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.
Time sharing agreement deadline date
Media Access Project had observed that LPFM applicants are comprised of small organizations with few administrative resources and limited access to the expertise of professional engineers. Few applicants are able to identify other mutually exclusive applications before receiving notice from the FCC leaving them with only 30 days to contact the other applicants, complete negotiations and file their agreements with the FCC. As a result the FCC proposed to extend the settlement period from 30 to 90 days. All commenters who addressed the issue favored adoption of the proposal to extend the period to 90 days, this included NPR and REC Networks.
The FCC agreed with the views of NPR, REC and others and therefore amends §73.872 to extend the settlement deadline to 90 days.
Renewals for involuntary time sharing arrangements
Currently, if an LPFM authorization is issued under an involuntary time sharing arrangement (successive license terms), the licenses are non-renewable. The NPRM proposed to change this provision as it may lead licensees under such arrangements to reach such arrangements to negotiate voluntary time sharing agreements among themselves. REC Networks was one of the few commenters to address this and suggested that if licensees under an involuntary time sharing arrangement was to come up with a voluntary agreement the FCC should grant the agreement and remove the non-renewable condition and be able to renew. So far, with more than 1,200 construction permits already granted, no stations hold authorizations for involuntary time sharing.
The FCC will consider these agreements as minor changes and then can operate under a universal voluntary time-sharing agreement to file it as minor change without having to wait for a filing window. Therefore, the FCC will amend the rules to allow them. The FCC stresses that the settlements must be universal, as in all parties in the group must be in agreement.
Filing for unused time
If in a time share group, if there is any unused time, REC suggested that new applicants be able to file for that unused time during a filing window. The FCC will only entertain these requests during a filing window, even if the new entrant reaches a universal agreement with the other time share stations. The FCC will not accept such filings outside of a filing window both due to administrative burden as well as fairness under the mutually exclusive selection procedures of §73.872.
If additional time becomes available due to the attrition of one of the time share proponents, then the remaining time share proponents can negotiate to apportion out the unused hours.
Technical rules
Construction period
In the original Report and Order, the FCC established an 18 month construction period for all LPFM facilities that would be strictly enforced. However, in the NPRM, the FCC adopted an interim waiver policy based on the fact that some groups may not be able to construct within 18 months because of various issues such as zoning approvals. Those waiver requests would allow for another 18 months to build upon a showing that the permittee can be expected to complete construction within the extended period.
As a more permanent solution, the FCC proposed to extend the construction period to 36 months. Many commenters favored the 36 month period stating that it has administrative advantages over a conditional extension or case-by-case review of individual waiver requests. Prometheus Radio Project and others contend that the better approach was to grant an 18 month extension, but only upon demonstration of good cause so to prevent unable or unwilling LPFM permittees from warehousing valuable spectrum without service to the public for an extended period of time.
As a result, the FCC will amend the rules to allow, upon a showing of good cause, the opportunity to seek an 18-month extension to complete construction.
Amendments
The FCC amended §73.871 to allow time share proponents to be able to make a minor amendment to a common (central) transmitter site even if the distance is more than 5.6 kilometers for LP-100 or 3.5 kilometers for LP-10 as long as the proposed location meets the minimum distance separation requirements.
LPFM-FM Translator interference priorities
Currently, the LP-100 and FM Translator services are on a co-equal basis with one not having "priority" over the other. The NPRM sought comments on under what circumstances should an LPFM station have priority over an FM translator. Specifically, the FCC sought comment on how to overcome the significantly preclusive effect of the 2003 Auction 83 "Great Translator Invasion" filing window, asking, among other things, of whether all of the pending FM translator applications should be dismissed. So far, the FCC has already granted 3,500 FM translator new station construction permit applications from the singleton filings and that 7,000 applications remain on file. Very few opportunities for LPFM stations existed before the Auction 83 window and that the Auction 83 window did have a preclusive effect on future LPFM licensing opportunities.
The FCC did receive a lot of comments on this issue to 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 the preclusive impact of the other 13,000 technical proposals filed in Auction 83. LPFM advocates contend that their service is preferable to FM translators because LPFM stations are locally owned and can originate local programming where translators merely rebroadcast another station's programming including distant programming fed by satellite. Some requested that LPFM stations should have priority over "distant" translators, those that broadcast the signals of a non-local station.
NAB, NPR and the state broadcaster associations as well as commercial and NCE broadcasters support retention of the current interference protection rules stating there's no simple ways to distinguish preferred stations or programming and 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 also note that LPFM stations have limited service in regard to their communities of license and do not need to originate programming. Also LPFM stations are only required to operate 35 hours per week and do not have a main studio or public file. Many contend that because LPFM is still in its infancy, that it is premature to assess the "co-equal" status of LPFM and FM translator stations. NCE stations argue that giving LPFM priority over operating FM translator stations would significantly disrupt established and valued translator service to millions of listeners, especially in rural areas and in situations where broadcasters rely on "chains" of translators to deliver programming.
With regard to the applications filed in Auction 83, some argued that LPFM stations should not have any special preference because LPFM had the first opportunity in the 2000-2001 Filing Window Series. Translator advocates note that their last opportunity for non-reserved band FM translators occurred in 1997. Edgewater Broadcasting (and co-owned Radio Assist Ministries) and REC Networks submitted studies. The Edgewater study shows that the preclusive effect was "miniscule" while the REC study shows many communities in which the 2003 window filings have allegedly precluded or diminished LPFM licensing opportunities. A number of commenters argue that the FCC's concern is misdirected and urge the FCC 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 without regard to the still-pending atranslator applications. Some contend that the high demand for new FM translators is unsurprising, given the extended freeze on non-reserved band licensing.
The FCC recognizes that both LPFM and FM translators are each valuable components of the nation's radio infrastructure. The FCC will address these issues further in the Second Further Notice of Proposed Rulemaking. For now, the current rules will remain in effect until the FCC resolves the issue in that proceeding. The FCC must also consider the question to whether Auction 83 filing activity has already impacted the Commission's goal to provide both LPFM and translators applicants reasonable access to limited FM spectrum in a manner that promotes the fair, efficient, and equitable distribution of radio service as mandated in §307(b) of the Communications Act. The FCC notes that as of September 30, 1990, a total of 1,847 FM translators and boosters were on the air. As of December 31, 1997 when the FCC imposed a freeze on new non-reserved band translator filings, a total of 2,881 translators were operating nationally. A total of 3,818 licensed translators were in operation in March 2003 when the FCC opened the Auction 83 window and a total of 3,897 stations were on the air when the FCC imposed the freeze on Auction 83 construction permits in March, 2005. The Auction 83 window has nearly doubled the total number of authorized stations and three times more than the number of LPFM stations authorized in the 2000-2001 window series.
The FCC believes that processing all of the remaining 7,000 remaining translator applications would further frustrate the development of the LPFM service and their efforts to promote localism. An REC study showed that 16 percent of census designated communities that otherwise would have had LPFM channels in their communities are now precluded because of Auction 83. In the Auction 83 window, filing activity was divided between hundreds of applicants that filed a limited number of applications and a very small number of applicants that filed for hundreds or thousands of construction permits. Approximately half of the filers submitted one or two proposals. Approximately 80 percent filed 10 or fewer proposals. 97 percent filed 50 or fewer proposals Commonly-owned Edgewater Broadcasting and Edgewater Broadcasting filed 4,219 proposals constituting almost one-third of all Auction 83 filings. The 15 most active filers were responsible for half of the proposals filed in the window.
Some have been concerned about Radio Assist/Edgewater'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 profits. More fundamentally, it appears that the FCC's assumption that competitive bidding procedures would deter speculative filings have been proven to be unfounded in the Auction 83 context. Radio Assist/Edgewater alone has sought to assign more than 50 percent of the 1,046 construction permits it has been awarded through the window and has already consummated assignments for over 400 of all such permits.
In order to further the twin goals of increasing the number of LPFM stations and promoting localism, the FCC limited further processing of applications submitted in the Auction 83 window to 10 proposals per applicants. Those with more than 10 pending proposals will need to identify the 10 they want to keep and the remaining ones will be dismissed. This cut off will limit the preclusive impact of Auction 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 80 percent of filers who filed 10 or fewer applications.
Interference from subsequently authorized full-service FM stations
Section 73.809 interference procedures
In January 2007, the FCC changed the full-service FM rules and lifted a freeze on community of license changes. As a result, approximately 100 FM community of license change applications were received in the first week of the new rules. In all over 200 full-service community of license changes had been filed under the new rules. Because of these filings and arguments being made by LPFM advocates persuaded the FCC to consider policies in place to address current and future LPFM displacement threats. The Media Bureau recently identified approximately 40 LPFM stations that could be forced to cease operations.
The FCC modified §73.809 to only apply to co-channel and first-adjacent channel interference and will no longer apply to second-adjacent channel interference. The FCC encourages full-service and LPFM stations to work cooperatively to minimize or eliminate the impact of the full-service proposal on both stations. In this regard, they encourage each encroaching full-service station to provide technical and financial assistance to any LPFM station at risk from a full-service proposal.
Second adjacent channel waivers
The FCC put an interim policy in place where if a full-service station made a modification with a change in community of license that would result in the termination of the LPFM station using the standards in §73.809 and there was no rule-compliant, fully-spaced (meaning it does not receive incoming interference based on the distance separation charts) channel, the LPFM station may be able to change to a channel that is only short-spaced to a second-adjacent channel station on a waiver basis.
Impacted LPFM stations could file a Form 318 to request the change in channel. The impacted second-adjacent station would be sent an Order to Show Cause as to why the modification of the station license to allow a second-adjacent channel short-spacing would not be in the public interest. If the Media Bureau determined that the waiver was in the public interest, it would issue a Special Temporary Authority (STA) to the LPFM station to make the channel change and hold the 318 application in abeyance pending the outcome of the Second Further Notice of Proposed Rulemaking.
LPFM station displacement
In certain circumstances, no alternate channel would be available for an LPFM station in risk of displacement. Because of this, the FCC provided guidance on the standards that will be used to whether the grant of a full-service application to change community of license would be in the public interest. Generally, the FCC would favor the grant of the full-service modification application, however they believed that it was appropriate that the public interest would be better served by a waiver of the Commission's rules making LPFM secondary to subsequently authorized full-service stations and the dismissal of an "encroaching" community of license change when the threatened LPFM station can demonstrate that it has regularly provided at least 8 hours a day of locally originated programming as that term is defined for the LPFM service. This presumption will only apply if the implementation of a community of license change results in the displacement of an LPFM station or if there is a significant increased in incoming interference towards the LPFM station where continued LPFM operation would be infeasible such as cases where the LPFM site is located within the interfering contour of a co- or first-adjacent channel community of license modification and no suitable alternate channel is available for the LPFM station.
LPFM stations that needed to apply this waiver standard could file an Informal Objection against the full-service community of license change within 60 days of the date the community of license change application was published in the Federal Register. This narrow policy only applied to LPFM stations that are demonstrably serving the needs of local listeners and does not apply in situations where the full-service station is not changing their community of license.
Statutory impacts
Some of the policies developed by the FCC in this Report and Order would eventually be prohibited by statute with the enactment of the Local Community Radio Act of 2010 (LCRA). Specifically in Section 5 of the LCRA, addressing the policies around application caps for translators and the denial of community of license changes in isolated situations, the statutory language read that when licensing new FM translator stations, FM booster stations and LPFM stations, the FCC shall ensure that licenses are available for all three services, such decisions are made by needs of the local community and that all three services remain equal in status to each other and secondary to existing and modified full-service FM stations.
Commissioner statements
Chairman Kevin Martin called LPFM a lower cost opportunity for additional voices to get into local radio and that this item facilitates LPFM access to limited FM spectrum by reforming the rules. He called the steps taken in this Order to be important steps to better promote entry and local responsiveness without harming the interests of full-power stations or other licensees. To preserve opportunities, the Order restricts the number of FM translators that will be granted from the 2003 window. The Order also streamlines and clarifies the process by which LPFM stations can resolve interference issues with full-power stations helps those LPFM stations that have been providing local programming. "Our work in this area is important for localism. I look forward to working with my fellow Commissioners to adopt additional rules that continue to ensure a competitive and diverse media that serves local communities."
Commissioner Michael Copps stated that big media companies are nothing if not persistent, lobbying for the elimination or relaxation of ownership limits, seeking waivers of existing rules and proposing merger upon merger and daring regulators to draw the line. "Runaway consolidation since the 1996 [Telecommunications] Act has left us with homogenized content, national play lists, outsourced news, a dumbed-down civic dialogue, and shameful levels of minority and female ownership." He refers to LPFM as a "breath of fresh air", truly local stations run by local organizations that provide an outlet for local voices and local talent. They cover issues of importance to local and very often under-served communities. "Low power is truly radio of the people, by the people and for the people. We cannot let it perish from the earth.". He welcomed the decisions on ownership and eligibility that will ensure that LPFM stations retain its local character, the steps to limit the preclusive effect of existing FM translator applications on LPFM and the initial steps taken to protect LPFM from full-power encroachment.
Commissioner Jonathan Adelstein reminisced when LPFM was first created that the critics were saying that there is no viable business model for such a localized medium while others argued that LPFM stations would undermine the economic stability of full-service FM stations and that time had revealed that neither statement was accurate; and referring to the LPFM service as "a great success story of communications policy". "Today, the Commission takes steps to reaffirm the non-commercial, local nature and orientation of LPFM stations, and to enhance opportunities for new voices to be heard on the radio dial. Additionally, the Commission finally recognizes the value of LPFM stations as a service that is worthy of some, albeit very limited, channel protection from full-power stations." The Commissioner was pleased that the FCC preserved the noncommercial local nature of LPFM stations by prohibiting most sales of licenses and outright ban any transfer or assignment of construction permits preventing a market for the sale of LPFM stations, which will help protect the local quality and service orientation that made LPFM thrive. The Commissioner was also pleased by the changes in the ownership rules, which could never happen in commercial radio.