NEWSReport No. MM 98- 14                       MASS MEDIA ACTION     October 21, 1998

     FCC SEEKS COMMENTS ON LOTTERIES, POINT SYSTEM TO CHOOSE BETWEEN
        COMPETING APPLICANTS FOR NONCOMMERCIAL BROADCAST STATIONS
                                    
     The FCC today asked for public comments on its tentative conclusion that either a
lottery or a point system should be used to award noncommercial educational (NCE)
television and radio station licenses between mutually exclusive competing applicants. 

     In a Further Notice of Proposed Rulemaking, the Commission said it had tentatively
concluded that in these competing NCE cases it should no longer continue to use traditional
comparative hearings, which it said can be cumbersome, costly and result in delays of
service to the public, without making meaningful distinctions between applicants.
     
     In asking for comments on using lotteries, the FCC noted that the Balanced Budget
Act of 1997 had preserved FCC authority to use lotteries for noncommercial licenses. It said
that one advantage of lotteries is that license decisions could be made quickly and would not
put financial burdens on competing applicants, many of whom have limited financial
resources.

     The Commission also suggested alternatively using a point system which would be
designed to select the best qualified noncommercial applicant, rather than leaving that
selection to chance.  The Commission asked for comment on a system that would award
points as follows: 2 points for local diversity; 1-2 points for introducing a second or a first
full-time NCE service into the community; and 1 point for having a 10% or greater service
range than the competing proposal. The Commission asked for comments on other factors
that could be included in a point system, and what factors would be used as a "tie-breaker"
when two or more applicants received the same number of points.

     With regard to the lottery option, the Commission noted that the Communications Act
requires the FCC to give significant preference in any broadcast lottery to applicants who
would increase the diversification of ownership and to applicants controlled by a member or
members of minority groups. It asked for comments on a number of legal and practical
issues raised by these statutory priorities.

     The Commission also asked for comments on how to choose among competing
applicants where NCE applicants apply for commercial broadcast spectrum. 

     The Balanced Budget Act of 1997, which authorizes auctions to resolve competing
applications for commercial licenses, specifically states that competitive bidding can not be
used for certain licenses for noncommercial educational and public broadcast stations. The
Commission asked for comment on whether this prohibition applies whenever an NCE entity
is among the competing applicants (even when competing with commercial applicants for
nonreserved spectrum) or whether this prohibition applies only when NCE entities are the
only applicants, such as on channels reserved for NCE use.

     If the Commission decided to allow NCE applicants to participate in auctions for
commercial channels, it asked whether commercial and NCE applicants should compete
under the same auction rules, or whether NCE applicants should receive some kind of
bidding credit to enhance fair competition, or whether it should have procedures to allow an
NCE entity to more easily request reallocation of a commercially available channel to one
available only to NCE applicants in order to counterbalance any potential competitive
disadvantage.

     Alternatively, the Commission asked for comments on several "non-auction options,"
including: finding NCE entities ineligible for non-reserved channels altogether; reserving a
commercial channel for noncommercial educational use once a technically acceptable
application is filed for a commercial channel by a noncommercial applicant; and a "hybrid"
approach of conducting a lottery or point system first, and if a noncommercial educational
entity does not win the lottery or point system , then using a subsequent auction among
remaining commercial applicants.

     Action by the Commission October 21, 1998, by Decision (FCC 98-269). Chairman
Kennard, Commissioners Ness, Furchtgott-Roth, Powell and Tristani.

- FCC - 
                                    
News Media Contact: David Fiske (202) 418-0513
Mass Media Bureau Contact: Irene Bleiweiss (202) 418-2780