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Before the Federal Communications Commission  S'"2Washington, D.C. 20554 ă  S4'In the Matter of#&I\  P6Q.?&P#)pp )  S'Implementation of Section 309(j) of the)ppMM Docket No. 97234 Communications Act Competitive Bidding) for Commercial Broadcast and Instructional) Television Fixed Service Licenses) )  S'Reexamination of the Policy Statement)ppGC Docket No. 9252 on Comparative Broadcast Hearings) )  S6 'Proposals to Reform the Commission's)ppGEN Docket No. 90264 Comparative Hearing Process to Expedite) the Resolution of Cases) )  S'  FIRST REPORT AND ORDER \  Sk'X` hp x (#%'0*,.8135@8:' xadopt herein a "new entrant" bidding credit to further the goals of the designated entity provisions of  xSection 309(j). We note, however, that we intend to continue our review of the barriers to entry or  xgrowth that may exist for small, minority and womenowned businesses in broadcasting, and make future  xadjustments to our auction rules, as appropriate, in light of these studies. In addition, pursuant to our  xdiscretion under Section 309(l) to utilize either comparative hearings or competitive bidding procedures  xto resolve certain mutually exclusive commercial broadcast applications filed before July 1, 1997, we  x*conclude that all of these preJuly 1st applications should be resolved by competitive bidding procedures.  S&' xWe also decide in this First Report and Order to resolve pending comparative renewal proceedings that  xare outside the scope of our auction authority under Sections 309(j) and 309(l) of the Communications  xZAct through comparative hearings in which the applicants may present whatever evidence they believe relevant, with the renewal expectancy remaining the most important factor.  S8'  II. BACKGROUND AND SUMMARY ă  S ' "\2. As fully described in the Notice of Proposed Rulemaking in this proceeding,[ XhO {O$'ԍ 12 FCC Rcd 22363 (1997) (hereafter Notice).[ the Commission  xZhas traditionally used comparative hearings to decide among mutually exclusive applications to provide  xMcommercial broadcast service, and it has used a system of random selection to award certain types of  xbroadcast licenses, such as low power television and television translator, pursuant to Section 309(i), 47"r#,l(l(,,$#"  xU.S.C.  309(i). For purposes of comparative hearings, the Commission has developed a variety of  S' xcomparative criteria,hO {O@'ԍ#C\  P6QP# See Policy Statement on Comparative Broadcast Hearings, 1 FCC 2d 393, 394 (1965). including the "integration" of ownership and management, which presumed that a  xstation would offer better service to the extent that its owner(s) were involved in the station's daytoday  S' xmanagement. However, in Bechtel v. FCC, 10 F.3d 875, 878 (D.C. Cir. 1993) (Bechtel II), the United  x"States Court of Appeals for the District of Columbia Circuit held that "continued application of the  xxintegration preference is arbitrary and capricious, and therefore unlawful." The Commission subsequently  xfroze all ongoing comparative cases (including comparative renewal cases) pending resolution of the  S'questions raised by Bechtel II.ZhO {O ' x #C\  P6QP#э Public Notice, FCC Freezes Comparative Hearings, 9 FCC Rcd 1055 (1994), modified, 9 FCC Rcd 6689  {O ' x (1994), further modified, 10 FCC Rcd 12182 (1995). Also, following Bechtel v. FCC, 957 F.2d 873, 881 (D.C. Cir.  {Ox ' x7 1992) (Bechtel I), and again following Bechtel II, the Commission issued further notices of proposed rulemaking.  {OB ' xt In Further Notice of Proposed Rulemaking, 8 FCC Rcd 5475 (1993), it proposed to amend 47 C.F.R.  73.3597,  x which governs the assignment and transfer of broadcast authorizations to lengthen the period of time that a successful  x applicant receiving a grant after a comparative hearing must operate its station before selling it. Similar issues had  x been raised in a petition for reconsideration filed by Black Citizens for a Fair Media in GEN Docket No. 90264 and  {Od' xp in responsive comments. In Second Further Notice of Proposed Rulemaking, 9 FCC Rcd 2821 (1994), the  {O.'Commission sought comments on a variety of issues raised by Bechtel II.#XP\  P6QXP#т  "<\ 3. Subsequently, on August 5, 1997, Congress enacted the Balanced Budget Act of 1997, which  x7expanded the Commission's auction authority under Section 309(j) of the Communications Act to include  xcommercial broadcast applicants. Amended Section 309(j) provides that, except for licenses for certain  xVpublic safety noncommercial services and for certain digital television services and noncommercial  xeducational or public broadcast stations, "the Commission shall grant the license or permit to a qualified  xapplicant through a system of competitive bidding . . . [i]f . . . mutually exclusive applications are  xaccepted for any initial license or construction permit." Balanced Budget Act of 1997,  3002(a)(1),  S ' xcodified as 47 U.S.C.  309(j). In addition, Section 3002(a)(2), codified as 47 U.S.C.  309(i), amends  xSection 309(i) to terminate the Commission's authority to issue any license through the use of a system  xof random selection after July 1, 1997, except for licenses or permits for stations defined by Section  S' x397(6) of the Communications Act (i.e., noncommercial educational or public broadcast stations). Finally,  S' xkSection 3002(a)(3) adopts Section 309(l), codified as 47 U.S.C.  309(l), which governs the resolution of  xpending comparative broadcast licensing cases. Specifically, it says the Commission "shall have the  xauthority" to resolve mutually exclusive applications for commercial radio or television stations filed  Sr' xbefore July 1, 1997 by competitive bidding procedures.  It specifies further that any auction conducted under this provision must be restricted to persons filing competing applications before July 1, 1997.  "<4. As a result of the Budget Act, the Commission no longer has the option of resolving competing  xapplications for commercial broadcast stations by comparative hearings except for certain applications filed  xbefore July 1, 1997, and it lacks the authority to resolve competing applications for commercial broadcast  xstations by a system of random selection. The Commission began this rulemaking proceeding to implement these provisions of the Budget Act.  S ' "5. In the Notice, the Commission tentatively proposed to adhere to the Commission's existing  xxcompetitive bidding procedures that are already in place for nonbroadcast services, set forth in 47 C.F.R.  S' x 1.21011.2111, subject to any changes made in these procedures in the ongoing Part 1 Rulemaking,"6 ,l(l(,,"  S' xwhere the Commission had proposed certain modifications to those procedures.4hO {Oh' x; ԍ SeeĠAmendment of Part 1 of the Commission's Rules Competitive Bidding Proceeding, Order, Memorandum  {O2'Opinion and Order and Notice of Proposed Rule Making, 12 FCC Rcd 5686 (1997) (hereafter Part 1 Rulemaking).4 We invited interested  xparties to identify any procedures that areinappropriate for broadcast auctions and to propose alternatives.  S' x*After the release of the Notice in this proceeding, the Commission adopted a Third Report and Order and  S' xSecond Further Notice of Proposed Rulemaking in the Part 1 Rulemaking, 13 FCC Rcd 374 (1997)  Sd' x(hereafter Third Report and Order), in which it modified its competitive bidding procedures in all  xMauctionable services in an effort to streamline the Commission's regulations, make the auction process  x}more efficient, and provide more guidance to auction participants. The general competitive bidding procedures for future applications that are subject to auctions are discussed in Section III(C).  "` ` 6. In addition to seeking comment on competitive bidding procedures for broadcast auctions, the  Sv' xNotice requested comment on a variety of other issues raised by the auction legislation, including our  xtentative conclusions regarding the scope of Section 309(l). Section III(A) reviews the statutory  xframework for broadcast auctions, and the special statutory provisions relating to pending comparative  S ' xlicensing cases in Section 309(l).  Resolution of the frozen Bechtel cases is addressed in Section III(B).  xtSpecial procedures for pending applications which will be resolved by competitive bidding procedures,  x3either because such resolution is statutorily mandated or because we have concluded that it will better  S ' xVserve the public interest, are outlined in Section III(C). Our statutory obligation to use competitive  xbidding to award ITFS licenses is discussed in Section III(D). Section III(E) describes how we will  xhandle pending comparative renewal proceedings, which by statute may not be resolved through competitive bidding. Finally, Section III(F) addresses a recusal request filed in regard to this proceeding.   S' F III. DISCUSSION ă  SJ' A. Statutory Overview  "1. General Authority to Use Competitive Bidding to Award Secondary and Primary Commercial Broadcast Licenses  S' " \7. As indicated above, the Commission's authority to award spectrum licenses is set forth in  xSection 309(j) of the Communications Act. Prior to the enactment of the Budget Act, Section 309(j)  x*provided that the Commission "shall have the authority . . . to grant . . . any initial license or construction  xpermit . . . through the use of a system of competitive bidding," but that authority was limited to awarding  xlicenses for certain nonbroadcast uses of the electromagnetic spectrum and required a determination by  xthe Commission that "a system of competitive bidding will promote the objectives described in" Section 309(j)(3). By virtue of the enactment of the Budget Act, however, Section 309(j)(1) now reads:  (XIf, consistent with the obligations described in paragraph (6)(E) [to avoid mutual  Bexclusivity], mutually exclusive applications are accepted for any initial license or  S ' 'construction permit, then, except as provided in paragraph (2), the Commission shall grant the license or permit to a qualified applicant through a system of competitive bidding.  (emphasis added.) "T$$,l(l(,,K#"Ԍ "8. Given the express language of amended Section 309(j)(1) providing that the Commission shall  xZgrant any initial license or permit through a system of competitive bidding, we tentatively concluded in  S' x&the Notice, 12 FCC Rcd at 22379 ( 40), that we are required to use auctions for all pending and new  x mutually exclusive applications to provide secondary broadcast service, such as low power television  x(LPTV), and FM and television translators. We also tentatively read Section 309(j)(1) as mandating that,  xexcept for certain pending licensing cases, the resolution of which is expressly governed by Section 309(l),  xand certain digital stations governed by Section 309(j)(2), the Commission must use competitive bidding  xto award authorizations for all new primary commercial broadcast stations, if mutually exclusive applications are filed.  Sr4 "+9. Discussion . Based upon the broad, explicit language of Section 309(j)(1), we continue to  SK ' xMbelieve that auctions are mandatory for all secondary commercial broadcast services (e.g., LPTV, FM  xRtranslator and television translator services). Similarly, we find that, except for certain pending  x7applications that are subject to Section 309(l), our auction authority is mandatory, rather than permissive,  xIfor all full power commercial radio and analog television stations. Specifically, our general auction  S ' xauthority set forth in Section 309(j)(1), as amended, now provides that the Commission "shallĠgrant"  xlicenses by competitive bidding and it no longer restricts the type of spectrum license which may be  xawarded through competitive bidding or requires an affirmative public interest determination that the use of competitive bidding will serve the objectives of the statute.  "\ 10. In this regard, we disagree with the small number of commenters who contend that we lack  xstatutory authority to use competitive bidding to award licenses to provide secondary broadcast service.  x7Nothing in the statutory language or in the accompanying legislative history indicates that the requirement  x to use competitive bidding for "any initial license or construction permit" is limited to full power radio  x7and analog television stations, or that Congress intended such a limitation. Nor are secondary commercial  x"broadcast service licenses exempted from the auction requirement under Section 309(j)(2), which  xtenumerates the certain types of spectrum licenses that are not subject to competitive bidding. We find  xno ambiguity in the statutory language as to the requirement to auction these applications. Moreover, the  xlegislative history does not support the contention that Congress intended to limit auction authority to  xthose types of commercial broadcast licenses generally awarded through the comparative hearing process.  x7The Conference Report states that "[a]ny mutually exclusive applications for radio or television broadcast  xglicenses received after June 30, 1997, shall be subject to the Commission's rules regarding competitive  S' xbidding, including applications for secondary broadcast services such as low power television, television  S' xtranslators, and television booster stations."hO yOI'ԍ H.R. Conf. Rep. 217, 105th Cong. 1st Sess. 573 (1997) (hereafter Conference Report) (emphasis added). This list of secondary broadcast service licenses is illustrative  xrather than exhaustive. For this reason, the omission of FM translators from that list does not persuade  S' x3us, as a few commenters urge,XhO {O!'ԍ See, e.g., Reply Comments of Beacon Broadcasting Corp. at 2; Duhamel Broadcasting Enterprises at 46. that Congress intended to exempt such applications from competitive  Si'bidding. ` `  "y 11. We continue to believe, moreover, that all pending mutually exclusive applications for these  xsecondary broadcast services must be resolved through a system of competitive bidding. Nothing in  x&Section 309(j)(1) suggests that the requirement to use auctions applies only to applications filed in the  xfuture. The only statutory reference to pending applications is contained in Section 309(l). This provision  x7governs the resolution of pending comparative licensing cases but applies only to "competing applications"y#,l(l(,,G""  xfor initial licenses or construction permits for commercial radio or television stations that were filed with  x7the Commission before July 1, 1997." As set forth in greater detail in Section III(B) below, our authority  xkto auction these applications is permissive, rather than mandatory. Whether we have discretion not to use  xtauctions for pending mutually exclusive commercial secondary broadcast applications filed before July 1, 1997, therefore, depends on whether such applications fall within the scope of subsection (l).  " 12. We do not believe that Congress intended to include these secondary broadcast applications  xDwithin Section 309(l). As several commenters note, licenses to provide secondary broadcast services are  S' xnot awarded through the comparative hearing process.hO {O( 'ԍ See, e.g., Comments of Kidd Communications at 56; Reply Comments of Beacon Broadcasting Corp. at 2. Yet, Section 309(l) is expressly titled, and thus  S' xgoverns, the "[r]esolution of pending comparative licensing cases." See also Conference Report at 573  x/(referring to Section 309(l) as pertaining to "pending comparative licensing cases"). Given that no  x<"pending comparative licensing cases" exist in the secondary broadcast services, we conclude that  xCongress intended Section 309(l) to apply only to pending preJuly 1, 1997 applications that formerly  S ' xwere resolved through comparative hearings, i.e., commercial full service stations. Moreover, although  xwe previously resolved competing LPTV applications by a system of random selection pursuant to Section  S ' x309(i), the Budget Act withdrew that authority. See Budget Act,  3002(a)(2). Given the simultaneous  xtermination of our lottery authority with respect to these pending applications, we do not believe that  xCongress contemplated that we instead use comparative hearings, in lieu of auctions, particularly since we  xdo not currently award secondary broadcast service licenses through the comparative hearing process.  xAccordingly, we conclude that all mutually exclusive applications for secondary broadcast service must be awarded through auctions.  S' 2. Statutory Authority to Use Competitive Bidding for Modification Applications  SH' "R 13.  In the Notice, 12 FCC Rcd at 22382 ( 47), we asked for comment on whether we should  xIapply competitive bidding procedures to mutually exclusive applications for major modifications of  xcexisting broadcast facilities, as well as applications for minor modifications, which can be mutually  x*exclusive in certain rare instances. Some commenters opposing this proposal argue that the Commission  xdoes not have authority to auction modification applications, because Section 309(j) states that mutually  xIexclusive applications for "any initial license or construction permit" shall be subject to competitive  SZ'bidding. 47 U.S.C.  309(j)(1).\ ZZZhO {OT' x ԍ See, e.g., Comments of Cox Radio, Inc. at 2; Noncommercial Educational Broadcast Licensees at 9; KM  x Broadcasting, Inc. at 5; Rio Grande Broadcasting Co. at 13; HeidelbergStone Broadcasting Co. at 13; ITFS Parties at 7; Reply Comments of WB Television Network at 12. \  " 14. After further consideration, we conclude that the Commission is not precluded by the terms  xof Section 309(j) from auctioning mutually exclusive modification applications. Applications proposing  xkmajor changes to existing facilities are, in our view, analogous to applications for construction permits for  S' xxnew stations. In the Second Report and Order originally adopting general competitive bidding procedures,  xwe concluded that it may be appropriate in some cases to treat a major modification application as an  x/initial application for competitive bidding purposes. In particular, we said that if the changes to an  xexisting facility proposed in a modification application are substantial and if such modification application  xIis mutually exclusive with another major modification application or with an initial application, then" | ,l(l(,,"  S' x3resolving the mutual exclusivity by competitive bidding may be appropriate. &hO {Oh' x ԍ See Second Report and Order, Implementation of Section 309(j) of the Communications Act Competitive  {O2' x Bidding, 9 FCC Rcd 2348, 2355 (1994) (hereafter Second Report and Order), recon. granted in part, Second  {O' x7 Memorandum Opinion and Order, 9 FCC Rcd 7245 (1994) (hereafter Second Memorandum Opinion and Order).  We note that subjecting  xa modification application to competitive bidding may also be particularly appropriate where it is mutually  xZexclusive with one (or more) initial applications, as Section 309(j) mandates the use of auctions where  S' xZmutually exclusive applications are accepted for "any initial license or construction permit." 47 U.S.C.  309(j)(1) (emphasis added).  S' "15. We note, moreover, that our approach here is consistent with our previous interpretation of  xthe identical statutory language in Section 309(i) authorizing the Commission to award spectrum licenses  S' x@through a system of random selection "[i]f there is more than one application for any initial license or  S' x7construction permit." 47 U.S.C.  309(i)(1)(A) (1996) (emphasis added). In adopting lottery procedures  x@for the LPTV service, we construed the statutory phrase "any initial license or construction permit" to  xauthorize lotteries of mutually exclusive major modification applications, and our lottery procedures for  S& ' x7that service therefore encompassed such applications. See Second Report and Order in Gen. Docket No.  xc81768, 93 FCC 2d 952, 98182 (1983). When Congress amended Section 309(i) to terminate our  xauthority to use lotteries except with respect to the award of noncommercial broadcast licenses, 47 U.S.C.  x 309(i)(5)(B) (1997), it retained the statutory language "any initial license or construction permit." That  S ' xpsame language is repeated verbatim in the provision setting forth our general auction authority. See  x@Section 309(j)(1). Consistent with our previous interpretation of Section 309(i) as it pertains to major  x*modification applications, we therefore construe the identical language in Section 309(j)(1) as authorizing  xDus to resolve mutually exclusive major modification applications through a system of competitive bidding.  S' "16. Our determination to subject mutually exclusive major modification applications to  xVcompetitive bidding is additionally supported by the absence of another viable method for resolving  xinstances of mutual exclusivity in a timely and efficient manner. Although some commenters oppose the  xauctioning of modification applications, they do not believe that comparative hearings are a "realistic  S"' xoption" for resolving competing modification applications,< Z"hO {Ox' x ԍ See Comments of Cox Radio, Inc. at 3 (given rejection by courts of previous comparative hearing criteria,  x it seems a futile exercise to try to develop in a timely manner new comparative criteria that would withstand judicial scrutiny). < and they do not suggest another method of  xgresolving mutual exclusivities that are as efficient as auctions. For example, some commenters simply  xoppose the use of auctions to resolve competing modification applications without suggesting any  S' xalternatives, hO {O"!' xZ ԍ See, e.g., Reply Comments of National Public Radio, Inc., et al. at 7; Comments of Kayo Broadcasting at 14. while others suggest procedures that seem time consuming and administratively cumbersome.  xOne commenter recommends the adoption of a point accumulation system to permit the resolution of  SZ' x@mutually exclusive modification applications.j Z2 hO {O,%'ԍ See Comments of Six Video Broadcast Licensees at 6. j We do not believe that the development of a new point  xsystem for the sole purpose of evaluating a limited number of broadcast major modification applications  xwould be preferable to utilizing the Commission's wellestablished auction system to resolve mutually"  ,l(l(,,4"  xexclusive modification applications. Resolving competing major modification applications on a  x*comparative basis would most likely result in disagreements over criteria to utilize in developing any such  S' xnew comparative system.ZhO {O' x ԍ See, e.g., Comments of Independent Broadcast Consultants, Inc. at 5 (resolve modifications according to  x "relative merit based on increased population served"); Edward Czelada at 2 (major change applications should be granted "solely on existing public service issues, such as coverage, first service and population").  Another commenter generally contends that, if modification applications  xbecome mutually exclusive, the Commission "staff [should] work with the parties to eliminate [the] mutual  xexclusivity." If a technical solution cannot be found, then the Commission should allow "the use of  x}alternative dispute resolution techniques or other settlement avenues before considering competitive  S' xbidding."hO yO ' x; ԍ Comments of the National Association of Broadcasters at 3. This commenter did not specify what "alternative dispute resolution" methods might be utilized. This suggestion appears administratively burdensome for the Commission and time consuming  S' x7for the parties; moreover, if the mutual exclusivity is not resolved by these unidentified alternative dispute  x/resolution techniques, then the use of auctions (or some other method of resolution) would still be required.  SH ' "I17. We recognize, however, that competing major modification applications can often be resolved  x by changes to the engineering proposals submitted by applicants and may raise special considerations  xwhere settlements are particularly appropriate. We will therefore allow applicants who have, under the  xwindow filing procedures adopted herein for new and major modification applications, filed either  xcompeting major modification applications, or competing major modification and new applications, to  xresolve their mutual exclusivities by means of engineering solutions or settlements during a limited period  SX' xgafter the filing of shortform applications but before the start of the auction.XBhO yO:' xk ԍ The precise period for preauction settlement of competing modification applications will be specified in the public notice identifying the mutually exclusive applicants who filed in the window. We realize that allowing  x&competing major modification applicants to settle following the filing of shortform applications is not  xconsistent with the terms of the general Part 1 anticollusion rule, which is triggered by the filing of short S' x7form applications. See infra  155. However, that rule was formulated in the context of geographic area  xlicensing, rather than sitespecific licensing as in broadcast where determinations of mutual exclusivity can  xdepend on specific technical proposals, which in some instances may be altered so as to allow the grant  xkof several formerly mutually exclusive applications. We will therefore allow parties with competing major  xmodification applications this limited opportunity to settle or otherwise resolve their mutual exclusivities  xfollowing submission of their shortform applications, in accordance with our statutory directive "to use  xengineering solutions . . . and other means" to resolve competing applications. 47 U.S.C.  309(j)(6)(E).  xtWe emphasize that any such settlement agreements must comply with all Commission regulations, and  xDthat the Commission will proceed to auction promptly any competing major modification applications that are not resolved by the parties.  S*' "018. In the past, we have designated for hearing groups of mutually exclusive broadcast  S' xapplications involving major modification applications.eZhO {O<%' x ԍ See, e.g., Palmetto Communications Co., 5 FCC Rcd 5154 (ALJ 1990); Vacationland Broadcasting Co., Inc.,  x 97 FCC 2d 485 (Rev. Bd. 1984) (cases involving major modification applications resolved on basis of typical comparative criteria, including integration). e Given Congress' expressed preference in the" ,l(l(,,'"  x}Budget Act for competitive bidding as a method of selecting from among competing applicants, we  xbelieve that utilizing auctions to resolve competing major modification applications would now be  xtappropriate. Applying competitive bidding procedures to modification applications "comports with our  S' xobjectives of increasing competition and awarding spectrum to those who value it most highly."hO {O' x ԍ Second Report and Order, 9 FCC Rcd at 2355 (concluding that "there is merit" in treating major modification applications as akin to initial applications for purposes of competitive bidding, at least in some circumstances).   xAuctions are moreover an efficient method of resolving mutually exclusive applications that should speed  xthe grant of construction permits to competing parties and the improvement or initiation of service to the  xpublic. For these reasons, we will apply competitive bidding procedures, as set forth in detail below, to  xresolve mutual exclusivities among major modification applications and between major modification and  x&initial applications, if the parties are unable to resolve their mutual exclusivities during a limited period, as established by public notice, following the filing of shortform applications.  SH ' ""19. We will not, however, generally subject competing minor modification applications to auction  xZprocedures. Given the infrequency with which minor modification applications are mutually exclusive  xxand the less significant changes usually proposed in minor modification applications, we will, as discussed  xin detail below, encourage parties "to use engineering solutions, negotiation . . . and other means" to  x&resolve any mutual exclusivities. 47 U.S.C.  309(j)(6)(E). The commenters oppose utilizing auction  S ' xMprocedures to resolve competing minor modification applications, "hO {OB' x ԍ See, e.g., Comments of Cox Radio, Inc. at 6 (opposing auctioning minor modification applications "under any circumstances"). and we see less utility to be gained  xfrom subjecting minor change applications to competitive bidding procedures. Accordingly, in the rare  S0' xinstances in which minor modification applications become mutually exclusive, the parties will be expected  S' xto work together to resolve the mutual exclusivity. See infra  177178. We furthermore note that,  xparticularly if our proposal in another proceeding regarding modifications is ultimately adopted, fewer  S'modifications in the broadcast services will be regarded as "major."/H|hO yO' x ԍ As several commenters urge in this proceeding, we have proposed in another proceeding to alter the  x  definitions of "major" and "minor" modifications in the AM service and FM translator service, so that fewer  {Of' x modifications in those services are regarded as major. See Comments of Cox Radio, Inc. at 6; Jacor  x* Communications, Inc. at 45. If this proposal is adopted, then fewer types of modification applications would be  {O' x subject to auction if mutually exclusive.  See Notice of Proposed Rule Making and Order, 1998 Biennial Regulatory  {O' x Review Streamlining of Radio Technical Rules in Parts 73 and 74 of the Commission's Rules, FCC 98117 at   {O' x 4850 (rel. June 15, 1998) (Technical Streamlining Notice). Virtually all modifications in the FM and television services are, under our current rules, already regarded as minor./  S'  Sj'  3. Statutory Exemption for Noncommercial and Public Broadcast Stations  SB'  S' "c20. Section 309(j)(2) sets forth three types of spectrum licenses to which our competitive bidding  x7authority does not apply. In addition to licenses for certain public safety radio services and certain digital  xtelevision stations, we may not use competitive bidding to award licenses for "stations described in section  x397(6) of this Act." Section 397(6) of the Communications Act, 47 U.S.C.  397(6), defines the terms" ,l(l(,,"  S' x<"noncommercial educational broadcast station" and "public broadcast station."xhO yOh'#X\  P6G;P#э This provision specifies that "[t]he[se] terms . . . mean a television or radio broadcast station which   X(A) under the rules and regulations of the Commission in effect on the effective date of this   paragraph, is eligible to be licensed by the Commission as a noncommercial educational radio or  q television broadcast station and which is owned and operated by a public agency or nonprofit private foundation, corporation, or association; or    X(B) is owned and operated by a municipality and which transmits only noncommercial programs for educational purposes.  To effectuate this  S' xkexemption, we proposed in the Notice, 12 FCC Rcd at 22383 ( 50), that such nonprofit applicants would  S' x@be exempt from competitive bidding when they applied to use reserved broadcast channels, for which  xapplicants must be noncommercial educational entities. Auctions would be used for nonreserved  xDfrequencies, however, where applicants may be either commercial or noncommercial educational entities.  xWe stated that we would treat nonprofit applicants for commercial frequencies, including those who could  xqualify under 47 C.F.R.  73.503 as nonprofit educational organizations, no differently under the  xIproposed filing and competitive bidding procedures than any other mutually exclusive applicant for commercial frequencies.  Sr4 "+21. Discussion . Under current Commission regulations, certain television channels and FM  xfrequencies are reserved solely for noncommercial educational use. Nonreserved broadcast channels are  x7usually called "commercial." Currently, noncommercial educational applicants may apply for commercial  xchannels under the same application procedures as commercial applicants. Upon establishment of their  xqualifications under Sections 73.503 or 73.621, the stations are licensed as noncommercial stations.  S ' xcBecause of this dichotomy and as the comments we received in response to the Notice made clear,  xapplying the exemption set forth in Section 309(j)(2)(C) in situations where one or more of the mutually  xexclusive applicants for a broadcast license on a commercial frequency seeks to establish a noncommercial broadcast station is not a simple matter.  S' "22. A number of commenters, including noncommercial educational broadcasters, note that  xkSection 309(j)(2)(C) explicitly provides that the Commission's auction authority does not apply to licenses  x<issued "for stations described in section 397(6)" and that Section 397(6) of the Act, which defines  xnoncommercial educational and public stations, is not expressly limited to stations operating on reserved  xfrequencies. Accordingly, they urge that mutually exclusive applications filed by noncommercial  xeducational or public broadcast entities are exempt from competitive bidding, regardless of whether the  S'frequency applied for is reserved or whether there are also commercial applicants for that frequency.\hO {O' xD #X\  P6G;P#э See, e.g., Comments of Noncommercial Educational Broadcast Licensees at 34; National Public Radio, Inc.,  {Og' x et al. at 56; Board of Education of the City of Atlanta, et al. at 34; Association of America's Public Television Stations at 56; Beacon Broadcasting, Inc. at 2.  S' "<23. Other commenters oppose this approach. They contend that licenses or construction permits  x@are "issued by the Commission for stations described in section 397(6)" only in those circumstances  xwhere the Commission knows in advance that the ultimate licensee will be a noncommercial educational  S-' xor public entity. Thus, they would argue, only in situations where by definition the license will be issued"- , ,l(l(,,W"  S' xto an entity described in Section 397(6), i.e., a reserved frequency is involved, are auctions prohibited. L$hO {Oh' x& #X\  P6G;P#э See Reply Comments of Jacor Communications, Inc. at 36; Lakefront Communications, Inc. at 26. The  {O2' x comments of JTL Communications Corporation (at 3) also support the Commission's proposal in  50 of the Notice,  x arguing that nonprofit applicants should compete in the market like other applicants and that nonprofit applicants were not necessarily faced with the same financial handicaps as small or minorityowned businesses. L  xThese commenters point out that substantial complexities are raised by interpreting the competitive bidding  xexemption for noncommercial educational broadcasters to include such broadcasters when applying for  xtcommercial channels. For example, if ten commercial entities and one noncommercial entity apply for  xDa nonreserved frequency and if auctions may not be used to resolve the mutual exclusivity because of the  x&presence of the single noncommercial applicant, it is not clear what equities and public policies would govern the procedure to be used to choose among the applicants.  S' "24. We do not believe that we have received sufficiently focused comment to finally resolve the  xDnoncommercial issue in this proceeding. While the exemption in Section 309(j)(2)(C) for noncommercial  xeducational broadcasters clearly precludes us from using competitive bidding to award broadcast station  x*licenses on the reserved noncommercial frequencies, there are difficult issues as to how we should apply  xthe provision when licensing frequencies in the commercial band. Different interpretations of the  xcongressional intent of Section 309(j)(2)(C) and its consequences can be made in the context of our  x"allocation and licensing practices. One possible approach would be to prohibit the use of auctions  xwhenever one or more of the competing applicants for a nonreserved channel is a Section 397(6) entity.  xtAnother possible approach would be to conclude that frequencies in the commercial band could not be  xused for noncommercial stations. Yet another option could be to adopt some form of hybrid procedure  x<involving both lotteries and auctions when noncommercial and commercial applicants compete for  S 'commercial channels. hO {O^' xx #X\  P6G;P#э The Commission has the authority to award licenses for stations described in Section 397(6) by lottery. See 47 U.S.C.  309(i) as amended by Budget Act.  S' "25. We did not focus on the complicated nature of this issue in our Notice in this proceeding. As  x a result, we believe that our decision would be aided by a further round of comment. For example, a  xkrelated question is whether the Commission should modify its standards that allow noncommercial entities  SD' xIto seek to reclassify commercial frequencies as noncommercial.>$DhO yO' x ԍ#X\  P6G;P# Under our existing procedures, we grant requests by applicants to reserve for noncommercial educational use  x FM channels located outside the reserved band, only if channels in the reserved band are not available because of  {O' x foreign allocations (Canadian or Mexican) or potential interference to operations on VHF television Channel 6. See,  {OL'e.g., Lindside, West Virginia, 2 FCC Rcd 6046 (Alloc. Br. 1987).> We intend to further develop all  xpossible options for resolving this question and seek further comment in the outstanding rulemaking  x<proceeding (MM Docket No. 9531) regarding the reexamination of the comparative standards for  xknoncommercial educational applicants. Thus, we will not proceed to auction at this time any cases where  x/both noncommercial and commercial applicants have filed competing applications for nonreserved  xchannels. We will resolve these cases following the release of a report and order in our noncommercial  xproceeding, MM Docket No. 9531, although prior to resolution by the Commission, the pending  xapplicants involved in such cases may of course agree to a settlement that complies with all Commission  S' xregulations. See infra  7677. In ultimately resolving this question of awarding licenses to  xnoncommercial applicants applying for commercial channels, our goal will be to maximize participation" ,l(l(,," of noncommercial broadcast entities consistent with the statute.   S' x1# B. Resolution of Comparative Initial Licensing Cases Involving Applications Filed Before July 1, 1997  S'1. Discretion to Use Auctions in Pending Cases  S' "c26. As noted above, Section 309(l) expressly governs the resolution of pending mutually exclusive  xZapplications for new commercial radio and television stations filed before July 1, 1997. We tentatively  Sp' xconcluded in the Notice that this provision accords us the discretion to decide such cases either by a  xcompetitive bidding proceeding or through the comparative hearing process. In this regard, we relied on  xstatutory language providing that "the Commission shall . . . have the authority to conduct a competitive  xDbidding proceeding pursuant to subsection (j) to assign such license or permit." We noted, however, that  S ' x*the Conference Report contradicted this reading of the provision in that it states that the section "requires  xthe Commission to use competitive bidding to resolve any mutually exclusive applications" filed "prior  S ' x3to July 1, 1997."U hO yO'ԍ Conference Report at 573 (emphasis added). U We asked for comments on whether the statute could be read to require that these pending preJuly 1, 1997 applications must be resolved by competitive bidding procedures.  S 4 "c27. Discussion. We continue to believe that we have discretion to resolve comparative licensing  xproceedings that involve preJuly 1, 1997 applications for new commercial radio and television stations  xby either competitive bidding procedures or through the comparative hearing process. The vast majority  S' xof commenters either support our tentative reading of the statute or acknowledge without addressing the  Sm' xissue that we have statutory authority to use comparative hearings for these cases.<mXhO {Oe' x ԍ See, e.g., Comments of KM Communications, Inc. at 2; Columbia FM Limited Partnership at 2; Stephen M.  x Cilurzo, attaching Letter dated October 17, 1997 from Senator John McCain, Chairman, Committee of Commerce,  xk Science, and Transportation to Stephen Cilurzo ("Section 3002 of Title III authorizes the Federal Communications  x* Commission (FCC) to select permittees for radio and television. The authority to use auctions is permissive, not mandatory." ). < We disagree with  x3commenters that either the absence of an express reference to the preJuly 1, 1997 applications in the  x7Section 309(j)(2) exemptions, or the indication in the legislative history accompanying Section 309(l) that  S'auctions are "required," compels a conclusion that auctions are required. hO {O' xg ԍ See, e.g., Comments of Thomas M. Eells at 12; Liberty Productions, LP at 23; Willsyr Communications, LP at 16; Reply Comments of Irene Rodriquez Diaz de McComas at 3.  S' "[28. The explicit language of Section 309(l)(1) provides that the Commission "shall have the  xauthority to conduct a competitive bidding proceeding," in contrast to the mandatory language of Section  x309(j)(1) providing that "the Commission shall grant the license . . . through a system of competitive  xbidding." The language of Section 309(l), we believe, unambiguously addresses a situation in which  xauctions are permissible, but are not required. There was thus no reason for Congress to exempt these  xapplications from the Commission's auction authority in Section 309(j)(2) unless Congress meant, in  xcontrast to the permissive language of Section 309(l)(1), to prohibit use of auctions to resolve such applications. " d ,l(l(,,"Ԍ S' "_ԙ29. Some commenters urge that the absence of language in Section 309(l) affirmatively stating  xthat the Commission may use comparative hearings to resolve these cases signifies that auctions are  S' xmandatory rather than permissive.fhO {O'ԍ See, e.g., Comments of Liberty Productions, LP at 23.f We disagree. Until enactment of the Budget Act, the Commission  xhad disposed of such initial license applications exclusively through the comparative hearing process.  xThus, in interpreting Section 309(l), we attach little significance, for example, to Section 3002(a)(2) of  S8' xthe Budget Act, which repeals our lottery authority. Given the Commission's exclusive use of  x7comparative hearings to resolve competing applications to provide full power radio and television service,  xtCongress had no reason to provide statutory language affirming the Commission's existing authority to  xresolve this group of pending cases through the comparative hearing process. By contrast, it had every reason to provide explicit language prohibiting such resolution, if this was what it meant to do.  SH ' "30. It is a wellestablished principle of statutory construction that when congressional intent, as  xreflected in the statutory language, is clear "that is the end of the matter; for the court, as well as the  S ' xagency, must give effect to the unambiguously expressed intent of Congress." Chevron U.S.A v. Natural  S ' xRes. Def. Council, 467 U.S. 837, 84243 (1985). Here, the plain language of Section 309(l)(1) raises no  xquestion that justifies resort to the legislative history for clarification as to the proper interpretation. Nor  xcan the statement in the legislative history that auctions are "required" for these cases override the plain  xlanguage of the statute, which does not impose such a requirement but merely affords the Commission  S4' xMauthority to use auctions.z4ZhO {O.' x ԍ See, e.g., United Air Lines, Inc. v. CAB, 569 F.2d 640, 647 (D.C. Cir.1977) ("We find no mandate in logic  {O' x7 or in case law for reliance on legislative history to reach a result contrary to the plain meaning of a statute . . . .")  {O' x (emphasis in original). See also Landreth Timber Co. v. Landreth, 471 U.S. 681, 685 (1985) ("It is axiomatic that  {O' x [t]he starting point in every case involving construction of a statute is the language itself.'") (quoting Blue Chip  {OV' x Stamps v. Manor Drug Stores, 421 U.S. 723, 756 (1975) (Powell, J., concurring)); Greyhound Corp. v. Mt. Hood  {O 'Stages, Inc., 437 U.S. 322, 330 (1978) (same, citing other cases). z We also note that a contrary interpretation would render Section 309(l)(1)  xksuperfluous, inasmuch as Section 309(j)(1) already provides authority to use auctions in these cases. This  x}provides additional support, consistent with the statute's express language, that in Section 309(l)(1)  xDCongress intended to single out these pending cases for different treatment, by affording the Commission  xdiscretion to determine whether the use of auctions would be appropriate. For these reasons, we conclude  xthat our auction authority for the preJuly 1, 1997 applications is permissive rather than mandatory, and that we have authority to resolve these applications through the comparative hearing process.  S' 2. Public Interest Considerations Favoring Resolution by Competitive Bidding  S' "c 31. In this section we address the general issue of whether to use a system of competitive bidding  xZto resolve mutual exclusivity among any of the preJuly 1, 1997 applications subject to Section 309(l).  xSpecial circumstances relating to certain frozen hearing cases, and particularly whether equitable  S,'considerations warrant a different approach in those cases, are discussed in Section III(B)(3) below.   S' "y32. In the Notice, 12 FCC Rcd at 2236972 ( 1419), we tentatively concluded that resolving  xthe pending comparative licensing cases subject to Section 309(l) through a system of competitive bidding  xgwould serve the public interest. At the outset, we noted our statutory authority to alter our process for  xchoosing among license applications and to apply amended processing rules to pending applications. We  S>' xobserved that the vast majority of pending applicants, having filed after Bechtel II and the imposition of"> ,l(l(,,D"  S' xMthe comparative freeze, were unlikely to have relied on any particular selection criteria. Id.Ġat 22370 (  S' xM15). And, as to those pending applicants filing before Bechtel, we noted that the court's invalidation of  xxthe integration criterion precluded us from deciding cases according to applicants' reasonable expectations  xtwhen they filed. In these circumstances, we tentatively concluded that resolving the pending cases by  Sd'auction was not unfair even for these applicants.  S' "h 33. We also cited our continuing concern with the potential delay, administrative costs, and  xuncertainty associated with comparative hearings and the relative advantages of auctions in terms of  xexpediting service to the public in a more costeffective manner, allocating the spectrum to the applicant  xgvaluing it the most, and recovering for the public a portion of the value of spectrum made available for  xcommercial use. We sought comments on our tentative conclusion that generally resolving these  xcompeting preJuly 1, 1997 applications through a system of competitive bidding would better serve the  x&public interest than resolving them through the comparative hearing process. In this context, we also  xproposed to refund, upon request, all hearing fees paid in cases in which we ultimately use competitive  xbidding procedures to select the winner, as well as filing fees actually paid by applicants declining to participate in the auction.  S\4 "d!34. Discussion . We continue to believe that auctions will generally be fairer and more  xgexpeditious than deciding the pending mutually exclusive applications filed before July 1, 1997 through  xMthe comparative hearing process. We conclude that auctions will generally expedite service and better  xserve the public interest in these cases. Based upon our long experience with the comparative process,  xDwe believe that once the competitive bidding procedures, as well as any special processing rules for these  xpending comparative cases are in place, auctions will result in a more expeditious resolution of each  xZparticular case, thereby expediting the initiation of new broadcast service to the public. In this regard,  xwe note that, despite the 180day period during which we waived our settlement rules as required by  x Section 309(l)(3), there are approximately 150 proceedings involving more than 600 preJuly 1, 1997  S'mutually exclusive applications that remain to be decided.@hO yO]' x ԍ As of the deadline for filing settlements executed within 180 days after enactment of the Budget Act,  x@ settlement agreements had been filed in approximately 225 cases and approximately 150 cases remained to be  x resolved. Of these approximately 150 cases for which settlement agreements were not filed during the 180day  xx period, approximately 20 involve noncommercial and commercial applicants competing for nonreserved channels;  x as described above, resolution of these cases will be addressed in our noncommercial proceeding, MM Docket 9531.  xk Of the remaining 130 cases involving solely commercial applicants, fewer than ten cases have progressed at least  x through an Initial Decision by an Administrative Law Judge, and the rest have not been designated for hearing. These numbers could be higher if some pending settlements are not approved.   S' ""35. Commenters are also correct that holding an auction in these cases will not eliminate possible  x^litigation over the basic qualifications of the winning bidder. We note, however, that the Communications  xAct authorizes the Commission to prescribe expedited procedures for the resolution of issues concerning  S-' x7the qualifications of winning bidders. See 47 U.S.C.  309(j)(5). We adopt such procedures below. See  S' xxSection III(C). Based on our experience with the hearing process, moreover, we believe that any possible  xdelay caused by such litigation would still be significantly less than what we might reasonably expect if we were to resolve these cases through the comparative hearing process.  Sg' "#36. In this regard, we have long noted the potential for delay inherent in the adjudicatory nature  xof the comparative process. In connection with a rulemaking initiated in 1989 to explore the possibility"?,l(l(,,*"  xDof using lotteries to award initial broadcast licenses, for example, we estimated that a routine comparative  x<proceeding can take from three to five years or more to complete after designation of the mutually  S' xexclusive applications for hearing, and that complex cases may take much more time. |hO {O' xb ԍ See Amendment of the Commission's Rules to Allow the Selection from Among Competing Applicants for New  {O' x AM, FM, and Television Stations By Random Selection, 4 FCC Rcd 2256, 2257 (1989), cataloguing various factors  x contributing to this delay, including the heavy use by comparative broadcast applicants of motions to enlarge issues;  x complex and intricate discovery procedures that materially add to the cost and length of comparative proceedings;  xt lengthy hearings that may involve numerous witness and hearing exhibits; the 3090 day time period for filing  xU findings with the Administrative Law Judge; the approximately sixmonth period that it takes the Administrative Law Judge to issue his opinion; and the time for any administrative or judicial appeals.  More recently in  S' xOrion Communications Limited v. FCC, 131 F.3d 176, 180 (D.C. Cir. 1997), the court recognized that repetitious appeals may prolong proceedings for years even after the Commission's decision.  S' "$37. Here, the potential for delay is also increased by the court's decision in Bechtel II invalidating  xour central comparative criterion, integration of ownership and management, and the resulting freeze on  xthe processing and adjudication of comparative proceedings in effect since February 1994. The  xcommenters are divided over the ease by which the Commission may resolve the standard comparative  St' xissue if it elects not to use auctions to resolve the frozen Bechtel cases, and the extent to which Bechtel  SN ' xZII permits us to modify the existing comparative criteria. But none dispute our assertion in the Notice,  x^12 FCC Rcd at 2236667 ( 5), that the integration criterion has been crucial in recent comparative cases,  S ' xor urge that we decide these cases without regard to the court's express holding in Bechtel II, 10 F.3d at  xt878, that "continued application of the integration preference is arbitrary and capricious, and therefore  S ' x^unlawful." Moreover, we note many other relevant factors (e.g., local residence, civic participation, past  xbroadcast experience) were "enhancements" of the integration criterion. Determining which of these  Sd' xcriteria could best survive Bechtel IIĩtype scrutiny and determining how such criteria should now be  xpweighted is a difficult process that no doubt would lead to serious challenges in the courts with the  S' x7outcome unclear.! hO {O' x< ԍ See Bechtel II, 10 F.3d at 88687 ("[T]he ability to pick persons and firms who will be successful' at  x delivering any kind of service is a rare one, however success might be defined . . . . [I]f success could be captured  x in a formula, the skill of identifying future successes would not be so scarce and well rewarded. Any sort of recipe  x that could be discerned would necessarily abstract criteria from a complex web of facts . . . . All these difficulties flow from the statutory scheme itself."). Indeed, there is wide disparity in the record as to what the best approach would be. " Z hO {Ot' x ԍ See, e.g., Comments of Cromwell Group, Inc. at 2 (rely on factors including local ownership and  x management, local residence, satisfactory technical proposal that will serve the most people, financial ability to  x& operate for one year, and preferences for the applicant that proposed the frequency and filed earlier); United  xt Broadcasters Co. at 58 (rely on comparative coverage, broadcast experience, and diversification); Rio Grande  x Broadcasting Co. at 5 (just exclude integration); John W. Barger at 3 (just exclude integration); Stephen M. Cilurzo  x. at 68 (use an equally weighted point system including broadcast experience (enhanced by the length of experience,  x the areas of expertise and how they relate to the overall success of a new start up broadcast system), past local  x residence (enhanced by civic involvement, daytime [sic] preference, and best practical [sic] service, but remand the  xx case to the ALJ if this changes the outcome); J. McCarthy Miller & Biltmore Forest Broadcasting FM, Inc. at 810  xg (decide all cases within 90 days based only on broadcast experience enhanced if in the service area, length of  x experience, and ownership share); Orion Communications Limited at Exhibit 1 (rely on enhancement factors  x (broadcast experience, broadcast record, local residence in the proposed service area, civic participation of parties  xb in proportion to their equity interests without regard to minority or female ownership), efficient use of the frequency,  xH and diversification); Susan M. Bechtel at 810 (exclude integration, female ownership and minority ownership); J&M"'!,l(l(u'"  x Broadcasting Co., Inc. at 68 (comparative coverage, past broadcast record, and meaningful civic participation);  {OX' xx HeidelbergStone Broadcasting Co. at 5 (just take out integration; Bechtel does not authorize any modification of the other criteria); Williams Broadcasting Co. at 4 (rely on diversification). "",l(l(,,}"  xxThe value of developing a revised comparative system (and expending the associated administrative costs)  xis further attenuated by the fact that it would only be used for these pending cases (and potentially also  xMa very small number of comparative renewal cases) and would have no future applicability. Thus, we  xconclude that using a system of competitive bidding rather than the comparative hearing process for  xcompeting preJuly 1, 1997 applications that are subject to Section 309(l) will avoid the difficulties and  xpotential delays of developing and defending new or modified comparative criteria to apply in the cases that did not settle during the 180day period that ended February 1, 1998.  S' "%38. Moreover, we are acutely aware of the delay already occasioned in all of the frozen Bechtel  S' x@cases. Section 309(j)(3) provides that "[i]n identifying classes of licenses and permits to be issued by  Sr' xcompetitive bidding," the Commission shall seek to promote "(A) the development and rapid deployment  SL ' xof new technologies . . . for the benefit of the public . . . without administrative or judicial delays."  xV(emphasis added.) As a more general matter, expedited service to the public is an important public  S ' xginterest consideration. We estimate that it would take many years for the Commission's administrative  xlaw judges to adjudicate and decide well over 100 cases. Auctions can be carried out much more quickly.  S ' x*And, whatever the cause of past delay in resolving these cases,i# hO {O8'ԍ See, e.g., Comments of Orion Communications Limited at 6.i we believe that minimizing further delay and now providing new service to the public as quickly as possible best serves the public interest.  S6' "&39. Some commenters favoring the use of comparative hearings for these pending cases express  x7concern that the switch to auctions will detrimentally affect the quality of broadcast service. They focus  xparticularly on the impact that auctions will allegedly have in terms of securing service that is narrowly  S' xtailored to the needs of the small, local community.$|hO {O'ԍ See, e.g., Comments of Wolfgang V. Kurtz at 12; Cromwell Gro up, Inc. at 12. As to these more general policy concerns, however,  xCongress itself has made the judgment that auctions are generally preferable to comparative hearings by  xrequiring them for commercial broadcast applications filed on or after July 1, 1997. In giving us  x7discretion to determine whether or not to use auctions in pending cases, we believe Congress intended us  xto focus on any special circumstances in these cases that would tip the policy balance in favor of  xkcomparative hearings, not to revisit the general congressional determination that broadcast auctions serve  xthe public interest. In any event, it is far from clear that a licensee that wins its license in an auction has  xless incentive to serve the needs and interests of the community than one who wins in a comparative  S~'hearing.%~hO {O,!' x@ ԍ Cf. Bechtel II, 10 F.3d at 884 ("absentee owners thus have strong incentives to ensure that their station complies with the relevant statutes and rules").  S.' "~'40. Moreover, auctions will have significant public interest benefits. In a 1997 report to  xpCongress, we indicated that our experience with auctions shows that competitive bidding is a more  xefficient and costeffective method of assigning spectrum in cases of mutual exclusivity than any"h %,l(l(,,"  S' xpreviously employed method, including comparative hearings.~&hO {Oh'ԍ The FCC Report to Congress on Spectrum Auctions, 13 FCC Rcd 9601, 9612 (1997).~ And, as we stated in the Notice, 12 FCC  xRcd at 22371 ( 18), we have relied on the relative advantages of auctions which also include the public  xinterest benefits of encouraging the efficient use of the frequency, assigning the frequency to the eligible  x<party that values it the most and recovering for the public a portion of the value of spectrum made  xavailable for commercial use in other contexts in which we have faced a choice of either using  xcomparative hearings or a system of competitive bidding to resolve mutual exclusivity among license applicants. We believe many of these same benefits will apply in this context.  S' "(41. We continue to believe, moreover, that there is no inherent unfairness in using auctions to  xgresolve mutual exclusivity among these preJuly 1, 1997 applications. Commenters are correct that all  xof these applicants, including those not designated for hearing, filed in response to public notices stating  SJ ' xMthat mutual exclusivity would be resolved by the comparative hearing process.'J ZhO {OD ' x ԍ See, e.g., Comments of Stephen M. Cilurzo at 23; Rio Grande Broadcasting Co. at 3; HeidelbergStone Broadcasting Co. at 3. Most, however, filed  S" ' x7after Bechtel II and the institution of the comparative freeze, which made it clear that some change in the  x3existing comparative criteria was inevitable. While possibly filing with the expectation of participating  xgin a comparative hearing, these applicants clearly had no basis to rely on a particular selection scheme.  S ' x And, as to those that filed before Bechtel II, the court's holding in that case legally precludes us from  xdeciding their pending applications in accordance with their reasonable expectations when they filed their applications.  S' ")42. Additionally, it is by no means certain that an applicant that formulated its comparative  S' xcproposal based on the criteria in effect before Bechtel II will have a better chance of prevailing in a  xcomparative hearing than in an auction. This uncertainty, moreover, is unaffected by the strength of its  S' xcomparative proposal under the preBechtel II criteria. The difficulty is that integration, although one of  xseveral factors used to predict which applicant will offer the best service, was nevertheless a crucial  SJ' xelement of the comparative scheme before Bechtel II. Specifically, quantitative integration (i.e., the extent  xto which the owners would manage the station on a daytoday full time basis) determines the credit  xawarded for a variety of qualitative enhancement factors, such as local residence, civic participation,  xbroadcast experience, past broadcast record and minority ownership. Elimination of this criterion, even  xif all other criteria are retained, may therefore have a profound, largely unpredictable impact on all  xcomparative proposals. Given the pivotal role assigned to quantitative integration and particularly its  xpotential to diminish or nullify all credit for a multiplicity of possible enhancement factors, we cannot  xpredict how an applicant will fare under such a modified comparative system. Nor can we replicate the  S ' x&remaining standards existing before Bechtel II in a manner that would preserve the applicants' relative  S'comparative standing prior to Bechtel II.  S' "*43. And, although the switch to auctions requires that pending applicants spend additional funds  Sp' xto participate in the auction, the statute requires that such auctions be limited to the pending applicants.  SJ' xSee Section 309(l)(2), 47 U.S.C.  309(l)(2). This insulates them from having to bid against applicants  xnot previously incurring costs to secure the license and ensures that these previous expenditures will not  xunfairly disadvantage the pending applicants in the auction. In all likelihood, the amounts bid for the  S!' xlicenses in these cases will reflect the significant amounts already expended by all qualified bidders. In  xthese circumstances, and particularly given that we may not lawfully consider the integration criterion after""',l(l(,,j!"  S' xBechtel II, we believe that deciding the competing preJuly 1, 1997 applications by auction entails no  xinherent unfairness to any of these applicants, including those that had filed their applications before the  S'Bechtel II decision.  Sd' "_+44. We disagree with commenters that changing the selection process for pending applications  S<' xfiled before July 1, 1997 is impermissibly retroactive or otherwise unlawful.(<hO {O' x ԍ See, e.g., Comments of Susan M. Bechtel at 68; Lindsay Television, Inc. at 810; Throckmorton Broadcasting, Inc. at 34. As we indicated in the  S' xNotice, 12 FCC Rcd at 2236970 ( 14), our statutory authority to alter the way we process applications  xand to apply the amended processing rules to pending applications is well established. The seminal case  S' xis United States v. Storer Broadcasting Co., 351 U.S. 192, 202 (1956), where the Supreme Court upheld  xthe dismissal without a hearing of an application based on a rule adopted after the application was filed.  Sx' x7Following Storer, the courts have consistently recognized that filing an application creates no vested right  SR ' x7to a hearing, and that an application may be dismissed if the substantive standards subsequently change.)R "hO {O' xM ԍ See, e.g., Chadmoore Communications, Inc. v. FCC, 113 F.3d 235, 24041 (D.C. Cir. 1997) (permitteehad  x no vested right in a particular outcome of its extension request that was abridged when the Commission dismissed  {O' x that request pursuant to a subsequent, more restrictive rule); Hispanic Information & Telecommunications Network  {Op' xp v. FCC, 865 F.2d 1289, 129495 (D.C. Cir. 1989), citing Storer Broadcasting, 351 U.S. at 197 (upholding the  x dismissal without a comparative hearing of an application for an Instructional Television Fixed Service license  x pursuant to a subsequently adopted rule establishing a one year period during which local ITFS applicants had  {O' x absolute priority over nonlocal applicants). See also Committee for Effective Cellular Rules v. FCC, 53 F.3d 1309  x (D.C. Cir. 1995) (permissible for the Commission in a noticeandcomment rulemaking to make technical changes  yO\'in the definition of the service areas applicable to all existing licensees).   xThe preJuly 1, 1997 applicants, whether their applications are pending on the processing line or have been  xdesignated for hearing, have no vested right to a comparative hearing that is abridged by our decision to  x*award such authorizations by a system of competitive bidding. Thus, resolving these cases by auction is  S ' xnot a retroactive rule and is not unlawful under Bowen v. Georgetown University Hospital, 488 U.S. 204  S ' x(1988), because this does not "impair rights a party possessed when [it] acted, increase a party's liability  Sf' xDfor past conduct, or impose new duties with respect to transactions already completed."*f hO {O' xp ԍ Landgraf v. USI Film Prods., 511 U.S. 244, 280 (1994). See also DIRECTV, Inc. v. FCC, 110 F.3d 816,  yO' x 82526 (D.C. Cir. 1997) (FCC's explicit policy to allocate surrendered direct broadcast satellite (DBS) channels to  {O' x existing licensees did not create a right that was retroactively abridged under Landgraf when the Commission decided  {O\' x2 that allocating them through competitive bidding would better serve the public interest); Chadmoore Communications,  {O&' x Inc. v. FCC, 113 F.3d 235, 24041 (D.C. Cir. 1997) (denial of a request for an extension of time to construct based  {O' x| on a subsequent, more restrictive rule is not retroactive under Landgraf because the rule in effect when the permittee sought an extension did not establish a "right" to a given outcome).  Nor is Section  x309(l) retroactive "merely because it is applied in a case arising from conduct antedating the statute's  S'enactment . . . or upsets expectations based in prior law." Landgraf, 511 U.S. at 269.   S' "+,45. Rather, our authority to resolve these cases by auction rather than by comparative hearing  xydepends upon whether that decision is arbitrary and capricious. In this regard, we note that the  xMCommission was upheld in its previous determination to decide by lottery cellular applications that had  SP' xbeen filed with the expectation that mutual exclusivity would be decided by comparative hearing. See  S*' xMaxcell Telecom Plus, Inc. v. FCC, 815 F.2d 1551, 1555 (D.C. Cir. 1987). There, as here, legislation  x@afforded the Commission an alternative to deciding mutually exclusive license applications through the"D*,l(l(,,G"  xcomparative hearing process. Moreover, in contrast to this situation, there was no legal impediment to  xthe Commission resolving the pending cellular applications according to the applicants' original  S' xexpectations. Nevertheless, the court in Maxcell, after evaluating the impact of the regulatory change on  S' xpending applicants, concluded that the Commission's overriding concern with the efficient processing of  xcellular applications fully justified the Commission's decision to use lotteries rather than comparative hearings to decide pending applications. Similar considerations justify our decision to use auctions here.  S' "-46. We disagree with commenters that Maxcell is distinguishable either because none of the pre xJuly 1st applicants had notice of a possible regulatory change, or because the switch to auctions requires  S' xthat such applicants make additional expenditures to pursue their bid for licenses.y+hO {O 'ԍ See Comments of Susan M. Bechtel at 67; Lindsay Television, Inc. at 89.y As noted above, as  St' xa result of Bechtel II, whatever the Commission decides regarding the pending frozen cases, the process  SN ' xwill be different than when the preBechtel II applications were filed. And the postBechtel II applicants  xxwere on notice that whatever system we adopted would have to be different from the integrationcentered  S ' xsystem struck down in Bechtel II. Moreover, as noted above, any adverse financial impact of having to  xMparticipate in an auction is mitigated somewhat by the statutory requirement that any auction to decide  xthese cases be limited to the pending applicants for a particular license. Thus, using auctions to resolve  S ' x&the preJuly 1st applications is not arbitrary and capricious or impermissibly retroactive. And, from a  xMpublic interest standpoint, we believe that, on balance, any adverse financial or equitable impact on the  x^pending applicants is overcome by the strong public interest in the public receiving new broadcast service  xas quickly as possible and other benefits of auctions, particularly given the legal impossibility of deciding  S'any of these cases based on the comparative criteria in effect before Bechtel II.  S' "8.47. Finally, neither the statute nor our proposed implementation of the statute involves a denial  xof equal protection or the taking of property without due process under the Fifth Amendment, as argued  SL' xby some commenters.,ZLZhO {OF' x ԍ See Comments of Susan M. Bechtel at 34; Lindsay Television, Inc. at 67; Willsyr Communications, LP at  x 3031 (Equal Protection, Due Process and Fifth Amendment). Comments of Lauren A. Colby at 2 (Fifth Amendment  yO'Taking and Due Process). Comments of Throckmorton Broadcasting, Inc. at 12 (Due Process).  Pursuant to Section 309(l)(2), only persons filing applications before July 1, 1997  xDwill be allowed to participate in the auction. No equal protection issue ever arises because the law applies  xMequally to these pending applicants, none of which knew when they filed their applications that mutual  x&exclusivity would be resolved by auction. No other persons will be qualified to participate in auctions  S' xinvolving applicants in the frozen Bechtel cases. Moreover, the shift to auctions is supported by strong public interest reasons.  S6' "/48. We also disagree with commenters that there is a violation of due process because applicants  x3who have expended considerable sums to prepare, and in some instances prosecute, their applications  x7through the comparative hearing process now face the prospect, by virtue of an unforeseeable regulatory  xchange, of either abandoning their considerable investment or spending additional funds to participate in  S' xan auction.-|hO {O$'ԍ See, e.g., Comments of Lauren A. Colby at 23; Susan M. Bechtel at 4; Lindsay Television, Inc. at 6. As indicated above, whatever the expectations of these applicants, they had no vested  xtinterest in having their applications decided by a comparative hearing, and the impact of this regulatory  xchange is ameliorated somewhat by the statutory requirement that auctions to decide these cases be closed  x@to other participants. In these circumstances, a decision to resolve the pending applications through a" -,l(l(,,"  xsystem of competitive bidding pursuant to subsequent legislation expressly authorizing such resolution thus does not deprive them of due process.  S' "049. The statute is also not a taking of property without just compensation in violation of the Fifth  xAmendment. The payment of regulatory fees, in this case hearing and filing fees, does not constitute a  xtaking under the Fifth Amendment regardless of whether such fees accurately reflect the cost to the  S' xCommission of processing the applications in question..ZhO {Ox' x} ԍ Longshore v. United States, 77 F.3d 440 (Fed. Cir.), cert denied, 117 S.Ct. 52 (1996) (rejecting claim of  x disappointed cellular applicant that application fee levied by Congress constituted an unlawful taking of property under the Fifth Amendment because it exceeded the Commission's processing costs).  And, in any event, as proposed in the Notice,  x12 FCC Rcd at 2237071 ( 16), we will refund upon request all hearing fees actually paid by applicants  xin proceedings in which the construction permit is awarded by auction rather than by comparative hearing,  x3and all filing fees paid by preJuly 1, 1997 applicants within the scope of Section 309(l) who elect not to participate in the auction.  S" ' "h150. We decline the suggestion of various commenters that we go further and reimburse the  xMlegitimate and prudent expenses of applicants who either do not participate in the auction or are outbid  S ' xtin the auction.6/$ hO {O\' x  ԍ See, e.g., Comments of United Broadcasters Company at 10; Rio Grande Broadcasting Co. at 89; Marri  yO&' x Broadcasting, LP at 45; Dewey Matthew Runnels at 45; Howard G. Bill at 45; HeidelbergStone Broadcasting Co.  {O' x& at 89; Grass Roots Radio, Inc. at 23; Willsyr Communications, LP at 3233; Roy F. Perkins, Jr. at 12; Liberty Productions, LP at 34; Columbia FM Limited Partnership at 7. 6 As indicated above, whatever the expectations of these applicants, they had no vested  x@interest in having their applications decided by a comparative hearing, and the impact of this change is  x*ameliorated somewhat by the statutory requirement that auctions to decide these cases be closed to other  xparticipants. In these circumstances, a decision to resolve the pending applications instead through a  xsystem of competitive bidding, pursuant to subsequent legislation expressly authorizing such resolution,  S ' xdoes not, as some have argued,0 hO {O'ԍ See, e.g., Comments of Lauren A. Colby at 23; Susan M. Bechtel at 4; Lindsay Television, Inc. at 6. deprive them of due process or constitute a taking without just  xxcompensation. Courts have, as commenters note, allowed compensation for losses incurred as a result of  S' xan unanticipated regulatory shift,1h hO {O'ԍ See, e.g., Comments of Willsyr Communications, LP at 3233; Lauren A. Colby at 2. ĉ but they have done so only pursuant to a contract in which the  S' xgovernment expressly agreed to indemnify private parties against the risk of such a regulatory shift.2 hO {O,' x" ԍ In United States v. Winstar Corp., 116 S.Ct. 2432 (1996), several financial institutions sued a federal  x% regulatory agency when congressional legislation precluded the agency from honoring a contractual promise regarding  xH accounting practices and this change resulted in the closure of the institutions. Recovery was permitted because of  x. an express contractual promise, in which the government agreed to indemnify the thrift institutions against financial  {ON"'loss as a result of a regulatory change.  ċ  Sj' xThus, even assuming arguendo, that we had the legal authority to reimburse these applicants,3jhO yO$' x ԍ These commenters do not suggest any legal authority through which we could make such payments and we are aware of none. we have  xno obligation to reimburse the pending applicants' expenses in prosecuting applications filed with the expectation of participating in a comparative hearing, and we decline to do so. "3,l(l(,,"Ԍ S'ԙ 3. Treatment of Pending Hearing Cases " S' ""251. In the Notice, 12 FCC Rcd at 22372 ( 22), we sought comment on whether, even if we  xdecide to use competitive bidding procedures for most cases involving preJuly 1, 1997 applications, we  xshould nevertheless use comparative hearings for the approximately 20 cases that had progressed at least  S:' xMthrough an Initial Decision by an Administrative Law Judge before the court held in Bechtel II that the  x&principal criterion previously used by the Commission to predict which applicant would offer the best  xservice (integration) was unlawful. In this context, we asked for comment on whether the resources these  xtapplicants have expended, as well as the delays they have experienced, raise special equitable concerns  x/that should lead us to resolve this group of cases through the comparative process. Following the  xexpiration of the 180day waiver period for settlements prescribed by Section 309(l)(3) and discussed in  SL ' xSection III(C)(1) below, fewer than ten hearing cases in which the applications have progressed at least  x*through an Initial Decision by an Administrative Law Judge remain for resolution either through a system  S 'of competitive bidding or the comparative hearing process.z4 hO yOd 'ԍ The number could be somewhat larger if not all pending settlements are approved.z  S 4 "}352. Discussion . We agree with those commenters who argue that, even for the small number of  xcases that have progressed at least through an Initial Decision, auctions better serve the public interest than  S]' xcomparative hearings.5]XhO {OU' xV ԍ See, e.g., Comments of Columbia FM Limited Partnership at 6; KM Communications, Inc. at 2; Reply Comments of WB Television Network at 67; Irene Rodriquez Diaz de McComas at 34. We recognize that these applicants have spent considerable time and money  S5' xprosecuting their applications before Bechtel II, and that as a result of that decision, our consideration of  xlits implications, and congressional consideration and enactment of auction legislation, they have  S' xexperienced significant delays in obtaining a final decision as to the selection of the licensee.6hO yO9' xH ԍ For these reasons, some commenters urge that we use the comparative hearing process to resolve these cases.  {O' xk See, e.g., Comments of J&M Broadcasting Co., Inc. at 3; Orion Communications Limited at 13; HeidelbergStone  x Broadcasting Co. at 68; United Broadcasters Company at 9; Rio Grande Broadcasting Co. at 7; Stephen M. Cilurzo  yO' x at 46 (also cites mental anguish and stress as equitable factors); Lisa M. Harris at 78; Breeze Broadcasting Co.,  x" Ltd. at 34; Reply Comments of Galaxy Communications, Inc. at 2; Letter of Anchor Broadcasting Limited Partnership at 3. These  xcircumstances, however, do not outweigh the additional delays, uncertainty and administrative costs that  x*would be incurred by resolving these cases through the comparative hearing process and which led us to  So'decide to resolve pending cases through auction. See supra discussion at  3443.  S!' "453. We disagree with those commenters who argue that these cases, which have already  xprogressed at least through an Initial Decision, can be expeditiously resolved through the hearing process  S' xand that it would be arbitrary and capricious to ignore the results of the prior hearing.7, hO {O"'ԍ See, e.g., Comments of Lisa M. Harris at 78; Breeze Broadcasting Co., Ltd. at 34. Despite the  xcompilation of a hearing record in these cases, we anticipate that their resolution through the hearing  xprocess will not be expeditious, and that auctions for these cases will much more likely expedite service  xtto the public. Our experience with the hearing process gives us reason to believe that these cases will"Y 7,l(l(,,"  S'likely involve significant litigation over points of questionable public interest significance.8hO {Oh' x ԍ See, e.g., Colonial Communications, Inc., 5 FCC Rcd 1967 (Rev. Bd. 1990), review denied, 6 FCC Rcd 2296  {O2' x (1991), recon. dismissed, 7 FCC Rcd 674 (1992) (lengthy litigation over the relative comparative significance of past  x continuous local residence of several years' duration versus childhood local residence plus current residence for a  {O' x short period); Ronald Sorenson, 6 FCC Rcd 1952 (1991) (litigation over relative comparative significance of longer  {O' x local residence versus greater involvement in civic activities); Greater Wichita Telecasting, Inc., 96 FCC 2d 984  x. (1984) (litigation over relative comparative significance of ownership of two distant television permits versus limited media interests in local market plus distant CATV interests).  S' "554. This is particularly true because the key comparative criterion integration will no longer  xexist and the Commission would be required to articulate a revised comparative criteria system. To the  S`' xcextent that new criteria would be adopted, as some commenters urge,9`hO {O 'ԍ See, e.g., Comments of Cromwell Group, Inc. at 2; Reply Comments of Howard G. Bill at 3. we would need to allow an  xopportunity for applicants to supplement the record. In the event factual disputes were to arise with  xrespect to such supplemental filings (which they almost certainly would), and perhaps in any event,  xsupplemental hearings and supplemental Initial Decisions would be required. If the Commission simply  xused the remaining criteria and qualitative enhancements (with the qualitative enhancements considered  x7as standalone comparative criteria), and articulated a clear new weighting system, supplemental hearings  xand supplemental Initial Decisions might be avoidable. But we would still need to allow supplemental  x3pleadings for applicants to evaluate themselves and the other applicants under the revised comparative  x^system. We are confident every applicant would argue it should win and the competing applicants should  xlose, and that they would press their views vigorously. Even assuming that all of this could be decided  xdirectly by the Commission without a remand to the ALJ in every case, this process would be time xDconsuming. Thus, while it would not take as much time as those cases that have not been designated for hearing, we believe it would be far more timeconsuming than if we held auctions.  S0' "E655. For all these reasons, we anticipate that, even though the timeconsuming tasks associated  xwith prosecuting a case through an Initial Decision have been completed, resolving these cases through  xthe comparative process would further delay service to the public, and thus would not serve the public interest.  Sh' "}756. We recognize that the switch to auctions requires further expenditures by applicants who have  x&already made substantial expenditures in reliance on established Commission procedures for awarding  xcommercial broadcast licenses where there are mutually exclusive applications. As noted above, however,  xSection 309(l)(2) provides that, in the event auctions are held to resolve cases involving preJuly 1, 1997  xapplications, only the pending applicants are eligible to be qualified bidders. This means that the pending  x*applicants will be bidding only against the competing applicants that have spent the same amount of time,  xand presumably incurred similar expenses, in prosecuting their applications through a comparative hearing.  xIn this manner, the pending applicants will not be unfairly disadvantaged in the auction as a result of  xprevious expenditures to secure the license. Rather, as in the case of applicants not designated for hearing,  xwe would expect that the price ultimately paid for the license will reflect the expenditures incurred by all qualified bidders in prosecuting their longpending applications. "9,l(l(,,"Ԍ S' "857. One commenter:hO {Oh'ԍ See Comments of J. McCarthy Miller and Biltmore Forest Broadcasting FM, Inc. at 14. suggests that, although Section 309(l)(2) clearly prohibits the Commission  xfrom opening new filing periods for additional applications that would be included in auctions involving  xpreJuly 1st applications, it nevertheless leaves open the question of new investors or participants in  xexisting applications. We recently amended our Part 1 rules to prescribe uniform ownership disclosure  xstandards requiring applicants filing shortform applications for future auctions to identify controlling  S8' x&interests as well as all parties holding a 10% or greater interest. See Third Report and Order, 13 FCC  xRcd at 418420. To the extent that the comments urge that we require preauction disclosures of all new  xxowners or parties, we disagree that either the letter or the spirit of Section 309(l)(2) warrants the adoption  xof special disclosure standards for applications that are subject to Section 309(l)(2). Thus, for such  xkapplications we will require the reporting prior to the auction of any changes in the ownership information  xrequired by our uniform Part 1 disclosure standards. We nevertheless agree that, consistent with Part 1  xgrules providing that a shortform application is considered to be newly filed if it is amended by a major  S" ' xamendment (see 47 C.F.R.  1.2105(b)(2)), a change in the control of an application otherwise subject  x_to Section 309(l) would render the existing applicant ineligible to participate in an auction that is statutorily limited to preJuly 1st applicants.  S ' "958. We also note that proceeding with hearings and concomitant litigation will also be costly for  xall the applicants. Thus, given the circumstances, additional costs cannot be avoided. Even assuming that  xgthe winning bid in an auction will exceed the additional litigation costs the winner would have to pay in  xa hearing, all the applicants would incur further litigation expenses. It is not at all clear that it is fairer  xDto all the applicants, particularly to those who eventually lose in a hearing, to make them incur significant,  xadditional hearing expenses as a tradeoff for the possibility that the winner's expenses may be less than  xgin an auction. Given the difficulty of predicting who would win under the revised comparative criteria  Sl' xVif we resolved these cases through the comparative hearing process (see supra  42), we think it is appropriate to focus on fairness to the class as a whole, not just on the winning applicants.  S' ":59. In addition, we are ameliorating the impact of additional expenses by refunding all hearing  S' x"and certain filing fees. See infra  101104. In sum, the public interest in getting new service to  xcommunities long awaiting such service as soon as possible under the circumstances, when combined with  xQthe other public interest benefits of auctions, discussed above, outweigh, in our view, any adverse impact  SX' xon these pending hearing applicants of requiring them to participate in an auction.;ZXZhO yOR' xZ ԍ We also note that the value of developing a revised comparative system (and expending the associated  x administrative costs) would be even less for this small class of cases (as well as the small class of pending  {O'comparative renewal cases) than the broader class of pending cases. See supra  37.  The auction  xQprocedures for these pending hearing cases are set forth in Section III(C)(1), below. These cases should be set for auction particularly quickly in light of how long they have been pending.  S' \ C. General Rules and Procedures for Competitive Bidding  S@' 1. Pending Comparative Initial Licensing Cases Subject to Section 309(l)  S 4 ";60.  Scope of Section 309(l) . Having decided to exercise our discretion under Section 309(l)(1)  x3to resolve through competitive bidding all applications that are subject to that provision, we must now"!|;,l(l(,, "  xDestablish the rules for the auctions. Paragraph (2) of Section 309(l) restricts the persons we may treat as  xqualified bidders eligible to participate in a competitive bidding proceeding conducted to resolve these  x!pending cases, and paragraph (3) prescribes special settlement provisions, discussed below, for these cases.  x^To determine whether these paragraphs apply to particular applicants and proceedings, however, we need to define the scope of pending cases covered by Section 309(l).  S8'   S' "<61. By its express terms, Section 309(l) applies to "competing applications for . . . construction  x3permits for commercial radio or television stations that were filed with the Commission before July 1,  xV1997." Paragraph (2), in contrast to the permissive language in paragraph (1), mandates that if the  xCommission exercises its discretion to use competitive bidding in these cases it "shall . . . treat the persons  x+filing such applications as the only persons eligible to be qualified bidders for purposes of such  SH ' x[competitive bidding] proceeding [to assign such license or permit]." In the Notice, 12 FCC Rcd at  xg2237374 ( 24), we tentatively concluded that Section 309(l) did not apply to a single application filed  xMbefore July 1, 1997. We relied in this regard on the express reference in Section 309(l) to "competing  xkapplications." Thus, in the event one or more applications filed after June 30, 1997 are mutually exclusive  xwith a single preJuly 1, 1997 application, we tentatively concluded that an auction was mandated under  xSection 309(j) and that the special Section 309(l) provisions concerning bidder eligibility and settlements would not apply.  S ' " =62. In contrast, we tentatively concluded, Notice, 12 FCC Rcd at 22374 ( 25), that Section  xZ309(l) did apply whenever two or more mutually exclusive preJuly 1, 1997 applications are filed. We  xgfound further that paragraph (2), which dictates that "only persons filing such applications" are eligible  xto be qualified bidders, may require the dismissal of postJune 30, 1997 applications in certain  x*circumstances. In this context, we considered the consequences of a filing period, which opened before  xJune 30, 1997 but closed after that date. We tentatively concluded that, in the event two or more  xapplications were filed before July 1, 1997, any mutually exclusive applications filed after June 30 1997,  xbecause they are ineligible under paragraph (2) to be qualified bidders, must be dismissed. Recognizing  xthat this is a harsh result, particularly when it requires the dismissal of applications timely submitted  xwithin an announced filing period, we asked for comment on whether there are other legally permissible interpretations of this provision.  S,4 "E>63.  Discussion . We continue to believe that, where postJune 30th applications are mutually  x@exclusive with two or more preJuly 1, 1997 applications, we are statutorily compelled by the express  x<language of Section 309(l)(2) to dismiss them and conduct a competitive bidding procedure that is  S' x"restricted to the preJuly 1, 1997 applications. We also believe that given the express reference to  x"competing applications" in Section 309(l), this provision does not apply to a single preJuly 1, 1997  xapplication. It is well established that statutory construction must begin with the language employed by  xCongress and the assumption that the ordinary meaning of the language accurately expresses the legislative  S ' xpurpose.S< hO {O}"'ԍ See cases listed in note 30 above. S With this principle in mind, we turn first to the issue of eligibility to participate in the auction.  xParagraph (2) unambiguously provides that the Commission "shall . . . treat the persons filing such  S!' x}applications as the only persons eligible to be qualified bidders," and the Conference Report, at 573,  S"' x/confirms that "[t]he Commission shall limit the class of eligible applicants who may be considered  xqualified bidders . . . to the persons who filed applications with the Commission before that date [July 1,  x1997]." (emphasis added.) Thus, we confirm our tentative conclusion that we are statutorily precluded  xfrom permitting postJune 30th applicants to participate as qualified bidders in a competitive bidding")%Z<,l(l(,,#"  xprocedure conducted to resolve mutual exclusivity among two or more preJuly 1, 1997 competing  xapplications. Given our decision to use competitive bidding procedures for these cases, we must therefore dismiss any such mutually exclusive applications filed after June 30, 1997.  S`' "?64. Several commenting parties complain that the distinction between applications filed before  S8' xgJuly 1 and after June 30 is arbitrary.=8hO {O' x3 ԍ See, e.g., Comments of George S. Flinn at 34; Robert B. Mahaffey at 47. But see Comments of Pappas Telecasting of America at 23. None, however, offers an alternative, legally persuasive reading  xof the statute that would permit us to include postJune 30th applications in any competitive bidding  xprocedure involving mutually exclusive preJuly 1st applications. Nor have they cited relevant precedent  x authorizing us to vary from the plain meaning of the statutory provision. Rather, Congress adopted a  xbright line distinction. That such a distinction operates to exclude some applicants but to include others  x3does not make it unlawful. Moreover, the practical effect of this bright line distinction will be limited,  xZas we believe that settlement agreements have been filed in connection with the small number of cases  xinvolving postJune 30th applications mutually exclusive with two or more preJuly 1, 1997 applications.  S ' "@65. The express language of Section 309(l) likewise governs the resolution of the second issue,  xMregarding the applicability of any portion of Section 309(l) to singleton applications filed before July 1,  x1997. Given the unambiguous reference in Section 309(l) to "competing applications . . . filed with the  xCommission before July 1, 1997," we are not persuaded that any of its special provisions (regarding bidder  xeligibility or the 180day period during which certain settlement rules were waived) apply to a singleton  xapplication filed before July 1, 1997. Thus, whether we should grant preJuly 1st singleton applications,  xor alternatively open new filing periods and conduct auctions in those instances in which mutually  x}exclusive applications are filed, is governed by Section 309(j)(1) rather than by Section 309(l). But  Sh' xSection 309(j) is silent on this question (see infra  106), making it appropriate to look to the legislative  xDhistory to determine what Congress intended with regard to singleton applications. The legislative history  xaddresses this point at least with respect to situations in which there are no mutually exclusive applications  x"because the Commission has yet to open a filing window." Specifically, "the conferees expect that,  xregardless of whether the [singleton] application was filed before, on or after July 1, 1997, the  x/Commission will provide an opportunity for competing applications to be filed, consistent with the  Sz' xRCommission's procedures,"F>z"hO yO<'ԍ Conference Report at 57374.F and employ competitive bidding to assign the license if competing  xapplications are filed. Where the filing windows or cutoff lists have closed, however, we agree that it  S*' xis appropriate to grant pending singleton applications.?*hO {O| ' x ԍ See Reply Comments of Press Communications, LLC at 4; Reply Comments of WB Television Network at 89; Comments of De La Hunt Broadcasting Corp. at 2. Such applications, even if filed before July 1,  x1997, are outside the express scope of Section 309(l)(2). Neither the language of Section 309(j)(1) nor  x@its accompanying legislative history suggests that Congress intended to require that we reopen already  xclosed filing periods if there is only one pending application. Particularly given our obligations under  xSection 309(j)(6)(E) to avoid mutual exclusivity, nothing in the requirement in Section 309(j) to use  xcompetitive bidding procedures to resolve mutually exclusive applications provides a basis to create a  xfurther opportunity for the filing of mutually exclusive applications where, despite an opportunity to file  xcompeting applications, there is only one pending application. The possibility of our opening an already"  ?,l(l(,,"  S' xclosed filing period exists only in the event that there are pending mutually exclusive applications not  S' xxsubject to Section 309(l). See infra  105109. To the extent that we suggested otherwise in the Notice, we correct that impression here.  Sd4 "A66.  Pending Applications With Waiver Requests of the Freeze on Television Applications . In  xa related context, we have received a number of comments asking us to clarify whether Section 309(l)(2),  xwhich insulates preJuly 1, 1997 applicants from competition with postJune 30, 1997 applicants in the  x7event of an auction, applies to analog television applications submitted for filing before July 1, 1997 along  xwith requests for waiver of the permanent freeze on applications for new analog television broadcast  S' xgstations.@&hO {O ' xQ ԍ The commenting parties are divided on whether Section 309(l) applies. Several urge that it does apply. See  {O ' x Comments of Davis Television Duluth, LLC, et al. at 38; Reply Comments of Arnold Broadcasting, Inc. at 24.  {O ' xM Others take the opposing view. See Comments of Gulf Coast Broadcasting, Inc. at 68; New Life Evangelistic Center, Inc. at 24. By way of background, we note that the Commission announced in July 1996 that it would  xno longer accept applications for any vacant NTSC allotment, but it provided an additional 30day period  SN ' xg(until September 20, 1996) for the filing of such applications. Advanced Television Systems and Their  S( ' xxImpact upon the Existing Television Broadcast Service (Sixth Further Notice), 11 FCC Rcd 10968, 10992  xQ(1996). At that time, the Commission indicated that it would continue to process on a casebycase basis  x*pending requests for waiver of the 1987 freeze that involved the top 30 television markets, as well as any  xwaiver requests filed during the 30day period. It pledged further that, in the event it granted any waiver  xrequests and accepted the related television applications, it would "continue [its] process of issuing Public  xNotices that cutoff' the opportunity for filing competing, mutually exclusive applications [and] . . .  S:'w[ould] allow additional competing applications to be filed." Id. at 10992 (1996).  S' "B67. At issue here is whether pending applications with waiver requests, all filed before July 1,  x1997, are subject to the provisions of Section 309(l), and in particular the extent to which Section  x309(l)(2) precludes the acceptance of additional applications that would be eligible to compete in any  xauction employed to resolve mutual exclusivity among any preJuly 1, 1997 analog television applications  xaccepted for filing. We conclude that the pending applications with waiver requests constitute  x"applications . . . filed with the Commission before July 1, 1997" within the meaning of Section 309(l).  xWe discern no distinction in the statutory language, or in the accompanying legislative history, between applications filed with waiver requests and applications submitted without waiver requests.  S' "C68. Thus, to the extent that there are multiple pending applications with waiver requests for a  xDsingle television allotment, that, if granted, would result in mutually exclusive applications, the restrictions  x@on bidder eligibility set forth in Section 309(l)(2) would apply. We disagree that these applications are  xbeyond the scope of Section 309(l) because no file number was assigned, no public notice was issued, and  xno cutoff list was published. We recognize that there is some degree of unfairness in this result,  x&particularly given our explicit pledge to provide an opportunity for the filing of competing applications  xgwith respect to any analog television application that we accepted. We believe, however, that we have  xpno choice under the statute. The language of paragraph (2) is unambiguous that, where competing  xapplications were filed with the Commission before July 1, 1997, "the Commission shall .. . treat the  xpersons filing such applications as the only persons eligible to be qualified bidders." The situation of  xprospective applicants deprived of the opportunity to file competing applications by our grant of multiple  xwaiver requests for a single allotment is analogous to that of postJune 30th applicants that are similarly  xZineligible to participate in an auction because more than one application was filed with the Commission""@,l(l(,,j!"  S' xbefore July 1, 1997 during an open cutoff period.=AZhO {Oh' xx ԍ See Comments of New Life Evangelistic Center, Inc. at 12, urging the publication of an A cutoff list so that  x; it can file an application that would be mutually exclusive with two pending applications for Channel 14 at Pittsburg, Kansas.= We note that these pending, potentially mutually  xexclusive applicants, who filed applications with freeze waiver requests before July 1, 1997, would not  xZbe entitled to participate in an auction except to the extent that we grant particular waiver requests and  S' xZaccept the related applications.BZhO yO' x ԍ One commenter requests that we dismiss the waiver requests for a single allotment and delete the vacant  {O' x allotment at this time. See Comments of Gulf Coast Broadcasting, Inc. at 89. That request, however, is beyond the scope of this proceeding, as are the merits of individual waiver requests. Pursuant to our determination to use auctions for all applications that  xare subject to Section 309(l), if we grant multiple waiver requests for a single allotment, we will conduct  xan auction that, as required by Section 309(l)(2), will be limited to mutually exclusive applicants who  xsubmitted applications on or before the September 20, 1996 close of the period for filing such  xapplications. No auction would be required, however, where multiple applications with waiver requests  xwere filed but by the time they were processed only one application with a waiver request remained on  xfile. In the event we grant the remaining waiver request, we would simply grant the related preJuly 1,  x@1997 application without soliciting further applications. We believe that this result is compelled by the express language of Section 309(l)(2).  S ' "D69. By contrast, if only one application with a freeze waiver request was filed for a single  xZallotment, such that there would be no mutually exclusive applications, Section 309(l) would not apply  x7because the threshold requirement for "competing applications . . . filed with the Commission before July  x1, 1997" has not been satisfied. Nothing in the Budget Act or the legislative history indicates that, where  xa single preJuly 1st application with a waiver request was filed, Section 309(l)(2) precludes the  x3acceptance of additional applications consistent with our normal practice, that would then be resolved  xthrough a system of competitive bidding pursuant to Section 309(j). Such applications are no different under the statute than other preJuly 1, 1997 applications that were not subject to a cutoff period.  S' "E70. In this regard, we disagree with commenters urging that we may, consistent with the  x*legislative history, grant such single television applications as soon as we grant the freeze waiver request.  x7As noted above, the Conference Report, at 574, reflects that, where no competing applications were filed  xagainst a singleton application because "the Commission has yet to open a filing window," it is expected  x<to provide an opportunity for competing applications to be filed and to use an auction if competing  xapplications are filed. A few commenters urge that the Commission effectively opened a filing window  xfor competing applications when it afforded a 30day period ending on September 20, 1996 for the filing  Sx' xof applications for vacant NTSC allotments before it ceased accepting such applications.}Cx hO {O$!'ԍ See, e.g., Comments of Davis Television Duluth, LLC, et al. at 5.} We disagree.  xThe intent of that 30day period was to afford an opportunity to file any applications that were currently  S(' xbeing prepared for filing, not to solicit competing applications. Sixth Further Notice, 11 FCC Rcd at  x&10992. The Commission did not, for example, publish a list of pending applications with requests for  xwaiver of the 1987 freeze, but promised to provide in the future an opportunity to file competing  x3applications, with respect to any applications with waiver requests filed by September 20, 1996 that it  S' xaccepted. Id. For this reason, we disagree with commenters that, by delaying the effective date of the  xpermanent freeze until September 20, 1996, the Commission effectively opened such a filing period. "dC,l(l(,,g"  xThus, in the event we grant a freeze waiver request and accept a single television application for a NTSC  xallotment filed prior to July 1, 1997, we will, consistent with the statute and the Conference Report, solicit  xadditional applications, and, if mutually exclusive applications are filed, resolve those applications by  S'competitive bidding.   S84 " F71.  Settlements . In the Notice, 12 FCC Rcd at 2237475 ( 26), we tentatively construed Section  x3309(l)(3) to require the Commission to waive any applicable provisions of its settlement regulations to  xpermit applicants subject to Section 309(l) to enter into settlement agreements that remove conflicts among  xtheir applications. We also indicated that, in addition to the mandatory waiver of any regulations  xgoverning settlements among competing broadcast applicants, we were willing to waive certain policies  xto facilitate settlements among pending applicants for new commercial fullpower radio or television  xZstations filed before July 1, 1997, including the prohibition against "white knight" settlements involving  xthe award of a permit to nonapplicant third party where necessary to facilitate a fullmarket settlement  xamong preJuly 1, 1997 comparative broadcast applicants. Based upon the express language of the statute,  S ' xwe concluded that applicants outside the scope of Section 309(l) (i.e., pending applicants for secondary  x broadcast service, postJune 30, 1997 applicants for a new commercial fullpower radio or television  xstation, and a single preJuly 1, 1997 applicant that is mutually exclusive with one or more postJune 30,  x1997 applicant(s) for a new commercial fullpower radio or television station) could not benefit from the waiver.  S' "cG72. Pursuant to Section 309(l)(3), mandating that the Commission "shall . . . waive any provisions  xof its regulations necessary to permit such persons to enter an agreement to procure the removal of a  xconflict between their applications," we have waived the payment limitations set forth in Section 73.3525  xof the Commission's rules, 47 C.F.R.  73.3525, as well as our prohibition against thirdparty  SD' xxsettlements.D^DhO {O' xD ԍ See, e.g, Gonzales Broadcasting, Inc., 12 FCC Rcd 12253, 1225556 (1997) (waiving limitations on payments  {Ov' x to settling applicants); Playa Del Sol Broadcasters, FCC 98I05 (OGC Feb. 12, 1998) (same); Praise Broadcasting  {O@'Network. Inc., FCC 98I03 (OGC Feb. 9, 1998); Charles A. Farmer, FCC 98M20 (ALJ Feb. 12, 1998). Several commenters urge that our settlement policy is too restrictive in excluding postJune  x30, 1997 applicants for new commercial full power radio and television stations (even if mutually  xexclusive with preJuly 1, 1997 applicants) and all pending applicants for licenses to provide secondary  S'broadcast service.pEhO {OZ'ԍ See, e.g., Reply Comments of Paxson Communications Corp. at 10. p  S|4 "H73.  Discussion. We believe that, with one minor modification, our tentative reading of Section  x309(l)(3) was correct. Although we indicated that this provision would apply to settlement agreements  xfiled with the Commission within the 180day period, we believe that the better reading of this provision  xis that it applies to agreements executed within the 180day period and filed with the Commission,  xgpursuant to Section 73.3525(a) of the Commission's rules. We note, moreover, that we have received  xcomments suggesting that only fullmarket settlements among preJuly 1, 1997 applicants are eligible to  S' xtake advantage of the waiver mandated by Section 309(l).~FhO {O$'ԍ See, e.g., Comments of R. L. Schwary at 1; Linear Research Associates at 18. ~ We reiterate that the statutory waiver  xprovision applies to any settlement among preJuly 1, 1997 applicants for a new commercial fullpower  S=' xradio or television station, even if all the applicants are not parties to the agreement. See Notice, 12 FCC  x}Rcd at 22375 ( 27). We will, however, only waive our policy against "white knight" settlements to" F,l(l(,,!"  S' xfacilitate fullmarket settlement agreements among competing applicants. Id. at 2237475 ( 26). See also  S'infra  7879.  S' "II74. Commenters are correct that we have the discretion to waive our settlement rules and policies  xon our own motion to facilitate settlements among applicants outside the scope of Section 309(l) and to  x&extend beyond the 180day period the statutorily mandated waiver for settlements among preJuly 1st  xpapplicants that fall within Section 309(l). As several commenters assert, nothing in the language of  xSections 309(j)(1) or 309(l)(3) or the accompanying legislative history expressly precludes us from  x*waiving our settlement rules and policies on our own motion to accommodate settlement agreements that  S' x&are not expressly within the scope of Section 309(l)(3).GhO {O ' x3 ԍ See, e.g., Reply Comments of WB Television Network at 10; Comments of Grace Communications LC at 7. And, despite the expansion of our authority  xunder Section 309(j) to mandate auctions in certain situations, Congress did not modify our statutory  xobligation under Section 309(j)(6)(E) to use appropriate means "to avoid mutual exclusivity in application  xand licensing proceedings." Indeed, the Commission's continuing obligations under Section 309(j)(6)(E)  S 'were specifically highlighted in the Conference Report.H "hO {O' x ԍ See Conference Report at 572 ("[T]he conferees emphasize that, notwithstanding its expanded auction  x authority, the Commission must still ensure that its determinations regarding mutual exclusivity are consistent with  x the Commission's obligations under section 309(j)(6)(E). The conferees are particularly concerned that the  x^ Commission might interpret its expanded competitive bidding authority in a manner that minimizes its obligations  xQ under section 309(j)(6)(E), thus overlooking engineering solutions, negotiations, or other tools that avoid mutual exclusivity.").   S ' "J75. We are not persuaded, however, that an acrosstheboard waiver for applicants ineligible to  x7take advantage of the waiver mandated by Section 309(l)(3) or a further waiver period for applicants that  xwere eligible to take advantage of the statutorily mandated waiver but did not do so would serve the  x@public interest or comport with congressional intent. Congress made no change in Section 311(c) that  xtwould require a substantial relaxation of our settlement rules generally. Moreover, in an apparent effort  S' xto expedite resolution of the frozen Bechtel comparative cases and at the same time provide an avenue of  S' xrelief to the longpending frozen Bechtel applicants, Congress selected a significant yet not unlimited  xperiod of time during which more liberal settlements were permitted among these applicants. It did not  xmake this waiver openended or extend it to other pending mutually exclusive commercial broadcast  xapplicants, who, by virtue of Section 3002(a) of the Budget Act, are now subject to resolution by  xcompetitive bidding. PostJune 30, 1997 applicants in comparative licensing cases, moreover, were  xDexpressly excluded from the 180day waiver provision. In these circumstances, we believe that a further  xacrosstheboard waiver is not what Congress contemplated and would not further Congress's policy of  xencouraging early settlements of these pending comparative cases. We believe, moreover, that our existing  xsettlement rules and policies are adequate to fulfill our statutory obligation to avoid mutual exclusivity  SX' x7under Section 309(j)(6)(E) for applicants in the frozen Bechtel cases that were not settled by February 1, 1998.  S' "/K76. We emphasize, moreover, that preJuly 1, 1997 applicants, who would have been able to take  xadvantage of the statutorily mandated waiver set forth in Section 309(l)(3) if such agreements had been  xQentered into by February 1, 1998, may still avoid an auction through a settlement agreement that complies  x3with all Commission regulations. This same avenue is available to postJune 30th applicants and to all"jH,l(l(,,Z"  xpending secondary service applications, which fall outside the scope of Section 309(l). Our settlement  S' xrules permit, inter alia, payments to a settling applicant that do not exceed its legitimate and prudent  xkexpenses. We note further that this is the second time that there has been a waiver of the settlement rules  xin an effort to facilitate resolution of the longfrozen comparative initial licensing proceedings. While we  xtagree that a further waiver would not necessarily lead to the kind of abusive filings the settlement rules  S:' xkwere originally intended to discourage,I^:hO {O' x ԍ See Amendment of Section 73.3525 of the Commission's Rules Regarding Settlement Agreements Among  {Ol' x Applicants for Construction Permits, 6 FCC Rcd 85 (1990), recon. granted, 6 FCC Rcd 2901 (1991); Rebecca Radio  {O6'of Marco, 5 FCC Rcd 937, recon. denied, 5 FCC Rcd 2913 (1990).  the settlement period that just ended was fairly lengthy. We have  x@no reason to believe that an additional period would produce settlements in a significant number of the remaining cases.  S' "L77. In these circumstances, therefore, we are not persuaded that fundamental fairness requires a  Sr' xfurther waiver period, particularly given our explicit statement in the Notice that we did not envision  SL ' xwaiving our settlement rules beyond the 180day period that ended February 1, 1998.eJL hO {O'ԍ See Comments of Bledsoe Communications, Ltd. at 23. e In the event that  xpending applicants believe special circumstances warrant a waiver of our settlement regulations and  x*policies, they may submit a waiver request. However, in no event may pending competing applicants for  S ' x*new facilities discuss settlement after shortform applications (FCC Form 175) are due. See infra  155.  xIn accordance with our continuing obligation to avoid mutual exclusivity under Section 309(j)(6)(E) and  xour public interest responsibilities, we will, of course, give full and careful consideration to all such waiver requests.  S4 "M78.  White Knight Settlement Agreements . Three separate questions have been raised relating  xVto the waiver of the prohibition against nonparty settlements that warrant consideration. First, SL  xCommunications urges that the waiver should apply to all comparative proceedings involving preJuly 1,  S' xM1997 applications, even proceedings in which there is only one remaining applicant (e.g., to permit the  Sq' xbuyout by a nonparty of a bankrupt or unqualified applicant). However, as noted in  7173 above, the  SI' xspecial settlement provisions of Section 309(l)(3) apply only to "competing [i.e., mutually exclusive]  S#' xapplications."  Moreover, as we determined in Dorothy O. Schulze and Deborah Brigham, A General  S' xPartnership, 13 FCC Rcd 3259, 3264 (1998), this provision of the Budget Act applies exclusively to cases  xthat might otherwise be resolved by competitive bidding. The discretion to use a system of competitive  xbidding, however, arises only if there are mutually exclusive applications. Second, Paxson  xCommunications urges that the waiver of the prohibition against "white knight" settlement agreements is  xtoo restrictive. In support of its claim that the waiver should encompass partial, as well as universal,  xgsettlements, Paxson observes that white knight settlements are often the only realistic means by which  xapplicants can be reimbursed for tremendous expenses incurred in these protracted cases. However,  xapproving white knight settlement agreements that did not include all of the pending applicants would be  xgcontrary to the spirit, if not the letter, of Section 309(l)(2). This provision expressly restricts qualified  xVbidders to those persons filing applications before July 1, 1997 and was clearly intended to insulate  x/pending applicants from having to bid against entities whose financial resources were not similarly encumbered by prosecution expenses.  S ' "N79. Two commenters make a similar suggestion regarding preJuly 1, 1997 applicants that were  xunable to reach a settlement within the 180day period. Specifically, they urge us to permit such"!J,l(l(,, "  xapplicants to enter into "white knight" settlements whereby nonparties can acquire the bidding rights of  x/the pending applicants. They claim this would provide equitable relief to applicants, which did not  xanticipate having to participate in an auction, and would also serve the public interest by maximizing  S' xauction revenues.~KhO {O'ԍ See Comments of Marri Broadcasting, L.P. at 24; Dewey Matthew Runnels at 24.~ Whatever the benefits of this approach in terms of settling the remaining cases, it is,  xhowever, contrary to Section 309(l)(2), which explicitly restricts our discretion regarding persons qualified  xto participate in a competitive bidding proceeding that involves preJuly 1, 1997 applicants. And, in any  xevent, for the reasons set forth above, we are not inclined to waive any of our settlement rules and policies  S'beyond the 180day period that ended on February 1, 1998.   S4 "UO80.  Special Auction Procedures for Frozen NonHearing Cases . To auction the preJuly 1, 1997  xfull service commercial broadcast applications that have not been designated for hearing and that did not  xsettle under the special provisions of Section 309(l)(3), we will, to the extent possible, apply the general  xcompetitive bidding procedures adopted for future broadcast auctions, as set forth in Section III(C)(3)  xbelow. Some modifications will, of course, need to be made to our general auction procedures adopted  xMherein, so as to apply them to a closed group of pending mutually exclusive applications. To keep our  xQauction procedures as clear and consistent as possible, we have attempted, as described below, to deviate  xgas little as possible from the competitive bidding procedures adopted for broadcast auctions generally.  S2' "P81. To prepare the frozen preJuly 1st nonhearing cases for auction, the Mass Media Bureau, in  xconjunction with the Wireless Telecommunications Bureau, will by public notices identify the applicants  x in each group of mutually exclusive applications who are eligible to bid on the broadcast construction  S' xpermits for which they previously filed longform applications (i.e., FCC Form 301 for AM, FM or  xQtelevision construction permits). We emphasize that, in accordance with congressional directive, pending  xapplicants will be eligible to bid on only those construction permits for which they previously filed long xform applications. Such public notices will also announce the filing deadline for shortform applications  x@(FCC Form 175), announce the amount of and deadline for submitting upfront payments, and provide  xmore detail on the time, place and method of competitive bidding to be used, as well as applicable bid submission and payment procedures.  S|' "EQ82. We will require all pending applicants to confirm their interest in participating in an auction  xby filing a shortform application. Although we realize that these applicants have already filed complete  xlongforms, the submission of a shortform application is necessary so that applicants may identify their  xauthorized bidders, create their FCC account numbers, and indicate whether they are entitled to a "new  S' xentrant" bidding credit. See infra  190. Pending applicants who have already filed longform  x3applications will not, of course, need to file any engineering data with their FCC Form 175s, as future  xapplicants in nontable services will be required to do so that determinations of mutual exclusivity can be  Sf' xmade. See infra  143. Given the importance of certain information on the shortform application to the  xQauction process and the brevity of the shortform itself, we will require the submission of shortforms by  xpending applicants, and will dismiss the previouslyfiled, longform application of any pending applicant  xwho fails to timely file a shortform application to participate in the auction. If the Commission were to  xreceive only one shortform application confirming interest in bidding competitively on any construction  xpermit, and thus there is no mutual exclusivity for auction purposes, the Commission will cancel the  xauction for any such permit and proceed to the review of the sole remaining applicant's previouslyfiled longform application. "(%ZK,l(l(,,#"Ԍ S' "ER83. Assuming that mutually exclusive shortform applications are submitted by the previously xfiled applicants, the auction will proceed pursuant to our general competitive bidding procedures. As in  xauctions of broadcast applications filed in the future, we will also require prospective bidders submitting  xgshortform applications to make an upfront payment prior to the commencement of the auction of any  xpending applications. The submission of an upfront payment helps safeguard the auction process by  x&requiring applicants to demonstrate their financial wherewithal and by providing the Commission with  xfunds to cover any bid withdrawal or default payments. The amount of the upfront payments for pending  xapplicants will be determined as set forth under our general auction rules in  129134. All pending  xMapplicants who file complete shortforms and submit appropriate upfront payments will be qualified to  S'participate in the auction, which will proceed as set forth below.   SH ' "S84. We will not, prior to the auction, review the longform applications previously filed by the  x&pending applicants, nor will we accept amendments to these previouslyfiled longforms. In addition,  xbefore the auction we will not consider petitions to deny already filed, or accept additional petitions,  xagainst pending applications, nor consider any questions raised in such petitions relating to the  xtenderability or acceptability of the pending longform applications. Although some commenters called  S ' xfor the review of all pending applications and petitions to deny prior to auction,L\ hO {O' x3 ԍ See Comments of John Anthony Bulmer at 23; Michael Ferrigno at 6; Linear Research Associates at 4;  x Williams Broadcasting Co. at 5; Donald James Noordyk at 6; Todd Stuart Noordyk at 56; Batesville Broadcasting  {Oz'Co., Inc. at 56; Positive Alternative Radio, Inc., et al. at 78; Throckmorton Broadcasting, Inc. at 6.  we believe that the  xinterests of this group of pending applicants will be best served overall by our approach. Only those  x pending applicants who ultimately become winning bidders will need to expend time and resources to  xtamend their longform applications. Moreover, if we were to review all of the considerable number of  xpending applications, and any petitions to deny against them, prior to an auction, we would delay the  S' xcommencement of bidding significantly.^MhO yOD' x ԍ In particular, if a pending longform application were dismissed as unacceptable for filing prior to auction,  x that applicant would have the right to file a petition for reconsideration of the dismissal, thereby adding to the pre x auction delay. For similar reasons, we have determined not to conduct any preauction review of the technical  {O' x submissions of future broadcast auction applicants, except as necessary to determine mutual exclusivity. See infra  149153. ^ Proceeding to the auction as expeditiously as possible will not  xonly end the administrative limbo in which these pending applications have been caught, but will also result in the licensing of new broadcast stations to serve the public more quickly.  S' "<T85. Following the close of the auction and the issuance of a public notice announcing the winning  xbidders, we will require each winning bidder to submit a down payment on its winning bid(s) within ten  S' xbusiness days,sNhO {O!'ԍ See infra  162 for a more detailed discussion of down payments.s and to make any necessary amendments to its previouslyfiled longform application(s)  S' x3within 30 days.*OX0 hO yOp#' x ԍ Such amendments may include the alteration of any commitments, such as divestiture commitments, made  x in the longform to obtain an advantage in the comparative hearing process, but which are not required by Commission rules.* The winning bidders' longform applications would then be placed on public notice,  xQthereby triggering the filing window for petitions to deny. Even in those rare instances in which the filing  x3window for petitions to deny against the winning bidder's application had fully or partially run prior to  xthe enactment of the Budget Act, we will, consistent with the procedures adopted herein for petitions to"( P O,l(l(,,d"  S' xZdeny following an auction generally, allow ten days for the filing of petitions to deny. See infra  165.  xgWe believe this approach is appropriate and not unduly burdensome, particularly given the rarity of the  xMsituation and the abbreviated petition to deny period for auction winners' applications. We will also, at  x@this time, consider any pending petitions to deny that were previously filed against the winning bidder.  xDFor the reasons discussed in greater detail in  99 below with respect to the frozen hearing cases, we will  xconsider site assurance and financial qualification issues raised in any petition to deny only to the extent they involve allegations of false certification.  S' "_U86. If the Commission denies any petitions to deny and otherwise determines that the applicant  xis qualified, we will then follow our general procedures set forth herein for payment and for issuing the  Sr' xconstruction permit to the winning bidder. See infra  166. The previouslyfiled longform applications  xof the unsuccessful competing bidders will be dismissed following the grant of the winning bidder's  x}construction permit. If, however, the winning bidder fails to remit the required payments, is found  xcunqualified to be a licensee, or is otherwise disqualified, we will exercise our discretion to offer the  S ' xconstruction permit to the other highest bidders in descending order at their final bids.cPZ hO {O<' x ԍ See 47 C.F.R.  1.2109 (giving Commission discretion to either reauction licenses to existing or new  x applicants or to offer licenses to other highest bidders in descending order at their final bids, in the event of default by, or disqualification of, the winning bidder). c Because Congress  xhas expressly restricted participation in any auction of the mutually exclusive applications subject to  x3Section 309(l) to the pending preJuly 1st applicants, we believe that offering any construction permit  xlupon which the winning bidder defaults to the next highest bidders, rather than reauctioning the  xconstruction permit to new applicants, would comport with statutory requirements and would be more expeditious.  S' "8V87. In organizing the auction of the preJuly 1, 1997 pending broadcast applications subject to  xthe comparative freeze, the Commission retains the discretion to conduct a combined auction of some or  xall pending applications subject to competitive bidding, or to conduct separate auctions for the different  xservices. We also retain the discretion to include some or all of these pending broadcast applications when  S'the Commission holds auctions of unsold or defaulted licenses in other services.  S4 "W88.  Special Auction Procedures for Frozen Hearing Applicants . In the Notice, 12 FCC Rcd at  x22376 ( 30), we tentatively proposed that in these hearing cases the Administrative Law Judge (or the  x/General Counsel in cases pending before the Commission) would issue an order indicating that the  xkpermittee is to be selected by competitive bidding, specifying the date by which such applicants must give  x^notice of their intent to participate in the auction, and stating whether there are unresolved issues as to the  xbasic qualifications of any particular applicant. We tentatively proposed to terminate the hearing  xproceeding in those cases in which there were no such issues, and to resume the hearing in other cases  xonly in the event an applicant with such unresolved issues was the winning bidder after the auction. We  xsought comment on whether it would be more efficient to review the basic qualifications of the pending applicants in hearing cases prior to the auction.  S ' "yX89.  At the outset we clarify that, where the Commission has denied or dismissed an application  S ' xxand such denial or dismissal has become final (e.g., when an applicant failed to seek further administrative  xor judicial review of that ruling), such an entity is not entitled to participate in the auction. Among those  xMremaining in the proceeding, we will permit all pending applicants to participate in the auction, without  xregard to any unresolved hearing issues (or outstanding petitions to enlarge) as to the basic qualifications"x#!P,l(l(,,:""  xof a particular applicant. We will do so regardless of the number of remaining applicants or whether the  S' xadverse resolution of outstanding basic qualifying issues would eliminate all but one applicant.QhO yO@' xx ԍ If the winning bidder is (or a series of winning bidders are) disqualified and only one applicant remains, that applicant will be granted without a further auction. This  xserves the public interest by not delaying the selection of an auction winner to resolve potentially  x irrelevant issues. It also comports with Section 309(j)(5) of the Communications Act authorizing the  xZprescription of expedited procedures for the resolution of any issues pertaining to the winning bidder's  xbasic qualifications. It is more efficient to decide basic qualifying issues only against the winning applicant.  S' "EY90. We therefore disagree with commenters who contend that deciding basic qualifying issues  S' xpprior to the auction will lead to a more expeditious resolution of these longpending hearing cases.RR\ hO {OX ' xt ԍ See, e.g., Comments of United Broadcasters Company at 78; Thomas M. Eells at 5; John W. Barger at 3.  {O" ' x But see Comments of J. McCarthy Miller & Biltmore Forest Broadcasting FM, Inc. at 13; Columbia FM Limited Partnership at 78.R  x*Deferring such issues until after the auction furthers the public interest by avoiding unnecessary litigation  SH ' x/that would waste the resources of the private parties and of the Commission. The alternative is to  xQpostpone the auction until after we fully litigate these unresolved questions, which may substantially delay  xservice to the public. In this regard, we could not, as some commenters have suggested, exclude from  xthe auction pending applicants based on nonfinal administrative determinations or unresolved allegations  S ' x3against such particular applicants.}S DhO {O'ԍ See Comments of Lisa M. Harris at 915; Breeze Broadcasting Co., Ltd. at 48.} We believe that the time and expense entailed in adjudicating fully  xall unresolved issues relating to the basic qualifications as to all pending applicants would greatly exceed  x@any additional delay that might result from the eventual disqualification of a winning bidder. For these  x*reasons, we find that deferring consideration of basic qualifying issues until after the auction is fairer and  x"ultimately more efficient than resolving any issues relating to the basic qualifications of all pending  xapplicants, only one of which will be the winning bidder. This approach is consistent with our practice  x_in prior auctions and lotteries of including applicants even where questions may exist as to their qualifications.  S@' "Z91. We disagree, moreover, that either Section 309(l)(2) or the accompanying legislative history  S' xrequires that we determine the pending applicants' basic qualifications before conducting any auction.WThO {O'ԍ See Comments of Thomas M. Eells at 56.W  xgSection 309(l), although clear that we may only award licenses to fully qualified applicants, is silent on  xwhether basic qualifying issues should be adjudicated before or after the competitive bidding procedure.  x}But it directs that any competitive bidding procedure employed to resolve these cases be conducted  xpursuant to Section 309(j). In this regard, Section 309(j)(5) provides that "[c]onsistent with the objectives  xdescribed in paragraph (3), the Commission shall, by regulation, prescribe expedited procedures consistent  xwith the procedures authorized by subsection (i)(2) for the resolution of any substantial and material issues  xtof fact concerning qualifications." 47 U.S.C.  309(j)(5). The "rapid deployment of new . . . services  xfor the benefit of the public" is one of the objectives listed in paragraph (3), which was not amended as  xpart of the Budget Act, and, despite the termination of our lottery authority to award certain types of  x&commercial broadcast licenses, Section 309(i)(2) still accords the Commission discretion to make the""h T,l(l(,,"  S' xxdetermination of basic qualifications with respect to the lottery winner only.oUXhO yOh' x ԍ Section 309(i)(2)(C) provides that "the Commission may, by rule, and notwithstanding any other provision  x of law . . . (C) omit the determination [of basic qualifications] with respect to any application other than the one selected pursuant to paragraph (1)." 47 U.S.C.  309(i)(2)(C). o In fact, we initially declined  xto adopt rules implementing our authority to award licenses through a system of random selection  xprecisely because the statute originally required that we adjudicate the applicants' basic qualifications  xbefore the lottery. This undermined the primary purpose of the statute, which was to reduce the expense,  S`' xdelays and backlogs incurred by comparative proceedings.;V\`hO {O' x ԍ Amendment of Part 1 of the Commission's Rules to Allow the Selection from Among Mutually Exclusive  {O ' x Competing Applications Using Random Selection or Lotteries Instead of Comparative Hearings, 89 FCC 2d 257, 277279 (1982). ; Auction authority was likewise granted to  S8' xZavoid the costs and delays of comparative hearings, W8 hO {O ' x ԍ Implementation of Section 309(j) of the Communications Act Competitive Bidding, 8 FCC Rcd 7635, 7651  {O '(1993), citing, H.R. Rep. 111, 103d Cong. 1st Sess. 254, 258 (1993).   and the language in Section 309(i) is comparable  xyto Sections 309(j)(1) and 309(l) in that both prescribe requirements that must be met before the  S' xCommission can award a license, not before it conducts a lottery or an auction.uXxh hO yO' xx ԍ Prior to the Budget Act, Section 309(i)(2) provided that "[n]o license or construction permit shall be granted  x to an applicant selected pursuant to [random selection procedures] unless the Commission determines the  x qualifications of such applicant . . ." As amended by the Budget Act, Section 309(i) now provides that "the  x Commission shall have the authority to grant such license or permit to a qualified applicant through the use of a  x system of random selection." Virtually identical language is contained in amended Section 309(j). That provision  x specifies that "the Commission shall grant the license or permit to a qualified applicant through a system of competitive bidding that meets the requirements of this subsection."u In these circumstances,  S' xZwe believe that, if Congress had intended to require that in these frozen Bechtel cases the Commission  xdepart from its established practice of determining qualifications only with respect to the winning bidder,  St' xgit would have done so explicitly. The Conference Report does not suggest otherwise. It provides that  x"[t]he Commission shall limit the class of eligible applicants who may be considered qualified bidders  x(provided such applicants otherwise qualify under the Commission's rules) to the persons who filed  S ' xapplications with the Commission before that date."CY hO yOD'ԍ Conference Report at 573.C This simply says that the only applicants who may  xgbe included in the auction are those on file before July 1, 1997 who meet the Commission's rules to be  S ' xa qualified bidder, not those who are necessarily qualified to be a licensee. In this respect, the Conference  xReport supports our conclusion that Section 309(l)(2) does not require that we exclude from an auction  S^'preJuly 1, 1997 applicants with outstanding, unresolved basic qualifications issues.   S6'  S' "I[92. As a result of settlements executed during the 180day waiver period, all of the frozen hearing  xcases are now pending before the Commission. Following release of this order, the General Counsel,  x acting on delegated authority, will issue an order in each case identifying the eligible, qualified bidders  xentitled to participate in the auction, referring all such cases to the Mass Media Bureau for processing in  Sn' xaccordance with the auction procedures outlined above for the frozen Bechtel nonhearing cases, and either  xstay or terminate the hearing proceeding, depending on whether there are any unresolved hearing issues  x(including any unresolved petitions to enlarge issues) relating to the basic qualifications of any particular  S' xapplicant. As proposed in the Notice, 12 FCC Rcd at 22376 ( 30), the hearing proceeding will resume"#8Y,l(l(,,a" only in the event that such an applicant is the winning bidder.  S' "u\93. Thereafter, all pleadings filed before the auction relating to any frozen comparative case  x<(whether hearing or nonhearing) should be submitted to the Mass Media Bureau for processing in  x}accordance with its procedures for frozen nonhearing cases outlined above, except that settlement  xagreements in stayed hearing proceedings should be submitted to the Commission. As we recognized in  S' xxthe Notice, 12 FCC Rcd at 2237677 ( 32), the Mass Media Bureau, as a party to the hearing proceeding,  x7is precluded by the separation of investigative and prosecuting functions prescribed by 5 U.S.C.  554(d)  x}of the Administrative Procedure Act from having any decisionmaking function with respect to any  xZremaining qualifying issues in these hearing cases. We continue to believe that having the Mass Media  xkBureau review FCC Forms 175 to determine completeness and process administrative information relating  xsolely to the conduct of the auction does not entail decisionmaking responsibilities that would violate the  x@separation of functions requirement. No commenters disagree with this conclusion. And, given our  xdetermination to resolve after the auction any remaining basic qualification issues in these hearing cases,  xpreauction pleadings unrelated to the conduct of the auction, except possibly for certain settlement  xgagreements, would be procedurally improper and will be summarily dismissed. Thus, even in a stayed  xhearing proceeding, a settlement agreement is the only type of procedurally proper preauction pleading  xthat might be filed that would entail decisionmaking responsibilities that could not be handled by the  xtMass Media Bureau. Such settlements, and any related pleadings, should therefore be submitted to the Commission rather than to the Mass Media Bureau.  S' "]94. The General Counsel, acting pursuant to delegated authority, will expeditiously process all  x^such settlement agreements in accordance with all applicable Commission rules and policies, including the  x@anticollusion rules, which, as discussed below, are triggered by the filing of a shortform application.  xIf such a settlement agreement is approved, the General Counsel will issue an order either dismissing the  xapplication(s) of certain previously identified qualified bidder(s) or, in the event of a universal settlement agreement resulting in the grant of an application, terminating the proceeding.  S' "A^95. In the Notice, 12 FCC Rcd at 22376 ( 30), we asked for comment on how we should  xproceed in the event a settlement agreement in a frozen hearing case filed either with the ALJ or the  x*Commission was denied or withdrawn. We received no comments on this question. We will proceed as  xfollows. If a settlement agreement pending before the Commission is denied or withdrawn prior to the  xdeadline for shortform applications, the General Counsel will issue an order as described above, stating  xthat the proceeding is ripe for resolution by competitive bidding, identifying all qualified bidders entitled  xto participate in the auction, referring the case to the Mass Media Bureau, and indicating whether the hearing proceeding is terminated or stayed pending the completion of the auction.  S<4 "D_96.  PostAuction Procedures for Hearing Cases . The postauction procedures for hearing cases  xin which the hearing proceeding was terminated before the auction shall be governed by the same  S 'procedures outlined above for nonhearing frozen Bechtel proceedings.  S"' "`97. In cases in which the proceeding was stayed because there were hearing issues (or unresolved  xpetitions to enlarge issues) pertaining to the basic qualifications of a particular applicant, the hearing  xIproceeding will resume only if such applicant is the winning bidder. In such stayed hearing cases,  xItherefore, the order identifying the winning bidder will also state whether the hearing proceeding is  xresumed. In the event none of the outstanding hearing issues (or unresolved petitions to enlarge issues)  xpertain to the winning bidder's basic qualifications, the hearing proceeding will be terminated as a"&$Y,l(l(,,m%"  xministerial matter by the Mass Media Bureau, and the case will proceed in accordance with the procedures  xZfor nonhearing cases (and any hearing cases where the hearing proceeding was terminated before the auction).  S`' "a98. If the hearing proceeding is resumed, it will proceed as follows. All applicants who have not  xformally requested the dismissal of their applications, or whose applications have not been finally denied  xgor dismissed, are entitled to participate in the resumed hearing proceeding. The Commission will issue  xQan order resolving according to its routine adjudicatory procedures any unresolved hearing issues and any  xother issues relating to the basic qualifications of the winning bidder. As tentatively proposed in the  S' x3Notice, 12 FCC Rcd at 22377 ( 34), we will accord the winning bidder 30 days for any amendments  xnecessary to report changes in its longform application and 15 days to respond to any new petitions to  x[enlarge. The filing of new petitions to enlarge will be governed by 47 C.F.R.  1.229 of the  xCommission's rules. Given the small number of cases in which the hearing proceeding is likely to  xresume, we deem it inappropriate to restrict the time for filing new motions to enlarge issues, and no  xcommenters have urged that we do so. We clarify, however, that there will be no new opportunity for the filing of petitions to deny in these resumed hearing proceedings.  SZ4 "}b99.  Site and Financial Certification Issues . To the extent that there are unresolved site or  xfinancial issues in these resumed hearing proceedings, or such issues are requested in a new petition to  xenlarge issues, we will resolve such issues (or add such issues if a substantial and material question of fact  S' xkis raised) only to the extent that they involve a question of false certification. As discussed in  172176  x/below regarding broadcast auctions generally, we are eliminating the site and financial certification  xkrequirements from the longform applications filed by auction winners. In these circumstances, we deem  xkit inappropriate to resolve such issues in cases in which there has not been a settlement agreement and the  xpermittee must therefore be selected by competitive bidding. The winning bidder is subject to the same  xrequirements regarding the payment of the winning bid, and the same payment provisions in the event of  xa default as any other broadcast applicant granted a construction permit through a system of competitive  xbidding. It is those requirements, rather than the original certifications, that serve as a mechanism to  xdiscourage insincere proposals. For this reason, adjudicating issues relating to whether the winning bidder  xhad reasonable assurance of site availability or was financially qualified would waste the resources of the  xMCommission and of the parties and would serve only to delay service to the public. Candor, however,  xcontinues to concern the Commission whether it awards the broadcast construction permits through the  S' xgcomparative hearing process or through a system of competitive bidding. Cf. Dorothy O. Schulze and  S' xDeborah Brigham, A General Partnership, 13 FCC Rcd 3259, 3264 (1998). Issues relating to whether  xthe winning bidder falsely certified reasonable assurance of its site availability or financial qualifications must therefore be resolved before we can grant a construction permit to the winning bidder.  S?' ""c100. All other unresolved hearing issues and any new issues relating to the winning bidder's basic  xtqualifications in these cases will be resolved in accordance with the Commission's routine adjudicatory  xkprocedures. Thus, the Commission will issue an order resolving such issues and, if appropriate, grant the  xRwinning bidder's application. In the event the winning bidder is ultimately disqualified and such  x}determination is not subject to further administrative and judicial review, we will, as urged by some  Sw#' xcommenters,Zw#hO {O%'ԍ See, e.g., Comments of J. McCarthy Miller & Biltmore Forest FM Broadcasting, Inc. at 1416. exercise our discretion to offer the construction permit to the other highest bidders in  SO$' x3descending order at their final bids. See 47 C.F.R.  1.2109. We do not believe that reauctioning any  xpermit upon which the winning bidder defaults or is disqualified would serve the public interest because")%%ZZ,l(l(,,#"  xthe Commission is precluded by Section 309(l) from soliciting any new applicants to participate in such a reauction, and a reauction could also entail some further delay in granting the permit.  S4 "}d101.  Refunds. In the Notice, 12 FCC Rcd at 2237071 ( 16), we proposed to refund all hearing  x+fees paid in any frozen comparative proceeding in which the permittee is ultimately selected by  xxcompetitive bidding rather than through the comparative hearing process, and also to refund the filing fees  xMpaid by any applicant that elects not to participate in the auction. Given the length of the comparative  xEfreeze, we continue to believe that such refunds are appropriate as a matter of fairness. Certain  xcommenters request that we pay such refunds immediately, with interest, because, they assert, the fees  S' xwere collected under false pretenses and are being improperly retained.[hO {O 'ԍ See Comments of Rio Grande Broadcasting Co. at 1112; HeidelbergStone Broadcasting Co. at 1112. We disagree. All such fees were  xproperly collected at a time when a comparative hearing was the only mechanism for resolving mutually  x7exclusive applications for full power radio and television stations, and we have not impermissibly retained  S" ' xany fees. In this First Report and Order we decide for the first time to exercise our discretion under  xSection 309(l) regarding comparative licensing cases and to resolve such cases by a system of competitive  xbidding, pursuant to our newly authorized auction authority for commercial broadcast licenses. Moreover,  xthere is no provision in the statute or our implementing rules authorizing the refund of fees with interest.  xxWe believe that the payment of interest would be inappropriate here, particularly since we charge penalties but do not assess interest for latefiled fees.  S ' "+e102. Administrative considerations dictate that refunds be issued only upon a specific request,  xQrather than automatically. In this regard, the procedure for requesting a refund is neither complicated nor  xlengthy. As to the timing of the refunds, however, we agree with commenters that refunds to applicants  x*electing not to participate in the auction should not be delayed until after the grant of the winning bidder's  Sl' xMapplication is final.\lZhO {Of' x ԍ See Comments of KM Communications, Inc. at 34; Rio Grande Broadcasting Co. at 11; HeidelbergStone Broadcasting Co. at 11. On or before the date for filing a shortform application, pending applicants in all  xcomparative licensing cases subject to resolution by competitive bidding pursuant Section 309(l) may file  xa pleading disavowing any interest in participating in the auction and seeking the dismissal of their  xapplications. Once the dismissal of any such application is final, we will entertain requests for refunds of any hearing and filing fees actually paid by such applicants.  S|' "Rf103. However, we will not refund filing fees paid by applicants participating in the auction that  x^are outbid by a competing applicant. We take the extraordinary step of refunding filing fees paid by those  xapplicants not participating in the auction, in recognition of the fact that these applicants might not have  xfiled their applications if they had known the permit would be awarded by competitive bidding. This is  xappropriate as a matter of fairness because these applications have been pending up to four years or  S' xlonger.]hO {O#' xQ ԍ See Implementation of Section 309(j) Competitive Bidding (Cellular Unserved Order), 9 FCC Rcd 7387,  xU 739192 (1994) (noting that if the Commission used competitive bidding procedures for pending cellular applications,  x those pending applicants indicating no desire to participate would, as a matter of fairness, be entitled to a refund of  {Ob%' x7 application processing fees). Accord Report and Order in MM Docket No. 94131 and PP Docket No. 93253, 10  x FCC Rcd 9589, 9632 (1995) (deciding to use lottery for pending MDS applicants, on file over four years, but noting  xk that if it used competitive bidding, those pending applicants indicating a desire not to participate may as a matter"&\,l(l(&" of fairness be entitled to refunds of any application processing fees).  There is no comparable basis to refund such fees to unsuccessful bidders, which, but for the"&X],l(l(,,"  xQhigher bid of a competing applicant, would have received a construction permit. In contrast to applicants  x*withdrawing their applications rather than participating in a competitive bidding proceeding, unsuccessful  xbidders, by competing in the auction, have continued to prosecute their applications. There is therefore  xno reason to refund previously paid filing fees. Although equitable considerations militate against  xrequiring applicants to pay fees for proceedings in which they do not participate, the ultimate disposition of an application is not a valid basis for refunding filing fees.  S' "Eg104. As to the timing of the refund of hearing fees to such unsuccessful bidders, the refund is  xpremised on the fact that applications, filed in anticipation of a comparative hearing, are now decided by  x<auction. Refunds are therefore premature until the dismissal or denial of the unsuccessful bidder's  xapplication is final and it can no longer challenge the winning bidder's basic qualifications. That occurs,  xhowever, only once the grant of the winning bidder's application and the denial of the losing bidder's application is final.  S '   S ' 2. Pending Applications Not Subject to Section 309(l)   S ' "h105. As generally described above in  712 and  6065, a broader group of pending mutually  xMexclusive applications falls outside the scope of Section 309(l) and is subject to the mandatory auction  x_authority contained in Section 309(j)(1). These applications include mutually exclusive pending  x/applications for the secondary broadcast services (whether filed before or after July 1, 1997), and  xcompeting full service AM and FM applications filed on or after July 1, 1997, but prior to the temporary  S' xfreeze on the filing of such applications imposed after the release of the Notice in this proceeding. This  x"pending group subject to auction under Section 309(j)(1) also includes a few situations where one  xbroadcast application was filed before July 1, 1997, and other mutually exclusive applications were filed  SB' xon or after that date. We will, as proposed in the Notice, 12 FCC Rcd at 2237980 ( 41), apply to the  S' xMextent possible the general competitive bidding procedures adopted for future broadcast auctions. See  x}Section III(C)(3). The minor adjustments necessary to be made to our general competitive bidding  x*procedures to accommodate the pending mutually exclusive applications not subject to Section 309(l) are  xtset forth below. Any of these pending applicants who choose not to participate in an auction may also  xQrequest a refund of their previouslypaid filing fees, pursuant to the procedure set forth with regard to the  SV'Section 309(l) pending applicants. See supra  101104.  S' "i106. The most significant issue with regard to the pending applications falling outside the scope  xof Section 309(l) concerns the pool of bidders who will be eligible for any auction of these mutually  xexclusive applications. In contrast to new Section 309(l), which expressly restricts the group of applicants  xZeligible to participate in an auction to the preJuly 1, 1997 applicants, Section 309(j)(1) is silent on that  xquestion. This section neither precludes the Commission from restricting the class of eligible bidders to  xthose with applications already filed, nor requires the Commission to reopen the filing period for  xMadditional applicants that would be eligible to participate in the auction. Because we have discretion as  xto whether to conduct an auction limited to the pending mutually exclusive applications, or whether we  xinclude such applications within our first general broadcast auction and permit new applicants to file  xadditional applications that may be mutually exclusive with the pending applications, we asked for  Sx#'comment on how to exercise this discretion. See Notice, 12 FCC Rcd at 22380 ( 42).  S*%' "/j107. All commenters addressing this issue oppose the reopening of any filing periods or windows"*%'X],l(l(,,#"  S' xpthat have already closed to allow additional parties to file competing applications.^DhO {Oh' xQ ԍ See Comments of Big Ben Broadcasting, et al. at 13; Dakota Communications, et al. at 29; Scranton Times  xD L.P. and Shamrock Communications. Inc. at 24; Six Video Broadcast Licensees at 23; Jay Man Productions, Inc.  x& at 25; Apache Radio Broadcasting Corp. at 89; TriCounty Broadcasting, Inc. at 6; KERM, Inc. at 6; Certain  xk Broadcast Applicants at 38; George S. Flinn, Jr. at 4; James G. Cavallo at 7; KM Communications, Inc. at 6; Grace  x Communications L.C. at 67; Communications Technologies, Inc. at 2; Michael Ferrigno at 7; Kidd Communications  x& at 7; Williams Broadcasting Co. at 67; Donald James Noordyk at 78; Todd Stuart Noordyk at 67; Batesville  {O' x* Broadcasting Co., Inc. at 67; Positive Alternative Radio, Inc., et al. at 89; and Throckmorton Broadcasting, Inc. at 89.  They argue that  xtreopening any such filing periods or windows would be unfair to pending applicants who were diligent  xMin filing their applications in a timely manner and would reward dilatory applicants who had previously  x&failed to file within clearly delineated time parameters. Commenters assert that the pending applicants  x7have already expended time and funds to file complete longform applications, and it would be inequitable  xto reopen filing windows for new applicants who would be required to file only shortform applications.  x3In addition, commenters assert that reopening filing periods to allow additional competing applications  xwould only delay the grant of construction permits and the commencement of service to the public. Given  xthese equitable and public interest considerations, commenters argue that the sole purpose in reopening  xfiling windows would be in expectation of generating higher auction revenues, which they contend is  Sp' ximpermissible in this context, citing 47 U.S.C.  309(j)(7)(A) (in prescribing certain auction regulations,  xthe Commission may not base a finding of public interest, convenience and necessity on expectation of  S 'federal revenues from the use of a system of competitive bidding)._Z hO {O' x ԍ See, e.g., Comments of Big Ben Broadcasting, et al. at 23; Dakota Communications, et al. at 48; Scranton  x Times L.P. and Shamrock Communications, Inc. at 34; Jay Man Productions, Inc. at 23; Apache Radio Broadcasting Corp. at 89; TriCounty Broadcasting, Inc. at 6; KERM, Inc. at 6; Certain Broadcast Applicants at 67.  S ' "8k108. Notwithstanding Section 309(j)(7)(A), we continue to believe that we have the discretion  xZto reopen relevant filing periods, if so doing would serve the public interest. We agree, however, with  x@the commenters that, in cases of pending mutually exclusive applications not subject to Section 309(l)  x^where the relevant period or window for filing applications under our existing procedures has expired, the  xpublic interest would not be served by reopening the filing period for additional mutually exclusive  xapplications. These pending applicants timely filed complete longform applications pursuant to our  xprocedures then in place, with the reasonable expectation that their only competitors would be persons who  xsimilarly timely filed applications within the Commission's designated filing period. The reopening of  xfiling windows would certainly not expedite the disposition of the pending applications or the  xcommencement of service to the public, but could produce further delays. Moreover, unlike situations  xwhere we have declined to hold an auction limited to pending applicants but preferred to permit the filing  xof applications by additional parties, the auction procedures adopted herein make no substantial changes  S' x7in the nature of the broadcast services or in the rights and responsibilities of broadcast licensees.`| hO yO"' xV ԍ For example, in the 220 MHz auction proceeding, we not only adopted auction proceedings but also  x. significantly altered the technical and operational rules for that service. Because of such substantial changes in the  x nature of the 220 MHz service, we concluded it would be unfair to preclude new applicants from having the  {O$' x opportunity to apply for licenses in what was essentially a new service. See Third Report and Order and Fifth Notice  x of Proposed Rulemaking, Amendment of Part 90 of the Commission's Rules to Provide for the Use of the 220222  {Op&' x MHz Band by the Private Land Mobile Radio Service, 12 FCC Rcd 10943, 1103839 (1997). With regard to the  x broadcast services, however, there have been no substantial changes in the nature of the services since the expiration":'_,l(l(2'"  x of the filing windows in which the pending applicants filed, and no such changes are being implemented in this proceeding.  Thus,"( `,l(l(,,:"  x@we see no compelling reason to reopen filing windows that have already expired to permit the filing of  xadditional applications by applicants who failed to file during the Commission's previously clearly delineated filing periods.  S`' "_l109. Accordingly, for groups of pending mutually exclusive applications not subject to Section  x7309(l) where the relevant filing periods have already expired, the auction will proceed in the same manner  x&as the auction of the Section 309(l) pending applications, for which we are statutorily precluded from  xreopening any filing periods. The procedures set forth in  8087 above will therefore also govern the  xauction of the pending applications not subject to Section 309(l) that have already been subject to  xcompetition through the opening and closing of periods for the filing of mutually exclusive applications.  xEWith regard to any remaining pending singleton applications where the relevant period for filing  x7competing applications has opened and closed, but no mutually exclusive applications were ever filed, we  S 'will continue to process and grant according to our regular procedures. See supra  65.  S ' "m110. We note, however, that there are pending before the Commission a number of broadcast  xapplications (primarily AM and FM translator) that have never been subjected to competition because  xperiods or windows for the filing of competing applications have not yet been opened by the  SZ' xCommission.a|Z hO yO' x ԍ As previously described, there are also pending before the Commission analog television applications that have  xH never been accepted for filing or subjected to competition because they request a waiver of our 1987 order imposing  {O' xg a freeze on applications for any new television stations in 30 major markets. See Order, RM5811 (Mimeo No.  x 4074, released July 17, 1987). In any cases where we ultimately determine to grant such a waiver, those pending  x television applications that are not subject to Section 309(l) because no mutually exclusive applications were filed  {O' xx (see supra  6970) will be subject to competition in the same manner as the other pending commercial broadcast  yO'applications that have not been subject to competition.  Rather than open individual filing windows or issue individual cutoff lists for each of  xthese pending broadcast applications, we believe it more efficient to simply include these applications in  xthe first general auction we conduct for new applicants in the relevant service. Specifically, during the  xfirst auction window opened for new applications in that service under the general window filing approach  S' xadopted herein (see infra  136140), these pending applicants will be required to confirm their interest  xin participating in an auction for the construction permit for which they previously applied by filing a  x shortform application. No engineering data will be required to be filed with the shortforms of these  x^pending applicants for the purpose of making mutual exclusivity determinations, as they have already filed  S' xcomplete longforms.bd hO yO ' xx ԍ If, in addition to reconfirming its interest in the construction permit for which it has already filed a longform  x application, a pending applicant that is not subject to Section 309(l) also wants to apply for another available channel  xU or frequency in the first general auction window for that service, the pending applicant will need, like new applicants  x applying for any available channels or frequencies in the window, to submit with the shortform application the  xZ requisite engineering necessary to make mutual exclusivity determinations, as set forth in the general auction  {O$'procedures. See infra  141143.  The Commission will dismiss the longform application of any pending applicant  xwho fails to file a timely shortform application during the first general auction window for the relevant  x@service. Following the determination of mutual exclusivity among all the applications filed in response  xtto this window by both pending and new applicants, the Commission will proceed, as described below  xin our general auction procedures, to the auctioning of the mutually exclusive applications and to the"|)b,l(l(,,"  S'processing of any nonmutually exclusive applications. See infra  149161.  S' "n111. As with the pending applications subject to Section 309(l), we will not, prior to the auction,  x^review the longform applications previously filed by pending applicants not subject to section 309(l) who  x3participate in the first general auction window, nor will we accept amendments to or petitions to deny  xagainst these previouslyfiled longforms. Within 30 days following the close of the auction, a winning  xbidder will, if a new applicant, be required to submit a complete longform application and, if a pending  xapplicant, be required to make any necessary amendments to its pending longform. Procedures for the  xsubmission of all payments and for the filing of petitions to deny against the longforms of the winning  S'bidders will be the same as under our general auction procedures. See infra  162176.  SL ' 3. Procedures for Broadcast Auctions Generally  S '` ` a. General Competitive Bidding Matters  S 4 "o112.  Retention of Broadcast Licensing Procedures . As proposed in the Notice, 12 FCC Rcd at  x72238182 ( 46), a winning bidder in broadcast auctions will, consistent with existing broadcast licensing  xMprocedures, be awarded a construction permit, rather than a "license." As currently required, winning  xbidders will then be required, within a specified time period, to construct their facilities and file an  xapplication for a "license to cover construction permit" to obtain a license for the constructed facilities.  S' xSee 47 C.F.R.  73.3598. We will retain this broadcast licensing procedure in the auction context, because  S' xit comports with the requirements of Section 319 of the Communications ActchO yO(' x ԍ Section 319(a) states that "[n]o license shall be issued under the authority of this Act for the operation of any station unless a permit for its construction has been granted by the Commission." 47 U.S.C.  319(a).  and has functioned well  xin the nonauction context. We also note that, given the requirements of Section 319, broadcast auction  xwinners, unlike winning bidders in some other auctionable services, will not be permitted to construct their  SH' xfacilities prior to grant of their longform applications and issuance of their construction permits.d\H hO {O' xk ԍ The Third Report and Order revising the Commission's general Part 1 auction rules adopted a new Section  x 1.2113, 47 C.F.R.  1.2113, which permits winning bidders, at their own risk, to construct facilities prior to the grant  {O'of their longform applications. Third Report and Order, 13 FCC Rcd at 469470. See  x/47 U.S.C.  319(d) ("With respect to any broadcasting station, the Commission shall not have any  x*authority to waive the requirement of a permit for construction," except that the requirement for a permit  xmay be waived by the Commission "for minor changes in the facilities of authorized broadcast  S'stations.").e\DhO yO' xg ԍ The Commission has amended its rules to permit certain minor changes in broadcast facilities without a  {OV ' x construction permit. See Report and Order in MM Docket No. 9658, 12 FCC Rcd 12371 (1997). Such minor  {O !'change applications are not, however, subject to auction. See infra  177178.   SZ4 "p113.  Secondary Services in the Auction Context . We reiterate that awarding broadcast and  xZsecondary broadcast service construction permits by auction will not alter the secondary nature of the  S ' xtLPTV and FM and television translator services. See Notice, 12 FCC Rcd at 22382 ( 46). A winning  xbidder who, after paying for its construction permit and satisfying the requirements for a secondary  xbroadcast license, receives the license will not have any greater rights visavis full service broadcast  xZfacilities than any other broadcaster licensed to provide that same secondary service. For example, an"*h e,l(l(,,"  xtLPTV or television translator licensee who receives its license by competitive bidding must still protect  xfull power television stations from interference and will still be subject to displacement by a full service  S' xtelevision licensee. See 47 C.F.R.  73.3572(a); 74.703(b).f\hO yO' x ԍ With regard to the secondary status of LPTV stations, the Commission has requested comment on a petition  {O' x for rulemaking proposing a new "Class A" television service for which certain LPTV stations could qualify. See  {O'Public Notice, Petition for Rulemaking for "Class A" TV Service (rel. April 21, 1998).  Similarly, an FM translator station will  xnot be permitted to continue to operate if it causes interference to any authorized broadcast station, even  Sb' xDif the translator licensee received its license by competitive bidding. See 47 C.F.R.  74.1203(a) & (b).gbhO yO' x ԍ FM translator stations will also continue to be subject to other existing rules concerning their secondary  {O ' x; status. See, e.g., 47 C.F.R.  74.1204(f) (allowing FM broadcasters right to object to proposed translators that would  x* be likely to interfere with reception of a regularly received existing service, even if there is no prohibited contour  xg overlap); 47 C.F.R.  74.1232(h) (FM translator authorization subject to termination if the circumstances in the  xp community or area served are so altered as to have prohibited grant of the translator application had such circumstances existed at time of filing).   S<' xA few commenters complain that auctioning secondary services is unfair or inequitable.h<f hO {OB' xg ԍ See, e.g., Comments of Friendship Broadcasting, LLC at 1; Board of Education of the City of Atlanta, et  {O 'al. at 6; Bible Broadcasting Network, Inc. at 3. However, the  xcfact that mutual exclusivity among secondary broadcast applicants will in the future be resolved by  xcompetitive bidding cannot, in our opinion, provide sufficient grounds to alter the basic character of any  S' xof the secondary services. See 47 U.S.C.  309(j)(6)(D) (nothing in the use of competitive bidding shall  x"be construed to convey any rights . . . that differ from the rights that apply to other licensees within the  Sv' x^same service that were not issued pursuant" to the Commission's competitive bidding authority).i"v hO {O' x7 ԍ See also Comments of Jacor Communications, Inc. at 78 (auction winner should not obtain any additional  x right to operate broadcast station that causes interference to previously operating or otherwise protected stations,  x3 regardless of means by which permittee obtained its permit); Reply Comments of KQED, Inc. at 23 (opposes altering existing rules that establish secondary status of FM translators).  Given  SN ' xour statutory mandate to auction the LPTV and translator services despite their secondary status (see supra  x 912), bidders must carefully weigh the risks that the secondary nature of these services present and  S 'adjust their bidding strategies accordingly.  S 4 " q114.  Displacement of LPTV and Television Translators by Digital Television (DTV) Stations .  xAlthough the secondary status of the LPTV and television translator services is unchanged by the adoption  Sa' xof competitive bidding procedures, we reemphasize here, as requested by several commenters,jahO {O' x ԍ See, e.g., Comments of National Translator Association at 8; Association of America's Public Television Stations at 1718. our  xQsupport for certain previouslyadopted special measures to protect LPTV and television translator stations  S' xduring the transition to digital television. As we stated in the Sixth Report and Order, LPTV stations and  x television translators displaced by new DTV stations will be allowed to apply for suitable replacement  xchannels in the same area without being subject to competing applications. Such applications by displaced  xLPTV and television translator stations will be considered on a firstcome, firstserved basis, and may be  Ss' xsubmitted at any time without waiting for a filing window to open. See Sixth Report and Order in MM"s+j,l(l(,,"  S' xZDocket No. 87268, 12 FCC Rcd 14588, 1465354 (1997) (hereafter Sixth Report and Order).Ik&hO yOh' xQ ԍ In essence, therefore, applications by LPTV and television translator licensees for DTV displacement relief  {O0' x* will be treated like minor modification applications, which can be filed at any time outside of filing windows. See  {O' x infra  177. This treatment of DTV displacement relief applications is consistent with our general rule regarding  {O'displacement relief for LPTV and television translators. See 47 C.F.R.  73.3572(a)(2). I Our  x@adoption of auction filing windows in this proceeding does not alter our earlier decision with regard to displacement relief for LPTV and television translator stations.  Sb4 "^r115. Accommodation of Section 307(b) in AM Auctions. As set forth in Section 307(b) of the  xCommunications Act, the Commission is charged with the duty to make such distribution of broadcast  xRlicenses "among the several States and communities as to provide a fair, efficient, and equitable  xdistribution of radio service to each of the same." 47 U.S.C.  307(b). Section 307(b), however,  xenunciates this mandate without denoting the procedure to be employed to effectuate the fair, efficient and  xZequitable distribution of radio service. Over the years, the Commission has used a variety of means to  ximplement the Section 307(b) directive. Previously, when mutually exclusive applicants sought authority  xto construct broadcast stations to serve different communities, the Commission, in the context of the  x/comparative hearing process, implemented the Section 307(b) mandate by first determining which  xcommunity had the greatest need for additional service, before addressing the comparative qualifications  S ' x<of the applicants. See FCC v. Allentown Broadcasting Corp., 349 U.S. 358 (1955). If the 307(b)  S ' xdetermination was dispositive, the standard comparative issues were not considered. See Pasadena  S ' xBroadcasting Co. v. FCC, 555 F.2d 1046 (D.C. Cir. 1977). The Commission altered this approach for  ximplementing Section 307(b) in the commercial FM and television services by establishing and  S9' xincorporating in its rules a Table of Allotments for each service.lZ9hO {O' x ԍ #X\  P6G;P##C\  P6QP#See Sixth Report and Order on Television Allocations, 41 FCC 148 (1952); Revision of FM Broadcast Rules,  x 40 FCC 747 (1963). 47 C.F.R.  73.202 contains the FM Table of Allotments and 47 C.F.R.  73.606 contains the television Table of Allotments. These allotment tables provide for a  x&distribution of channels for specific communities throughout the United States based on fixed mileage  xIseparations. The Commission fulfills the 307(b) obligation by making available for licensing only a  xfrequency that has been assigned to a specific community in the Table of Allotments through a rulemaking  xproceeding. A system of priorities guides the Commission's 307(b) determinations, setting preferences  Sq'for applicants proposing to establish a station in a nonserved or underserved community. mqhO yO' x ԍ#X\  P6G;P# #C\  P6QP#In contrast, LPTV and television and FM translator stations are not required to meet basic fullservice station  {O' x requirements, i.e. provide responsive programming or maintain a presence in the community, cover the community  {O{' x with an adequate strength signal, etc. Although LPTV and translator stations are licensed to specific communities,  x the Commission has concluded that Section 307(b) issues are not relevant in the context of these secondary services.  {O 'See Low Power Television and Television Translator Service, 2 FCC Rcd 1278, 1281 (1987).   S!' "s116. By comparison, AM radio frequencies are allocated on a demand basis, with applicants  x}specifying the desired community and providing engineering exhibits to demonstrate the absence of  xinterference to existing stations. Without an allotment table, mutual exclusivity may occur between AM  xapplicants proposing to serve different communities. If such mutually exclusive AM applications were  xfiled, the Commission formerly addressed the Section 307(b) considerations in the resultant comparative hearing process. "1, m,l(l(,,q"Ԍ S' ""t117. As discussed above, Section 309(j) of the Communications Act sets forth the Commission's  xauthority to award spectrum licenses by competitive bidding. In originally authorizing the Commission's  xuse of competitive bidding to award licenses in subscriberbased services and in subsequently expanding  xthat authority to include broadcast licenses, Congress did not eliminate or revise Section 307(b) of the Act.  xgPrior to authorizing (let alone requiring) the use of auctions for broadcast stations, Congress expressly  xQindicated that its grant of auction authority to the Commission should not affect specific provisions of the  xgCommunications Act that limit the rights of licensees, or that direct the Commission to adhere to other  xkrequirements. In particular, Congress stated that the adoption of competitive bidding procedures does not  S' xaffect, inter alia, Section 307 of the Communications Act. Section 309(j)(6) contains "Rules of  xZconstruction" and stipulates that "Nothing in this subsection, or in the use of competitive bidding, shall  x... (B) limit or otherwise affect the requirements of ... section ... 307 ... of this title ...." 47 U.S.C.   SJ ' xD309(j)(6)(B).nJ hO {O 'ԍ See also #X\  P6G;P##C\  P6QP#H.R. Conf. Rep. No. 213, 103d Cong., 1st Sess. 253 (1993). This provision of Section 309(j)(6) was neither modified nor excised by the 1997 Budget Act.  S ' "u118. As noted with respect to FM and television, a community's need for service is assessed in  xgthe context of the initial rulemaking proceeding to determine additions and substitutions to the Table of  xAllotments. This procedure is unaltered by the implementation of competitive bidding. Furthermore, we  xMhave always required demonstration that a singleton AM applicant seeking to change its community of  S2' xlicense complies with our standards under Section 307(b).4o2ZhO {O,' x3 ԍ #C\  P6QP# #C\  P6QP#See ArkValley Broadcasting Company, Inc., 15 FCC 818 (1951); North Texas Radio, Inc., 11 FCC Rcd  {O' x 8531, 8535 (1996), citing ArkValley (Section 307(b) must be considered when a licensee seeks to change its  x community of license. Applications for the removal of stations from one community to another in effect constitute  xx alternative requests, one for a new license to operate in a new community, and the other for authority to continue  yOP'operation at the existing location. Hence, there is demand for the station by two communities.).#K\  P@QP#4 However, the discontinuance of the  xcomparative hearing process leaves the 307(b) analysis for mutually exclusive AM applications without a venue.  S' "v119. A few commenters urge the Commission to treat all such mutually exclusive AM applicants  Sj' x*seeking authority to serve different communities as a nonauctionable class.pjhO {O'ԍ #X\  P6G;P##C\  P6QP#See Comments of New Jersey Television Corporation at 3; Jeffrey Eustis at 2. We reject this proposal as  xinconsistent with the clear statutory mandate. As described in detail above, amended Section 309(j)  xrequires the Commission to auction mutually exclusive applications for the broadcast and secondary  xbroadcast services, and includes no express exemption from competitive bidding for competing AM applications that specify different communities of license.  Sz' "w120. After consideration, however, we conclude that, our competitive bidding authority under  xSection 309(j) should be implemented in a way that accommodates our statutory duty under Section  xQ307(b) to effect an equitable geographical distribution of stations across the nation. Congress specifically  xdirected that the requirements of Section 307 should not be affected by the use of competitive bidding.  S' xSee 47 U.S.C.  309(j)(6)(B). Thus, our obligation to fulfill the Section 307(b) statutory mandate endures.  xThe Commission and the courts have traditionally interpreted Section 307(b) to require that we identify  S' x^the community having the greater need for a broadcast outlet as a threshold determination in any licensing  xscheme, for to decide otherwise would subordinate the "needs of the community" to the "ability of an"f-p,l(l(,,g"  S' xapplicant for another locality." FCC v. Allentown Broadcasting Corp. at 361362.qhO {Oh'ԍ #Xj\  P6G;XP##X\  P6G;P##C\  P6QP#See Comments of New Jersey Television Corporation at 3. We conclude that  xour rules should incorporate a similar threshold Section 307(b) analysis to determine whether particular  xapplications are eligible for auctions. Specifically, with respect to AM applications, a traditional Section  xg307(b) analysis will be undertaken by the staff prior to conducting auctions of competing applications.  xIf the Section 307(b) determination is dispositive, the staff will grant the application proposing to serve  xthe community with the greater need if there are no competing applications for that community, and  S' xdismiss as ineligible any competing applications not proposing to serve that community.!rZhO {O ' x ԍ See generally Storer Broadcasting, supra  44 (holding that the Commission has the statutory authority to prescribe threshold eligibility standards and to dismiss without a hearing applications not meeting such requirements). ! If no Section  x307(b) determination is dispositive (or if more than one application remains for the community with the  xgreater need), the applicants must then be included in a subsequently scheduled auction. This approach  xgis consistent with our established practice in the commercial FM and television services with allotment  x*tables where, as discussed above, the Section 307(b) analysis customarily precedes the licensee selection  xprocess. The number of AM applications subject to such a 307(b) staff analysis should be minimal, as  xkthere are relatively few instances of mutual exclusivity among AM applications submitted for new stations  S ' xtand major modifications.sz hO yON' x ԍ #X\  P6G;P##C\  P6QP#We recognize that the Commission will need to request supplemental information from the parties to evaluate  x! the 307(b) considerations of any mutually exclusive AM applications proposing to serve different communities. As  x in past Section 307(b) proceedings, comparisons of the radio needs of the respective communities will be made by  xt examining factual data submissions such as the area and populations that would gain or lose service from the  x competing proposals, the availability of other primary service to such area and populations, and particular community  {O6' x. attributes. See, e.g., Elijah Broadcasting Corporation, 2 FCC Rcd 4468 (ALJ 1987); Radio Greenbrier, Inc., 80 FCC 2d 125 (ALJ 1979). Moreover, this procedure accommodates both Section 307(b) and Section  xg309(j), and results in a balanced implementation of the two respective sections of the Communications  S 'Act. #&S\  P@Q.?&P#   SZ'` ` b. Competitive Bidding Design  S '` `  (1) Auction Methodology    S' "Ix121. In the Notice, 12 FCC Rcd at 22383 ( 51), we proposed to conduct all auctions of mutually  x*exclusive broadcast applications in conformity with the general competitive bidding rules set forth in Part  x1, Subpart Q of the Commission's rules, subject to any changes made to those rules in the thenongoing  xPart 1 rulemaking, and substantially consistent with the bidding procedures that have been employed in  xQprevious Commission auctions. Accordingly, we asked that commenters review the proposed changes in  xthe Part 1 rules, identify any rules they believed to be inappropriate for broadcast auctions, and propose  xalternatives. Commenters advocating different procedures were requested to explain in detail how such  xprocedures would work and why the proposed Part 1 rules would be inappropriate in the broadcast context.  S,' "Jy122. The Notice, 12 FCC Rcd at 2238385 ( 5255), sought comment on a variety of  xcompetitive bidding design options for the auction of broadcast service construction permits. Specifically,  xgwe discussed the possibility of using a simultaneous multiple round auction design, similar to that used". s,l(l(,,"  xin many previous auctions, as well as alternate bidding designs that might be appropriate in the broadcast  xcontext, including: (1) sequential multiple round auctions, using either oral ascending, remote or onsite  xelectronic bidding; and (2) sequential or simultaneous single round auctions, using either remote and/or  S' xon site electronic bidding, or sealed bids. See generally 47 C.F.R.  1.2103. Additionally, we noted that  Sb'we have the authority under Section 309(j) to explore other auction methodologies.tbhO {O' x ԍ See Section 3002(a) of the Budget Act expanding and extending the Commission's auction authority and,  {O'inter alia, directing the Commission to design and test a combinatorial bidding system.   S' "z123. We received a number of comments on the type of auction design that should be utilized  xfor the auction of broadcast construction permits. Several commenters addressing the issue oppose the  xVuse of a simultaneous multiple round auction design, arguing that the Commission should employ a  S' xsimpler auction design.OuZ$hO {O^ ' xZ ԍ See, e.g., Comments of National Association of Broadcasters at 34; Seven Ranges Radio Co., Inc. at 3;  x Liberty Productions, LP at 7; HeidelbergStone Broadcasting Co. at 13; Rio Grande Broadcasting Co. at 13; Independent Broadcast Consultants, Inc. at 7.O Specifically, simultaneous multiple round bidding is regarded as inappropriate  xZfor broadcast auctions because such auctions will be for scattered facilities and there is little likelihood  SJ ' xthat bidders will seek to acquire groupings of licenses.lvJ FhO {O0'ԍ See Comments of National Association of Broadcasters at 4. l A small number of commenters specifically  x}favor the use of open outcry for broadcast auctions, due to the simplicity and speed of that auction  S ' xmethod.w hO {Or' x ԍ See Comments of John W. Barger at 5; Seven Ranges Radio Co., Inc. at 2, 5; Independent Broadcast Consultants, Inc. at 78. With regard to the auction methodology to be employed in the event we determine to auction  xITFS licenses, several commenters express similar reservations about simultaneous multiple round bidding  S ' xgand support open outcry.x" 2 hO yO|' xk ԍ These commenters contend that, given the lack of interdependence between ITFS licenses, a simultaneous  x multiple round auction design would be unnecessarily costly and complex, and they instead favor a sequential auction  {O ' x; design, such as a sequential open outcry auction. See, e.g., Comments of Wireless Cable Association International, Inc. at 2223; BellSouth Corporation and BellSouth Wireless Cable, Inc. at 1314.  Another commenter specifically favors the use of multiple round auctions  xQbecause in single round or sealed bid auctions the successful bidder may be forced either to bid too much  SZ'for the spectrum or be unable to increase its bid if it is too low.yZhO {O'ԍ See #X\  P6G;P#Comments of Apache Radio Broadcasting Corporation at 8.  S ' "/{124. The Notice, 12 FCC Rcd at 2238687 ( 58), also sought comment on how the Commission  xshould deal with any "daisy chains" presented in auctions of AM radio, LPTV, or television or FM  xtranslator applications. As we discussed, daisy chains occur when an application is mutually exclusive  S' xV(i.e., would cause interference) with a second application, which is mutually exclusive with a third  xapplication in the same or adjacent community, and so on, even though the first application may not be  SF' xdirectly mutually exclusive with any application except the second.zXFhO yO%' x ԍ These daisy chains occur due to the contour overlap rules used to determine interference for AM, LPTV, and  x television and FM translator applications. Because applicants apply for full service FM and television stations  x pursuant to allotment tables that specifically identify vacant channels, daisy chains do not generally occur in those"$'y,l(l(4'" services.  Due to the possibility of daisy"F/Xz,l(l(,,"  xchains in AM, LPTV, and television and FM translator auctions, there may be limited instances in these  xauctions where, depending on who becomes the winning bidder among a mutually exclusive group,  x7another application (in addition to the auction winner) may become grantable, or another smaller mutually  xexclusive group will still exist and need to be resolved. We therefore sought comment on appropriate  xmethods for resolving any daisy chains in the auction context. We also suggested that commenters address  x whether the methods used to resolve daisy chains in the lottery process (such as the holding of "sub xlotteries") are applicable in the auction context, or whether a different method or methods may be more suitable, such as the use of combinatorial bidding.  S' "u|125. Only two commenters addressed the issues of daisy chains and combinatorial bidding.  xSpecifically, one commenter argues that daisy chains are a problem that should be dealt with by not  SH ' xconducting auctions for AM stations.0{H XhO {O@ ' x ԍ See #X\  P6G;P#Comments of JTL Communications Corp. at 7. We note this proposal is contrary to the Commission's statutory mandate in the amended Section 309(j) to auction mutually exclusive broadcast applications. 0 The other commenter states that combinatorial bidding should  x}be avoided because it is an open invitation to speculators who will then resell licenses to the highest  S 'bidder.c| hO {OJ'ԍ See Comments of Seven Ranges Radio Co., Inc. at 10.c  S ' "}126. As we discussed in the Notice, because the same type of auction methodology may not be  xappropriate for all mutually exclusive broadcast and secondary broadcast applications, different approaches  xmay be warranted to resolve mutual exclusivity among certain categories of broadcast applications and  xfor "daisy chain" situations. After considering the comments on this issue, we conclude that the  xappropriate auction design will vary depending on the type of service involved, the number of construction  xxpermits at stake, how many bidders are likely to participate, and the degree to which interdependence may  xbe important to those likely to bid on a particular type of permit. As the record suggests, we believe that  xa simple, rapid auction design, such as a single round sealed bid auction, will likely be appropriate for  x*those permits that are relatively lowvalued or for which there is little likelihood of interdependence (such  xkas translator construction permits). At the same time, however, our auction experience demonstrates that  xthere are instances where a simultaneous multiple round auction design can prove useful in ensuring that  S' xan auction progresses as efficiently as possible. In addition, as we discussed in the Notice, simultaneous  x/multiple round bidding has the advantage of affording bidders more information during the auction  xtconcerning the value that competing bidders place on the permits being auctioned than is the case with  xsingle round bidding. For this reason, simultaneous multipleround bidding is more likely to result in the  xparty that values the spectrum the most acquiring the permit. Therefore, for broadcast construction  xpermits that are more highly valued, or for which there is a greater likelihood of interdependence among the permits, we will likely use simultaneous multiple round auctions.  S' "~127. Consistent with our Part 1 rules, we therefore delegate authority to the Mass Media Bureau  xand the Wireless Telecommunications Bureau (hereafter, the Bureaus) to seek comment on and establish  xIan appropriate auction design methodology prior to the start of each broadcast auction or group of  S<' xkbroadcast auctions. As we discussed in the Third Report and Order, 13 FCC Rcd at 447449, the Budget  xAct requires that, "before the issuance of bidding rules" the Commission must provide adequate time for  xIparties to comment on proposed auction procedures, and that "after issuance of bidding rules," the" 0D|,l(l(,,"  xCommission must provide adequate time "to ensure that interested parties have a sufficient time to develop  S' xbusiness plans, assess market conditions, and evaluate the availability of equipment."{}hO yO@'ԍ Balanced Budget Act of 1997,  3002(a)(1)(B)(iv); 47 U.S.C.  309(j)(3)(E).{ Consistent with  S' xtthese provisions, in the Third Report and Order we directed the Wireless Telecommunications Bureau,  S' xunder its existing delegated authority,^~XhO {O'ԍ See 47 C.F.R.  0.131(c), 0.331, 0.332.^ to seek comment on a variety of auctionspecific issues prior to  Sb' xthe start of each auction.bhO {O' x ԍ See Third Report and Order, 13 FCC Rcd at 448. See also Comment Sought on Balanced Budget Provisions  {O ' x Calling For Reserve Prices or Minimum Opening Bids in FCC Auctions, Public Notice, DA 97-1933 (rel. Sept. 5,  {O ' x 1997); Comment Sought on Reserve Prices or Minimum Opening Bids for LMDS Auction, Public Notice, DA 97-2224  {OJ ' x (rel. Oct. 17, 1997) ; Comment Sought on Reserve Prices or Minimum Opening Bids and Other Auction Procedural  {O 'Issues for the Phase II 220 MHz Service, Public Notice, DA 9848 (rel. Jan. 13, 1998).  Specifically, we directed the Wireless Telecommunications Bureau to consider  xQa variety of mechanisms relating to daytoday auction conduct, including the structure of bidding rounds  xZand stages, establishment of minimum opening bids or reserve prices, minimum acceptable bids, initial  xmaximum eligibility for each bidder, activity requirements for each stage of the auction, activity rule  x3waivers, criteria for determining reductions in eligibility, information regarding bid withdrawal and bid  S' xremoval, stopping rules, and information relating to auction delay, suspension, or cancellation. See Third  St' x@Report and Order, 13 FCC Rcd at 448. We also directed the Wireless Telecommunications Bureau to  xafford interested parties a reasonable time, in light of the start date of each auction and relevant pre S& 'auction filing deadlines, to comment on auctionspecific issues.  Id.  S ' "+128. As we indicated in the Third Report and Order, we believe that this process is consistent  S ' xwith the requirements of Section 309( j)(3)(E), as added by the Budget Act, and will afford potential  xbidders adequate notice, as well as an opportunity to comment on issues relating to the daytoday conduct  Sb' xof each auction. See 47 U.S.C.  309(j)(3)(E). Although we did not specifically propose to employ this  xpractice for broadcast auctions, we conclude that it should apply in this context as well. Therefore,  S' x^consistent with our decision in the Third Report and Order and the guidance we provide herein, we direct  S' xDthe Bureaus to seek comment on the types of auctionspecific issues raised in the Notice prior to the start of each auction or group of auctions for particular broadcast services.   Sx'` `  (2) Upfront Payments, Minimum Opening Bids and Reserve Prices  S(' "129. The general Part 1 auction rules provide for the submission of upfront payments by  x*prospective bidders prior to the commencement of an auction, the amount of which generally determines  S' x&a bidder's eligibility to bid on any license or combination of licenses in each round of the auction. See  S' x47 C.F.R.  1.2106. In the Notice, 12 FCC Rcd at 22385 ( 56), we proposed that the Bureaus should  xestablish the upfront payments applicable in broadcast service auctions, which would be announced by  xpublic notice prior to any auction. We sought comment on the appropriate amount, or method of  xdetermining an appropriate amount, of this upfront payment for bidders in broadcast auctions. While in  xVprevious auctions we have typically based the upfront payments upon the amount of spectrum and  xpopulation (or "pops") covered by the licenses or permits for which parties intend to bid, we noted that  x"in the broadcast area there is other data, such as market size, market ratings, advertising rates and  xbroadcast transactions, that might prove more useful than the MHzpop formula utilized in valuing other,  xpless established telecommunications services. We therefore sought comment on alternate valuation"t1,l(l(,,t" formulas.  S' "130. As we recognized in the Notice, 12 FCC Rcd at 22381 ( 57), Congress in the Budget Act  xdirected the Commission to prescribe methods by which a reasonable reserve price or a minimum opening  xbid will be established for any license that is to be assigned by competitive bidding, unless such reserve  S:' xDprices or minimum opening bids would be contrary to the public interest.@Z:hO {O' x ԍ See 47 U.S.C.  309(j)(4)(F). A "reserve price" is a price below which a license subject to auction will not  x be awarded. A "minimum opening bid" is a minimum value below which bids will not be accepted in the first round of an auction.@ In response to this legislative  xDdirective, we proposed that the Bureaus consider the use of reserve prices and minimum opening bids for  xauctionable commercial broadcast construction permits. We sought comment on the methodology to be  x@employed in establishing each of these mechanisms, and noted the possibility of establishing minimum  xopening bids at the same level as upfront payments, as was done in connection with the auction for the  x800 MHz Specialized Mobile Radio service, and of using a MHzpop formula, as was done in the  SJ ' x recentlycompleted Local Multipoint Distribution Service auction.J hO {O' xD ԍ Public Notice, Auction of 800 MHz Specialized Mobile Radio Upper 10 MHz Band, DA 972147 (rel. Oct.  x 6, 1997), 62 Fed. Reg. 55251 (Oct. 23, 1997) (establishing minimum opening bids that are subject to reduction and  {Of' x* setting the initial amounts at the level of upfront payments).  See also Auction of Local Multipoint Distribution  {O0' x Service (LMDS), Minimum Opening Bids or Reserve Prices, Order, 13 FCC Rcd 782 (WTB 1998) (establishing  yO' x minimum opening bids for LMDS auction and stating that Wireless Telecommunications Bureau has discretion to lower minimum opening bids as it deems appropriate). We also sought comment on a variety  xQof alternative methods for estimating the value of the relevant construction permits and thus for providing  xZa basis for estimating reserve prices or minimum opening bids. Finally, we proposed to announce any  xreserve prices or minimum opening bids established for broadcast construction permits by public notice  xprior to auction, unless, based upon the record with respect to a particular auction or service, it is determined that a reserve price or minimum opening bid would not be in the public interest.  S2' "V131. A number of commenters addressed the issues of upfront payments, minimum opening bids,  xkand reserve prices in the broadcast auction context. With regard to upfront payments, commenters argue  xthat while upfront payments are useful to ensure that only serious applicants participate in broadcast  S' xauctions,Wh hO {O'ԍ See Comments of Thomas C. Smith at 10. W upfront payments should be small to allow small businesses to compete effectively. hO {OT'ԍ See, e.g., Comments of JTL Communications Corp. at 4; Independent Broadcast Consultants, Inc. at 89.  xCommenters differ, however, on how upfront payments should be determined, and suggest a variety of  Sj' xVfactors, including: (1) the population served and the class of station;j hO {O!' x ԍ See Comments of Apache Radio Broadcasting Corporation at 2, 67; Kidd Communications at 8; Thomas Desmond at 9. (2) data drawn from station  SB' xtransactions and the performance of operating stations in the market that the applicant hopes to serve;%$BhO {O$' x ԍ See Comments of Tanana Valley Television Co. at 2. However, this use of market data to establish an  {O%' x. appropriate upfront payment is opposed by several other commenters addressing the issue. See Comments of Kidd  x Communications at 89; Independent Broadcast Consultants, Inc. at 89; JTL Communications Corp. at 5. In  x particular, Kidd Communications (at 89) opposes this method of setting the upfront payment, arguing that it would"$',l(l(+'"  x be unfair to base the upfront payment on existing competitors' revenues in the market because a "startup station" might never be able to achieve the same financial results. %"B2 ,l(l(,,"  S' x(3) current permit costs;^ hO {O'ԍ See Comments of JTL Communications Corp. at 4.^ and (4) a flat upfront payment amount such as $100,000.hO {OR'ԍ See Comments of J. McCarthy Miller and Biltmore Forest Broadcasting FM, Inc. at 16. At least one  xMcommenter believes that pending applicants who filed prior to July 1, 1997, should only be required to  x&submit a nominal upfront payment, while other applicants should be required to demonstrate a greater  S' xfinancial commitment.TDhO {Ol 'ԍ See Comments of John W. Barger at 4.T Other commenters oppose an upfront payment requirement for broadcast  S`' xgauctions, arguing that upfront payments are contrary to the public interest,n`hO {O 'ԍ See Comments of Michael R. Ferrigno at 8; Terry A. Cowan at 4.n or that the Commission's  S8'existing default and bid withdrawal payments alone are sufficient to discourage insincere bidders.8h hO {O@' x ԍ See Comments of Liberty Productions, LP at 7; HeidelbergStone Broadcasting Co. at 14; Rio Grande Broadcasting Co. at 14.  S' "4132. Several commenters also discussed the Commission's tentative conclusions regarding  xminimum opening bids and/or reserve prices. Those commenters who support their use make a variety  x&of suggestions as to how such mechanisms should be established. One commenter contends that the  xZminimum opening bid should be equal to the upfront payment and based upon the population proposed  SH ' xto be served.H hO {O' x ԍ See Comments of Apache Radio Broadcasting Corporation at 2. Accord Comments of JTL Communications Corp. at 6 (set opening bid amount at same level as upfront payment). In contrast, another commenter argues that minimum opening bids, like upfront payments,  xshould be determined using data based upon station transactions and the performance of operating stations  xin the market that the applicant hopes to serve, particularly in smaller market areas for which there is no  S ' xcomparable market data that could fairly be used to estimate license value.b hO {O'ԍ See Comments of Tanana Valley Television Co. at 2.b Other commenters oppose  xthe establishment of a minimum opening bid and/or reserve price for the auction of broadcast construction  xpermits, arguing that (1) the Commission, Mass Media Bureau and Wireless Telecommunications Bureau  x3lack the expertise and/or staff resources necessary to establish a minimum opening bid and/or reserve  S0' x price;0hO {O~ ' x ԍ See Comments of Liberty Productions, LP at 78; HeidelbergStone Broadcasting Co. at 1415; Rio Grande Broadcasting Co. at 1415. (2) a minimum opening bid or reserve price is either unnecessary or not in the public interest  S' xbecause the auction itself will establish the fair market value of the broadcast construction permits;hO {O#' x ԍ See Comments of Seven Ranges Radio Co., Inc. at 4; Liberty Productions, LP at 8; KM Communications, Inc. at 7; James G. Cavallo at 67; HeidelbergStone Broadcasting Co. at 15; Rio Grande Broadcasting Co. at 15. or  x(3) the purpose of a minimum opening bid or reserve price would only be to generate funds for the U.S."3b,l(l(,,"  S' xTreasury.ThO {Oh'ԍ See Comments of Terry A. Cowan at 4.T Two commenters also contend that, for pending applications filed before July 1, 1997,  S'minimum opening bids or reserve prices would be particularly inequitable.ZhO {O' x ԍ See Comments of KM Communications, Inc. at 7; J. McCarthy Miller and Biltmore Forest Broadcasting FM, Inc. at 16.  S' "_133. We disagree with those commenters who contend that the Commission lacks expertise to  x@establish upfront payments, minimum opening bids or reserve prices for auctions. The submission of  x&upfront payments prior to auction has been provided for in our general Part 1 auction rules since they  x7were first promulgated, and the staff of the Wireless Telecommunications Bureau has established upfront  S' xpayments for most of the Commission's 1 6 previouslyconcluded spectrum auctions. That Bureau has also  x3accurately evaluated such disparate services as Direct Broadcast Satellite, Digital Audio Radio Satellite  xService, 800 MHz Specialized Mobile Radio and the Local Multipoint Distribution Service to establish  xminimum opening bids. Moreover, Congress in the Budget Act explicitly directed us to prescribe methods  xtby which reserve prices or minimum opening bids will be established, unless we specifically determine  S ' xthat doing so would not be in the public interest. See 47 U.S.C.  309(j)(4)(F).] hO yOt' xb ԍ The Conference Report to the Budget Act also indicates that Congress generally intended for the Commission  {O<' x to establish such minimum opening bids or reserve prices for future auctions. See H.R. Rep. No. 217, 105th Cong.,  {O' x 1st Sess. 573 (1997) ("the Commission must also prescribe methods by which a reasonable reserve price will be  x required, or a minimum bid will be established, for any license or permit assigned by means of auction") (emphasis added). ] General assertions by  xsome commenters that establishment of a minimum opening bid or reserve price would not be in the  xpublic interest for broadcast auctions are unpersuasive, given the terms of Section 309(j)(4)(F) and the successful use of minimum opening bids in previous Commission auctions.  SZ' "134. As discussed above (see supra  127128), we will, for auctions of broadcast construction  S4' xpermits, employ the procedure adopted in the Third Report and Order, whereby we will seek comment  xon a variety of auctionspecific issues prior to the start of the auction. Therefore, consistent with the  S' xDBudget Act, our treatment of these issues in the Third Report and Order, and our proposals in the Notice,  xwe delegate to the Bureaus authority to seek comment on and, as appropriate, to establish upfront  xpayments, minimum opening bids and/or reserve prices for each auction or group of auctions of broadcast  xservice construction permits. In formulating proposals regarding upfront payments, reserve prices and  xgminimum opening bids, we believe that both Bureaus should consider the issues raised by commenters  xin this proceeding. With respect to the methodology to be employed in establishing each of these  xQmechanisms, among the factors the Bureaus may consider are the type of service that will be offered, the  x^amount of spectrum being auctioned, the degree of competition from incumbent providers, the size of the  xgeographic service areas, potential advertising revenue, unalterable limitations due to physical phenomena  S' xk(e.g., propagation losses), equipment design limitations, issues of interference with other spectrum bands,  xand any other relevant factors that could reasonably have an impact on valuation of the spectrum being auctioned.  S '   S'` ` c. Auction Application and Payment Procedures  S' "135. In the Second Report and Order, the Commission initially established general competitive"4h ,l(l(,,"  xbidding rules and procedures for all auctionable services, but indicated that such rules could be modified  S' x*on a servicespecific basis. More recently, in the Third Report and Order, the Commission substantively  xamended these general competitive bidding rules in an effort to streamline regulation, increase the  S' xefficiency of the auction process, and provide more specific guidance to auction participants. Based on  xthe experience gained in the course of conducting numerous auctions and to provide for a more consistent  S:' xQand efficient competitive bidding process, the Third Report and Order modified the general Part 1 auction  x^rules, and stated that these uniform rules would govern all future auctions, unless the adoption of service S' x^specific rules was determined to be warranted with regard to particular matters. Id., 13 FCC Rcd at 382.  xDAccordingly, we will follow for all broadcast services the procedural and payment rules established in the  S' xSecond Report and Order and Third Report and Order, set forth at 47 C.F.R. Chapter I, Part 1, Subpart  x7Q, with certain modifications, as specifically indicated below. Our objective has been to design rules and  xprocedures that will reduce administrative and financial burdens on bidders and the Commission, ensure  xthat bidders and licensees are qualified, and minimize the delays in the authorization and construction of  S ' xnew or expanded broadcast facilities to serve the public. See 47 U.S.C.  309(j)(3)(A) (in designing  xauction rules, the Commission should seek to promote development and rapid deployment of new technologies, products and services for public benefit, without administrative or judicial delays).  Sb'` `  (1) PreAuction Application Procedures  S4 "V136. Window Filing Approach. As described in the Notice, 12 FCC Rcd at 22387 ( 60), the  xbroadcast and secondary broadcast services currently all have differing filing procedures, and none of these  xprocedures was designed to work in conjunction with the auction of mutually exclusive applications. In  S' xthis First Report and Order, we replace these disparate filing procedures for the various services with a  x}uniform window filing approach that will facilitate the efficient determination of groups of mutually exclusive applications for auction purposes.  S' "u137. In the television, AM and FM translator services, the new window filing approach will  S' x"replace the existing twostep cutoff list procedures presently utilized. See 47 C.F.R.  73.3571;  S' x74.1233.hO yO' x ԍ Under these rules, after an initial review for acceptability, the lead application is placed on an "A" cutoff  x list by a public notice, which announces a cutoff date by which applications mutually exclusive with, and petitions  x to deny, the lead application must be filed. Following an initial review of applications filed in response to the "A"  xQ cutoff list and a determination as to which of these applications are mutually exclusive with the lead application,  x a "B" cutoff list, which enumerates such applications and sets the date for filing petitions to deny against them, is released. The current LPTV and television translator window filing procedures will be modified to  S' x7conform with the auction window filing procedures. See 47 C.F.R.  73.3572(g). In the FM service, as  Sb' xtdiscussed in the Notice, 12 FCC Rcd at 22390 ( 65), the adoption of a fixed period filing window will  xterminate the ability of applicants to tender new and major change FM applications on a first come/first  S' xserved basis, as permitted under the Report and Order in Docket 84750, 50 Fed. Reg. 19936 (May 13,  S' x1985). See also 47 C.F.R.  73.3573. With regard to the FM allotment process, channels will continue  xpto be assigned to the FM Table of Allotments through our existing rulemaking process, and we will  xcontinue to accept and process petitions for rulemaking requesting the allotment of new FM channels to  xthe Table of Allotments at any time. However, we will no longer open filing windows in allotment report  xxand orders for the newlyallotted channel; applicants will, instead, be able to apply for any such allotments  S( 'during subsequently announced FM auction filing windows. See 47 C.F.R.  73.3564(d). "!5@,l(l(,,"Ԍ S' "138. We hereby replace these disparate filing procedures with a specific time period, or auction  xMwindow, during which all applicants seeking to participate in an auction must file their applications for  S' xnew broadcast facilities or for major changes to existing facilities.hO yO'ԍ As discussed in detail in  177, minor modification applications may continue to be filed at any time. Prior to any broadcast auction, the  xBureaus will release, pursuant to delegated authority, various public notices concerning the auction and  S`' xgthe procedures to be followed in the auction. As indicated in the Notice, 12 FCC Rcd at 22389 ( 63),  xZan initial public notice will announce an upcoming auction and will specify when the window for filing  xgto participate in the auction will open and how long it will remain open. The filing window will remain  xopen a sufficient period of time so that applicants, such as those for the AM and LPTV services, will be  x_able to prepare and file the engineering information necessary to make determinations of mutual  S' xexclusivity. See infra  143. We emphasize that applications filed before or after the dates specified in  xQthe public notice will not be accepted. Applications submitted prior to the window opening date identified  xin the public notice will be returned as premature, and applications submitted after the specified deadline will be dismissed with prejudice as untimely.  S ' "R139. We will retain the discretion to have combined filing windows allowing the submission of  xDapplications for several broadcast services, or to have separate filing windows for each type of broadcast  xor secondary broadcast service. Although the opening of a combined window for the filing of applications  xfor the various broadcast and secondary broadcast services at the same time may be more efficient, we  xrecognize that opening separate windows for each service may better accommodate the circumstances  xunique to each service and better allow the Commission to control the filing and processing of  S' xQapplications.XhO {O' xg ԍ See, e.g., Comments of Kyle Magrill at 2; Six Video Broadcast Licensees at 4 (supporting separate filing windows for different services). We will open filing windows for the broadcast and secondary broadcast services as often  xas our resources allow, taking into consideration the Commission's need to maintain orderly processing  xZprocedures and the frequency with which broadcast auctions may be efficiently conducted, as well as  xtequitable considerations that may warrant conducting auctions for pending applications before opening  x7auction filing windows for new applications. Mutually exclusive broadcast applications filed during these  xwindows may also be included in auctions of unsold or defaulted licenses, particularly if the number and  xestimated value of the construction permits at issue is low. We feel that the efficiency of the broadcast  xapplication and auction process will be best promoted by the Commission retaining discretion to open filing windows and schedule auctions in such a flexible manner.  ST' "140. We feel that the uniform window filing approach described above best complements the  xauction process and, at the same time, provides the staff with a mechanism to control effectively the filing  S' xxand processing of broadcast applications.hO yOV!' x< ԍ Thus, we disagree with one commenter who thought that filing windows would be burdensome for  {O"'Commission staff. See Comments of Hatfield & Dawson Consulting Engineers, Inc. at 4. In particular, adherence to date certain openings and closings  xof filing windows (rather than first come/first served processing) will enable the Commission to identify  x*more efficiently discrete groups of mutually exclusive applications for auction purposes. Although a few  x"commenters state that the window filing approach would encourage the filing of large numbers of  Sd' xcspeculative applications,}d hO {O''ԍ See Comments of Seven Ranges Radio Co. Inc. at 6; Sellmeyer Engineering at 2.} we have found that speculation is actually greatly reduced in the auction"d6,l(l(,,g"  xccontext, given the strict payment and other bidding requirements. Given the paucity of substantive  xcomments even addressing our window filing proposal, we conclude that commenters had no strong  x&objections to the replacement of our existing disparate filing procedures with a uniform window filing approach.  S84 "141. ShortForm Applications. To reduce the burden on bidders and the Commission, and to  xminimize the potential for delays, broadcast applicants, in accordance with our general Part 1 auction  xrules, will be required to submit only a shortform application (FCC Form 175) prior to any auction, and  xgonly winning bidders will need to file complete longforms (FCC Form 301 for AM, FM and television  xstations, FCC Form 346 for LPTV and television translators, or FCC Form 349 for FM translators).  x<Specifically, in response to a public notice announcing a window for the filing of broadcast and/or  x*secondary broadcast applications for new stations and for major changes in existing facilities, we will, as  S! ' xproposed in the Notice, 12 FCC Rcd at 22390 ( 65), require applicants to file a shortform application,  S 'along with any engineering data necessary to determine mutual exclusivity in a particular service.ef hO yOc ' x ԍ With a single exception involving freeze waivers, applicants will not be permitted to file applications for new  {O+' x analog television stations in these windows because, in the Sixth Report and Order concerning advanced television,  x the Commission essentially ended the licensing of new analog television stations. Specifically, the Commission  x determined to treat the existing vacant analog television allotments in the Table of Allotments that were not the  x subject of pending applications as deleted, and stated that we would not accept new applications for new stations on  x those allotments. With regard to pending applications and petitions for rule making requesting new television  x^ allotments, we determined to maintain and protect those vacant allotments that were the subject of such pending  {O' x applications. Sixth Report and Order, 12 FCC Rcd at 14639. In the event we grant a pending freeze waiver request  xk and accept for filing a singleton television application filed prior to July 1, 1997, we will announce a period during  {Oo' x which mutually exclusive applications may be filed. See supra  70. Any applicant then filing a competing  xx application against a pending analog television applicant granted a freeze waiver will only need to submit an FCC Form 175 application indicating the specific television allotment at issue. e  S ' "q142. With regard to the FM service, the Notice proposed that applicants would apply by  xsubmitting the FCC Form 175 application for any vacant FM allotment specified in the public notice  xannouncing the auction filing window. Applications specifying the same vacant FM allotment would be  x7mutually exclusive, and no supplemental engineering data would be necessary to make this determination.  xCommenters, however, noted that the Commission's proposal would protect from subsequently filed  xapplications (such as minor change applications that may be filed at any time) only the reference points  xof any vacant allotment. According to these commenters, the reference point of a vacant allotment and  xan applicant's actual desired location may be separated by a considerable distance, and they argued that  xFM applicants should be allowed to submit actual site preferences prior to the auction, emphasizing that  xthe ability to protect a specific tower or site from subsequently filed proposals would be a crucial factor  S' xin deciding whether to participate in an auction and how much to bid.$B hO {O!' x* ԍ See Comments of Association of Federal Communications Consulting Engineers at 3 (auction participants  xQ will likely conduct extensive investigations of potential transmission sites before deciding whether to apply for a  xZ vacant allotment, and, unless applicants' site preferences are protected and "cutoff" from subsequently filed  x applications, auction participants will be exposed to unnecessary risk that, at conclusion of the auction, their preferred  x! sites will no longer be usable); Reynolds Technical Associates at 2 (if only reference coordinates for FM allotments  x receive protection, then bidders will not know the value of the allocations they are bidding on during the course of  xk an auction); Hatfield & Dawson Consulting Engineers, Inc. at 2 (initial filing for FM stations must be sitespecific  x because subsequentlyfiled minor change applications by existing stations, while protecting the reference coordinates"-',l(l("'"  x of vacant allotments, might not protect actual usable site coordinates, thereby limiting new station applicants to undesirable sites). $ Accordingly, to address these"7 ,l(l(,,j"  xgconcerns, we will give FM applicants the opportunity to submit a set of preferred site coordinates as a  xsupplement to the FCC Form 175. We emphasize that FM applicants are not required to submit a set of  S'preferred site coordinates, and may simply indicate the vacant allotment upon which they intend to bid.  hO yOp' x ԍ Any specific site indicated by FM applicants will be entered into the Commission's database without  x determining its ultimate acceptability from a technical standpoint, and the site will be protected from subsequently  {O' x filed applications (such as minor modification applications) as a fullclass facility. See  180183 for general  x discussion of cutoff protection. Requests to upgrade, downgrade or change the channel of the allotment will not  x be accepted prior to the auction. In addition, we note the possibility that preferred site coordinates filed for two  x separate FM allotments during the same filing window may conflict, creating crossallotment mutual exclusivity.  x In the unlikely event that the preferred site coordinates submitted for two separate FM allotments were to conflict,  x we will expect the winning bidders for these allotments to resolve such conflict through negotiations after the close  yO 'of the auction. Ĕ  S`' " 143. Applicants for AM stations, LPTV stations, and television and FM translators will be  xrequired to file shortform applications specifying a channel or frequency upon which the applicant may  xoperate in accordance with the Commission's existing interference standards for these services, which we  S' xare not altering in any way.ZZ hO {Oz' x< ԍ See, e.g., 47 C.F.R.  73.37, 73.182, and 73.187 (AM interference rules); 47 C.F.R.  74.703; 74.705,  x 74.707 and 74.709 (LPTV and television translator interference rules); and 47 C.F.R.  74.1203 and 74.1204 (FM translator interference rules). Z To determine which AM, LPTV, and television and FM translator  xapplications are mutually exclusive for auction purposes, we will require applicants for these services to  xfile, in addition to their shortform applications, the engineering data contained in the pertinent FCC form  Sp' x(i.e., FCC Form 301, FCC Form 346 or FCC Form 349). Similarly, in those rare instances in which  x analog television licensees file major modification applications (such as a change in the community of  S" ' xlicense), we will require that such applicants file both an FCC Form 175 and the engineering data  xcontained in the FCC Form 301. We believe that submission of this technical data with a shortform  xconstitutes the least burdensome means of providing us with the necessary information to make mutual exclusivity determinations.  SZ' "144. Overall, we conclude requiring prospective bidders to file only shortforms (supplemented  xfor nontable services with engineering information) prior to any auction will enable us to identify the  S ' xgroups of mutually exclusive applications for auction in the most expeditious manner possible.  hO {O' x ԍ See Comments of TriCounty Broadcasting, Inc. at 4; KERM, Inc. at 4 (prior to auction, requiring submission of longforms is unnecessary and preparing longforms is burdensome and expensive for applicants).  Based  x*on our experience in conducting numerous auctions in different services, we also believe that submission  xof the FCC Form 175, which requires various certifications as to the legal, technical, financial and other  xqualifications of the applicant, is sufficient documentation to demonstrate an applicant's qualifications to  xVparticipate in an auction. We therefore disagree with commenters who argue that merely requiring  xsubmission of the shortform prior to auction (as is our practice for all auctions) will invite speculators"B8n,l(l(,,"  S' x^and insincere applicants.K\hO {Oh' x ԍ See Comments of Williams Broadcasting Co. at 45; Todd Stuart Noordyk at 45; Donald James Noordyk  {O2' x at 5; Batesville Broadcasting Co., Inc. at 45; Positive Alternative Radio, Inc., et al. at 56; Throckmorton Broadcasting, Inc. at 5.K We emphasize that, for broadcast auctions, we will follow the general auction  S' xkrule, 47 C.F.R.  1.2105, with regard to completion of the shortformNZhO {Od' xQ ԍ See Section 1.2105(a)(2) for a description of the information required to be submitted on the FCC Form 175.  x 47 C.F.R.  1.2105(a)(2). Applicants will also need to indicate whether they are eligible for the new entrant bidding credit adopted herein. N and exhibits to be submitted with  S' xthe shortform.$hO yO^ ' x ԍ For example, applicants will need to submit exhibits disclosing certain ownership information, identifying  xb all parties with whom the applicant has entered into joint bidding arrangements, and, if seeking any special measures  {O ' x that may be available to small businesses, disclosing gross revenue information. See 47 C.F.R.  1.2105(a)(2),  {O '1.2112; Third Report and Order, 13 FCC Rcd at 419420. More detailed information about the completion and submission of the shortform applications will be included in the public notices released prior to the opening of auction filing windows.  S84 "145. Amendment of ShortForm Applications.  To encourage maximum bidder participation in  xxbroadcast auctions, we will, in accordance with the Part 1 auction rules, provide applicants whose timely xfiled shortform applications are substantially complete, but which contain minor errors or defects, with  xan opportunity to correct and resubmit their applications prior to the auction. However, applicants will  S' xnot be permitted to make any major changes to their applications after the initial filing deadline (i.e., the  xclose of the filing window), and any application that does not contain the requisite certifications will be  SK ' xkdismissed with prejudice and may not be resubmitted. See 47 C.F.R.  1.2105(b)(1). Major amendments  xtinclude changes in ownership of the applicant that would constitute a change of control, changes in an  x^applicant's size that would affect eligibility for any designated entity provisions, and changes in the license  S ' xservice areas identified in the shortform applications on which the applicant intends to bid. See 47 C.F.R.  x 1.2105(b)(2). For auctions of broadcast services, we will construe "changes in the license service areas"  x*to encompass changes in the engineering information submitted with shortform applications in nontable  xservices, changes of the vacant allotments specified in shortforms in the FM and television services, or  xchanges in any preferred site coordinates submitted with shortforms in the FM service. Thus, changes  xxin the engineering submissions accompanying a shortform will be regarded as major changes, and cannot  S' x3be made after the initial filing deadline.D hO {O' x ԍ As discussed in detail below (see infra  149153), to the extent engineering information is required to be  xk submitted with shortforms for certain broadcast services, such information is required only for the staff to utilize  x in making mutual exclusivity determinations for auction purposes. A comprehensive review of any applicant's  x technical proposal will be undertaken by the staff only postauction, and an applicant who becomes a winning bidder  {O ' x* will be able to make changes to its technical proposal at that time. We will also, as described above (see supra   x* 17), allow applicants who have filed competing major modification applications, or competing major modification  x and new applications, to make changes in their engineering submissions following the filing of their shortforms so as to resolve their mutual exclusivities. Minor amendments include typographical corrections, those  xreflecting ownership changes or formation of bidding consortia specifically permitted under the anti S'collusion rule (see infra  158), and those making other changes not identified as major.  SI' "146. After reviewing the shortform applications, the Bureaus will issue a public notice listing  xxall applications containing minor defects, and applicants will be given the opportunity to cure and resubmit"!9,l(l(,,"  xdefective applications. On the date set for submission of corrected applications, applicants who on their  xIown discover minor errors in their applications also will be permitted to file corrected applications.  xFollowing a review of the corrected applications, we will proceed to determine which of the shortform  S'applications accepted for filing are mutually exclusive. See infra  149153.  S:4 "t147. Method of Filing ShortForm Applications. After requesting comment on the issue, the  S' xtCommission determined in the Third Report and Order to require all shortform applications to be filed  S' xelectronically beginning January 1, 1999. See 47 C.F.R.  1.2105(a). The Notice in this proceeding, 12  xDFCC Rcd at 2239091 ( 67), anticipated that all broadcast and secondary broadcast applicants would file  xtheir FCC Form 175 applications electronically, and requested comment on this proposal. Some  xcommenters oppose requiring electronic filing, stating concerns about technical problems and placing  xcertain applicants, such as LPTV and translator applicants and those who are not computer literate, at a  S' ' xMdisadvantage.' hO {O ' x ԍ See Six Video Broadcast Licensees at 6; Kyle Magrill at 3; Thomas C. Smith at 12; Liberty Productions, LP at 8; Rio Grande Broadcasting Co. at 15; HeidelbergStone Broadcasting Co. at 15. After consideration, we have determined to follow the general auction rule mandating  x&electronic filing, and will therefore require all applicants for broadcast auctions to file their FCC Form  x8175 applications electronically beginning January 1, 1999, unless it is not operationally feasible.  xApplicants for nontable services, who, as noted above, must submit engineering information with their  xshortforms, will be required to file the engineering section of the electronic versions of the FCC Forms  S_' x301, 346 and 349, which are currently being developed.;x_"hO yO!' xp ԍ If the electronic versions of the FCC Forms 301, 346 and 349 are not available by the time of the first  x  auction filing window opened for new applicants, then the Bureaus will by public notice announce the filing  xb procedures for applicants to follow in submitting the necessary engineering information. We note that this question  x7 of the method of filing the engineering data necessary to make mutual exclusivity determinations will not arise in  x the initial broadcast auctions expected to be conducted by the Commission, which will be limited to pending  x applicants who have already filed complete longform applications and who will only need to submit the FCC Form 175. ; More detailed instructions on electronic filing will be provided in the public notices announcing auction filing windows.  S' "148. We believe that requiring electronic filing for broadcast auctions will best serve the interests  xof the prospective bidders as a whole. Electronic filing does not pose an undue financial burden for  xtapplicants, as no fee is assessed for filing the FCC Form 175 electronically. This method of filing also  xgpromotes openness in the auction process generally. Competing bidders, as well as the general public,  xmay easily review electronically filed applications by downloading applications, without needing to travel  x*to Commission headquarters or contract for the photocopying of paper applications. To further facilitate  xpublic access, the Commission has developed userfriendly electronic filing software and Internet World  xWide Web forms to give auction applicants the ability to easily file and review applications. This  xsoftware also aids applicants in ensuring the accuracy of their applications as they are being completed,  xkand enables applicants to correct errors and omissions prior to submitting their applications. To assist the  xpublic, we provide technical support personnel to answer questions and work with callers using the  xelectronic auction system. Especially after the recent enhancements to our electronic filing system, we  xare confident that the system is reliable and secure, and bidders in previous auctions have apparently  xagreed, as the vast majority have chosen to file electronically, even when electronic filing was not":b ,l(l(,,"  S' xrequired.dXhO yOh' x ԍ For example, in the 800 MHz SMR auction, 93% of the qualified bidders filed their shortform applications  x< electronically. Moreover, we required all applicants to file their shortforms electronically in the Wireless Communications Service auction, with no objections from bidders. d While we are cognizant of the fact that some broadcast applicants may currently lack  xcexperience in the filing of electronic applications, we feel, for the reasons described above, that the  xxadvantages of electronic filing are significant, and we will therefore, in accordance with the Part 1 auction  S' xrules, require shortform applications to be filed electronically.hO yO' xD ԍ The electronic filing of shortform applications is also consistent with the Commission's movement toward  {O' xx electronic filing in the broadcast area generally. See Notice of Proposed Rulemaking, 1998 Biennial Regulatory  {O ' x Review Streamlining of Mass Media Applications, Rules, and Processes, 13 FCC Rcd 11349, 1135255 (1998)  {Ol ' x (Nontechnical Streamlining Notice); Notice of Proposed Rulemaking, 1998 Biennial Regulatory Review Amendment  {O6 'of Part 73 and Part 74 Relating to Call Sign Assignments for Broadcast Stations, FCC 98130 (rel. June 30, 1998).  Although we are mandating the  xelectronic filing of the FCC Form 175 in broadcast auctions, we nevertheless reserve the right to provide  S8'for manual filing in the event of technical failure or other difficulties. xxX  S4 "  149.  Determination of Mutual Exclusivity.  After receipt of the shortform applications, the  xCommission must determine which applications are mutually exclusive for auction purposes. In the  S' x}Notice, 12 FCC Rcd at 22391 ( 68), we tentatively concluded that, in cases where applicants have  xsubmitted engineering data in addition to the FCC Form 175, the Commission would not engage in pre xauction processing of the data, beyond the review necessary to determine mutual exclusivity for auction  xpurposes. We sought comment on an alternate approach whereby the Commission would substantively  xevaluate the submitted engineering data, noting that this more extensive preauction processing could  xreduce the risk of applicants with defective technical proposals prevailing at auction. We cautioned,  xhowever, that evaluating and returning shortform applications with technical problems (such as  xinterference or international coordination) would likely delay the auction process, as a returned applicant could seek reconsideration of the Commission's decision.  S ' "p150. While some commenters support our alternate approach of conducting an engineering review  S' x*prior to auction,hO {O#' x! ԍ See, e.g., Comments of Michael Ferrigno at 9; Independent Broadcast Consultants, Inc. at 4; Communications Technologies, Inc. at 2; Hatfield & Dawson Consulting Engineers, Inc. at 2. other commenters addressing this issue support our tentative conclusion to utilize pre S' xcauction engineering submissions solely for the purpose of determining mutual exclusivity. hO {OU'ԍ See, e.g., Comments of KERM, Inc. at 4; TriCounty Broadcasting, Inc. at 4; John W. Barger at 3. These  xIcommenters emphasize that the primary purpose of filing applications prior to auction should be to  xdetermine mutual exclusivity, rather than to determine the acceptability of an applicant's engineering  xproposal or other submissions. According to these commenters, the filing and review of longform  S' xapplications following the auction would be sufficient for the Commission to determine the acceptability  xtof the applicant's engineering proposal, and, moreover, would relieve the Commission of the burden of  xreviewing in depth the technical and other qualifications of all potential applicants prior to the auction.  S}' "151. We will adopt our tentative conclusion and will accordingly examine the engineering data  xsubmitted by applicants for AM and LPTV stations and television and FM translators only to the extent"U; ,l(l(,,"  S' xDnecessary to determine the mutually exclusive groups of applications for auction purposes.[XhO yOh' xQ ԍ As noted above, applicants for FM stations need not submit any engineering data in addition to their FCC  x Form 175 applications because FM applications specifying the same available vacant allotments, as reflected in the FM Table of Allotments, will be mutually exclusive. [ In keeping  x@with the Commission's efforts to "reduce the administrative burdens of the initial stages of the auction  xQprocess, avoid unnecessary delay in the initiation of service, and encourage applicants to participate in the  S' xtprocess," Second Report and Order, 9 FCC Rcd at 2376, we will not make any determination as to the  xacceptability or grantability of an applicant's technical proposal prior to the auction. Deferring technical  xreview until the postauction submission of longform applications by the winning bidders will minimize  xthe potential for delay and will promote the deployment of new broadcasting service to the public as  S'expeditiously as possible, in keeping with our statutory objective.hO {Or ' x ԍ See 47 U.S.C.  309(j)(3)(A) (in designing competitive bidding systems, Commission should seek to promote the development and rapid deployment of new services for public benefit).  S' "152. We observe, however, that by filing the FCC Form 175, broadcast applicants are certifying  xthat they are "legally, technically. . . and otherwise qualified pursuant to Section 308(b) of the  xCommunications Act of 1934," and we expect to be able to rely on applicants' representations in this  xregard. We also remind applicants that the Commission has ample tools at its disposal to discourage  x7unqualified applicants from participating in the auction process. For example, prospective bidders should  xbe aware that a winning bidder whose longform application cannot ultimately be granted for either legal  xor technical reasons may be subject to default payments under the Commission's general competitive  S ' xbidding rules. BhO yOd' xD ԍ Several commenters specifically state that the proposal to defer determinations regarding the acceptability  xM or grantability of an applicant's technical proposal until after the auction appears workable, provided that the  x Commission strictly enforces its postauction processing rules and assures that winning bidders whose longform  x! applications cannot ultimately be granted for either legal or technical reasons are subject to default payments under  {O' x the Commission's general competitive bidding rules. See Comments of Liberty Productions, LP at 9; Rio Grande Broadcasting Co. at 1516; HeidelbergStone Broadcasting Co. at 1516. See infra  161. See also 47 C.F.R. 1.2104(g)(2); 1.2107(b); 1.2109. Our general  xZcompetitive bidding rules also provide that if a winning bidder is found unqualified to be a licensee, the  x*Commission may either reauction the license to existing or new applicants, or offer it to the other highest  S ' x@bidders in descending order at their final bids. See 47 C.F.R.  1.2109(c). These provisions establish  xgstrong incentives for potential bidders to make certain of their qualifications before the auction, so that  xwe may avoid delays in the deployment of new services to the public that would result from the  S' xdisqualification of winning bidders and the reauctioning of broadcast construction permits. See Second  Sp'Report and Order, 9 FCC Rcd at 2382.  S"' "  153. Following the determination of mutual exclusivity among the applications filed in an auction  x7window, the Bureaus will issue a public notice identifying the applicants in each mutually exclusive group  xeligible to bid at auction on the construction permits for the allotments or channels identified in their  xxshortform applications. The public notice may also provide more detailed information regarding the time,  xplace and method of competitive bidding to be used in the upcoming auction, applicable bid submission  xxand payment procedures, the amount of the upfront payments, the procedures and deadline for submitting  xthe upfront payments, and any minimum opening bid or reserve price for the construction permits being  xauctioned. Mutually exclusive applicants identified by public notice will be required to submit the full" < ,l(l(,,'"  xamount of their upfront payment to the Commission's lockbox bank by the date specified in the public  S' x7notice, in accordance with the provisions of 47 C.F.R.  1.2106. After receiving from the Commission's  xlockbox bank the names of all applicants who have submitted timely upfront payments, the Bureaus will  x<issue a public notice announcing the names of all applicants determined to be qualified to bid in the  xZbroadcast auction. An applicant who fails to submit a sufficient upfront payment will not be identified  x@on this public notice as a qualified bidder, will be ineligible to bid in the auction, and its application will  S' xbe dismissed. See 47 C.F.R.  1.2106(c). Each applicant identified on this public notice will be issued  S'a bidder identification number that must be used when submitting bids.,DhO yOR' xt ԍ We decline to follow the suggestion of one commenter that the Commission should require the filing of  xH shortform applications and the submission of upfront payments at the same time, with the number of licenses being  x applied for restricted to the bidding eligibility limit, as established by the amount of the upfront payment submitted.  {O ' x3 See Comments of American Women in Radio & Television, Inc. at 18. We have rejected similar arguments in  x2 previous auction orders, and continue to believe that our established procedures with regard to shortform applications  x and upfront payments strike the proper balance between deterring speculation, yet still providing bidders with  {O ' x flexibility during the auction. See Second Report and Order and Further Notice of Proposed Rulemaking in WT Docket No. 9618 and PP Docket No. 93253, 12 FCC Rcd 2732, 279394 (1997).,  S4 "  154.  NonMutually Exclusive ShortForm Applications.  If the Commission receives only one  x&acceptable shortform application for any broadcast allotments or channels, then mutual exclusivity is  xyabsent and the Commission is precluded from using competitive bidding to award the broadcast  xconstruction permits. In these circumstances, the Bureaus will issue a public notice cancelling the auction  xfor those particular construction permits and identifying the nonmutually exclusive applicants, who will  S ' xMthen be required to submit the appropriate longform application within 30 days. hO {OG' x ԍ See 47 C.F.R.  73.3533 for identification of the specific longforms used in applying for broadcast service construction permits or for modification of construction permits. The Commission's  xtgeneral rules governing the submission of fees and the filing of applications will apply to the longform  S ' xapplications submitted by nonmutually exclusive applicants, . hO {OQ'ԍ See, e.g., 47 C.F.R.  1.1104 (schedule of application filing fees); 1.1111 (filing locations). and these applications will be processed  S[' xin accordance with our general processing procedures. In particular, the longform applications will be  xplaced on public notice, and, consistent with the procedures adopted herein, ten days will be allowed for  S 'the filing of petitions to deny. See infra  165.  S4 "155. AntiCollusion Rule .  In the Notice, 12 FCC Rcd at 2239394 ( 73), we sought comment  xon whether applicants for broadcast auctions should be subject to the Commission's anticollusion rule,  xwhich provides that, after the shortform filing deadline, applicants generally may not discuss the  xcsubstance of their bids or bidding strategies with other bidders that have applied to bid on the same  S' x7licenses or permits. See 47 C.F.R.  1.2105(c).~~ hO yO"' x ԍ We noted that this prohibition also prevents the transfer of indirect information which affects, or could  x affect, bids or bidding strategy, and asked for comment on the effect of the rule. As we have previously explained,  xD the anticollusion rule may affect the way in which auction participants conduct their routine business during an  x auction by placing limitations upon an auction participant's ability to pursue business opportunities in the areas in  {O%' x which it has applied to bid for licenses.  See Public Notice, Wireless Telecommunications Bureau Provides Guidance  {Oi&' x on the AntiCollusion Rule for D, E and F Block Bidders, DA 961460 (Aug. 28, 1996) (August 28 Public Notice);  {O3'' x| Public Notice, FCC Staff Clarifies Application of AntiCollusion Rule to Broadband PCS 'C' Block Reauction, DA"3',l(l(+'"  {O' x 96929 (June 10, 1996); Public Notice, Wireless Telecommunications Bureau Clarifies Spectrum Auction Anti {OZ' x Collusion Rules, DA 952244 (Oct. 26, 1995); News Release, Staff Adopts Order and Releases Letters Clarifying  {O$' x Issues on Broadband PCS Auctions (Oct. 26, 1994); Letter from William E. Kennard, FCC, to Gary M. Epstein &  x James H. Barker, Oct. 25, 1994; Letter from Rosalind K. Allen, FCC, to R. Michael Senkowski, Dec. 1, 1994; Letter  x from Rosalind K. Allen, FCC, to Leonard J. Kennedy, Dec. 14, 1994; Letter from Kathleen O'Brien Ham, FCC, to  x Mark Grady, Apr. 16, 1996; Letter from Kathleen O'Brien Ham, FCC, to David L. Nace, DA 961566, Sept. 17,  yOF'1996. ā We adopt our proposal to apply the anticollusion rule"=,l(l(,,"  x*to broadcast service auctions. We recognize that a number of commenters oppose this, believing instead  xthat auction applicants should be permitted to conclude settlement agreements following the shortform  S' xfiling deadline with those applicants with whom they are mutually exclusive.5ZhO {O^ ' x/ ԍ See, e.g., Comments of KM Communications, Inc. at 8; Positive Alternative Radio, Inc., et al. at 10;  x Throckmorton Broadcasting, Inc. at 11; Independent Broadcast Consultants, Inc. at 9; National Translator Association at 8.5 Except to the extent  S' xdiscussed in  17 with respect to competing major modification applicants, we disagree. The Commission  x*adopted the anticollusion rule to both prevent and to facilitate the detection of collusive conduct, thereby  S8' x*enhancing the competitiveness of the auction process and the postauction market structure. See Second  S' xReport and Order, 9 FCC Rcd at 23862388. Although the services subject to auction have increased in  xnumber and have become more diverse, we continue to believe that our anticollusion rule is necessary  xto deter bidders from engaging in anticompetitive behavior. The rule has proven effective in the 16  S' xspectrum auctions conducted to date, and we conclude that it should apply in the broadcast context as well.  S$ ' "/ 156. Accordingly, applicants in broadcast auctions will be required to identify on their shortform  xapplications any parties with whom they have entered into any consortium arrangements, joint ventures,  xtpartnerships or other agreements or understandings which relate in any way to the competitive bidding  S ' x^process. See 47 C.F.R.  1.2105(a)(2)(viii); 1.2105(c)(1). Applicants also will be required to certify on  xEtheir shortform applications that they have not entered into any explicit or implicit agreements,  xgarrangements or understandings of any kind with any parties, other than those identified, regarding the  xamount of their bids, bidding strategies, or the particular construction permits on which they will or will  S' xnot bid. See 47 C.F.R.  1.2105(a)(2)(ix). After shortform applications are filed and prior to the time  xlthat the winning bidder has made its required down payment, all bidders will be prohibited from  xcooperating, collaborating, discussing or disclosing in any manner the substance of their bids or bidding  xstrategies with other bidders that have applied to bid in the same geographic license area, unless such  x7bidders are members of a bidding consortium or other joint bidding arrangement identified on the bidder's  SH' xshortform application. H0 hO {O ' x ԍ See 47 C.F.R.  1.2105(c); Fourth Memorandum Opinion and Order in PP Docket No. 93253, 9 FCC Rcd  {O '6858, 686669 (1994); Second Report and Order, 9 FCC Rcd at 238788.  Consistent with the anticollusion rule's prohibition of discussions between  xcompeting applicants, we also conclude that we will not permit applicants to modify or amend their  xtechnical or engineering data submitted with their shortform applications following the shortform filing  x_deadline so as to eliminate mutual exclusivity, except as previously discussed with regard to the  S' xengineering submissions of competing major modification applicants. See supra  17, 145. For purposes  xof the anticollusion rule, an applicant is defined as the entity submitting a shortform application; all  x"holders of partnership, ownership, and any stock interest amounting to ten percent or more of the applicant; and any holder of a controlling interest in the applicant. 47 C.F.R.  1.2105(c)(6)(i). "2> ,l(l(,,W"Ԍ S' "8ԙ157. In addition, winning bidders in broadcast service auctions will be required to attach as an  xcexhibit to their longform applications a detailed explanation of the terms and conditions and parties  x*involved in any bidding consortia, joint venture, partnership or other agreement or arrangement they have  xentered into relating to the competitive bidding process. All such arrangements must have been finalized  S`'prior to the filing of the shortform applications. See 47 C.F.R.  1.2107(d); 1.2105(c)(1).  S' "158. We also adopt for broadcast auctions the exceptions to the anticollusion rule, which were  xtrecently reaffirmed in the general Part 1 auction rules. Specifically, under Section 1.2105(c)(4) of our  xrules, a party holding a noncontrolling, attributable interest in one applicant will be permitted to acquire  xpan ownership interest, form a consortium with, or enter into a joint bidding arrangement with other  xpapplicants for licenses in the same geographic area, provided that (1) the attributable interest holder  x7certifies that it has not and will not communicate with any party concerning the bids or bidding strategies  xof more than one of the applicants in which it holds an attributable interest, has formed a consortium, or  xQhas entered into a joint bidding arrangement; and (2) the arrangements do not result in a change in control  xof any of the applicants. 47 C.F.R.  1.2105(c)(4)(i) & (ii). In addition, participants in broadcast auctions  xgwill be permitted to take advantage of another exception to the general anticollusion rule, under which  xZa holder of a noncontrolling attributable interest in an applicant may obtain an ownership interest in or  xenter into a consortium arrangement with another applicant for a license in the same geographic area  x@provided that the original applicant has withdrawn from the auction, is no longer placing bids, and has  xno further eligibility. To meet the requirements of this exception, the attributable interest holder will be  xQrequired to certify to the Commission that it did not communicate with the new applicant prior to the date  x}the original applicant withdrew from the auction, and that it will not convey bidding information, or  S' xotherwise serve as a nexus, between the previous applicant and the new applicant. See 47 C.F.R.   xk1.2105(c)(4)(iii). These exceptions were adopted to allow holders of noncontrolling attributable interests  x@in an applicant greater flexibility to form agreements with other applicants, thereby enabling applicants  S' x to acquire additional capital needed to bid at auction.hO {O' x ԍ See Implementation of Section 309(j) of the Communications Act Competitive Bidding, Memorandum  {ON'Opinion and Order, 9 FCC Rcd 7684, 768789 (1994). As we previously have stated, we believe that  xRthese exceptions will encourage investment in auction applicants without threatening the overall  S'competitiveness of the auction process. See Third Report and Order, 13 FCC Rcd at 465466.  S~' "159. We take this opportunity to reemphasize certain aspects of our anticollusion rule for the  SV' xxbenefit of potential broadcast auction applicants. As indicated in the Notice, Section 1.2105(c) may affect  xthe way in which auction applicants conduct their routine business during an auction by placing significant  xllimitations upon their ability to pursue business opportunities involving broadcast services in the  xgeographic areas for which they have applied to bid for permits. As a general matter, the anticollusion  xrule does not prohibit nonauction related business negotiations between auction applicants that have  xapplied for the same geographic service areas. We caution auction applicants, however, that certain  xbusiness discussions concerning, but not limited to, issues such as management, sales, local marketing  S@' xMagreements, rebroadcast agreements, and other transactional arrangements  may all raise impermissible  S ' xsubject matter for discussion because they may convey pricing information and bidding strategies. $hO {O$'ԍ See Letter from Kathleen O'Brien Ham, FCC, to David L. Nace, DA 961566, Sept. 17, 1996, at 12.  xBecause auction applicants should avoid all discussions with each other that will likely affect bids or  xbidding strategies, we believe that individual applicants, and not the Commission, are in the best position"!?,l(l(,, "  S'to determine in the first instance which communications are permissible and which are not.NhO {Oh'ԍ See August 28 Public Notice. N  S' "160. As previously indicated, the Commission will aggressively investigate any allegations that  S' xan auction participant has violated Section 1.2105(c).ZhO {O'ԍ See Second Report and Order, 9 FCC Rcd at 2388. See also August 28 Public Notice at 34. Bidders who are found to have violated the  xCommission's anticollusion rules may, among other sanctions, have their applications denied, be subject  xto forfeitures, be subject to the loss of their down payments or their full bid amounts, or face the  x*cancellation of their licenses. In addition, where allegations appear to give rise to violations of the federal  xantitrust laws, the Commission may investigate and/or refer such cases to the United States Department of Justice for investigation.  Sp4 "161. Rules Regarding Bid Withdrawal and Default . We also sought comments in the Notice,  x12 FCC Rcd at 22394 ( 74), on the advisability of applying in the broadcast context the Commission's  xDgeneral policy of imposing bid withdrawal and default payment requirements in instances where high bids  xare withdrawn during the course of an auction, where winning bids are withdrawn after an auction has  xclosed, and where winning bidders fail to submit their longform applications or pay their winning bids.  S ' xSee 47 C.F.R.  1.2104(g); 1.2109. All commenters addressing these issues support our proposals. hO {O6' x ԍ See Comments of Communications Technologies, Inc. at 2; Liberty Productions LP at 9; HeidelbergStone Broadcasting Co. at 17; Rio Grande Broadcasting Co. at 17.  xWe therefore will apply our Part 1 auction rules regarding bid withdrawal and default to auctions of  xbroadcast construction permits. The Commission has successfully employed these rules in previous  x&auctions, and they have functioned effectively to ensure that only serious, financially qualified bidders  xparticipate in our auctions. In the event that a broadcast auction winner defaults or is otherwise  xdisqualified, we will similarly follow the established Part 1 rules regarding the reauctioning of the  S'construction permits at issue. See 47 C.F.R.  1.2109.  S'    ` `   Sn'  (2)  PostAuction Processing Procedures Đ\  S4 "l  162.  Down Payments . Following the close of bidding in an auction, the Bureaus will issue a  xDpublic notice announcing the close of the auction and identifying the winning bidders. To provide further  S' xassurance that winning bidders will be able to pay the full amount of their bids and construct their  xfacilities, we will, consistent with the Part 1 auction rules, require winning bidders in broadcast auctions  S' xto submit a down payment. See 47 C.F.R.  1.2107(a) & (b). Specifically, within ten business days of  SY' xkthe public notice announcing the close of the auction, winning bidders will be required to supplement their  x+upfront payments with a down payment amount sufficient to bring their total deposits with the  xCommission up to 20% of their winning bids. If the upfront payment already tendered by a winning  x7bidder, after deducting any bid withdrawal payments due, amounts to 20% or more of its winning bid(s),  xVno additional deposit will be required. To the extent that any upfront payment not only covers, but  xexceeds, the required down payment, the Commission will refund any excess amount after determining  Si' xpthat no bid withdrawal payments are owed by the bidder.iFhO yOO&' x. ԍ The upfront payments submitted by unsuccessful bidders will generally be returned as soon as possible after the close of the auction. The down payment will be held by the"i@,l(l(,,"  xCommission until the winning bidder has been issued its construction permit and has paid the remaining  x"balance of its winning bid, or until the winning bidder is found unqualified to be a permittee or has  xdefaulted, in which case it will be returned, less any applicable default payments. All down payments  xshould be submitted to the Commission's lockbox bank in accordance with 47 C.F.R.  1.2107(b) and any relevant public notices.  R84   S4 " 163.  LongForm Applications.  A winning bidder that meets its down payment obligations in a  xgtimely manner must file an appropriate longform application for each construction permit for which it  xwas the high bidder. Under the general Part 1 auction rules, a winning bidder is required, within ten  S' xtbusiness days after being notified of its winning bidder status, to submit its longform application. See  x47 C.F.R.  1.2107(c). Given the complexity of certain of the technical and legal submissions in  SK ' xbroadcast service longform applications, we suggested in the Notice that winning bidders in broadcast  xauctions should be allowed 30 days to file their longform applications. A small number of commenters  xtstate that winning bidders should be given an even longer period of time, such as 45, 60 or 90 days, to  S ' xfile their longform applications, hO {O=' xM ԍ See, e.g., Comments of Thomas C. Smith at 13; Communications Technologies, Inc. at 2; Seven Ranges Radio Co. Inc. at 13; KERM, Inc. at 45; TriCounty Broadcasting, Inc. at 4. although other commenters find 30 days to be sufficient.~ "hO {O'ԍ See, e.g., Comments of Michael Ferrigno at 10; JTL Communications Corp. at 10.~ After  xkconsideration, we believe that 30 days should be a sufficient period of time for winning bidders to prepare  x7their longform applications. In particular, we note that winning bidders in the AM, LPTV, and television  xDand FM translator services will have already prepared engineering data required by longform applications  xin connection with their earlier submission of their shortform applications. Even in the FM service,  xapplicants may have already conducted investigations of potential transmission sites and submitted a set  x7of preferred site coordinates as a supplement to the FCC Form 175. Moreover, we are eliminating herein  xxthe reasonable assurance of site certification and the financial qualification requirements contained in long x form applications, which may additionally reduce the period of time necessary for winning bidders to  Sm' xpcomplete their longform applications. See infra  172176. For these reasons, we will adopt our  SG' x*proposal in the Notice to require submission of longform applications by winning bidders within 30 days  xfollowing the release of the public notice announcing the close of the auction and identifying the winning  xbidders. We will, however, retain the discretion to extend this 30 day period for the filing of longform applications upon the showing of good cause by an applicant.  S' "164. Longform applications filed by winning bidders in broadcast auctions should include, if  SY' xapplicable, the exhibits required by the general Part 1 auction rules,ZYhO {O' x ԍ See 47 C.F.R.  1.2107(d) (concerning bidding consortia or joint bidding arrangements); 1.2110(i)  x7 (concerning designated entity status); and 1.2112(a) & (b) (concerning disclosure of ownership and real party in interest information, and disclosure of gross revenue information for small business applicants). and should be filed pursuant to the  xrules governing the relevant broadcast service and according to any procedures set out by public notice.  xVThe statutorily established application fees will apply to the longform applications filed by winning  S' xbidders.{hO {OW%'ԍ See 47 U.S.C.  8; 47 C.F.R.  1.1104 (schedule of application fees).{ When electronic procedures become available for the submission of broadcast service long x&form applications, the Commission may require all winning bidders to file their longform applications"Ah ,l(l(,,"  S' x@electronically.\hO {Oh' x ԍ As discussed above (see  147), the electronic versions of the FCC Forms 301, 346 and 349 are currently  x being developed, and the Commission has requested comment on a range of issues relating to the electronic filing  {O'of longform applications. See Nontechnical Streamlining Notice, 13 FCC Rcd at 1135255.  An applicant that fails to submit the required longform application will be deemed to  S' x@have defaulted and will be subject to the default payments set forth in the Part 1 auction rules. See 47  S'C.F.R.  1.2107(c); 1.2104. hhC  Sb4 "  165.  Petitions to Deny . After the winning bidder's longform application has been accepted for  xcfiling, a public notice will be released announcing this fact, thereby triggering the filing window for  S' xpetitions to deny. See 47 C.F.R.  1.2108(b). Previously, the Commission has generally provided a 30  S' xday period for the filing of petitions to deny against broadcast applications.^hO {Oy 'ԍ See 47 C.F.R.  73.3584(a); 73.3584(c).^ As indicated in the Notice,  xhowever, in Section 3008 of the Budget Act, Congress granted the Commission the authority to shorten  S' xthe period for filing petitions to deny, and, as a result, to grant licenses more rapidly.&@~hO yO'ԍ Section 3008 of the Budget Act provides as follows:  " [N]o application for an instrument of authorization for frequencies assigned under this title . . . shall be  "" granted by the Commission earlier than 7 days following issuance of public notice by the Commission of the acceptance for filing of such application or of any substantial amendment thereto. Notwithstanding  "l section 309(d)(1) of such Act (47 U.S.C. 309(d)(1)), the Commission may specify a period (no less than  " 5 days following issuance of such public notice) for the filing of petitions to deny any application for an instrument of authorization for such frequencies.& Some  xcommenters objected to the establishment of a petition to deny period as brief as that allowed under  SO ' xSection 3008 (i.e., five days), contending, inter alia, that such a short period is insufficient to evaluate  S) ' xthe technical proposals and legal information contained in broadcast longform applications.) hO {OO' x^ ԍ See Comments of KERM, Inc. at 5; TriCounty Broadcasting, Inc. at 5; Communications Technologies, Inc. at 2; Michael Ferrigno at 10; Hatfield & Dawson Consulting Engineers at 3. While  xrecognizing that the Commission relies on petitioners as private attorneys general to assist in overseeing  xthe conduct of applicants and licensees and in the fulfillment of its statutory functions, we also consider  xexpedition of service to the public to be of paramount significance. Delay in awarding a construction  xpermit frustrates the public interest and denies communities new or expanded broadcast service. To  xexpedite service, the Commission was asked to disincent disappointed bidders from raising spurious  S9' xIobjections to winning bidders.V9hO {O'ԍ See Comments of James G. Cavallo at 6.V Accordingly, after careful consideration and in light of Congress'  xdirective in the Budget Act, we believe that a shortened petition to deny period of ten days is appropriate  xfor applications for broadcast and secondary broadcast construction permits obtained through the  S' xcompetitive bidding process. Consistent with the Part 1 auction rules, the time for filing oppositions will  xbe five days from the filing date for petitions to deny, and the time for filing replies will be five days  Sq'from the filing date for oppositions. See 47 C.F.R.  1.2108(c).  S#' "d166. If the Commission denies or dismisses all petitions to deny (if any are filed), and is  x"otherwise satisfied that the applicant is qualified, a public notice will be issued announcing that the  xconstruction permit is ready to be granted. Auction winners will be required to pay the balance of their"Br,l(l(,,>"  xwinning bids in a lump sum within ten business days following the release of this public notice. If a  xwinning bidder fails to pay the balance of its winning bid in a lump sum by the applicable deadline as  xpspecified by the Commission, it will be allowed to make payment within ten business days after the  xpayment deadline, provided that it also pays a late fee equal to 5% of the amount due. When a winning  xbidder fails to pay the balance of its winning bid by the late payment deadline, it is considered to be in  S8' xdefault and subject to the applicable default payments. See 47 C.F.R.  1.2109(a). We anticipate  xtgenerally issuing the construction permit to the auction winner within ten business days after receiving full payment.  R4    S4 "8 167.  Amendments to LongForm Applications . To assist winning bidders in resolving  xCommission concerns relating to their technical proposals or other matters contained in their longform  xcapplications, we specifically proposed to modify our application processing procedures to relax the  S# ' x@limitations on the number, and the timing of filing, of curative amendments. The Notice, 12 FCC Rcd  xat 22395 ( 78), indicated that such changes would affect the rules for amending applications for all  xauctionable broadcast services, and would specifically eliminate the tenderability criteria and twotiered  S ' xminimum filing requirements currently in effect for new full service FM applications.i hO {O'ԍ See 47 C.F.R.  73.3522; 73.3525; 73.3564. i No comments were received regarding this proposal.  S5' "168. Under the competitive bidding and processing procedures established herein, only winning  xbidders and nonmutually exclusive applicants will file longform applications. We believe the relatively  xZsmaller volume of longforms requiring processing permits us to accomplish our operational goals in a  xless restrictive manner and warrants liberalization of the procedures now applied to defective broadcast  S' x@and secondary broadcast service applications.  ZhO yO' x ԍ By contrast, the Commission designed the strict "hardlook" processing approach for commercial FM  {OW' xH applicants to, inter alia, provide the staff with a mechanism to handle the dramatic increase in applications expected  {O!' x from the allocation of 689 new FM channels pursuant to Docket 8090. See Report and Order, MM Docket No. 84 {O' x 750, 50 Fed. Reg. 19936 (May 13, 1985), recon. denied, 50 Fed. Reg. 43157 (Oct. 24, 1985), aff'd sub nom. Hilding  {O'v. FCC, 835 F.2d 1435 (9th Cir. 1987).  Accordingly, we shall adopt a more lenient approach  xtoward the processing of defective broadcast applications for new facilities and major changes, employing staff deficiency letters, and permitting multiple corrective amendments, if necessary.  S' "169. Applicants must continue to meet the technical and legal requirements of all applicable rules,  xRbut we will expand the current limited opportunity to amend defective applications. Longform  xapplications for new facilities and for major changes in existing facilities in all broadcast services will no  x@longer be immediately returned for defects pertaining to completeness or technical or legal acceptance  SU' xcriteria, without ample opportunity to correct the deficiency. As stated in the Notice, however, in relaxing  xthe standards for filing amendments, deficiencies in longform applications filed by winning bidders will  xnot be curable by major amendment. As they significantly change the longform application as originally  x^filed, major amendments must be filed in accordance with the window filing procedures discussed above.  xMoreover, winning bidders in all broadcast and secondary broadcast services who file longform  xapplications with waiver requests that cannot be granted, and who cannot provide timely alternate proposals consistent with our rules, will be dismissed.  S ' "170. With regard to applications for new full service commercial FM stations or for major" C,l(l(,,"  xMchanges to such facilities, this new process will replace the existing procedure whereby applicants are  xprovided with one opportunity period to correct application defects, and applicants unable to correct all  S' xxacceptability defects within this time period are dismissed without occasion for reinstatement.;\hO {O' x ԍ See Report and Order, Amendment of Part 73 of the Commission's Rules to Modify Processing Procedures  {O' x< for Commercial FM Broadcast Applications, MM Docket No. 91347, 7 FCC Rcd 5074 (1992); 47 C.F.R.  73.3522(b)(2).; The new  x*process will also replace the current AM and FM translator approach to defective applications, where the  xnature of the defect determines the course of staff action. Currently, if the AM or FM translator  xtapplication is substantially complete and meets all core technical acceptance criteria, the staff will send  x&a deficiency letter giving the applicant 30 days to correct the defect in question. For more substantial  S' xdefects, i.e., those going to substantial completeness or technical acceptability, the staff returns the  S' xgapplication as either not substantially complete or unacceptable for filing.)$hO yON ' x ԍ However, the AM or FM translator applicant is provided with an opportunity to have its application  {O ' x reinstated nunc pro tunc if the applicant submits a petition for reconsideration together with an amendment curing  {O ' xU the defect in substantial completeness or in acceptability within 30 days. See Public Notice, Patently Defective AM and FM Construction Permit Applications, FCC 84366, 49 Fed. Reg. 47331 (December 3, 1984).) Similarly, the Commission  xcurrently allows LPTV and television translator applicants whose applications are substantially complete  Sr' xDbut contain defects or omissions 30 days to amend in response to a staff deficiency letter. See 47 C.F.R.  xk 73.3564(a)(2). Unlike these current procedures, the new processing standards for broadcast longform  xapplications will enable applicants for new facilities and for major changes to avoid dismissal and to  xliberally correct heretofore fatal defects in application information. We will, however, retain the  xVamendment filing procedures presently used for applicants for minor modification of facilities in all broadcast services.  S\' " 171. For all full service FM applications for new facilities and major changes, we will also  x abolish the twotiered minimum filing requirement, regardless of whether the longform application is  S ' xsubmitted postauction by a winning bidder, or by an applicant determined to be nonmutually exclusive.u hO yO' x ԍ As an indication that the listed applications satisfied the minimum filing requirements, the staff would issue  x a Notice of Tender. The staff will discontinue the issuance of such Notices of Tender for all new and major  x modification FM applications. We will, however, continue to issue Notices of Acceptance. These Notices will not  xU indicate compliance with our acceptance criteria, but will continue to serve as the mechanism for permitting petitions  {O'to deny. See supra  165. u  xIn essence, the shortform application previously submitted at the initial stage of the competitive bidding  xgprocess serves this function. Having established through the shortform that the applicant has met the  xminimum filing requirements prior to auction, the Commission need not repeat the exercise upon the  xsubsequent filing of the longform application. Applications for minor modification of FM facilities,  x_however, will continue for the present to be processed under existing procedures, including the  S'employment of the twotiered minimum filing requirements. hO {OF#' xx ԍ In the Nontechnical Streamlining Notice, 13 FCC Rcd at 11367 n. 68, the Commission has invited comment on whether we should modify the tenderability and twotier processing standards for minor change FM applications.  S'  S4 "  172.  Elimination of Reasonable Assurance of Site Certification.  In the Notice, 12 FCC Rcd at  x@22396 ( 81), we proposed to eliminate the requirement that applicants certify they have a "reasonable  xassurance" that the site or structure proposed as the location of their transmitting antennas will be"~D,l(l(,,"  xavailable. We requested comment on our proposal to delete the reasonable assurance of site certification  xkfrom the FCC Forms 301, 346 and 349, and to rely on the strict enforcement of our existing construction  xrequirements to ensure that winning bidders in future broadcast auctions construct their facilities in a  S' xtimely manner.hO {O' x ԍ See 47 C.F.R.  73.3598 (establishing a twoyear construction period for television stations and an 18month construction period for AM, FM and LPTV stations, as well as television and FM translators). Given the relatively brief time period that winning bidders will have to prepare and file  xtheir longform applications following the close of a broadcast auction, we surmised that elimination of the requirement of reasonable assurance of site availability was appropriate.  S' "=173. A certification of site availability, requiring that an applicant certify that reasonable  xxassurance has been obtained from the property owner that the site will be available, was added to the FCC  S' x^Form 301, at the request of commenters, as a component of the "hard look" processing approach.h"hO {OZ 'ԍ See Report and Order in MM Docket No. 84750 at  22.h The  xcertification provided verification of existing Commission policy and was implemented as a deterrent to the filing of frivolous and speculative applications that frustrated our processing goals.  S ' "174. We believe that the competitive bidding process itself serves to lessen the incentive for  xQinsincere application filings and provides a strong stimulus for timely station construction, so to recapture  S ' xybidding investments.HZ hO {O' xI ԍ See, e.g., Comments of J. McCarthy Miller and Biltmore Forest Broadcasting FM, Inc. at 17; Liberty  x Productions, LP at 10; Thomas Desmond at 9; JTL Communications Corp. at 11 (agreeing with proposal to eliminate site certification requirement). H We therefore will eliminate the reasonable assurance of site certification  xrequirement for all broadcast and secondary broadcast new and major change applicants, regardless of  xwhether the longform application is submitted postauction by a winning bidder, or by an applicant determined to be nonmutually exclusive.  S' "  175. Furthermore, our construction period requirements provide the Commission with an  x^additional safeguard to ensure that winning bidders construct their authorized facilities in a timely manner.  xThe Commission has found that the strict enforcement of such buildout requirements, in conjunction with  xthe employment of competitive bidding procedures, best promote the rapid deployment of service to the  S@' xpublic.@hO {O' xb ԍ See, e.g., Establishment of Rules and Policies for the Digital Audio Radio Satellite Service in the 23102360  {O' xD MHz Frequency Band, 12 FCC Rcd 5754, 5815 (1997); Second Report and Order, 9 FCC Rcd at 2358. In addition,  x the Commission has proposed to eliminate, to the extent permitted by statute, the circumstances under which the time  x for construction will be extended, and to make the construction permits subject to automatic forfeiture upon  x expiration. To compensate for the proposed "no extension" policy, the Commission has proposed to issue permits  {O!' x^ that would provide an increased and uniform construction period of three years. See Nontechnical Streamlining  {Ol"'Notice, 13 FCC Rcd at 1137173. Although some commenters urge the Commission to retain the site certification requirement,U@hO {O#' x ԍ See, e.g., Comments of Rio Grande Broadcasting Co. at 17; HeidelbergStone Broadcasting Co. at 17;  x Independent Broadcast Consultants, Inc. at 5; Jeffrey Eustis at 2; Communications Technologies, Inc. at 3; Michael  xZ Ferrigno at 10; Todd Stuart Noordyk at 9; Batesville Broadcasting Company, Inc. at 9; Williams Broadcasting  x! Company at 9; Throckmorton Broadcasting, Inc. at 11; Donald James Noordyk at 9; Positive Alternative Radio, Inc.,  {O ''et al. at 11. U"@E,l(l(,," we no longer find it vital to our pursuit of prompt initiation of service to the public.  S4 "  176.  Elimination of Financial Qualification Certification Requirement . After consideration,  xwe will also eliminate from the broadcast longform applications the requirement for the applicant to  x@certify as to its financial qualifications, estimate the total funds necessary to construct and operate the  xkbroadcast facility for three months, and to identify each source of funds. We believe that our competitive  xbidding procedures provide adequate assurance that applicants will be financially qualified. Any winning  xbidder submitting a longform application will have, prior to filing its application, already submitted a  xktimely upfront payment and down payment, and will also be required to pay the full amount of its winning  x7bid to obtain its construction permit. We think it unlikely that bidders, who must construct their facilities  xto recoup the expenditures made in obtaining their construction permits via auction, will have the incentive  xgto participate in and prevail at auction if they lack the financial wherewithal to construct their facilities.  S! ' x3Accordingly, we agree with the few commenters who address this issue,! hO {O ' x ԍ See Comments of J. McCarthy Miller and Biltmore Forest Broadcasting FM, Inc. at 1718; Thomas Desmond at 9. and eliminate the financial qualification requirements from the FCC Forms 301, 346 and 349.  S '` `  (3) Additional Application Processing Issues  SY4 "177.  Minor Modification Applications. Although, under the window filing approach adopted  xherein, applications for new and major changes in the broadcast and secondary broadcast services must  xbe filed in an announced filing window, applications for minor modifications of existing facilities will not  xbe restricted to announced window filing periods and may continue to be filed at any time in accordance  S' xwith existing procedures."hO yO|' xD ԍ Thus, applicants proposing minor modifications will continue to file the appropriate longform application, rather than a shortform. Minor modification applications will continue to be governed by first  xcome/first served processing procedures, whereby priority rights are determined by the filing date of the  xZminor modification application and such filing will cutoff the filing rights of all subsequent applicants.  xETo avoid the possibility of the filing of minor modifications that are mutually exclusive with the  xapplications submitted by auction applicants during general auction filing windows, we will retain the  xdiscretion to impose temporary freezes on the filing of minor modifications in particular services during  S'the brief periods that auction filing windows are open for such services.TZzhO {O' x ԍ See Robert M. Richmond, 8 FCC Rcd 471 (1993) for an example of the complications that may occur when  x a modification application filed during a window filing period for new facilities is mutually exclusive with certain of those applications for new facilities. T  Sz' ""178. In rare instances, two or more FM, AM, television or LPTV minor modification applications  SR' xcan be mutually exclusive.RhO yO#' x ԍ With regard to LPTV and television translators, applications by two or more licensees seeking displacement  xQ relief under 47 C.F.R.  73. 3572(a)(2) are the only types of minor modifications that can create mutual exclusivity.  x FM minor modification applications may become mutually exclusive only when conflicting applications are filed on  xk the same day. Currently, television, AM and FM translator minor modification applications can become mutually  {O&'exclusive until grant by the filing of a conflicting application. See infra  180183 for a discussion of cutoff rules.  As discussed above and as the commenters urge, we will generally not  xsubject mutually exclusive minor modification applications to competitive bidding, but expect the parties"*FN ,l(l(,,"  S' xto use engineering solutions and negotiations to resolve the mutual exclusivities. See supra  19.  xHowever, we note one situation in which many minor modification applications have recently been filed  xon the same day, with the potential to create an unusually large number of mutual exclusivities. On June  x1, 1998, we received over one thousand LPTV and television translator applications requesting  Sb' xreplacement channels due to displacement by new DTV stations.%HbhO yO' x ԍ June 1, 1998 was the first day for filing DTV displacement relief applications by LPTV and television  {O' x translator licensees and permittees who face eventual channel displacement by DTV stations. (In contrast, operators  {O\' x facing imminent channel displacement, for example due to the filing of an application for a conflicting DTV station,  xD were allowed to apply for such displacement relief at any time.) Because displacement applications are filed on a  xH firstcome, firstserved basis and because there may not be enough channels to accommodate all displaced stations,  {O ' x@ there was a premium on filing applications on this initial June 1st filing date. See Public Notice, Commission  {O ' x Postpones Initial Date for Filing TV Translator and Low Power TV Applications for Displacement Channels, Mimeo No. 82914 (rel. April 16, 1998).% As with other competing minor  xmodification applications, we expect these LPTV applicants to use engineering solutions and negotiations  xto resolve any mutual exclusivities. But we note in this situation, due to the large number of applications  xcfiled on the same day all seeking a limited number of replacement channels, that the applicants may  x^experience greater difficulties in resolving the mutual exclusivities. If we find that, following a reasonable  xperiod after release of a public notice identifying any mutually exclusive LPTV displacement applicants,  xga significant number of these applicants have been unable to resolve their mutual exclusivities, then the  xVCommission reserves the right to subject these competing displacement applications to competitive  S" 'bidding. " hO yO' x ԍ Given Congress' termination of our lottery authority in the Budget Act, there is no efficient method other  x| than auctions to select the licensee, if the parties themselves cannot resolve the mutual exclusivities. Also, although  x technically regarded as "minor" modifications, LPTV displacement applications are akin to new applications in that they generally propose operations on new channels at new locations.  S 4 "179. CrossBand Mutual Exclusivity in FM Service . Mutual exclusivity may also arise between  xkapplications filed for channels in the FM reserved band (Channels 200220) and applications filed for non S ' xVreserved FM channels.4X hO yO' xD ԍ Specifically, an application for a new facility in the FM reserved band that has not yet been cutoff may be  x mutually exclusive with the preferred site indicated by an auction winner for a vacant allotment in the FM nonreserved band.4 Given the lack of statutory authority to auction applications for channels  S[' xcreserved for noncommercial educational use (see supra  24), we will not subject these crossband  xmutually exclusive applications to competitive bidding. In the rare instances in which crossband conflicts  xarise, we will, as in the case of competing minor modification applications, expect the parties concerned to use engineering solutions and negotiations to resolve the mutual exclusivities.  S4 "  180.  CutOff Protection for Auction Applicants . Pursuant to the window filing procedures  xadopted herein, applicants for new broadcast facilities or for major modifications to existing facilities must  xfile shortform applications during specified window filing periods. After the closing date of any window,  x*no applications (such as minor modification applications) may be filed that would conflict with the short x^form applications filed during the window. Accordingly, under the new window filing procedures, short xform applications for all services will receive cutoff protection as of the close of the window filing"G,l(l(,,1"  S' xperiod.6"hO {Oh' x ԍ In City of Angels Broadcasting, Inc. v. FCC, 745 F.2d 656, 663 (D.C. Cir. 1984), the Court recognized  xx that a cutoff procedure basically serves two purposes. "First, it advances the interest of administrative finality . .  x . . Second, it aids timely broadcast applicants by granting them a protected status,' . . . that allows them to prepare for what often will be an expensive and timeconsuming contest, fully aware of the competitors they will be facing." 6 FM applicants supplementing their FCC Form 175 applications with a set of preferred site  S' xcoordinates will be protected at that site from subsequently filed applications. See supra  142. All FM  xapplicants, including those choosing not to supplement the FCC Form 175 with preferred site coordinates,  S' xwill receive full class facility protection at the reference points of the vacant allotment.hO yO' x ԍ The allotment will be protected until the grant of a longform application for a construction permit for that allotment. As described  Sb' xDabove, applicants for AM and LPTV stations and for television and FM translators must submit with their  xxshortform applications the engineering data from the appropriate longform application to provide us with  S' xthe information necessary to make mutual exclusivity determinations. See supra  143. The specific  x^facilities proposed in these engineering supplements will be protected pursuant to our existing interference  S'rules as of the date of the closing of the auction window. hO yOn' x} ԍ This approach will therefore alter the current practice of affording cutoff protection to AM and FM  x translator applications on a date specified by Commission public notice. Minor amendments to the engineering  xM submissions accompanying shortform applications that are filed so as to resolve mutual exclusivities among  {O' x competing major modification applications, or competing major modification and new applications (see supra  17, 145), will be considered on a first come/first served basis, as are minor amendments to longform applications.   St' "V181. In addition to protecting the sites specified in shortform applications, longform applications  xVwill also be afforded cutoff protection. All longform applications for new facilities and for major  x^modifications to existing facilities (whether filed by winning bidders or nonmutually exclusive applicants)  xDwill be cutoff as of the date of filing with the Commission, and will be protected from subsequently filed  xlongform applications and rulemaking petitions. All longform applicants will be required to protect all  S 'previously filed commercial and noncommercial applications.   S\' "8182. Winning bidders (or nonmutually exclusive applicants) filing longform applications may  xDchange the technical proposals that they specified in their shortform applications. A winning bidder may  xknot, however, specify in its longform application a change in its proposed facility that constitutes a major  xchange from the facility specified in its shortform. With respect to the FM service, if an FM applicant  xspecifies a preferred site in its shortform application, and specifies a different site in its longform, the  xsite specified in the shortform will no longer receive cutoff protection. However, the reference points  x"of the vacant allotment will remain protected until a construction permit is granted, even if the site  xspecified in the applicant's longform and the allotment site differ. In the nontable AM, LPTV, and  xtelevision and FM translator services, if the facilities specified in the longform differ from those  xpreviously specified in the shortform, both facilities will receive protection until grant of the longform application.  S|' "183. Furthermore, we note our proposal in another proceeding to conform the processing  xprocedures for AM and FM translator minor modification applications to those currently used for  S,' xycommercial FM minor modification applications by providing cutoff protection. See Technical  S' x*Streamlining Notice, FCC 98117 at  4647. This represents a departure from our current procedures,"H ,l(l(,,'"  xas AM and FM translator minor change applications currently receive no cutoff protection from  x3competing applications until the date the application is granted. It is therefore not unusual for a minor  xchange application in the AM service, which had no conflicts as of the date of its filing, to conflict with  S' xa subsequently filed application.hO yO' x ԍ If the mutually exclusivity was not eliminated through settlement or technical amendment, the minor AM modification application would have been designated for comparative hearing. If ultimately adopted, our proposal to provide cutoff protection for  xcAM and FM translator minor modification applications as of the date of filing with the Commission  S8'should reduce the potential for mutual exclusivity between minor modification applications.8 hO {O'ԍ See supra  177178 for a discussion of minor modification applications and filing procedures.  S4 "t184. Transfer and Assignment of Broadcast Permits Awarded by Auction. Under Section  x1.2111(a) of the general auction rules, an applicant seeking approval of a transfer of control or assignment  xof a license within three years of receipt of such license by means of competitive bidding must, together  xDwith its transfer or assignment application, file with the Commission a statement indicating that its license  x/was obtained through competitive bidding. Such applicant must also file with the Commission the  x^associated contracts for sale, option agreements, management agreements, or other documents disclosing  xthe consideration that the applicant would receive in return for the transfer or assignment of the license.  x&47 C.F.R.  1.2111(a). These transfer disclosure requirements are intended to aid the Commission in  S ' xtmonitoring whether abuses relating to trafficking in licenses have occurred,_ hO {O'ԍ See Second Report and Order, 9 FCC Rcd at 2385._ and we see no reason to  xdeviate from our general auction rules in the broadcast context. Accordingly, we will require broadcast  xservice auction winners to comply with these disclosure requirements if they apply to assign or transfer their construction permits or licenses within the relevant threeyear period.  S' "185. As part of the Commission's current, wide ranging efforts to streamline Mass Media Bureau  xIprocedures and initiate the electronic filing of applications, we have, however, proposed in another  x@proceeding to eliminate entirely the requirement to submit contracts with any broadcast assignment or  Si' xtransfer applications,kiDhO {OM'ԍ See Nontechnical Streamlining Notice, 13 FCC Rcd at 11362. k contrary to the provisions of Section 1.2111(a). If the Commission were ultimately  xto adopt this proposal with regard to broadcast assignment and transfer applications generally, we will at  xthat time revisit the requirements imposed by Section 1.2111(a) on broadcast auction winners who apply  xto assign or transfer their licenses so as to make the broadcast auction rules consistent with the general  S'broadcast service rules.>hO {O? ' x ԍ Similarly, if we ultimately adopt our streamlining proposals in the Nontechnical Streamlining Notice, we will  x. revisit the issue of requiring applications for assignment or transfer of control of broadcast licenses held by auction  xU winners to include an exhibit disclosing the ownership information set forth in Section 1.2112(a) of the Part 1 auction  {O"' xk rules. See 47 C.F.R.  1.2112(a). We note this same ownership information is already required to be submitted by  x all prospective bidders with the shortform applications and by all winning bidders as an exhibit to their longform applications, and any changes in such information must also be reported within 30 days.>  Sy' 4. Designated Entities "QIR ,l(l(,,"Ԍ S' "Ԋ186. Section 309(j) of the Communications Act provides that the Commission "ensure that small  xbusinesses, rural telephone companies, and businesses owned by members of minority groups and women  xare given the opportunity to participate in the provision of spectrumbased services." 47 U.S.C.   xD309(j)(4)(D). To achieve this congressional goal, the statute directs the Commission to "consider the use  S`' xof tax certificates, bidding preferences, and other procedures."`e yO' x ԍ Congress repealed, as of January 17, 1995, that portion of Section 1071 of the Internal Revenue Code, 26 U.S.C.  1071, under which the Commission administered the tax certificate program. Id. In addition, Section 309(j)(3)(B)  xinstructs the Commission, in establishing eligibility criteria and bidding methodologies, to promote  x}"economic opportunity and competition . . . by avoiding excessive concentration of licenses and by  x disseminating licenses among a wide variety of applicants, including small businesses, rural telephone  xcompanies, and businesses owned by members of minority groups and women," which are collectively  xreferred to as "designated entities." 47 U.S.C.  309(j)(3)(B). Section 309(j)(4)(A) further provides that  x^to promote these objectives, the Commission shall consider alternative payment schedules, including lump  SJ ' xpsums or guaranteed installment payments. 47 U.S.C.  309(j)(4)(A).J e {O ' xQ ԍ In the Third Report and Order, the Commission determined that, until further notice, installment payments  x should not be offered in auctions as a means of promoting participation by small businesses and other designated  x entities. To ameliorate the impact on small businesses of this decision to discontinue the use of installment payments  {Od' x7 in the near future, the Commission approved the use of higher bidding credits for designated entities. See Third  {O.'Report and Order, 13 FCC Rcd at 398400.  In addition to the statutory  xdirective to "ensure" opportunities for designated entities in spectrum auctions, the Commission has had  xxa longstanding commitment to promoting the diversification of ownership of broadcast facilities. Indeed,  x "a maximum diffusion of control of the media of mass communications" was one of the two primary  S ' xobjectives of the traditional comparative broadcast licensing system. Policy Statement on Comparative  S ' xpBroadcast Hearings, 1 FCC 2d 393, 394 (1965).~Z e {O' x ԍ See also Notice of Proposed Rulemaking in MM Docket Nos. 94149 and 91140, 10 FCC Rcd 2788 (1994)  x (inviting comment on initiatives to increase ownership of mass media facilities by minorities and women to further a "core" Commission goal of maximizing diversity of points of view available to public).~ Section 257 of the Telecommunications Act of  S^' x1996,[^ e yO'ԍ Pub. L. No. 104104, 110 Stat. 56 (Feb. 8, 1996).[ moreover, directed the Commission to identify and eliminate market entry barriers for small and  S6'entrepreneurial telecommunications businesses.6 e {O^' x ԍ See Report, Section 257 Proceeding to Identify and Eliminate Market Entry Barriers for Small Businesses, 12 FCC Rcd 16802 (1997).  S' "187. To fulfill our obligations under Section 309(j), the Notice, 12 FCC Rcd at 2239722404 (  x!8397), sought comment on whether bidding credits or other special measures were necessary to encourage  xxparticipation by rural telephone companies, small businesses, and minority and womenowned businesses  xin the provision of broadcast services, and, if so, how eligibility for any such special measures should be  xtestablished. In particular, we requested comment on how special measures for minority and women S ' xgowned entities could be developed consistent with applicable constitutional standards. The Notice also  xasked for comment on the advisability of adopting bidding credits or other measures to promote  xdiversification of ownership, and on the appropriateness of adopting rules to prevent unjust enrichment in connection with the special measures approved for designated entities. "J,l(l(,,"Ԍ S' "188. Many commenters argue that the present record is insufficient to support the adoption of  S' xbidding credits for women and minorities under the standards enunciated in United States  v. Virginia, et  S' xal., 518 U.S. 515 (1996) and Adarand Constructors, Inc. v. Pena, 515 U.S. 200 (1995).u^e {O' x ԍ See, e.g., Comments of Cook Inlet Region, Inc. at 6, 1415; J. McCarthy Miller and Biltmore Forest  {O' x7 Broadcasting FM, Inc. at 23. See also Lutheran ChurchMissouri Synod v. FCC, No. 971116 (D.C. Cir. April 14,  {O'1998), petition for rehearing pending. u Some  xcommenters urge that we delay the adoption of competitive bidding procedures for broadcast auctions until  Sd' xcompletion of studies already in progress that may shed light on these questions.de {O' x ԍ See Comments of American Women in Radio & Television, Inc. at 3, 16; Reply Comments of United Church  {O 'of Christ, Office of Communications, et al. at 23, 1819; Reply Comments of NOW Foundation at 1. And, although a  xnumber of commenters support the adoption of bidding credits for small businesses, they have supplied  x3relatively little information regarding the capital requirements of, or the characteristics of the expected  S' xkpool of bidders for, the various broadcast services.ZJe yO ' x ԍ Only one commenter provided any specific information as to the capital requirements of any of the broadcast  {O' x services. See Comments of Danbeth Communications, Inc. at 23 (providing information as to the estimated capital required to construct a television station in one North Carolina market).  Determining the details of any small business credit  x^is also complicated in the broadcast context by the fact that, at least traditionally, most applicants for new  xbroadcast stations are in fact small businesses under almost any reasonable definition, particularly in the  x3context of radio. Pursuant to our Section 257 proceeding, we have commenced a series of studies to  x examine the barriers encountered by small, minority and womenowned businesses in the secondary  S$ ' xmarkets and the auctions process.$ l e yO0' x ԍ Studies have been commenced examining the following: (i) barriers to acquisition of cellular, paging and  x Specialized Mobile Radio licenses on the secondary market, and barriers to entry or growth, comparing small, large,  x| minority and womenowned licensees; (ii) barriers to acquisition of broadcast licenses on the secondary market, and  xx barriers to entry or growth, comparing small, large, minority and womenowned licensees; (iii) barriers to entry or  x  growth due to advertising industry practices such as paying less to advertise on stations targeting minority  x communities, and the impact of such practices on ownership opportunities and viewpoint diversity; (iv) the impact  x of duopoly and multiple ownership rules on broadcast station ownership; and (v) the impact of small, minority and  xo women ownership of broadcast stations on service. The Commission is also planning to undertake a comprehensive study on the experiences of small, minority and womenowned businesses in the auctions process.  We believe it is important to complete these studies and provide for  xan opportunity for public comment before any ultimate determination of what rules we should have for  xdesignated entities. At the same time, we believe that it is important to move forward promptly with  xMauctions. Particularly with regard to pending cases, considerations of fairness demand that no further delays occur and that we proceed expeditiously to licensing.  S4' "189. In proceeding with auctions before determining what rules we may ultimately adopt for  xZsmall, minority or womenowned businesses, we are, of course, sensitive to our statutory obligations  xlregarding designated entities. As a preliminary matter, we note that, based on our experience in  S' xconducting comparative hearings under the 1965 Policy Statement on Comparative Broadcast Hearings,  S' xit is likely that the vast majority of the pending preJuly 1st applicants are small businesses,<e {Or%' x^ ԍ As we stated in the Notice, "[o]ur experience has been that most applicants for new broadcast stations are small businesses." 12 FCC Rcd at 22397 ( 85). and indeed  xxlikely very small businesses. With respect to specific measures that may further assist designated entities, "nK,l(l(,,"  xxwe note that all of the commenters who addressed the question supported a bidding credit or other special  S' xDmeasure for applicants with no or few other media interests.$e {O@' x ԍ See, e.g., Comments of Grace Communications L.C. at 9; Kidd Communications at 9; JTL Communications  xZ Corp. at 1415; Danbeth Communications, Inc. at 45; James G. Cavallo at 911; Thomas Desmond at 56; Kyle  x Magrill at 3; Throckmorton Broadcasting, Inc. at 12; Reply Comments of United Church of Christ, Office of  {O'Communications, et al. at 1516. We conclude that, based on the record to  xdate, adopting such a "new entrant" bidding credit would be the most appropriate way to implement the  x^statutory provisions regarding opportunities for small, minority and womenowned businesses before the  S`' xcompletion of the studies mentioned above and related public comment.`e yO ' x. ԍ Rural telephone companies appear less relevant in the context of these pending comparative broadcast cases.  {O| 'See infra  191. Providing bidding credits to  x}entities holding no or few mass media licenses will promote opportunities by minorities and women  xconsistent with congressional intent without implicating prematurely the constitutional issues raised in   S' xx188.e {O' x ԍ See Implementation of Section 309(j) of the Communications Act Competitive Bidding (Sixth Report and  {O`' x Order), 11 FCC Rcd 136 (1995), aff'd sub nom. Omnipoint Corp. v. FCC, 78 F.3d 620 (D.C. Cir. 1996)  x@ (Commission complied with statutory mandate to create opportunities for small, women and minorityowned  {O' x businesses, yet avoided the Adarand constitutional issue, because expanding the special measures available for small  x businesses would incidentally benefit businesses owned by minorities and women, many of which also qualified as small businesses).  While such an approach may not be as direct and finetuned as measures we may ultimately adopt  xDafter further development of the record, we believe a bidding credit for entities who have no or few other  xcmedia interests will work to give these groups the additional opportunities intended by Congress, in  xfurtherance of the statutory objectives. Because the record regarding small businesses is not well  xdeveloped and existing size standards seem illsuited to the broadcast auction context, we do not believe  xit is appropriate, as we did for certain other auctions, merely to adopt bidding credits for small businesses.  x7In these circumstances, we conclude that the best approach is to commence the auction process utilizing  S ' xthis "new entrant" bidding credit.  e yO' x ԍ At this time, we are not utilizing an asset or gross revenue standard in conjunction with the new entrant  x bidding credit. If it appears, however, after some experience with implementing the new entrant credit in broadcast  x? auctions that such a standard is necessary and appropriate to effectuate congressional intent with regard to designated entities, then we may revisit this question.  We hereby instruct the staff to complete expeditiously all necessary  S ' xAdarand studies, and we anticipate the release of a further notice considering designated entity issues in  xthe broadcast context following completion of these studies. If additional or alternative designated entity  x"measures are ultimately adopted in a further report and order released following completion of our  xevidentiary studies, then any such measures will be applicable to the auction of any broadcast and ITFS applications then on file with the Commission.  "190. With respect to the details of our new entrant bidding credit, we believe an appropriate  xgmodel that has worked well exists in our lottery rules for mass media services. Those rules have been  xused for several years for LPTV, television translator and Multipoint Distribution Service licenses. The  xrules take a twotiered approach. Specifically, applicants whose owners in the aggregate hold more than  x50% of the ownership interests in no other media of mass communications receive a twotoone lottery  x^preference, and applicants whose owners in the aggregate hold more than 50% of the ownership interests  xin one, two or three other media of mass communications receive a one and a half to one lottery"Lt,l(l(,,$"  S' xtpreference. See 47 C.F.R.  1.1622(b).e yOh' x ԍ In accordance with the definition previously employed in lotteries, a "medium of mass communications" for  x purposes of the new entrant credit means a daily newspaper; a cable television system; or a license or construction  x permit for a television station, a low power television or television translator station, an AM, FM or FM translator  {O' x station, a direct broadcast satellite transponder, or a Multipoint Distribution Service station. See 47 C.F.R.  73.5008(b) of our amended rules, attached as Exhibit C. These preferences are not available to entities holding more  S' xthan 50% of the ownership interests in certain local media services.  gze {O'ԍ See 47 C.F.R.  73.5007(a)(1) of our amended rules. g We will use these rules with two  S' xadjustments: (1) we will add an explicit requirement that the rules cover de facto controlling interests, as  xZwell as interests of more than 50% of the ownership interests; and (2) to conform the approach to the  Sd' xexisting tiered approach taken with auction bidding credits, see 47 C.F.R.  1.2110(e)(2), we will adopt  S>'bidding credits of 35% and 25%, respectively.e> e {O 'ԍ See 47 C.F.R.  73.5007(a) of our amended rules. e   S4 "191. Other Designated Entity Issues. Although we are deferring a final decision regarding any  xadditional or alternative special measures for small, minority and womenowned businesses until the  xVcompletion of the various pending studies relating to these entities, we determine here certain other  xVdesignated entity issues. We conclude that the provision of additional measures for rural telephone  xIcompanies is unnecessary in broadcast auctions. The record does not indicate that rural telephone  S' ' xcompanies have any particular interest in providing broadcast services.' e {Oe' x ԍ See Comments of De La Hunt Broadcasting Corporation at 3; J. McCarthy Miller and Biltmore Forest Broadcasting FM, Inc., at 2223; James G. Cavallo at 8. Indeed, no commenter supports  x*providing bidding credits or other incentives to rural telephone companies. As we have previously noted,  xCongress included rural telephone companies among the categories of designated entities because it was  x"concerned with assuring rural consumers the benefits of new technologies and providing opportunities  x3for participation by rural telephone companies in the provision of wireless services that supplement or  S_' x@replace their landline facilities." Second Report and Order, 9 FCC Rcd at 239192. We do not believe  xthat bidding credits or other special measures for rural telephone companies are needed to assure that rural  xconsumers receive new broadcast service or that rural telephone companies have the opportunity to  xparticipate in broadcast service auctions. We accordingly decline to adopt special measures for rural  xtelephone companies in particular, although those companies will be eligible for bidding credits if they  xqualify as new entrants or, if such bidding credits are ultimately adopted in our further report and order, as small, minority or womenowned businesses.  "E192. We also decline to adopt bidding credits, as urged by a small number of commenters, for  xvarious other entities, including: (1) applicants who would have qualified for an AM daytimeonly  S' xxpreference in an FM comparative hearing;SZ e {Oi#' x& ԍ See Comments of JEM Broadcasting Co., Inc. at 34; Pacific Radio Engineering at 1; KERM, Inc. at 78.  x In the past, the Commission gave special consideration to daytimeonly AM licensees in comparative hearings for FM allotments in their community of license.S and (2) a "pioneer's" or "finder's" preference for the applicant"M,l(l(,,1"  S' xwho successfully petitioned for the allotment when a newlyallotted FM channel is auctioned.e {Oh' x ԍ See Comments of JEM Broadcasting Co., Inc. at 4; Sound Broadcasting, Inc. and Regency Broadcasting, Inc. at 34; Reynolds Technical Associates at 4; Kidd Communications at 1011. We decline to adopt bidding credits or other special measures  xfor these categories of entities, which, unlike the case with the likely recipients of the "new entrant" credit,  xare not among the entities specifically designated by Congress in our competitive bidding authority. We  xare also reluctant to replicate, in the guise of bidding credits, specific comparative criteria (such as the AM  S8' x^daytimeonly preference), given our past difficulties with the criteria employed in comparative hearings.=Z8"e {O' xc ԍ See Comments of James G. Cavallo at 1112 (opposes awarding bidding credits for factors that were  x previously credited under Commission's comparative hearing criteria, as that risks "turning the auction into a minicomparative hearing"). =  xWe note, moreover, that the grant of a bidding credit to an FM applicant who petitioned for the allotment  xIof a channel being auctioned is analogous to the pioneer preferences that Congress has specifically  S'eliminated.De {O' x ԍ See 47 U.S.C.  309(j)(13)(F) (eliminating pioneer preferences for persons who make significant contributions to development of new service or new technologies, as of August 5, 1997).  S'  Sp4 "l193.  Unjust Enrichment . In designing competitive bidding systems, the Commission has a  xstatutory obligation to require "antitrafficking restrictions and payment schedules as may be necessary to  S! ' xprevent unjust enrichment." 47 U.S.C.  309(j)(4)(E). Accordingly, the Notice sought comment regarding  xthe appropriate approach to prevent unjust enrichment by designated entities that acquire broadcast licenses  xthrough the use of bidding credits or other special measures. To fulfill our statutory obligations and  xensure that the new entrant bidding credit measure we adopt herein has the intended effect of aiding  xeligible entities to participate in broadcast auctions, we adopt the unjust enrichment provisions described  xbelow. Provisions to prevent unjust enrichment in the context of any additional or alternative designated  xentity measures will be considered if any such measures are adopted in our further order specifically addressing such issues.  S' "4194. Specifically, we will follow the general Part 1 auction rules in requiring, under certain  xpcircumstances, reimbursement of bidding credits utilized to obtain broadcast licenses. A broadcast  x*licensee, or the holder of a construction permit, who utilized a new entrant bidding credit will be required  xto reimburse the government for the amount of the bidding credit, plus interest based on the rate for ten xyear U.S. Treasury obligations applicable on the date the construction permit was granted, as a condition  xof Commission approval of the assignment or transfer of that license or construction permit, if the licensee  xQor permittee seeks to assign or transfer control of the license or construction permit to an entity that does  S' x@not meet the eligibility criteria for the bidding credit. See 47 C.F.R.  1.2111(d)(1).Xe yO!' xk ԍ If the construction permit or license is transferred to an entity that is eligible for a lower bidding credit than  x the permittee or licensee, then the reimbursement is the difference between the amount of the bidding credit originally utilized and the amount of the bidding credit for which the transferee/assignee would qualify. The amount of  S}' xthis repayment will be reduced over a fiveyear period, as set forth in 47 C.F.R.  1.2111(d)(2).X} e yO%' x7 ԍ A transfer within the first two years after grant of the construction permit will result in a forfeiture of 100%  x of the value of the bidding credit; during year three, of 75% of the bidding credit; in year four, of 50%; in year five,  x" of 25%; and thereafter, no forfeiture. We will follow the Part 1 auction rules in establishing this fiveyear"k',l(l({'"  {O' x reimbursement period, rather than the shorter two or threeyear period supported by one commenter. See Comments of KM Communications, Inc. at 10.  This"}N",l(l(,,"  S' x*unjust enrichment provision also responds to the concerns expressed by the court in Bechtel II regarding  S' xthe ephemeral nature of comparative preferences and the need for postgrant enforcement. See 10 F.3d at 879880.  Sd' "195. However, if a permittee or licensee who utilized a new entrant bidding credit to obtain a  xbroadcast license simply acquires within the fiveyear reimbursement period an additional broadcast  xfacility or facilities, such that the licensee would not have been eligible for the new entrant credit, the  xlicensee will not be required to reimburse the government for the amount of the bidding credit. To require  xreimbursement in such a situation would discourage new entrants from attempting to obtain another  x!broadcast facility and would, in effect, punish the most successful new entrants into the broadcast industry.  x7We believe such a result would be contrary to the basic purpose of the new entrant bidding credit, which  xis to encourage new entities to not only enter, but to remain and succeed, in the broadcast industry. We  x/note this approach is in accord with existing Commission rules as to certain small business special  S ' xDmeasures." "e {O' x& ԍ See, e.g., 47 C.F.R.  1.2111(c)(2) (a licensee, such as a small business, paying for licenses obtained by  x auction through installment financing does not lose its small business status and its eligibility for such financing due  x to an increase in annual gross revenues resulting from operations, business development or expanded service.)  Accordingly, we will not, as proposed for designated entities generally in the Notice, require  xbroadcast permittees and licensees granted a license through a new entrant credit to certify annually their  x3continuing eligibility for the credit under the new entrant rule in effect when the permit or license was  S 'awarded.jX e yO2' x ԍ We will consider the appropriateness of such a fiveyear certification requirement in the context of other  x! designated entity measures, such as bidding credits for minority or femaleowned businesses, if such measures are adopted in our further report and order on designated entities. j  S6' "196. Based on our experience conducting numerous auctions, we believe that these reimbursement  x7requirements are sufficient to preserve the integrity of the designated entity measures adopted herein, and  S' xwe note that the few commenters who addressed unjust enrichment issues generally agree.F, e {O' x ԍ See Comments of TriCounty Broadcasting, Inc. at 78; KERM, Inc. at 89; Thomas Desmond at 7. Only  x one commenter called for additional enforcement actions, including shortterm renewals, forfeiture and revocation  x proceedings, in addition to the monetary reimbursement of the bidding credit, but offered no explanation as to why  {O ' x such additional measures were needed to preserve the integrity of our designated entity policies. See Comments of  x Kidd Communications at 11. We similarly believe that imposing a holding period on broadcast permittees and  xg licensees who obtain their permits through the use of a new entrant bidding credit would be inappropriate, as  x prohibitions on permit transfers are "likely" to delay service to the public, contrary to the purpose of Section 309(j).  {O."'Second Report and Order, 9 FCC Rcd at 2385. To improve  xour ability to enforce these reimbursement requirements, we also intend to amend our broadcast transfer  x*and assignment applications to include questions as to whether the construction permit or license at issue  Sn'was obtained via competitive bidding and whether the licensee used a new entrant bidding credit.  S' D. Auction Authority for Instructional Television Fixed Service "O:,l(l(,,G"Ԍ S4 "197. Statutory Authority . The Instructional Television Fixed Service (ITFS) is a pointtopoint  xor pointtomultipoint microwave service whose channels are allocated to educational organizations and  S' x7are used primarily for the transmission of instructional, cultural and other types of educational material.ze yO' x ԍ Authorized ITFS "channels must be used to transmit formal educational programming offered for credit to  x@ enrolled students of accredited schools," with certain exceptions. 47 C.F.R.  74.931(a)(1). Specifically, ITFS  x licensees may lease excess capacity on their channels to Multipoint Distribution Service (MDS) operators, which have  x generally used such excess capacity to transmit multichannel video programming to subscribers. An ITFS licensee  xk who leases excess channel capacity to an MDS operator must still provide a total average of at least 20 hours per  x7 channel per week of ITFS programming on its authorized channels, and must also retain the right to recapture an  {O'additional 20 hours per channel per week for its ITFS programming. Id.   xxAn described above, Section 309(j) of the Communications Act, as amended by the Budget Act, mandates  xthe utilization of competitive bidding to resolve mutually exclusive applications, with certain specified  S9' xkexemptions. See 47 U.S.C.  309(j)(1) & (2). Although the spectrum reserved for ITFS, an instructional  xmicrowave service, is not specifically exempted from the Commission's expanded general auction  x@authority, the channels reserved for noncommercial educational and public broadcasters, as discussed  S' x*above, are so exempt under Section 309(j)(2)(C). See supra  24. Given this apparent disparity between  xthe treatment of spectrum similarly reserved for educational purposes, we sought comment on whether,  xunder the terms of the amended Section 309(j), we must, and if not, whether we should, apply competitive  SM ' x3bidding to mutually exclusive ITFS applicants. See Notice, 12 FCC Rcd at 2240422405 ( 98100).  xcBased on our further review of the express terms of the amended Section 309(j), we conclude that channels reserved for ITFS are not exempt from competitive bidding under Section 309(j)(2)(C).  S ' "198. As originally provided in 1993, the Commission's initial auction authority was limited to  xservices where licensees received compensation in exchange for providing transmission or reception  xcapabilities to subscribers. Thus, the Commission at that time lacked the authority to auction the broadcast  xservices as well as ITFS, and Congress specifically indicated that the Commission was not to construe  xcpayments received by ITFS licensees for leasing excess capacity to MDS operators as constituting  S' xcompensation from "subscribers," as that term was used in the initial auction statute.l e {O'ԍ See H.R. Rep. No. 213, 103d Cong., 1st Sess. 481482 (1993).l The Budget Act,  xhowever, amended Section 309(j) so as to eliminate the subscriber limitation from the Commission's  S' xauction authority and to mandate the use of competitive bidding to resolve mutually exclusive applications,  Sq' xwith certain specific exceptions.\qe {O' x ԍ See 47 U.S.C.  309(j)(1) (if "mutually exclusive applications are accepted for any initial license or  {Ow' x. construction permit, then, except as provided in paragraph (2), the Commission shall grant the license or permit to a qualified applicant through a system of competitive bidding") (emphasis added). The exceptions to this general auction mandate are set forth in Section  xD309(j)(2), which provides that the Commission's competitive bidding authority "shall not apply to licenses  xor construction permits issued" in three specific services, of which ITFS is not one. 47 U.S.C.   S'309(j)(2).  e yOY#' x ԍ Section 309(j)(2) states that the Commission shall not apply competitive bidding to the public safety radio  x services; to the initial digital television licenses given to existing broadcast licensees to replace their analog television  x7 licenses; and to stations described in Section 397(6), which defines "noncommercial educational broadcast" and "public broadcast" stations. 47 U.S.C.  309(j)(2)(A)(C).  "P,l(l(,,1"Ԍ S' "199. Because Section 309(j) generally requires the use of competitive bidding to resolve mutually  xexclusive applications with only certain specified exemptions, the Commission does not have the discretion  xto create another exemption for ITFS. When Congress explicitly enumerates certain exceptions to a  S' xgeneral requirement, additional exceptions should not be implied.e {O' x ԍ See Andrus v. Glover Construction Co., 446 U.S. 608, 616617 (1980). See also 2A N. Singer, Sutherland  {O'Statutory Construction  47.11, 47.23 (5th ed. 1992). The list of exemptions from our  xkgeneral auction authority set forth in Section 309(j)(2) is clearly exhaustive, rather than merely illustrative,  xDof the types of licenses or permits that may not be awarded through a system of competitive bidding. By  xits express terms, Section 309(j)(1) requiring the use of auctions to award licenses or permits applies to  S' x}all situations in which mutually exclusive applications are filed except as provided in paragraph (2).  xNothing in the language of Section 309(j)(2) enumerating three types of licenses or permits not included  xin our general auction authority, nor in the accompanying legislative history, suggests that Congress  xintended to authorize the creation of additional categories of licenses that would not be awarded by a system of competitive bidding.  S ' "[200. We also decline to interpret the noncommercial educational broadcast exemption from  S ' x*competitive bidding contained in Section 309(j)(2)(C) to include ITFS, as urged by many commenters.4 $e yO' xQ ԍ The following commenters and reply commenters all oppose subjecting ITFS to competitive bidding under  x Section 309(j), generally arguing that ITFS falls within the noncommercial educational exemption from auctions set  xZ forth in Section 309(j)(2)(C): ITFS Parties; BellSouth Corporation and BellSouth Wireless Cable, Inc.; Indiana  x Higher Education Telecommunications System; School District of Palm Beach County, Florida; Wireless Cable  {O' x Association International, Inc.; National ITFS Association; College of the Albermarle, et al.; Corporation for Public  {O' x Broadcasting; Board of Trustees of CommunityTechnical Colleges (Connecticut), et al.; Rocky Mountain  {OL' x Corporation for Public Broadcasting; Edward Czelada; University of North Carolina, et al.; Community  {O' x! Telecommunications Network; Ball State University, et al.; ITFS Coalition; Throckmorton Broadcasting, Inc.; Board  {O' x of Education of the City of Atlanta, et al.; Mitchell Community College; RowanCabarrus Community College; and  xb Association of America's Public Television Stations. One commenter supports competitive bidding for ITFS, stating  x that, because ITFS is not specifically exempted from Section 309(j)'s broad general auction authority, the  {O:' x Commission must auction mutually exclusive ITFS applications. See Comments and Reply Comments of Hispanic Information and Telecommunications Network.   xAs the Commission has stated and the courts have recognized, ITFS is not a broadcast service. The  xprimary use of ITFS, delivery of educational materials to a limited audience (students pursuing academic  xcredit), does not constitute a broadcast use because the communications are not intended to be received  S4' xby the general public.~4 e yO' x ԍ Section 3(6) of the Communications Act defines broadcasting as the "dissemination of radio communications  {O' x intended to be received by the public." 47 U.S.C.  153(6). See also Memorandum Opinion and Order in MM  {O ' x Docket No. 83523, 59 RR 2d 1355, 1376 (1986) (classifying ITFS as nonbroadcast); Telecommunications Research  {OP!' x and Action Center, 836 F.2d 1349, 1354 (D.C. Cir. 1988) (ITFS used for the precise purpose of providing  x educational programming to a narrow group of students is clearly not broadcasting, as defined by Communications Act).  Moreover, excess capacity use of ITFS channels (such as by MDS operators)"4Qf,l(l(,,"  xQis typically provided on a subscription basis, and the Commission has clearly determined that subscription  S'video services are not broadcast.e {O@' x ԍ In Subscription Video Services, 2 FCC Rcd 1001 (1987), the Commission held that subscription video  {O ' x services are not broadcasting services, and this determination was subsequently affirmed on appeal. See National  {O' x Association for Better Broadcasting v. FCC, 849 F.2d 665 (D.C. Cir. 1988). We have also recently reaffirmed the  {O' x; classification of subscription MDS as a nonbroadcast service. See Second Report and Order in CC Docket No. 86179, FCC 9870 (rel. May 4, 1998).   S' "201. Because the exemption from competitive bidding set forth in Section 309(j)(2)(C) specifies  xMonly Section 397(6) of the Communications Act, which refers to only noncommercial educational and  xpublic broadcast stations, we have no authority to exempt a nonbroadcast service such as ITFS. As the  xSupreme Court has repeatedly emphasized, there is one "cardinal canon" in interpreting a statute a  S' xpresumption "that a legislature says in a statute what it means and means in a statute what it says there."se {O 'ԍ  Connecticut National Bank v. Germain, 503 U.S. 249, 25354 (1992). s  x Moreover, Congress could have simply and clearly made that exemption include ITFS by referencing  xSection 397(7) of the Communications Act, as well as Section 397(6). Section 397(7) defines the term  Sp' xc"noncommercial telecommunications entity," which would include ITFS licensees.epe yO"' xk ԍ Under Section 397(7), a "noncommercial telecommunications entity" means any enterprise that (i) is owned  x and operated by a state or a subdivision thereof, a public agency, or a nonprofit private foundation, corporation or  xk association; and (ii) has been organized primarily for the purpose of disseminating audio or video noncommercial  x! educational and cultural programs to the public by means other than a primary television or radio broadcast station, including microwave. 47 U.S.C.  397(7). e The fact that  xxCongress chose not to reference Section 397(7), in addition to Section 397(6), in the Section 309(j)(2)(C)  xexemption from competitive bidding further supports the conclusion that Congress did not intend to exempt ITFS from competitive bidding.  S ' "202. Given the explicitness of the statutory mandate to utilize competitive bidding and the limited  xnature of the statutory exemptions from competitive bidding set forth in Section 309(j)(2), examining the  x@legislative history of the Budget Act as a guide to interpretation of the amended Section 309(j) appears  S0' xunnecessary.\0 e {O' x ԍ See Darby v. Cisneros, 509 U.S. 137, 147 (1993) (recourse to legislative history found unnecessary in light  {O\' x3 of plain meaning of statutory text); Connecticut National Bank, 503 U.S. at 254 (when words of a statute are unambiguous, then inquiry into the meaning of a statute is complete). In any event, in this case recourse to the legislative history of the Budget Act is not  x3particularly enlightening, as it contains no discussion whatsoever concerning ITFS. Furthermore, the  xpolicy arguments set forth by various commenters against auctioning ITFS cannot override Section  x309(j)'s statutory mandate to utilize competitive bidding for competing applications in all services, except  S'those specifically exempted.~e {O#' x ԍ These commenters contend that subjecting ITFS to competitive bidding would, inter alia, divert the limited  x. funds of educators away from educational purposes to purchasing licenses, favor ITFS applicants most closely tied  x to commercial excess capacity users and disfavor those applicants most focused on providing educational services  {Op%' x to the community, and perhaps even discourage educators from applying for licenses. See Comments of Corporation  x for Public Broadcasting at 47; ITFS Parties at 56; BellSouth Corporation and BellSouth Wireless Cable, Inc. at 78;  x Indiana Higher Education Telecommunications System at 3; School District of Palm Beach County, Florida at 3. "',l(l(&" ~ "RX,l(l(,,"Ԍ S4 "Dԙ203.  Congressional Clarification of Section 309(j).  Several commenters argue that, despite the  xabsence of an express exemption for ITFS from competitive bidding in Section 309(j), Congress would  xnot have made such a fundamental shift in its treatment of ITFS without some explicit discussion of the  S' xservice in the text or the legislative history of the Budget Act.Xe {O' x  ԍ See, e.g., Comments of Wireless Cable Association International, Inc. at 5; BellSouth Corporation and BellSouth Wireless Cable, Inc. at 9. These commenters contend that the  xCommission should not infer from the omission of a specific statutory exemption for ITFS an intent by  xpCongress to ignore the longstanding reservation of ITFS spectrum for noncommercial educational  S'purposes, and urge the Commission to seek a clarifying amendment of Section 309(j) from Congress.e {Oc ' x ԍ See, e.g., Comments of Indiana Higher Education Telecommunications System at 7; ITFS Parties at 8; School District of Palm Beach County, Florida at 7.  S' ""204. Although we understand and sympathize with commenters' concerns about subjecting ITFS  x^to competitive bidding, we, as discussed in detail above, feel compelled to conclude, based on the express  xterms of Section 309(j), that competing ITFS applications are subject to auction. We are concerned,  xQnonetheless, that Section 309(j), as adopted, may not reflect Congress' intent with regard to the treatment  xof competing ITFS applications. Given the instructional nature of the service and the longstanding  xreservation of ITFS spectrum for noncommercial educational use, it is possible, as commenters argue, that  xCongress did not intend its expansion of our auction authority in the Budget Act to include ITFS.  S ' xZAccordingly, we will  request that Congress amend Section 309(j) so that the statute clearly reflects its  xintent with regard to ITFS. Absent a clear statement from Congress that it means to exempt ITFS from  xcompetitive bidding, then the Commission will proceed with the auction of mutually exclusive ITFS  xapplications, as described below. We will not commence ITFS auctions immediately, however, in order to allow sufficient time for us to obtain Congressional guidance.  S4 "Z205. Pending Mutually Exclusive ITFS Applications . Pending ITFS applications are outside  xtthe scope of new Section 309(l) of the Communications Act, which provides that the Commission has  x&discretion regarding the resolution of pending comparative licensing proceedings involving preJuly 1,  x1997 applications for commercial radio and television stations. Accordingly, pending mutually exclusive  xITFS applications, although pending since at least the last ITFS filing window in October 1995, must be  S' xresolved by competitive bidding pursuant to Section 309(j)(1).l e yO' x^ ԍ Thus, we cannot agree with the commenters, who generally oppose auctioning pending ITFS applications.  {Of' x! See, e.g., Comments of College of the Albermarle, et al. at 23; BellSouth Corporation and BellSouth Wireless Cable,  x< Inc. at 10; Wireless Cable Association International, Inc. at 1418; National ITFS Association at 67. One  {O ' x commenter supports auctioning pending ITFS applications. See Comments of Hispanic Information and Telecommunications Network at 10. l As we concluded, however, with respect  S' x*to pending broadcast applications that are outside the scope of Section 309(l) (see supra  105109), we  x*believe it would not serve the public interest to accept additional competing ITFS applications despite our  xauthority to do so under Section 309(j)(1), and we will therefore limit the eligible bidders in any auction of the pending ITFS applications to those with applications already on file. ",S ,l(l(,,q"Ԍ S' "206. We realize that the pending ITFS applicants filed their applications under our current rules,  xEwith the expectation that any mutually exclusive applications would be resolved pursuant to the  xCommission's established point system. These applications have, moreover, been pending since at least  xOctober 1995, and some for an even longer period of time. For these reasons, we believe that the pending  xcompeting ITFS applicants should be given an opportunity to settle, without any limitations on payments  S8' x7to withdrawing applicants. For a 120day period following the publication of this First Report and Order  xin the Federal Register, the Commission will accordingly waive any of its rules (such as 47 C.F.R.   x73.3525(a)(3)) that precludes the receipt of any money or other consideration in excess of legitimate and  xprudent expenses in exchange for the dismissal of an application, and will also waive our policy against  x"white knight" settlements involving the award of a license to a nonapplicant third party. Given the  xcongressional directive in Section 309(l)(3) to waive such limitations on settlement prior to any auction  xof the pending preJuly 1, 1997 broadcast applications, we believe it appropriate to provide a similar period for pending competing ITFS applicants to settle prior to the scheduling of any auction.  S 4 "207.  Competitive Bidding Procedures Applicable to ITFS . As we proposed in the Notice, the  xsame application and competitive bidding procedures that we are adopting herein for the broadcast services  xZwill also apply to ITFS. Applications for new ITFS facilities or for major changes to existing facilities  xmay only be submitted during an announced auction window; ITFS minor modification applications may  xcontinue to be filed at any time and will not be subject to competitive bidding. To apply during an  xannounced auction window, ITFS applicants should submit an FCC Form 175 and the engineering data  xcontained in the FCC Form 330. Applicants who submit mutually exclusive shortform applications for  xITFS licenses will be subject to auction, and will be required to make all upfront, down and full payments,  xas set forth in our general auction rules. Only winning bidders or nonmutually exclusive applicants will  xbe required to file complete longform applications, and petitions to deny against ITFS longform  xapplications must be filed within the same tenday period as adopted herein for broadcast longform  xapplications. As with the broadcast longform applications, we are deleting the financial certification  S'requirement from the FCC Form 330.e yO\'ԍ The FCC Form 330 does not contain a reasonable assurance of site certification requirement.  S' "R208. We emphasize that the adoption of competitive bidding procedures for ITFS will not alter  xthe current technical requirements, interference protection rules, or eligibility criteria for the service. Thus,  xto apply to participate in any future ITFS auction, the applicant must be eligible under our existing rules  S,' x3to hold an ITFS license.,Xe yO$' x ԍ ITFS station licenses are "issued only to an accredited institution or to a governmental organization engaged  x in the formal education of enrolled students or to a nonprofit organization whose purposes are educational and  x; include providing educational and instructional television material to such accredited institutions and governmental organizations." 47 C.F.R.  74.932(a).  Similarly, ITFS licensees who obtain their licenses via competitive bidding  S' xtwill be subject to our existing rules regarding use of ITFS channels. See supra  197.xe yO#' x@ ԍ Under the Commission's rules, wireless cable operators are permitted to apply for ITFS channels under  {Ot$' xH certain conditions. See Amendment of Parts 21, 43, 74, 78, and 94 of the Commission's Rules Governing Use of the  {O>%' x/ Frequencies in the 2.1 and 2.5 GHz Bands, 6 FCC Rcd 6792, 680106 (1991). In allowing the utilization of  x available ITFS frequencies by wireless cable ventures, the Commission emphasized that it would adopt procedural  x rules which "provide for the absolute primacy of ITFS applications visavis wireless cable applications where the  {O'' x/ two may be mutuallyexclusive." Id. at 6805. Accordingly, Section 74.990(e) provides that "[i]f an [ITFS]"',l(l('"  xZ application and a wireless cable application for available [ITFS] facilities are mutuallyexclusive . . . the [ITFS]  xk application will be granted if the applicant is qualified." 47 C.F.R.  74.990. Thus, consistent with our commercial  x ITFS processing rules, a qualified ITFS application which is mutually exclusive with an application filed by a  x qualified wireless cable operator, will not be subject to competitive bidding, but will be granted as required by  xD Section 74.990(e). In the event that more than one ITFS application is mutually exclusive with a commercial ITFS  xx application, the ITFS applications will be resolved by competitive bidding only to the extent that they are directly mutually exclusive.  Thus, we are"T,l(l(,,'"  x3not altering in any way the basic requirements and characteristics of ITFS, but are merely altering the method through which we resolve competing applications in that service.  S`' E. Resolution of Pending Comparative Renewal Proceedings  S' "209. In the Notice, 12 FCC Rcd at 22406 ( 102), we proposed that, if the Commission did not  xpadopt a revised comparative hearing system for pending comparative cases for new stations, and if  S' xcomparative renewal cases where the comparative issue was decisionally significant did not settle,$e yOj' x! ԍ In this regard, we note that the Commission has waived the monetary limits on settlements in the comparative  {O2'renewal context to facilitate settlements. See, e.g., EZ Communications, Inc., 12 FCC Rcd 3307 (1997).$ we  xwould instead use a twostep procedure. Under this approach, a renewal application would be granted if  xwe determined, after a threshold hearing, that the renewal applicant deserved a renewal expectancy for  SJ ' x"substantial performance."J b e {OL' x ԍ See Central Florida Enterprises, Inc. v. FCC, 683 F.2d 503, 509 (D.C. Cir. 1982), cert. denied, 460 U.S. 1084 (1983). As part of the twostep procedure (i.e., in connection with those cases where  xthe renewal applicant did not receive a renewal expectancy) or as an alternative, we asked for comment  xQon whether we should consider any comparative factors raised by the applicants on a casebycase basis.  S 4 x"See Notice  , 12  FCC Rcd at 2240607 ( 103). We recognized that the twostep process had been  S ' xdetermined to be unlawful by the United States Court of Appeals for the District of Columbia Circuit, e {O 'ԍ Citizens Communications v. FCC, 447 F.2d 1201 (D.C. Cir. 1971), clarified, 463 F.2d 822 (D.C. Cir. 1972).  xQbut indicated that we believed the court could be persuaded to change its mind in light of subsequent case  S^'law.  S' "210. We continue to believe that a twostep renewal procedure is consistent with the  S' xCommunications Act and that we could convince the court to overrule its decision to the contrary.$N e {O' x ԍ See Amendment of Part 22 of the Commission's Rules Relating to License Renewals in the Domestic Public  {O 'Cellular Radio Telecommunications Service, 8 FCC Rcd 2834 (1993), recon. denied, 8 FCC Rcd 6288 (1993).$ We  xalso believe that the twostep procedure would be a quicker system for resolving these cases, at least for  xthose cases where a renewal expectancy is granted and the hearing concludes after the first step. (We  xwould anticipate, based on past experience, that this would be the outcome in most cases.) Indeed, we  xthink this approach would be faster (at least for the onestep hearings) even if we stayed our decision to  xadopt the twostep approach pending the outcome of judicial review. Nevertheless, we have decided not  xto adopt the twostep procedure. We do not believe it would best serve the public interest to expend the  xresources of the Commission, private parties and the courts to litigate (at what would presumably have  S' xto be the en banc level) the lawfulness of a procedure previously found to be unlawful when the new"U,l(l(,,"  xprocedure would apply to only a handful of cases (roughly eight) and would have no future applicability.  xIn addition, we note that even under the twostep procedure, we could not avoid full comparative hearings  xfor those cases that reach the second stage because the renewal applicant does not qualify for a renewal  xexpectancy. And, for those cases, the twostep approach would be slower since, assuming we stayed this  xDpart of our order pending judicial review, the process could not get underway until after a decision by the court.  S' "/211. As we discussed at length above, having comparative hearings for pending cases is far from  xthe most desirable result. Indeed, our experience with the comparative hearing process has been that it  x+tends to produce protracted litigation over minutiae of questionable public interest significance.  xNevertheless, having rejected the twostep approach, we have no choice here other than to use comparative  SH ' xhearings. The Commission has traditionally used for comparative renewals the same standard comparative  S ' xissue used in connection with mutually exclusive applications for new commercial broadcast stations.  e {O ' x ԍ See, e.g., Cowles Broadcasting, Inc., 86 FCC 2d 993 (1981), aff'd sub nom. Central Florida Enterprises,  {OR 'Inc. v. FCC, 683 F.2d 503 (D.C. Cir. 1982), cert. denied, 460 U.S. 1084 (1983).  xIn addition, as part of the standard comparative issue in renewal proceedings, the Commission awards a  S ' x renewal expectancy to renewal applicants whose performance has been "substantial." N $e {O' x ԍ See, e.g., Cowles Broadcasting, Inc, 86 FCC 2d 993, 10061008 (1981), aff'd sub nom. Central Florida  {O^' xI Enterprises, Inc. v. FCC, 683 F.2d 503 (D.C. Cir. 1982), cert. denied, 460 U.S. 1084 (1983).  See also United  {O(' x Broadcasting Co., Inc., 100 FCC 2d 1574, 157681 (1985); Radio Station WABZ, Inc., 90 FCC 2d 818, 83643  {O' xI (1982), aff'd sub nom. Victor Broadcasting, Inc. v. FCC, 722 F.2d 756 (D.C. Cir. 1983). A licensee that has  x provided "meritorious service" has a "legitimate renewal expectanc[y]" that is "implicit in the structure of the Act"  {O' x| and that "should not be destroyed absent good cause." FCC v. National Citizens Committee for Broadcasting, 436  {ON' xZ U.S. 775, 805 (1978) (quoting Greater Boston Television Corp. v. FCC, 444 F.2d 841, 854 (D.C. Cir. 1970), cert.  {O'denied, 403 U.S. 923 (1971)). Accord Central Florida Enterprises, 683 F.2d at 506.  The renewal  x"expectancy has been the most important comparative factor in a comparative renewal proceeding;  S ' xintegration (and diversification) have been factors of lesser weight.  : e {OZ' xk ԍ See, e.g., National Citizens Committee for Broadcasting, 436 U.S. at 806; Victor Broadcasting, 722 F.2d at  {O$'765; Central Florida Enterprises, 683 F.2d at 509. Although integration was less  ximportant in comparative renewal proceedings than comparative proceedings involving new applications  x(in those instances where the renewal applicant received a renewal expectancy), it nevertheless was one  x3of the relevant factors. Indeed, if no renewal expectancy were awarded, it would have become a key  S' xfactor. Because the court found integration to be unlawful in Bechtel II and prohibited its further use, any  xsystem of comparative renewal hearings we adopt here must, by definition, be different than the system we have used in the past.  SB' "212. As noted above, it is a difficult task, open to significant potential legal challenge, to attempt  xto craft a revised set of comparative criteria or even to establish a revised weighting system using the  x7existing criteria other than integration and the integration enhancements as standalone factors. While we  xdo not have the option of auctions in this context, we continue to believe that it does not serve the public  xinterest to develop such a revised or newly weighted system that would apply only to a small number of  x^cases. Developing legally sustainable criteria that would reliably predict future performance is particularly  xproblematic when the universe to which it applies will be so small and where there will be no future  S*'applicability. "*V ,l(l(,,W"Ԍ S' "Rԙ213. We think the most equitable and expeditious approach here would be simply to permit the  xrenewal applicants and their challengers, within the confines of the generally phrased standard comparative  xDissue, to present the factors and evidence they believe most appropriate. As noted above, this is what we  S' xsuggested as an alternative approach to the twostep procedure in the Notice, and no commenters have  xprovided any persuasive arguments against such an approach to comparative hearings if we reject the two S:' xstep procedure. :e yO' xx ԍ One commenter urges that in cases in which the renewal applicant is not awarded a renewal expectancy the  {Oj' x Commission should rely on diversification. See Comments of Lawrence Brandt at 23. Another commenter  x recommends that the Commission resolve these cases on a casebycase basis, consider all comparative criteria except  x for integration, and accord comparative credit for the incumbent's past record based on the strength of the station's  {O 'performance during the license period. See Reply Comments of Simon T. at 1619.  Of course, if the renewal applicant can demonstrate substantial performance and thus  xan entitlement to a renewal expectancy, this will continue to be the most important factor and can be  S'expected in most cases to outweigh other considerations in favor of the challenger.  S' "u214. In so concluding, we acknowledge that comparative renewal hearings tend to be time xconsuming and expensive for both the Commission and the private parties, and to disserve the public  xinterest by prolonging the period during which a renewal applicant operates under a cloud. In these  xcircumstances, we remain willing, where the circumstances afford assurance that the competing  xapplications were not filed for speculative or other improper purpose, to waive the limitations on payments  xcto dismissing applicants in comparative renewal proceedings, and we will, as commenters suggest,  S ' xDexpeditiously consider such settlement agreements.  |e {O' xD ԍ See Comments of Parties to Comparative Renewal Proceedings at 5; Reply Comments of National Minority T.V., Inc. at 3. This will serve the public interest by expediting the  S ' xresolution of proceedings that were prolonged as a result of the court's decision in Bechtel II. Although  xkwe are sympathetic to the unusual delays occasioned in these cases by the comparative freeze, we decline  xto consider the licensee's performance after the renewal term for purposes of determining whether it  S ' xZdeserves a renewal expectancy, as one commenter suggests,h e {O'ԍ See Reply Comments of National Minority T.V., Inc. at 2. h or to make other suggested changes in  xccomparative renewal proceedings that would apply to only a few pending cases and have no future  S' xQapplicability.J$h e yO' x ԍ One filing, for example, urges that the Commission expedite the resolution of motions to dismiss pending  x against competing applications as a means of possibly eliminating the need for any comparative hearing, and adopt  {OT' x a variety of measures designed to ascertain the bona fides of any competing applicants. See Comments of Parties  {O'to Comparative Renewal Proceedings at 56. See also ReplyComments of National Minority T.V., Inc. at 12. J We believe that the fairest and most expeditious approach in these cases is to decide them  S' xas nearly as possible according to the standards in effect prior to Bechtel II. We accomplish this by  xdeciding them on a casebycase basis, affording all parties the flexibility to present evidence they deem  xxrelevant under the standard comparative issues, and at the same time adhering to the criteria for evaluating  xthe renewal applicant's performance during the license term to determine its eligibility for, and the comparative significance of, any renewal expectancy.  S~' F. Request for Recusal of Commissioners "VWT ,l(l(,,"Ԍ S' "_215. Willsyr Communications, an applicant in a frozen hearing proceeding involving a new FM  xstation in Biltmore Forest, North Carolina, filed a Motion to Recuse FCC Commissioners, as well as  xQcomments in this rulemaking proceeding. This Motion is denied in its entirety. A separate statement from  S' x@Chairman Kennard addresses the request that he recuse himself from this rulemaking.se {O' x ԍ Chairman Kennard is already recused from participating in the Biltmore Forest licensing proceeding. See  x Letter, dated July 15, 1997, from William E. Kennard, General Counsel, Federal Communications Commission, to  xt Mark Langer, Clerk of the Court, United States Court of Appeals for the District of Columbia (withdrawing his  {OJ' x notice of appearance in Orion Communications Ltd. v. FCC (Case No. 961430), and notifying the court of his recusal from further participation in that proceeding). s Based on the  xapplicable law of recusal, the other four commissioners decline to recuse themselves from this rulemaking  S8' x@and from the related adjudicatory proceeding involving Biltmore Forest. Recusal from a rulemaking is  xwarranted only upon a clear and convincing showing of an unalterably closed mind, as to issues of fact  S' xor policy,|e {O 'ԍ See C & W Fish Company v. Fox, 931 F.2d 1556, 1564 (D.C. Cir. 1991). whereas the test for disqualification of a Commissioner from an adjudicatory proceeding on  xgrounds of bias or the appearance of bias is whether "a disinterested observer may conclude that [the  x7decisionmaker] has in some measure adjudged the facts as well as the law of a particular case in advance  Sp'of hearing it."pe {O' x ԍ Metropolitan Council of NAACP Branches v. FCC, 46 F.3d 1154, 116465 (D.C. Cir. 1995), citing Cinderella  {O'Career and Finishing Schools, Inc. v. FTC, 425 F.2d 583, 591 (D.C. Cir. 1970).    S ' "216. At no time during the confirmation process was Commissioner FurchtgottRoth, Tristani or  xPowell, or any member of his or her staff, contacted as to the merits of using comparative hearings rather  xthan auctions to decide certain pending adjudicatory proceedings, as to the merits of the ongoing  xpermanent license proceeding involving Biltmore Forest, North Carolina, or of any adjudicatory licensing  xEproceeding potentially affected by the auction rules we adopt today. In addition, subsequent to  SX' xconfirmation, none has received any impermissible ex parte communication regarding the merits of any  x3issue in this rulemaking, or any related adjudicatory proceeding. Each confirms that no impermissible  xlfactor has influenced, or would influence in the future, his or her decision on any aspect of this  xrulemaking proceeding, or on the merits of pending applications. There is, therefore, no basis to challenge  xthe participation of Commissioners FurchtgottRoth, Powell and Tristani in deciding any issue in this rulemaking proceeding or any related adjudicatory licensing proceeding.  SB' "~217. There is also no basis to challenge the participation of Commissioner Ness in either  S' xgproceeding. A requester seeking the recusal of a commissioner from an adjudicatory proceeding must  xpoint to specific statements clearly showing prejudgment of both the facts and law of a given case, and  S' xsuch statements must be viewed in the context of the entire case.j e {O!' x ԍ See Fox Television Stations, 9 FCC Rcd 5246, 5250 (1994)  (Separate Statement of Chairman Quello), aff'd  {O"'sub nom. Metropolitan Council of NAACP Branches, 46 F.3d at 116465.  Willsyr, however, relies exclusively  S' x on public remarks quoted in Mediaweek (Jan. 5, 1998) that Commissioner Ness was "concerned that  xkauctions, while quick and efficient, ignore the equities that exist in some of these outstanding radio license"|X ,l(l(,,"  S' xcases, including Lee's."dXe yOh' x ԍ The individual mentioned in the quotation, Zebulon Lee, is a principal of Orion Broadcasting, one of the  x competing applications for a new FM station in Biltmore Forest. The Biltmore Forest license proceeding is one of the fewer than ten frozen hearing cases that did not settle. d These remarks merely reformulate an issue of policy expressly articulated by  S' xthe Commission in its Notice in this rulemaking proceeding."e {O`' x ԍ Notice, 12 FCC Rcd at 2237273 ( 22), requesting comments on "whether the resources these applicants  x [who have progressed at least through an Initial Decision by an Administrative Law Judge] have expended, as well  xL as the delays they have encountered, raise special equitable concerns that should lead us to have comparative hearings in these cases even if we use auctions for other pending cases." But they neither suggest that Lee should  xbe singled out for special treatment, intimate how the Biltmore Forest proceeding should be resolved, nor  xDindicate Commissioner Ness's view on whether certain cases should be resolved through the comparative  xhearing process instead of by auction. Hence, the statements provide no basis for a disinterested reader  S:' xof the Mediaweek article to conclude that the Commissioner had adjudged in advance any partyspecific  xquestion of fact or law concerning the merits of any of the pending applications for Biltmore Forest, or  xthat recusal from the adjudicatory proceeding is necessary to prevent the appearance of such prejudgment.  xAs to the policy issue of whether to use comparative hearings in certain cases, the remarks identify, but  S' xdo not discuss the relative merits of, competing public interest considerations (i.e, the speed and efficiency  xof auctions and the equities existing in some cases) pertinent to that issue. Thus, they in no way show  xby clear and convincing evidence that Commissioner Ness had an unalterably closed mind on that issue,  xtand therefore they fall far short of the threshold showing necessary to disqualify a commissioner from participating in a rulemaking.  S ' "218. Willsyr also surmises that the remarks quoted in the Mediaweek article indicate that  x*Commissioner Ness must have been presented with, and considered, extrarecord evidence regarding the  xmerits of Orion Broadcasting's pending license application for Biltmore Forest in the context of the issue  xconcerning the use of comparative hearings. The Commissioner affirmatively states that she has not  S' xreceived any impermissible ex parte communications regarding the merits of pending applications or the  xissue of whether considerations of fairness warrant the use of comparative hearings rather than auctions  xgto decide certain outstanding license cases (including the mutually exclusive applications at issue in the Biltmore Forest license proceeding).  Sr'   S"'  IV. PROCEDURAL MATTERS AND ORDERING CLAUSES  S' "'219. The Final Regulatory Flexibility Analysis, pursuant to the Regulatory Flexibility Act, 5 U.S.C.  604, is contained in Appendix B.  SZ' "220. Accordingly, IT IS ORDERED, That pursuant to the authority of Sections 4(i) and (j), 301,  xk303(f), 303(g), 303(h), 303(j), 303(r), 307(c), 308(b), 309(j), 309(l) and 403 of the Communications Act  xof 1934, as amended, 47 U.S.C.  154(i), 154(j), 301, 303(f), 303(g), 303(h), 303(j), 303(r), 307(c),  S' x^308(b), 309(j), 309(l) and 403, this First Report and Order IS ADOPTED, and Part 73 and Part 74 of the Commission's Rules ARE AMENDED as set forth in the attached Appendix C.  Sl' "221. IT IS FURTHER ORDERED, That the rule amendments set forth in Appendix C WILL  xBECOME EFFECTIVE 60 days after their publication in the Federal Register, and the information"DY,l(l(,,7"  xcollection contained in these rules will become effective 60 days after publication in the Federal Register, following OMB approval, unless a notice is published in the Federal Register stating otherwise.  S' "222. IT IS FURTHER ORDERED, That the Motion to Recuse FCC Commissioners, filed February 25, 1998, by Willsyr Communications, Limited Partnership, IS DENIED.  S' "223. IT IS FURTHER ORDERED, That pursuant to 47 U.S.C.  155(c) and 47 C.F.R.  0.61,  x0.131(c), 0.283 and 0.331, the Chief of the Mass Media Bureau and the Chief of the Wireless  x Telecommunications Bureau ARE GRANTED DELEGATED AUTHORITY to prescribe and set forth  x procedures as set forth herein, including the authority to seek comment on and set forth mechanisms  xxrelating to the daytoday conduct of specific broadcast service and Instructional Television Fixed Service auctions.  S ' "R224. IT IS FURTHER ORDERED, That the Commission's Office of Public Affairs, Reference  S ' x*Operations Division, SHALL SEND a copy of this First Report and Order, including the Final Regulatory  S 'Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.  SZ' "225. IT IS FURTHER ORDERED, That GC Docket No. 9252 and GEN Docket No. 90264 ARE TERMINATED. ` `  hhCqFEDERAL COMMUNICATIONS COMMISSION ` `  hhCqMagalie Roman Salas ` `  hhCqSecretary "&Z,l(l(,,`%"Ԍ 6%M   S' 6%M  XX   )e S'  #&I\  P6Q.?&P#Federal Communications Commission`g(#bFCC 98194 ă   yx}dddy )@A-@%  APPENDIX A LIST OF COMMENTING PARTIES  S`' Comments  X` hp x (#%'0*,.8135@8:ze {O'ԍ See 47 C.F.R.  1.2104(g) & 1.2109.Z  "8A licensee, or holder of a construction permit, who utilized a new entrant bidding credit will be  xrequired to reimburse the government for the amount of the bidding credit, plus interest, as a condition  xkfor Commission approval of the assignment or transfer of the license or permit to an entity that would not  xthave qualified for the new entrant credit. As provided in the Commission's Part 1 rules, the amount of  S' xthe repayment will be reduced over a fiveyear period.W?~e {O$'ԍSee 47 C.F.R.  1.2111(d)(2).W A licensee who received a new entrant bidding  xcredit, however, will not be required to repay such bidding credit if it obtains within the fiveyear  xreimbursement period additional media interests so that it no longer meets the eligibility requirements for the new entrant credit it previously received." g?,l(l(,,"Ԍ S'   S' V. Steps Taken to Minimize Significant Economic Impact on Small Entities,  S' and Significant Alternatives Considered:  S`' "Due to the insufficiency of the record in this proceeding, the First Report and Order does not  x*make a final determination regarding the adoption of bidding credits or other special measures to enhance  xparticipation by various designated entities, including small businesses, in broadcast service and ITFS  S' xauctions. The First Report and Order does adopt a tiered new entrant bidding credit for entities with  xcontrolling interests in either no, or less than four, other media entities so as to enhance participation by  xsmall businesses and other designated entities, including small businesses owned by women and minority  xgroup members. Following the completion of certain pending evidentiary studies, the Commission may,  x in a further report and order in this proceeding, adopt additional or alternative bidding credits or other  xmeasures that more directly alleviate any adverse impact on small businesses (including those owned by  xwomen or by minority group members) of the requirement to participate in an auction to obtain a  xkconstruction permit to provide commercial broadcast service. If additional or alternative designated entity  xmeasures are ultimately adopted, then any such measures will be applicable to the auction of any broadcast and ITFS applications then on file with the Commission.  "Moreover, even if further special measures are not ultimately adopted, we believe that some of  S ' xZthe competitive bidding procedures adopted in this First Report and Order reduce the time and cost of securing commercial broadcast and ITFS licenses to the ultimate benefit of small businesses.  S' "Entities interested in bidding for broadcast station permits will not be required to submit a long  xtform application prior to auction. We will require only that a short form application be submitted prior  x@to auction, although AM, LPTV, and television and FM translator applicants will be required to submit  xthe engineering data necessary to make determinations of mutual exclusivity. Requiring only minimal  xinformation in a short form application rather than a more detailed long form application will reduce the  xkburden on small entities interested in participating in an auction. These entities (particularly FM applicants  xwho are not required to submit any engineering data with their shortforms) will not be required to expend  xadditional sums to prepare a complete long form application prior to auction. Limiting preauction costs  x}will encourage and facilitate the participation of small entities in the auction and eliminate a potential  S.'barrier to entry for these parties.  S'  "The procedures adopted here further expedite service to the public, thereby reducing the cost to  xsmall entities of participating in these auctions, by limiting our preauction processing to what is necessary  xgto determine mutual exclusivity. Similarly, in the case of pending applications, we will defer until after  xZthe auction all issues as to a bidder's basic qualifications or the acceptability of its application, whether  x^raised in a petition to deny or a motion to enlarge issues, and we will decide such issues only with respect to the auction winner.  "Also, as permitted by Section 3008, we have reduced the time for filing petitions to deny to 10  xdays after the long form applications submitted by winning bidders are accepted for filing. Some  xcommenters objected to the establishment of a petition to deny period as brief as that allowed under  SN$' xSection 3008 (i.e., five days), contending, inter alia, that such a short period is insufficient to evaluate"N$h?,l(l(,, #"  S' xthe technical proposals and legal information contained in broadcast longform applications.@e {Oh' x^ ԍ See Comments of KERM, Inc. at 5; TriCounty Broadcasting, Inc. at 5; Communications Technologies, Inc. at 2; Michael Ferrigno at 10; Hatfield & Dawson Consulting Engineers at 3. While  xrecognizing that the Commission relies on petitioners as private attorneys general to assist in overseeing  xthe conduct of applicants and licensees and in the fulfillment of its statutory functions, we also consider  xexpedition of service to the public to be of paramount significance. Accordingly, after careful  xconsideration and in light of Congress' directive in the Budget Act, we found that a shortened petition to  xdeny period of 10 days is appropriate for applications for broadcast and secondary broadcast construction  S'permits obtained through the competitive bidding process.  S'  S' "zWe have eliminated the requirement that applicants affirmatively certify their financial  xqualifications and the availability of their proposed tower locations in their applications. This will provide  xsmall entities with additional flexibility to focus their limited financial resources on participation in the  xauction rather than preparing financial and other documentation and securing a tower location. We believe  xtthat the competitive bidding process itself serves to lessen the incentive for insincere application filings  xQand provides a strong stimulus for timely station construction, so as to recapture bidding investments. In  xaddition, we think it unlikely that bidders, who must construct their facilities to recoup the expenditures  xmade in obtaining their construction permits via auction, will have the incentive to participate in and  S 'prevail at auction if they lack the financial wherewithal to construct their facilities.   SX'  S0' "h We recognize that, despite the efficiency of auctions and the resulting reduction in the costs  xassociated with filing an application, having to participate in an auction may limit the opportunities  xavailable to small businesses, particularly regarding future applications filed in anticipation of the winner  xbeing selected through a system of competitive bidding. However, except for certain commercial  xbroadcast applications filed before July 1, 1997, Section 309(j)(1), as amended by the Budget Act of 1997,  xrequires that the Commission use competitive bidding procedures to award virtually all construction  xpermits for commercial broadcast stations where mutually exclusive applications are filed. After carefully  xVconsidering the comments, we determined that auctions are statutorily required to resolve mutually  xexclusive secondary broadcast service applications, as nothing in the statute or in the legislative history  xreflects an intention to limit Section 309(j)(1) to full power radio and television applications. We advised  xapplicants to be aware that the requirement that competing applications be auctioned did not change the secondary nature of the LPTV and television and FM translator services.  "yRelying on the fact that the exemption from competitive bidding set forth in Section 309(j)(2) is  S' xMexpressly limited to noncommercial educational and public broadcast stations, we also determined that  xQthe exemption does not apply to ITFS, which is a nonbroadcast service. Thus, although we agreed with  xcommenters that ITFS is similar to noncommercial educational broadcast service and that Section 309(j)  xmay not reflect on its face Congress's intent regarding the treatment of competing ITFS applications, we  xfound that auctions are statutorily required to resolve all pending and future mutually exclusive ITFS  xapplications. However, we will request that Congress amend Section 309(j) so that the statute clearly  xreflects its intent with regard to ITFS. Absent a clear statement from Congress that it means to exempt  xMITFS from competitive bidding, we will proceed to auction mutually exclusive ITFS applications. We  x^will not commence ITFS auctions immediately, however, in order to allow sufficient time for us to obtain  S"'Congressional guidance. "r#i"@,l(l(,,-""Ԍ "Auctions are not statutorily required to resolve modification applications, since Section 309(j)(1)  x@expressly refers to "mutually exclusive applications for . . . any initial license or construction permit."  xD Nevertheless, we determined to use competitive bidding to resolve mutually exclusive major modification  xapplications but not mutually exclusive minor modification applications. Although some commenters  S`' xZopposed the auctioning of modification applications,A`e {O' x* ԍ See, e.g., Comments of Cox Radio, Inc. at 23; Kayo Broadcasting at 14; KM Broadcasting, Inc.; Six Video Broadcast Licensees at 6; Reply Comments of WB Television Network at 12. commenters did not suggest another method of  xMresolving mutually exclusive major modification applications that is as efficient as competitive bidding.  xWe will, however, allow applicants who have filed competing major modification applications, or  xcompeting major modification and new applications, to resolve their mutual exclusivity by means of  xengineering solutions or settlement before proceeding to auction. Given the infrequency with which minor  xVmodification applications are mutually exclusive and the less significant changes proposed in minor  xmodification applications, we saw less utility to be gained from subjecting minor change applications to  xcompetitive bidding procedures. Thus, in accord with the comments, the parties will be expected to work together to resolve any mutual exclusivities between minor modification applications.  "Section 309(l) governs the resolution of approximately 130 pending comparative licensing  xproceedings involving preJuly 1, 1997, applications for new commercial radio or television stations that  xdid not settle within the 180day waiver period prescribed by Congress. For settlements executed within  x@that period, we waived our settlement rules, including the prohibition against "white knight" settlement  xagreements where a fullmarket settlement was involved. Such a waiver would allow a nonparty to  xreceive the license after paying the pending applicants to settle. We concluded that this "white knight"  S' xwaiver could not be extended to partial settlements, as some commenters urged,B"e {O' xQ ԍ See Reply Comments of Paxson Communications Corp. at 10; Comments of Marri Broadcasting, L.P. at 24; Dewey Matthew Runnels at 24. because doing so would  xcontravene Section 309(l)(2), which explicitly restricts our discretion regarding persons qualified to participate in a competitive bidding proceeding that involves preJuly 1, 1997 applications.  S@' "We also concluded that, contrary to certain comments,C@|e {O\' xg ԍ See, e.g., Reply Comments of WB Television Network at 10; Comments of Grace Communications LC at 7. it would not serve the public interest to  xwaive our settlement rules on our own motion to facilitate settlements among applicants ineligible to take  x3advantage of the statutory 180day settlement period where applicants could settle for more than their  xglegitimate and prudent expenses, or expand the 180day period for applicants who were eligible to take  xkadvantage of the statutorilymandated waiver period but did not do so. We noted that Congress had made  xVno change to Section 311(c) that would require a substantial relaxation of our settlement rules, and  x}pending competing applicants may settle at any time under our existing policies that limit payments.  xMoreover, there was no reason to believe that an additional waiver period would produce settlements in a significant number of the remaining cases.  "Based upon the express language of Section 309(l), we concluded that in cases that did not settle,  xwe have discretion to resolve applications subject to that provision by either auction or comparative  xkhearings. Some commenters favored the use of comparative hearings for these pending preJuly 1, 1997  xcases and expressed concern that the switch to auctions will detrimentally affect the quality of broadcast"8jC,l(l(,,7"  xZservice. They focused particularly on the impact that auctions will allegedly have in terms of securing  S' xservice that is narrowly tailored to the needs of the small, local community.De {O@'ԍ See, e.g., Comments of Wolfgang V. Kurtz at 12; Cromwell Gro up, Inc. at 12. We found that Congress  xitself has made the judgment that auctions are generally preferable to comparative hearings by requiring  xkthem for competing commercial broadcast applications filed on or after July 1, 1997. We concluded that,  xby providing us with the discretion to determine whether or not to use auctions in pending preJuly 1st  xcases, Congress intended us to focus on any special circumstances in these cases that would tip the policy  xbalance in favor of comparative hearings, not to revisit the general congressional determination that broadcast auctions serve the public interest.  "In exercising this discretion, we concluded that, even for the few preJuly 1, 1997 cases that had  xZalready progressed through an Initial Decision by an Administrative Law Judge, auctions will generally  xbe fairer and more expeditious than deciding these pending cases through the comparative hearing process,  xparticularly since the court's invalidation of the key comparative criterion prevents us from deciding any  xof these cases according to the applicants' reasonable expectation when they filed their applications.  xQUnder these circumstances, we disagreed that it would be arbitrary and capricious to ignore the results of  xthe prior hearing. We found that for the Commission's Administrative Law Judges to adjudicate and  xdecide the approximately 130 pending proceedings would take many years while auctions can be carried out much more quickly.  S' "We rejected arguments raised by commenters that changing the selection process for pending  S' xxapplications filed before July 1, 1997 is impermissibly retroactive or otherwise unlawful.EZe {O' xR ԍ See, e.g., Comments of Susan M. Bechtel at 68; Lindsay Television, Inc. at 810; Throckmorton Broadcasting, Inc. at 34. We found that  xnone of the preJuly 1, 1997 applicants subject to the new Section 309(l) have a vested right to a  xcomparative hearing that is abridged by our decision to resolve such applications by a system of  xMcompetitive bidding. And, in any event, the economic impact of this regulatory change is ameliorated  x&somewhat by the statutory requirement that auctions to decide these pending cases be closed to other participants.  "Based upon the express language of Section 309(l)(2), we found that, where postJune 30, 1997,  xapplications are mutually exclusive with two or more preJuly 1, 1997 applications, we must dismiss them  xand conduct a competitive bidding procedure that is restricted to the preJuly 1, 1997 applications. We  x&rejected arguments by some commenters that the distinction between preJuly 1st and post June 30th  S(' xapplications is arbitrary.F(e {O| ' xg ԍ See, e.g., Comments of George S. Flinn at 34; Robert B. Mahaffey at 47. But see Comments of Pappas Telecasting of America at 23. We found that Congress adopted a bright line distinction and that this  x_distinction operates to exclude some applicants but to include others does not make it unlawful.  xMoreover, the practical effect of this bright line distinction will be limited, as we believe that settlement  x<agreements have been filed in connection with the small number of cases involving postJune 30th  S'applications mutually exclusive with two or more preJuly 1st applications.  S`'  "Except for applications subject to Section 309(l), there is no statutory bar to reopening new filing  xperiods for applications that would be mutually exclusive with pending applications. We agreed with" kF,l(l(,,"  xQcommenters that reopening already closed filing periods would not serve the public interest since it would  x@delay, rather than expedite, the resolution of the pending applications, and would defeat the reasonable  xQexpectations of applicants who timely filed longform applications. As in the case of pending applications  xsubject to Section 309(l)(2), restricting the qualified bidders to the pending applicants ameliorates the economic impact on small businesses of having to participate in an auction.  S8'  "As a matter of fairness to pending applicants, we determined to refund all hearing and certain  xfiling fees paid by all pending applicants. But we declined the suggestion of various commenters that we  x}also reimburse the legitimate and prudent expenses of pending preJuly 1st applicants subject to the  S' xMcomparative freeze, who either do not participate in the auction or are outbid in the auction.5G$e {O ' x ԍ See, e.g., Comments of United Broadcasters Company at 10; Rio Grande Broadcasting Company at 89; Marri  yO ' x Broadcasting, LP at 45; Dewey Matthew Runnels at 45; Howard G. Bill at 45; HeidelbergStone Broadcasting Co.  {O ' x< at 89; Grass Roots Radio, Inc. at 23; Willsyr Communications, LP at 3233; Roy F. Perkins at 12; Liberty Productions, LP at 34; Columbia FM Limited Partnership at 7. 5 We are  xaware of no legal authority to make such additional reimbursement and concluded we have no obligation to do so.  S ' "We concluded that, consistent with our approach in most of the Commission's previous auctions,  xbroadcast and ITFS applicants should be required to submit upfront payments with their shortform  xapplications prior to auction. We also reserved the right to adopt minimum opening bid and/or reserve  x7prices for each license. Establishing upfront payments, minimum opening bid and/or reserve prices may  xhave a significant economic impact on small businesses interested in applying for commercial broadcast  xand ITFS licenses. However, upfront payments have been required in our general Part 1 auction rules  xsince they were first promulgated, and Congress has directed us to prescribe minimum opening bids or  xkreserve prices unless we specifically determine that this will not serve the public interest. While we were  xQunpersuaded by generalized assertions that reserve prices or minimum opening bids would contravene the  x^public interest, we directed the staff to seek comment on, and as appropriate, establish upfront payments,  xopening bids and/or reserve prices for each auction or group auctions, and to consider the issues raised  x3by commenters in this proceeding in formulating proposals regarding upfront payments and minimum opening bids or reserve prices.  "We adopted our proposal to apply the anticollusion rule to broadcast service auctions. A number  x@of commenters opposed this, believing instead that auction applicants should be permitted to conclude  xsettlement agreements following the shortform filing deadline with those applicants with whom they are  SP' xmutually exclusive.5HZPe {O' x/ ԍ See, e.g., Comments of KM Communications, Inc. at 8; Positive Alternative Radio, Inc., et al. at 10;  x Throckmorton Broadcasting, Inc. at 11; Independent Broadcast Consultants, Inc. at 9; National Translator Association at 8.5 We noted that we adopted the anticollusion rule to both prevent and to facilitate  xthe detection of collusive conduct, thereby enhancing the competitiveness of the auction process and the  xZpostauction market structure. We found that the rule has proven effective in the numerous spectrum  S' xauctions conducted to date, and concluded to apply the rule to broadcast auctions. A limited exception  x8to the anticollusion rule will, however, allow applicants who have filed either competing major  xmodification applications, or competing major modification and new applications, to resolve their mutual  xexclusivity by means of engineering solutions or settlements during a limited period after the filing of  S8'shortform applications."8lH,l(l(,,7"Ԍ S' "EęFor the pending comparative renewal proceedings (which may not be resolved by auction), we  x}determined that the most equitable and expeditious approach would be simply to permit the renewal  x^applicants and their challengers, within the confines of the generally phrased standard comparative issues,  xto present whatever factors and evidence they believe most appropriate. We found that none of the  S`' xcommenters provided any persuasive arguments against such an approach to comparative hearings if we  S8' xDrejected our alternative twostep procedure.I8e yO' x* ԍ One commenter did urge that in cases in which the renewal applicant is not awarded a renewal expectancy  {Oh' x the Commission should rely on diversification. See Comments of Lawrence Brandt at 23. Another commenter  x. recommended that the Commission resolve these cases on a casebycase basis, considering all comparative criteria  xb except for integration, and according comparative credit for the incumbent's past record based on the strength of the  {O 'station's performance during the license period. See Reply Comments of Simon T. at 1619.  We acknowledged that comparative renewal hearings tend  xto be timeconsuming and expensive for both the Commission and the private parties, and to disserve the  xpublic interest by prolonging the period during which a renewal applicant operates under a cloud.  xxHowever, we stated that we remain willing, where the circumstances afford assurance that the competing  xapplications were not filed for speculative or other improper purpose, to waive the limitations on payments to dismissing applicants in comparative renewal proceedings.  S ' VI. Report to Congress:  S ' "The Commission will send a copy of the First Report and Order, including this FRFA, in a report  S ' xxto be sent to Congress pursuant to the Small Business Regulatory Enforcement Fairness Act of 1996. See  S ' !t5 U.S.C.  801(a)(1)(A). In addition, the Commission will send a copy of the First Report and Order,  S^' !gincluding the FRFA, to  X the Chief Counsel for Advocacy of the Small Business Administration. A copy  S6' !of the First Report and Order and FRFA (or summaries thereof) will also be published in the Federal  S'Register. See 5 U.S.C.  604(b). "m|I,l(l(,,Z"  S' X   )5e S'  #&J\  P6Q.?&P#Federal Communications Commission`g(#bFCC 98194 ă   yx}dddy )#ec}C1#@B-C-@  Xc(#y APPENDIX C ă  S'I. Part 1 of Chapter 1 of Title 47 of the Code of Federal Regulations is amended as follows:  S8' Subpart A General Rules of Practice and Procedure Section 1.65 is amended to read as follows:  S' !P!  1.65 Substantial and significant changes in the information furnished by applicants to the  Sp'Commission.  !(a) Each applicant is responsible for the continuing accuracy and completeness of information furnished  !3in a pending application or in Commission proceedings involving a pending application. Whenever the  !information furnished in the pending application is no longer substantially accurate and complete in all  !gsignificant respects, the applicant shall as promptly as possible and in any event within 30 days, unless  !7good cause is shown, amend or request the amendment of his application so as to furnish such additional  !or corrected information as may be appropriate. Whenever there has been a substantial change as to any  !other matter which may be of decisional significance in a Commission proceeding involving the pending  !^application, the applicant shall as promptly as possible and in any event within 30 days, unless good cause  !is shown, submit a statement furnishing such additional or corrected information as may be appropriate,  !7which shall be served upon parties of record in accordance with  1.47. Where the matter is before any  !Mcourt for review, statements and requests to amend shall in addition be served upon the Commission's  !3General Counsel. For the purposes of this section, an application is "pending" before the Commission  !/from the time it is accepted for filing by the Commission until a Commission grant or denial of the application is no longer subject to reconsideration by the Commission or to review by any court.  !(b) Applications in ITFS and broadcast services subject to competitive bidding will be subject to the provisions of  73.5002, 73.3522 and 1.2105(b) regarding the modification of their applications. n* * * * *  Sx'  SP' Subpart L Random Selection Procedures for Mass Media Services Section 1.1601 is amended to read as follows:  S'  1.1601 Scope .  !The provisions of this subpart, and the provisions referenced herein, shall apply to applications for initial  !licenses or construction permits or for major changes in the facilities of authorized stations in the following services: (a) [Reserved] (b) [Reserved]  SH$'  1.1604 Postselection hearings.  !(a) Following the random selection, the Commission shall announce the "tentative selectee" and, where permitted by  73.3584 invite Petitions to Deny its application. (1) [Removed] "(nI, * *,,u'"Ԍn* * * * *  S'II. Part 73 of Chapter 1 of Title 47 of the Code of Federal Regulations is amended as follows: Section 73.1010 is amended to read as follows:  S'  73.1010 Cross reference to rules in other parts.   S' xD Certain rules applicable to broadcast services, some of which are also applicable to other services, are set forth in the following Parts of the FCC Rules and Regulations. (a) Part 1, "Practice and Procedure." s****** (8) Subpart Q, "Competitive Bidding Proceedings" ( 1.21011.2112). Section 73.3500 is amended to read as follows:  S'  73.3500 Application and report forms.  S' Following are the FCC broadcast application and report forms, listed by number.  Sh'Form number` `  hhCTitle  S'175 . . . . .` `   Application to Participate in an FCC Auction  *xxX (#(# Section 73.3522 is amended to read as follows:  SP'  73.3522 Amendment of applications. (a) Broadcast services subject to competitive bidding.  " (1) Applicants in all broadcast services subject to competitive bidding will be subject to the provisions of  73.5002 and 1.2105(b) regarding the modification of their shortform applications.  "<(2) Subject to the provision of  73.5005, if it is determined that a long form application submitted  xby a winning bidder or a nonmutually exclusive applicant for a new station or a major change in an  xexisting station in all broadcast services subject to competitive bidding is substantially complete, but  xcontains any defect, omission, or inconsistency, a deficiency letter will be issued affording the applicant  xan opportunity to correct the defect, omission or inconsistency. Amendments may be filed pursuant to  xthe deficiency letter curing any defect, omission or inconsistency identified by the Commission, or to make  xIminor modifications to the application, or pursuant to  1.65. Such amendments should be filed in  xgaccordance with  73.3513. If a petition to deny has been filed, the amendment shall be served on the petitioner.  "(3) Subject to the provisions of  73.3571, 73.3572 and 73.3573, deficiencies, omissions or  xinconsistencies in longform applications may not be cured by major amendment. The filing of major  xMamendments to longform applications is not permitted. An application will be considered to be newly filed if it is amended by a major amendment."&oI,l(l(,,%"Ԍ "'(4) Paragraph (a) of this section is not applicable to applications for minor modifications of facilities in the nonreserved FM broadcast service, nor to any application for a reserved band FM station.   @C-C-@(b) Reserved band FM and reserved noncommercial educational television stations.  "(1) Predesignation amendments. Subject to the provisions of  73.3525, 73.3572, 73.3573 and  x73.3580, mutually exclusive broadcast applications for reserved band FM stations and television stations  xon a reserved channel may be amended as a matter of right by the date specified (not less than 30 days  xafter issuance) in the FCC's Public Notice announcing the acceptance for filing of the last-filed mutually  xexclusive application. Subsequent amendments prior to designation of the proceeding for hearing will be  xconsidered only upon a showing of good cause for late filing or pursuant to  1.65 or  73.3514. Unauthorized or untimely amendments are subject to return by the FCC's staff without consideration.  "(2) Postdesignation amendments. (i) Except as provided in paragraph (ii) of this section, requests  xto amend an application after it has been designated for hearing will be considered only upon written  xpetition properly served upon the parties of record in accordance with  1.47 and, where applicable,  xcompliance with the provisions of  73.3525, and will be considered only upon a showing of good cause  xxfor late filing. In the case of requests to amend the engineering proposal (other than to make changes with  xrespect to the type of equipment specified), good cause will be considered to have been shown only if, in addition to the usual good cause consideration, it is demonstrated:  "X(A) That the amendment is necessitated by events which the applicant could not reasonably have  "foreseen (e.g., notification of a new foreign station or loss of transmitter site by condemnation); and(#  "X(B) That the amendment does not require an enlargement of issues or the addition of new parties to the proceeding.(#  xD(ii) In comparative broadcast cases (including comparative renewal proceedings), amendments relating to  x^issues first raised in the designation order may be filed as a matter of right within 30 days after that Order  x}or a summary thereof is published in the Federal Register, or by a date certain to be specified in the  xOrder. (iii) Notwithstanding the provisions of paragraphs (b)(2)(i) (ii) of this section, and subject to  xtcompliance with the provisions of  73.3525, a petition for leave to amend may be granted, provided it  xis requested that the application as amended be removed from the hearing docket and returned to the  Sx'processing line.  SP'(c) Minor modifications of facilities in the nonreserved FM broadcast service. xxX  "'(1) Subject to the provisions of  73.3525, 73.3573, and 73.3580, for a period of 30 days  x/following the FCC's issuance of a Public Notice announcing the tender of an application for minor  xmodification of a nonreserved band FM station, (other than Class D stations), minor amendments may be filed as a matter of right.  "(2) For applications received on or after August 7, 1992, an applicant whose application is found  xto meet minimum filing requirements, but nevertheless is not complete and acceptable, shall have the  xMopportunity during the period specified in the FCC staff's deficiency letter to correct all deficiencies in  xthe tenderability and acceptability of the underlying application, including any deficiency not specifically  xtidentified by the staff. [For minimum filing requirements see  73.3564(a). Examples of tender defects  xZappear at 50 FR 19936 at 19945-46 (May 13, 1985), reprinted as Appendix D, Report and Order, MM  xDocket No. 91- 347, 7 FCC Rcd 5074, 5083-88 (1992). For examples of acceptance defects, see 49 FR  x47331.] Prior to the end of the period specified in the deficiency letter, a submission seeking to correct  xa tender and/or acceptance defect in an application meeting minimum filing requirements will be treated  xRas an amendment for good cause if it would successfully and directly correct the defect. Other  xQamendments submitted prior to grant will be considered only upon a showing of good cause for late filing or pursuant to  1.65 or  73.3514. "&pI,l(l(,,`%"Ԍ "4(3) Unauthorized or untimely amendments are subject to return by the Commission without  x consideration. However, an amendment to a non-reserved band application will not be accepted if the  xkeffect of such amendment is to alter the proposed facility's coverage area so as to produce a conflict with  xDan applicant who files subsequent to the initial applicant but prior to the amendment application. Similarly,  xan applicant subject to "first come/first serve" processing will not be permitted to amend its application  x&and retain filing priority if the result of such amendment is to alter the facility's coverage area so as to  xproduce a conflict with an applicant which files subsequent to the initial applicant but prior to the amendment.  x@Note 1: When two or more broadcast applications are tendered for filing which are mutually exclusive  xtwith each other but not in conflict with any previously filed applications which have been accepted for  xkfiling, the FCC, where appropriate, will announce acceptance of the earliest tendered application and place  xZthe later filed application or applications on a subsequent public notice of acceptance for filing in order to establish a deadline for the filing of amendments as a matter of right for all applicants in the group. Section 73.3525 is amended to read as follows:  S0'  73.3525 Agreements for removing application conflicts.  S'  S' p****** ă  x(c) Except where a joint request is filed pursuant to paragraph (a) of this section, any applicant filing an  xamendment pursuant to  73.3522(b)(1) and (c), or a request for dismissal pursuant to  73.3568(b)(1)  xQand (c), which would remove a conflict with another pending application; or a petition for leave to amend  x pursuant to  73.3522(b)(2) which would permit a grant of the amended application or an application  xpreviously in conflict with the amended application; or a request for dismissal pursuant to  73.3568(b)(2),  xshall file with it an affidavit as to whether or not consideration (including an agreement for merger of  xinterests) has been promised to or received by such applicant, directly or indirectly, in connection with the amendment, petition or request.  x (d) Upon the filing of a petition for leave to amend or to dismiss an application for broadcast facilities  xwhich has been designated for hearing or upon the dismissal of such application on the FCC's own motion  xpursuant to  73.3568, each applicant or party remaining in hearing, as to whom a conflict would be  x&removed by the amendment or dismissal shall submit for inclusion in the record of that proceeding an  xaffidavit stating whether or not he has directly or indirectly paid or promised consideration (including an agreement for merger of interests) in connection with the removal of such conflict. s******  x(l) The prohibition of collusion as set forth in  1.2105(c) and 73.5002 of this section, which becomes  xeffective upon the filing of shortform applications, shall apply to all broadcast services subject to competitive bidding. "&qI,l(l(,,%"ԌSection 73.3564 is amended to read as follows:  S'  73.3564 Acceptance of applications.  x(a) (1) Applications tendered for filing are dated upon receipt and then forwarded to the Mass Media  xBureau, where an administrative examination is made to ascertain whether the applications are complete.  xExcept for applications for minor modifications of facilities in the nonreserved FM band, as defined in  x 73.3573 (a)(2), long form applications subject to the provisions of  73.5005 found to be complete or  xsubstantially complete are accepted for filing and are given file numbers. In the case of minor defects as  xto completeness, a deficiency letter will be issued and the applicant will be required to supply the missing  xor corrective information. Applications that are not substantially complete will not be considered and will be returned to the applicant.  x(2) In the case of minor modifications of facilities in the non-reserved FM band, applications will be  xplaced on public notice if they meet the following two-tiered minimum filing requirement as initially filed in first come/first served proceedings: (i) The application must include: (A) Applicant's name and address, (B) Applicant's original signature, (C) Principal community, (D) Channel or frequency, (E) Class of station, and (F) Transmitter site coordinates; and  xg(ii) The application must not omit more than 3 of the second tier items specified in appendix C, Report  xZand Order, MM Docket No. 91-347, FCC 92-328, 7 FCC Rcd 5074 (1992). Applications found not to  xmeet minimum filing requirements will be returned to the applicant. Applications found to meet minimum  xfiling requirements, but that contain deficiencies in tender and/or acceptance information, shall be given  xan opportunity for corrective amendment pursuant to  73.3522. Applications found to be substantially  xkcomplete and in accordance with the Commission's core legal and technical requirements will be accepted  xQfor filing. Applications with uncorrected tender and/or acceptance defects remaining after the opportunity for corrective amendment will be dismissed with no further opportunity for corrective amendment.  x(b) Acceptance of an application for filing merely means that it has been the subject of a preliminary  xreview by the FCC's administrative staff as to completeness. Such acceptance will not preclude the subsequent dismissal of the application if it is found to be patently not in accordance with the FCC's rules.  x(c) At regular intervals, the FCC will issue a Public Notice listing all long form applications which have  S8' xDbeen accepted for filing. Pursuant to  73.3571(h), 73.3572, and 73.3573(f), such notice shall establish  xxa cut-off date for the filing of petitions to deny. With respect to reserved band FM applications, the Public  x Notice shall also establish a cutoff date for the filing of mutually exclusive applications pursuant to   S!' xZ73.3573(e). However, no application will be accepted for filing unless certification of compliance with the local notice requirements of  73.3580(h) has been made in the tendered application.  x^(d) The FCC will specify by Public Notice, pursuant to  73.5002, a period for filing applications for new  xMstations or for major modifications in the facilities of an existing station. Except for reserved band FM  xxstations and TV stations on reserved noncommercial educational channels, applications for new and major"%rI,l(l(,,$"  x<modifications in facilities will be accepted only during these window filing periods specified by the Commission.  x(e) Applications for minor modification of facilities may be tendered at any time, unless restricted by the  xFCC. These applications will be processed on a "first come/first served" basis and will be treated as  xVsimultaneously tendered if filed on the same day. Any applications received after the filing of a lead  xapplication will be grouped according to filing date, and placed in a queue behind the lead applicant. The  xFCC will periodically release a Public Notice listing those minor modification of facilities applications accepted for filing.  x^(f) If a non-reserved band FM channel allotment becomes vacant, after the grant of a construction permit  xbecomes final, because of a lapsed construction permit or for any other reason, the FCC will, by Public Notice, announce a subsequent filing window for the acceptance of new applications for such channels.  x@(g) Applications for operation in the 1605-1705 kHz band will be accepted only if filed pursuant to the terms of  73.30(b). Section 73.3568 is amended to read as follows:  S'  73.3568 Dismissal of applications.  x(a) (1) Failure to prosecute an application, or failure to respond to official correspondence or request for additional information, will be cause for dismissal.  x(2) Applicants in all broadcast services subject to competitive bidding will be subject to the provisions of  73.5002 and 1.2105(b) regarding the dismissal of their shortform applications.  x(3) Applicants in all broadcast services subject to competitive bidding will be subject to the provisions of  x< 73.5004, 73.5005 and 1.2104(g) regarding the dismissal of their longform applications and the imposition of applicable withdrawal, default and disqualification payments.  x(b) (1) Subject to the provisions of  73.3525, dismissal of applications for channels reserved for  xknoncommercial educational use will be without prejudice where an application has not yet been designated for hearing, but may be made with prejudice after designation for hearing.  x(2) Subject to the provisions of  73.3525, requests to dismiss an application for a channel reserved for  x/noncommercial educational use, without prejudice, after it has been designated for hearing, will be  xconsidered only upon written petition properly served upon all parties of record. Such requests shall be  xggranted only upon a showing that the request is based on circumstances wholly beyond the applicant's control which preclude further prosecution of his application.  xc(c) Subject to the provisions of  73.3523 and 73.3525, any application for minor modification of facilities may, upon request of the applicant, be dismissed without prejudice as a matter of right.  x(d) An applicant's request for the return of an application that has been accepted for filing will be regarded as a request for dismissal. "&sI,l(l(,,m%"ԌSection 73.3571 is amended to read as follows:  S'  73.3571 Processing of AM broadcast station applications. (a) Applications for AM broadcast facilities are divided into three groups.  x(1) In the first group are applications for new stations or for major changes in the facilities of authorized  xZstations. A major change for an AM station authorized under this part is any increase in power, except  xkwhere accompanied by a complimentary reduction of antenna efficiency which leads to the same amount,  x}or less, radiation in all directions (in the horizontal and vertical planes when skywave propagation is  xinvolved, and in the horizontal plane only for daytime considerations), relative to the presently authorized  xradiation levels, or any change in frequency, hours of operation, or community of license. A major change  xZin ownership is a situation where the original party or parties to the application do not retain more than 50% ownership interest in the application as originally filed.  x(2) The second group consists of applications for licenses and all other changes in the facilities of authorized stations.  x(3) The third group consists of applications for operation in the 1605-1705 kHz band which are filed  xsubsequent to FCC notification that allotments have been awarded to petitioners under the procedure specified in  73.30.  xk(b) (1) The FCC may, after acceptance of an application for modification of facilities, advise the applicant  x7that such application is considered to be one for a major change and therefore is subject to the provisions  xof  73.3522, 73.3580 and 1.1111 of this chapter pertaining to major changes. Such major modification  S'applications will be dismissed as set forth in paragraph (h)(1)(i) of this section.  x(2) An amendment to an application which would effect a major change, as defined in paragraph (a) (1) of this section, will not be accepted except as provided for in (h)(1)(i).  xZ(c) An application for changes in the facilities of an existing station will continue to carry the same file  xnumber even though (pursuant to FCC approval) an assignment of license or transfer of control of said  xlicensee or permittee has taken place if, upon consummation, the application is amended to reflect the new ownership.  x*(d) If, upon examination, the FCC finds that the public interest, convenience and necessity will be served  xby the granting of an application, the same will be granted. If the FCC is unable to make such a finding and it appears that a hearing may be required, the procedure set forth in  73.3593 will be followed.  x(e) Applications proposing to increase the power of an AM station are subject to the following requirements:  x(1) In order to be acceptable for filing, any application which does not involve a change in site must propose at least a 20% increase in the station's nominal power.  x(2) Applications involving a change in site are not subject to the requirements in paragraph (e)(1) of this section.  x7(3) Applications for nighttime power increases for Class D stations are not subject to the requirements of this section and will be processed as minor changes."%tI,l(l(,,$"Ԍ x(4) The following special procedures will be followed in authorizing Class II-D daytime-only stations on  xt940 and 1550 kHz, and Class III daytime-only stations on the 41 regional channels listed in  73.26(a), to operate unlimited-time.  xx(i) Each eligible daytime-only station in the foregoing categories will receive an Order to Show Cause why  xpits license should not be modified to specify operation during nighttime hours with the facilities it is  xclicensed to start using at local sunrise, using the power stated in the Order to Show Cause, that the  xxCommission finds is the highest nighttime level--not exceeding 0.5 kW--at which the station could operate  x^without causing prohibited interference to other domestic or foreign stations, or to co-channel or adjacent channel stations for which pending applications were filed before December 1, 1987.  x(ii) Stations accepting such modification shall be reclassified. Those authorized in such Show Cause  x<Orders to operate during nighttime hours with a power of 0.25 kW or more, or with a power that, although less than 0.25 kW, is sufficient to enable them to attain RMS field strengths of 141 mV/m or  xmore at 1 kilometer, shall be redesignated as Class II-B stations if they are assigned to 940 or 1550 kHz, and as unlimited-time Class III stations if they are assigned to regional channels.  x(iii) Stations accepting such modification that are authorized to operate during nighttime hours at powers  xless than 0.25 kW, and that cannot with such powers attain RMS field strengths of 141 mV/m or more at 1 kilometer, shall be redesignated as Class II-S stations if they are assigned to 940 or 1550 kHz, and as Class III-S stations if they are assigned to regional channels.  x(iv) Applications for new stations may be filed at any time on 940 and 1550 kHz and on the regional  xVchannels. Also, stations assigned to 940 or 1550 kHz, or to the regional channels, may at any time,  xregardless of their classifications, apply for power increases up to the maximum generally permitted. Such  xapplications for new or changed facilities will be granted without taking into account interference caused  xto Class II-S or Class III-S stations, but will be required to show interference protection to other classes  xof stations, including stations that were previously classified as Class II-S or Class III-S, but were later  xreclassified as Class II-B or Class III unlimited-time stations as a result of subsequent facilities modifications that permitted power increases qualifying them to discontinue their "S" subclassification.  x^(f) Applications for minor modifications for AM broadcast stations, as defined in (a)(2) of this paragraph,  x3may be filed at any time, unless restricted by the FCC, and, generally will be processed in the order in  xwhich they are tendered. The FCC will periodically release a Public Notice listing those applications  xpaccepted for filing. Any such applications found to be mutually exclusive must be resolved through settlement or technical amendment.  x(g) Applications for change of license to change hours of operation of a Class C AM broadcast station,  x3to decrease hours of operation of any other class of station, or to change station location involving no change in transmitter site will be considered without reference to the processing line. (h) Processing new and major AM broadcast station applications.  x(1)(i) The FCC will specify by Public Notice, pursuant to  73.5002, a period for filing AM applications  xfor a new station or for major modifications in the facilities of an authorized station. AM applications  xfor new facilities or for major modifications will be accepted only during these specified periods.  x&Applications submitted prior to the appropriate filing period or "window" opening date identified in the  x@Public Notice will be returned as premature. Applications submitted after the specified deadline will be  xdismissed with prejudice as untimely. (ii) Such AM applicants will be subject to the provisions of   S%' x1.2105 and 73.5002 regarding the submission of the shortform application, FCC Form 175, and all  xappropriate certifications, information and exhibits contained therein. To determine which AM applications"&uI,l(l(,,`%"  S' xare mutually exclusive, AM applicants must submit the engineering data contained in FCC Form 301 as  xVa supplement to the shortform application. Such engineering data will not be studied for technical  x&acceptability, but will be protected from subsequently filed applications as of the close of the window  xfiling period. Determinations as to the acceptability or grantability of an applicant's proposal will not be  xmade prior to an auction. (iii) AM applicants will be subject to the provisions of  1.2105 and 73.5002  S8'regarding the modification and dismissal of their shortform applications.  S'  x*(2) Subsequently, the FCC will release Public Notices: (i) identifying the shortform applications received  xMduring the window filing period which are found to be mutually exclusive; (ii) establishing a date, time  x&and place for an auction; (iii) providing information regarding the methodology of competitive bidding  xto be used in the upcoming auction, bid submission and payment procedures, upfront payment procedures,  xupfront payment deadlines, minimum opening bid requirements and applicable reserve prices in accordance  xxwith the provisions of  73.5002; (iv) identifying applicants who have submitted timely upfront payments and, thus, are qualified to bid in the auction.  x(3) If, during the window filing period, the FCC receives nonmutually exclusive AM applications, a  xPublic Notice will be released identifying the nonmutually exclusive applicants, who will be required to  xsubmit the appropriate long form application within 30 days of the Public Notice and pursuant to the  xkprovisions of  73.5005(d). These nonmutually exclusive applications will be processed and the FCC will  xperiodically release a Public Notice listing such nonmutually exclusive applications determined to be  xacceptable for filing and announcing a date by which petitions to deny must be filed in accordance with  xZthe provisions of  73.5006 and 73.3584. If the applicant is duly qualified, and upon examination, the  xFCC finds that the public interest, convenience and necessity will be served by the granting of the nonmutually exclusive long form application, the same will be granted.  x(4) (i) The auction will be held pursuant to the procedures set forth in  1.2101 et seq. and 73.5000 et  xseq. Subsequent to the auction, the FCC will release a Public Notice announcing the close of the auction  xand identifying the winning bidders. Winning bidders will be subject to the provisions of  1.2107 and  x73.5003 regarding down payments and will be required to submit the appropriate down payment within  x10 business days of the Public Notice. Pursuant to  1.2107 and 73.5005, a winning bidder that meets  xits down payment obligations in a timely manner must, within 30 days of the release of the Public Notice  xannouncing the close of the auction, submit the appropriate longform application for each construction  xxpermit for which it was the winning bidder. Longform applications filed by winning bidders shall include the exhibits identified in  73.5005(a).  x(ii) These applications will be processed and the FCC will periodically release a Public Notice listing such  xapplications that have been accepted for filing and announcing a date by which petitions to deny must be  x*filed in accordance with the provisions of  73.5006 and 73.3584. If the applicant is duly qualified, and  x*upon examination, the FCC finds that the public interest, convenience and necessity will be served by the  x granting of the winning bidder's long form application, a Public Notice will be issued announcing that  xthe construction permit is ready to be granted. Each winning bidder shall pay the balance of its winning  xbid in a lump sum within 10 business days after release of the Public Notice, as set forth in  1.2109(a)  xtand 73.5003. Construction permits will be granted by the Commission following the receipt of the full  xpayment. (iii) All longform applications will be cutoff as of the date of filing with the FCC and will be  xprotected from subsequently filed longform applications. Applications will be required to protect all  S %' xpreviously filed commercial and noncommercial applications. Winning bidders filing longform  x/applications may change the technical proposals specified in their previously submitted shortform  xapplications, but such change may not constitute a major change. If the submitted longform application"&vI,l(l(,,`%"  xkwould constitute a major change from the proposal submitted in the shortform application, the longform  S'application will be returned pursuant to paragraph (h)(1)(i) of this section.  S' x(i) In order to grant a major or minor change application made contingent upon the grant of another  xlicensee's request for a facility modification, the Commission will not consider mutually exclusive  x@applications by other parties that would not protect the currently authorized facilities of the contingent  xDapplicants. Such major change applications remain, however, subject to the provisions of  73.3580 and  x1.1111. The Commission shall grant contingent requests for construction permits for station modifications  S'only upon a finding that such action will promote the public interest, convenience and necessity. Section 73.3572 is amended to read as follows:  S '  73.3572 Processing of TV broadcast, low power TV, TV translator and TV booster station applications.  S ' (a) Applications for TV stations are divided into two groups:  "(1) In the first group are applications for new stations or major changes in the facilities of  xtauthorized stations. A major change for TV broadcast stations authorized under this part is any change  xin frequency or community of license which is in accord with a present allotment contained in the Table  xpof Allotments ( 73.606). Other requests for change in frequency or community of license for TV  xbroadcast stations must first be submitted in the form of a petition for rulemaking to amend the Table of  xAllotments. In the case of low power TV, TV translator, and TV booster stations authorized under Part 74 of this chapter, a major change is any change in:  S@' (i) Frequency (output channel) assignment (does not apply to TV boosters);  S' (ii) Transmitting antenna system including the direction of the radiation,  S' directive antenna pattern or transmission line;  S' (iii) Antenna height;  S' (iv) Antenna location exceeding 200 meters; or  Sx' (v) Authorized operating power.  "(2) However, if the proposed modification of facilities, other than a change in frequency, will not  xincrease the signal range of the low power TV, TV translator or TV booster station in any horizontal direction, the modification will not be considered a major change.  S' "  (i) Provided that in the case of an authorized low power TV, TV translator or TV booster which  xis predicted to cause or receive interference to or from an authorized TV broadcast station pursuant to  x* 74.705 or interference with broadcast or other services under  74.703 or  74.709, that an application  xfor a change in output channel, together with technical modifications which are necessary to avoid  xinterference (including a change in antenna location of less than 16.1 km), will not be considered as an application for a major change in those facilities.  S ' " (ii) Provided further, that a low power TV, TV translator or TV booster station: authorized on  xa channel from channel 60 to 69, or which is causing or receiving interference or is predicted to cause  xtor receive interference to or from an authorized DTV station pursuant to  74.706, or which is located  xwithin the distances specified below in paragraph (iii) of this section to the coordinates of co-channel DTV  xauthorizations (or allotment table coordinates if there are no authorized facilities at different coordinates),  xMmay at any time file a displacement relief application for a change in output channel, together with any  x"technical modifications which are necessary to avoid interference or continue serving the station's  xprotected service area. Such an application will not be considered as an application for a major change"&wI,l(l(,,z%"  xin those facilities. Where such an application is mutually exclusive with applications for new low power  xTV, TV translator or TV booster stations, or with other nondisplacement relief applications for facilities  x&modifications, priority will be afforded to the displacement application(s) to the exclusion of the other applications.  "(iii)(A) The geographic separations to co-channel DTV facilities or allotment reference coordinates, as applicable, within which to qualify for displacement relief are the following:  S' ` ` (1) Stations on UHF channels: 265 km (162 miles)  S' ` ` (2) Stations on VHF channels 2-6: 280 km (171 miles) ` ` (3) Stations on VHF channels 7-13: 260 km (159 miles)  S' " (B) Engineering showings of predicted interference may also be submitted to justify the need for displacement relief.  "(iv) Provided further, that the FCC may, within 15 days after acceptance of any other application  xxfor modification of facilities, advise the applicant that such application is considered to be one for a major  x<change and therefore subject to the provisions of  73.3522, 73.3580, and 1.1111 of this chapter  xxpertaining to major changes. Such major modification applications filed for low power TV, TV translator,  xITV booster stations, and for a nonreserved television allotment, are subject to competitive bidding procedures and will be dismissed if filed outside a specified filing period. See 47 C.F.R.  73.5002(a).  x(b) A new file number will be assigned to an application for a new station or for major changes in the  xfacilities of an authorized station, when it is amended so as to effect a major change, as defined in  xparagraph (a)(1) of this section, or result in a situation where the original party or parties to the application  xMdo not retain more than 50% ownership interest in the application as originally filed and  73.3580 will  xapply to such amended application. An application for change in the facilities of any existing station will  x*continue to carry the same file number even though (pursuant to FCC approval) an assignment of license  xor transfer of control of such licensee or permittee has taken place if, upon consummation, the application is amended to reflect the new ownership.  x(c) Amendments to low power TV, TV translator, TV booster stations, or nonreserved television  xkapplications, which would require a new file number pursuant to paragraph (b) of this section, are subject  xto competitive bidding procedures and will be dismissed if filed outside a specified filing period. See 47  x3C.F.R.  73.5002(a). When an amendment to an application for a reserved television allotment would  xrequire a new file number pursuant to paragraph (b) of this section, the applicant will have the opportunity  xVto withdraw the amendment at any time prior to designation for a hearing if applicable; and may be  xafforded, subject to the discretion of the Administrative Law Judge, an opportunity to withdraw the amendment after designation for a hearing.  xg(d) Applications for TV stations on reserved noncommercial educational channels will be processed as  xnearly as possible in the order in which they are filed. Such applications will be placed in the processing  xQline in numerical sequence, and will be drawn by the staff for study, the lowest file number first. In order  xthat those applications which are entitled to be grouped for processing may be fixed prior to the time  xprocessing of the earliest filed application is begun, the FCC will periodically release a Public Notice  xQlisting applications which have been accepted for filing and announcing a date (not less than 30 days after  xZissuance) on which the listed applications will be considered available and ready for processing and by which all mutually exclusive applications and petitions to deny the listed applications must be filed.  x(e) (1) The FCC will specify by Public Notice, pursuant to  73.5002, a period for filing applications for  xQa new nonreserved television, low power TV and TV translator stations or for major modifications in the"&xI,l(l(,,`%"  xfacilities of such authorized station. (2) Such applicants shall be subject to the provisions of  1.2105 and competitive bidding procedures. See 47 C.F.R.  73.5000 et seq.  x*(f) Applications for minor modifications for television broadcast, low power television and TV translator  xstations, as defined in paragraph (a)(2) of this Section, may be filed at any time, unless restricted by the FCC, and, generally, will be processed in the order in which they are tendered.  xt(g) TV booster station applications may be filed at any time. Subsequent to filing, the FCC will release  xa Public Notice accepting for filing and proposing for grant those applications which are not mutually  xexclusive with any other TV translator, low power TV, or TV booster application, and providing for the filing of Petitions To Deny pursuant to  73.3584. Section 73.3573 is amended to read as follows:  S '  73.3573 Processing FM broadcast station applications. (a) Applications for FM broadcast stations are divided into two groups:  x(1) In the first group are applications for new stations or for major changes in the facilities of authorized  xstations. A major change for an FM station authorized under this part is any change in frequency or  xZcommunity of license which is in accord with a present allotment contained in the Table of Allotments  x( 73.202 (b)). A licensee or permittee may seek the higher or lower class adjacent channel, intermediate  xfrequency or co-channel or the same class adjacent channel of its existing FM broadcast station  xauthorization by filing a minor change application. Other requests for change in frequency or community  xof license for FM stations must first be submitted in the form of a petition for rulemaking to amend the  xTable of Allotments. Longform applications submitted pursuant to  73.5005 for a new FM broadcast  S' x^service may propose a higher or lower class adjacent channel, intermediate frequency or co-channel. Ú For  x3noncommercial educational FM stations, a major change is any change in frequency or community of  xclicense or any change in power or antenna location or height above average terrain (or combination  xkthereof) which would result in a change of 50% or more in the area within the station's predicted 1 mV/m  xZfield strength contour. (A change in area is defined as the sum of the area gained and the area lost as a  xMpercentage of the original area). A major change in ownership is a situation where the original party or  xparties to the application do not retain more than 50% ownership interest in the application as originally filed.  x(2) The second group consists of applications for licenses and all other changes in the facilities of authorized stations.  x<Note. 1: Applications to modify the channel and/or class of an FM broadcast station to an adjacent  xchannel, intermediate frequency (IF) channel, or co-channel shall not require any other amendments to  xIthe Table of Allotments. Such applications may resort to the provisions of the Commission's Rules  xpermitting short spaced stations as set forth in  73.215 as long as the applicant shows by separate exhibit  xattached to the application the existence of an allotment reference site which meets the allotment standards,  xgthe minimum spacing requirements of  73.207 and the city grade coverage requirements of  73.315.  xThis exhibit must include a site map or, in the alternative, a statement that the transmitter will be located  xon an existing tower. Examples of unsuitable allotment reference sites include those which are offshore,"&yI,l(l(,,m%"  xQin a national or state park in which tower construction is prohibited, on an airport, or otherwise in an area which would necessarily present a hazard to air navigation.  x(b) (1) The FCC may, after the acceptance of an application for modification of facilities, advise the  x&applicant that such application is considered to be one for a major change and therefore subject to the  xprovisions of  73.3522, 73.3580 and 1.1111 of this chapter pertaining to major changes. Such major  xmodification applications in the nonreserved band will be dismissed as set forth in paragraph (f)(2)(i) of this section.  x(2) An amendment to a nonreserved band application which would effect a major change, as defined in paragraph (a)(1) of this section, will not be accepted, except as provided for in (f)(2)(i).  x(3) A new file number will be assigned to a reserved band application for a new station or for major  xgchanges in the facilities of an authorized station, when it is amended so as to effect a major change, as  xZdefined in paragraph (a)(1) of this section. Where an amendment to a reserved band application would  xQrequire a new file number, the applicant will have the opportunity to withdraw the amendment at any time  x/prior to designation for hearing, if applicable; and may be afforded, subject to the discretion of the Administrative Law Judge, an opportunity to withdraw the amendment after designation for hearing.  x(c) An application for changes in the facilities of any existing station will continue to carry the same file  xnumber even though (pursuant to FCC approval) an assignment of license or transfer of control of such  xlicensee or permittee has taken place if, upon consummation, the application is amended to reflect the new ownership.  x*(d) If, upon examination, the FCC finds that the public interest, convenience and necessity will be served  xby the granting of an application for FM broadcast facilities, the same will be granted. If the FCC is  xunable to make such a finding and it appears that a hearing may be required, the procedure given in  73.3593 will be followed.  x(e) Applications for reserved band and Class D FM broadcast stations will be processed as nearly as  xpossible in the order in which they are filed. Such applications will be placed in the processing line in  xnumerical sequence, and will be drawn by the staff for study, the lowest file number first. In order that  xthose applications which are entitled to be grouped for processing may be fixed prior to the time  xprocessing of the earliest filed application is begun, the FCC will periodically release a Public Notice  xQlisting applications which have been accepted for filing and announcing a date (not less than 30 days after  xpublication) on which the listed applications will be considered available and ready for processing and by which all mutually exclusive applications and/or petitions to deny the listed applications must be filed. (f) Processing non-reserved FM broadcast station applications.  x(1) Applications for minor modifications for non-reserved FM broadcast stations, as defined in (a)(2) of  xthis paragraph, may be filed at any time, unless restricted by the FCC, and, generally, will be processed  xZin the order in which they are tendered. The FCC will periodically release a Public Notice listing those  xDapplications accepted for filing. Processing of these applications will be on a "first come/first serve" basis  xwith the first acceptable application cutting off the filing rights of subsequent applicants. All applications  xreceived on the same day will be treated as simultaneously tendered and, if they are found to be mutually  xexclusive, must be resolved through settlement or technical amendment. Applications received after the  xptender of a lead application will be grouped, according to filing date, behind the lead application in a  xqueue. The priority rights of the lead applicant, as against all other applicants, are determined by the date"&zI,l(l(,,`%"  x of filing, but the filing date for subsequent applicants for that channel and community only reserves a  xplace in the queue. The rights of an applicant in a queue ripen only upon a final determination that the  xlead applicant is unacceptable and if the queue member is reached and found acceptable. The queue will  xremain behind the lead applicant until a construction permit is finally granted, at which time the queue dissolves.  x(2) (i) The FCC will specify by Public Notice, pursuant to  73.5002(a), a period for filing non-reserved  xkband FM applications for a new station or for major modifications in the facilities of an authorized station.  xFM applications for new facilities or for major modifications will be accepted only during the appropriate  x}filing period or "window". Applications submitted prior to the window opening date identified in the  x@Public Notice will be returned as premature. Applications submitted after the specified deadline will be  xdismissed with prejudice as untimely. (ii) Such FM applicants will be subject to the provisions of   x1.2105 and 73.5002 regarding the submission of the shortform application, FCC Form 175, and all  xappropriate certifications, information and exhibits contained therein. FM applicants may submit a set of  xpreferred site coordinates as a supplement to the shortform application. Any specific site indicated by  xQFM applicants will not be studied for technical acceptability, but will be protected from subsequently filed  xapplications as a fullclass facility as of the close of the window filing period. Determinations as to the  x<acceptability or grantability of an applicant's proposal will not be made prior to an auction. (iii) FM  xapplicants will be subject to the provisions of  1.2105 and 73.5002(c) regarding the modification and  S'dismissal of their shortform applications.  S'  x*(3) Subsequently, the FCC will release Public Notices: (i) identifying the shortform applications received  xMduring the window filing period which are found to be mutually exclusive; (ii) establishing a date, time  x&and place for an auction; (iii) providing information regarding the methodology of competitive bidding  xto be used in the upcoming auction, bid submission and payment procedures, upfront payment procedures,  xupfront payment deadlines, minimum opening bid requirements and applicable reserve prices in accordance  xxwith the provisions of  73.5002; (iv) identifying applicants who have submitted timely upfront payments and, thus, are qualified to bid in the auction.  x(4) If, after the close of the appropriate window filing period, a non-reserved FM allotment remains  x3vacant, the window remains closed until the FCC, by Public Notice, specifies a subsequent period for  xfiling nonreserved band FM applications for a new station or for major modifications in the facilities of  xan authorized station pursuant to paragraph (f)(2)(i) of this section. If, during the window filing period,  xkthe FCC receives only one application for any nonreserved FM allotment, a Public Notice will be released  x^identifying the nonmutually exclusive applicant, who will be required to submit the appropriate longform  xapplication within 30 days of the Public Notice and pursuant to the provisions of  73.5005. These non x3mutually exclusive applications will be processed and the FCC will periodically release a Public Notice  x3listing such nonmutually exclusive applications determined to be acceptable for filing and announcing  xa date by which petitions to deny must be filed in accordance with the provisions of  73.5006 and  x73.3584 of this chapter. If the applicant is duly qualified, and upon examination, the FCC finds that the  xgpublic interest, convenience and necessity will be served by the granting of the nonmutually exclusive longform application, it will be granted.  x(5) (i) The auction will be held pursuant to the procedures set forth in  1.2101 et seq. and 73.5000 et  xseq. Subsequent to the auction, the FCC will release a Public Notice announcing the close of the auction  xand identifying the winning bidders. Winning bidders will be subject to the provisions of  1.2107 and  x73.5003 regarding down payments and will be required to submit the appropriate down payment within"&{I,l(l(,,`%"  x10 business days of the Public Notice. Pursuant to  1.2107 and 73.5005, a winning bidder that meets  xits down payment obligations in a timely manner must, within 30 days of the release of the public notice  xannouncing the close of the auction, submit the appropriate longform application for each construction  xxpermit for which it was the winning bidder. Longform applications filed by winning bidders shall include the exhibits identified in  73.5005(a).  x(ii) These applications will be processed and the FCC will periodically release a Public Notice listing such  xapplications that have been accepted for filing and announcing a date by which petitions to deny must be  xfiled in accordance with the provisions of  73.5006 and 73.3584 of this chapter. If the applicant is duly  x@qualified, and upon examination, the FCC finds that the public interest, convenience and necessity will  x@be served by the granting of the winning bidder's longform application, a Public Notice will be issued  xDannouncing that the construction permit is ready to be granted. Each winning bidder shall pay the balance  xof its winning bid in a lump sum within 10 business days after release of the Public Notice, as set forth  xin  1.2109(a) and 73.5003(c). Construction permits will be granted by the Commission following the  xreceipt of the full payment. (iii) All longform applications will be cutoff as of the date of filing with the  x}FCC and will be protected from subsequently filed longform applications and rulemaking petitions.  xApplications will be required to protect all previously filed commercial and noncommercial applications.  xIWinning bidders filing longform applications may change the technical proposals specified in their  xpreviously submitted shortform applications, but such change may not constitute a major change. If the  xsubmitted longform application would constitute a major change from the proposal submitted in the short  xform application or the allotment, the longform application will be returned pursuant to paragraph (f)(2)(i) of this section. Note 2: Processing of applications for new low power educational FM applications:  xpPending the Commission's restudy of the impact of the rule changes pertaining to the allocations of  xx10-watt and other low power noncommercial educational FM stations, applications for such new stations,  x_or major changes in existing ones, will not be accepted for filing. Exceptions are: (1) In Alaska,  xapplications for new Class D stations or major changes in existing ones are acceptable for filing; and (2)  xapplications for existing Class D stations to change frequency are acceptable for filing. In (2), upon the  xgrant of such application, the station shall become a Class D (secondary) station. (See First Report and  xtOrder, Docket 20735, FCC 78-386, 43 FR 25821, and Second Report and Order, Docket 20735, FCC  x78-384, 43 FR 39704.) Effective date of this FCC imposed "freeze" was June 15, 1978. Applications which specify facilities of at least 100 watts effective radiated power will be accepted for filing Note 3: For rules on processing FM translator and booster stations, see  74.1233 of this chapter.  S ' "f III. The following sections are added as amendments to Part 73 of Chapter 1 of Title 47 of the  S 'Code of Federal Regulations.  S"' Subpart I Competitive Bidding Procedures  SH$'  73.5000 Services subject to competitive bidding.  x (a) Mutually exclusive applications for new facilities and for major changes to existing facilities in the  xfollowing broadcast services are subject to competitive bidding: AM; FM; FM translator; analog"&|I,l(l(,,%"  x"television; low power television; and television translator. Mutually exclusive applications for new  xfacilities and for major changes to existing facilities in the Instructional Television Fixed Service (ITFS)  xare also subject to competitive bidding. The general competitive bidding procedures found in 47 C.F.R. Part 1, Subpart Q will apply unless otherwise provided in 47 C.F.R. Part 73 and Part 74.  x(b) Mutually exclusive applications for broadcast channels in the reserved portion of the FM band  xx(Channels 200220) and for television broadcast channels reserved for noncommercial educational use are not subject to competitive bidding procedures.  Sp'  73.5001 Competitive bidding procedures.  x(a) Specific competitive bidding procedures for broadcast service and ITFS auctions will be set forth by  xpublic notice prior to any auction. The Commission may also design and test alternative procedures,  S 'including combinatorial bidding and real time bidding. See 47 C.F.R.  1.2103 and 1.2104.  x(b) The Commission may utilize the following competitive bidding mechanisms in broadcast service and ITFS auctions:  S ' x7 (1) Sequencing. The Commission will establish and may vary the sequence in which broadcast service construction permits and ITFS licenses will be auctioned.  S' x (2) Grouping. In the event the Commission uses either a simultaneous multiple round competitive  xbidding design or combinatorial bidding in broadcast service or ITFS auctions, the Commission will determine which construction permits or licenses will be auctioned simultaneously or in combination.  S' x_ (3) Reservation price. The Commission may establish a reservation price, either disclosed or  xundisclosed, below which a broadcast construction permit or ITFS license subject to auction will be not awarded.  SX' xD (4) Minimum and maximum bid increments. The Commission may, by announcement before or during  xbroadcast service or ITFS auctions, require minimum bid increments in dollar or percentage terms. The  xCommission may, by announcement before or during broadcast service or ITFS auctions, establish maximum bid increments in dollar or percentage terms.  S' xQ (5) Minimum opening bids. The Commission may establish a minimum opening bid for each broadcast construction permit or ITFS license subject to auction.  S ' x (6) Stopping rules. The Commission will establish stopping rules before or during multiple round broadcast service or ITFS auctions in order to terminate the auction within a reasonable time.  S"' xg (7) Activity rules. The Commission will establish activity rules which require a minimum amount of  x/bidding activity. In the event that the Commission establishes an activity rule in connection with a  xsimultaneous multiple round auction, each bidder will be entitled to request and will be automatically granted a certain number of waivers of such rule during the auction. "&}I,l(l(,,m%"Ԍ S'ԙ  73.5002 Bidding application and certification procedures; prohibition of collusion.  x7(a) Prior to any broadcast service or ITFS auction, the Commission will issue a public notice announcing  xMthe upcoming auction and specifying the period during which all applicants seeking to participate in an  xauction must file their applications for new broadcast or ITFS facilities or for major changes to existing  xfacilities. Broadcast service or ITFS applications for new facilities or for major modifications will be  xQaccepted only during these specified periods. This initial and other public notices will contain information  xabout the completion and submission of applications to participate in the broadcast or ITFS auction, any  xmaterials that must accompany the applications, and any filing fee that must accompany the applications  x<or any upfront payments that will need to be submitted. Such public notices will also, in the event  xmutually exclusive applications are filed for broadcast construction permits or ITFS licenses, contain  xinformation about the method of competitive bidding to be used and more detailed instructions on  x@submitting bids and otherwise participating in the auction. In the event applications are submitted that  x/are not mutually exclusive with any other application in the same service, such applications will be identified by public notice and will not be subjected to auction.  x3(b) To participate in broadcast service or ITFS auctions, all applicants must timely submit shortform  xapplications (FCC Form 175), along with all required certifications, information and exhibits, pursuant to  xxthe provisions of 47 C.F.R.  1.2105(a) and any Commission public notices. So determinations of mutual  xexclusivity for auction purposes can be made, applicants for nontable broadcast services or for ITFS must  x7also submit the engineering data contained in the appropriate FCC form (FCC Form 301, FCC Form 346,  xFCC Form 349 or FCC Form 330). Beginning January 1, 1999, all shortform applications must be filed electronically.  x(c) Applicants in all broadcast service or ITFS auctions will be subject to the provisions of 47 C.F.R.   x*1.2105(b) regarding the modification and dismissal of their shortform applications. Notwithstanding the  xgeneral applicability of Section 1.2105(b) to broadcast and ITFS auctions, applicants who file mutually  xexclusive major modification applications, or mutually exclusive major modification and new station  xapplications, will be permitted to make amendments to their engineering submissions following the filing of their shortform applications so as to resolve their mutual exclusivity.  xM(d) The prohibition of collusion set forth in 47 C.F.R.  1.2105(c), which becomes effective upon the  xfiling of shortform applications, shall apply to all broadcast service or ITFS auctions. Notwithstanding  xthe general applicability of Section 1.2105(c) to broadcast and ITFS auctions, applicants who file mutually  xexclusive major modification applications, or mutually exclusive major modifications and new station  xapplications, will be permitted to resolve their mutual exclusivities by means of engineering solutions or  xsettlements during a limited period after the filing of shortform applications. Such period will be further specified by Commission public notices.  S!'  73.5003 Submission of upfront payments, down payments and full payments.  x(a) To be eligible to bid, each bidder in every broadcast service or ITFS auction shall submit an upfront  x^payment prior to the commencement of bidding, as set forth in any public notices and in accordance with 47 C.F.R.  1.2106. "%~I,l(l(,,$"Ԍ x(b) Within ten (10) business days following the close of bidding and notification to the winning bidders,  xkeach winning bidder in every broadcast service or ITFS auction shall make a down payment in an amount  xsufficient to bring its total deposits up to twenty (20) percent of its high bid(s), as set forth in 47 C.F.R.  1.2107(b).  x(c) Each winning bidder in every broadcast service or ITFS auction shall pay the balance of its winning  x@bid(s) in a lump sum within ten (10) business days after release of a public notice announcing that the  xCommission is prepared to award the construction permit(s) or license(s), as set forth in 47 C.F.R.   x1.2109(a). If a winning bidder fails to pay the balance of its winning bid in a lump sum by the applicable  x deadline as specified by the Commission, it will be allowed to make payment within ten (10) business  xVdays after the payment deadline, provided that it also pays a late fee equal to five (5) percent of the  x}amount due. Broadcast construction permits and ITFS licenses will be granted by the Commission following the receipt of full payment.  S '  73.5004 Bid withdrawal, default and disqualification.  xt(a) The Commission shall impose the bid withdrawal, default and disqualification payments set forth in  xQ47 C.F.R.  1.2104(g) upon bidders who withdraw high bids during the course, or after the close, of any  xbroadcast service or ITFS auction, who default on payments due after an auction closes, or who are  xdisqualified. Bidders who are found to have violated the antitrust laws or the Commission's rules in  x7connection with their participation in the competitive bidding process may also be subject to the remedies set forth in 47 C.F.R.  1.2109(d).  x(b) In the event of a default by or the disqualification of a winning bidder in any broadcast service or  xITFS auction, the Commission will follow the procedures set forth in 47 C.F.R.  1.2109(b)(c) regarding the reauction of the construction permit(s) or license(s) at issue.  Sx'  73.5005 Filing of longform applications.  x@(a) Within thirty (30) days following the close of bidding and notification to the winning bidders, each  xwinning bidder must submit an appropriate longform application (FCC Form 301, FCC Form 346, FCC  xForm 349 or FCC Form 330) for each construction permit or license for which it was the high bidder.  xLongform applications filed by winning bidders shall include the exhibits required by 47 C.F.R.   x1.2107(d) (concerning any bidding consortia or joint bidding arrangements);  1.2110(i) (concerning  xdesignated entity status, if applicable); and  1.2112(a) & (b) (concerning disclosure of ownership and real  xkparty in interest information, and, if applicable, disclosure of gross revenue information for small business applicants).  x(b) The longform application should be submitted pursuant to the rules governing the service in which  xxthe applicant is a high bidder and according to the procedures for filing such applications set out by public  xnotice. When electronic procedures become available for the submission of longform applications, the Commission may require all winning bidders to file their longform applications electronically. X` hp x (#%'0*,.8135@8: