Third Report and Order
The Third Report and Order addresses the comments received by the FCC as a result of the Further Notice of Proposed Rulemaking (NPRM). The NPRM addressed various issues raised in an FCC forum held in February, 2005 with various LPFM stakeholders including non-local ownership of LPFM stations, the transferability of LPFM stations, the renewability of licenses that are on involuntary time share arrangements, the maximum distance allowed on minor moves and more periodic LPFM filing windows.
| Document Information | |
|---|---|
| Type | Report and Order |
| Docket Number(s) | MM 99-25 |
| FCC Number | 07-204 |
| FCC Record | 22 FCC Rcd 21912 |
| Federal Register Citation(s) | 73 FR 12601 |
| Federal Register Date(s) | March 6, 2008 |
| Relevant Dates | |
| Adoption Date | November 27, 2007 |
| Release Date | December 11, 2007 |
This Report and Order was released 7 years into the LPFM service and to date, the FCC received 3,236 applications for new LPFM stations for which 1,286 have been granted and 809 stations are fully licensed and operating. 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.
Ownership and eligibility
Changes in board membership
The NPRM proposed to amend the rules to allow for sudden changes of more than 50 percent of the membership of governing boards. Commenters such as KVLP-LP noted that 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. Overall, most commenters favored amending the rules to permit transfers of control due to sudden change so long as the overall mission of the organization has not changed.
The FCC did amend §73.865 to clarify that transfers of control involving a sudden change in board membership of more than 50% of an LPFM governing board shall not be deemed as a "substantial change in ownership or control".
Assignments and transfers
On this subject, comments were mixed between those who supported the ability for LPFM stations to be transferred/assigned to different organizations without restrictions because there is very little risk to manipulation or take-over in the "market" for LPFM authorizations, and those who contend that transfers/assignments should be limited to those situations where the proposed assignee/transferee "represents the community" and no consideration is involved. The FCC concluded that the for-profit sale of LPFM stations to any buyer is fundamentally inconsistent with the FCC's desire to promote local, community based use and ownership of LPFM stations.
The FCC will allow for assignments of licenses, but only after the station has been constructed and licensed for at least three years and that consideration be limited to the depreciated fair market value of the physical equipment and facilities of the station. Proposed assignees must meet the qualifications to be an LPFM licensee including localism.
The FCC determined that the standard FCC forms that are being used for other broadcast services would also apply to LPFM stations such as Form 314 or assignments of license, Form 315 for non pro forma transfers of control and Form 316 for pro forma transfers of control.
Ownership caps and localism
When LPFM stations were first authorized, ownership was limited to one station per local entity within the first two years. At the two year mark, ownership would increase to 5 stations and then after 3 years from the creation of LPFM, the ownership cap would increase to 10. This was to allow for national organizations to have LPFM stations but giving local applicants a head start.
Several organizations urged the FCC to keep the LPFM service local and limited to one station per entity stating that any relaxation of the localism and multiple ownership restrictions are at odds with the "community radio" rationale that justifies the existence or LPFM stations. In response to the FCC's prior concerns about potential LPFM channels not being used if no local organization wants it, Prometheus Radio Project stated that non-local entities should be barred from applying, because LPFM is not a goal on itself, rather it is a means to promote localism.
As a result, the FCC reinstated the "one to a customer" ownership rules (except for public safety agencies) and the requirement that LPFM stations remain under the control of local organizations. At the recommendation of Prometheus Radio Project, the FCC did extend the local standard for rural markets to consider a local applicant as one that is less than 20 miles from the transmitter site if the LPFM station is located outside of the Top 50 media markets.