Fourth Report and Order

This Report and Order is the first of three that implements the provisions of the Local Community Radio Act of 2010 (LCRA). This Order addresses LCRA Section 5 which relates to the relationship between LPFM stations, FM Translator stations and FM booster stations. This Order also addresses the use use of FM translators to rebroadcast AM stations and addresses the trafficking of FM Translator construction permits following the end of the Auction 83 "Great Translator Invasion" filing window.

Fourth Report and Order

Document Information
Type	Report and Order
Docket Number(s)	MM 99-25
FCC Number	12-29
FCC Record	27 FCC Rcd 3364
Federal Register Citation(s)	77 FR 21002
Federal Register Date(s)	April 9, 2012
Relevant Dates
Adoption Date	March 19, 2012
Release Date	March 19, 2012

Issues discussed

LCRA Section 5 - Broad Interpretive Principles

Overview

In the Third Further Notice of Proposed Rulemaking, the FCC interpreted Section 5 of the LCRA to establish the following broad principles:

• Section 5(1) requires the Commission to adopt licensing procedures that ensure some minimum number of licensing opportunities for both LPFM and translator services across the nation.
• Read together with Section 5(2), Section 5(1) requires the Commission to provide licensing opportunities for both services in as many local communities as possible.
• A tentative conclusion that the FCC's primary focus under Section 5(1) must be to ensure that translator licensing procedures do not foreclose or unduly limit future LPFM licensing, because the more flexible translator licensing standards will make it much easier to license new translator stations in spectrum-limited markets than new LPFM stations.

Overall, there was broad support to eliminate the cap of 10 translator applications (10-cap) and using market-specific spectrum availability metrics to implement Section 5. There were differing arguments from LPFM and FM Translator proponents on how Section 5 should be implemented.

Comments received

Section 5(1) - Ensuring licenses are available

LPFM advocates supported the FCC's view that Section 5(1) requires that the FCC ensure that the processing of FM translator applications does not preclude future opportunities for new LPFM licenses. LPFM supporters contend that Congress intended that the Commission take existing licenses into account when assessing whether its licensing procedures would ensure that licenses are available rather than establish a “going forward” only standard that ignores legacy licensing. LPFM advocates also argue that Section 5(1) requires the Commission to preserve a significant number of licensing opportunities for new LPFM stations in all markets where this is possible.

Translator supporters disagree with these positions. These commenters oppose an interpretation of Section 5(1) that, in their view, would favor LPFM stations over translators and urge the Commission not to devise licensing procedures to redress perceived imbalances in past licensing. National Public Radio (NPR) argues that our proposal unduly favors future LPFM service at the expense of the pending FM translator applicants by taking into account the number of existing LPFM and translator stations. NPR also argues that “ensuring that licenses are available” includes current and future FM translator station applicants. Similarly, Educational Media Foundation notes that the LCRA never “directly” references applications from Auction 83, and emphasizes Congress’ use of “new” at the beginning of Section 5 to argue that Section 5(1) “requires that ‘new’ licenses for both translators and LPFM stations be made available.” The National Association of Broadcasters argues that a policy of dismissing translator applications where translators but not LPFM stations could be located would counter Section 5(1)’s mandate that licenses be available for translator stations.

Section 5(2) - Assessing the needs of the local community

LPFM advocates suggest that Section 5(2) should be interpreted as a mandate favoring localism, and in particular LPFM stations, which they argue provide the greatest localism benefit of any broadcast service. Indeed, commenters note that the LPFM service was established in part to address the perceived loss of local programming during a period of significant radio consolidation. Some parties argue that translators, which do not originate programming, fail to serve local community needs24 and are not truly local, while LPFM stations better serve the goals of localism. LPFM proponents also suggest that, when making licensing decisions, the Commission could address the needs of local communities by considering demographic data. Specifically, they argue that urban communities, well served by commercial and noncommercial services, have less need for translator services and more need for local community-level programming, while rural communities, poorly served by full-service facilities, have need for both translators and LPFM stations.

Translator advocates argue that translators can serve the needs of the local community and note that the Commission and Congress have found that to be the case. For example, translators can provide emergency information, as well as regional and state news. Translators can also serve the local community by providing a format not currently available in that area. Thus, they argue it is wrong to assume that LPFM stations better serve local community needs than do translators. NPR criticizes our analysis of Section 5(2) on the ground that we focused on the differences between translators and LPFM stations, rather than focusing on how both services serve the needs of the local community by expanding the programming choices available to listeners. NPR also argues that some communities might actually have a greater need for a translator than for an LPFM station because a translator may be filling a coverage gap for a significant full-power station. Common Frequency replies that urban communities served by multiple translators have more need for a first LPFM station.

Section 5(3) - Equal in Status

Translator proponents argue that, for regulatory purposes, the terms “stations” and “applications” are interchangeable. Translator proponents argue that either changing the Commission’s market-based approach or waiving the cut-off rules in favor of future-filed LPFM applications would not be consistent with Section 5(3). Mullaney Engineering argues that the services are not “equal in status” if LPFM applicants are allowed to invalidate the cut-off protection rights of previously-filed translator applications. NPR likewise believes that waiving cut-off rules to give preference to later-filed LPFM applications would violate the “equal in status” mandate. Other translator supporters express concern that this approach would disproportionately favor the licensing of future LPFM stations and thereby violate Section 5(3)’s equal in status mandate. They claim that trying to make LPFM and translators equal in numbers would suppress translator licensing and artificially encourage unwanted LPFMs.

LPFM supporters disagree, arguing that, while the grant of a station license conveys certain vested and statutorily protected interests to a licensee, those interests do not attach to a pending application. Prometheus Radio Project argues that Section 5(3) does not refer to the cutoff rule, but instead merely requires that translators and LPFM stations be secondary to full service stations and equal to each other. Prometheus further asserts that Section 5(3) does not prohibit the Commission from giving LPFM applicants priority over translator applicants, particularly when read in the context of Section 5(2)’s requirement that licensing serve the needs of local communities and Section 307(b)’s requirement that the Commission distribute radio service in the public interest.48 Prometheus states that the Commission should balance the two services by aiding in the development of LPFM. Other LPFM advocates argue that the cut-off protection rule is a regulatory custom that the Commission can waive if it serves the public interest. Some commenters argue for giving LPFM stations priority because translators consume valuable radio spectrum while failing to provide original local programming. LPFM advocates also argue that the Commission must compensate for the “head start” that the translator service has to the comparatively new LPFM service. Commenters further argue that the current rules favor translators. Some suggest that, in order to achieve a true equality between the LPFM service and translators, the technical rules governing the LPFM service should be changed to match those of translators. Common Frequency contends that Section 5(3) calls for a goal of equal spectrum for each service.

Analysis

The FCC adopted the interpretations of the three Section 5 licensing standards proposed in the Third Further Notice. In its broadest terms, Section 5(1) clearly requires the Commission to ensure that some minimum number of FM translator and LPFM “licenses are available” throughout the nation when licensing new FM translator and LPFM stations. We also find that Section 5 is most reasonably interpreted to require consideration of existing licenses. As we observed in the Third Further Notice, the word “new” appears in the first clause of Section 5 but not in subparagraph 1, suggesting that we should consider the availability of both new and existing stations in ensuring that “licenses are available” for both services. In addition, our interpretation is consistent with the title of Section 5, “Ensuring Availability of Spectrum for Low-Power FM Stations,” as well as the Commission’s longstanding license allocation policies under §307(b) of the Communications Act, which directs the Commission to ensure “a fair, efficient, and equitable distribution of radio service” “among the several States and communities.” In contrast, interpreting Section 5 to require the FCC to license new translator and LPFM stations without regard to the number of operating stations in each service, as EMF advocates, would be inconsistent with ensuring the availability of spectrum for both services, as well as §307(b)’s direction. The FCC concluded that the mandate of Section 5(1) to ensure that “licenses are available” is reasonably interpreted to require consideration of both existing and future licenses in the translator and LPFM services when licensing new stations in those services.

The FCC also adopted their proposed interpretation of Sections 5(1) and (2) together to require that LPFM and translator licenses be available in as many “local communit[ies]” as possible, according to their needs. They recognized that translators and LPFM stations both serve the needs of communities, albeit in different ways, and conclude that they must take those factors into consideration in implementing Section 5(2). In particular, translators, which are inexpensive to construct and operate, can effectively bring service to rural and under-served areas. LPFM stations, on the other hand, which typically utilize volunteer staffs, operate under great budget constraints, and serve smaller geographic areas, may be less effective in meeting the needs of small communities and areas of low population density. Translators also are essential components of local and regional transmission systems that efficiently deliver valued programming to listeners. Nevertheless, as explained in the Third Further Notice, the FCC has historically accorded no weight to translators in assessing the comparative needs of a community for radio service under its §307(b) licensing policies. In contrast, the LPFM service was created “to foster a program service responsive to the needs and interests of small community groups, particularly specialized community needs that have not been well served by commercial broadcast stations.” Numerous LPFM service and comparative licensing criteria are designed to promote these goals. These criteria include a requirement that licensees be local, a licensing preference for those applicants with an established community presence, and a licensing preference for those applicants that pledge to locally originate at least eight hours of programming per day. In addition, ownership restrictions and time-share rules necessarily result in expanded ownership diversity. Based on those factors, the FCC found that LPFM stations are uniquely positioned to meet local needs, particularly in areas of higher population density where LPFM service is practical and sustainable.

The FCC also adopted their tentative conclusion that the primary focus under Section 5 must be to ensure that translator licensing procedures do not foreclose or unduly limit future LPFM licensing, because the more flexible translator licensing standards will make it much easier to license new translator stations in spectrum-limited markets than new LPFM stations. The FCC's market-specific analyses establish that few LPFM licenses have been issued and limited LPFM licensing opportunities remain in many markets due to the relatively inflexible LPFM technical rules and high spectrum utilization. In contrast, given the more flexible translator licensing standards and the limited LPFM licensing opportunities in many markets, the next round of LPFM licensing will have only a modest impact on licensing opportunities for future translator stations. Thus, our principal challenge in effectuating the mandates of Sections 5(1) and 5(2) is to identify and preserve LPFM licensing opportunities where few or no LPFM stations currently operate. The FCC notes that this goal is fully consistent with Congress’s decisions to eliminate third adjacent channel distance separation requirements and to permit second adjacent channel spacing waivers, and thereby, expand the LFPM service.

Their interpretation of Section 5 has clear implications for the translator processing and dismissal procedures that they adopted in this proceeding. These procedures must be responsive to two different situations. The first concerns markets where, taking into account both licensed stations and the potential for additional stations, ample LPFM licensing opportunities are present. Procedures in these markets must balance translator and LPFM licensing in a manner that “ensures” a level of future LPFM licensing that the Commission determines is sufficient to satisfy statutory requirements. Secondly, in markets where insufficient spectrum remains to satisfy these requirements, the translator processing and dismissal procedures, including amendment and settlement procedures, should preserve all identified LPFM licensing opportunities, i.e., should facilitate the grant of only those translator applications that would not diminish or “block” future LPFM licensing in these markets.

On the other hand, the FCC agreed with NAB that, consistent with its statutory interpretation, our policies should seek to avoid the dismissal of translator applications where LPFM stations “cannot” be licensed. The FCC noted that, however, that capacity to identify such situations is limited. The FM database is dynamic, with LPFM filing opportunities being created, eliminated or modified daily due to FM application and allotment filings. Moreover, revised LPFM technical licensing rules that are now under consideration will materially affect licensing opportunities. Given the limited LPFM licensing opportunities in many markets, the modest impact that LPFM licensing will have on future translator licensing in those markets and the difficulties in establishing with certainty that a translator application “cannot“ preclude an LPFM filing, the FCC concluded that adoption of a conservative processing regime that fully protects scarce spectrum for future LPFM stations would be consistent with Section 5, read as a whole.

We adopt our tentative conclusion that the 10-cap dismissal policy we established prior to the LCRA’s enactment is inconsistent with Section 5 because it would not provide a certain and effective way to ensure that LPFM “licenses are available” for local communities in many markets. Under that policy, translator applications that prevent or “block” LPFM licensing opportunities would likely be eligible for processing in markets where the need for LPFM licensing opportunities is greatest and spectrum most limited. Based on the market-specific analyses that will be used, the FCC also concluded that no or limited useful spectrum for LPFM stations is likely to remain in numerous specific radio markets where typically few or no LPFM stations now operate unless translator dismissal procedures reliably result in the dismissal of all “blocking” translator applications.

With regard to Section 5(3), the FCC asked in the Third Further Notice whether the requirement that translator and LPFM stations remain “equal in status” prohibits waivers of the LPFM cut-off rule, which prioritizes pending FM translator applications over later-filed LPFM applications, explaining that such an interpretation would require the Commission to dismiss any pending FM translator applications that it determines must make way for LPFM licensing opportunities, rather than deferring action on such applications and later processing any that remain pending after the completion of dismissal and settlement procedures adopted to implement Section 5. The FCC identified several factors that support such an interpretation. The cut-off rules are a principal characteristic of the two services, establishing their “equal” status as to each other. While acknowledging that Section 5(3) refers to “stations,’” they noted in the Third Further Notice that the Commission has used “stations” and “applications” interchangeably in considering whether to give priority to applications filed in the upcoming LPFM window, a central issue in this proceeding since 2005. Thus, the FCC explained, Section 5(3) could be reasonably interpreted to prohibit waivers of the LPFM cut-off rule.

Implementing LCRA Section 5

Overview

Having tentatively concluded that the ten-application cap dismissal policy would run contrary to the LCRA’s mandate, the FCC considered three alternative processing regimes and tentatively concluded that a market-specific, spectrum availability-based translator application dismissal policy would most faithfully implement Section 5 of the LCRA. To determine LPFM opportunities in major markets, the Media Bureau undertook a nationwide LPFM spectrum availability analysis. The Media Bureau studied all top 150 radio markets, as defined by Arbitron, and smaller markets where more than four translator applications are pending. It centered a thirty-minute latitude by thirty-minute longitude grid over the center-city coordinates of each studied market. Each grid consisted of 961 points – 31 points running east/west by 31 points running north/south. The Media Bureau analyzed each of the 100 FM channels (88.1 mHz – 107.9 mHz) at each grid point to determine whether any channels remained available for future LPFM stations at that location. Only channels that fully satisfied co-, first- and second adjacent channel LPFM spacing requirements to all authorizations and applications, including pending translator applications, were treated as available. The area encompassed by the grid was designed to approximate “core” market locations that could serve significant populations. The results of that analysis were presented in the Third Further Notice, and identified the number of channels (“LPFM Channels”) currently available for LPFM use in each studied market.84 In calculating “available” LPFM channels, it included both the identified vacant channels and those channels currently licensed to LPFM stations which are authorized to operate at locations within each market’s thirty-minute latitude by thirty-minute longitude grid.

The FCC proposed to dismiss all pending applications for new FM translators in any market in which the number of available LPFM Channels was below a specified LPFM channel floor (a “dismiss all” market), and to process all pending applications for new translators in markets in which the number of available LPFM channels met or exceeded the applicable LPFM channel floor (a “process all” market).86 In proposing the channel floors, the FCC was guided by the number of top 150-market NCE FM full power stations, noting that this service was most comparable to the LPFM service.

Proposed LPFM Channel Floors

Market Rank	LPFM Channels
1~20	8
21~50	7
51~100	6
101~150 as well as smaller markets where more than 4 translator applications are pending.	5

The FCC sought comment on the methodology of its study, and whether a market-tier approach was a reasonable means for effectuating both Section 5(1) and 5(2) directives. It also sought comment on whether use of Arbitron market-based assessments as used therein was reasonable for purposes of implementing Section 5 of the LCRA, and tentatively concluded that a market-based analysis would provide a reasonable “global” assessment of LPFM spectrum availability in particular areas. It sought comment on whether defining the Section 5(2) term “local community” in terms of markets was reasonable and whether it was appropriate to use the same definition for LPFM and translator purposes.

The FCC also sought comment on whether it should impose restrictions on the translator settlement process in the “process all” markets to ensure that engineering solutions to resolve application conflicts would not reduce the number of channels available for LPFM stations in these markets. Finally, in order to preserve the status quo during the pendency of this proceeding, it proposed to suspend the processing of any translator modification application that proposes a transmitter site for the first time within any market that has fewer LPFM channels available than the proposed channel floor. It also imposed an immediate freeze on the filing of translator “move-in” modification applications and directed the Bureau to dismiss any such application filed after the adoption of the Third Further Notice. It noted that the freeze would continue until the close of the upcoming LPFM filing window, but would not apply to any translator modification application which proposes to move its transmitter site from one location to another within the same spectrum-limited market. It sought comment on these proposals.

Defining the market and channel floors

Prometheus and other LPFM proponents suggest that the Commission analyze the top markets using a smaller grid (21x21), arguing that the 31x31 grid studies an area “far too large to adequately evaluate spectrum availability in most urban areas.” Prometheus and REC Networks each note that many available LPFM opportunities are located in sparsely populated (or unpopulated) areas on the fringe of the 31x31 grid. LPFM advocates likewise urge the Commission to separately evaluate named cities in hyphenated Arbitron markets, to set higher channel floors, to count only channels (and not locations) as counting toward a channel floor, and to only count new licensing opportunities when assessing LPFM channel availability.

Translator advocates largely disagree with these suggestions. NPR and NAB assert that a 21x21 grid “provides a skewed analysis of market conditions” and would violate the LCRA mandate that the two services remain equal in status because it would result in the dismissal of more translator applications. Indeed, they maintain that even the Commission’s proposed 31x31 grid is too small, 1 and argue that use of Arbitron market boundaries would provide a more accurate measure of current LPFM and FM translator station locations and potential LPFM licensing opportunities. EMF and other translator proponents likewise disagree with Prometheus’s view that only channels should apply to the channel floors, maintaining that potential “locations” for LPFM stations should also count.106 By looking solely at channels, EMF maintains that the Commission is understating the number of potential LPFM stations that could actually be constructed in the market. It argues that if LPFM is truly a localized service to small populations, channel re-use within a market is “to be expected.”

Translator amendment and settlement procedures

In “Dismiss All” Markets. NAB and others assert that we should process translator applications where an application grant would not obstruct a particular LPFM opportunity or where a dismissal would not create an additional LPFM opportunity. LPFM advocates oppose these suggestions. With respect to the former, they argue that this proposal in practice would likely result in the loss of significant LPFM licensing opportunities. With respect to the latter, they argue that the second-adjacent waiver process will create many LPFM opportunities in markets that otherwise appear to have no available LPFM channels (such as New York and Chicago). Common Frequency further urges the Commission to take into account LP-10 availability and the potential for intermediate frequency (“I.F.”) and second adjacent channel waivers in determining whether a particular translator application could preclude an LPFM licensing opportunity.

In “Process All” Markets. NPR and others argue that the Commission should not restrict the ability of pending translator applicants to make minor amendments to their applications, arguing that circumstances may have changed considerably since their applications were filed in 2003. NAB argues that the Commission should allow applicants to choose other channels as part of the settlement process, so long as the availability of LPFM opportunities is not reduced below the LPFM channel floor for that market. It does not, however, propose procedures to select among competing translator applicants while also safeguarding the pertinent LPFM channel floor. It notes that in many “process all” markets, the number of available LPFM channels far exceeds the channel floor. LPFM advocates disagree, arguing that the “availability of settlements negates the FCC’s systemic approach to defining clear channel floors.” Common Frequency maintains that the availability of settlements “provides for an open-ended scenario where translator applicants could effectively cherry-pick the best channels, leaving the channels at the edges of the grid-area for LPFM applicants.

Analysis

The FCC adopted, with certain modifications, the market-specific processing approach outlined in the Third Further Notice. As previously discussed, the FCC's principal challenge in effectuating Section 5(1) of the LCRA is to identify and preserve those LPFM licensing opportunities where few or no LPFM stations currently operate. The processing approach adopted furthers this goal by ensuring that LPFM licensing opportunities in spectrum-limited markets remain “available.” At the same time, the adoption of translator application and amendment procedures that will permit the immediate licensing of certain pending translator applications in both “dismiss all” and “process all” markets, consistent with Section 5(1) and 5(2) directives and the procedures set forth below.120 To conform our terminology to the revised processing standards, the FCC used the names “spectrum limited” and “spectrum available” markets to refer to what were previously characterized as “dismiss all” and “process all” markets, respectively.

The FCC reviewed their grid studies and have determined that in some smaller “spectrum available” markets, many of the channels identified as available for LPFM are on the fringe of the 31x31 grid in unpopulated or very lightly populated areas. Indeed, in some cases, the population of the 21x21 grid represents more than 90 percent of the population of the 31x31 grid. They believed that LPFM stations can best serve the needs of local communities in areas with significant populations where LPFM service is practical and sustainable. Accordingly, they find that adoption of a smaller grid is appropriate in certain markets to compensate for low population levels on the outer fringes of the grid. They believed that use of a smaller grid in these markets will more faithfully implement Section 5(2) of the LCRA than our original proposal because it identifies and preserves LPFM opportunities in core city areas, where the LPFM service can best serve community needs. The FCC found that this revised approach is more faithful to our interpretation of Sections 5(1) and 5(2) of the LCRA. As previously set forth, these sections, when read together, requires the FCC to ensure a certain level of future LPFM licensing in “spectrum available” markets. However, they believed that licensing opportunities identified as “available” in these smaller markets should be limited to those locations that are likely to be able to support viable LPFM stations. The adoption of a 21x21 grid in certain markets will enable the FCC to more accurately identify such opportunities.

Different considerations apply to the largest markets. The FCC's analysis establishes that there are few or no LPFM licensing opportunities within the core areas of most of the top 50 markets, especially when compared to the number of licensed translator stations and the number of pending translator applications in these markets. The FCC determined that only seven of the top 50 markets which are classified as “spectrum limited” exhibit the high population concentrations within the grid that occur in a number of smaller markets. That is, based on both raw population numbers and population distributions, the largest markets are more likely to include population centers outside core market locations that LPFM stations could serve. Thus, the FCC finds that their translator processing procedures must not preclude LPFM licensing opportunities beyond the studied 31x31 grids in the top 50 spectrum limited markets.

The FCC modified the LPFM spectrum availability study set forth in the Third Further Notice as follows. As before, they identified the number of available LPFM channels and licensed stations within the 31x31 grid and compared this number to each market’s channel floor. Then, they analyzed “spectrum available” markets to identify those where 75 percent or more of the total population in the 31x31 grid is located in the 21x21 grid. In these markets, the smaller grid contains the concentrated core population, they used the smaller grid to determine both the number of licensed stations and the number of channels available for future LPFM stations. Thus, “spectrum available” markets are those markets in which the number of LPFM channels within the applicable grid meets or exceeds the market’s channel floor. The FCC did not subject the 31x31 “spectrum limited” markets to the 21x21 population threshold test for several reasons. First, any such market would necessarily remain a “spectrum limited” market on the basis of a 21x21 grid analysis. More importantly, the 31x31 grid analysis in each of these markets establishes that few opportunities remain within the larger grid for new LPFM stations. Thus, the FCC found that it was necessary that our “spectrum limited” market translator application processing rules, as described below, protect all of the limited LPFM licensing opportunities within the larger grid in such markets. In addition, for the reasons stated above, they also will required a translator applicant in any top 50 spectrum limited market to demonstrate that its out-of-grid proposal would not preclude the only LPFM station licensing opportunity at that location (“Top 50 Market Preclusion Showing”) by making the showing described below.

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