FCC seeks a better way to choose noncommercial spectrum licensees

Originally published in Current, Oct. 26, 1998

By Jacqueline Conciatore

The FCC is finally considering a new method of deciding between competing applications for noncommercial radio and TV licenses, potentially filling a policy vacuum that dates back to the early '90s. But the commission is suggesting that it pick licensees with a lottery or point system, which may not be palatable to pubcasters as a whole.

The FCC is also asking for opinions about how to handle competing requests for commercial spectrum when the applicants include noncommercial broadcasters.

In proposed rules published Oct. 21, the FCC rejected its old system of comparative hearings--in which administrative law judges decide, based on set criteria, who should get the license. The commission says the hearing system is costly, time-consuming and arbitrary in effect.

The FCC actually stopped the hearings after courts in 1992 threw out the commission's criteria for deciding who among competing commercial applicants should get the license. An FCC review board also said the criteria for decided noncom competitions were "vague" and "meaningless." Today the FCC leaves it to noncommercial competitors to haggle over who gets the license, sometimes requiring them to share frequencies if one doesn't buy out the other.

Public broadcasters say the lack of a system is not only a headache, but sometimes encourages competing applications from broadcasters who just want to be paid to go away.

"I think anything is better--a lottery or a point system--when you have complete deadlock, which is what we have now," says Doug Vernier, an engineering consultant and g.m. of KUNI, Cedar Falls. "Is the system going to be fair? I don't have an answer to that, and I don't think anyone does. It's incumbent on the [public broadcasting] system to advocate our position as strongly as possible so we can make it as fair as possible."

Most parties commenting on the issue in previous years, including NPR and America's Public Television Stations (APTS), favored continuing some form of comparative hearings.

NPR and APTS in the past offered the FCC a list of new criteria that would take into account the applicants' community service plans and whether a proposed station would increase the diversity of programming in a community.

At Current deadline last week, few public broadcasters had reviewed the very recent FCC notice. But Todd Gray, a communications attorney with Dow, Lohnes & Albertson--who says he represents about 300 public radio and TV stations and had filed the earlier response with NPR and APTS--was ready to weigh in. He hopes the commission will reconsider comparative hearings once it gets reaction.

"Nothing in this whole proceeding seems to be oriented toward anything other than finding the most convenient and trouble-free way to dole out licenses," Gray said. "It seems to be an abandonment of the FCC's responsibility to find a way to issue licenses that best accomplish the goals of public broadcasting."

Lotteries are random and "nonsensical in this context," he says. And a point procedure wouldn't allow the commission to fully judge applications on their merits, he says. "Two different applicants could be integrated into the educational and cultural life of the community. The question is, which is more integrated?"

Lottery or point system

The FCC says a lottery system is appealing because it would allow for quick decisions and pose less of a financial burden to noncommercial applicants, who are often strapped for cash.

These advantages are especially appealing because the number of competing noncommercial applications is increasing, the FCC said. There is currently a backlog of almost 800 mutually exclusive noncom TV and radio applications, most on the radio side, the commission reports. Probably 750 radio applications will be filed just this year alone, about 500 of them mutually exclusive. Many of the radio applications come from religious broadcasters.

If the FCC adopted a lottery system, it would by law have to give "significant preference" to (1) applications that would avoid concentration of ownership and (2) minority applications. The FCC notice proposes weighting the lottery, in most cases two to one, in favor of these applicants. But the commission also says it's concerned that favoring applicants without stations would hurt statewide networks.

The commission says a point system, like a lottery setup, would be quicker and less costly; but it wouldn't leave outcomes entirely to chance. The FCC's proposing a system that would award points for local diversity, for introducing first or second services in a community and for proposing to serve an area or population that's at least 10 percent larger than competing bids.

Noncom apps on the unreserved side

Why is the FCC doing this now? The FCC notes that the Balanced Budget Act of 1997 reasserted the FCC's authority to use lotteries for competing noncom applications, at the same time that it directed the FCC to auction commercial licenses. The latter ruling forces the commission to address one of the issues that it's raising--how to handle noncommercial applications for commercial channels.

The commission has not yet decided whether the Communications Act prohibits auctions even where there is the potential that a license may be awarded to a noncommercial station.

If the commission decides to allow noncommercial applicants to participate in auctions for commercial channels, it must decide whether commercial and noncommercial compete under the same auction rules.

Other questions posed:

The commission seeks comments in the proceeding (Docket No. 95-31) within 45 days after the notice appears in the Federal Register and wants replies to the comments 20 days later. An FCC spokesperson estimates the deadline will be sometime in mid-December; of course comments can be filed anytime before the deadline. Comments can be filed electronically:



To Current's home page

Current Briefing on reserved spectrum issues.

Related text: Further notice of proposed rulemaking in Docket 95-31, Oct. 8, 1998.

Later stories: In comments to the FCC, public broadcasters push for point systems, January 1999; the commission adopts a point system, April 2000.


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