******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In re Application of ) MM Docket No. 85-269 ) DOROTHY O. SCHULZE and ) File No. BPCT-850320KG DEBORAH BRIGHAM, A General ) Partnership ) ) For a Construction Permit for ) a New Television Station ) at Blanco, Texas ) MEMORANDUM OPINION AND ORDER Adopted: February 12, 1998 ; Released: February 17, 1998 By the Commission: 1. This order denies a Petition for Reconsideration, filed March 26, 1997, by Dorothy O. Schulze and Deborah Brigham, A General Partnership (DSDB) and SL Communications, Inc. (SL) (collectively Petitioners). Petitioners seek reconsideration of a Memorandum Opinion and Order declining to approve their proposed settlement in this proceeding. Dorothy O. Schulze and Deborah Brigham, A General Partnership, 12 FCC Rcd 2602 (1997). We find that Petitioners provide no basis for reconsideration. I. BACKGROUND 2. DSDB is the remaining applicant in what was once a three-party comparative proceeding for a new UHF television station on Channel 52 in Blanco, Texas. It was disqualified based on a finding that its principals had engaged in misrepresentations. Opal Chadwell, 2 FCC Rcd 5502 (Rev. Bd. 1987), rev. granted in part, 4 FCC Rcd 1215 (1989), recon. granted in part, 5 FCC Rcd 3227 (1990). Following the extensive proceedings described at 12 FCC Rcd 2602-03  2-6, DSDB and SL, which is not a party to this proceeding, filed a proposed settlement intended to terminate the proceeding. 3. Under the proposed settlement, DSDB would amend its application to substitute SL as the applicant in return for reimbursement of its expenses, and the amended application would be granted. The Commission, however, disapproved the proposed settlement because of DSDB's lack of qualifications. The Commission agreed with the Mass Media Bureau not to elevate form over substance by ignoring the fact that the requested relief was the equivalent of granting DSDB's application and authorizing an assignment of the construction permit to SL. Because DSDB had not shown itself qualified to receive the grant of a construction permit, the Commission found that DSDB had nothing to assign. Given these circumstances, the Commission found no good cause -- as is required by 47 C.F.R.  73.3522(b) -- for accepting an amendment to DSDB's application. II. PETITION FOR RECONSIDERATION 4. Petition. Petitioners argue that disapproval of the settlement was contrary to the public interest. They contend that despite the lengthy pendency of this proceeding, the settlement represents the only prospect for bringing a new television service to Blanco by an unquestionably qualified licensee. They assert that as a result of the freeze on the filing of new television applications related to Commission consideration of new digital television Systems (DTV) in MM Docket No. 87-268, it is unlikely that a construction permit will be awarded for the Blanco facility in the foreseeable future. See Advanced Television Systems and Their Impact upon the Existing Television Broadcast Service, 11 FCC Rcd 10968 (1996) (Sixth Further Notice of Proposed Rulemaking). 5. Petitioners also argue that approving the settlement would be consistent with Commission precedent. According to Petitioners, cases such as Rebecca Radio of Marco, 4 FCC Rcd 830 (1989), modified, 5 FCC Rcd 937 (1990), recon. denied, 5 FCC Rcd 2913 (1990), and James U. Steele, 4 FCC Rcd 4700 (1989), reaffirmed, 5 FCC Rcd 4121 (1990), permit third party settlements, such as that proposed here under circumstances where it would not encourage the filing of abusive applications. In this regard, they assert that, since DSDB prosecuted its application for many years, the application was not filed for the purpose of securing a settlement and cannot be considered abusive. Petitioners assert that under these circumstances only the qualifications of the prospective permittee concern the Commission, not those of the withdrawing applicant. 6. The Bureau responds that Petitioners have shown no material error or omission in the Commission's action. On the contrary, the Bureau contends that the Commission's action is consistent with the policy of deterring misconduct by applicants and that approving the settlement would simply reward DSDB's persistence and undermine the Commission's policy of deterring misconduct. The Bureau submits that the potential impact of the DTV proceeding on the Blanco facility was known at the time of the Commission's order and that the Commission has the discretion to preclude new service in Blanco for that reason. 7. In reply, Petitioners reiterate their contention that the Commission's decision is inconsistent with Rebecca Radio and Steele. Moreover, they deny that DSDB would be enriched by approval of the settlement since it would receive no more than its out-of-pocket expenses and that an adverse decision concerning its qualifications would remain outstanding. Thus, they argue that approval of the settlement would not undermine the Commission's character policy. Petitioners note that if SL had been one of the original applicants, instead of a newcomer, DSDB could dismiss its application and receive reimbursement pursuant to Allegan County Broadcasters, Inc., 83 FCC 2d 371, 372-74  4-7 (1980). 8. Discussion. We find the petition without merit. We agree with the Bureau that for the most part Petitioners' arguments were before us and fully considered at the time we adopted our Memorandum Opinion and Order. Reconsideration will not be granted merely for the purpose of again debating matters on which we have once deliberated and spoken. WWIZ, Inc., 37 FCC 685, 686  2 (1964), aff'd sub nom. Lorain Journal Co. v. FCC, 351 F.2d 824 (D.C. Cir. 1965), cert. denied, 383 U.S. 967 (1966). Certain matters raised in the petition, however, warrant discussion. 9. We first consider Petitioners' claim that, unless we approve their proposed settlement, the Commission's actions in the DTV proceeding will effectively preclude a long- awaited new service to Blanco. We also consider the Bureau's suggestion that the impact of the DTV proceeding should be taken into account in ruling on Petitioners' request. By way of background, when we initiated the DTV proceeding, we were concerned that limitations on the availability of broadcast spectrum might interfere with the development of high definition television or other enhanced video technologies. Accordingly, we imposed a freeze on the creation of new conventional (NTSC) television allotments and on the acceptance of applications for vacant television allotments. Advanced Television Systems and Their Impact on the Existing Television Broadcast Service, Mimeo No. 4074 (Jul. 17, 1987) at  2. See generally Advanced Television Systems and Their Impact on the Existing Television Broadcast Service, 2 FCC Rcd 5125 (1987) (Notice of Inquiry). Initially, the freeze covered only the 30 largest television markets (and did not include Blanco), but we subsequently broadened the freeze to all areas of the country. Advanced Television Systems and Their Impact upon the Existing Television Broadcast Service, 11 FCC Rcd 10968, 10991-93  57-62 (1996) (Sixth Further Notice of Proposed Rulemaking). We also proposed to delete all unused allotments. Petitioners' argument is premised on the assumption that, if this proceeding does not result in a grant, any future applications on Channel 52 in Blanco would be barred and the Channel 52 allotment would be deleted. 10. While we agree with Petitioners' premise that it would be equitable to take action to ensure that Blanco is not deprived of this long-awaited television service, we need not grant the relief Petitioners' seek to achieve that result. Recently, our deliberations in MM Docket No. 87-268 have resulted in the adoption of technical standards and an allotment plan for DTV, and we have now completed the initial allotment of DTV channels. Advanced Television Systems and Their Impact upon the Existing Television Broadcast Service, 12 FCC Rcd 12809 (1997) (Fifth Report and Order); Advanced Television Systems and Their Impact upon the Existing Television Broadcast Service, 12 FCC Rcd 14588 (1997) (Sixth Report and Order). The Table of Allotments that we adopted effectuated our primary objective of fully accommodating the transition of all existing licensees from NTSC to DTV by pairing, during a transition period, a DTV channel with each NTSC channel used by an existing broadcaster. 12 FCC Rcd at 14595  11, 14460  113. We were able to do this while, at the same time, maintaining and protecting all vacant NTSC allotments subject to pending applications, such as Channel 52 in Blanco. Id. at 14639  112. As proposed, we eliminated all other vacant NTSC allotments. 11. In light of all the circumstances in this case, and to ensure that the people of Blanco have an opportunity to receive television service without undue delay, we believe that Channel 52 should be preserved. Although we found that eliminating vacant NTSC allotments would generally further our goals in the development of DTV allotments, we recognize the countervailing public interest in protecting the Channel 52 allotment in Blanco. Continuing to protect this channel will not jeopardize our plans with respect to DTV, because this allotment is not necessary to effectuate those plans. See 12 FCC Rcd at 14639  112. Further, applications for this channel have been on file since 1985. In view of the foregoing, we conclude that both the public interest and basic fairness warrant taking further steps to provide service on Channel 52 in Blanco. We hold that Channel 52 in Blanco is exempt from the general provisions of the Sixth Report and Order deleting vacant NTSC allotments. We direct the Bureau, therefore, to take appropriate steps to permit the filing of applications for Channel 52. 12. A second matter we wish to address is the relevance of Allegan to this proceeding. The facts here are distinguishable from Allegan in at least two ways. First, SL is not an original applicant for the construction permit. In contrast, in Allegan, the recipient of the construction permit, Allegan County Broadcasters, was an original applicant in the proceeding to select a permittee from mutually exclusive applications. If Petitioners' settlement were approved and SL were granted the construction permit, other potential applicants would not have had an opportunity to compete with SL for the license. Second, DSDB has been adjudged and found to be unqualified by an ALJ, whose decision has been reviewed and affirmed by a Review Board, as well as by the full Commission. Conversely, in Allegan, charges of disqualifying conduct had been made against the party seeking to withdraw from the proceeding, but at the time of settlement, the charges had not been fully resolved by the Commission. Indeed, central to the Commission's decision in Allegan, was that Commission resources would not be needlessly wasted to conduct a hearing on charges of disqualifying conduct when the challenged applicant was willing to voluntarily withdraw and when another qualified applicant in the proceeding stood ready to construct the station. In these circumstances, we decline to extend the Allegan policy to the Petitioners' proposed settlement. III. SUPPLEMENTS TO PETITION 13. Supplement. On September 2, 1997 and December 8, 1997, SL filed supplements to the petition contending that recent events have strengthened the grounds for reconsideration. SL observes that the Balanced Budget Act of 1997, Pub. L. No. 105-33, 111 Stat. 251 (1997), added Section 309(l) to the Communications Act of 1934, which grants the Commission authority to use competitive bidding, in lieu of comparative hearings, to resolve proceedings involving mutually exclusive applications. Thus, SL contends, granting the parties settlement here will have no precedential impact, because SL anticipates that the authority granted by the Balanced Budget Act "will mean the end of comparative hearings." [First] Supplement to Petition for Reconsideration at 3. Moreover, the Act also provides that, for a 180-day period, the Commission "shall waive any provisions of its regulations necessary" to allow persons filing competing applications before July 1, 1997 to enter into agreements to eliminate conflicts "between their applications." SL notes that in Gonzales Broadcasting, Inc., FCC 97-283 (Aug. 12, 1997), the Commission waived the limits on reimbursement in 47 C.F.R.  73.3525 to approve a settlement involving a non-applicant and contends that the Commission should be willing to waive other rules and policies so that the third-party settlement here can be granted. Similarly, SL suggests that the Commission could waive the requirements of 47 C.F.R.  73.3522(b), which requires that DSDB demonstrate good cause to substitute SL as the applicant. SL notes that in Implementation of Section 309(j) of the Communications Act, FCC 97-397 (Nov. 26, 1997) at  26 (NPRM), the Commission specifically indicated that the Balanced Budget Act warrants waiving policies that might otherwise bar third-party settlements. 14. Discussion. We find that neither the passage of the Balanced Budget Act, the NPRM, nor our decision in Gonzales supports reconsideration here. We reject SL's argument that the Balanced Budget Act eliminates the possibility that approval of the settlement would have adverse precedential impact. Whether or not comparative hearings continue to be held for pending mutually exclusive applications, a settlement proposal that effectively grants an authorization to an applicant that lacks character qualifications potentially has precedential significance outside the context of comparative hearings. In addition, the provisions of the Balanced Budget Act applying to settlements do not apply to this case. That Act provides for the waiver of provisions to "procure the removal of a conflict between [competing] applications," in pending cases that otherwise might be resolved by the Commission's newly-authorized competitive bidding authority. See Balanced Budget Act of 1997, Pub. Law No. 105-33,  3003(a)(3), 111 Stat. 251 (1997). See also NPRM at  26. Because DSDB is the only remaining applicant in this proceeding, there are no "competing applications" entitled to the settlement relief contained in the Balanced Budget Act. By contrast, Gonzales, in which pending competing applicants who might otherwise have been subject to an auction entered into a settlement, does fall within the class of cases addressed by the Balanced Budget Act. The Balanced Budget Act thus has no relevance to whether the proffered settlement here should be approved. 15. If anything, passage of the Balanced Budget Act, which provides for the use of competitive bidding instead of comparative hearings for future competing applications, lends further support for our public interest determination that the license here should not simply be awarded to a non-party who seeks to obtain the permit from a disqualified applicant. As discussed in the NPRM, use of competitive bidding will expedite new service and conserve administrative resources in selecting a new licensee. It will also afford other applicants the opportunity to compete for this channel and reimburse the public for use of the spectrum, consistent with the congressional objectives underlying the Commission's auction authority. IV. ORDERING CLAUSES 16. ACCORDINGLY, IT IS ORDERED, That, good cause having been shown, the Petition for Leave to Supplement Petition for Reconsideration, filed September 2, 1997, by SL Communications, Inc. IS GRANTED. 17. IT IS FURTHER ORDERED, That the Petition for Reconsideration, filed March 26, 1997, by Dorothy O. Schulze and Deborah Brigham, A General Partnership and SL Communications, Inc., as supplemented, IS DENIED. 18. IT IS FURTHER ORDERED, That this proceeding IS TERMINATED. 19. IT IS FURTHER ORDERED, That the Mass Media Bureau IS DIRECTED to take further action consistent with paragraph 11, supra. FEDERAL COMMUNICATIONS COMMISSION Magalie Roman Salas Secretary