LPFM and NCE licensing rule changes on the agenda for FCC January meeting

LPFM and full-service NCE will have an agenda item in the January open meeting of the Federal Communications Commission.  The Commission will consider a Notice of Proposed Rulemaking, MB Docket 19-3, which will make some revisions to the (mutually exclusive) comparative processes and licensing rules for LPFM and full-service NCE stations.  This proceeding includes a couple of items that were proposed by REC Networks during the Media Modernization Proceeding (MB Docket 17-105) and reiterated in REC’s LPFM Petition for Rulemaking, RM-11810.

For LPFM, the FCC is proposing the following:

  • Prohibiting the amendment of construction permit applications to remove a party that was involved in unlicensed broadcasting in violation of Section 301 of the Communications Act.  Under the current policies, if it is identified through various means such as an Informal Objection or Petition to Deny that a person shown on the board of directors has previously engaged in unlicensed operation (and it can be proven through prior enforcement action), the application would be dismissed.  The applicant than can file nunc pro tunc to “remove” that person from the board and properly answer the certification question that no party has engaged in unlicensed broadcasting.  During the 2013 window, there were several cases where nunc pro tunc was used to remove a person with a pirate past. 
  • Permit time sharing agreements prior to tentative selectee designations.  In the previous window, we saw cases in Los Angeles and Philadelphia where applicants were alleged to have “pre-planned” the aggregation of points.  The FCC is proposing to allow point aggregation discussions between applicants to take place during the application process and not subject to collusion rules.  As a part of the revised policy, the FCC wants to review the policy of how time should be reapportioned in the event that a time share proponent’s construction permit is cancelled or expired.  The FCC is even exploring the concept of doing a “mini-window” to fill in the space.
  • Establish procedures for remaining tentative selectees following dismissal of an accepted point aggregation time share agreement.  The FCC is proposing a “start-over” process in the event a time share agreement involving aggregated points being dismissed.  Under the proposed process, the FCC will dismiss all agreements and “clear the board” and opening up a new 90-day window for all equally qualified applicants (tentative selectees) to renegotiate aggregation agreements or a universal settlement.
  • Reclassify gradual board changes as minor. Under the current rules, if an application is amended multiple times during the initial application process and a change to the board is made, once the change exceeds 50% from the original application, the change is considered major and causes the construction permit application to be dismissed.  Under the proposed rule (which would apply to both LPFM and full-service NCE) would allow gradual board changes as long as the organization and mission remain primarily the same.  Sudden board changes (more than 50% on a single application) will still be considered major and subject to dismissal.
  • Clarify reasonable site assurance requirements.  During the 2007 and 2010 NCE windows as well as during the 2013 LPFM window, there was confusion over the site assurance requirements on original construction permits.  The FCC proposes to add instructions to Forms 340 and 318 to acknowledge the site assurance requirements and modify the forms to include a site assurance certification question.  The question of whether a statement of site assurance should also be on the application is also under consideration.
  • Changes in the tolling process.  The FCC is proposing to change their procedures to place into a tolling posture any original NCE or LPFM permit that includes a condition on the commencement of operations and the Commission has a direct licensing role in the satisfaction of that condition or that the permit grant is subject to an administrative or judicial review.  Grantees will still be required to request tolling on other issues such as local, state and non-FCC federal requirements such as FAA.  We believe that this would also include conditional grants due to pending Mexico notifications.
  • Lengthen the LPFM construction period.  As proposed by REC, the FCC is proposing to extend all LPFM construction permits (new and modification) to three years.  This will eliminate the need to contact the FCC for an 18-month extension.  This will also bring modification permits to three years for the first time.
  • Modify restrictions on transfers and assignments of LPFM authorizations.  As proposed by REC, the FCC is proposing to:
    • Permit the assignment of “failing” construction permits after the original grantee has been given 18 months to construct the facility.  The assignee will have the remainder of the three years to construct the facility and no additional time will be granted (unless allowed by tolling policies).
    • Require assignee to be equally or greater qualified if the original construction permit was granted based on a comparative review.  This prevents a “strong” organization obtaining a permit for the sole purpose of assigning their permit to a weaker organization (i.e. one that would have been eligible for fewer points if they had filed during the window).
    • On constructed and licensed facilities, require assignee to be equally or greater qualified if the original construction permit was granted based on a comparative review for a period of 4 years following the license grant.  This brings LPFM rules consistent with full-service NCE rules.

At this time, this is draft NPRM and is currently not open for comment.  The FCC will discuss and vote on this agenda item on or prior to the next open Commission meeting scheduled for January 30, 2019.

REC will release more information, including the information specific to NCE full-service stations in a later release.