E. Ownership and Eligibility (76-96)

1.Local Ownership Restrictions

76. In the Report and Order we prohibited common ownership of more than one LPFM station in the same area and cross-ownership of any LPFM by any other broadcast station, including translator and low power television stations, as well as other media subject to our ownership rules.[1]  Lawson & Langford request that AM licensees be permitted to file LPFM applications, in part, they argue, because of the higher number of minorities that are AM station licensees.[2] As discussed extensively in the Report and Order,[3] we believe that strict ownership rules are an important mechanism for assuring the diversity of ownership that is so critical to this service.  We concluded that the interest in bringing new voices to the airwaves would be best served by barring cross-ownership between LPFM licensees and existing broadcast owners and other media entities. We believe that the rules we have adopted for the LPFM service -- including the strict cross ownership ban -- will lead to more access by all segments of the population to the airwaves.  We will, therefore, maintain the cross-ownership restrictions set forth in the Report and Order. [4]  As noted in the Report and Order, if a licensee of an AM station (or any other station) agrees to divest its interest in its license upon grant of the LPFM license, it may apply for an LPFM license.
77. Cohn & Marks ask us to clarify that an entity may hold both an ITFS license and an LPFM license.  Cohn & Marks state that many universities and colleges hold ITFS stations, which transmit a signal to fixed receiving locations and may only be used to transmit formal educational programming offered for credit to enrolled students of accredited schools.  We clarify that ITFS is neither a broadcast service nor other “media subject to our ownership rules” and is therefore not encompassed by the LPFM cross-ownership restrictions.[5]

2.National Ownership Limit

78. The Commission established a staged national ownership rule.  For the first two years after a filing window opens, an entity may own only one LPFM station.  After the first two years we will allow one entity to own up to five stations nationwide; after three years, we will allow an entity to own up to ten stations nationwide.  The purpose of this staged approach is to foster diversity by initially disallowing common ownership of LPFM stations, but eventually permitting common ownership where local applicants fail to come forward.[6]  As noted above, since adoption of the Report and Order we adopted staggered filing windows based on geographic regions.  We clarify that this two year limitation -- as well as other time periods tied to the opening of a filing window -- will begin to run in a geographic region based on the opening of that region’s filing window. 
79. Public Safety and Transportation.  In addition to NCEs, state or local governments or not-for-profit organizations that operate public safety or emergency services[7] are also eligible owners for LPFM licenses.[8]  The NYSTA requests that the Commission relax the national ownership rules to allow such government, public safety and transportation entities, such as itself, to hold multiple licenses.[9]  It argues that in order to disseminate traffic, safety, and other information over a large geographic area, these entities should be able to operate a string of stations along certain roadways.  Upon reconsideration, we will allow government, public safety and transportation entities to apply for more than one license without waiting for the expiration of the two year period where no mutually exclusive application is filed in the same window.  We agree that government, public safety and transportation agencies have separate and distinct needs from other local organizations that might seek LPFM licenses.[10]  However, we need to balance those needs with our goal of LPFM ownership diversity.  We believe that allowing a limited exception to the ownership restrictions for government, public safety and transportation entities where they do not face competing applications strikes the right balance.
80. Thus, we will allow government, public safety and transportation organizations to apply for more than one license, but they must designate a “priority” application among those applications. The “priority” application will undergo the usual selection process as outlined in the Report and Order whether or not it encounters mutually exclusive applicants.  The other applications they submit will be dismissed if they are mutually exclusive with any other applications but will be eligible for grant in the absence of competing applications.
81. Schools with Multiple Campuses.  Several schools with multiple campuses sought clarification of the national ownership rules to permit the separate licensing of LPFM stations at several campuses.  We believe the LPFM attribution exception should be expanded to cover separate school campuses in most cases, allowing schools to have LPFM stations on separate campuses notwithstanding our national ownership rule.[11]  For example, if several high schools in an area seek LPFM licenses but are all governed by a local school board, the high schools can assert that they are local chapters of a large organization and can apply for their own licenses.  If multiple campuses of the same university apply for LPFM licenses, they too would be considered separate local entities under that exception.  The same principle will apply to charter schools that are a part of a larger school system but seek their own licenses.

3.University-Licensed Student-Run LPFM Stations

82. As noted above, in the Report and Order, we determined that no broadcaster or other media entity subject to our ownership rules, or any party with an attributable interest in a broadcaster or media entity subject to our ownership rules, could hold an attributable ownership interest in an LPFM licensee.[12]  Moreover, we restricted local ownership, allowing an entity to own only one LPFM station in a community.[13]  Finally, for purposes of our national ownership limits, an entity may own only one LPFM station during the first two years of LPFM service.[14]
83. Two petitioners ask us to create an exception to these LPFM multiple and cross-ownership rules to allow universities that hold full-power FM radio licenses to obtain LPFM licenses for student-run stations.[15]  Specifically, petitioners contend that our LPFM ownership rules preclude students from operating a university-licensed LPFM station where the university already holds licenses for radio broadcast stations, including NPR affiliated stations.  Petitioners argue that students are not permitted to participate in the operation of these full-power stations and that our LPFM ownership rules deny students the opportunity to operate LPFM stations.[16]  UCC supports an exception for student organizations cautioning the Commission “to place strict limits on what constitutes a student-run station,” but not to “limit university support for student-run LPFM stations.”[17]
84. We will allow universities that hold licenses for full-power broadcast stations that are not student-run to apply for LPFM licenses for stations that would be managed and operated on a day-to-day basis by students, provided that they do not face any competing applications.  We find that allowing this limited exception to our LPFM ownership rules will promote our goals of maximizing diversity of ownership in a community and providing a medium for new speakers, including students, to gain experience in the broadcast field.  Accordingly, if a university’s full-power station does not provide the university’s students with a meaningful opportunity to participate in the management and operation of that station, we will allow the university to apply for a license for a student-run LFPM station on that campus.[18]  If a license is granted, the station must be managed and operated by students of the university, although as the licensee, the University must retain ultimate control of the station’s operations.  However, in those cases where a university already holds an attributable interest in a broadcast station, its LPFM application will be eligible for grant only if it does not face competing applications.  If the university is a licensee and its LPFM application faces a competing application, the university’s LPFM application will be dismissed.[19]  We believe this exception properly balances the interests of local groups in acquiring a first broadcast facility and of university licensees that desire to provide a distinct media outlet for students. 

4.Time Periods for the Community-Based Requirement and for the National Ownership Cap

85. In the Report and Order, the Commission established a two-year time period during which only local, community-based applicants are eligible, and an entity can only own one station nationwide. UCC asks that we extend both of these time periods in order to give more local groups enough time to organize and submit their applications.[20]
86.       We deny UCC’s request that we extend the two-year time periods for the community-based requirement and the national cap.  We considered UCC’s concerns when we adopted the Report and Order and concluded that we struck an appropriate balance between the interests of local groups and the interest in insuring that the service is used fully. 
87. When deciding on the two-year time period for the community-based requirement, we weighed our interest in putting LPFM stations into the hands of local and diverse entities against our interest in ensuring that available spectrum does not go unused.  As noted above, we have adopted a staggered filing window approach for accepting LPFM applications based on geographic region.  We clarify that the two-year period for the community-based requirement for each jurisdiction starts on the date of the filing window for that jurisdiction.  Therefore, in Alaska, California, District of Columbia, Georgia, Indiana, Louisiana, Maine, Mariana Islands, Maryland, Oklahoma, Rhode Island and Utah, for which we opened a filing window on May 30, 2000, the two-year period began running on that date. In the remainder of the jurisdictions, in which LPFM filing windows have not yet opened, the two-year period has not yet begun to run.  Thus, applicants in these jurisdictions that have not yet had a filing window will have additional time to organize and prepare their applications.  Amherst argues that it will take longer than two years for groups to organize themselves and apply for licenses.  We believe that the simplified application process we created for LPFM will ameliorate this concern.
88. With regard to the two-year time period for the national ownership cap, UCC argues that national entities do not have the “experience and connections with a tiny 3 or 7 mile area of a neighborhood necessary to serve that neighborhood.”[21]  They seem to be arguing against allowing national entities to hold licenses at all, rather than arguing against the two-year time period for the national ownership cap.  Amherst’s arguments do not convince us that our decision to maintain a two-year time period was imprudently made.

5.Foreign Ownership and Non-Stock Entities

89. Questions have arisen with respect to the application of statutory foreign ownership requirements to LPFM applicants and licensees.   As we explained in the Notice,[22] all low-power facilities will be subject to the statutory requirements of Section 310(b) of the Act, which limits foreign ownership and voting interests in radio station licenses, including broadcast licenses.[23]  Sections 310(b)(1) and (b)(2) prohibit the grant of a license to a foreign government or a representative of a foreign government; an alien or representative of an alien; or a corporation organized under the laws of a foreign government.[24]  While foreign parties may act as officers or directors of corporate licensees,[25] Section 310(b)(3) prohibits foreign entities from owning or voting more than 20 percent of the capital stock of a broadcast licensee.[26]  Section 310(b)(4), which limits foreign ownership in parent corporations, allows us to deny a license application, upon a determination that denial is in the public interest, where more than 25 percent of the parent corporation’s capital stock is owned or voted by foreign entities.[27]  The Commission has determined that Section 310(b) applies not only to corporate interests, but also to partnership and other non-corporate interests.[28]  Thus, we will apply our foreign ownership rules and policies on a case-by-case basis to all entities that are LPFM applicants and licensees, guided by Commission precedent.
90. We recognize that many entities that will hold LPFM licenses will be non-stock corporations or other non-stock entities,[29] and that non-stock entities do not have “owners” in the traditional sense.  As the Commission has explained, the specific citizenship requirements of Section 310(b) reflect a deliberate judgment on the part of Congress to prevent undue foreign influence in broadcasting.[30]  Thus, for the purpose of determining whether a non-stock LPFM applicant or licensee complies with the statutory foreign ownership requirements, we will first consider the citizenship of those individuals who would have the ability, comparable to that of a traditional owner, to influence or control the licensee.  In making these determinations we will be guided by Commission precedent.
91. An applicant or licensee must directly inform us that an ownership structure may or does in fact exceed the foreign ownership benchmarks in Section 310(b) of the Act.

6.Minority Broadcast Training Institutions

92. Minority Media and Telecommunications Council (MMTC) filed a supplementary pleading contending that the Commission should award the first LPFM licenses exclusively to minority broadcast training institutions (MBTIs). MMTC argues that such a provision is necessary to ensure that MBTIs receive licenses wherever they are available in order to assist them in their mission of educating minorities in broadcasting, to prevent discrimination, to remedy past discrimination and its consequences, and to promote diversity.[31]  We decline to grant MMTC’s proposal.  First, we do not believe it is necessary to grant MBTIs the right to receive the first wave of LPFM licenses in order to provide them a significant opportunity to participate in LPFM.  Although MMTC argues that the chances of MBTIs winning many licenses are remote, it concedes that they would likely be able to earn points under our selection criteria for mutually exclusive applications.[32]  Thus, as long as MBTIs agree to time-share or, as a last resort, accept a shorter license term as part of a group, they will be likely to be granted a license under the tie-breaker procedures.[33] 
93. Second, although we agree that providing minority broadcast education would be a valuable use of the LPFM service, it is not the only valuable use.  We believe our current eligibility rules will lead to the ownership of LPFM stations by a wide variety of groups, which will best promote our goals in this proceeding. 
94. Finally, notwithstanding MMTC’s argument that Adarand Constructors v. Pena[34] would not apply to their proposal, we believe the legal issues underlying the proposal would pose a risk of delaying the introduction of LPFM service to the public.  As we stated in the Report and Order in response to requests for preferences for entities controlled by minorities, the Commission is conducting fact-finding studies as to whether such preferences may be justified consistent with Adarand.[35]  Depending on the outcome of these studies, as well as our experience with LPFM, we will consider in the future whether to adjust our rules to facilitate participation of more minority-oriented organizations in the service.

7.Unlicensed Broadcasters

95. In the Report and Order, we determined that unauthorized broadcasters would not be eligible for LPFM licenses unless they could certify that they (1) promptly ceased operation when directed by the Commission to do so if that direction was received prior to February 26, 1999, or (2) voluntarily ceased operation by February 26, 1999 (within 10 days of the publication of the Notice in the Federal Register.)[36]  In no event will an unlicensed broadcaster be eligible for an LPFM license if it continued illegally broadcasting after February 26, 1999.[37]  Don Schellhardt requests that we allow unlicensed broadcasters to apply for LPFM licenses if: (1) the unauthorized broadcaster challenged the legality of an FCC order to cease operations and/or sought an injunction to bar the FCC from enforcing such an Order, and (2) the court “allowed” the unlicensed broadcaster to continue operating while the legal challenge was pending.[38]
96. We reject Shellhardt’s request.  As discussed in the Report and Order, our rule on unlicensed broadcasters was based on our concern that past illegal broadcast operations reflect on the entity’s proclivity to deal truthfully with the Commission and to comply with our rules and policies.  We continue to believe that a party that continued to operate in contravention of an FCC direction to cease operations should not be eligible to apply for an LPFM license.  Such a party should have ceased its illegal broadcast while pursuing any legal challenge to a Commission order.[39]  Any party ignoring our order has demonstrated an unwillingness to comply with the Commission’s rules and thus should not be rewarded with an LPFM license.  For the same reasons, we reject Schellhardt’s request that those who flagrantly violated a Commission order to cease operating and “continued to broadcast while in hiding” or after losing a court challenge be eligible for “probationary licenses.”[40]