Noncom snag delays auctions

With broadcasters clamoring for more channels, the FCC is working overtime to bring hundreds of new stations to the FM dial. But, ironically, broadcasters—both commercial and nonprofit—are creating some of the biggest hurdles to getting those stations on the air.

Not that the courts and Congress haven't done their part. Last summer, federal judges struck down an FCC plan to require public broadcasters to bid against for-profit operators for new stations on the commercial band. Now nearly all the commission's options appear destined to land the regulators back in court.

The dispute stems from a 1997 law that threw out the FCC's decades-old comparative-hearing process. Instead, lawmakers ordered the commission to put new commercial channels out for bid. Congress, however, exempted channels reserved for nonprofit operators, located between 88 and 92 MHz.

Public-radio stations have always had the right to apply for channels outside their reserved band, but whether Congress meant for them to participate in the new auction process was hotly debated.

Two weeks ago, NPR floated its own plan in comments to the FCC. Under NPR's scenario, noncommercial operators would be allowed to apply for a commercial allotment in a market only when no noncommercial channels were available. In that case, a commercial allotment would be reserved for nonprofit operators, which would compete against each other according to a point system.

"We're really dealing with the last available spectrum," says NPR Associate General Counsel Gregory Lewis. "In large segments of the country, there is not a lot of spectrum left." Forcing nonprofits to bid or excluding them from the channels altogether as the FCC had suggested would leave new stations an option only for the most deep-pocketed radio businesses, even in medium-size markets, he said.

Broadcasters are likely to fight the NPR proposal, says Gary Smithwick, a Washington attorney representing applicants for roughly half a dozen licenses that have been stalled.

"NPR's plan is good for NPR," he says. "But there are broadcasters out there who are not afraid of competition and want to bring these stations online. Any approach that gives the advantage to NPR will end up in court."

An NAB official said the industry's major trade group would not comment until replies are due next month. In its own comments, NAB endorsed a ban on new noncommercial licenses in the commercial band.

The FCC was considering barring noncommercial operators from commercial portions of the dial. It also floated other options, including permitting public broadcasters to acquire commercial frequencies only when there are no competing commercial applicants and providing opportunities to add new noncommercial FM and TV channels on a community-by-community basis.

Although the FCC argued that Congress did not intend to exempt nonprofits from auctions of other channels, federal appeals judges ruled that a strict reading of the law shields them from bidding for those frequencies.

The decision forced the FCC to delay an auction of 350 new FM allotments and to forget even thinking about scheduling bids for another 190 FM channels that have been either added to the allotment table or seized from operators that broke agency rules.

Because the licensing rules also apply to TV channels, the dispute is preventing the FCC from going ahead with bids for 1,650 low-power TV and translator permits. Also, any future broadcast allotments for full-power TV would be blocked until the issue is resolved.

The easiest solution would be for Congress to clarify the 1997 law's auction provisions. FCC Chairman Michael Powell has asked lawmakers to amend the law but says he can't wait to see whether consensus for new legislation builds. In the meantime, he reserves his ire for the judges, whose ruling he says clearly contradicts any logical reading of congressional intent because it would give public broadcasters power to claim any new allotment for free.

NPR officials insist that nonprofit operators would get the advantage in very few markets. In a study of 25 randomly picked allotments from the 350 licenses ready for auction, in only four markets would an auction be blocked under NPR's plan, they say.

The National Federation of Community Broadcasters endorsed NPR's proposal. The federation is represented by Washington-based Media Access Project.

Similarly, the Association for Public Television Stations is calling on the FCC to give "first-come, first-served" priority to noncommercial TV operators applying for translator licenses when they show there is a need to fill gaps in a market's public-television coverage.