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New Comparative Criteria for MX’d

Noncommercial Educational Applicants

 

The FCC has established new criteria for awarding construction permits to mutually exclusive (MX’d) applicants for noncommercial educational (NCE) radio and television stations. It concurrently froze applications for new NCE stations and for major changes in existing NCE stations.

 

Applications are mutually exclusive if grant of the applications would violate the FCC’s interference rules. Applications usually become MX’d because they propose use of the same radio or television frequency to serve the same community, but other scenarios are possible. For example, applications to upgrade existing stations may be MX’d with applications for new stations. In addition, radio applicants may be MX’d even if they specify different communities of license or different frequencies that nonetheless would result in prohibited interference.

 

Point System. The Commission considered, but rejected traditional comparative hearings, lotteries, and preferences for the first applicant to file as means of resolving MX’d applications. It chose, instead, a point system which would evaluate all MX’d applications in terms of basic goals of noncommercial broadcasting. These goals include:  localism, diversity of ownership, technical efficiency and service to statewide networks.

 

            1.         Established local entities (3 points). Established local applicants are those that, for the two years immediately preceding the application, have been physically headquartered, had a campus, or had Board Members, 75% of whom reside within 25 miles of the proposed community of license. Governmental entities are local throughout the area within which their authority extends.

 

            2.         Local diversity of ownership (2 points). Applicants are awarded 2 points if they have no attributable interest in any other broadcast station or authorized construction permit whose principal community contour overlaps that of the proposed station. The principal community (city grade) contour is the 5 mV/m for AM stations, the 3.16 mV/m for FM stations and the contour identified in Section 73.685(a) for television stations. Directors, officers and voting shareholders of the applicant, or of a parent or subsidiary organization, generally have an “attributable” interest in the applicant, as does an entity that provides more than 33% of an applicant’s equity and/or debt and (1) either supplies more than 15% of the station’s weekly programming or (2) has an attributable interest in other media in the same market.   

 

            3.         Statewide network (2 points). Applicants that do not claim credit as an established local applicant may claim two points as a statewide network if they meet one of the following tests: 

 

                        (a) They are a public or private entity with authority over a minimum of 50 accredited full-time elementary and/or secondary schools within a single state encompassed by the combined primary service contours of the proposed station and existing stations. The existing stations must regularly provide programming to the schools in furtherance of the school curriculum. The proposed station must increase the number of schools that will be regularly served.

 

                        (b) An accredited public or private institution of higher learning with a minimum of 5 full-time campuses within a single state encompassed by the combined primary service contours of the proposed station and existing stations. The existing stations must regularly provide programming to campuses in furtherance of their curriculum. The proposed station must increase the number of campuses served.

 

                        (c) A public or private organization, with or without direct authority over schools, that regularly provides programming for and in coordination with the school systems described in 3 (a) or (b) for use in the school curriculum.

 

            4.         Technical parameters (1-2 points). Applicants that provide coverage to a 10% greater area and a 10% greater population than other MX’d applicants will be awarded 1 point. Applicants that provide coverage to a 25% greater area and 25% greater population will be awarded 2 points.

 

Radio Applicants Proposing Different Communities of License. In the special case in which the MX’d radio applications propose to serve different communities, the Commission will evaluate the respective needs of the service areas for an NCE station before applying the point system. If the FCC concludes that there is a significant difference in need for NCE service, it will grant the application that supplies that need. In order to provide a significantly better NCE service, an applicant must provide a first or second NCE service to at least 2,000 people and at least 10% of the population within the 60 dBu (1 mV/m) service contour. First service to 2,000 or more people will be considered superior to second service to a population of any size. If more than one applicant will provide a first or second NCE service, the applicant providing the most people with the highest level of service will be granted if that applicant provides service to 5,000 or more people than the next best applicant.

 

Tiebreakers. If the FCC cannot award a construction permit based upon a point system, it will use the following tiebreakers:

 

            (a) The applicant with the fewest number of attributable existing authorizations (licenses and construction permits, commercial and noncommercial) in the same service (radio or television) nationally, as of the time of application, will be chosen.

 

            (b) If a tie remains after the first tie-breaker is applied, the construction permit will be awarded to the applicant with the fewest pending new and major change applications in the same service at the time of filing.

 

            (c) If a tie still remains, the Commission will order time-sharing, and will divide the time equally divided among all applicants.

 

Translators. The FCC will give a decisive preference to NCE translator applicants proposing fill-in service over applicants proposing to serve an area outside the 1 mV/m contour of the primary station. If a construction permit cannot be awarded on this basis, the FCC will apply the point system. In the event of a tie among translator applicants, the FCC will use the tie-breaker mechanism described above, but, as a last resort, will grant the first application to be filed rather than order time-sharing.

 

NCE Applications for Non-Reserved Frequencies. NCE applicants that apply for frequencies not reserved for NCE use will not be evaluated by the point system. These applicants must bid on the frequency at auction if there is a competing expression of interest. Future NCE applicants will be allowed to reserve non-reserved channels for NCE use if they can demonstrate that no NCE radio or TV channel will serve the community and that an NCE service would provide a first or second NCE radio or TV service to more than 2,000 people and 10% of the population within the 1 mV/m contour of the proposed radio station or the Grade B contour of the proposed TV station.

 

Public Notices. The rules concerning MX’d applications will be implemented by a series of Public Notices. These Notices will identify MX’d groups of applications and establish dates by which applicants may amend their applications to claim credits under the point system. In some cases, additional documentation will be required. For example, applicants who claim credit as an established local entity must demonstrate that they are physically headquartered, have a campus within 25 miles of the proposed community of license, or that governing By-laws require that 75% of Board members reside within 25 miles of the community of license. The documentation must be placed in the applicant’s Public Inspection File and made available in the FCC’s Public Reference Room.

 

Petitions to Deny. After awarding a construction permit to one of the MX’d applicants (the Tentative Selectee) the FCC will issue a Public Notice and allow other MX’d applicants 30 days in which to file Petitions to Deny. If the Commission revises the point tally of the Tentative Selectee in light of arguments made in the Petition to Deny, it will compare the revised point tally with that of the MX’d applicants and either grant the original application or announce a new Tentative Selectee. If the application of the Tentative Selectee is denied because the Selectee is found unqualified, the applicant with the next highest point tally will be named as the new Tentative Selectee.

 

Holding Periods. NCE stations awarded by use of a point system will be subject to a four-year holding period, beginning with the date of on-air operations. An applicant proposing to assign or transfer a construction permit or license to another party must demonstrate that the proposed assignee qualifies for the same or greater number of points and that the consideration received or promised does not exceed the assignor’s expenses. Those expenses are the expenses reasonably incurred in obtaining the construction permit and constructing the station, but do not include operating costs.

 

NCE applicants receiving a decisive preference for fair distribution of service are required to construct and operate the facilities as proposed. Downgrades will not be allowed until after four years of on-air operations.

 

Freeze. Applications for new NCE stations and for major changes of existing NCE stations operating on reserved channels have been frozen. The freeze affects future applications and applications not accepted for filing by the April 21, 2000 release date of the Report and Order regarding MX’d applications. The FCC will, however, accept applications filed in response to cut-off lists that have already been issued. Applications filed before release of the Report and Order which have not been accepted will be included in the first window open for new NCE applications. That window will probably not open until the FCC has processed all pending MX’d applications.