members. The
Commission recognized the significance of this charge in its 2000 Tribal Policy Statement. And
as Native Public Media and the National Congress of American Indians have recently reminded
us, a Tribal Priority would be – and now is – the Commission’s first step in implementing our
Tribal Policy Statement for broadcasting services. Thank you to the staffs of the Media Bureau
and the Office of General Counsel for their hard work and attention to detail in producing this
important item.
58

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