Federal Register: RULES [47 CFR Part 73]

FEDERAL COMMUNICATIONS COMMISSION

Federal Communications Commission

CFR Citation: 47 CFR Part 73

Docket ID: [MB Docket No. 99-25; FCC 07-204]

NOTICE: RULES

DOCUMENT ACTION: Final rule.

SUBJECT CATEGORY: Creation of a Low Power Radio Service

DATES: The rules will become effective March 17, 2008.

DOCUMENT SUMMARY: In this document, the Commission adopts rules and provides guidance to efforts to promote the operation and expansion of the low power FM (LPFM) service. The Commission solicited and reviewed comments regarding the status of LPFM service, and found that to promote the service, it was necessary to make rule changes related to ownership and technical issues.

SUMMARY: Creation of a Low Power Radio Service,

SUPPLEMENTAL INFORMATION

This is a summary of the Commission's Third Report and Order, FCC 07204, adopted on November 27, 2007, and released on December 11, 2007. The full text of this document is available for public inspection and copying during regular business hours in the FCC Reference Center, Federal Communications Commission, 445 12th Street, SW., CYA257, Washington, DC 20554. These documents will also be available via ECFS (http://www.fcc.gov/cgb/ecfs/). (Documents will be available electronically in ASCII, Word 97, and/or Adobe Acrobat.) The complete text may be purchased from the Commission's copy contractor, 445 12th Street, SW., Room CYB402, Washington, DC 20554. To request this document in accessible formats (computer diskettes, large print, audio recording, and Braille), send an email to fcc504@fcc.gov or call the Commission's Consumer and [[Page 3203]]
Governmental Affairs Bureau at (202) 4180530 (voice), (202) 4180432 (TTY).
Summary of the Third Report and Order

I. Introduction

1. In March 2005, the Commission released a Second Order on Reconsideration (Second Order), 70 FR 39182, July 7, 2005 and Further Notice of Proposed Rulemaking (FNPRM), 70 FR 39217, July 7, 2005 as part of its ongoing efforts to promote the operation and expansion of the low power FM (LPFM) service. In the Second Order, the Commission made minor changes to the LPFM rules. The accompanying FNPRM sought comment on a number of issues related to ownership and eligibility restrictions for LPFM licensees, as well as technical matters related to the LPFM service. This Third Report and Order resolves the issues raised in the FNPRM. In so doing, this Order advances the Commission's goal ``to ensure that we maximize the value of LPFM service without harming the interests of fullpower FM stations or other Commission licensees.'' In light of changed circumstances since we last considered the issue of protection rights for LPFM stations from subsequently authorized fullservice stations, we also find it necessary to consider certain rule changes to avoid the potential loss of LPFM stations. Accordingly, we issue a Second Further Notice of Proposed Rulemaking (Second FNPRM) to seek comment on these changes.

II. Background

2. In January 2000, the Commission adopted rules to establish two classes of LPFM facilities: (a) The LP100 class, consisting of stations with a maximum power of 100 Watts effective radiated power (ERP) at 30 meters antenna height above average terrain (HAAT), providing an FM service radius (1 mV/m or 60 dB[mu]) of approximately 3.5 miles (5.6 kilometers); and (b) the LP10 class, consisting of stations with a maximum of 10 Watts ERP at 30 meters HAAT, providing an FM service radius of approximately one to two miles (1.6 to 3.2 kilometers). The Report and Order, 65 FR 7615, February 15, 2000 announcing those classes imposed separation requirements for LPFM stations to protect fullpower FM stations operating on the co, first, and second adjacent channels, as well as stations operating on intermediate frequency (IF) channels. The Report and Order concluded, however, that imposition of a thirdadjacent channel separation requirement would restrict unnecessarily the number of LPFM stations that could be authorized, and therefore declined to impose that requirement.

3. The Report and Order also established ownership and eligibility rules for the LPFM service. The Commission restricted LPFM service to noncommercial educational (NCE) operations, restricted licensee eligibility to applicants with no attributable interests in any other broadcast station or other media subject to our ownership rules, and prohibited the assignment or transfer of LPFM stations. The Commission also determined that, during the two years following the first LPFM filing window, no entity would be permitted to own more than one LPFM station and that ownership should be restricted to local entities. To choose among entities filing mutually exclusive applications for LPFM licenses, the Report and Order set forth a point system that favors local ownership and locallyoriginated programming, with ties between competing applicants resolved by either voluntary timesharing agreements between such applicants or, in the event that they cannot so agree, the imposition of ``involuntary timesharing,'' with each tied and grantable applicant awarded an equal, successive and nonrenewable license term of no less than one year, for a combined total eightyear term. Finally, the Report and Order directed the thenMass Media Bureau to establish filing windows for LP100 applications.

4. The Commission revised and clarified some of its LPFM rules in a September 2000 Memorandum Opinion and Order on Reconsideration (Reconsideration Order), 65 FR 67289, November 9, 2000. The Reconsideration Order declined to adopt the more restrictive channel separation requirements urged by certain petitioners. Instead, the Commission adopted complaint and license modification procedures to address unexpected thirdchannel interference problems caused by LPFM stations. The Reconsideration Order modified spacing standards to require LPFM stations to protect radio reading services. Beyond the issue of interference, the Commission increased ownership flexibility for universities, state and local governments, and entities operating public safety or transportation services. Finally, the Reconsideration Order addressed a number of technical and ownership issues and clarified the eligibility rules for certain groups.

5. After the Commission declined to impose thirdadjacent channel separation requirements in the Reconsideration Order, Congress directed the agency to do so in the Making Appropriations for the Government of The District of Columbia for FY 2001 Act (2001 DC Appropriations Act). In that legislation, Congress instructed the Commission to prescribe thirdadjacent channel spacing standards for LPFM stations and to deny LPFM applications of applicants that previously had engaged in the unlicensed operation of a radio station. The 2001 DC Appropriations Act also directed the Commission to evaluate the likelihood of interference to existing FM stations if LPFM stations were not subject to the third adjacent channel spacing requirement.

6. As a result of the spacing requirement imposed by the 2001 DC Appropriations Act, a number of facilities proposed in otherwise technically grantable applications became shortspaced to existing fullpower FM stations or translators, leading to the eventual dismissal of those applications. To evaluate the likelihood of interference in the absence of a thirdadjacent channel separation requirement, the Commission selected an independent third partythe Mitre Corporationto conduct field tests. The Commission then sought public comment on Mitre's reported findings. In February 2004, the Commission submitted its report to Congress, recommending that, based on the Mitre study, Congress ``modify the statute to eliminate the thirdadjacent channel distan[ce] separation requirements for LPFM stations.''

7. In the March 2005 Second Order, the Commission reexamined some of the rules governing the LPFM service, noting that the rules might need adjustment in light of the experiences of LPFM applicants and licensees. The Commission also took into account comments made at a February 2005 forum on LPFM that had addressed ``achievements by LPFM stations and the challenges faced as the service mark[ed] its fifth year.'' The Second Order clarified that ``local program origination,'' as that term is used in Sec. 73.872(b)(2) of the Commission's rules, does not include the airing of satellitefed programming. The Second Order also modified slightly the definitions of ``minor change'' and ``minor amendment.''

8. In the accompanying FNPRM, the Commission sought comment on a number of issues with respect to LPFM ownership restrictions and eligibility. The Commission asked whether LPFM licenses should be assignable or transferable and whether the temporary restrictions on multiple ownership of
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LPFM stations and on nonlocal ownership should be extended or allowed to sunset. Because ``introducing some level of transferability to the LPFM service is critical,'' the Commission delegated to the Media Bureau the authority to waive the prohibition on the assignment or transfer of a LPFM station contained in Sec. 73.865 of the rules on a casebycase basis and cited examples of circumstances in which the grant of such a waiver might be appropriate:

a sudden change in the majority of a governing board with no change in the organization's mission; development of a partnership or cooperative effort between local community groups, one of which is the licensee; and transfer to another local entity upon the inability of the current licensee to continue operation. * * * The Commission noted, however, that ``until we have further considered the transferability issue, we do not believe that waiver is appropriate to permit the forprofit sale of an LPFM station to any entity or the transfer of an LPFM station to a nonlocal entity or an entity that owns another LPFM station.''

9. The Commission also proposed certain changes to the rules governing the formation and duration of voluntary and involuntary time sharing arrangements among mutually exclusive LPFM applicants. The FNPRM also considered a number of changes to the LPFM technical rules. The Commission proposed to extend the construction period for LPFM stations and to allow timesharing applicants greater flexibility to amend their applications to relocate the transmitter to a central location. The FNPRM also sought comment on the relationship between the LPFM and fullpower FM services. Noting that thousands of FM translator applications remained pending from the 2003 filing window, the Commission froze the processing of those applications and sought comment on possible adjustments to the coequal status of LPFM stations and FM translators with regard to interference between them. The Commission also sought comment on whether LPFM stations should be protected from interference from subsequently authorized FM stations. Finally, the Commission denied a request by the Media Access Project (MAP) to schedule ``regular'' filing windows for LPFM new station applications and major modification applications.

10. During the seven years since we created the LPFM service, that service has flourished for the most part, but also has encountered unique obstacles. To date, the Media Bureau has received 3236 applications for new LPFM construction permits, of which 1,286 have been granted. Currently, there are 809 LPFM stations operating throughout the country. At the same time, the Media Bureau was compelled to cancel 17 station licenses and 95 construction permits for failure by the holder to satisfy certain procedural and/or technical requirements. In view of this practical experience with LPFM service, we now turn to the issues raised in the FNPRM. In resolving those issues, we seek to increase the number of LPFM stations that are on the air and providing service to the public, and to promote the continued operation of LPFM stations already broadcasting, while avoiding interference to existing FM service.
III. Discussion
A. Ownership and Eligibility
1. Alienability of Authorizations

a. Changes in Board Membership

11. Section 73.865 of the rules provides that ``[a]n LPFM authorization may not be transferred or assigned except for a transfer or assignment that involves: (1) Less than a substantial change in ownership or control; or (2) An involuntary assignment of license or transfer of control.'' The Reconsideration Order clarified that the gradual change of a licensee's governing board or membership body is a permissible ``insubstantial change,'' even if the majority of current members joined after the station's authorization was granted. As the FNPRM noted, however, ``[o]ur rules * * * do not permit a sudden change in the board or membership of an LPFM licensee, which would constitute an impermissible transfer of control.'' Panelists at the February 2000 LPFM forum and other parties concerned with the viability of LPFM stations remarked that the proscription of sudden changes in governing board membership causes unnecessary complications for LPFM licensees. Responding to that concern, the FNPRM proposed to amend our rules to permit sudden changes of more than 50 percent of the membership of governing boards.

12. As commenters have since observed, frequent elections and changes in governing board membership are common among volunteer organizations and other entities that operate LPFM stations. As LPFM station KVLPLP noted, experience on the board of an LPFM station can confer valuable leadership experience to community members, leading community groups to encourage frequent shuffling of board membership. Unsurprisingly, then, most commenters favor amending our rules to permit transfers of control in the case of a sudden change in a majority of a governing board's membership so long as the overall mission of the organization remains unchanged.

13. We agree. In crafting our LPFM rules, the Commission intended to preserve the integrity of the LPFM service and of the local organizations operating LPFM stations. We did not intend, however, to hamper the customary governance procedures of those organizations or to make LPFM less ``accessible to community groups.'' To the extent that our rules have blocked that access, we now remove that inadvertent barrier and adopt the FNPRM's proposal to allow sudden changes of more than 50 percent of the membership of governing boards. Accordingly, we will amend Sec. 73.865 of our rules to clarify that transfers of control involving a sudden change of more than 50 percent of an LPFM licensee's governing board shall not be deemed ``a substantial change in ownership and control.''

b. Assignments and Transfers

14. The FNPRM sought comment on whether the rules should permit the sale of LPFM authorizations, for some or no consideration, and whether they should impose a holding period by the initial permittee and licensee. Noting that at least 221 construction permits have lapsed due to the permittee's failure to construct facilities, REC Networks (REC) argues that an LPFM permittee or licensee should be able to convey its authorization when doing so would prevent the loss of the permit. Indeed, most commenters support amending the rules to permit sales in at least some circumstances, although they express diverse views with respect to when such transactions should be allowed. At one extreme are those commenters who maintain that LPFM stations should be transferable without restriction because there is little risk of manipulation or takeover in the ``market'' for LPFM authorizations. At the opposite end of the spectrum are those who contend that transfers of control or assignments should be limited to those situations in which the assignee or transferee ``represents the community'' and no consideration is involved. Prometheus argues that the Commission should not allow transfers or assignments to be made in exchange for consideration, as such a rule could lead to speculation by those with substantial resources, at the expense of local community groups that lack funding. [[Page 3205]]

15. The forprofit sale of LPFM authorizations to any buyer is fundamentally inconsistent with the Commission's desire to promote local, community based use and ownership of LPFM stations. Transfers of control or assignments for consideration will create a market for LPFM licenses and may facilitate trafficking in licenses by those who have no interest in providing LPFM services to the public. Such a state of affairs would likely interfere with, rather than spur development of, communitybased programming and hamper the ability of communitybased entities to obtain LPFM authorizations. Therefore, we will not permit the sale of LPFM licenses for consideration exceeding the depreciated fair market value of the physical equipment and facilities of the station, and will not allow under any circumstances the transfer or assignment of construction permits.

16. With respect to the imposition of eligibility restrictions on a transferee or assignee of an LPFM license, some commenters suggest that we permit the sale of an LPFM authorization to any willing buyer. Others suggest that we limit the universe of eligible assignees and transferees to other local nonprofits. We conclude that the appropriate balance is struck by requiring the assignee or transferee of an LPFM license to satisfy ownership and eligibility criteria existing at the time of the assignment or transfer. That restriction will prevent entities from using intermediaries to circumvent our LPFM eligibility requirements and will further address our concern about potential trafficking in LPFM authorizations by ensuring that future LPFM licensees meet the Commission's criteria for LPFM service. At the same time, permitting assignments or transfers among qualified parties will allow newly``merged'' local entities, consisting of several eligible organizations, to pool their resources to provide the necessary financial support for quality local programming when, standing alone, those entities would be otherwise incapable of constructing and operating an LPFM station.

17. For all transfers and assignments, we will require a three year holding period from the issuance of license, during which a licensee cannot transfer or assign the license, and must operate the station, as suggested by Prometheus. That restriction will prevent entities from using the LPFM assignment and transfer process to undermine the Commission's LPFM policies and will ensure that the benefits to the public which were the basis for the license grant will be realized. c. Procedures

18. The FNPRM asked what procedures would be appropriate to allow assignments and transfers while ensuring the integrity of the LPFM service. Because many LPFM permittees and licensees are entities that do not issue ownership shares, the Commission drew attention to the NonStock Transfer NOI for guidance in establishing the procedures for transfers of control of such licensees. The NonStock Transfer NOI proposed to treat a sudden change of a governing board's majority as an insubstantial transfer for which approval must be sought on an FCC Form 316 (short form) broadcast application. The FNPRM sought comment on adopting a similar approach for changes in the governing boards of LPFM permittees and licensees that are nonstock entities. The FNPRM also sought comment on the process by which LPFM stations should seek approval of assignments and transfers of control.

19. Few commenters addressed the issue of the appropriate procedures for transfers of control or assignments of LPFM authorizations. Christian Community Broadcasters proposed using a modified FCC Form 318 LPFM construction permit application to cover all instances of ownership changes or changes in board membership. Limestone Community Radio suggested instead that entities use a modified FCC Form 316 for ``typical'' changes in station ownership. Still other commenters suggest that the Commission should take a more active role in overseeing any LPFM ownership changes to ensure ``ethical use'' of LPFM licenses.

20. We will use existing FCC forms for the conveyance of LPFM licenses, rather than adopting new forms and filing procedures. We see no reason to depart from the filing procedures that currently are used for other broadcasting services. Accordingly, we direct LPFM licensees to use modified FCC Forms 314 and 315 for assignments and transfers of control, respectively, and FCC Form 316 for pro forma changes in ownership. We will apply the NonStock Transfer NOI to appropriate LPFM licensees, and thus, will interpret a sudden change of a governing board's majority as an insubstantial transfer for which approval must be sought on an FCC Form 316 (``short form'') broadcast application. Use of these forms offers many advantages, particularly to smaller entities that have few resources to dedicate to the application process, such as the ability to retrieve and submit the forms electronically.

2. Ownership and Eligibility Limitations

21. As discussed above, the rules required that, during the two years following the first LPFM filing window, no entity was permitted to own more than one LPFM station, and ownership was restricted to local entities. The rules gradually relaxed these restrictions. Currently, the rules limit the number of LPFM stations a single entity may own up to ten stations and the rule that allows only local entities to apply for LPFM licenses has sunsetted. As we explained in the FNPRM, the Commission's intention in gradually increasing the ownership limitation from one to ten stations and in allowing the local entity restriction to sunset ``was to make it more likely that local entities would operate this service, but to ensure that if no local entities came forward, the available spectrum would not go unused.'' In connection with its query of whether to allow the sale of LPFM stations, the FNPRM asked if either the ownership limitation or the restriction to local entities should be extended or reinstated.

22. Several organizations urge the Commission to maintain ``strict local and multiple ownership requirements,'' to ensure that LPFM service continues to advance the public's interest in localism and diversity. According to some of these commenters, any relaxation of either the multiple ownership restriction or the localitybased restriction is fundamentally at odds with the ``community radio'' rationale that justifies the existence of LPFM stations. Prometheus Radio Project argues that, even when no local entity applies for an LPFM authorization, nonlocal entities should be barred from applying, because ``LPFM is not a goal in itself, rather it is a means to promote localism.''

23. We agree. As emphasized in our Report and Order, our two primary goals in establishing the LPFM service were to ``create opportunities for new voices on the airwaves and to allow local groups, including schools, churches, and other communitybased organizations, to provide programming responsive to local community needs and interests.'' The Report and Order also stated that the potential benefit of allowing multiple ownershipincreased efficiencywas clearly outweighed by ``the benefit to a community of multiple communitybased voices.'' By amending the rules to permanently limit LPFM eligibility, we protect the public interest in localism and foster greater diversity of programming from community sources. Thus, we will reinstate the prohibition
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on the ownership of more than one LPFM station.

24. In addition, we agree with those parties that suggest that we reinstate the local ownership restrictions. Although growing in both usage and recognition, LPFM service is still in its nascence and doing away with the locality restriction could threaten its predominantly local character, in particular the hallmark of a LPFM station's local character, its local origination of programming. In upholding the local origination selection criterion for mutually exclusive applications, our Second Order emphasized that local origination is ``intended to encourage licensees to maintain production facilities and a meaningful staff presence within the community served by the station.'' Even outside the limited context of mutually exclusive applications, we view local origination as a central virtue of the LPFM service and therefore will reinstate the eligibility restriction contained in Sec. 73.853(b) of the rules to encourage local origination. We also wish to clarify our definition of local origination. According to Prometheus, a licensee could theoretically create one program, continually repeat it on a tape loop, and still claim it meets the definition of local origination. Prometheus asserts that in order to meet the local origination requirement, programming cannot be automated, including randomized songs or long blocks of locally produced programming run multiple times, and cannot be aired more than two times. We agree that there is room for abuse here, and as such, we clarify that repetitious automated programming does not meet the local origination requirement. We will only allow a program to be broadcast twice in order to meet the local origination requirement. After its initial broadcast a program can be rebroadcast once and still meet our requirement. After that, the program cannot count toward the local origination requirement.

25. Finally, we adopt the suggestion by Prometheus that we extend the local standard for rural markets. Pursuant to Sec. 73.853(b) of the rules, an LPFM applicant is deemed local if it is physically headquartered or has a campus within ten miles of the proposed LPFM transmitter site, or if 75 percent of its board members reside within ten miles of the proposed LPFM transmitter site. The tenmile limit was adopted based on the ``station's likely effective reach.'' Prometheus' comments express concern that this tenmile local entity standard is difficult to meet for rural applicants, especially in finding board members who reside within ten miles of the proposed transmitter site. Prometheus states that people in rural communities often listen to and participate in stations that are outside of their home coverage area, because they listen to the station while driving to and from work. As such, Prometheus requests modifying the tenmile requirement to twenty miles for all LPFM applicants for proposed facilities in other than the top fifty urban markets, for both the distance from transmitter and residence of board member standards. We agree with Prometheus that applicants for stations located in rural communities find it particularly challenging to meet the current tenmile standard. We also agree that the concept of ``local'' should be more expansive in rural areas. Accordingly, we will revise Sec. 73.853(b) of the rules to reflect Prometheus' proposal.

3. TimeSharing

26. The Report and Order established a comparative point system for determining which among mutually exclusive LPFM applicants should receive the authorization that they commonly seek. If such applicants have the same point total, two or more of the tied applicants may propose to share use of the LPFM frequency by submitting a timeshare proposal within 30 days of the release of a public notice announcing their tie. If the tie among the applicants is not resolved through a voluntary timesharing agreement, the tied applicants submitting grantable applications are placed in an involuntary timesharing arrangement, and granted equal, successive, nonrenewable license terms for the appliedfor facility of no less than one year each, for a total combined term of eight years. The FNPRM proposed amending the rules governing mutually exclusive LPFM applications in two key respects. First, in response to a request by MAP, the FNPRM proposed to extend, from 30 to 90 days, the period allowed for applicants to submit a voluntary timesharing agreement. Second, the FNPRM proposed to amend the rules to permit the renewal of licenses granted under the involuntary timesharing successive licensing procedures. We address those proposals in turn.
a. Deadline for Submission of Voluntary TimeSharing Agreements

27. In its Petition for Reconsideration of the Report and Order, MAP observed that ``LPFM applicants are largely comprised of small organizations with few administrative resources,'' and that few applicants ``have access to the expertise of professional engineers.'' Accordingly, few applicants are able to identify mutually exclusive applications before receiving notice from the Commission that they are tied with others, leaving them only 30 days to contact the other applicants, complete negotiations and execute and file their agreements with the Commission. Because those negotiations likely will be conducted by inexperienced volunteers, MAP argues, reaching a successful compromise within that time frame is very unlikely. Finding MAP's argument persuasive, the FNPRM proposed to extend to 90 days the time period within which mutually exclusive LPFM applicants must reach and file a voluntary timesharing arrangement.

28. All commenters who addressed the issue favor adoption of the proposal to so extend the negotiation and filing period to 90 days. NPR, ``recogniz[ing] the fundamental importance of a diversity of programming services and station ownership,'' observes that allowing LPFM applicants more time to enter into voluntary timesharing arrangements will promote that diversity. Similarly, REC contends that 30 days is not enough time in which to reach and file a viable time sharing agreement. REC sought to assist applicants with negotiations of universal settlements, but found that often basic contact information supplied on the applications was inaccurate. Drawing from that experience and similar considerations, REC urges the Commission to extend the period of time in which mutually exclusive applicants may negotiate and file timesharing agreements.

29. We agree with the views of NPR, REC, and others, and therefore adopt the FNPRM's proposal to extend the negotiating and filing period to 90 days. Mutually exclusive LPFM applicants should be given every opportunity to arrive at a negotiated timesharing arrangement before the LPFM rules impose a successiveterm licensing scheme on the applicants. To the extent that the 30day time period in Sec. 73.872 of the rules has impeded the successful negotiation of timesharing arrangements, we remove that impediment and hope that this will reduce considerably the likelihood that involuntary timesharing arrangements with multiple successive license terms will be necessary.
b. License Renewal Procedures for Parties to TimeSharing Arrangements

30. Section 73.872(d) of the rules provides that an LPFM authorization issued under involuntary timesharing arrangements, under which mutually exclusive applicants are granted
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successive license terms, is not renewable. The FNPRM also proposed that we change this provision and make such authorizations renewable. The FNPRM sought comment on how the renewal process should operate, given that increased flexibility in the rules governing assignments and transfers of control may lead licensees under such arrangements to negotiate voluntary timesharing agreements among themselves.

31. REC is one of the few commenters to respond to our queries about involuntary timesharing arrangements. In its submission, REC suggests that if licensees under an involuntary timesharing arrangement ``come up with a universal settlement to engage in a conventional timeshare arrangement * * * the Commission should grant such an arrangement and remove the nonrenewable condition of the permit and/or license.'' REC further proposes that, at the end of the eightyear term, all licensees in a successive license term group should each be permitted to file a renewal application.

32. The FNPRM tentatively proposed to make renewable all viable licenses under both voluntary and involuntary timesharing
arrangements. Making renewable only the authorizations of those organizations that can reach a mutually acceptable agreement with respect to scheduling, however, will provide a powerful incentive to licensees that thus far have been unable to reach such agreement. This will lead to more efficient use of the spectrum. Accordingly, we agree with REC that when organizations subject to an involuntary timesharing arrangement reach a ``universal settlement'' with respect to the allocation of time on the relevant frequency, the nonrenewable condition of their authorizations should be removed.

33. For the same reasons, we also agree with REC that stations subject to involuntary timesharing under successive license terms that subsequently enter into a voluntary timesharing agreement should be permitted to file a renewal application. However, we are not persuaded that we should accommodate those licensees with successive license terms that fail to reach a universal voluntary agreement with the ability to renew. By doing this, we would be rewarding such applicants' unwillingness or inability to reach such agreements. We note that, of the more than 1,200 construction permits granted in the LPFM service, currently no stations hold authorizations for involuntary time sharing. In this Order, we have extended the 30day time period in Sec. 73.872 of the rules for applicants to negotiate and file universal voluntary timeshare agreements to 90 days. We have also enabled those applicants originally issued involuntary timeshare permits that reach such agreements to ultimately acquire renewable licenses. We believe that these measures will greatly reduce the likelihood that involuntary timesharing arrangements will be necessary. Therefore, we decline to provide a renewal expectancy for involuntary timeshare licensees. We strongly encourage any such permittees and licensees and future mutually exclusive applicants to enter into universal voluntary time share agreements.

34. Making renewable the authorizations of parties who timeshare who have reached voluntary timesharing agreements raises a number of practical questions with respect to how and when those arrangements will supersede involuntary ones. First, we must determine when a voluntary timesharing agreement should replace the successiveterm structure of the involuntary arrangement. As we noted in the FNPRM, it is likely that licensees will reach universal timesharing agreements prior to seeking renewal. We will therefore construe the superseding agreement as a ``minor change,'' allowing the licensees who seek to operate under a universal voluntary timesharing agreement to file the minor change application as soon as the agreement is reached, rather than having to wait for a filing window. Expediting our approval of voluntary timesharing arrangements in this manner will encourage prompt negotiations among licensees operating under involuntary time sharing arrangements and, it is hoped, promote a more efficient use of scarce LPFM spectrum than that under the successive licensing terms that apply to involuntary timesharing arrangements. Accordingly, we will revise the rules to facilitate those voluntary agreements. We stress, however, that voluntary timesharing agreements must be genuinely universal, involving all permittees and licensees of a particular LPFM facility. That is, to give rise to a renewal expectancy, all of those in a timeshare group must be parties to the timesharing agreement.

35. To ensure that voluntary timesharing arrangements will result in the most efficient use of LPFM spectrum, we also must address how to apportion unused airtime among licensees in a timeshare group. This circumstance may arise in a number of ways. For example, a permittee in that group could fail to construct its facilities, decide to cease operations, or have its authorization revoked for a serious violation of the rules. There might also be situations in which no permittee or licensee has come forward requesting to operate during a certain part of the day or week. REC points to an example in Visalia, California, where one licensee, KFSCLP, broadcasts from 5 to 9 a.m. Monday through Saturday and a second licensee, KQOFLP, broadcasts from 5 to 9 p.m. Monday through Saturday. No licensee broadcasts other than those times. REC proposes that, prior to the opening of a new filing window, new entrants who can reach a universal settlement with existing stations should be allowed to do so. REC also argues that new entrants should be allowed to apply for periods of unused time once a window for new applications has opened.

36. We agree with REC that, during filing windows for new applications, new parties should be permitted to apply for unused and unwanted time on a particular frequency. We will not entertain such applications outside of an open filing window, however, even when the potential new entrant could successfully negotiate a universal settlement with existing licensees. Aside from the administrative burden that such outofwindow filings could create, allowing a new entrant to act before a formallyannounced filing window could prejudice unfairly other potential applicants who, under the comparative criteria set forth in Sec. 73.872(b) of the rules, would be entitled to a preference over the wouldbe new entrant's mutually exclusive application. Restricting applications for unwanted time to new filing windows does raise a potential concern in that the restriction will leave periods of time on a particular frequency vacant until the Commission elects to open a filing window for new applications. To alleviate that concern, and to promote a more efficient use of available LPFM frequency, we will allow existing stations in a voluntary timeshare group to apportion among themselves any time that, for any reason, becomes unused. As with the negotiation and execution of voluntary timesharing agreements by parties in an involuntary timeshare arrangement, we will deem amendments to a voluntary timesharing agreement to account for unused time requests to be minor modifications that may be filed at any time.
B. Technical Rules

1. Construction Period

37. The Report and Order established an 18month construction period for all LPFM facilities, stating that deadlines
[[Page 3208]]
would be strictly enforced. However, as a temporary measure, the FNPRM adopted an interim waiver policy to allow permittees with soonto expire permits to request additional time to construct their facilities. Under that policy, the Media Bureau has the authority to consider and grant requests for an additional 18 months to construct facilities, upon a showing that the permittee reasonably can be expected to complete construction within the extended period.

38. As a permanent solution, the FNPRM proposed extending the construction period for LPFM stations to 36 months, the construction period afforded to all other broadcast permittees. During the six years since the release of the 2000 Report and Order, our assumption that LPFM facilities would require significantly less time to build than that required to construct fullpower FM facilities has proven to be overly optimistic. LPFM licensees have encountered varying difficulties in locating suitable transmitter sites, raising sufficient funds for the proposed facilities, and obtaining the necessary zoning permits. The FNPRM thus proposed extending the construction period in order ``to maximize the likelihood that LPFM permittees will get on the air.''

39. Many commenters favor extending the construction period. Some state that the blanket adoption of a 36month construction period has administrative advantages over a conditional extension or casebycase review of individual waiver requests. Moreover, extending the construction period to 36 months would put the LPFM and fullpower FM services on equal footing and avoid disenfranchising able, willing, but inexperienced, LPFM permittees. Prometheus Radio Project and others contend that the better approach is to grant an 18month extension to complete construction, but only upon demonstration of good cause. Prometheus argues that such a procedure would give able and willing LPFM permittees a total of 36 months to construct their facilities but prevent unable or unwilling LPFM permittees from warehousing valuable spectrum, without service to the public, for an extended period of time.

40. We seek to encourage permittees to construct their facilities within 18 months, and therefore, decline to adopt a blanket 36month construction period for LPFM. We agree with Prometheus that this approach will prevent unwilling/unable applicants from sitting on valuable spectrum. We recognize, however, that some permittees may face difficulties in meeting this deadline. Therefore, we will amend the rules to allow all permittees, including current ones whose construction permits have yet to expire, the opportunity to seek an 18 month extension to complete construction of their facilities upon a showing of good cause. Because any such extension should account adequately for the delays resulting from the potential inexperience of the permittee, as well as for potential obstacles that may arise during the zoning or permitting processes, that extended construction deadline will be strictly enforced, as it is with all other radio broadcast stations; we do not expect to entertain, and most likely will not grant, waiver requests or those for further extensions.

2. Technical Amendments

41. Section 73.871 of the rules limits the ability of applicants to propose site changes by minor amendment to relocations of 3.2 kilometers or less for an LP10 station, and 5.6 kilometers or less for an LP100 station. That rule prevents timesharing applicants from relocating their transmitters to a central location unless the site falls within those distance limits. To increase flexibility for time sharing applicants and thereby promote voluntary timesharing agreements, the FNPRM proposed to allow timesharing applicants to file minor amendments to relocate their transmitters to a central location, notwithstanding the site relocation limits imposed by Sec. 73.871 of the rules.

42. Few commenters have responded to our queries about technical amendments by timesharing applicants under Sec. 73.871 of the rules. In 2001, UCC requested that we amend the rules to allow applicants that submit a voluntary timeshare agreement to relocate the transmitter to a central location, provided that one is available. The Commission has a longstanding policy of providing mutually exclusive applicants with maximum flexibility to enter into timeshare agreements in order to facilitate rapid licensing in the service. For instance, in 2003, the Commission by public notice waived Sec. 73.871 of the rules for a time to permit all LPFM settling applicants the ability to file major change amendments specifying new FM channels. Permitting parties to file time share agreements to specify a ``central location'' beyond the current minor amendment distance limitations would remove one more potential impediment to such agreements. Accordingly, we amend Sec. 73.871 of the rules to permit timesharing applicants to specify a central transmitter location with a minor amendment without regard to the respective 3.2 and 5.6 kilometer limitations on such amendments. These agreements, which permit a number of different organizations to reach local audiences, promote diversity. Providing applicants additional flexibility and the opportunity to avoid the construction of duplicate facilities also serves the public interest. For the same reason, we amend that rule to allow permittees and licensees that reach a voluntary timesharing agreement after their permits have been granted to submit such site change applications by minor submission. We anticipate that this rule change will encourage timeshare applicants, permittees and licensees to consolidate transmission and studio facilities.

3. LPFMFM Translator Interference Priorities

43. The FNPRM identified several possible ways to modify the LPFM FM translator interference protection requirements. Currently, stations in these two services operate on a substantially coequal basis, with a facility proposed in an application having ``priority'' over one specified in any subsequently filed application. The FNPRM sought comment on whether, and if so, under what circumstances LPFM applications should be treated as having priority status over prior filed FM translator applications and granted authorizations. In particular, the Commission sought comment on how to overcome the significant preclusive impact of the 2003 Auction No. 83 translator filing window, asking among other things whether all pending applications for new FM translator stations filed during the window should be dismissed. The FNPRM explained that the staff already had granted approximately 3,500 new station construction permit applications from the singleton filings, ``a number nearly equal to the total number of FM translator stations licensed and operating prior to the filing window,'' that 7,000 applications remained on file, that very few opportunities for LPFM stations in major markets remained prior to the 2003 translator filing window, and that the Auction No. 83 filing would have a ``significant preclusive impact on future LPFM licensing opportunities.'' The voluminous comments submitted in response to the priority issue focus on two possible theories supporting modification of the current rule: (1) That LPFM provides a ``preferred'' radio service to that offered by translators; and (2) that priority status for LPFM applications is necessary to overcome [[Page 3209]]
the preclusive impact of the over 13,000 technical proposals filed during the 2003 Auction No. 83 FM translator window.

44. LPFM advocates contend that their service is preferable to translator service. They note that the rules require LPFM stations to be locally owned and permit local program origination. They note that, in contrast, many translators merely rebroadcast satellitedistributed national programming. Some LPFM advocates request priority status for only those LPFM stations that originate programming. Others request priority status over all ``distant'' translators, i.e., translators that rebroadcast the signals of nonlocal stations.

45. NAB, NPR, the various state broadcast associations, and virtually all fullservice commercial and NCE broadcasters support retention of the current interference protection rules. They argue that there are no simple ways to distinguish preferred stations or programming. They also claim that there is no such thing as a typical LPFM or FM translator station. They reject as unfounded the contention that program origination or local ownership correlates to more desirable programming. They note that LPFM licensees have limited service responsibilities with regard to their communities of license: LPFM stations need not originate programming; many serve the needs of niche interest groups rather than their entire communities of license; they are not required to maintain a main studio or public file; and they are required to operate for only 35 hours per week. Many broadcasters contend that, because the LPFM service is still in its infancy, it is premature to reassess the ``coequal'' status of LPFM and FM translator stations. NCE and public radio broadcasters argue that giving LPFMs priority over operating FM translator stations would significantly disrupt established and valued translator service to millions of listeners, particularly those in rural areas and in situations in which broadcasters rely on ``chains'' of translators to distribute programming. The public radio commenters note that translators are a critical component of the public radio
infrastructure. A number of other commenters urge that a ``fillin'' translator should be treated as the equivalent of its associated primary fullservice station and, therefore, always preferred to an LPFM station.

46. With regard to the potentially preclusive impact of the over 13,000 FM translator applications filed in 2003, some commenters argue that the LPFM service is not entitled to any special consideration because LPFM applicants had the first opportunity during the 20002001 national LPFM windows to apply for new stations. Translator advocates note that their last opportunity for nonreserved band FM translators occurred in 1997. Edgewater Broadcasting, Inc. (Edgewater) submits an extensive analysis of the preclusive impact of the construction permits issued out of the 2003 translator filing window and the more limited impact of the over 1,000 permits issued to it and its commonlyowned Radio Assist Ministries. Edgewater contends that the preclusive impact has been ``miniscule,'' notes that the Commission received no LPFM applications to serve many of the areas specified in its translator filings, and argues that its studies demonstrate that vast areas in the country remain available for new LPFM stations. REC also submits both national and marketspecific analyses and identifies several communities in which 2003 window filings have allegedly precluded or diminished LPFM station licensing opportunities.

47. The Station Resource Group, an alliance of 45 public radio broadcasters that operate 168 radio stations, contends that the chief contributor to LPFM station preclusion is a ``maxed out spectrum situation'' which prevents any broadcasters, NCE or commercial, translators or LPFM stations, from obtaining new licenses in virtually all major markets and many mediumsized markets. Several commenters argue that the statutory thirdadjacent channel LPFM protection requirement blocks many otherwiselicensable LPFM opportunities.

48. A number of commenters argue that the Commission's concern is misdirected. They urge the Commission to instead move vigorously against alleged FM translator filing abuses, speculators, and deficient application filings. They suggest imposing numerical application filing limits, either on a prospective basis or with regard to the still pending translator applications. Several contend that the high demand for new FM translators is unsurprising, given the extended freeze on nonreserved band licensing.

49. As demonstrated by the comments filed on this issue, the LPFM and FM translator services are each valuable components of the nation's radio infrastructure. We agree with the advocates for each of these services regarding the important programming that these stations can provide to their local communities. We do not reach the merits of the priority rules between these two services here. Instead, we seek further comment in the attached Second FNPRM to develop a better record on whether and how our current rule affects our core goals of localism, diversity and competition. The current rules will remain in effect until the Commission resolves the issue in that proceeding.

50. We also must consider the question of whether Auction No. 83 filing activity has adversely impacted our goal to provide to both LPFM and translator applicants reasonable access to limited FM spectrum in a manner which promotes the ``fair, efficient, and equitable distribution of radio service * * *. '' This issue has taken on much greater significance over the past few years as demand for new radio stations has increased dramatically while the spectrum for such stations has become increasingly scarce, particularly in many midsized communities and in virtually all urbanized areas. Station Resource Group is correctthe primary licensing impediment is the nation's ``maxed out'' spectrum situation. New Jersey LPFM licensing activity is illustrative of the limited new station opportunities in spectrumcongested areas. Only 29 New Jersey LPFM applications were filed during that state's June 2001 window. Of those submissions, the Media Bureau has issued only eleven construction permits and only one additional authorization possibly may be granted. Only seven LPFM stations are currently operating in the state. We find these statistics more probative of the LPFM service's growth potential than the studies completed by Edgewater because LPFM stations, due to their limited service area potential, generally require higher population densities to be viable. It seems unlikely that the availability of spectrum in the vast rural portions of the nation will generate significant levels of LPFM station licensing.

51. Demand for radio spectrum is, if anything, increasing. The number of applications filed during the AM new and major change windows jumped from 258 in 2000 to more than 1,300 in 2004. Competitive bidding activity for FM new station construction permits has been robust since the commencement of open FM auctions in 2004. The 2003 FM translator window provides further evidence of this trend, especially when compared to historic licensing levels for this service. As of September 30, 1990, a total of 1,847 licensed FM translators and (cochannel) boosters operated throughout the nation. As of December 31, 1997, shortly after the date on which the Commission imposed a freeze on new nonreserved band translator filings (but not on new boosters or new reserved band stations), a total of 2,881 FM
[[Page 3210]]
translators operated nationally. The number of licensed stations continued to grow modestly over the next six years, chiefly as a result of ongoing reserved band filing activity. A total of 3,818 licensed stations were in operation in March 2003 when the Commission opened the FM translator window, a total of 3,897 licensed stations when the Commission imposed the Auction No. 83 construction permit freeze in March 2005.

52. Measured against this historical licensing record, Auction No. 83 window filing activity was significant. Proposals exceeded authorized stations by a factor of three in a service in which little licensing was done before the 1980s. The 2003 window already has nearly doubled the total number of authorized stations. To date, three times more translator stations have been authorized out of this one window than LPFM stations authorized through the initial LPFM window filing process. Approximately 7,000 translator applications remain pending. The Commission faces two chief difficulties in trying to balance spectrum allocations for LPFM stations and translators. First, FM translators are licensed under substantially more flexible technical rules. Thus, some of the Auction No. 83 filing activity involves spectrum which is unavailable for LPFM use. By the same token, LPFM station proponents have far fewer licensing opportunities in spectrum congested markets because LPFM technical rules are substantially less flexible. Second, it is impossible to accurately predict future demand for LPFM station licenses. While engineering studies can identify areas in which additional licensing is technically permissible, the interest of local organizations to apply for, construct, and operate new LPFM stations can only be determined at the time a window is opened.

53. Although precise preclusionary calculations are not possible, we believe that processing all of the approximately remaining 7,000 translator applications would frustrate the development of the LPFM service and our efforts to promote localism. Several factors support the adoption of some remedial measures. The sheer volume of Auction No. 83 filings, when compared to historic translator and LPFM licensing levels, is a significant concern. We recognize that LPFM proponents had the ``first'' opportunity to file for the spectrum which Auction No. 83 filers now propose to use. However, it is apparent that the translator filings have precluded or diminished LPFM filing opportunities in many communities. For example, a REC national study found that 16 percent of all census designated communities that otherwise would have LPFM channels available in their communities have been precluded by the translator filings and that the greatest preclusionary impact has been in the largest such communities. Moreover, the Media Bureau has found that its efforts to identify alternative channels for LPFM stations either causing or receiving interference have been significantly limited in numerous cases by the requirement to protect pending FM translator applications and authorizations granted out of the 2003 window. The licensing asymmetries between these two services also support this finding. Translator filings can materially impact LPFM new station options which are far more limited than FM translator filing opportunities. In contrast, it is unlikely that LPFM filings will materially affect translator licensing options. FM translator contour based station licensing is substantially more flexible than the strict distance separation requirements which LPFM stations must satisfy. This difference is tied in part to the fact that unlike an LPFM station, an FM translator station must cease broadcast operations if it is causing ``actual interference'' to any authorized broadcast station. In short, any translator station construction is at the risk of the permittee. The level of Auction No. 83 filing activity and the fact that many applications were filed for facilities in the top 100 markets both illuminate the significant difference in the licensing opportunities between these two services. The next LPFM window may provide the last meaningful opportunity to expand the LPFM service in spectrumcongested areas. In contrast, we expect significant filing activity in many future translator windows.

54. Certain equitable considerations also tilt in favor of adopting remedial measures to limit the preclusive impact of Auction No. 83 filings. Each applicant filing in Auction No. 83 submitted one Form 175 Application to Participate in an FCC Auction and a separate Form 349 ``Tech Box'' for each translator proposal. 861 filers submitted 13,377 such proposals in the window. Applicant filing activity divided between the hundreds of applicants who filed a limited number of applications and a very small number of applicants who filed for hundreds or thousands of construction permits. For example, approximately half the filers submitted one or two proposals. Approximately 80 percent of filers submitted 10 or fewer proposals. 97 percent filed 50 or fewer proposals. In contrast, the two most active filers, commonlyowned Radio Assist Ministries and Edgewater (collectively, RAM), filed 4,219 proposals, constituting almost onethird of all Auction No. 83 filings. The fifteen most active filers were responsible for onehalf of all Tech Box submissions.

55. We are concerned that the heavily skewed filing activity in Auction No. 83 raises concerns about the integrity of our FM translator licensing procedures. Even if lawful, it is fair to question whether the acquisition of unprecedented numbers of FM translator
authorizations by a handful of entities through our window filing application procedures promotes either diversity or localism. The rapid flipping of hundreds of permits acquired through the window process for substantial consideration does suggest that our current procedures may be insufficient to deter speculative conduct. Some commenters have been critical of RAM's business strategy. ``The [National Translator Association] considers those applicants who intend to obtain construction permits and then sell those permits to be simply speculators for profit.'' Most fundamentally, it appears that our assumption that our competitive bidding procedures would deter speculative filings has proven to be unfounded in the Auction No. 83 context. RAM, alone, has sought to assign more than 50 percent of the 1,046 construction permits it has been awarded through the window and has consummated assignments for over 400 of all such permits.

56. In order to further our twin goals of increasing the number of LPFM stations and promoting localism, we find it necessary to take action. Accordingly, we will limit further processing of applications submitted during the Auction No. 83 filing window to ten proposals per applicant. Applicants with more than ten proposals pending will be provided an opportunity to identify those applications which they wish to have processed and those for which they seek voluntary dismissal. The Media Bureau is directed to complete its processing of the approximately 100 pending but frozen singleton longform applications without regard to the ten application limit. However, construction permits granted from this group will count toward the limit for future Auction No. 83 licensing purposes. This cap will only apply to short form applications, and will not impact the ability of Auction No. 83 filers with granted construction permits or pending longform applications to obtain licenses to
[[Page 3211]]
cover. This limit will not have an adverse impact on the more than 80 percent of those who filed ten or fewer proposals in the Auction No. 83 filing window. It will require certain filers to identify priority proposals. This cutoff will limit the preclusive impact of Auction No. 83 filings on LPFM licensing opportunities by barring the processing of thousands of applications filed by a very small number of applicants, without impacting the approximately 80 percent of filers who filed ten or fewer applications. Although we recognize the equitable interests of the remaining 20 percent of filers in the processing of all of their shortform applications, on balance we conclude that the public interest requires a bar on the processing of more than ten applications per filer. We are hopeful that as a result of this cap the Media Bureau will be able to shorten the period between windows for both new LPFM and FM translator stations. We direct the Media Bureau to issue a public notice announcing the opening of the settlement window required by Sec. Sec. 73.5002(c) and (d) of the rules. Applicants must select the ten applications they wish to preserve before the settlement window opens. With the imposition of this cap, we direct the Media Bureau to resume the processing of Auction No. 83 filings. Specifically, the Media Bureau is to expeditiously process the applications of any applicant that is now in compliance or brings itself into compliance with the ten proposal cap.

57. We are mindful of the expenses that translator applicants have incurred in preparing their nonfeeable Form 175 shortform
applications and Form 349 Tech Box submissions but believe that the imposition of this cap treats all applicants equitably. We have attempted to accommodate applicants to the greatest extent possible, consistent with statutory requirements and competing Commission goals. All applicants will benefit from expedited processing and the Media Bureau's ability to open future windows more quickly. Thus, this action is entirely consistent with Commission's rules and precedent for the dismissal of pending applications as a necessary adjunct of efficient and effective rulemaking. Finally, we note that there is ample precedent for the mass dismissal of applications based on a rule or policy change. This procedural change is a reasonable exercise of the Commission's administrative discretion. Accordingly, we conclude that the imposition of a cap in these circumstances is lawful.
4. Interference Protection From Subsequently Authorized FullService FM Stations

58. Background. The Report and Order establishing the LPFM service set minimum distance separation requirements to ensure that LPFM stations protect existing commercial and NCE fullservice FM stations, as well as FM translator and booster stations. The Report and Order also concluded that existing fullservice stations would not be required to protect proposed LPFM facilities. Moreover, ``operating LPFM stations will not be protected against interference from subsequently authorized fullservice facility modifications, upgrades, or new FM stations.'' Conversely, an LPFM station is not permitted to cause interference within the 3.16 mV/m (70 dB[mu]) contour of a full service FM station. An LPFM station generally may continue to operate within that contour so long as it can demonstrate that actual interference is unlikely to occur. Section 73.809 of the rules sets forth detailed complaint procedures to resolve disputes over the likelihood of actual interference and the sufficiency of actions taken by LPFM stations to eliminate that interference.

59. In September 2000, the Commission dismissed a motion to reconsider the regulatory status of LPFM stations. In the FNPRM, however, the Commission stated that ``it would be useful to consider whether to limit the Sec. 73.809 interference procedures to situations involving co and firstadjacent channel predicted interference, where the predicted interference areas are substantially greater than for second and thirdadjacent chan

FOR FURTHER INFORMATION CONTACT For additional information on this proceeding, contact Holly Saurer, Holly.Saurer@fcc.gov of the Media Bureau, Policy Division, (202) 4182120.