GM 12-004

FCC Issues Report and Order to Enhance Tribal Ownership of FM Radio Stations

On December 29, 2011, the Federal Communications Commission (FCC) released the attached final rule (Report and Order) designed to facilitate tribal and tribally-affiliated ownership of commercial FM radio stations. This is the most recent in a series of actions by the FCC to strengthen and expand communications services in Indian Country.

In our General Memorandum 10-30 (March 12, 2010) we reported on the FCC’s adoption of a Tribal Priority in the award of allotments and construction permits for new FM and AM radio operations (including non-commercial educational FM stations). We also reported that the FCC was soliciting comments on how it might increase the likelihood that tribes, tribal consortia, and tribally-affiliated organizations would successfully apply for these allotments and permits. Specifically, the FCC asked for comments on how, and under what circumstances, federally-recognized Native American Tribes and Alaska Native Villages should receive a bidding credit in auctions for new radio stations. The rule issued on December 29, 2011, is the result of that inquiry.

In the final rule, the FCC chose to adopt a “threshold qualifications” approach to commercial FM application processing, rather than a bidding credit approach. The FCC was concerned that a bidding credit to tribal applicants would ultimately be insufficient, since non-tribal competitors might still be able to out-bid tribal applicants. Instead, under the final rule, once a Tribal Allotment is allocated, qualifying tribes or tribal consortia would be permitted to file an application for the allotment prior to the allotment becoming open for general bidding (during the “Threshold Qualifications Window”).

The final rule specifies eligibility criteria for tribal applicants, but in summary an applicant must either be a federally recognized tribe, tribal consortium, or an entity in which 51 percent or more of the ownership interest is controlled by a tribe or tribes. Additionally, at least 50 percent of the “principal community contour” of the proposed station would have to be tribal lands, and the applicant’s proposed “community of license” would have to be a community located on tribal lands. Further, the applicant must propose “first or second aural (reception) service, or first local tribal-owned commercial transmission service at the proposed community of license.” The term “tribal lands” is broadly defined and the rule notes that it is the same as set forth in footnote 15 of the First Report and Order, Further Notice of Proposed Rule Making, FCC-10-24.

If only one acceptable tribal application is filed, that application will be accepted and processed, and the Allotment will not be opened for auction. If two or more are filed, the FCC will allow the tribal applicants a limited period of time to reach a settlement or merger in order to share the Allotment; otherwise those applicants alone will be permitted to bid. The Allotment will only be opened for auction to non-tribal parties in the event that no acceptable tribal applications are submitted.

The FCC explained in the report that these new procedures were adopted “in order to provide significant opportunity for the award of [tribal allotments] to tribal applicants, in keeping with the goals underlying the Commission’s Tribal Priority.” The FCC has also directed the Office of Native Affairs and Policy and the Audio Division of the Media Bureau to coordinate in establishing informational materials and training opportunities in order to assist tribes in understanding the threshold qualifications licensing process, and to consult with tribes.

FCC Commissioner Michael J. Copps, who made the expansion of communications services in Indian Country a priority, issued a statement which is included in the attached Report and Order. Commissioner Copps’ term of office expired at the end of 2011.

Please let us know if we may provide additional information regarding this Federal Communications Commission rule or related matters.