Fifth Order on Reconsideration

This Order on Reconsideration addresses various Petitions for Reconsideration filed in response to the Fourth Report and Order which addressed various issues related to FM Translators including a national cap of still pending FM translator applications of 70 (of which, up to 50 can be in metro markets) and an additional cap of one application per metro market. This Order on Reconsideration was released simultaneously with the Sixth Report and Order.

Fifth Order on Reconsideration

Document Information
Type	Order on Reconsideration
Docket Number(s)	MM 99-25, MB 07-172
Related RM(s)	11338
FCC Number	12-144
FCC Record	27 FCC Rcd 15402
Federal Register Citation(s)	77 FR 73545
Federal Register Date(s)	December 11, 2012
Relevant Dates
Adoption Date	November 30, 2012
Release Date	December 4, 2012

Translator application caps

History

The FCC released the Fourth Report and Order on March 19, 2012. The Commission affirmed its decision to reject the prior national cap of 10 translator applications per applicant (10-cap). It adopted a modified market-specific translator licensing scheme which incorporated a number of commenter proposals. To minimize the potential for speculative licensing conduct, the FCC established a national cap of 50 applications (50-cap) and a local cap of one application per applicant per market for the 156 Arbitron Metro markets identified in Appendix A of the Fourth Report and Order. Prior to the 2003 Auction 83 "Great Translator Invasion" filing window, there were 3,818 licensed FM translators. 13,377 translator applications were filed in the Auction 83 window. From that group, 3,476 new authorizations were issued prior to the FCC imposing a previous freeze on grants. Of those grants, over 25 percent were never constructed and almost 40 percent were assigned (sold) to a party other than the original applicant.

Trafficking of FM Translator construction permits

Although 97 percent of the filers filed fewer than 50 applications, the remaining three percent filed 8,163 applications, representing 61 percent of the total applications filed in the window. The largest filer was commonly owned Radio Assist Ministries and Edgewater Broadcasting (RAM), which filed 4,219 applications and received 1,046 grants prior to the freeze. When the FCC adopted the prior 10-cap, RAM had sought to assign more than 50 percent of the construction permits it has received and had already consummated the sale of more than 400 of those permits. The FCC based the 10-cap on the need to preserve spectrum for future LPFM availability and the need to protect the integrity of the translator licensing process.

In the Third Further Notice of Proposed Rulemaking, when the FCC proposed to replace the 10-cap with a market-specific processing system, they tentatively concluded that such a processing system would not be sufficient to address the potential abuses in translator licensing and trafficking. They noted that the vast majority of applicants hold only a few applications, but the top 20 applicants collectively account for more than half of the pending applications. Similar imbalances exist in particular markets and regions. For instance, one applicant holds 24 of the 24 translator applications proposing operation within 20 kilometers of Houston’s reference coordinates and 73 applications in Texas. Two applicants hold 66 of the 74 applications proposing service to the New York City radio market.

They also described a number of factors that create an environment which promotes the acquisition of translator authorizations solely for the purpose of selling them. First, they expected that a substantial portion of the remaining translator grants will be made pursuant to our settlement (i.e., non-auction) procedures. Second, translator construction permits may be sold without any limitation on price. Third, permittees are not required to construct or operate newly authorized facilities before they can sell their authorizations. Collectively, these factors created an incentive for speculative filings and trafficking in translator authorizations. The FCC concluded that such behavior damages the integrity of our licensing process, which assigns valuable spectrum rights to parties based on a system that gives priority to applications filed in one filing window over subsequent applications based on the assumption that the applications filed in the earlier window are filed in good faith by applicants that intend to construct and operate their proposed stations to serve the public. The history of the Auction 83 translator applications strongly supports the FCC's view that speculative applications delay the processing of bona fide applications, thereby impeding efforts to bring new service to the public. The FCC noted that these speculative translator applications have also delayed the introduction of new LPFM service pursuant to the mandate under the LCRA to provide licensing opportunities for both LPFM and translator stations.

The extraordinarily high number of applications filed in the Auction 83 window, particularly by certain applicants (both nationally and in certain markets), and the significant number of authorized stations that were either assigned to another party or never constructed are strong indicia of applications filed for speculative purposes (either for potential sale or to game the auction system) rather than a good faith intent to construct and operate the proposed stations. Based on those concerns, the FCC sought comment on whether a national cap of 50 or 75 applications would force filers with a large number of applications to concentrate on those proposals and markets where they have bona fide service plans. We also asked whether applicants should be limited to one or a few applications in a particular market, noting that such a restriction “could limit substantially the opportunity to warehouse and traffic in translator authorizations while promoting diversity goals.

Fourth Report and Order

The Fourth Report and Order concluded that both a national cap and a per-market cap for the 156 identified metro markets were appropriate to limit speculative licensing conduct and necessary to bolster the integrity of the remaining Auction 83 licensing. The FCC stated that non-feeable application procedures, flexible auction rules, and flexible translator settlement and transfer/assignment rules clearly have facilitated and encouraged the filing of speculative proposals. The FCC acknowledged that while high-volume filers did not violate the rules, these types of speculative filings are fundamentally at odds with the core FCC broadcast licensing policies and contrary to the public interest.

The Fourth Report and Order rejected other potential anti-trafficking proposals offered by commenters, stating that application caps were the most administratively feasible solution for processing this large group of long-pending applications. The FCC stated that we considered caps to be the only approach that would not only limit trafficking in translator authorizations but also fulfill their mandate under the LCRA to provide the fastest path to additional translator and LPFM licensing in areas where the need for additional service is greatest.

The FCC adopted the 50-cap, which they found would affect no more than 20 of the approximately 646 total applicants in this group, and that this was a reasonable number of stations to construct and operate as proposed and would place restraints on trafficking of permits on the open market. The FCC also noted that there was some agreement on such a limit even among translator advocates. The FCC also adopted a per-market cap of one application per market in the top 150 Arbitron Metro markets plus six additional markets where more than four translator applications are pending. They noted that some applicants had filed dozens of applications for a particular market, when it was inconceivable that a single entity would construct and operate so many stations there. They concluded that such applications were clearly filed for speculative reasons or to skew our auction procedures. Given the volume of pending applications, they found that it was administratively infeasible to conduct a case-by-case assessment of these applications to determine whether they could satisfy our rule limiting the grant of additional translator authorizations to a party that can make a “showing of technical need for such additional stations” pursuant to §74.1232(b). Accordingly, the FCC adopted a cap of one translator application per market in the identified Arbitron markets. For applications outside those markets, where only a small number of applications will require analysis, the FCC decided to apply the Technical Need Rule on a case-by-case basis.

Petitions for Reconsideration filed and responsive pleadings

Educational Media Foundation (K-Love, Air1)

Educational Media Foundation (EMF) filed a Petition for Reconsideration seeking reconsideration as to both the 50-cap and the per-market cap of one application. EMF was the only one who filed against the 50-cap. EMF had at the time, 292 pending translator applications from the Auction 83 window. EMF received 259 translator grants from that window before the grant freeze.

EMF first contends that the Commission must clarify the definition of the term “radio market” as used in the Fourth Report and Order. EMF argues that the term could mean census-designated urban areas, metropolitan statistical areas, Arbitron Metro markets, or some definition connected to the “grids” used in determining whether markets are “spectrum limited” or not. Additionally, EMF argues that both the national cap and the per-market cap are arbitrary and capricious. EMF argues that the Commission did not adequately explain the “abusive” licensing activity relating to Auction 83 filings and did not adequately explain why other “more direct” measures to combat speculation are not being used. EMF also argues that the Commission did not adequately explain how the caps square with the Commission’s own conclusion that the LCRA requires it to make available licensing opportunities for both translators and LPFM stations “in as many local communities as possible.”

Hope Christian/Bridgelight/Calvary Finger Lakes joint petition

Hope Christian Church of Marlton, Inc. (Hope), Bridgelight, LLC (Bridgelight) and Calvary Chapel of the Finger Lakes, Inc. (CCFL) filed a joint Petition for Partial Reconsideration (Joint Petition) seeking reconsideration to revise the one-per-market cap to include a waiver process. Hope is the licensee of WVBV(FM), Medford Lakes, NJ (Philadelphia, PA Arbitron Metro market); WWFP(FM), Brigantine, NJ (Atlantic City-Cape May, NJ Arbitron Metro market); and WZBL(FM), Barnegat Light, NJ (Monmouth-Ocean, NJ embedded market). Hope has 46 pending translator applications from the Auction 83 window, of which 45 are in the identified markets and one outside. Hope received 21 translator grants before the processing freeze, primarily in the Philadelphia and Baltimore Arbitron Metro markets. Hope constructed all of those proposed stations. Bridgelight is the licensee of WRDR(FM), Freehold Township, NJ (Monmouth-Ocean, NJ embedded market); and WJUX(FM), Monticello, NY (outside the identified markets). Bridgelight has 16 pending applications from the Auction 83 window. Bridgelight received five translator grants before the processing freeze (primarily in the New York Arbitron Metro market), but assigned all of them to other parties. CCFL is the licensee of WZXV(FM), Palmyra, NY (Rochester, NY Arbitron Metro market). CCFL has 16 pending translator applications from the Auction 83 window, of which eight are in identified markets (five in the Buffalo, NY Arbitron Metro market and three in the Rochester, NY Arbitron Metro market). CCFL received 14 translator grants before the processing freeze (primarily in the Buffalo and Rochester Arbitron Metro markets), but assigned five of those to other parties and cancelled another one.

Their Joint Petition maintained that the one-per-market cap unfairly harms local and regional applicants that have filed applications in a limited number of markets for the purpose of reaching distant communities in geographically large markets. The Joint Petition argued that the one-per-market cap should be supplemented with a waiver process that allows for waivers (with no limit on the number of authorizations in a market) under three conditions:

1. The 60 dBu contour of the translator application cannot overlap the 60 dBu contour of any commonly-controlled application;
2. The application would not preclude a future LPFM application in the grid for the identified market or at the proposed transmitter site; and
3. The applicant agrees to accept a condition on the construction permit that disallows sale of the authorization for a period of four years after the station commences operation.

Conner Media, Inc.

Conner Media, Inc. filed a Petition for Partial Reconsideration. Conner is the licensee of WAVQ(AM), Jacksonville, NC (Greenville-New Bern-Jacksonville, NC Arbitron Metro market). Conner states that it filed translator applications in five different locations to serve the Greenville-New Bern-Jacksonville, NC Arbitron Metro market, which comprises ten diverse counties. Conner expresses interest in assigning additional permits from its pending applications to other AM broadcasters who would benefit from the nighttime service available on a translator. Conner argues that any local translator cap should be per-community, not per-market.

Western North Carolina Public Radio, Inc.

Western North Carolina Public Radio, Inc. is the licensee of noncommercial educational stations WCQS(FM), Asheville, NC; WFSQ(FM), Franklin, NC; and WYQS(FM), Mars Hill, NC (all in the Asheville, NC Arbitron Metro market). WNC filed a Petition for Reconsideration arguing that its Arbitron Metro market, Asheville, NC, should not be included in the identified markets or, alternatively, that the community of Black Mountain, NC, should not be considered part of that market because it is separated by a mountain range from Asheville and therefore requires its own translator service. WNC notes that Asheville is the 159th Arbitron Metro market, but was considered an identified market because more than four translator applications are pending in that market.

CircuitWerkes/Kyle Magrill

Magrill has seven pending translator applications from the Auction 83 window in four identified markets in Florida. Magrill received three translator grants before the processing freeze took effect. Magrill argues that the Commission did not propose per-market caps in the Third Further Notice, but instead called for processing all translator applications in non-spectrum limited markets. Magrill argues that the number of translator sales has not been so high as to present a problem. Magrill notes that many markets are geographically and ethnically diverse and also notes that HD channels have increased the need for multiple translators in certain locations. Magrill argues that the per-market cap particularly hurts local service providers who did not exceed the national cap. Magrill argues that the cap should be revisited and at least eased in markets that are not spectrum limited.

Prometheus Radio Project's opposition

Prometheus Radio Project argued that the Commission properly defined the “market” for the one-per-market translator caps as the Arbitron Metro market. Prometheus rejects Magrill’s claim about lack of notice, noting that the Commission specifically asked for comments on whether translator applicants should be limited to one or a few applications in any particular market and that this material was published in the Federal Register. Prometheus then argues that the caps will prevent speculation and preserve radio market diversity. Prometheus opposes any waiver process that would delay the LPFM application window

REC Networks' partial opposition

REC Networks supported the national cap of 50 applications, but believes the per-market cap may be overly restrictive. REC argued for adoption of a waiver standard that is more stringent than the one proposed in the Joint Petition. REC suggests the following additional criteria:

1. The applicant must accept a condition on its construction permit that for a four-year period after commencing operations, the translator must be commonly owned with the primary station and must rebroadcast the primary analog output of that station;
2. The 60 dBu contour of the translator application must not overlap (i) a 30 kilometer radius around the center of markets 1-20, (ii) a 20 kilometer radius around the center of spectrum limited markets 21-50, or (iii) a 10 kilometer radius around the center of spectrum limited markets 51-100; and
3. Applications grantable under this waiver must also comply with the national cap of 50 applications.

Reply comments

In reply comments, Conner, the Joint Petitioners and Magrill reiterate their prior positions. Four Rivers Community Broadcasting Corporation filed a reply arguing for a waiver standard similar to the standard suggested by the Joint Petition. One Ministries, Inc. and Life On The Way Communications, Inc. filed reply comments arguing for separation of embedded markets from the core market, particularly in the case of San Francisco, San Jose and Santa Rosa.

Outcome

Definition of markets

....

Changes to the proposed 50-cap

....

Changes to the proposed 1-per-market cap

....

Rules amended by this order

...

Related links

....