How We Initially Evaluated MX Applications in the 2023 LPFM Filing Window

As a part of REC’s “post-window” activities, we have provided our own evaluation of each MX Group.  During this evaluation we looked at specific aspects of the application:

• Claims of the Established Community Presence (ECP) point. 
• Whether educational statements would likely be acceptable to the FCC.
• In cases where we had doubts, confirmation of corporation status.

Established Community Presence (ECP)

There was a lot of confusion over the ECP guidelines.  This has been communicated to me by several people and it was very evident when evaluating the MX Groups.  There were many who thought that just because people lived in the community or did charity work for the past two years in the local community, they could claim the point, even if the corporation only existed for less than two years.  Some did not even associate ECP with the two year minimum.  The FCC made it clear in the original Report and Order for LPFM back on 2000 that there must be a corporation established in order to have a headquarters and even though board members may live within 10 or 20 miles of the transmitting site, they were only board members during the time when the corporation actually existed.  We had adjusted quite a few MX applicants who claimed ECP but their organizations were only established within the past two years (between December 16, 2021 and December 15, 2023).

For educational applications (a large majority of LPFM applicants), the Form 318 instructions state that applicants must submit evidence of their qualifications as an exhibit to their application forms.  This evidence must demonstrate the date of commencement of the applicant’s existence and the location(s) of the applicant’s headquarters, campus, or governing board members’ residences during the two years prior to the application filing.

For example, such evidence may consist of copies of corporate charters, articles of incorporation, association, or partnership, or other written instruments filed with the appropriate governmental agency (e.g., Secretary of State) documenting the applicant’s period of existence.

The location of an applicant’s headquarters, campus, or governing board members’ residences may be demonstrated by the submission of statements supported by the affidavit or declaration of a person or persons with personal knowledge thereof.  See 47 C.F.R. Section 1.16.

In the REC evaluations, we did a very strict grading on the point claims.  The key items we were looking for on applications included:

• Governance documents issued by the state’s Secretary of State (SOS) or equivalent agency such as articles of incorporation or annual reports from 2001 or earlier that include the physical (not PO box) addresses of either the headquarters and/or members of the board (even if they are not the current members).  If that information was not on the paperwork, we would not accept it.  We also did not accept documents that did not have an official stamp of acceptance from the state which will have the date, and in most cases, a file number.  Some applicants attempted to just submit application forms that were filed out but with no evidence on the form itself that is was filed (no state stamp/file number). 
• In lieu of properly submitted governance documents, we accepted unsworn declarations of the applicants attesting to the local presence.  We did require that the documents were subscribed, pursuant to §1.16 of the rules.  Specifically, we were looking for language that stated that the statement was made under penalty of perjury. 
• Properly submitted statements that establish the organization as an unincorporated association which includes a statement from an attorney licensed to practice law in the state accompanied by the unsworn statement, subscribed pursuant to §1.16 to attest to the localism of the organization.

We did not accept the addresses of registered agents or registered offices.  When a corporation is established, a registered agent must be identified.  This is normally a person who is physically in the state and in many cases will be a service provider that specializes in providing registered agent services for corporations.  The address of a registered agent is not indicative of the address for a board member or the organization’s headquarters. 

Examples of items that we did not accept:

• Articles of incorporation, statements of existence, good standing statements and other SOS documents that did not bear addresses.  Just because an organization is incorporated in the state does not mean that they are local.
• Any document from the IRS.  The most common submissions were EIN/TIN letters. Anyone can get a EIN/TIN. Having an EIN does not convey corporation status.  IRS documents use mailing addresses and not physical addresses.  They cannot be used to solidly demonstrate physical location.
• Bank statements, utility bills, property tax statements, lease agreements, state tax exempt certificates, business licenses, internal corporate documents and anything else that was not certified as filed by the SOS.

While the FCC may give some leeway from the outset, we graded these applications on a very strict criteria in order to demonstrate the vulnerability that applications will have to either point adjustments during the point hearing process at the FCC or subjection to challenges (informal objections and petitions to deny) from other applicants or the general public at large.

Again, our findings and predictions may not match what the FCC comes up with in the point hearings, but we are attempting to present what could be a more worst-case scenario.

It is important to remember that missing information needed to claim the ECP point cannot be amended to the application after the close of the filing window.  This will be seen as an attempt to improve comparative position.

Removal from consideration

Applicants were removed from consideration from an MX Group and predicted dismissed before the point hearing and not included in the score for the following reasons:

• The application specified a facility that has §73.807 short-spacing on co- and first-adjacent channels.  This short-spacing is considered fatal upon filing, pursuant to §73.870(c) and cannot be cured on amendment.
• Applicants who failed to include governance documents in their application just for the purpose of showing corporate existence.  Applicants without governance documents were checked through a search of the transmitting antenna state’s SOS to check for the corporation.  These applicants may be able to cure and get themselves back into consideration by amending the application with the appropriate governance documents as long as the corporate filing was made on or before December 15, 2023.
• Legitimate public safety applicants who filed multiple applications and did not designate the application at hand as their “priority” application.
• Applicants claiming to be “public safety” entities that are non-government (private sector) in nature but do not provide any documentation that bestows a “jurisdiction” granted to them in accordance with a compact or contract with a competent authority or through other legislation.  The 2023 window had a large amount of public safety abuse in it.

We did not exclude from consideration, reserved band (88.1~91.9 MHz) applicants with Channel 6 short-spacings.  §73.825 violations do not fall under the fatal when filed provision of §73.870(c) and there is past case law that allows these discrepancies to be cured by amendment.  We note that the only ways an LPFM station can qualify to use the reserved band are:

• Meets the minimum distance separations in §73.825 towards both full-service and low-power television stations.
• If short-spaced, the applicant provides a letter of consent from the affected Channel 6 licensee.
• If short-spaced and has no letter of consent, a showing of a lack of contour overlap based on the methodology that applies to FM translators, pursuant to §74.1205.   We did not accept attempts to use §73.525 (full service NCE) methodology.  The ability to use §74.1205 methodology was negotiated by REC and is specified in the 2020 LPFM Tech Order as an alternative for TV6 short spacing.

Weighted Boards

A “weighted board” is a listing of the parties to the application where members of the board have uneven percentages, such as a board where three members have votes of 60%, 20% and 20% respectively (as opposed to 33.3%, 33.3% and 33.3%).  This has been used in the past to circumvent the localism requirements as well as the alien (non-citizen) ownership restrictions.  Past unpublished decisions by the Audio Division on assignment applications within the past 10 years have rejected applicants who proposed weighted boards without appropriate documentation such as bylaws or meeting minutes of the organization that established the weighted board.

Application of Concern (AOC)

For the purposes of MX evaluation, we did not take into account applications of concern.  During the MX exercise, we have identified some serial filers and we will be addressing those through our AOC evaluation process.  Some of the issues we have already discovered were added to the AOC List during the MX evaluation exercise.  Applicants on AOC will continue to compete in the REC MX evaluations as long as they are otherwise qualified based on the information shown above.

Educational Statements

In our MX evaluations, we did take the liberty to also provide commentary on the quality of educational statements submitted by the applicants.  Specifically, we were looking for a showing that the organization was indeed educational and that the station would be used to advance the organization’s educational objectives through over the air teaching/instruction.  We did give leeway to some religious broadcasters consistent with past FCC decisions.  Our experiences on this come from the monitoring of statements on assignment applications filed in the 10 years following the 2013 window. 

An MX applicant’s educational statement had no bearing on whether the applicant was granted their ECP claim nor used as a basis for excluding an applicant from consideration.  Educational statement deficiencies can be cured by an amendment and will do nothing more than just delay a grant.

Acronym/Jargon Soup

Here are some of the acronyms and terms you may see in the evaluations:

T/S: Tentative selectee(s).

ECP: Established Community Presence.

SOS: Secretary of State.

With pledges:  This means that if the applicant is granted after the point hearing and points were used to eliminate other applicants from the MX Group, the applicant will be subject to the main studio and local programming pledges if they claimed those.

As singleton: This means that any other member of the MX Group has been disqualified for a reason other than points (short spaced, public safety, etc.) and that the remaining application could be granted and not be expected to adhere to the main studio or local programming pledges.

Tie breaker priority: In a case where after the point hearing is conducted in late 2024 or 2025 and the settlement period passes and no amendment activity takes place, then the MX Group defaults to involuntary time share.  The choice in the pre-designated time slots is first given to the group with the oldest established community presence date.  In MX groups with two tied applicants, we will mention the organization that has the oldest ECP date as they will pick their slot and the other applicant will have the other.  In three way groups, we will provide priority in rank order.  In some cases where the ECP claim is denied, we cannot necessarily determine that date and we will yield to the FCC.

Escalations/Appeals

These evaluations are not the official FCC findings.  They are only opinion based on many years of experience dealing with these types of applications as well as reflective of some decisions made following the 2021 NCE Window.  These evaluations are just one possible path for the MX Group and is intended to call attention to possible actions that can be taken.

All applicants in these MX Groups, including REC clients were considered equally and fairly. 

Use at your own risk

The FCC has reminded applicants, and REC agrees, that when considering whether to enter into a settlement or timeshare agreement with another MX applicant, the Commission is the official, and only, source for determining and awarding comparative points to MX applicants.  Applicants that rely on unofficial point predictions from outside sources (such as the REC Window Tracker) do so at their own risk, as such predictions are not binding on the Commission.