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Further Statement of Program Policy
Federal Register / Vol. 56, No. 226 / Friday, November 22, 1991 / Rules and Regulations / 59185

DEPARTMENT OF COMMERCE
National Telecommunications and Information Administration

15 CFR Part 2301
[Docket No. 91 0635-1245]

Public Telecommunications Facilities Program (PTFP);
Policy Statement


AGENCY: National Telecommunications and Information Administration (NTIA), Commerce.

ACTION: Further Statement of Program Policy.


SUMMARY: This further statement of Program Policy clarifies fund ing considerations for the Public Telecommunications Facilities Program (PTFP). In 56 FR 38004, published August 9, 1991, the National Telecommunications and Information Administration (NTIA) an nounced further refinements of PTFP policies and requested public comment on the proposals. NTIA has reviewed the comments submitted as a result of the notice and is now responding to the comments and issuing the Further Statement of Program Policy.

EFFECTIVE DATE: December 23, 1991.

FOR FURTHER INFORMATION CONTACT: Dennis R. Connors, Director, Pub lic Telecommunications Facilities Program, NTIA/DOC, 14th Street and Constitution Avenue, NW, Room H-4625, Washington, DC 20230; telephone: (202) 377-1835.


SUPPLEMENTARY INFORMATION: In response to the Proposed Further Statement of Program Policy [56 FR 38004, August 9, 1991], NTIA received comments from nine different organizations.<1> The State ment encourages the submission of applications seeking to further public educational efforts through the use of broadcast and nonbroadcast public telecommunications. In addition, it assists potential PTFP grant applicants<2> in evaluating the prospects for obtaining funding for certain projects by summarizing NTIA's programmatic concerns and the legal considerations affecting the funding of three types of projects:

(1) Educational and instructional projects;

(2) Expansion or improvement of nonbroadcast services; and

(3) Broadcast improvement and augmentation projects.

The Statement provides guidance to potential grant applicants in determining whether to apply for PTFP funds, and it supplies a uni form response to frequently arising questions about the competi tiveness of certain applications.


RESPONSES TO THE COMMENTS ON THE PROPOSED FURTHER STATEMENT OF PROGRAM POLICY

Educational and Instructional Projects

The comments received generally supported "NTIA's encourage ment of PTFP applications that would assist educational and in structional projects"<3> and praised the Agency "for affirming its long-standing commitment to educationally oriented goals".<4> At the same time CPB pointed out that, "no other institution...does more than public broadcasting to service the Nation's daily needs for timely, thoughtful and in-depth educational programming and news and information programming on issues which are vital to the general population and workforce."<5> APTS and PBS urged NTIA to "be fully aware of the extent of educational and instructional programming currently provided by the nation's public broadcasting stations"<6> and provided a fairly detailed summary of that "ex tent".<7>

NTIA is very aware of "the unique capability of a broadcasting service dedicated to public service and education."<8> NTIA hopes in formulating and publishing this policy statement that public broadcasters will be stimulated to develop a number of projects with an educational component to further their contributions to education.

Some public broadcasting organizations expressed concern that the Agency's encouragement of applications to assist educational and instructional projects would result in less NTIA support for public broadcasting projects.<9> In the Statement, NTIA tried to emphasize the important role of public broadcasting in providing educational services, and it takes this opportunity to state clearly that it has no intention of abandoning its commitment to public radio and television. It anticipates that the rate and ratio of funding of high-priority broadcast and nonbroadcast projects will remain approximately the same as it has been in the past. NTIA's intent in issuing this Policy Statement is to "encourage the submission of more applications focusing on educational objectives"<10> from both broadcast and nonbroadcast applicants.

The commenters focused their responses on the educational pol icies put forth in the proposal. These policy initiatives may be broken into three broad categories -- public availability and pro ject purposes, technology, and interactivity.

Public Availability and Project Purposes

In the Statement, NTIA pointed out its obligation to "look only to projects offering instruction to the public," excluding "from its purview televised coursework that is both produced and received within the confines of either a school building or a single campus," contrasted with a "distance learning project" offering "students expert instruction in an advanced subject while they remain hundreds or thousands of miles from the instructor."<11> The Statement also identified several factors that might make a project more highly competitive for funding, such as whether it:

  • reaches a large number of potential students, especially those in remote, isolated areas;
  • reaches students who clearly would never receive the course work offered without the project;
  • reaches a high number of potential beneficiaries;
  • meets some special need; e.g. a state mandate to raise sub stantially the educational achievement level of all students, in cluding those in isolated areas; and
  • assists the nation's international competitiveness.<12>

Some commenters read these factors as a voluntary curtailment of NTIA's discretion to fund educational projects that serve a loc al, as opposed to a regional or national, audience.<13> These par ties were concerned that use of phrases such as "a large number of potential students", or "far ranging course distribution system"<14> indicated a bias in favor of nationally distributed educational programming.<15> This is not NTIA's intention.

NTIA recognizes that the nation's educational system is based upon local schools governed by local boards of education. In addi tion, the myriad and positive contributions that local public radio and television stations make to the education effort, no matter what the grade level, is a fact well known to NTIA. The factors that NTIA listed in the Statement were not intended as dispositive to the final funding decision. Rather they were intended to delineate some of the parameters within which PTFP may consider applications with educational benefits. Therefore, NTIA will continue to maintain its discretion in deciding which types of project to fund. Whether a project promises to reach the entire nation or a portion of a single school system will not be the only factor considered when evaluating an application. NTIA also will be aware of CPB's stress on the advantages of supporting "services principally directed at the general at-home audience population that are also usable in the classroom" and be mindful that "the long-term educational benefits of its investment...will be defined by the number of users of the services, the frequency and variety of educational uses, the special contributions to education which the services can provide, the effectiveness and uniqueness of the services, and the long-term sustainability and usefulness of the services."<16>

Technology

As a general matter, NTIA cannot bind itself to favor any one specific technology over another. The language of the statute is clear in its intent that all types of technology, whether broadcast or non-broadcast, are to be considered for funding.<17> While agree ing that "expansion of public radio into unserved and under-served areas continues to be a Congressional priority,"<18> NTIA cannot agree with NPR's contention that Congress intended PTFP to fund nonbroadcast technology "simply as an alternative delivery mecha nism for public television and radio broadcast programming".<19>

Federal support for public broadcasting began in 1962 with passage of the Educational Television Facilities Act.<20> In 1978 responsibility for this program was transferred to NTIA, and the Program was renamed the Public Telecommunications Facilities Program.<21> The Public Telecommunications Financing Act of 1978 also substantially amended the substance of the PTFP's authorizing statute.<22> In the 1978 Act's Declaration of Purpose, language referring to public broadcasting was struck and the term "public telecommunications facilities" inserted.

PTFP has funded projects using nonbroadcast technology ever since NTIA began administering the grant program. These funding decisions were based on NTIA's interpretation of PTFP's authorizing statute.<23> Among the projects funded were Instructional Television Fixed Service (ITFS) and nation-wide satellite distribution systems for specialized instructional programming.

NTIA's interpretation that PTFP's statute permits the funding of nonbroadcast technologies has remained constant for thirteen years and three amendments to the statute.<24> It is significant that since 1978, Congress has amended the statute several times and has not changed the agency's interpretation of the statute.<25>

Telecommunications equipment is continuously changing and im proving and, as CPB urged, NTIA will monitor "upcoming advances and opportunities in the broadcast systems it has supported."<26> NTIA will be alert to the possibilities of such promising developments as digital audio broadcasting (DAB) and high definition television (HDTV) as they are developed, get acceptance from broadcasters and the public, and become important in providing public telecommunica tions services.

There are two distinct opinions in the comments received as to the efficacy of "broadcasting" versus "narrowcasting" to deliver educational programming.<27> Parties on both sides of the issue agreed, however, that numbers alone (e.g., establishment of a reach threshold) should not be NTIA's sole consideration.<28> The Agency states, therefore, that its policy is to consider the number of potential beneficiaries from a given project, but stresses that this is only one consideration.

Based on the foregoing discussion, NTIA announces the follow ing policies with regard to the technology used by applicants pro posing to extend education through public telecommunications:

  • There will be no automatic prejudgments based merely on the type of technology proposed.
  • PTFP is authorized to extend the reach of public tele communications and will remain alert to promising new technologies.
  • NTIA declines to establish a reach threshold by which to measure the efficiency of a proposal.

Interactivity

Among the variety of other issues that NTIA thought commenters might view as important to judging the merits of a particular pro posal was the one of interactivity -- that is, whether one-way sys tems with no possibility of student feedback should be considered comparable to two-way systems.<29> Those who commented were in agreement that interactivity is not amenable to a strict defini tion, and that such a definition is not desirable.<30> The comment ers felt that applicants are the appropriate parties to address this issue because only they can determine whether interactivity is an essential component of a project.<31> NTIA agrees with this proposition.

Further, APTS and PBS suggested several factors that NTIA hopes applicants will address in any proposal to use interactive technology in a project. These include, but are not limited to, the educational background and motivation of the target audience, the nature of the organization and content of the course, the age of the target audience, the preparation and effectiveness of the instructor, the training of receiving site personnel, and the set ting in which courses are received.<32> The burden of justifying interactivity, with its added expense and complexity, is on the applicant. NTIA will consider such proposals, if otherwise eligible, but does not believe interactivity is a prerequisite for an educational project to be funded.

Review

CPB recommended that NTIA "revisit these policy issues again in approximately five years".<33> The Agency tries to monitor the field on an on-going basis so as to be prepared for policy changes that may be needed, and it will continue to do so. NTIA expects to propose and seek comment on revisions whenever it seems necessary to help PTFP carry out its mission.

Expansion or Improvement of Nonbroadcast Services

NTIA noted in the Policy Statement that the PTFP's authorizing legislation prohibits the Agency from awarding grants that would result in the improvement of already-operating nonbroadcast enti ties. The Statement then asked for comments on six major issues that have arisen over the years as the program attempted to apply this Congressionally-imposed limitation to diverse nonbroadcast applications.

Three commenters addressed this element of the Statement. APTS and PBS approved PTFP's present approaches, saying, "The Joint Commenters believe that the current policies and practices utilized by NTIA to classify nonbroadcast equipment requests have worked well and should be continued..."<34>

The other two commenters -- Mercer County Community College and the New York Network/State University of New York -- advised PTFP to alter its policies on this matter. MCCC explicitly suggested that the policy prohibiting the funding for the improve ment of operating nonbroadcast entities be changed so as to allow such funding.<35> In response, NTIA notes that the prohibition in question is statutory<36> and cannot be altered except by legislative action.

The New York Network submission emphasized the extraordinary diversity of telecommunications delivery systems that has been developed over the past 20 years and argued that "NTIA's policies must reflect this amazing migration of technology".<37> The submis sion recommended that, to be cost effective in making its funding decisions on such projects, NTIA should apply as one criterion the record of the applicant's demonstrated achievement in distance learning: "The rules should... allow those who are the most active and innovative in producing Distance Education to be eligible for facilities funding" and NTIA should "tap those organizations who are currently contributing with their own resources. The use of PTFP funds should provide for the extension of these existing ef forts and not contribute to a duplication of facilities where there may be no actual sustaining educational mandate or revenue source."<38>

NYN continued this theme in its comments on the Statement's Issue One, which asked to what extent an applicant's pre-existing activities should affect the eligibility of a nonbroadcast application. NYN said, "The possession of a single piece of advanced communications technology should not cause unduly harsh limitation on the ability to apply for funds especially where such hardware will directly serve an educational entity and its popula tion."<39> In stating this, NYN apparently had in mind primarily the acquisition of multiple satellite receive-only earth stations at sites that receive a vast amount of satellite-delivered pro gramming.

NYN also commented on NTIA's Issue Four ÄÄ whether, in a ser vice expansion project, the applicant should be permitted to use PTFP funds to acquire production equipment if it is to replace leased, borrowed, or inferior equipment. Noting that NTIA's interpretation would inhibit NYN's ability to provide the extensive programming that it might wish over its widespread and sophisticat ed system, the Network stated, "To extend our services to more locations may at some point require an increase in the capacity to support those needs and hence the addition of similar equipment. Yet under the strict application of existing NTIA rules such an application would not be permitted."<40>

The clear trend of all these comments is towards NTIA's fund ing applications to improve the facilities of already-operating nonbroadcast entities. As we noted above and discussed fully in the Statement, the issue is governed by statute, and any change in the policy may be brought about only by Congressional action. NTIA reaffirms, however, that to the extent that a proposed project would result in the extension of a nonbroadcast entity's geographic scope or bring its service to a new and distinct audience, PTFP may accept the application as eligible for funding consideration. NTIA agrees with NYN's suggestion that applicants' demonstrated achievement in distance learning is relevant in the evaluation of an application and encourages applications to address this issue.

Finally, NYN urged NTIA to recognize the significance of digi tally compressed video as an vehicle for transmitting vast quanti ties of programming: "The NTIA PTFP policies should allow the up grade and expansion of non-broadcast networks and facilities to adopt this new more efficient technology."<41>

As noted in the earlier discussion on technology in the section on Educational and Instructional Projects, NTIA will monitor developments in telecommunications technology. NTIA re- emphasizes that it considers all established telecommunications technologies to be eligible for funding. This includes equipment to allow the use of digitally compressed video. There is, of course, one major limitation: the proposed use of the technology in question must be in compliance with PTFP's Congressionally mandated goals and objectives. If -- but only if -- the "upgrade and expan sion of non-broadcast networks and facilities" in question would result in the expansion of the applicant's service in a manner con forming to the dictates of PTFP's authorizing legislation, then the application would be considered eligible for program funding.

Broadcast Improvement and Augmentation Projects

Since 1987 NTIA's policy on local matching requirements has been to fund projects providing first service to a geographic area at up to 75% of the eligible project costs, with a presumption of 50% Federal funding for equipment replacement projects. The policy has also been that NTIA would consider showings of extraordinary need, such as regional economic problems or emergency situations, as justification for the submission of a replacement project appli cation for more than 50% Federal funding. In the Policy Statement, NTIA extended the presumption of 50% Federal funding to broadcast improvement and augmentation projects with the same provision for applicants to demonstrate extraordinary need.

No comments were received on extending the policy, but APTS and PBS "believe that the same matching standard should be appli cable both for new service and transmitter replacement applica tions. Both should be entitled to 75/25% grants or both should be entitled to 50/50% grants. To do otherwise jeopardizes the con tinued service of existing stations".<42>

As explained in the Statement, NTIA established the 50/50% policy in 1987 so that PTFP could participate in a greater number of replacement projects by making the available funds go further. This approach enabled NTIA to award $2,688,217 in PTFP grants that would have gone unfunded in 1991 if all transmitter grants had been funded automatically at 75%.

It has been the Agency's experience that this policy has posed no problem or threat for stations since any applicant in an especi ally severe economic situation could seek funding at 75/25%. A number of such submissions in fact have been made and funded.<43> This fact gives NTIA confidence that there is no reason automati cally to fund transmitter replacement at 75% and that continuing the 50/50% policy for equipment replacement projects and extending it to broadcast improvement and augmentation projects will not ad versely affect any station.


STATEMENT OF PROGRAM POLICY

The National Telecommunications and Information Administra tion, (NTIA), U.S. Department of Commerce, is charged with admini stration of the Public Telecommunications Facilities Program (PTFP). In order to assist potential PTFP grant applicants to evaluate the potential for obtaining PTFP grant funding for certain projects, NTIA summarizes below its programmatic concerns and the legal considerations affecting funding of three types of projects:

(1) educational and instructional projects;

(2) projects to expand or improve nonbroadcast services; and

(3) broadcast improvement and augmentation projects.

Immediately below, we state our policies for each type.

Educational and Instructional Projects

Introduction

Public education is an important element in any country's com petitive arsenal, and the United States has come to recognize that a well-educated work force is a necessity if it wishes to maintain its high standard of living. In its administration of the PTFP, NTIA has sought to support educational projects through its broad- based assistance for public broadcasting services and by funding nonbroadcast projects offering specific educational or instruc tional benefits.

NTIA would like to encourage the submission of more applica tions focusing on educational objectives, and believes that it has sufficient latitude within its current legislative and regulatory mandate to fund a wide range of both broadcast and nonbroadcast projects of this nature. NTIA already has a funding category called Special Applications.<44> This category is related to, but separate from, the PTFP funding priorities. Important educational and instructional projects -- whether broadcast or nonbroadcast -- can be given preferential consideration, in the Administrator's discretion, within this category. In this policy statement NTIA identifies factors that will be relevant in exercising its discre tion to fund educational projects.

Background

NTIA is authorized to use PTFP funds to support the purchase of telecommunications equipment to be used by public telecommunica tions entities to provide educational programming to the public.<45> NTIA has exercised that authority to fund educational projects us ing both broadcast and nonbroadcast technologies.

In the field of broadcast instruction, PTFP funds are consis tently made available to noncommercial television and radio sta tions, the former of which are generally stations affiliated with the Public Broadcasting Service (PBS). Typically, such PTFP grants have been awarded to local public broadcast stations providing edu cational services as part of their programming day. In some cases, those services are directed to the school population, sometimes to the public at large.

With respect to nonbroadcast instruction, NTIA has awarded grants to support the activation and extension of satellite net works to distribute instructional programming to a large geograph ical area, often nationwide. The networks so funded have usually been composed of entities at the college or university level and have offered coursework in advanced fields, such as engineering, science, math, agricultural science and management.

NTIA also has awarded grants to nonbroadcast projects to es tablish local instructional television networks. The technology involved usually has been microwave, utilized as Instructional Tel evision Fixed Service (ITFS) systems. The entities funded have included regional school systems, state telecommunications organi zations, vocational schools, and colleges and universities. Such systems offer many channels of instruction and usually reflect the educational concerns of a community or relatively small region. Satellite networks and ITFS system transmissions are both usually one-way video with a telephone line audio interconnection for question-and-answer periods.

As summarized above, PTFP's own grant history illustrates that education may be brought to citizens in many ways. Of greatest current interest to NTIA is the concept of "distance learning", which NTIA interprets to mean the use of telecommunications to make instruction available to students at locations apart from the teacher.

Funding Considerations

To further its statutory mandate to advance educational goals,<46> NTIA believes it is timely to reemphasize that education is a significant PTFP program purpose within the meaning of its Rules and to amplify how the funding criteria set forth therein may be applied to such project proposals.<47>

Public Availability: In seeking to define its role in providing funding support, NTIA is attentive to certain threshold considerations. The first is the requirement, arising from PTFP's authorizing statute, that NTIA look only to projects offering instruction "to the public".<48> Thus, NTIA will exclude from its purview televised coursework that is both produced and received within the confines of either a school building or a single campus. Such a project would be in contrast to a distance learning project -- e.g., a communications satellite network -- which would offer students expert instruction in an advanced subject while they remain hundreds or thousands of miles from the instructor.

Technology: Secondly, as indicated above, NTIA's experience is that education can be provided effectively to distant students through both broadcast and nonbroadcast technologies, and PTFP's legislative authority allows funding of projects within both cate gories.<49> Accordingly, NTIA will not automatically favor one technology over another with respect to educational project applications, but rather will consider the services to be rendered and the efficiency of the technology proposed.

Project Purposes: Given the extraordinary diversity within the field, a project will be considered more highly competitive for funding if it promises to accomplish one or more of the following objectives:

  • reach a large number of potential students, especially those in remote isolated areas, or, reach a high number of potential beneficiaries (an example of the latter might be the activation of a series of satellite transmit earth stations [uplinks] to form the nucleus of a far-ranging course distribution system);
  • reach students who clearly would never receive the course work offered without the project;
  • meet some special need; e.g., a state mandate to raise sub stantially the educational achievement level of all students, in cluding those in isolated areas; and
  • assist the nation's international competitiveness.

NTIA also regards as particularly relevant the participation of minorities and women in providing instructional programming or in receiving it.<50>

These factors are not rigid criteria, nor will they supplant the existing funding criteria and priorities.<51> Like all appli cations, educational/distance learning applications will continue to be evaluated on a case-by-case basis, and other factors might raise the competitiveness of any given application.

Further, NTIA will not make prejudgments about a variety of other issues that might be viewed as important in judging the merits of a particular proposal. For example, NTIA is not prepared to issue a definitive opinion on the question of whether one-way video broadcasting, without the possibility of student feedback, should be considered comparable to more sophisticated two-way educational systems. In assessing applications relating to educational or instructional projects, NTIA will expect the applicant to demonstrate the merits of whichever type of system -- be it one-way or interactive -- is proposed. NTIA also assumes that such applicants will show that alternative systems could not be anticipated to work as well as the proposed method. In making their case, NTIA urges educational/instructional applicants to consider such concerns as the educational background and motivation of the target audience, the nature of the applicant organization, the content of the relevant coursework, the age of the target stu dents, the preparation and effectiveness of the faculty, the training of the staff at the receive sites, and the setting in which the courses are received.

Similarly, NTIA makes no judgment as to whether a course has to be "live" to count as effective distance learning. Nor will NTIA stipulate what sort of equipment it will consider eligible for funding in educational projects.

Finally, although NTIA will continue to be interested in the number of students the proposed educational programming will reach, the Agency is not ready to impose any reach threshold; i.e., a designated minimum number of students expected to receive the programming below which NTIA will not consider an application project truly competitive. Also, being alert to the singular role that the local community has in United States education, NTIA will not automatically elevate a proposed national-distribution system to a competitive position above that of a strictly local system just because of the presumed greater "reach" of the former. NTIA believes that the fears of some local systems that they will be crowded out by bigger, more powerful national systems are exagger ated. The Agency notes that often the presence of a nationally- distributed service strengthens a local system simply by allowing the latter to enrich its curriculum through the addition of the nationally-fed coursework. Nonetheless, NTIA realizes that all types of distribution systems -- local, state, regional, and national -- have their merits. NTIA will, therefore, look at each application in turn to determine, case by case, which most deserve PTFP support.

Improvement of Nonbroadcast Telecommunications Services

Every year NTIA receives applications that raise the question of whether the applicant is proposing an improvement of an already operating nonbroadcast facility and, thus, whether the project is eligible for PTFP funds pursuant to statutory guidelines.<52> In contrast to the authority granted to fund improvements of broadcast projects,<53> the statute limits funding of nonbroadcast projects to those designed for the provision of

new telecommunications facilities to extend service to areas currently not receiving public telecommunications services;...[or] the expansion of the service areas of existing public telecommunications entities.<54>

NTIA interprets the phrases "extend service to areas" and "expan sion of the service areas" to mean an enlargement of geographic scope or a targeting of a new and distinct audience for the nonbroadcast service in question. Nonbroadcast applications submitted by operating entities that do not expand the geographic scope or target a new and distinct audience will continue to be ineligible for funding. Complexities constantly arise, however, in applying the statutory text to specific circumstances. NTIA has identified six such issues and states its position on each.

Issue One: To what extent do an applicant's pre-existing activities affect the eligibility of a nonbroadcast application? Some PTFP nonbroadcast applicants have had some previous telecommu nications experience. For example, many colleges have a small studio for producing instructional materials or a satellite downlink, for on-campus distribution of programming. Should the possession of such facilities disqualify an applicant from obtaining PTFP funds for the establishment of a new nonbroadcast entity on the grounds that the new activity is solely an "improvement" outside the scope of NTIA's funding authority?

Of relevance here is the Act's formal definition of a "noncom mercial telecommunications entity"<55> -- an organization which dis seminates audio or video noncommercial educational, instructional or cultural programming to the public by nonbroadcast means, such as coaxial cable, optical fiber, satellite, microwave, or ITFS transmission. NTIA believes, therefore, that a vital factor in determining whether an applicant is an already-operating nonbroad cast entity is its ability to distribute programming to the public.

NTIA considers the distribution of programming when confined to either a single building or a single campus to be "closed cir cuit" transmissions and not dissemination of programming to the public. Thus, an organization that possesses only a satellite downlink, or that produces instructional programs not disseminated to the public, is not a noncommercial telecommunications entity as PTFP uses the term. Its PTFP application for nonbroadcast equip ment -- assuming that the equipment would be used to establish a public nonbroadcast service -- would therefore be eligible for con sideration for PTFP funding.

Issue Two: In establishing a new nonbroadcast telecommunica tions entity, may an applicant use PTFP funds to acquire origina tion (production) equipment to replace old or non-standard equip ment owned by the applicant? Sometimes colleges or universities have studio equipment not used for public telecommunications, as that term is discussed in Issue One, above. The existing equipment may consist only of consumer- or industrial-level quality. Occasionally, it is of broadcast-level quality, but obviously obso lete and fit only for closed-circuit purposes.

NTIA insists that all equipment acquired with PTFP funds be of professional broadcast quality.<56> It does so to ensure that the equipment will provide a high quality, reliable service to the pub lic. NTIA also wants to be assured that the equipment purchased will hold up for the full period of Federal interest in it.

Under these circumstances, NTIA believes that it is appropri ate for PTFP to fund new production equipment to replace substan dard equipment as part of a project to establish a new nonbroadcast entity. NTIA also will support the purchase of new production equipment to complement existing equipment -- even if the latter is of broadcast quality -- if the result would be to bring the appli cant's production capability to the minimum recognized standard for broadcast operations.

Issue Three: Must a nonbroadcast telecommunications entity have studio production capability? Some PTFP applicants request funds to establish a production studio for use with an already- operating nonbroadcast dissemination facility. NTIA believes that a nonbroadcast telecommunications entity can acquire and distribute programming without the use of studio production equipment and thus studio production capability is not necessary for the operation of a nonbroadcast entity. While production equipment admittedly would strengthen the entity's service, a request to acquire production equipment in these circumstances would be an improvement and there fore not eligible for PTFP funds.

Issue Four: In a service expansion project, should the ap plicant be permitted to use PTFP funds to acquire origination (pro duction) equipment if it is to replace leased, borrowed, or inferior equipment? Periodically, an already operating nonbroad cast entity proposes to expand its existing service area and in cludes in its PTFP application a request for funds to replace ex isting production equipment.

With respect to already operating nonbroadcast entities, NTIA believes that such a purchase would represent an improvement in the applicant's capabilities. Therefore, the portion of the applica tion involving production equipment would not be eligible for PTFP funding. The application could be accepted for consideration, but the only equipment eligible for funding would be that required for expansion of the service area, primarily dissemination and inter connection equipment.

NTIA believes that applications for funds to acquire new pro duction equipment, rather than relying on leased or borrowed equip ment, should also be denied. Customarily, applicants in these sit uations point out that they do not currently own any production equipment and characterize this part of the project as the "estab lishment" or as the "completion of construction" of their nonbroad cast facility. As noted under Issue Three, NTIA believes that a nonbroadcast entity does not require a local production facility in order to provide service to the public. Therefore, an applicant already disseminating nonbroadcast services to the public is not eligible to improve its facility by constructing a production stu dio with the use of PTFP funds.

Issue Five: What is the effect of an applicant's activating a nonbroadcast facility between the closing date and the award date, or the effect of such action on the reactivation of a defer red application? Applicants have submitted proposals which indi cate that a substantial portion of the proposed nonbroadcast pro ject will be activated after the closing date (when the application is due at NTIA), but before the award period start date. The lat ter is the date on which the project period begins, generally eight or nine months after the closing date. NTIA has determined that the legal nature of a nonbroadcast application does not change when, after the closing date, the applicant acquires equipment from the proposed equipment list and begins project operations. In such an instance, the application continues to be eligible during the grant cycle for which it is submitted.

NTIA has also concluded that the activation of a proposed nonbroadcast facility, however, represents a substantial change in the applicant's circumstances. Activation of the facility creates a "public telecommunications entity", and subsequent applications would be eligible for funding only if the project is an "expansion" of service area as outlined above. In the event the original ap plication is not granted by NTIA, the activation of the nonbroad cast facility disqualifies the applicant from reactivating the ap plication for further consideration in subsequent grant cycles.

Issue Six: Should a university that operates a full broadcast standard production facility in one of its colleges be permitted to receive PTFP funds for the establishment of a nonbroadcast produc tion facility in a different college? In the past, NTIA has received requests for nonbroadcast studio equipment in these circumstances, and will look to the following factors to confirm that the project is an eligible service "expansion":

  • dedication of the existing production facility to serving a distinctly different audience from that to be reached by the pro posed facility, with a distinctly different curriculum and, per haps, via a different distribution system;
  • full utilization of the existing production facility for its current purpose and its consequent unavailability for the proposed project;
  • expense of interconnecting the existing production facility with that of the proposed project; or,
  • inaccessibility to the applicant college of the existing production facility.

Broadcasting Improvement and Augmentation Projects

NTIA hereby clarifies its policy on local matching require ments. In its previous policy NTIA stated that it would fund projects to provide first service to a geographic area at up to 75% of the eligible project costs while a presumption of 50% Federal funding would be the general rule for equipment replacement pro jects.<57> The policy further stated that the agency would accept showings of extraordinary need such as regional economic problems in agriculture or other industries or emergency situations as just ification for submission of a replacement application for more than 50% Federal funding.

NTIA established this policy so it could participate in a greater number of replacement projects. NTIA continues to believe that encouraging greater Federal/local partnership in this way, along with an allowance for hardships and special circumstances as previously announced, is an efficient means of administering PTFP funds.

NTIA will now treat broadcast "improvement" and "augmentation" projects in the manner of "replacement" projects that normally are supported only at the 50% Federal funding level. NTIA believes that this addition is consistent with the existing policy and allows for more equitable treatment of applications. Again, a showing of extraordinary need will be taken into consideration as justification for grants of up to 75% of the project cost.

In a related matter, NTIA also takes this opportunity to reaf firm its existing policy on the use of Corporation for Public Broadcasting (CPB) funds to meet the local matching requirements of the PTFP grant.<58> As previously announced, CPB grants are not considered "funds supplied by Federal departments and agencies" within the meaning of the Rules and therefore there is no absolute proscription against the use of such CPB grants.<59>

NTIA continues to believe, however, that the policies and pur poses underlying the PTFP requirements could be significantly frus trated if applicants routinely relied upon another Federally sup ported grant program for its local match. Accordingly, NTIA has limited the use of CPB funds for the non-Federal share of PTFP pro jects to circumstances of "clear and compelling need."<60> It intends to maintain that standard and to apply it on a case-by-case basis in future years.


Other Information

Under Executive Order (E.O.) 12291, the Department must de termine whether a policy statement is a "major" rule within the meaning of Section 1 of E.O. 12291 and therefore subject to the requirement that a Regulatory Impact Analysis be performed. This policy statement is not a major rule because it is not "likely to result in: (1) An annual effect on the economy of $100 million or more; (2) a major increase in costs or prices for consumers, individual industries...; or (3) significant adverse effects on competition, employment, investment, productivity or innovation..." Therefore, preparation of a Regulatory Impact Analysis is not required.

The Regulatory Flexibility Act [5 U.S.C. §601 et seq.] does not apply to this policy statement, because, as explained above, the policy statement was not required to be promulgated as a proposed policy statement before issuance as a Final Policy State ment by §553 of the Administrative Procedures Act [5 U.S.C. §553] or by any other law or regulation. Neither an initial nor final Regulatory Flexibility Analysis was prepared. This policy statement does not contain policies with Federalism implications sufficient to warrant preparation of a Federalism assessment under Executive Order 12612.

The Office of Management and Budget has approved the informa tion collection requirements contained in this policy statement pursuant to the Paperwork Reduction Act under OMB Control No. 0660- 0003. Public Reporting for this collection of information is estimated to vary from 16 hours to 200 hours and has an average of 125 hours per application, including associated exhibits. This total includes the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to Office of Policy Coordination and Management, NTIA, U.S. Department of Commerce, Washington D.C. 20230: and to the Paperwork Reduction Project (0660-0003), Office of Information and Regulatory Affairs, Office of Management and Budget, Washington D.C. 20503.

Janice Obuchowski

Assistant Secretary for Communications and Information

[FR Doc. 91--28118 Filed 11-21-91; 8:45 am]

BILLING CODE 3510-60-M


Footnotes

<1> Comments were submitted by the following organizations: Associa tion of America's Public Television Stations and the Public Broad casting Service in a joint filing (Joint Comments); the Corporation for Public Broadcasting (CPB); Greenville Technical College, Green ville, SC (GTC); Mercer County Community College, Trenton, NJ (MCCC); National Public Radio (NPR); the New York Network, State University of New York, Albany, NY (NYN); the Organization of State Broadcasting Executives, Columbia, SC (OSBE); and the WGBH Educa tional Broadcasting Foundation, Boston, MA (WGBH).

<2> PTFP is authorized to provide matching grants to plan and con struct public telecommunications facilities. See 47 U.S.C. §§390- 393, 397 (1988), The Communications Act of 1934, as amended. Unless otherwise noted, all statutory citations are to Title 47 of the United States Code.

<3>Joint Comments at 4.

<4>CPB at 2-3.

<5>Id. at 3.

<6>Joint Comments at 5.

<7>See Id. at 5-7 and Appendices A and B.

<8>CPB at 3 (emphasis in the original).

<9>See Joint Comments at 9-12, passim; NPR at 3; and, inferential ly, CPB at 3.

<10>56 FR 38004.

<11>56 FR 38005.

<12>Ibid.

<13>Joint Comments at 12; GTC at 6-7.

<14>Ibid.

<15>Joint Comments at 12.

<16>CPB at 5.

<17>See §390, using the phrase "public telecommunications facilities." The phrase is defined to include a wide variety of equipment, both broadcast and non-broadcast. See §397(13).

<18>NPR at 9.

<19>NPR at 3 and similarly at 8.

<20>House Report No. 100-825, "Public Telecommunications Act of 1988", at 4.

<21>Id.

<22>See, e.g., House Report 95-1178 and Senate Report 95-858 "Public Telecommunications Financing Act of 1978."

<23>§§390-393,397.

<24>47 USC §§390-393,397 (1988), The Communications Act of 1934, amended by P.L. 97-35, 95 Stat. 357,725 "Public Broadcasting Amendments Act of 1981" approved August 13, 1981; P.L. 100-626, 102 Stat. 3207 "Public Telecommunications Act of 1988" approved October 19, 1988; H.R. 2977, "Public Telecommunications Act of 1991".

<25>The Supreme Court has noted "[i]t is commonplace in our juris prudence that an administrative agency's consistent, longstanding interpretation of the statute under which it operates is entitled to considerable weight." International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America v. Daniel 439 U.S. 551, 566, fn. 20 (1979) [citations omitted], and see Saxbe v. Bustos 419 U.S. 65, 74 (1974).

<26>CPB at 6.

<27>For example, GTC at 2 and WGBH at 2. The Joint Comments at 5-9 detailed the efforts that public television stations have made in education.

<28>See, e.g., GTC at 2 and Joint Comments at 16.

<29>56 FR 38005.

<30>GTC at 5; Joint Comments at 14-16.

<31>See, inter alia, Joint Comments at 16 and GTC at 6.

<32>Joint Comments at 16, citing Stone, A Comparative Analysis of In teractive and Non-Interactive Video Delivery of Off-Campus Graduate Engineering Education (The American Society for Engineering Education, 1990) and Holt, Interaction: What is it and How Much is Enough?, Tel-Con (May 1991).

<33>CPB at 7.

<34>Joint Comments at 17.

<35>MCCC at 1-2.

<36>§393(b)(1)-(2).

<37>NYN at 2.

<38>Ibid.; emphasis supplied.

<39>Ibid.; emphasis in original.

<40>NYN at 3.

<41>Id. at 2-3.

<42>Joint Comments at 18.

<43>In 1991, for example, seven transmitter projects -- three for television and four for radio -- received grants of more than 50% in response to the economic showings the applicants made.

<44>PTFP Rules are at 15 CFR Part 2301. See Appendix. (Hereinafter Rules 2301.)

<45>§§390-393, 397.

<46>§§390(2), 397(14).

<47>Rules 2301.2, 2301.13, 2301.14.

<48>§§392(a)(1), 397(12).

<49>§390(1).

<50>§§390(2) and 393(b)(3) direct the Agency to "increase public telecommunications services and facilities available to, operated by, and owned by minorities and women".

<51>§§390 (1)-(3), 393(b); Rules 2301.13, 2301.14, and Appendix.

<52>§393(b)(1), (2).

<53>§§390(3),393(b)(4).

<54>§393(b)(1), (2) and see §390.

<55>§397(7).

<56>Rules 2301.24.

<57>§392(b), 52 FR 31,497 (1987).

<58>§392(b); Rules 2301.16(a)(2).

<59>Rules 2301.16 and 44 FR 30,898 at 30,907 (1979).

<60>Rules 2301.16(a)(4).

Source: U.S. Department of Commerce
National Telecommunications and Information Administration
Office of Telecommunications and Information Applications
Posted: 17 Sep 1997
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