Experimental, Auxiliary, and Special Broadcast and Other Program Distributional Services; ITFS Filing Window

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 74

[MM Docket No. 93-24, FCC 95-51]

Experimental, Auxiliary, and Special Broadcast and Other Program

Distributional Services; ITFS Filing Window

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: This Report and Order adopts a window filing procedure for the

processing of applications for new Instructional Television Fixed

Service (ITFS) stations and major changes to existing stations. It

further adopts rules affecting the four-channel rule, receive site

interference protection, the protected service area, and other aspects

of ITFS operation. The Report and Order responds to the comments

received in response to the Notice of Proposed Rulemaking in this

proceeding. Notice of Proposed Rulemaking in MM Docket No. 93-24,

(Notice), Order and Further Notice of Proposed Rulemaking in MM Docket

No. 93-24 (Further Notice). The action is required to hasten ITFS and

wireless cable service to the public by streamlining the processing of

ITFS applications.

EFFECTIVE DATE: Upon approval of the Office of Management and Budget of

a modified FCC Form 330 to effectuate the modifications approved in

this Report and Order. The FCC will published a document announcing the

effective date in the Federal Register when OMB approval is imminent.

FOR FURTHER INFORMATION CONTACT:

Paul R. Gordon, Mass Media Bureau, Policy and Rules Division, (202)

739-0773.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report

and Order in MM Docket No. 93-24, adopted and released on February 7,

1995. The complete text of this Report and Order is available for

inspection and copying in the FCC Reference Center (room 239) at the

Federal Communications Commission, 1919 M St., NW, Washington, DC

20554, and may also be purchased from the Commission's copying

contractor, International Transcription Service, at (202) 857-3800,

2100 M St., NW, Suite 140, Washington, DC 20037.

Synopsis of Report and Order

1. By this Report and Order, the Commission adopts rules that will

increase the efficiency of our processing of applications for new ITFS

stations, major amendments to such applications, and major changes to

existing stations. The Commission also considers additional proposals

intended to increase the efficiency, and curtail potential abuse, of

the application processes.

2. During the past decade, applicants for new ITFS stations or

major changes in existing stations have been subject to an A/B cut-off

procedure. This procedure involves placing the first application(s)

accepted for filing and determined to be substantially complete on a

public notice called an ``A'' cut-off list. This list notifies the

public that the application has been accepted and gives interested

parties 60 days to file competing applications or petitions to deny. An

applicant placed on the ``A'' cut-off list is required to make any

major changes to its proposal before the end of the ``A'' cut-off

period. After the ``A'' period expires, the staff places all

substantially complete applications which were filed during that period

and found to be mutually exclusive with any listed ``A'' application on

a ``B'' list. This list notifies the public that the specified

applications have been accepted for filing, and it provides 30 days for

the filing of petitions to deny or minor amendments to those

applications.

3. The telecommunications environment has changed substantially

since 1985, when the Commission instituted this procedure. Also, in

more than 90% of recently filed applications, ITFS licensees plan to

lease their excess channel capacity to wireless cable operators, who

almost always pays for the construction of the ITFS facilities. These

changes have fostered a substantial increase in the rate of

applications filed for new ITFS stations or major changes in existing

stations, creating a significant backlog of applications. Therefore, in

the Notice of Proposed Rulemaking in this proceeding, 58 FR 12011

(March 2, 1993), we proposed a filing window procedure for the

acceptance of applications, to allow us to better control the flow of

applications and to improve processing efficiency.

4. Pursuant to our proposal, we would accept applications for new

facilities and applications for major changes in existing facilities

only during limited periods (or ``windows''). We would place

applications filed in the window that were not mutually exclusive with

any other application, and that were found to be acceptable for filing,

on a proposed grant list. We would then provide the immediately

following 30 days for the submission of petitions to deny. Uncontested

applications would then be granted, if in the public interest. With

regard to mutually exclusive applications, we would similarly give 30-

day Public Notice for the submission of petitions to deny. Thereafter,

we would evaluate those applications under the existing comparative

selection process. Any applications currently tendered but not yet

placed on an ``A'' cut-off list would be treated as having been filed

and cut off as of the close of the first filing window.

5. Currently, simply to allow the release of an ``A'' cut-off list,

each application must undergo a substantive engineering analysis upon

filing. No applications are granted or denied in this stage of

processing. Subsequently, after the ``B'' cut-off period, each

[[Page 20242]] application undergoes a second technical analysis in

order to determine whether it is grantable. Because each of these

analyses requires significant resources, eliminating the duplicative

step would substantially improve processing efficiency.

6. The Commission concludes that a window filing system, as

enhanced by an electronic filing and processing system as proposed in

our outstanding MDS rulemaking proceeding, 59 FR 63743 (Dec. 9, 1994),

would serve the public interest. A window filing procedure would allow

us to better control the flow of applications and it would prevent

speculators from filing against applicants that had appeared on an

``A'' cut-off list.

7. A 60-day Public Notice period before each filing window will

provide potential applicants adequate notice and opportunity to prepare

their applications. As most commenters observe, this is the same period

within which parties currently have to file an application in response

to an ``A'' cut-off list. The window shall remain open for at least

five business days. This period, when combined with the 60-day public

notice, will provide all potential applicants time to prepare their

applications.

8. Potential inefficiencies caused by the submission of a large

number of applications during a national (as opposed to a regional)

window are significantly diminished by our likely adoption of the

electronic filing system for ITFS applications. A regional window would

unfairly require educators not located within the relevant area to

delay their educational plans. Finally, a national window will allow

all interested parties to commence or continue their ITFS and MDS plans

as soon as possible. This will provide the certainty of an imminent

filing opportunity to all wireless cable entities, not just those

within a restricted geographic area.

9. Frequency. Some commenters support a fixed schedule, arguing

that this would allow educators to plan their proposals in advance of

the Public Notice. They also advocate the non-discretionary opening of

a window at least once each quarter, asserting that frequent filing

periods are necessary to avoid unduly delaying the licensing of ITFS

facilities that are essential to the growth of the wireless cable

industry. However, we have never before utilized a window filing system

with ITFS, and we therefore believe that we should take a more cautious

approach as we structure the window filing system. The rate of the

submission of applications could vary significantly in the future, and

a fixed requirement could quickly and unpredictably become

counterproductive or impracticable to meet. Also, we intend to open

filing windows as frequently as is consistent with our goals of

efficient and expeditious processing.

10. Amendments. Some commenters propose that, after a filing window

closes, the Commission should prohibit amendments that demonstrate

eligibility, improve comparative standing, or seek rule waivers.

Currently, they claim, many applicants impose an unnecessary burden on

the Commission by filing such amendments, such as requests for waiver

of the four-channel-per-market rule, Sec. 74.902(d) of the Commission's

rules, 47 CFR 74.902(d).

11. We agree that amendments that pertain either to improving

comparative standing or to establishing eligibility, as set forth in

Secs. 74.913(b) and 74.932(a) of the Commission's Rules, respectively,

47 CFR 74.913(b) and 74.932(a) should not be filed outside the window

period. Similarly, we shall prohibit the filing of amendments to a

facility's proposed technical operations, including amendments to add

any receive sites, outside the window. Such engineering amendments

often require a time-consuming re-analysis by the staff of the

amendment's effects on other applications and thus delay the processing

of all pending applications. However, with the two exceptions noted

above, such delay is not inherent in non-engineering amendments,

including requests for waiver of the four-channel rule, and we will

consequently permit their filing.

12. We make a narrow exception to the window filing system. NTIA

rules require a party seeking a grant to have already filed its

application with the Commission, and those requests are subject to an

annual deadline. Accordingly, in order not to obstruct these grants, we

shall allow the tendering of applications that rely upon NTIA funding

during the 30 days preceding the annual deadline. They shall be

considered as having been filed during the current or immediately

subsequent window, whichever is appropriate.

13. In response to several commenters, we decline generally to

exempt the filing of major change applications from the window filing

process, and, as discussed above, we similarly decline to exempt

amendments with similar effects. By definition, such changes can

substantially impact both existing and proposed facilities.

Accordingly, for the purpose of the window filing procedure, they

should be treated the same as applications for new facilities. However,

consistent with existing practice, we shall continue to make a narrow

exception for amendments to pending applications that would resolve

mutually exclusive applications without creating any additional

interference. We will accept such amendments at any time, and we shall

provide a 30-day period for the submission of petitions to deny those

amendments. We believe that this will most efficiently bring new or

improved service to the public. Further, to encourage market

settlements, we shall now allow licensees of existing facilities to

submit at any time applications for major changes, as long as the

changes are essential components of a settlement involving mutually

exclusive applications.

14. The Commission declines to adopt several other exceptions that

the commenters propose. These rules would significantly disrupt the new

window filing system, while promoting no public interest that is not

already being served by the filing procedure or other ITFS rules.

Proposals to Improve the Application Process

15. As argued by the commenters, and noted in the Further Notice,

the goals of the proposed window filing procedure could be maximized if

we at the same time enacted additional rules that would increase its

efficiency. Therefore, we set forth several proposals, many initially

advanced by the commenters, that were intended to improve service to

the public or otherwise enhance processing efficiency. Our analysis of

each of the proposals will be affected by two factors. First, as noted

above, is the proposed electronic filing and processing system for ITFS

applications, which would diminish the negative impact that a large

number of applications has had on our processing in the past. Second,

implementation of the proposals adopted herein and strict enforcement

of our existing rules will, we believe, eliminate many of the

inefficiencies and alleged abuses of the existing processing system.

Financial Qualifications

16. Proposal. Currently, applicants are required to certify their

financial ability or their reliance upon NTIA funding. In response to

the Notice, two commenters proposed to require applicants or their

prospective wireless cable lessees to submit with their applications

proof of their financial ability to construct. In the Further Notice,

59 FR 35665 (July 13, 1994) we postulated that such a

[[Page 20243]] requirement might deter a significant number of ITFS

speculators. We also asked whether we should require separate financial

documentation for each station applied for, and whether we should

require the wireless cable lessee to submit the documentation when it

is paying for construction of the facilities.

17. The record does not indicate that our reliance on applicant

certification has been ill-placed. Further, we believe that the

submission of detailed financial information would in practice neither

increase processing efficiency nor deter abuse. Collecting the data

would impose significant costs on the wireless cable lessee, regardless

of whether the supporting documents were kept on hand by the educator

or submitted to the Commission. We believe that a sound analysis of all

of the incoming detailed financial submissions would consume a great

deal of the staff's time, severely slowing the rate of processing.

Conversely, any reliance on the documents without our own rigorous

independent analysis would enable us to detect only a small proportion

of potential abuse.

18. A financially unqualified educator would generally not be able

to complete construction within the prescribed period. Because that

educator would then need an extension of time within which to

construct, it would have to submit an appropriate application to the

Commission, explaining the reasons for its delay in construction. Thus,

we already have a process in place by which we can monitor and assess

ITFS licensees' progress in constructing their authorized facilities

and forestall any dilatory conduct on their part. Should it become

necessary in the future, we can revise this process accordingly.

Application Caps

19. We now address two proposals, raised in response to the Notice

by the Educational Parties: (1) To impose a cap of 25 applications

associated with the same wireless cable entity, including any entity

with direct or indirect common ownership or control; and (2) to limit

an individual nonlocal ITFS entity to filing no more than three to five

applications during a window. To support this restriction, the

Educational Parties argued that nonlocal applicants often work with

wireless cable entities as frequency speculators. The overwhelming

majority of interested commenters oppose the adoption of either type of

cap.

20. To suddenly impose limits on the number of applications that

particular parties may be affiliated with would slow both ITFS and

wireless cable development. Further, it would artificially constrain

MDS operators' business decisions as to the number of ITFS channels

needed to establish economically viable wireless cable operations.

Also, we can deter the speculation complained of by the less

restrictive process of analyzing construction extension applications,

as noted above.

Assignment of Unbuilt Facilities

21. In the Further Notice, we proposed to formalize our current

practice of limiting the allowable consideration for the assignment of

authorizations for unbuilt ITFS facilities to out-of-pocket expenses,

as we do with broadcast construction permits. Our stated goal was to

diminish the incentive of frequency speculators to submit applications

for authorizations that they intend to later assign for profit. Every

commenter addressing this issue supports the proposal, agreeing that it

would help deter abuse. We agree that this limitation, applicable to

broadcast construction permits, will have similar deterrent effects on

frequency speculation in the ITFS service, and we shall therefore adopt

it.

Excess Capacity Lease Terms

22. Proposal and Comments. Our existing policy does not authorize

an educator to execute a lease agreement the term of which extends

beyond the end of the educator's license term. Consequently, depending

on how many years remain in the term, there may be situations in which

our policy would prohibit a lease agreement to extend beyond one or two

years. At most, MDS operators can have contractual access to ITFS

channels for no more than ten years, the length of a full license

period. Some commenters propose that we modify our policy to allow

parties to negotiate lease agreements whose terms extend beyond the end

of the license term, to demonstrate to potential investors their long-

term channel access. The proposal is unopposed.

23. Discussion. The wireless cable industry requires substantial

equity investment in order to become a viable competitor in the video

marketplace. However, potential financiers are likely to exercise

caution before investing in an MDS system, where there is uncertain

long-term availability of the ITFS channels that provide the basic

capacity for that system. Authorizing lease agreements that extend

beyond the end of the license term would reduce the anxiety of

potential investors that the MDS entity would shortly lose four

channels, crippling the entire system. The increased confidence of

investors will significantly accelerate the development of the wireless

cable industry and provide competition to wired cable. Hence, we are

revising our policy to permit an educator, if it chooses, to execute a

10-year lease agreement without regard to the duration of the

educator's current license term. ITFS lease agreements that extend

beyond the end of the license term must note that such an extension is

contingent on the renewal of the educator's license.

Application of the Four-Channel Rule

24. Proposal. We seek to provide as many educators as possible with

the opportunity to operate ITFS systems that meet their educational

needs. Consequently, the four-channel limitation rule generally limits

an ITFS licensee to four channels for use in a single area of

operation. However, we have never clearly and formally defined what

constitutes an ``area of operation.'' The Further Notice proposed to

adopt the staff's informal policy of considering a single area of

operation for this purpose to extend no farther than 20 miles from the

transmitter site. Many commenters supported such a mileage-based

proposal, while others preferred one based on predicted interference.

25. Discussion. We adopt the 20-mile standard. Our experience has

demonstrated that this standard is efficient and easily understood and

implemented. Determining a station's area of operation by use of the

interference approach would require a considerable amount of technical

analysis by the staff. As a consequence, adoption of this proposal

could inordinately slow processing and delay service to the public. We

recognize that any mileage standard will be imprecise, because there

will always be educators that serve sites beyond the designated

distance. However, the bright-line test we are adopting today has the

important advantage of being easy for applicants to comprehend and

apply. Further, the Commission staff can process applications far more

efficiently using this standard. Moreover, staff, educators, and

wireless cable entities are extremely familiar with this standard,

having utilized it for a number of years.

Protected Service Areas

26. Proposal. The Further Notice also solicited comment on a

proposed change in the application of protected service areas for

wireless cable lessees. Currently, we provide a 15-mile interference

protection for a service area regardless of receive site locations, but

solely at the request of the ITFS [[Page 20244]] applicant or licensee.

The Further Notice observed that an applicant for new facilities often

requests and receives interference protection that restricts an

existing licensee lacking such protection from pursuing certain

modifications to its facilities. At the same time, an existing facility

that has not requested such protection, upon learning that an

application for a nearby operation has been filed, often requests

interference protection and possibly obstructs the new applicant. We

therefore proposed to apply interference protection only prospectively,

making it effective solely with regard to applications filed after the

protection request. We asked commenters whether our proposal would

sufficiently diminish the disruption and delay resulting from the

current system. We also asked commenters to address a specific

application of the proposed rule: If two applications are (1) submitted

during the same filing window, (2) otherwise grantable, and (3)

mutually exclusive only because both applicants request a protected

service area, we proposed to consider them as mutually exclusive. Most

commenters addressing the proposal express support.

27. Discussion. We conclude that the public interest will be served

by adoption of the proposal to apply protected service area protection

only prospectively. Adoption of the proposal will diminish disruption

to existing and proposed facilities. Only one commenter expressed

opposition to the proposed specific application of the rule involving

mutual exclusivity, and we shall adopt it, with a slight exception.

There is no public interest benefit in protecting an uninhabitable

area. To do so would needlessly restrict neighboring facilities, unduly

depriving the area of both ITFS and wireless cable programming. Thus,

if an applicant shows that interference will occur solely over water,

we shall not consider the applications to be mutually exclusive.

However, in order to avoid future conflicting interpretations and

confusion, we will not extend the exception to cover any area in which

no subscribers or potential subscribers would be affected by the

interference.

Receive Site Interference Protection

28. Proposal. The Commission's rules currently provide interference

protection to an educator's receive sites, regardless of their distance

from the transmitter. The Further Notice cited instances in which

interference protection was requested for receive sites apparently

beyond an educational institution's reasonable coverage area. We stated

in the Further Notice that such requests could be an abuse of our

processes, designed to artificially increase the service area of the

wireless cable lessee. We also opined that eliminating this practice

would significantly increase the efficiency of our processing of

applications, thereby hastening service to the public. We tentatively

concluded that an educational institution is generally unlikely to

reasonably serve a receive site located more than 35 miles from the

transmitter. Thus, absent a showing of unique circumstances, we

proposed to protect only those receive sites 35 miles or less from the

transmitter. Further, we proposed that an applicant not be able to

claim basic eligibility for a license by use of any receive site more

than 35 miles from the transmitter. With regard to the 35-mile standard

generally, the commenters are nearly evenly divided.

29. Discussion. We acknowledge the concerns of some commenters that

educators may at times serve receive sites beyond the proposed

boundary. In fact, however, under the proposed rule, a licensee could

protect two receive sites that were as far as 70 miles apart, depending

on the location of the transmitter. Thus, we find that the 35-mile

standard is not unduly restrictive, and we adopt the proposal as it

regards both interference protection and basic eligibility for receive

sites not more than 35 miles from the transmitter. However, we will

waive the rule for a particular site if an applicant can demonstrate

that it is located within the educator's reasonable coverage area.

Major Modifications

30. Proposal. We turn now to our proposal to reclassify certain

types of modifications to existing ITFS facilities. As stated in the

Further Notice, we have classified these as either major or minor,

attaching different procedural rules to each. In the Further Notice, we

expressed our belief that our consideration of certain changes as minor

does not realistically take into account the impact that they would

have on the facilities in question, nearby facilities, or proposed

facilities. Consequently, we proposed to reclassify as a major change

any application involving: (1) Any polarization change; (2) the

addition of any receive site that would experience interference from

any licensee or applicant on file prior to the submission of the

application; (3) an increase in the EIRP in any direction by more than

1.5 dB; (4) an increase of 25 feet or more in the transmitting antenna

height; or (5) any change that would cause interference to any

previously proposed application or existing facility. We additionally

proposed to formalize our policy of considering proposals to relocate a

facility's transmitter site by ten miles or more as a major change. We

also proposed to exempt from the new rule any change that would resolve

mutually exclusive applications without creating new frequency

conflicts. Most of the commenters that addressed this issue generally

supported the proposal. Also, the supporting comments assert that the

adoption of the MDS modification rules would be desirable, due to the

technical and regulatory relationship that exists between the two

services.

31. Discussion. Our experience, as supported by many of the

comments, warrants the need to modify the current classification system

to increase processing efficiency, and we do not believe that the

reclassification of certain amendments as major will diminish

processing efficiency. Also, adoption of the MDS classification system

would not be appropriate. Its definition of a major change is

significantly broader than that previously used or now adopted for

ITFS. However, the MDS rolling one-day filing window is structured to

accommodate such an expansive definition, and it does not significantly

restrict the submission of applications to change existing facilities.

The ITFS window filing system, on the other hand, is not compatible

with such an expansive classification that would needlessly restrict

the filing of many ITFS technical modifications. Thus, we shall

classify as major any application involving: (1) Any polarization

change; (2) an increase in the EIRP in any direction by more than 1.5

dB; (3) an increase of 25 feet or more in the transmitting antenna

height; and (4) relocation of a facility's transmitter site by ten

miles or more. We shall, however, accept such applications at any time,

if their grant would resolve mutually exclusive applications without

creating new conflicts. Adoption of the proposal will significantly

expedite the processing of ITFS applications.

32. We do not incorporate into the new rule two types of changes

that we had earlier listed: (1) The addition of any receive site that

would experience interference from any licensee or applicant on file

prior to the submission of the application; and (2) any change that

would cause interference to any previously proposed application or

existing facility. By eliminating the cut-off system, the window filing

system will prevent parties from requesting changes that are mutually

exclusive with a tendered but not yet cut-off

application. [[Page 20245]]

Reasonable Assurance of Receive Sites

33. Proposal. The Further Notice requested comment on how best to

ensure the accuracy of each applicant's list of receive sites. We seek

to deter applicants from listing receive sites that have in fact not

agreed to participate in the proposed ITFS system. We therefore

proposed requiring a letter of assurance from the applicant, listing

each receive site's contact person, title, and telephone number. Most

interested commenters support a stricter requirement than we proposed,

and two commenters oppose the proposal in any form. Supporters argue

that for adequate deterrence, we should require a verification letter

from an authorized official of each receive site listed in an

application.

34. Discussion. To better ensure the accuracy of receive site lists

submitted both by local and nonlocal applicants, we adopt a modified

version of the proposal. Processing efficiency will be enhanced because

the additional data would allow for rapid confirmation of a site's

participation. However, requiring a separate letter of verification

from each receive site would involve the submission of potentially

dozens of separate letters. We believe, though, that we can expedite

processing to the same degree on the application form: where we already

ask for information about each of the applicant's receive sites, we

shall simply add a column asking for a contact person's name, title,

and telephone number. The contact person should be the person (or one

of the people) responsible for implementation of the ITFS program at

that receive site.

Accreditation of Applicants

35. Proposal. While applicants seeking to construct a new ITFS

station must indicate their accreditation or that of the schools or

other institutions that intend to utilize the proposed ITFS service, we

noted in the Further Notice that the extent to which the specified

receive sites are being utilized by students from accredited

institutions is not called for. Accordingly, we proposed to require

applicants to state whether and by whom each listed receive site is

accredited. We also asked whether having only one proposed receive site

out of many as accredited defeats the fundamental purpose of ITFS: To

serve the educational needs of accredited institutions. Thus, we

invited commenters to address whether we should require a majority of

receive sites to be accredited in order for the application to be

grantable, or if we should deny interference protection for any

unaccredited receive site. The proposed changes are generally opposed

by the commenters. Many of them argue that receive sites are

increasingly being used for distance learning without regard to whether

they are accredited.

36. Discussion. The record does not demonstrate that serving one

accredited receive site among other unaccredited receive sites is

incompatible with serving the formal, for-credit educational needs of

students enrolled at accredited institutions, and we therefore decline

to adopt either proposal. To do otherwise would artificially restrict

those enrolled students' accessibility to formal ITFS educational

programming, while depriving others of worthwhile programming, such as

in-service training and instruction in special skills and safety

programs. As most commenters note, while the essential purpose of the

ITFS service is to provide formal educational programming to students

enrolled in accredited schools, colleges and universities, the

Commission has long recognized the value of transmitting ``other visual

and aural educational, instructional and cultural material to selected

receiving locations * * *'' 47 CFR 74.931(a)-(b). We find no evidence

on the record that persuades us to now significantly alter the existing

relationship between the provision of formal, for-credit educational

ITFS programming and the offering of other educational, instructional,

and cultural material, Indeed, we reaffirm our commitment to our

longstanding objective, one that permits ITFS licensees to transmit

educational and cultural programs for use in other than a classroom

setting or to persons other than students enrolled at accredited

institutions. However, we take this opportunity to modify and make

clearer our requirements regarding the need for further specification

with respect to the accreditation of the parties utilizing the proposed

ITFS services.

37. To attain eligibility, an ITFS applicant must, among other

things, be accredited in its own right and serve its own students or

serve accredited institutional or governmental organizations. It has

come to our attention that some applicants accredited in their own

right propose service only to receive sites which will not be used by

their own students. Such applicants do not satisfy the eligibility

requirements. They must, therefore, as Item 3 of Section II in the FCC

Form 330 now requires, indicate the name of the ``school/institution''

it will serve, the accreditation date and the accrediting agency or

organization. However, we have found, in processing applications, that

the name of the school or institution often does not match with any

receive site specified in Section VI of the Form 330. For ease of

processing, we shall require, for applicants accredited in their own

right and serving their own students, to identify in Section II, Item

3(a), the receive sites in Section VI which fall under their

jurisdiction. For other applicants, that is, those which are accredited

and not serving their own students and those applicants which are

unaccredited and establishing their eligibility by serving accredited

institutions, we shall require that they specify in Section II, Item

3(b), the receive sites belonging to or being used by the accredited

institution. This additional information will enable the staff and all

interested parties to immediately determine the accreditation status of

an applicant.

Other Proposals

38. Offset. The Further Notice proposed requiring the use of offset

when all affected transmitters are capable of handling frequency offset

stability requirements. This proposal is supported by most of the

commenters. However, we believe that voluntary agreements to utilize

frequency offsets better serve the public interest. The use of

frequency offsets represents a balancing of the need to prevent co-

channel interference with our desire to allow an increase in the number

of stations in a geographic area. As such, frequency offsets are not a

substitute for the standard of interference protection, a desired-to-

undesired signal ratio of 45dB, that our technical rules are designed

to ensure. Indeed, the efficacy of frequency offsets, which is not

universally acclaimed by the engineering society, is largely determined

by the exigencies of the situation at hand, requiring affected

applicants and licensees to engage in cooperative efforts to construct

and adjust their respective technical operations to successfully avail

themselves of this engineering technique, if possible. Under these

circumstances, we are not persuaded to require the mandatory

specification of frequency offsets.

39. Expedited Consideration of Applications. In the Further Notice,

we asked for comments on the Educational Parties and WCA's proposal

that we expedite consideration of certain ITFS applications in return

for the applicant's agreeing to an accelerated construction schedule.

The stated purpose was to rapidly authorize facilities that would most

likely become part of an operating wireless cable system. Most

commenters are supportive of the proposal, although [[Page 20246]] they

disagree on the details of its implementation. Opponents of expedited

consideration argue that it would not in fact accelerate the

construction of viable MDS systems, because processing the likely high

number of requests would delay service to the public. We agree. Rapid

authorization of ITFS facilities is essential to providing unique

educational programming to greater numbers of people, and to

accelerating the ability of MDS systems to compete with wired cable

operators. The more rapid processing sought by the commenters will

likely be achieved by implementation of the filing window, as enhanced

by the proposed electronic filing and processing system and the other

modifications adopted in this proceeding Hence, we do not believe that

adoption of the commenters' proposal is warranted.

40. FAA Authorization. As mentioned in the Further Notice, we do

not grant or modify a license until the Federal Aviation Administration

(FAA) has determined that the proposed transmitter site and receive

sites will pose no hazard to air navigation. To prevent needless delay

in processing applications, we proposed to require applicants to inform

the Commission of the FAA's determination. The record clearly supports

our belief that enactment of this policy would speed processing at

minimal cost to applicants. Therefore, to expedite processing, we

require applicants to inform the Commission of the FAA's determination

on a timely basis.

41. Interference Studies. The Further Notice noted that applicants

frequently make technical claims that lack adequate supporting data. To

address this problem, we proposed requiring the submission of terrain

profiles and a quantitative analysis of any additional signal loss

calculated by using the Longley-Rice propagation model, Version 1.2.2,

in the point-to-point mode. Most of the commenters that addressed this

issue generally support the proposal, but advocate various exceptions

to the rule, allowing the use of less rigorous models under a variety

of circumstances.

42. Based on the information before us, we shall not adopt the

proposal. The record demonstrates that our concern will be met by the

submission of any valid profile maps or sufficient data that takes

terrain shielding into account and supports the validity of each claim,

regardless of whether the study involves the Model. Also, for each

instance where terrain shielding is relied upon to protect ITFS

facilities, applicants will be required to submit the quantitative

amount of signal attenuation, in dB, attributable to terrain shielding.

Any study must use generally acceptable engineering practices, and

applicants must state the specific model they have used in their

analysis.

43. Construction of Facilities. Some commenters express concern

that the Commission has extended construction periods for parties with

no intention to construct. Hence, they request strict guidelines for

granting such extensions. One proposes decreasing the period within

which an ITFS licensee must construct its facilities from 18 months to

12 months. It alleges that, if its proposal were adopted, frequency

speculators would quickly lose their licenses and their channels would

consequently become available during the next window. In both cases,

however, our existing rules already address these matters. We have set

forth the requirements an educator must meet in order to obtain an

extension of time within which to construct: (1) Construction is

complete and testing of the facilities has begun; (2) substantial

progress has been made; or (3) reasons clearly beyond the applicant's

control, which applicant has taken all possible steps to resolve, have

prevented construction. We have no specific evidence that these rules

have not operated sufficiently to prevent abuses by frequency

speculators. Therefore, we decline to modify the period of time to

construct.

Administrative Matters

A. Regulatory Flexibility Analysis

44. These rules are not major rules for the purposes of Executive

Order 12291 of February 17, 1981. As required by the Regulatory

Flexibility Act, it is hereby certified that these rules will not have

a significant impact on small business entities.

B. Final Regulatory Flexibility Analysis

45. Pursuant to the Regulatory Flexibility Act of 1980, 5 U.S.C.

605, it is certified that this decision will have an impact on ITFS

stations by establishing a window filing procedure for the processing

of such applications and applications for major changes to existing

ITFS stations, and by adopting rules affecting the four-channel ruleee,

receive site interference protection, the protected service area, and

other aspects of ITFS operation. As detailed in the full text of the

Report and Order, the Commission has attempted, wherever possible

within the statutory constraints, to establish regulations which, to

the extent possible, minimize the burdens of ITFS stations. The full

text of the Commission's final regulatory flexibility analysis may be

found in Appendix A of the full text of this Report and Order.

C. Ordering Clauses

46. It is ordered that this Report and Order is adopted.

47. It is further ordered that, pursuant to authority contained in

sections 4(i) and 303 of the Communications Act of 1934, as amended, 47

CFR 74 is amended as set forth below. The change to the rules adopted

in this Report and Order will become effective upon approval of the

Office of Management and Budget of a modified FCC Form 330 to

effectuate the modifications approved in this Report and Order.

48. It is further ordered that MM Docket No. 93-24 is terminated.

List of Subjects in 47 CFR Part 74

Television broadcasting, Instructional television fixed service.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

Rules

Part 74 of title 47 of the Code of Federal Regulations is amended

as follows:

PART 74--EXPERIMENTAL AUXILIARY, AND SPECIAL BROADCAST DISTRIBUTION

SERVICES

1. The authority citation for part 74 continues to read as follows:

Authority: Secs. 4, 303, 48 Stat. 1066, as amended, 1082, as

amended; 47 U.S.C. 154, 303, unless otherwise noted. Interpret or

apply secs. 301, 303, 307, 48 Stat. 1081, 1082, as amended, 1083, as

amended; 47 U.S.C. 301, 303, 307.

2. Section 74.902 is amended by revising the second sentence of

paragraph (d)(1) to read as follows:

Sec. 74.902 Frequency assignments.

* * * * *

(d)(1) * * * An area of operation is defined as the area 20 miles

or less from the ITFS transmitter.* * *

* * * * *

3. Section 74.903 is amended by adding a new paragraph (a)(5), by

adding a final sentence to paragraph (e), and by adding a new paragraph

(f), to read follows:

Sec. 74.903 Interference.

(a) * * *

(5) No receive site more than 35 miles from the transmitter shall

be entitled to interference protection.

* * * * * [[Page 20247]]

(e) * * * Such protection shall be applied solely with regard to

applications filed subsequent to the request for a protected service

area.

(f) With respect to protected service area proposals, two

applications will be regarded as mutually exclusive if they are:

(1) Submitted during the same filing window;

(2) Otherwise grantable;

(3) Mutually exclusive only because either or both applicants

request a protected service area. However, if an applicant in such a

situation shows that the resulting interference would occur solely over

water, the applications will not be considered to be mutually

exclusive.

Sec. 74.910 [Amended]

4. Section 74.190 is amended by removing the entry Section

73.3564(a), (b) Acceptance of applications, and adding in its place,

73.3597(c)(2) Procedures on transfer and assignment applications.

5. Section 74.911 is amended by revising the third sentence of

paragraph (a)(1), and by revising paragraph (c) to read as follows:

Sec. 74.911 Processing of ITFS station applications.

(a) * * *

(1) * * * A major change for an ITFS station will be any proposal

to add new channels, change from one channel (or channel group) to

another, change polarization, increase the EIRP in any direction by

more than 1.5dB, increase the transmitting antenna height by 25 feet or

more, or relocate a facility's transmitter site by 10 miles or more.* *

*

* * * * *

(c)(1) New and major change applications for ITFS stations will be

accepted only on dates specified by the Commission. Filing periods will

be designated by the Commission in a Public Notice, to be released not

fewer than 60 days before the commencement of the filing period.

Qualified parties will have no fewer than 5 business days within which

to submit their applications. After termination of the filing period,

the Commission shall release a Public Notice with a list of

applications filed in the window and provide no fewer than 30 days for

the submission of petitions to deny. Uncontested applications that are

not mutually exclusive with any other application or licensed facility,

and are found to be acceptable, shall be granted. Mutually exclusive

applications shall be evaluated pursuant to the comparative selection

process set forth in Sec. 74.913 as herein amended.

(2) The requirements of this section apply to a wireless cable

entity requesting to be licensed on ITFS frequency pursuant to

Sec. 74.990. The application of such a wireless cable entity shall be

included in the Public Notice released after the termination of the

filing period.

* * * * *

6. Section 74.913 is amended by revising the first sentence of

paragraph (d)(1), and adding a new paragraph (d)(5), to read as

follows:

Sec. 74.913 Selection procedure for mutually exclusive ITFS

applications.

* * * * *

(d) * * *

(1) Enrollment will be considered as of the last date of the filing

window during which the applications were filed, as provided by

Sec. 74.911(c).* * *

* * * * *

(5) A receive site not receiving interference protection may not be

utilized by an applicant for tie-breaking purposes.

* * * * *

7. Section 74.932 is amended by adding a new paragraph (e), to read

as follows:

Sec. 74.932 Eligibility and licensing requirements.

* * * * *

(e) No receive site more than 35 miles from the transmitter site

shall be used to establish basic eligibility.

* * * * *

8. Section 74.991 is amended by revising the last two sentences of

paragraph (a) to read as follows:

Sec. 74.991 Wireless cable application procedures.

(a) * * * A wireless cable application for available instructional

television fixed service channels will be subject to Sec. 21.914 of

this chapter with respect to other wireless cable applicants, and to

the ITFS window filing period with respect to instructional television

fixed service applications. All lists of accepted applications for ITFS

frequencies, regardless of the nature of the applicant, will be

published as ITFS public notices.

* * * * *

[FR Doc. 95-10024 Filed 4-24-95; 8:45 am]

BILLING CODE 6712-01-M