******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) Hooten Broadcasting, Inc. ) File Nos. BMPH-961016IA ) Application for Modification of Construction) Permit for Station KZAM, Ganado, Texas) MEMORANDUM OPINION AND ORDER Adopted: June 22, 1998 Released: June 29, 1998 By the Commission: 1. The Commission has before it an Application for Review filed by MAZAK Broadcasting Company ("Mazak"), asking us to overturn an August 11, 1997 staff decision which allowed Hooten Broadcasting, Inc. ("Hooten") to construct a new radio broadcast station serving Ganado, Texas from a different site than that originally proposed. Mazak's interest in this matter stems from the staff's refusal to accept Mazak's request to have a new FM station allotted to Victoria, Texas, because Mazak's request conflicted with Hooten's application for site change. Mazak argues that the staff's grant of the site change was inconsistent with precedent, i.e. Deleted Station WHPR(FM), Ashtabula, Ohio, 11 FCC Rcd 8513 (1996) (Ashtabula). In Ashtabula, the Commission denied a modification request based on facts that Mazak considers factually similar. For the reasons discussed below we find that the Ashtabula case, while indeed similar in several ways to the case at hand, also differs in significant ways, and that the staff's action should be upheld. BACKGROUND 2. Critical to the central issue in this case are two different standards that can apply to a request to modify an unbuilt broadcast station. See 47 C.F.R.  73.3535. If an applicant requests a modification of its permit within the first nine months of its 18-month construction period, we consider the request under a lenient standard. The applicant need only certify that construction will begin immediately upon grant of the modification. See 47 C.F.R.  73.3535(a). After that first nine months, however, the standard becomes much stricter. Specifically, the applicant must also make a "one-in-three" showing, demonstrating one of three factors that evidence the applicant's diligence. See 47 C.F.R.  73.3535(b). Applying a stricter standard during the latter portion of the construction period encourages expedited broadcast service to the public by ensuring that permittees are diligent and prompt in their constructions efforts, identify any problems with their original proposal early in the process, and do not "warehouse" radio spectrum. See generally Construction of Broadcast Stations, 102 FCC 2d 1054 (1985). 3. In the present case, Hooten filed an application during the first half of its construction period, accompanied by an application fee. The fee was incorrect, however, fees having increased slightly three and one-half weeks previously. The staff returned the application and Hooten resubmitted it with the proper fee within a day of Hooten's receipt. The resubmission date nevertheless was within the second half of Hooten's construction period. The staff waived the strict "one-in-three" requirement that ordinarily would be applicable. Pursuant to the waiver, the staff instead applied the lenient standard usually used during the first half of the construction period. The validity of the staff's waiver decision, in view of existing caselaw, is the matter currently before us for consideration. DISCUSSION 4. The Commission can waive any of its rules, upon a finding of good cause consistent with the public interest. WAIT Radio v. FCC, 418 F.2d 1153 (D.C. Cir. 1969). Mazak maintains that the staff's grant of a waiver was inconsistent with the Commission's denial of a waiver in the Ashtabula case. Both the present case and the Ashtabula case involve applicants who voluntarily decided, during the first half of the construction period, that they wanted to construct at a site other than that initially approved by the Commission. Both applicants attempted to file modification applications within the first nine months of their respective construction periods, when lenient standards would ordinarily apply. Both applicants failed to include the proper filing fee and, therefore, the staff returned their applications as fee-deficient pursuant to 47 C.F.R.  1.1116(a). Both applicants subsequently refiled their applications during the second half of their construction periods. The staff found that both had not made a sufficient one-in-three showing as is required at that time. Mazak argues that the facts of the current case and Ashtabula are thus virtually identical and that the end-result of both cases should be the same. Given that the Commission denied a request for a waiver of the "one-in-three" standard in Ashtabula, resulting in the cancellation of that applicant's authority to build, Mazak maintains that the staff acted wrongly when it waived the rules in the present case. As will be discussed below, however, we find that the two cases at issue are factually dissimilar in other ways, and that the waiver granted by the staff was appropriate in view of those dissimilarities. See WAIT Radio v, FCC, 418 F.2d 1153 (D.C. Cir. 1969). 5. The Ashtabula application could not be considered under the standard applicable in the first half of the construction period because the Ashtabula applicant submitted no filing fee, contrary to the clear and express requirements of our rules that a fee must be submitted with all such applications. The Ashtabula applicant claimed to have made this mistake on the basis of information obtained from unofficial sources, which the Commission has long stated are relied on at the applicant's own risk. See Mary Ann Salvatoriello, 6 FCC Rcd 4705 (1991) citing Malkan FM Associates, 935 F.2d 1313 (D.C. Cir. 1991). Hooten's fee deficiency differs significantly. In contrast to Ashtabula, Hooten submitted, within the first half of the construction period, a fee in the exact amount specified in the Commission's fee filing guide -- an official source of information. Unbeknownst to Hooten, however, the required fee amounts had slightly increased only three and a half weeks earlier. Mazak faults Hooten for not consulting more up- to-date information such as the Commission's page on the internet's world wide web. We recognize, however, that access to the internet was not widely enough available as of the 1996 date of filing of the Hooten's fee-deficient application, to establish any Commission expectation that small broadcast applicants like Hooten would use it to verify the continued accuracy of official Commission publications. Here, where the new fee schedule had been in effect less than one month, we would not consider it unreasonable for a small broadcast applicant like Hooten to rely on official fee information that, until only recently, had been accurate. The staff's waiver of the one-in-three standard would have been justified on this basis alone. 6. The staff also cited several other matters as justification for its waiver decision. For example, the staff noted that Hooten was not represented by counsel, and nevertheless took immediate steps to correct its earlier mistake as soon as it became aware of its error. In contrast, the Commission noted that the Ashtabula applicant (who was an attorney herself, and who also had retained communications counsel) failed to take several possible corrective measures despite the staff's repeated requests for such action. 7. Mazak argues that the staff erred in according any weight to Hooten's pro se status, because all applicants are required to abide by our rules regardless of legal representation and, in any event, the correct amount of a filing fee is not a matter requiring legal interpretation. See generally, Mandeville Broadcasting Corp., 2 FCC Rcd 2523 (1987) (upholding denial of untimely unsupported arguments of pro se participant). While we agree that pro se applicants are not relieved from compliance with our rules, that is not the issue in this case, as Hooten was required to pay the proper fee. Rather, the issue is whether an unrepresented party should be expected to learn of changes in established filing fees as quickly as parties who are represented by counsel. Although, as Mazak notes, the Commission has been working to establish various means to get information to the public sooner, we nevertheless do not find it indicative of lack of diligence for an unrepresented applicant to have not yet learned of a rule change dealing with a relatively low profile issue in less than one month from the effective date of the change. Thus, we would not find this matter to reflect negatively on the applicant's diligence -- which is one of the purposes of the one-in-three rule which the staff waived. 8. Mazak also alleges that the equities do not favor grant of Hooten's waiver request. Although Mazak alleges that Hooten does not have "clean hands," a prerequisite for equitable relief, its argument consists simply of the staff's conclusion that Hooten had not yet undertaken construction that would be sufficient enough to meet the one-in-three test. Thus, Mazak is essentially arguing that the one-in-three rule can never be waived, because in order to be eligible for a waiver of that rule, one would have to first satisfy it, making a waiver unnecessary. We find this argument untenable. We also note, with respect to "unclean hands," that the facts of this case differ significantly from Ashtabula where there were outstanding character issues against the applicant. 9. Finally, Mazak asks us to consider the equities of its own situation. According to Mazak, it is still possible for Hooten to build at its authorized site, but Mazak could "lose its investment," and the citizens of Victoria, Texas could lose a new media outlet for that community if Hooten's site change precludes allotment of a channel to Victoria. We do not find these arguments persuasive. KZAM, Ganado, Texas is a station with an allotted channel, and a construction permit. Mazak's request, which was returned by the staff, was simply a petition for rulemaking, asking that a new channel be allotted to Victoria, so that applications to construct might be filed at some future date. Regardless of the outcome of Hooten's modification request, there would be no guarantee that the Commission would ultimately grant the allotment request for Victoria. Nor, if such an allotment were granted, would there be any guarantee that Mazak would be the only applicant for that allotment, or that Mazak would be awarded the construction permit. See Balanced Budget Act of 1997, Pub. L. No. 105-33, 111 Stat. 251 (1997) (competing applications to construct commercial broadcast stations filed on or after July 1, 1997 to be resolved by auction). Accordingly, we do not agree with Mazak's arguments. 10. In sum we find no staff error, and find that the waiver in this case is not inconsistent with our holding in Ashtabula. The Ashtabula decision represents our continuing policy that the "one-in-three" requirement in 47 C.F.R.  73.3555(b) is the standard generally applicable to modification requests filed in the latter half of a construction period, and one that will not be waived absent compelling circumstances. In the present case, Hooten has shown such circumstances, and therefore merits a waiver. ORDERING CLAUSES 11. Accordingly, the Application for Review filed on September 10, 1997 by MAZAK Broadcasting Company with respect to station KZAM, Ganado, Texas IS DENIED. FEDERAL COMMUNICATIONS COMMISSION Magalie Roman Salas Secretary