FCC sets up new NCE license process

By Rod Perlmutter, News Editor, Media Central

(Additional material from wire services)

KANSAS CITY, Mo., April 19, 2000 (Media Central) – The Federal Communications Commission announced an order last week that should help break up a five-year backlog of applications for licenses for noncommercial educational (NCE) radio and television stations.

Communications lawyers who represented public radio stations said this week that the rules were a step in the right direction.

“It’s an improvement over the current situation, but anything would have been,” said John Crigler, a Washington, D.C., attorney who represents the Station Resource Group, whose members operate 168 public radio stations in the United States. “On the whole, this will help local public radio stations.”

Sheryl Leanza, deputy director of the Media Access Project in Washington, said though her organization is glad that the FCC proposed an order, it is not sure whether it will petition to make further changes to help local community groups gain access to radio spectrum.

Crigler and Leanza said the new FCC order comes at a time when demand for broadcast spectrum is increasing, and some national groups are trying to chip away at the 20 percent of the bottom of the radio dial that was reserved for noncommercial use. Increasingly, they said, the battle to get on the air is between small sparsely-funded community groups versus well-heeled national groups.

Conflicting applicants could be “Mxed”

Crigler, an attorney with Garvey, Schubert and Barer in Washington, said that for years, when there was more than one application for noncommercial educational frequencies, the applicants were declared mutually exclusive or “Mxed.” That meant before a license could be granted, the FCC would hold a comparative hearing before an administrative judges. These hearings were expensive and took months.

In 1995, the FCC froze comparative hearings for NCE facilities, and accepted public comments on the best way to decide who should get a license when several parties applied for the same thing. As a result, those applications that were declared “Mxed” were not being processed, and no one was getting the license.

But while the FCC was accepting comments on how to change the procedure, the number of applications for the NCE licenses increased. The FCC said in 1998 it received 750 applications, which was almost twice as many as were filed in 1997. As a result, the number of applications that were mutually exclusive increased as well, from 250 to 1997 to 500 in 1998.

Interest in NCE licenses was high, Crigler said, because NCE licenses were exempt from filing fees. Similarly, the number of applications grew for NCE licenses for smaller supplemental stations known as translators. A translator is a small station that receives a primary station’s signal, amplifies, shifts its frequency, and rebroadcasts it. It is used by FM and television broadcasters to expand their coverage area. For example, a translator might help a station with a weak signal get to listeners on both sides of a mountain.

Under FCC rules, a commercial translator could only be used to “fill in” dead zones of its current coverage area. But, Crigler said, an NCE translator could be fed by satellite transmission and could serve areas far removed from its primary station’s service area.

Crigler, in comments to the FCC, said the rise in NCE translator license applications increased because national groups were creating large satellite-fed translator networks in which the signal of a primary station was re-transmitted by dozens of translator stations thousands of miles away.

“The growth of far-flung translator networks has increased congestion in the reserved spectrum and reduced listenership to existing NCE stations,” he wrote.

Crigler, using the FCC database of applications for NCE licenses, documented that most of the applications were not coming from small local groups applying to serve their own community, but large national groups applying for licenses all over the country.

According to Crigler, the following is a list of the top five appliers for NCE licenses, including the number of those that were declared Mxed:

• American Family Association, with 179 NCE applications, of which 115 were Mxed;
• Calvary Chapel of Twin Falls, Inc., 111 and 11;
• Broadcasting for the Challenged, Inc., 87 and 77;
• Educational Media Foundation, 85 and 26;
• Paulino Bernal Evangelism, 40 and 14.

Crigler said that when the FCC froze its comparative hearings, it eliminated the only means the commission had to test whether the applicants for NCE licenses intended to serve the needs of the community, or even if they were non-profit groups.

In comments to the FCC filed in 1998, Crigler said that Broadcasting for the Challenged exemplified why some form of application review was needed. Crigler alleged that Broadcasting for the Challenged was a “nonprofit corporation” made up of the members of a single family. One member, Crigler alleged, had about 40 pending applications for new commercial radio and six television stations. That member also had links to other commercial television operators.

“In the days when the commission conducted comparative hearings, these facts would have warranted an inquiry into ….whether Broadcast for the Challenged is a bona fide NCE applicant or merely a vehicle for speculating in reserved frequencies,” Crigler wrote.

In another case, Crigler said that a Station Resource Group member found itself competing for an NCE license with an applicant who allegedly “misrepresented its status as a nonprofit corporation, …that the application is the creation of a convicted felon with a history of violating FCC rules…and the applicant declined to answer damaging questions about its educational purposes (and) the ownership interests of parties to the application.”

FCC adopts point system for NCE applicants

In a press release published Friday, the FCC said it adopted new procedures to decide which is the best applicant when several apply for the same NCE license.

Instead of comparative hearings, the FCC will use a point system to determine which is the best applicant.

“It will be faster and less expensive than the former traditional hearing process, while continuing to foster the growth of public broadcasting as an expression of diversity,” the commission said in its release.

Points will be awarded as follows:

• three points if the applicant is an established local entity (An applicant must be local for two years prior to application to be deemed “established.”);
• two points if the applicant owns no other local broadcast stations;
• two points if the applicant is part of a state wide network providing service to accredited schools (This credit will be awarded only if applicant does not also claim the local ownership points.);
• one to two points based on the technical parameters of the proposed facility.

The commission even set up a series of “tie-breaker” clauses. The winner among several applicants will be:

• the applicant with the fewest existing stations. If that results in a tie, the next criteria is:
• the applicant with the fewest pending applications. After that, for FM stations:
• the first applicant to file.

Leanza said the point system is a step in the right direction, because the FCC entertained proposals based on picking the winner by lottery.

“We are gratified that the FCC recognized that lotteries would have been an abdication of their responsibilities under federal communications law,” Leanza said. “Selecting a licensee based on randomness does not serve the public interest.”

Crigler said the point system was good because it explicitly put important goals in the decision-making process.

“The preferences support localism – it is better to have a local group than a national chain,” Crigler said. “The system also encourages state educational networks. It also supports diversification, since it is better to have more voices rather than fewer. And, in the case of a tie, the applicant with the fewest pending application wins, which favors a small local group over a big national applicant with more than a hundred applications.”

Leanza said the point system, however, failed to address the needs of noncommercial applicants who wanted to broadcast on the 80 percent of the spectrum that is not reserved for public use. Leanza said some public radio groups may apply for NCE licenses in the part of the spectrum currently dominated by commercial stations. Under the FCC order announced last Friday, if both a commercial and a noncommercial applicant apply for an NCE license in the non-reserved part of the spectrum, the point system will not apply. Instead, the license will be decided by auction.

“Noncommercial applicants have limited financial resources, and they will rarely succeed against a well-funded commercial applicant,” Leanza said. “This is a bias against noncommercial applicants.”

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