M E M O R A N D U M

 

 

To:      Station Resource Group

 

From:  John Crigler

 

Date:   March 2, 2001

 

Re:      NCE Point System

 

 

On February 28, 2001 the FCC issued an order (the “Recon Order”) in which it considered various objections to the system it adopted April 4, 2000 for awarding a noncommercial educational (“NCE”) construction permit for which two or more mutually exclusive (“MX’d”) applicants applied. The Recon Order reaffirmed a point system as the preferable selection process and rejected criticisms that such a system favored secular over religious applicants.

 

The Recon Order clarified several aspects of the point system and added procedural details. It contains a list of 439 “closed groups” of MX’d full-service FM applicants, consisting of 1,356 applications; as well as 43 groups of MX’d FM translator applicants, consisting of 79 applications. These “closed groups” are no longer subject to any additional competing applications. They are distinguished from “open groups,” where an application for a new frequency has been filed, but not been cut-off, so that other MX’d applications are still possible.

 

FAIR DISTRIBUTION CREDIT

 

The Commission reaffirmed the basic framework of the system it adopted earlier. No point system will be applied if one of the mutually exclusive applicants is entitled to a decisive “fair distribution” credit. That credit is earned only if the applicant provides a first or second NCE signal to at least 10% of the population within its 1 mV/m contour and serves more than 2,000 people. Only stations operating on reserved channels will be considered to deliver an NCE service.  A first service to 2,000 or more people is considered superior to a second service to a population of any size. If more than one applicant has an equivalent level of first or second NCE service, the applicant with the highest level of service will be given the permit, if it provides that service to 5,000 or more people than the next best applicant.

 

THE POINT SYSTEM

 

If none of the applicants in the “closed group” prevail on this “fair distribution” standard, the point system will be applied. Points are awarded as follows:

 

Criterion

Points

Established Local Applicants

3

Local Diversity

2

Statewide Educational Networks

2

Superior Technical Proposal 

1-2

 

Because the points for statewide networks are available only to applicants that do not qualify for “local diversity” points, 7 is the maximum number of points that can be awarded to any applicant.

 

The tie-breaking mechanism remains the same. The applicant with the fewest existing authorizations will first receive a preference, than the applicant with the fewest pending applications. If neither of these preferences break the tie, the applicants will be ordered to share the frequency. 

 

HOLDING PERIOD

 

Construction permits awarded under the point system will be subject to a four-year holding period. The permit or license can be assigned or transferred during that period only to an entity qualifying for the same or greater number of points, and for consideration that does not exceed the assignor’s expenses in obtaining the construction permit and constructing the station.

 

PROCEDURAL MATTERS

 

The Reconsideration Order provides detail on a number of procedural matters. For future applications, an applicant’s characteristics at the time of filing will determine the maximum number of points which it is entitled. Post-filing changes can decrease, but not increase the number of points or tie-breaker preferences. For pending applicants in closed groups, the rule is slightly more complicated. FCC staff will issue a public notice which establishes a “supplement date” by which pending applicants must file supplements to their applications or enter into universal settlement agreements. The supplement must contain the applicant’s claim to points and documentation that supports the claim. The supplement date will be used to determine points except points for technical proposals. For example, an applicant could improve its tie-breaker position by dismissing other applications prior to the supplement date.

 

Technical proposals will be evaluated by an earlier date than the supplement date. For closed groups for which a “B” cut-off notice has been issued, technical points are calculated as of the “B” cut-off date. For “closed groups” for which no “B” cut-off notice has been issued, technical proposals will be evaluated as of April 21, 2000.

 

CLARIFICATIONS

 

Although the reconsideration order does not substantially modify the point system, it does clarify a number of issues. Here are some of the highlights:

 

·                 Established local entities are those that have maintained their headquarters, campus, or the principal residencies of 75% of their Board Members within 25 miles of the central coordinates of their proposed community of license for at least two years immediately preceding the supplement date. Governmental applicants are considered local within their areas of jurisdiction. An applicant is an “established local applicant” only if it has been continuously local for two years prior to the supplement date. It cannot become local by adding local citizens to its Board after commencement of this two-year period.

 

·                 “Superior” Technical proposals get 1 point only if they serve an area and population that is 10% greater than the next best proposal. Superior technical proposals get 2 points if they serve an area and population that is 25% greater than the next best proposal.

 

·                 When applicants proposing a major modification are compared to applicants for a new station, the Commission considers only the area of newly added service.

 

·                 Local diversity points are awarded if the proposed station’s principal community contour (the 3.16 mV/m contour for FM stations) does not overlap with the principal community contour of any other station in which the applicant, a parent or subsidiary of the applicant, or members of the applicant’s governing board have attributable interests. Interests in or positions on the boards of other NCE stations are considered “attributable” for purposes of determining diversity credit. These points are calculated as of the supplement date.

 

·                 An applicant may seek a waiver of the attribution rules if it can show that an officer’s position with another entity imposes duties that are wholly unrelated to that entity’s broadcast business.

 

·                 Applicants will be awarded a diversity credit only if the governing documents require that diversity of ownership is maintained. For public institutions, governed by statute rather than articles of incorporation, the FCC will accept a certification in which the applicant commits to maintain board characteristics on which a diversity claim is based.

 

·                 In order to claim points as a statewide network, the applicant must show that it is not qualified for diversity of ownership point and that the station will be used to provide programming in furtherance of a school curriculum. To qualify, the applicant must be a public or private entity with authority over at least 50 accredited full-time elementary and/or secondary schools within a single state or an accredited public or private institution of higher learning with a minimum of five full-time campuses within a single state. Small schools and colleges may enter into consortia for coordinating broadcast programming for use in their respective curricula.

 

·                 In applying the tie-breaker for existing radio authorizations, the Commission will count all non-fill-in translators. Applicants applying for a full-service station to replace a translator do not have to count the translator being replaced.

 

·                 To encourage settlements, the FCC suspended the rule that bars paying any dismissing applicant more than its reasonable expenses. This rule will be suspended only until the supplement date.

 

·                 The Commission will consider only universal settlements and technical settlements, i.e. settlements that resolve all MX’d applications in a given group, or amendments that modify an applicant’s technical proposal so as to allow it to cease being mutually exclusive with any other applicants.  

  

·                 The Commission declined to specify a processing order based on either the date on which applications were filed or upon the geographical location of applications. It also declined to impose any limit on the number of applications that could be filed by any single applicant in any future filing window.

 

·                 The Commission rejected requests to award points to non-local applicants who would make certain commitments to local communities; or those who would make SCA frequencies available or reading services.

 

·                 Although the Commission did not lift the current freeze on applications for new stations, it noted its awareness of PTFP funding deadlines and stated that it would coordinate with PTFP in a way that would open “sufficient Commission filing windows for applicants to meet the requirements of NTIA.”