Washington, DC – Feb 25, 2002 – The Federal Communications Commission has requested comment from broadcasters on the matter of non-commercial educational (NCE) license allocation via a just released Second Further Notice of Proposed Rulemaking.

In the FM band, channels 88.1MHz to 91.9MHz - effectively 20 channels - are reserved for NCE license. Historically, when a prospective non-commercial NCE license holder has applied for license on a channel outside of the reserved band or in a service where there is not a reserved band (i.e. AM radio), that party has had to compete under the same rules as a commercial entity. However, because of the differing nature of the applicants, The Commission was forced to use different comparative criteria to decide the license award. In the early 1990s, the U.S. Court of Appeals called the process "arbitrary and capricious, and therefore unlawful." Compounding the issue, The Budget Act of 1997 introduced several other issues that the Commission was unable to resolve, including whether it was completely prohibited from using competitive bidding to resolve such applications.

At that point, the Commission issued a Notice of Proposed Rulemaking to consider revising the criteria used to select among competing applicants for new NCE broadcast facilities, and in 2000 issued a Report & Order and rules on the issue. The Report stated that NCE stations could seek to reserve a new channel by meeting, but that if the NCE station could not meet the reduced criteria for doing so, they had to compete at auction with commercial stations for the channel. However, the Court of Appeals has rejected the Commission's new construction of section because "nothing in the Act authorizes the Commission to hold auctions for licenses issued to NCEs to operate in the unreserved spectrum."

In light of the Court's decision, the FCC now seeks comment on several points: (1) holding NCE entities ineligible for licenses for non-reserved channels and frequencies; (2) permitting NCE entities opportunities to acquire licenses for non-reserved channels and frequencies when there is no conflict with commercial entities; and (3) providing NCE entities opportunities to reserve additional channels in the Table of Allotments. A combination of the above options working in tandem is also a possibility, as are any others that are consistent with the Court's decision. The Commission also seeks comment upon "comment on the breadth of the statutory language that describes the entities that are exempt from auctions." Such language can be found in the full text of the Second Further Notice.

Interested parties may file comments on or before April 15, 2002, and reply comments on or before May 15, 2002.