C. Nature of Service and Licenses (15-23)
- Background. In proposing the creation of a new LPFM service, the Commission set forth its goals of encouraging diverse voices on the nation’s airwaves and creating opportunities for new entrants in broadcasting. We raised the question of whether the service should be noncommercial in nature. We noted that while mutually exclusive commercial broadcast applications are subject to auction, certain noncommercial stations are specifically exempted from our auction authority.
- Comments. Of those commenters supporting LPFM, an overwhelming majority endorsed establishing it as a noncommercial service. Commenters stressed the diversity that would be created by a noncommercial service, and argued that noncommercial radio is the best way to serve local communities. Other commenters, however, argued that low-power FM licensees should be available to both noncommercial and commercial licensees.
- Decision. We will establish LPFM as a noncommercial educational service. Our goals in establishing this new service are to create opportunities for new voices on the air waves and to allow local groups, including schools, churches and other community-based organizations, to provide programming responsive to local community needs and interests. We believe that a noncommercial service is more likely to fulfill this role effectively than a commercial service. Commercial broadcast stations, by their very nature, have commercial incentives to maximize audience size in order to improve their ratings and thereby increase their advertising revenues. We are concerned that these commercial incentives could frustrate achievement of our goal in establishing this service: to foster a program service responsive to the needs and interests of small local community groups, particularly specialized community needs that have not been well served by commercial broadcast stations. We believe that noncommercial licensees, which are not subject to commercial imperatives to maximize audience size, are more likely than commercial licensees to serve small, local groups with particular shared needs and interests, such as linguistic and cultural minorities or groups with shared civic or educational interests that may now be underserved by advertiser-supported commercial radio and higher powered noncommercial radio stations. We note that commenters addressing this issue favored establishing LPFM as a noncommercial service by a substantial margin, though some have argued that a commercial service could provide ownership opportunities for new entrants. While we have considered the entrepreneurial opportunities that low power radio stations might create, we nonetheless conclude that a noncommercial service would best serve the Commission’s goals of bringing additional diversity to radio broadcasting and serving local community needs in a focused manner.
- Establishing LPFM as a noncommercial service will have the added benefit of giving us additional flexibility to assign licenses for this service in a manner that is most likely to place them in the hands of local community groups that are in the best position to serve local community needs. As a general matter, where mutually exclusive applications are filed for initial commercial licenses or construction permits, the licenses or permits must be awarded by competitive bidding pursuant to 47 U.S.C. § 309(j). Licenses for noncommercial educational broadcast stations, as described in Section 397(6) of the Act, however, are not subject to competitive bidding. Accordingly, having decided to establish LPFM as a noncommercial service, we will require that LPFM licensees comply with the eligibility requirements of Section 397(6) of the Act.
- Section 397(6) of the Act defines “noncommercial educational broadcast station” as a station which:
(A) under the rules and regulations of the Commission in effect on the effective date of this paragraph, is eligible to be licensed by the Commission as a noncommercial educational radio or television broadcast station and which is owned and operated by a public agency or nonprofit private foundation, corporation, or association; or
(B) is owned and operated by a municipality and which transmits only noncommercial programs for education purposes.
Since the statute incorporates by reference the Commission’s noncommercial eligibility rules, we must look to those rules in determining noncommercial eligibility under Section 397(6) of the Act. The Commission’s rules limit eligibility for noncommercial radio stations to nonprofit educational organizations that show that the station will be used “for the advancement of an educational program.” In applying this rule, the Commission has required that applicants be (a) a government or public educational agency, board or institution, or (b) a private, nonprofit educational organization, or (c) a nonprofit entity with a demonstrated educational purpose. We require that an applicant described in (a) or (b) have an educational program and demonstrate how its programming will be used for the advancement of that program. An applicant applying as (c) must specifically show (i) that it is in fact a nonprofit educational organization, (ii) that it has an educational objective, and (iii) how its programming will further that objective.
- The requirement that NCE licensees provide programming that advances an educational objective may be satisfied by a variety of programs, including but not limited to “instructional programs, programming selected by students, bible study, cultural programming, in-depth news coverage, and children’s programs such as Sesame Street that entertain as they teach.” We have also stated that “in order to qualify as an educational station, it is not necessary that the proposed programming be exclusively educational.” Given the latitude that entities have under our rules to qualify as NCEs, we do not believe that limiting eligibility for LPFM licenses to NCEs will unduly limit the range of groups that will be eligible to apply for LPFM licenses or the services that they can provide.
- Background. One appropriate use of LPFM stations is use by public safety or transportation organizations. Although the Notice did not specifically raise this issue, a number of commenters proposed it.
- Comments. We received a number of comments from public safety and transportation entities arguing that they would use LPFM stations to serve communities’ need for public safety and traffic information. The New York State Thruway Authority (Thruway) argued that low power FM stations could be used for the benefit of public safety and transportation entities throughout the country to provide critical real-time information to travelers confronting emergency situations, traffic patterns and accidents. The Texas Department of Transportation stated a low power FM service would offer more reliable service to travelers than does its existing AM Travelers’ Information Stations (TIS).
- Decision. The public safety and transportation commenters propose important uses for low power FM stations. LPFM stations could be used by state or local governments or other not-for-profit entities to provide traffic, weather, and other public safety information to local communities. The use of LPFM stations for public safety purposes will further our goal of better serving local communities. Certain of these entities already hold TIS or other broadcast licenses. We emphasize, however, that we will not exempt these licenses from the cross-ownership restrictions, described below, and will therefore require TIS licensees or other public safety or transportation licensees, to return their existing licenses upon the initiation of LPFM service. Thus, in addition to noncommercial, educational organizations, associations or entities as described above, public safety radio services used by state or local governments or not-for-profit organizations, as defined in 47 U.S.C. § 309(j)(2)(A), will be eligible for LPFM licenses.
 47 U.S.C. § 309(j)(2)(C).
 See, e.g., Comments of Civil Rights Organizations at 16 (noncommercial stations would serve groups, including those defined by race, religion ethnicity, language or age, that are poorly served by advertiser-supported radio).
 See, e.g., Comments of Civil Rights Organizations at 16-17 (noncommercial LPFM service is the best means of creating locally-based radio likely to serve needs of the local communities); Comments of National Lawyers Guild at 6-8 (noncommercial service will attract those who truly wish to provide a service to their community). See also Comments of The National Federation of Community Broadcasters (Community Broadcasters) at 7 (noncommercial LPFM service would avoid the debate over the impact of LPFM on the economics of radio broadcasting); see also Comments of Creative Educational Media Corp. at 4; Comments of Mid-America Broadcasting Co. at 3, Comments of Nassau Broadcasting at 3; Comments of WATD at 4; Comments of WBRV at 3.
 See, e.g., Comments of Amherst (filed April 28, 1999) at 32-34 (supporting licensing all categories of LPFM service, but arguing that noncommercial uses should be given priority); see also Comments of Media Island International (both commercial and noncommercial stations should be licensed but noncommercial should be given a two-year “head start” on commercial); Comments of Trident Media at 2-3 (LPFM stations should have the option of being commercial in order to generate revenues and remain viable).
 Comments of Civil Rights Organizations at 16-17
 See e.g., Comments of UCC, et al. at 25-26 (commercial low power stations could provide an important entrepreneurial opportunity for members of demographic groups that have historically been underrepresented in the broadcast industry as licensees and professionals).
 While opposing the establishment of an LPFM service generally, NPR stated that "if there can be some assurance that prospective licensees will serve the community and the public interest, it is by" applying the "current eligibility criteria" for noncommercial educational licensees to all LPFM stations. Comments of NPR at 29‑30.
 See 47 U.S.C. § 309(j)(2)(C) and 397(6).
 As discussed below, we will license LPFM stations to operate in both reserved and non-reserved portions of the FM band. Nevertheless, the same eligibility and noncommercial service restrictions will apply to all LPFM stations, regardless of the portion of the FM band in which they are licensed to operate. In this regard, LPFM NCE stations will be different from full-service NCE stations that operate in the non-reserved band. The latter can convert from NCE status to commercial status at will by filing a notification letter with the Commission, but LPFM stations will not be permitted to change their noncommercial status.
 47 U.S.C. § 397(6).
 47 U.S.C. § 73.503(a). The same eligibility requirements were in effect on the effective date of Section 397(6) of the Act. See also Appendix A to Notice of Inquiry, In the Matter of Eligibility for Noncommercial Educational FM and TV Broadcast Station Licenses, BC No. 78-164, FCC 77-382, 43 Fed. Reg. 30842 (1978), 30844 (processing guidelines for institutional and organizational applicants for noncommercial educational licenses).
 See generally Appendix A to Notice of Inquiry, In the Matter of Eligibility for Noncommercial Educational FM and TV Broadcast Station Licenses, BC No. 78-164, FCC 77-382, 43 Fed. Reg. 30842, 30844 (1978).
 See, e.g., In re Applications of Music Ministries, Inc. and Community Education and Religious Broadcasting, Hearing Designation Order, 9 FCC Rcd 3628 (Aud. Serv. Div. 1994).
 Further Notice of Proposed Rulemaking, In the Matter of Reexamination of the Comparative Standards for Noncommercial Educational Applicants, MM Docket No. 95-31, FCC No. 98-269, 13 FCC Rcd 21167, 21169 (1998).
 Memorandum Opinion and Order, In re Application of Lower Cape Communications, Inc., FCC 80-453, 47 RR2d 1577, 1579 (1980). See also Memorandum Opinion and Order, Florence Bridges, FCC 78-719, 44 RR2d 667, 668 (1978).
 We note, however, that individuals cannot qualify as NCEs.
 Comments of the New York State Thruway Authority at 2. See also Comments of the Port Authority of New York and New Jersey (LPFM stations could be used to facilitate the transmission of travel information to the public).
 Comments of Texas Department of Transportation at 2.