Federal Register, Part IV,
Volume 61, Issue 218, p. 57966, November 8, 1996
DEPARTMENT OF COMMERCE
and Information Administration
15 CFR Part 2301
[Docket No. 960524148-6243-02 ]
AGENCY: National Telecommunications
and Information Administration (NTIA), Commerce.
ACTION: Final rules.
SUMMARY: This document
revises and clarifies the rules governing administration of the Public
Telecommunications Facilities Program (PTFP). The PTFP is authorized to
provide matching grants to plan and construct public telecommunications
EFFECTIVE DATE: November
FOR FURTHER INFORMATION
CONTACT: Dennis Connors, Director, Public Broadcasting Division, NTIA,
Department of Commerce, 14th Street and Constitution Avenue, NW, Room
4625, Washington, DC 20230. Telephone: (202) 482-5802; Fax (202) 482-2156.
Internet address: email@example.com.
In 61 FR 27230, the National Telecommunications
and Information Administration (NTIA) announced proposed revisions
of the rules that govern the PTFP and requested public comments on those
revisions. NTIA has reviewed the comments submitted as a result of the
notice of proposed rulemaking and is now responding to the comments and
issuing final rules. In response to the notice of proposed rulemaking
(61 FR 27230, May 30, 1996) NTIA received comments from 7 different organizations.<2>
There was general support for
the overall direction of the proposed revision. APTS, NPR, and NFCB supported
the general thrust of the proposed clarifications and the reorganization
of the rules. No opposition was received to many of NTIA's proposed changes
to the rules including the incorporation of the priorities from the Appendix
into the body of the rules and the changes proposed in the following sections:
§2301.1 Program Purposes;
Amount of Federal Funding; §2301.7
Eligible and Ineligible Project Costs; §2301.9
Deferred Applications; §2301.12
Federal Communications Commission Authorizations; §2301.13
Public Comments; §2301.14
Supplemental Application Information; §2301.15
Withdrawal of Applications; §2301.16
Technical Evaluation Process; §2301.18
Selection Process; §2301.19
General Conditions Attached to the Federal Award; §2301.20
Schedules and Reports; §2301.21
Payment of Federal Funds ; §2301.22
Protection, Acquisition and Substitution of Equipment; §2301.23
Completion of Projects; §2301.24
Final Federal Payment; §2301.25
Retention of Records and Annual Status Reports; and §2301.26
Comments on the proposed rules
were mainly focused on two sections: §2301.4
Scope of Projects and §2301.17
Evaluation Criteria. The subject that prompted the most public
comments, however, was not a section of the proposed rules, but rather
a discussion in the Supplemental Information section of the Notice regarding
the conversion of public broadcasting to advanced digital technologies.<3>
We discuss each of these three subjects and several other issues raised
by the public in the following sections.
§2301.4 Scope of Projects
relates to the scope of projects eligible for PTFP funding and moved a
section that was an Appendix in prior years into the body of the Rules.
APTS supported the incorporation of the priorities in the Rules as part
of its general support for the reorganization of the PTFP Rules.
There were several comments
on the proposed changes to this section. RMCPB suggested that the title
of this section was nondescriptive of the content. RMCPB recommended this
section be titled "Types of Projects, Priorities." We agree
that this is an improvement and so have modified the title to "Types
of Projects and Broadcast Priorities" in the Final Rules.
Three organizations, NFCB,
NTU and RMCPB, commented on NTIA's proposal to place all broadcast applications
within the five funding priorities and revise the scope of the Special
Applications category to consist solely of nonbroadcast projects.
NFCB supported NTIA's proposal and thought that reserving the Special
Applications category for non-broadcast would be useful for considering
applications utilizing new technologies. NTU hoped that the proposed reorganization
did not change the priority status that PTFP has developed for distance
learning projects over the past decade. RMCPB questioned whether, under
the proposed rules, NTIA continued to possess the discretionary authority
to award grants to eligible broadcast as well as nonbroadcast applicants
with unique/innovative proposals. NTIA encourages the submission of applications
that propose unique and innovative telecommunications projects, whether
using broadcast or nonbroadcast technologies. We have therefore clarified
this position through the creation of §2301.4(b)(6)
Other Cases within the Broadcast Applications section. This
section provides broadcast applicants the same opportunities for submission
of unique or innovative applications as contained in the Special Applications
§2301.4(a) for nonbroadcast
RMCPB proposed that, if NTIA
were to place broadcast and nonbroadcast applications in different categories,
NTIA should establish a set of priority distinctions for the nonbroadcast
applications similar to that of the broadcast applications. While NTIA
has established specific priorities for broadcast applications and continues
to refine those priorities in the current regulations, we have chosen
not to establish a fixed set of priorities for nonbroadcast applications
for two reasons. The first reason is that under the Act, NTIA can only
fund construction applications that establish or expand a nonbroadcast
facility,<4> which are comparable to Priority
1A and 1B broadcast applications. Nonbroadcast applications are not eligible
for equipment replacement, improvement or augmentation, which are Priorities
2, 4 and 5 of the broadcast applications. Priority 3 in the broadcast
priorities, first local origination, is not applicable for nonbroadcast
since NTIA considers the service provided by a nonbroadcast facility rather
than the service area and recognizes that different technologies and services
may provide a unique service in a particular service area. In effect,
nonbroadcast applications are already grouped into a single category,
Special Applications, which is comparable to Priority 1. NTIA has not
broken the Special Applications category into different priorities for
a second reason. We recognize that nonbroadcast applicants propose many
different technologies, each technology with its own strengths in meeting
the needs of a particular community, whether that community is a city,
state, region or the nation. In encouraging the submission of innovative
and unique applications, NTIA prefers not to establish rigid priorities
but to let applicants propose projects which identify and serve needs
in their chosen service area. We have, therefore, not published a set
of priorities for Special Applications but have made minor changes to
the Special Applications category to further clarify the intent of this
NFCB and APTS commented on
NTIA's proposal to consider projects to construct public broadcast stations
to address underserved needs in an area already served by other public
broadcasting facilities within the Priority 4A, Improvement of Public
Broadcasting Services. APTS supported the proposal to place these
"second station" applications within the broadcast priorities
but suggested that a lower priority -- Priority 5A -- would be more appropriate.
APTS noted that given limited Federal funding, it was important to support
existing public broadcasting facilities that are serving distinct and
unserved needs before supporting new facilities. APTS indicated that stations
in multi-station markets are treated as Priority 4A and that treating
applicants for new second stations under Priority 5A would insure that
existing facilities receive support before applications for new facilities
to serve underserved needs.
NFCB, however, supported NTIA's
placement of projects to construct public broadcast stations to address
underserved needs in an area already served by other public broadcasting
facilities within the Priority 4A. NFCB noted that public radio is a targeted
medium and that even the best stations can only hope to serve a portion
of their communities of license. NFCB felt that placement of second stations
within Priority 4A recognized the need for such stations in an increasingly
multicultural American society.
In the Notice of Proposed Rulemaking,
NTIA proposed that projects to construct public broadcast stations to
address underserved needs in an area already served by other public broadcasting
facilities would be considered in Priority 4A so they could be considered
with other applications from stations in areas already served by another
public broadcasting facility. NTIA believes that not only is it important
to maintain the existing services of second stations, but it is also important
that communities with underserved needs have the opportunity to receive
additional service from new facilities. We expect that new second service
stations will be radio facilities that serve demonstrated needs in their
community, and we do not anticipate that this provision will have a major
impact on television facilities. We recognize that there is a delicate
balance between supporting applications for new such services and maintaining
those second stations already in place, but we believe that there is no
clear reason to favor one type of application over the other. Therefore,
we believe that Priority 4A is the appropriate placement for these applications.
In a related matter, RMCPB
raised an issue under §§2304.4(b)(2)
and (4), regarding those instances where two full-service public radio
stations serve the same area with two discrete and distinct program services.
RMCPB noted that even when utilizing different national program services
and distinctive local programming, neither station can qualify as "essential"
(existing broadcast stations that provide either the only public telecommunications
signal or the only locally originated public telecommunications signal
to a geographical area) and therefore neither may be eligible for Priority
2 replacement. These applications are accordingly placed in Priority 4A.
RMCPB suggested that "PTFP discretionary consideration differing
from that given either of two such stations without discrete service"
be given<5>. NTIA appreciates RMCPB's concern
regarding the priority of stations in multi-station areas. NTIA notes
that some stations in a multi-station area may in fact qualify for Priority
2 as an "essential" station as the term is used in the PTFP
regulations. Applicants are encouraged to provide information as part
of their applications documenting whether they provide either the only
public telecommunications signal or the only locally originated public
telecommunications signal to a geographical area. NTIA, however, is reluctant
to distinguish between stations on the basis of their programming services
as proposed by RMCPB. NTIA has been able to fund Priority 4A applications
in the past and expects to be able to do so in the future, dependent on
the availability of funds.
RMCPB supported NTIA's clarification
of how PTFP considers the presence of AM daytime only stations in determining
the Priority for proposed FM facilities serving a similar coverage area.
RMCPB raised the question regarding the priority for a public radio FM
station serving an area covered by a student noncommercial educational
station that does not operate full-time or year-round. NTIA's long-time
practice is not to consider student noncommercial educational stations
that do not operate full-time or year-round as providing a public telecommunications
service. The presence of a student noncommercial educational radio station
in an area, therefore, does not preclude Priority 1 consideration of an
application for a public radio FM station proposing to provide a public
§2301.17 Evaluation Criteria
for Construction and Planning Applications.
Four organizations addressed
the issue of evaluation criteria and each supported the combination of
construction and planning into a single set of evaluation criteria <6>.
The four organizations supported the criteria proposed by NTIA, though
APTS and IURTS both opposed deleting the community support criterion from
the past evaluation criteria.
APTS noted that public broadcasting
stations exist to serve their local communities and that NTIA should not
make grants to applicants who cannot demonstrate significant ties to their
community. APTS suggested that financial support is the clearest objective
evidence that an applicant is providing service valued by their community
and that NTIA continue to require that applicants demonstrate that they
receive local financial support. IURTS suggested that demonstration of
community support is a good check to insure that the purposes of the PTFP
program are being served.
NTIA agrees with the thrust
of both the APTS and IURTS comments. We believe that demonstration of
community support is an important element in the evaluation of an application.
Indeed, we intend to incorporate demonstration of community support into
the evaluation of several of the evaluation criteria proposed. As noted
by APTS, community support is an important element in an applicant's ability
to raise funds. This is true both for determining whether an applicant
can raise both the short-term local match required by the PTFP application
and the long-term funds necessary to operate the system during the Federal
interest period. NTIA believes that demonstration of community support,
therefore, is important for the financial qualifications criterion but
also believes the demonstration of community support will be useful in
evaluating other criteria as well. In most applications, demonstration
of community support will be useful in documenting an applicant's fulfillment
of the project objectives criterion. In many applications, demonstration
of community support can be used to document urgency, applicant qualifications
and special consideration. Rather than making community support an independent
criterion, we have chosen to give applicants the opportunity to document
community support for those criteria that are most appropriate to their
application. Information on how this documentation can be included in
the application will be contained in the Application Guidelines distributed
to each applicant.
In a similar manner, we will
include information within the Guidelines on another matter which was
not included on the list of new criteria in the proposed rules -- coordination
of the application with other telecommunications organizations. NTIA continues
to believe that coordination of a project with other telecommunications
organizations is an important issue but as with demonstration of community
support, this information could support several evaluation criteria, depending
on the nature of the applicant's project.
The four organizations each
addressed the question raised by NTIA in the Notice which solicited comments
on the appropriate weight to be assigned to each criteria.<7>
Three of the four organizations presented suggestions on how the criteria
should be weighted and all three suggested that "project objectives"
and "urgency" be given the greatest weight.<8>
NFCB and RMCPB each suggested that "urgency" and "project
objectives" be given the greatest weight. NPR indicated that "Urgency"
and "Project Objectives" (proposed criteria #3 and #1) have
traditionally distinguished the most worthy applications. NPR cautioned,
however, that "the most urgent need may not warrant a grant if the
applicant lacks sufficient financial or other qualifications to implement
the project." <9> Likewise, RMCPB suggested
that the "financial qualifications" and "applicant qualifications"
(proposed criteria #2 and #4) are in effect threshold criteria and should
be given minimal weight but that NTIA might disqualify applications that
did not meet a minimum on these two criteria. NFCB also felt that these
two criteria would have to be met for a project to succeed but cautioned
that there should be some evaluative process on these criteria which enables
small public radio stations with limited staff and budget to compete equally
for PTFP funds against larger stations. NFCB indicated that the "technical/planning
qualification" (criterion 5(a) or 5(b)) should be a criterion that
indicates whether a project is a go or a no-go. RMCPB recommended that
criterion 5 and "special consideration" (criterion 6) should
be equally weighted.
NTIA appreciates the thoughtful
responses received on this issue. We agree that "project objectives"
and "urgency" are the most significant of the criteria and so
these criteria will be given the greatest weight during evaluation. We
also agree that NTIA should not award a grant for a proposal, no matter
how well the application meets the "project objectives" and
"urgency" criteria, if the applicant is not financially qualified
or otherwise able to complete the project. Therefore, the applicant's
qualifications and financial qualifications will each serve as qualifying
criteria. An application must meet a minimum threshold as defined in each
of these criteria for further consideration during the evaluation process.
The two remaining criteria, Technical/Planning qualifications and Special
Consideration will be given lesser weight in evaluation than that awarded
to "urgency" and "project objectives."
NTIA has, therefore, modified
this section to reflect the evaluation weighting adopted. The criteria
in §2301.17(b) have
been reordered to list first the two qualifying criteria, "applicant
qualifications" and "financial qualifications" as numbers
1 and 2. "Project objectives" will be criterion number 3 and
"urgency" has been placed as criterion number 4. Since the financial
qualification criterion has been made a qualifying criterion, the requirement
that applicants "adequately justify the need for Federal funds in
excess of fifty (50) percent of total project costs (see §2301.6(b)(2)
), if requested for equipment replacement, improvement, or augmentation
projects" has been relocated to the project objectives criterion.
The justification for more than 50% Federal funding only relates to the
level of potential Federal funding and should not be a part of a criterion
which is used to qualify the application for further consideration. A
sentence has also been added to the project objective criterion which
clarifies that evaluation of the applicant's proposal includes evaluation
of the applicant's ability to implement the proposal, if funded. A sentence
reading "that the condition of existing equipment justifies its prompt
replacement" has been relocated from criterion 5(a) "technical
qualifications", to criterion 2 "urgency" to reflect the
weight given this criterion. Several new phrases have been added to clarify
the "urgency" and "applicant qualifications" criteria.
Finally, new language has been added to §2301.17(a)
which incorporates the weighting adopted by NTIA.
Conversion to Digital Technology
Although not a part of the
proposed rules itself, six of the seven organizations commented on the
statement in NTIA's Notice which welcomed applications which will assist
in planning for the digital conversion of public broadcasting facilities.<10>
Five of these six organizations supported NTIA's interest in supporting
projects to plan for digital conversion of public broadcasting facilities.
NFCB supported the concept in general, as did NPR, which cautioned that
NTIA should bear in mind the program's broader objectives so that the
funding of digital conversion planning projects promotes, rather than
undermines, the availability of public telecommunications services, particularly
in rural areas. RMCPB was supportive of NTIA's recognition of the issue
of conversion to digital technologies but suggested that public broadcasters
capable of practicable conversion are also capable of planning without
PTFP grants. RMCPB concluded that NTIA funds might better be devoted to
funding acquisition of digital components through construction grants.
Both APTS and PBS suggested
changes in NTIA policy to encourage digital conversion. APTS expressed
concern that the number of applications for planning grants for ATV conversion
could swamp the PTFP funds if a large number of public television stations
seek planning grants. APTS noted that it and PBS have launched efforts
to coordinate public television's transition to digital technology. APTS
urged NTIA to clarify that these coordinated efforts, such as reducing
the cost of digital transition by pooling engineering resources, establishing
model planning programs for different types of stations, and consolidating
buying power in order to obtain volume discounts, would be eligible for
PTFP planning funds. APTS requested that these coordinated efforts be
afforded a high priority in receiving Federal grants. APTS also urged
that NTIA make it clear that planning for capital campaigns to finance
the transition to ATV at individual public television stations will be
eligible for planning grants. APTS noted that for a number of stations,
the cost of planning capital campaigns will itself be a significant drain
on their finances.
PBS addressed two issues in
its comments regarding digital conversion: fund allocation priority and
the percentage of costs that may be funded. Because digital television
is intended to replace, rather than to supplement, analog television and
because the FCC plans to mandate a transition to digital and abandonment
of analog operation, PBS urged that NTIA consider the coordinated planning
of digital facilities as a first service to an unserved area, with no
diminution of priority because of the existence of analog service. PBS
also urged that such applications be considered new or extended service,
thereby qualifying the proposals for 75% rather than only 50% funding.
PBS also suggested that some
aspects of the proposed regulations may require modification after the
FCC adopts its digital television regulations. PBS noted as an example
that the FCC may not require the filing of applications for digital conversion
or may establish timetables which may not conform to that required under
the PTFP regulations. NTIA recognizes that the FCC has the lead in establishing
policy regarding television's transition to digital technology and will
indeed be mindful of FCC requirements for digital conversion. NTIA will
ensure that the PTFP regulations do not restrict public television's ability
to seek Federal funding or FCC authorizations during the conversion to
digital technology. NTIA will also keep an open mind on the use of ancillary
data streams on NTIA-funded facilities.
PBS suggested that NTIA should
be flexible in releasing the Federal interest in analog equipment that
becomes obsolete because of the transition to digital equipment. PBS further
noted that a ten-year Federal interest period may be inappropriate for
digital equipment, since the useful life span of this equipment is as
yet unknown. In a similar comment, IURTS noted that even traditional broadcast-grade
products cannot remain current for the duration of the ten-year Federal
interest period. IURTS commented that PTFP should consider reducing the
federal interest period from ten years. IURTS is concerned that due to
the rapid advancements in computer platforms and operating systems in
today's market, the hardware and software will be obsolete in about half
the Federal interest period described by PTFP. IURTS recommended that
NTIA expand its support of computer-based PC-type technology in place
of traditional broadcast products. Specific reference was made to PC based
character generators, still-store devices, digital special effects devices,
replacement for audio carts, digital audio workstations, etc. With the
development of PC-based technology, IURTS noted that these less-expensive
solutions can reduce station's costs while still providing service to
the community. Acknowledging that these PC-based solutions will not last
the ten-year Federal interest period, IURTS recommended both a shortening
of the Federal interest period and a corresponding reduction in the recommended
funding level. IURTS gave an example of a dual channel still-store normally
funded by PTFP at a $50,000 level which could be reduced to $25,000 and
provide many stations with digital options they could not otherwise afford
NTIA acknowledges the problem
in a rapidly changing technical environment that some analog or digital
broadcast equipment may not have a useful life of ten years. PTFP is mandated
by statute to maintain a ten-year Federal interest period. See 47 U.S.C.
§392(g). While we appreciate the concerns expressed by PBS and IURTS,
until such time as the statute is changed, NTIA is bound to maintain this
requirement. NTIA notes that grantees may have alternatives in satisfying
NTIA's Federal interest in equipment and calls grantees attention to §2301.22(g)
Transfer of Federal interest to different equipment of the final rules.
Under this provision, a grantee may request that the Agency transfer the
remaining Federal interest in a piece of equipment to another item of
equipment presently owned or to be purchased by the grantee with non-Federal
funds. Grantees may also dispose of the equipment at any time in accordance
with the Uniform Administrative Requirements under OMB Circular A-110,
§34 and 15 CFR §24.32. The recipient may request disposition
of the equipment from the agency; and, if the fair market value of the
equipment at the time of disposition is under $5,000, there is no further
obligation to the Federal Government.
NTIA appreciates the support
shown by the public comments for its interest in participating in the
digital conversion of public broadcasting facilities. We have carefully
considered the suggestions for changes in the proposal offered by the
respondents, including changes to priorities and funding levels. We believe
that it is premature to make those changes at this time since so much
about the transition to digital technology is still unknown. The FCC has
neither adopted technical standards for digital television nor established
its digital television regulations. It has yet to set a timetable for
the transition of television facilities from analog to digital technology.
NTIA will work with the public broadcasting community and closely monitor
the development and transition to digital technologies. As conditions
warrant, NTIA can revise its policies towards digital conversion through
publication of the annual closing date notice or through other publications.
For the moment, we will adopt the suggestion of RMCPB, which noted that,
despite the Agency's recognition of the issue of digital conversion, there
was no provision in the proposed rules for addressing the issue or welcoming
applications to plan for conversion. We have modified the language in
Cases within the Broadcast Applications section to specifically reference
planning applications for digital conversion as a unique or innovative
project. NTIA has been routinely funding digital equipment for replacement
which is compatible with the proposed standards for digital television.
Under Other Cases, NTIA would also accept applications for construction
of digital facilities that could be considered unique or innovative.
In addition to the comments
on these three major sections, there were public comments on several other
changes in the Notice of Proposed Rulemaking.
APTS expressed concern about
its perceived change to the Federal interest period to the useful life
of the equipment under the definition contained in §2301.2
of the proposed rule. We did not change the federal interest period, as
mandated in 47 U.S.C. §392(g), from ten years to the useful life.
The federal interest period remains at ten years and is primarily a financial
interest within which PTFP must collect a proportionate share of the Federal
funds expended under an award if a grantee ceases to be a public telecommunications
entity or the facilities cease to be used for the provision of public
telecommunications services. We intended to clarify that Federal Constitutional
interests, for example, the First Amendment's protections under the Establishment
of Religion and the Freedom of Speech Clauses, and the Fourteenth Amendment's
equal rights protections, extend for the useful life of the facilities.
Even where a grant program statute establishes a federal interest period,
the Supreme Court has ruled that certain Constitutional guarantees remain
for the useful life of Federally-funded facilities. <11>
We have inserted "Constitutional" to clarify what federal interests
extend for the useful life of property.
RMCPB suggested we define the
term "useful life." A definition of "useful life"
has been added as the last defined term in §2301.2.
As mandated by Congress under
§392(f) of the Act, the Agency will give special consideration to
applications that foster ownership of, operation of, and participation
in public telecommunications entities by minorities and women. This statutory
provision remains and over the past nine years, the Corporation for Public
Broadcasting has assembled a report to Congress on the provision of services
to minority and diverse audiences by public telecommunications entities,
which evidences the continued need for these services. NTIA is particularly
concerned with the provision of services to minorities, women, and diverse
audiences by public telecommunications entities. Therefore, NTIA will
continue to evaluate how well applicants demonstrate significant diversity
in the ownership of, operation of, and participation in public telecommunications
facilities. Special consideration, therefore, remains as one of several
evaluation criteria contained in the regulation, specifically, at 15
NFCB expressed concern over
the elimination of the 50% minimum participation of minorities an/or women
in order to qualify for special consideration. NFCB argued that the elimination
of the 50% minimum requirement may open up special consideration to such
a degree that it becomes useless as a factor in evaluating applications.
NTIA does not believe that it is necessary to establish any minimum minority
or women participation requirements for special consideration in PTFP
evaluations in order to carry out the objectives of the statute. Rather,
NTIA believes that the congressional intent can be achieved in a fair
and flexible manner by taking into account all factual circumstances that
might lead to special consideration.
PTFP applies special consideration
to encourage all applicants to assist the program to achieve one of its
statutory purposes, to increase the amount of public telecommunications
facilities owned by, operated by and participated in by minorities and
women. Employment of minorities or women is not the only way in which
NTIA may assess whether an application promotes significant diversity
in the ownership of, operation of, and participation in by minorities
and women. NTIA is also interested in outreach efforts, audience development,
and programming strategies. One stated purpose of this program is to respond
to the educational, cultural and related programming needs of diverse
groups. If an applicant can demonstrate to the NTIA that its application
is furthering the statutory objective, that application will be more highly
rated under the special consideration factor.
The language of this section
has been modified to clarify NTIA's policy on special consideration and
an accompanying modification has been made in the Special Consideration
evaluation criterion in §2301.17(b)(6)
. To the degree there is any discrepancy of interpretation, this final
rule will take precedence and is intended to describe special consideration
as required by 47 U.S. C. §392(f).
RMCPB observed that §2301.6(a)
permits 100% Federal funding of planning grants and noted that this provision
is permissive and not obligatory. Since NTIA has limited funds for the
PTFP program, RMCPB suggested that 75% be the general presumption for
planning purposes. NTIA appreciates this suggestion and notes that most
of the planning grants awarded by PTFP in recent years include matching
in-kind services and funds contributed by the grantee. Modifying §2301.6(a)
as suggested by RMCPB would codify what already has become PTFP practice.
We are, however, mindful that planning grants are sometimes the only resource
that emerging community groups have with which to initiate the planning
of new facilities in unserved areas. We have, therefore, included a provision
at §2301.(6)(a)(2) that
NTIA will continue to award up to 100% of total project costs in cases
of extraordinary need. We have also modified the evaluation criteria with
a new section at §2301.17(b)(3)
to reflect the need for applicants to justify a request for more than
75% Federal funding for planning projects.
RMCPB expressed concern in
a change in the proposed §2301.8(d)
which removed the number of copies of applications required by NTIA from
the specific number "2" to the more flexible "the number
of copies specified by the Agency." RMCPB pointed out that any increase
in the number required will be an added burden on the small station and
community broadcaster applicants. We note that under 5 CFR §1320.5(d)(2)(iii),
an agency can only require an original plus two copies of an application.
Any request for additional copies would have to be justified to and cleared
by the Office of Management and Budget. The flexibility in the number
of applications which NTIA can request is, therefore, extremely limited.
For the first time in FY 1996, NTIA requested three copies of an application
to permit concurrent processing of the applications by NTIA reviewers
and thereby enable issuance of timely awards.
APTS expressed its concern
about NTIA's proposal to delete from the rules the specific showings required
of applicants and to specify those requirements in the application form
in the bid solicitation. APTS indicated that, while the deletion of this
information is intended to give NTIA flexibility to reduce application
burdens, the proposal can create uncertainty as to the showing required
of applicants. APTS continued that the flexibility conferred would also
permit NTIA to impose additional burdensome requests without affording
public broadcasters the opportunity to comment meaningfully.
NTIA appreciates the concerns
expressed by APTS. It was NTIA's intention in removing the specific requirements
from the Rules to give NTIA the flexibility of future reductions in requirements
on the application form to lessen the burden on applicants. We believe
that this flexibility will be beneficial to applicants in several ways.
First, it will permit NTIA to lessen the burden on applicants during the
FY 97 grant cycle while using the existing PTFP application form. These
improvements will include several changes supported by APTS which are
contained in the proposed rules, such as the proposal to modify the requirement
that an applicant report changes in its board structure and to require
applicants to provide only summaries of their application to the State
Single Point of Contact rather than complete copies of the application.
Second, flexibility in these final rules will permit NTIA to further lessen
the burden on applicants through modification of the PTFP application
form in 1997 without having to promulgate another set of accompanying
PTFP rules.<12> Promulgation of a set of PTFP
rules is a lengthy administrative process and one that cannot be done
every year. The average PTFP rules are in force for a period of three
to five years. Therefore, removing the specific application requirements
from the final rules also gives NTIA the flexibility of continually making
improvements in lessening applicant burdens during the periods between
formal revisions of the PTFP rules. NTIA supports a continuing dialog
with members of the public telecommunications community to improve the
responsiveness of the PTFP. PTFP continually solicits comments on the
application process from those who are sent the application packet, both
from applicants and those who choose not to submit an application.<13>
NTIA will also discuss application guidelines with members of NTIA's National
Advisory Panel of Public Broadcasting Organizations at its annual meetings.
APTS felt that NTIA's proposal
could create uncertainty as to the showing required of applicants since,
"the solicitation of bids is typically published with only a few
weeks notice before applications are due.<14> NTIA has typically published formal announcements
of the acceptance of applications approximately 3 months before the closing
date.<15> We believe that this is sufficient
time for preparation of applications since the major objectives and priorities
of the program are well known and have not significantly changed in these
final rules. PTFP distributes a detailed set of Guidelines to assist applicants
in the preparation of applications, and applicants may contact PTFP for
technical assistance in the preparation of application during the period
prior to the application deadline.
APTS also commented on the
financial responsibility requirements contained in §§2301.8(g),
(h) and (i). APTS believes that the financial responsibility requirements
"confers virtually unfettered discretion on NTIA as to which applicants
will be subject to the request for data," "the scope of the
inquiry is astonishingly broad," can be "potentially burdensome"
and contain "vague provisions".<16>
and (h) are based on the "Department of Commerce Financial Assistance
Name Check Procedures." This policy has been in effect since 1988,
has served as a reasonable attempt to protect the public interest, and
has not proven to be overburdensome. NTIA does not intend to use the "responsibility
determination" process in a punitive or detrimental manner against
potential award recipients. As an agency which has been provided authority
to make discretionary decisions for the Federal Government, it is reasonable
for NTIA to make every effort to determine that potential award recipients
are responsible. To the extent possible, the regulation is intended to
ensure that there are no matters facing potential award recipients that
might significantly and negatively impact on their business honesty, financial
integrity and/or ability to successfully perform the proposed grant activity.
We think that the trust vested in NTIA demands that it makes a reasonable
attempt to protect the public interest by trying to ensure that it deals
with only responsible parties. Therefore, no changes have been made to
Based on "a reasonable
person" standard which is employed throughout these regulations,
we feel that §2301.8(i)
is clear. Unsatisfactory performance essentially means that one does not
substantially achieve his or her project goals and objectives. As project
goals and objectives vary from one project to another, unsatisfactory
performance must, to some extent, be situationally determined. It would
be unreasonable to attempt to precisely define "unsatisfactory performance"
in the regulation for all projects, all circumstances and for all times.
APTS and RMCPB commented on
NTIA's addition of a phrase regarding "complete equipment failure"
to this section on applications resulting from catastrophic damage or
emergency situations. RMCPB characterized the proposal as being "a
box of Pandoras". APTS warned that NTIA may inadvertently create
a loophole in the funding priorities by creating incentives for applicants
to claim that the imminent loss of an essential piece of equipment warrants
an immediate grant. APTS continued that unlike a catastrophic loss, a
clearly defined unanticipated event, the complete loss of essential equipment
lacks any clearly defining moment. APTS concluded that, in many cases,
the "loss" may have been avoided by a timely request for funding.
NTIA believes that APTS and
RMCPB raise valid concerns, which are shared by the Agency. NTIA's intent
in making this proposal was to be able to quickly respond to the emergency
of a complete failure of basic equipment essential to a stations continued
operation, whether that failure was caused by natural or manmade causes.
This section is limited to equipment essential to a station's continued
operation. We do not believe this section would include most program origination
equipment but rather would be applicable to equipment such as transmitters,
tower, antennas, STL's or similar equipment which, if the equipment failed,
would result in a complete loss of service to the community. For example,
NTIA recently received an emergency request from an applicant regarding
the strengthening of a tower. A recent engineering study on the tower
indicated that the tower was dangerously overloaded and in danger of imminent
collapse. NTIA felt that it was both prudent and good business sense to
make the modest investment in strengthening the tower on an emergency
grant basis rather than risking loss of service to a community and incur
the greater expense of replacing a collapsed tower.
NTIA will, therefore, retain
the originally proposed language in this section but will add clarifying
language in regarding the nature of the equipment eligible for emergency
applications, as well as language indicating that an applicant claiming
complete equipment failure must document the circumstances of the equipment
failure and demonstrate that the equipment has been maintained in accordance
with standard engineering practice.
NPR and RMCPB supported NTIA's
proposal in §2301.11
that the applicant's notification to the SPOC,
the FCC and the state
telecommunications agencies need only be a summary of the application,
rather than the full application required in prior PTFP Rules. Both organizations
cautioned, however, that if selecting/compiling excerpt materials is too
complicated, it will be an added burden on applicants instead of a benefit.
RMCPB noted that the New Mexico Commission on Public Broadcasting only
needs to review pages 1 and 2 of the PTFP application form and the narrative.
NTIA's intent in proposing that applicants submit a summary of the application
rather than the full application to the SPOC and other appropriate agencies
was intended to reduce the paperwork burden on applicants. We did not
intend this summary to be a burdensome exercise and the information suggested
by RMCPB appears to be reasonable notification. In making notification
to the appropriate agencies, applicants should make clear that additional
information regarding their PTFP application is available upon request.
Future application materials will provide guidance as to what should be
included in the summary to provide adequate notification to the requisite
agencies while reducing the notification burden on all applicants.
NTIA is making two revisions
to this section to clarify internal procedures in the selection process
for the public. At §2301.18(a)
and the new §2301.18(b),
we have added language which clarifies that the PTFP Director presents
recommendations to the OTIA Associate Administrator for review and approval
prior to their submission to the NTIA Administrator. We have also clarified
in the new §2301.18(a)(4)
that NTIA may consider in the selection of a grant recipient whether the
applicant has any current NTIA grants. This provision recognizes that
in some instances the presence of a current NTIA grant is relevant in
the decision to make a new award and does not prohibit the award of new
grants to current grant recipients.
Restatement of Existing Policies
We are also taking this opportunity
to restate several long-standing PTFP policies which were published in
the preambles of previous PTFP rules or as a separate policy statement.
The following policies remain in effect:
Applicants who are eligible
for a §501(c)(3) exemption from the IRS or the equivalent exemption
from the Commonwealth of Puerto Rico must submit a copy of that exemption.
Applicants who are ineligible for §501(c)(3) exemption but who can
demonstrate nonprofit status by showing an applicable State tax exemption
will be considered on a case-by-case basis. They must submit: (a) evidence
of their State tax-exempt status; (b) citation to, and a copy of, the
State statutory provisions governing that exemption; and (c) a brief statement
explaining why they lack a §501(c)(3) exemption. (Fed. Reg. Vol.
44, No. 104, p. 30899)
which becomes obsolete before the end of the ten-year period of Federal
In the case of equipment which
becomes obsolete or wears out before the ten-year period of Federal interest
expires, we will permit the trade-in or sale of the equipment and application
of the remaining portion of the ten-year period to the new equipment.
(Fed. Reg. Vol. 44, No. 104, p. 30910)
In preparing the narrative
portions of its application, each applicant should state under which priority
it desires NTIA to consider its application. In doing so, each applicant
makes sure that its application contains sufficient documentation to justify
its qualification under the selected priority. NTIA will then evaluate
the application with the selected priority unless the Agency determines
that the priority selected by the applicant is not supported by the documentation
provided. Each applicant will be notified of any change in the priority
under which its application is to be considered. Such notifications will
be in writing and will not be subject to appeal. (Fed. Reg. Vol. 47, No.
228, p. 53653)
of Deferred Applications
The Administrator retains the
discretion to award grants to deferred applications at any time where
the Administrator can determine with reasonable certainty that the particular
project is exceptionally meritorious (on the basis of the Agency's preliminary
determination of all other applications within the priority) and that
the Agency would fund the project after completing the evaluation of all
the applications in the priority (on the basis of the Agency's prior experience
in making grants.) Under this process, the Agency will be able to fund
applications that the Agency had deferred in the prior year because of
technical problems (such as the inability to obtain the necessary FCC
authorizations) which have since been eliminated. (Fed. Reg. Vol. 47.
No. 50, p. 11232.)
for Salary Expenses
NTIA regards its primary mandate
to be funding the acquisition of equipment and only secondarily the funding
of salary expenses, even when allowed by law. Moreover, NTIA notes that
the competition for PTFP funding remains intense. To ensure that PTFP
monies are distributed as effectively as possible in this competitive
atmosphere, NTIA must weigh carefully its support for any project cost
not directly involved with the purchase of equipment.
Therefore, NTIA generally will
not fund salary expenses, including staff installation costs, pre-application
legal and engineering fees, and pre-operational expenses of new entities.
NTIA will support such costs only when the applicant demonstrates that
exceptional need exists or that substantially greater efficiency would
result from the use of staff installation instead of contractor installation.
As regards the installation
of transmission equipment, NTIA strongly favors the use of either manufacturer
or professional contractor personnel and commonly funds these costs. NTIA
believes that the value of transmission equipment and the complicated
nature of its installation require expertise beyond that normally found
on station staffs.
NTIA will rarely support requests
for assistance for the installation of studio and test equipment, whether
that installation is by staff or by contract employees. Such installation
is normally of minimum difficulty, and the associated installation costs
should be absorbed in the recipient's normal operating budget. Again,
NTIA will take into account demonstrations of exceptional need. (Fed.
Reg. Vol. 56, No. 226, p. 59172)
Applicants are advised that
on December 22, 1995, NTIA issued a notice and an amendment to the PTFP
regulations in the Federal Register on its policy with regard to sectarian
activities. Under NTIA's prior policy, NTIA funds could not be used for
any sectarian purposes. Under the revised policy, while religious activities
cannot be the essential thrust of a grant, an application will not be
ineligible where sectarian activities are only incidental or attenuated
to the overall project purposes for which funding is requested. (60 Fed.
It has been determined that
this rule is not significant for purposes of Executive Order (E.O.) 12866.
A Regulatory Flexibility Analysis
is not required under The Regulatory Flexibility Act (5 U.S.C. §601
et seq.) because the rules were not required to be promulgated
as proposed rules before issuance as final rules by §553 of the Administrative
Procedures Act (5 U.S.C. §553) or by any other law. This rule does
not contain policies with Federalism implications sufficient to warrant
preparation of a Federalism assessment under Executive Order 12612.
The Department has determined
that these rules will not significantly affect the quality of the human
environment. Therefore, no draft or final Environmental Impact Statement
has been or will be prepared. Notwithstanding any other provision of law,
no person is required to respond to nor shall a person be subject to a
penalty for failure to comply with a collection of information subject
to the requirements of the Paperwork Reduction Act unless that collection
of information displays a currently valid OMB Control Number.
The Office of Management and
Budget has approved the information collection requirements contained
in these rules pursuant to the Paperwork Reduction Act under OMB Control
Nos. 0660-0003, 0660-0001 and 0605-0001. The public reporting burden for
the application requirements vary from 16 hours to 200 hours with an estimated
average of 125 hours per application, including associated exhibits; the
reporting and record keeping burden for the grant monitoring reports vary
from 1 to 24 hours depending on the respective requirement; and, the reporting
burden for the name-check form (CD-346) is estimated at 15 minutes. These
estimates include the time for reviewing instructions, searching existing
data sources, gathering and maintaining the data needed, and completing
and reviewing the collections of information. Send comments regarding
these burden estimates, or any other aspects of the collections of information,
including suggestions for reducing this burden, to the Office of Policy
and Coordination and Management, NTIA, U.S. Department of Commerce, Washington,
D.C. 20230; and to the Office of Information and Regulatory Affairs, Office
of Management and Budget, Washington, D.C. 20503 (Attention: NTIA Desk
(Catalogue of Federal Domestic
Assistance No. 11.550)
List of subjects in 15 CFR
Administrative procedure, Grant
programs -- communications, Reporting and recordkeeping requirements,
See 47 U.S.C. 309-393, and 397-399b (1994), The Communications Act of
1934, as amended. Unless otherwise noted, all statutory citations are
to title 47 of the United States.
Comments were submitted by the following organizations: Association of
America's Public Television Stations (APTS); Indiana University Radio
and Television Services, operator of WFIU-FM/WTIU-TV (IURTS); the National
Federation of Community Broadcasters (NFCB); Public Broadcasting Service
(PBS); and the Rocky Mountain Corporation for Public Broadcasting, Albuquerque,
See NPRM at 27230.
§390 of the Act, which is included at §2301.1
of these final rules.
of RMCPB, p.3.
and NPR specifically supported a common set of criteria for evaluation
of planning and construction applications and NFCB and RMCPB supported
the common evaluation criteria by reference.
See NPRM at 27230.
APTS opposed giving the criteria different weights, indicating it was
not clear which criterion was more important than the others. APTS also
felt NTIA had already decided what factors it considers most significant
by establishing priorities for grants and that applicants would tailor
their proposals to match the weighting.
Comments of National Public Radio, p. 3.
See NPRM at 27230. The only organization not addressing this issue was
See Tilton vs. Richardson, 403 U.S. 672 (1971).
The current PTFP application form expires October 1, 1997. The new form
will be adopted after public comment in conjunction with Office of Management
and Budget review pursuant to the Paperwork Reduction Act, 44 U.S.C. 3501.,
See for example the "Special Note" on the inside back cover
of the FY 96 PTFP Guideline for Preparing Applications.
Comments from APTS, p. 4.
For fiscal year 1996, the Department of Commerce did not receive a final
appropriation unitl April 26, 1996. See Department of Commerce
and Related Agencies Appropriations Act, 1996, P.L. 104-134. This, in
turn, left PTFP with five months to review, evaluate and make awards.
Comments from APTS, P. 5-7.
Source: U.S. Department
National Telecommunications and Information Administration
Office of Telecommunications and Information Applications
Posted: 08 Nov 96