Fifth Order on Reconsideration: Difference between revisions

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.

The FCC clarified that the appendix (Appendix A) included with the ''Fourth Report and Order'' made it clear that that they were referring to Arbitron Metro markets rather than non-Arbitron data such as census data.  Although they did not describe the markets as Arbitron Metro markets, the only alternative type of Arbitron radio market is an Arbitron Total Survey Area. Appendix A could not be interpreted to mean Arbitron Total Survey Area, however, because there is no Arbitron Total Survey Area for many of the markets listed in Appendix A, particularly the largest radio markets. Accordingly, contrary to EMF’s claim, the FCC did not believe there could reasonably have been any confusion over the fact that Appendix A refers to Arbitron Metro markets. In any event, they clarified that the markets listed in Appendix A are Arbitron Metro markets.  

EMF also argues that the ''Fourth Report and Order'' did not spell out how an application would be deemed to be within an Appendix A market. The FCC disagreed. Both the ''Third Further Notice'' and the ''Fourth Report and Order'' consistently referred to the proposed transmitter site as the determining factor for whether an application would be considered to be within a particular market. In fact, the ''Third Further Notice'' adopted a processing freeze on “any translator modification application that proposes a transmitter site for the first time within any [spectrum-limited] market,” while allowing any translator modification application “which proposes to move its transmitter site from one location to another within the same spectrum-limited market.” The detailed market-specific translator processing policy adopted in the ''Fourth Report and Order'' specifically refers to the proposed transmitter site as the determining factor, and the translator cap discussion in the ''Fourth Report and Order'' likewise refers to proposed transmitter locations. In any event, the FCC clarified here that a translator application is considered within an Arbitron Metro market for purposes of the per-market translator caps if it specifies a transmitter site within that Arbitron Metro market.

An embedded market is a unique marketing area for the buying and selling of radio air time. It is contained, either in whole or in part, within the boundaries of a larger “parent” market. For example, in the San Francisco market, there are two embedded markets for San Jose and Santa Rosa.  The FCC clarified that as long as the embedded market appears in Appendix A, it will be considered a separate market for the per-market caps.

EMF was the only party to challenge the national cap of 50 applications.  EMF focused its challenge to the national cap of 50 translator applications on two claims. First, EMF claimed that the cap is based on an erroneous assumption that translator applicants with higher numbers of pending applications do not intend to construct all of those proposed stations. Second, EMF pointed out that the Commission chose a cap of 50 as the most “administratively feasible solution for processing this large group of long-pending applications” instead of “more direct means” of curbing speculation, such as limits on sales of new translator construction permits or the prices at which they can be sold.

With respect to the choice of an application cap over other options such as antitrafficking rules, EMF claims erroneously that the FCC's objective was to limit the number of applications they had to process. The FCC chose an application cap “both [to] deter trafficking and provide the fastest path to additional translator and LPFM licensing in areas where the need for additional service is greatest.” That approach benefits both translator and LPFM applicants and the public they seek to serve. An application cap provides an immediate solution to the trafficking issue and also ameliorates the impact of translator applications on LPFM service while avoiding the lead time necessary to develop and adopt new anti-trafficking rules or the resources needed to enforce such rules. This is why the FCC described application caps as “the most administratively feasible solution for processing this large group of long-pending applications.” Advocates of anti-trafficking rules, such as EMF, have not shown that this conclusion is flawed

The FCC did, however, grant reconsideration with respect to the national cap of 50 applications in order to better ensure equitable distribution of radio service between urban and rural areas. The FCC recognized that parties restricted to 50 applications will tend to choose applications in urban areas, because those applications offer potential service to the greatest number of people. The FCC believed that a modest relaxation of this restriction can provide additional service to rural areas without sacrificing the integrity of our licensing process or opportunities for new LPFM service. Accordingly, the FCC allowed applicants to prosecute up to 70 applications nationally, provided that no more than 50 of those are in Appendix A markets. All selected applications outside the Appendix A markets must meet certain conditions. Specifically, the applications outside the Appendix A markets must:

The FCC stated that their decision to establish a national cap is an exercise in line-drawing that is committed to agency discretion. Their choice of a limit of 70 applications nationally, with no more than 50 applications in the Appendix A markets (70-cap), reasonably balances competing goals based on a careful evaluation of the record.

The FCC stated that EMF characterizes the per-market cap as arbitrary and capricious. However, the record here clearly demonstrates that speculative translator filing activity was not only a national problem but also a local market problem. In the ''Third Further Notice'', the FCC described exactly this situation, noting that one applicant held 25 of the 27 translator applications proposing locations within 20 kilometers of Houston’s center city coordinates and 75 applications in Texas. We also noted that two applicants held 66 of the 74 applications proposing service to the New York City Arbitron Metro market. The FCC concluded that EMF did not show that their analysis as to speculative filings activity within Appendix A markets was incorrect.

Appendix A to the ''Fourth Report and Order'' included six non-top 150 markets, including Asheville, NC, because they have more than four translator applications pending. Such a large number of applications for markets outside the top 150 markets suggests speculative filing activity. Although Western North Carolina Public Radio, Inc. (WNC) claimed that it filed multiple applications to serve "various clusters of communities" in the Asheville market, it did not explain how its proposed service would achieve that result with respect to Black Mountain, NC, which is the focus of the WNC Petition. All of WNC’s applications there specify Black Mountain as the community of license and, with only one exception, propose the same transmitter site. In addition, the FCC stated that WNC failed to show any error in the Commission’s analysis of the need to apply the market cap to those markets listed in Appendix A that are outside of the top 150 markets, or any valid justification for departing from Arbitron Metro market definitions. Arbitron Metro market definitions are based on multiple demographic/geographic factors, including terrain issues. Accordingly, the FCC denied WNC’s request to exclude Asheville, NC from Appendix A or in the alternative exclude the community of Black Mountain from the Asheville market.

Conner Media argued that any local application cap on translators should be per-community, based on the number of service-restricted AM stations in any given community. Kyle Magrill similarly pointed out that there is increased demand for FM translators, both to rebroadcast AM stations and to rebroadcast HD radio streams. However, the FCC had an obligation to address abusive application conduct, as described above, regardless of the supply/demand balance in the marketplace. In fact, trafficking in translator authorizations could only occur where there is demand, so the existence of such demand supports, rather than undercuts, the FCC's rationale for curbing speculation. With respect to Conner’s suggested cap based on the proposed community of license rather than the Arbitron Metro market, the FCC determined it to be impractical from an administrative standpoint.

The FCC stated that the record in this proceeding strongly supports a limit on translator applications within each Arbitron Metro market identified in Appendix A to protect the integrity of the licensing process. They recognized that EMF proposed anti-trafficking restrictions as an alternative approach, but the FCC's rationale for rejecting those restrictions in favor of a national cap applies equally to the per-market cap. Accordingly, the FCC rejects the claim that a per-market cap is arbitrary and capricious.

Although the petitioners do not challenge the FCC's conclusion that it is infeasible to apply the Technical Need Rule to the thousands of pending translator applications, they did argue that one translator can only serve a small portion of most markets in Appendix A. The Joint Petition focuses on the Joint Petitioners’ attempts to build regional networks of translators to rebroadcast the signals of their NCE stations. REC independently analyzed the applications of the Joint Petitioners and agrees that many of these applications propose operations very distant from the center of the Arbitron Metro market. REC agrees that, with appropriate limits, allowing such applications to be processed would improve diversity and competition in underserved areas, without impinging on LPFM filing opportunities. The FCC believed the Joint Petition and the REC Partial Opposition raise a valid point as to whether the one-per-market cap is overly restrictive. The Joint Petition states that the Joint Petitioners are prosecuting their pending translator applications not to speculate in translator permits or to manipulate the auction process, but in hopes of increasing the reach of their NCE stations. Based on its analysis of Joint Petitioners’ applications, REC agrees that the Joint Petition demonstrates that the one-per-market cap is overly restrictive.

The FCC agreed with certain elements of the Joint Petition and the REC Partial Opposition, but the FCC's revised per-market cap would vary in certain respects. First, they would not rely on an anti-trafficking condition. As we explained above, we believe such conditions are subject to circumvention, and monitoring compliance with an anti-trafficking condition would be unduly resource-intensive and could delay processing. Second, the FCC believed it was unnecessary to allow parties to prosecute a large number of translator applications within an Appendix A market, as would be possible under the waiver procedures advocated in the Joint Petition. As the FCC had shown, the Joint Petitioners and other applicants already have received a significant number of translator grants from the Auction 83 application process. Further, the FCC's clarification of embedded markets will help these parties prosecute more applications within embedded markets. As the FCC had previously stated, they will also expect that translator applicants will not be foreclosed from comparable application opportunities in the next translator filing window.

Based on their analysis of pending applications, the FCC believed that a limit of three applications per applicant in the Appendix A markets was appropriate, subject to the conditions described below. With those conditions, the FCC believed this relaxation in the per-market cap will improve diversity and competition in under-served areas of the Appendix A markets without precluding LPFM filing opportunities or increasing significantly the potential for licensing abuses.

The relaxed limit of three applications per market will only apply to an applicant that shows that its applications meet the conditions described below. As they indicated below, the FCC instructed the Media Bureau to issue a public notice asking any applicant that is subject to the national cap or the per-market cap to identify the applications they wish to prosecute consistent with the caps and to show that those applications comply with the caps. If a party has more than one application in an Appendix A market but fails to submit a showing pursuant to the public notice, or submits a deficient showing, the FCC would not analyze their applications independently to assess whether they comply with the conditions that there be no 60 dBu overlap with that party’s other applications or authorizations and that there be no preclusion of LPFM filing opportunities. Accordingly, in those situations the FCC would process only the first filed application for that party in that market.

The FCC adopted the following processing policies: The protected (60 dBu) contour (calculated in accordance with Section 74.1204(b)) of the proposed translator station may not overlap the protected (60 dBu) contour (also calculated in accordance with Section 74.1204(b)) of any other translator application filed by that applicant or translator authorization held by that applicant, as of the date of the release of this ''Fifth Order on Reconsideration''. Because the FCC's goal was to expedite the processing of applications, they will not accept an alternative contour prediction method study to establish lack of 60 dBu contour overlap. The concern they had about service duplication applies even more strongly when a party already has an existing translator station providing service to the same area proposed by that party in an application. Accordingly, they expanded the proposed condition to include outstanding authorizations as well as applications. However, they will not extend this condition to limit applications based on parties’ attributable interests or common control of applicant and licensee entities. The pending Auction 83 applications lack any information about parties to the applications, and so they lack sufficient information to make determinations about attributable interests in other applications or common control of applicant entities. Asking applicants to amend their applications to provide this information would delay our efforts to ensure expeditious processing of translator and LPFM applications, and resolving disputes over whether an application is commonly controlled with another application or authorization would further delay this effort. Accordingly, consistent with the approach taken in the ''Fourth Report and Order'', the FCC limited this condition to applications filed by and authorizations issued to the named applicant entity.

The FCC agreed with the condition advocated by the Joint Petitioners and REC that the proposed translator station cannot preclude approval of a future LPFM application in the grid for that market, under the processing policy delineated in Section II.B of the ''Fourth Report and Order'', or at the proposed out of grid transmitter site. To satisfy this condition, applicants must submit an LPFM preclusion study demonstrating that grant of the proposed translator station will not preclude approval of a future LPFM application. As the FCC explained in the ''Fourth Report and Order'', one of their broad principles for implementation of the LCRA is that our 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 the future. This condition is consistent with that broad principle.