On March 3, 2011, the Federal Communications Commission (FCC or Commission) adopted a Second Report and Order in the Matter of Policies to Promote Rural Radio Service and to Streamline Allotment and Assignment Procedures (Rural Radio Order). Among other things, the Rural Radio Order restricts the allotment of new stations in urban areas and further limits the ability of a station to change its community of license.

Section 307(b) Analysis

First, the Commission examined its policies for new station applications under a Section 307(b) analysis. When there are competing applications for new stations, the Commission evaluates the merits of each proposal under certain priorities. If the Section 307(b) analysis yields no clear winner, the applications are included in an auction and awarded to the highest bidder. The four primary "Priorities" in a 307(b) analysis are:

  1. Service to white areas-a "white area" is an area where there is currently no predicted radio service.
  2. Service to gray areas-a "gray area" is an area served by only one radio service.  
  3. Proposes a first local transmission service-the proposed station would be the first station licensed to a community.  
  4. Other public interest factors-such as service to underserved areas or listeners, which are generally recognized to be those areas served by fewer than five radio stations, where one proposal serves significantly more people than another proposal or the population of one community has increased significantly in recent years.  

In the Rural Radio Order, the Commission concluded that while Section 307(b) "remains a vital provision of the Communications Act," certain adjustments to the priorities are necessary, including:

  • A rebuttable presumption that when a station proposes (1) to serve a community located in an urbanized area or (2) to cover or with a minor modification could cover more than 50 percent of an urbanized area, the 307(b) analysis will treat that application as serving the entire urbanized area rather than just the named community (Urbanized Area Service Presumption).  
  • Reception service to underserved listeners will be considered as having a greater need under Priority 4 than reception service to a community with local service.
  • Greater detail and transparency will be required in the showings provided by applicants seeking new communities of license and raw population totals will be given less emphasis.

Next, recognizing that the 307(b) analysis will vary depending on service and type of application, the Commission proposed separate procedures for a Section 307(b) analysis for each situation.

Proposals for New AM Facilities

The new rules restrict awarding a dispositive Section 307(b) preference among mutually exclusive AM applications unless there is a significant difference between the applications. If there is not a significant difference, then the new allotment will be awarded by competitive bidding.

  • In considering proposals for new facilities, the FCC will impose the Urbanized Area Service Presumption, slightly modified for AM facilities. Proposals for a first local transmission service (Priority 3) to a community located within an urbanized area will be presumed to serve the entire urbanized area if the daytime principal community signal reaches (or with a minor modification could reach) 50 percent or more of the urbanized area.
  • The Urbanized Area Service Presumption, however, can be rebutted by a compelling three part showing (1) that the proposed community is independent from the urbanized area, (2) the community has a specific need for a local outlet separate from the urbanized area and (3) the proposed station will provide programming to serve that specific need.  
  • This showing can be based on the existing three-pronged Tuck test (1) the degree to which the proposed station will provide coverage to the urbanized area, (2) the size and proximity of the proposed community of license relative to the central city of the urbanized area, (3) the interdependence of the proposed community of license and the urbanized area as determined using the eight Tuck factors. However, the Commission cautions that the Tuck factors will be more rigorously scrutinized than in the past.  
  • The new Priority 4 preference for underserved listeners will be given greater weight. Where a new AM applicant is proposing a third, fourth or fifth reception service to at least 25 percent of the population in the proposed primary service area and where that community has two or fewer local transmission services, the proposal can receive a dispositive Section 307(b) preference. Except in this limited circumstance the Commission is not likely to award a 307(b) preference under Priority 4 comparisons.
  • Applicants that meet the above criteria (third, fourth or fifth reception service to at least 25 percent of the population) may but are not required to submit a Service Value Index (SVI) showing. Such a showing, however, must demonstrate a 30 percent differential in SVI between the proposal under consideration and the next highest ranking proposal.

Proposals for New FM Allotments

In comparative cases, a decision must be made for one of the proposals before the FM Table of Allotments can be amended and the allotment designated for auction. Because of this need to choose one proposal, the Commission recognized that the standards for awarding a Section 307(b) preference for an FM allotment cannot be as strict or limited as for an AM allotment. Accordingly, the Commission adopted the following modifications to its Section 307(b) analysis for new FM allotments:

  • Imposed the Urbanized Area Service Presumption, except that the determination of whether a proposed facility, if modified, could cover 50 percent or more of an urban area will be based upon the applicant's certification that no existing towers are in the area to which-at the time of filing-the applicant's antenna could be relocated.
  • Declined to give greater weight to the underserved listeners component of Priority 4.  
  • Determined that raw population total differentials for the competing communities should be considered only after other Priority 4 factors.  

Proposals to Change Community of License

A proposal to change the community of license must demonstrate that the facility at the new community represents a preferential arrangement of allotments or assignments when compared to the current facility. While the Commission affirmed that it would still afford flexibility to applicants proposing a new arrangement, it will now require more specificity of the actual effects of the proposed change in community of license, including:

  • Imposing the Urbanized Area Service Presumption.
  • In considering Priority 4 claims, the Commission will limit the presumption that raw net population gains, in and of themselves, represent a preferential arrangement of allotments or assignments.  
  • An absolute prohibition to any facility modification that would create white or gray area.
  • A strong presumption disfavoring any change that would result in the net loss of third, fourth, or fifth reception service to more than 15 percent of the population in the station's current protected contour.  
  • Applicants must now disclose the size of the populations gaining and losing service under their proposal, as well as, the numbers of services those populations will receive if the application is granted, and an explanation as to how the proposal advances these revised Section 307(b) priorities.  

The Commission stated that it would apply these new criteria to any applications which are pending as of the release date of the Order.

Prohibition on FM Translator "Band Hopping" Applications

Unless a FM translator station has been operating for at least two years, the Commission will prohibit that station from filing an application to change frequencies between the non-reserved and reserved bands.

Codify Technical Standards for Determining AM Nighttime Mutual Exclusivity Among Window-Filed AM Applications

The Rural Radio Order codified its earlier decision in Nelson Enterprise, Inc., MO&O, 18 FCC Rcd 3414 (2003), which provides that Section 73.182(k) standards for caused or received interference to other window pending applications as well as existing stations are applicable to determining nighttime mutual exclusivity between applications to provide AM service filed in the same window.