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Federal Communications Commission
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This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action. See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).

Report No. GN 97-12 GENERAL ACTION November 25, 1997

(MM Docket 97-234, GC Docket 92-52, GEN Docket 90-264)

The FCC today proposed rules to implement its new authority to auction broadcast licenses.

The Balanced Budget Act of 1997 requires that the Commission use auctions to decide mutually exclusive commercial broadcast cases. The statute includes an exception for competing applications for full-service stations filed before July 1, 1997. For these pending cases, the statute says that the Commission "shall have the authority" to use auctions.

In a Notice of Proposed Rule Making adopted today, the Commission tentatively concluded that auctions are a more efficient method to resolve the pending cases than comparative hearings. Accordingly, it tentatively concluded to use auctions for the pending cases, almost all of which involve applications filed after the D.C. Circuit invalidated the FCC's central criterion for deciding comparative initial licensing cases in Bechtel v. FCC.

Nonetheless, the Commission asked for comment on whether to hold comparative hearings for these pending cases. In particular, it asked for comment on whether, even if auctions are used for most of the pending Bechtel cases, there are equitable concerns that might warrant using comparative hearings in the small number of remaining cases in which an Initial Decision by an Administrative Law Judge or a Commission decision had been issued before the court's remand decision.

The Commission also noted that for settlement agreements involving pre-July 1, 1997 Bechtel applicants that are filed by February 1, 1998, the statute requires it to waive certain settlement rules, including the prohibition against settlements for more than out-of-pocket expenses. It also stated that it would be inclined to waive certain other settlement policies for these pre- July 1 applicants, including its policy against "white knight" settlements involving third parties.

Consistent with section 309(j) of the Communications Act, the Commission asked for comment on policies within its auction procedures for promoting ownership by minorities, women, small businesses and rural telephone companies. Noting in particular its longstanding policies on minority ownership, the Commission tentatively concluded that it should take steps to further that goal to the extent it complies with applicable constitutional standards.

In addition, the Commission sought comment on proposed commercial broadcast auction procedures. The proposed auction rules generally conform to the Commission's auction rules for other services. The procedures would not apply to noncommercial broadcast educational licenses, which are outside the Commission's auction authority, although the Commission asked for comment on whether ITFS licenses should be subject to auctions in the absence of an explicit statutory exemption.

In order to relieve prospective applicants of the time and expense of filing applications under existing procedures that will likely be changed and streamlined under the new rules, the Commission announced a temporary freeze, effective upon the release of the NPRM, on the filing of applications for commercial broadcast stations.

Action by the Commission November 25, 1997 by Notice of Proposed Rulemaking (FCC 97-397). Chairman Kennard, Commissioners Ness, Furchtgott-Roth, Powell and Tristani, with Commissioners Powell and Tristani issuing separate statements.

- FCC -

OGC Contacts: John Riffer and Lee Martin (202) 418-1720
MMB Contacts: Lisa Scanlan (202) 418-2720 and Jerianne Timmerman (202) 418-1600
News Media Contact: David Fiske (202) 418-0513