3-26-2012
The status of LPFM stations has been up in the air almost since they were first created over a decade ago, as the FCC has been slow to open a window for filing applications for new stations while controversies about interference with full-power FM stations and FM translators, and other issues, were being hashed out. This past week, the FCC issued two orders interpreting the Local Community Radio Act ("LCRA") passed by Congress in late 2010 and clarifying other issues affecting the service.
This article will discuss the first of the two orders ? attempting to resolve the priorities between LPFM stations and the thousands of applications for new FM translators still remaining to be processed from the FCC?s 2003 FM translator window. Subsequent articles will discuss the second order (which also contains a Notice of Proposed Rulemaking asking for public comment on several proposals). That order and NPRM addresses the interference protections between LPFM and full-power FM stations, the elimination of third-adjacent channel protections, and proposes some changes in LPFM rules, including proposals to allow LPFM stations to operate with up to 250 watts ERP in smaller markets, and even to operate FM translator stations of their own.
The first order attempts to resolve the issues about the FM translator applications that have been pending since 2003. LPFM advocates contend that the thousands of applications that remain to be processed will foreclose LPFM opportunities, particularly in larger markets, by using up all available spectrum. The translator applicants, on the other hand, have contended that translators provide an important service - expanding the reach of noncommercial stations and now allowing new outlets to more readily make available to the public the signals of AM stations and FM HD streams. The order sets out markets where the FCC has found that spectrum is indeed limited for LPFM opportunities, where translator applications will be dismissed to provide opportunities for a certain base level of LPFM service. The order does not fully adopt the system proposed in the FCC's July NPRM in this matter (see our summaries here and here) which would have required the blanket dismissals of all translator applications in spectrum limited markets. Instead, it provides opportunities for some translators to be processed even in these markets with limited LPFM opportunities, where it can be shown that these translators do not in fact block such opportunities. This is detailed below, as are the rules that the FCC has adopted which set local and national limits on the number of applications from the 2003 window that one applicant can continue to process and some changes in the rules regarding FM translator use by AM stations.
In beginning its analysis, the FCC first needed to interpret the LCRA to determine what Congress intended as to the priorities to be assigned to translators and LPFM stations. The LCRA calls for both translators and LPFM stations to be made available in the various communities across the country. In determining where to process the pending translator applications, the FCC decided that it must take into account not only the pending translator applications, but also existing translators in various markets, to assess whether both services were available in particular communities. By determining that translators were already available in most markets, the FCC decided that, in many markets where new translator applications blocked the availability of spectrum for new LPFM stations, such applications would have to be dismissed to make channels available for LPFM.
Based on that analysis, FCC decided to adopt the ?service floors? for LPFM stations, guaranteeing that there were a minimum number of available channels for LPFM stations in each market. These channels floors were adopted as proposed in the FCC's July rulemaking in this matter, setting requirements for the number of LPFM channels needed in a market in a range from 8 to 12, depending on the size of the market. This floor was based not on the number of translators already available in the market, but instead based on the average number of noncommercial stations in particular market sizes, which the Commission seemed to believe set some sort of standard as to how many LPFMs would be needed in that market. Based on a complicated analysis of LPFM channel availability, where translator applications preclude opportunities to meet the LPFM service floors, they are to be dismissed.
In its Notice of Proposed Rulemaking in this proceeding, released last July, the FCC had proposed to divide markets into ones where all translators would be processed, and ones where all would be dismissed, based on whether there were a sufficient number of channels that could be used by LPFM applicants to meet the LPFM service floor. The FCC had made this go,no-go decision based on the availability for LPFMs of channels in a market determined from a grid 31 geographical seconds by 31 geographical seconds in size, overlaid onto the market. The Commission surveyed the points on the grid to determine the availability for LPFM service on each FM channel somewhere on the grid. In reviewing the comments filed in this proceeding, the FCC backed away from the determination that markets would be all or nothing for translator applicants.
Instead, the FCC adopted a much more complicated process, determining that some markets which had been ?process-all markets?, where all of the 2003 translator applications would be processed, overstated the opportunity for LPFM use, particularly where these markets were densely populated in their core areas. Thus, the Commission determined that it would overlay yet another smaller 21 by 21 grid over the larger grid that it had initially used. If, in any particular market, 75% of the population of the market was contained in that smaller grid, the smaller grid would be used to evaluate whether there was sufficient opportunity for LPFMs to meet the service floor in that more densely populated central urban core area. Appendix A of the FCC's order sets forth the analysis of the 31 by 31 grid, and Appendix B sets forth the analysis of the markets requiring the more detailed 21 by 21 analysis because of their densely populated urban core.
However, in all markets, what had been ?dismiss-all markets? are in fact no longer markets in which all translators will necessarily be dismissed. Instead of "dismiss all" markets, the FCC now refers to markets with insufficient spectrum to allow for the enough LPFM stations to meet the service floor if all translator applications are processed, as "spectrum-limited markets." In these spectrum limited markets, if a translator applicant can show that it proposes to operate on a channel where LPFM stations could not operate because of limitations imposed by nearby full-power stations, then the translator application will not be dismissed. This is possible as LPFM interference is based on mileage spacings to full-power stations, while translators can be located closer to a full-power station on the same channel, or on an adjacent channel, where the translator applicant can show that there will be no actual interference to that full-power station.
However, in making the showing that the translator grant is possible because it will not block any viable LPFM opportunities, the translator applicant must assume that any LPFM applicant will be able to obtain a waiver of interference to full-power stations operating on second-adjacent channels (more explanation about this second-adjacent channel interference in Part 2 of our report on the LPFM orders, to be posted soon).
Even these modifications to the process-all and dismiss-all market definitions do not end the FCC?s examination of the impact of translators on LPFM opportunities. The FCC was concerned that there was little opportunity for LPFM stations in the largest of markets because of existing spectrum use in those markets. But, it found that, in these largest of radio markets, there was an opportunity for LPFMs to serve population centers that existed beyond the 31 by 31 grid areas. Thus, any translator applicant proposing to serve areas in these markets, even if the area is beyond the 31 by 31 grid, must demonstrate that its proposed translator will not preclude an LPFM opportunity at the site of its proposed translator. If the translator application would preclude such use, the applicant can show that there is another channel available at the site for LPFM use. If it cannot make either showing, the translator application will be dismissed.
Obviously, this presents a very complex methodology for translator applicants to use to determine whether or not their pending applications can continue to be processed. This complex methodology will seemingly create some degree of confusion as to which translators can be processed and which will be dismissed, and it will require substantial effort by the FCC to evaluate the showings made by translator applicants. Even though this process is not clear-cut, the FCC has imposed yet another complexity onto the system, by adopting caps on the number of pending translator applications that can continue to be processed, both on a national and on a local basis.
The FCC determined that one applicant can only continue to prosecute 50 applications on a nationwide basis. In local markets, applicants are limited to prosecuting one application in any spectrum-limited market. These caps were not adopted to protect opportunities for LPFM stations, but instead to deter speculation in construction permits for new translators. The FCC felt that some applicants were not filing for translators for purposes of building those stations, but instead for purposes of selling the permits they received. While there might be other more effective ways of combating such speculation by directly targeting those applicants who don?t truly plan on building out the translators for which they are applying (e.g. limits on the profits from resale or outright bans on resale of construction permits), the Commission felt that additional public comment would be needed before such processes could be adopted. As the Commission was in a rush to wrap up the proceeding, they adopted this more indirect policy of combating perceived speculation.
Apparently, applicants will have to elect which of their applications to continue to process before any evaluation will be made of which will be allowed to be processed under the LPFM protection criteria set out above. Thus, applicants picking 50 applications to prosecute may well end up prosecuting less than 50 applications if the FCC does not accept their showings of protection to LPFM opportunities in spectrum-limited markets, and those picking one application in a market may well end up with none if their pick is one that the FCC later determines is one that does not protect LPFM opportunities.
After the determinations are made as to which applications to process by those who are subject to the cap, and whether or not applications are limited by LPFM opportunities, the FCC will open a settlement window so that the remaining applications that are mutually exclusive can attempt to work out their differences. After the settlement window, any remaining mutually exclusive applications will go to an auction.
Many of the new translators already granted and sold by the alleged speculators went to AM broadcasters, who were recently granted permission by the FCC to use FM translators to rebroadcast their stations. The limits on application processing by current translator applicants may well cut off the ready supply of additional translators to be used by AM licensees. Even though there may not be a supply of new translators to be used by AMs because of these limits on processing, the FCC did amend its rules to allow the use of new translators by AMs. Under the rules adopted almost three years ago allowing the use of FM translators by AM operators, only those translators already in existence could be used to rebroadcast AM stations. Now, any translator, whenever it is granted, can be used to rebroadcast AM stations.
We will write about the FCC?s decisions as to changes in the operating rules for LPFM stations in a subsequent article. These rules described here, setting out the processing of translator applications so as to protect LPFM opportunities, leave open many questions, and may yet be subject to appeal. So the last chapter in this long story may not have yet been written.
[In the interests of full disclosure, note that I have represented translator applicants in this proceeding]
Oxenford is a partner in Davis Wright Tremaine's Washington, DC office. He has represented broadcasters for over 25 years on a wide array of matters from purchases and sales of broadcast properties and the negotiation of programming agreements to regulatory matters.
Read his blog HERE
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