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

ACTION: Final rules.

Table of Contents

Summary

Effective Date

Supplementary Information

Applicant Guidelines

• Priorities
• Catastrophic Damage
• Additional Information for Applications
• Withdrawals and Deferrals of Applications
• Appropriate Applicant/PTFP Contacts
• Filing of FCC Applications
• Support for Salary Expenses
• Premature Obligation of Non-Federal Funds
• Assurances
• Applicant Debts

• Site Rights Documentation
• Administration of Federal Grant Funds and Control and Use of Facilities
• Equipment
• Discrimination

Signed

Changes ot Part 2301

• 2301.1 -- Definitions
• 2301.2 -- Program Purposes
• 2301.3 -- Special Consideration
• 2301.4 -- Eligible Organizations and Projects
• 2301.5 -- Application Procedures
• 2301.6 -- Additional Information
• 2301.7 -- Service of Applications
• 2301.8 -- Federal Communications Commission Authorization
• 2301.9 -- Acceptance for Filing
• 2301.10 -- Appeals
• 2301.11 -- Public Comments
• 2301.12 -- Coordination with Interested Agencies and Organizations
• 2301.13 -- Funding Criteria for Construction Applications
• 2301.14 -- Funding Criteria for Planning Applications
• 2301.15 -- Action on All Applications
• 2301.16 -- Amount of the Federal Grant
• 2301.17 -- Items and Costs Ineligible for Federal Funding
• 2301.18 -- Payment of the Federal Grant
• 2301.19 -- Retention of Records
• 2301.20 -- Completion of Projects
• 2301.21 -- Annual Status Report for Construction Projects
• 2301.22 -- Conditions Attached to the Federal Grant
• 2301.23 -- Grant Suspensions, Terminations, and Transfers
• 2301.24 -- Equipment
• 2301.25 -- Waivers
• Appendix to Part 2301 - Special Applications and Priorities

Public Telecommunications Facilities Program

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

ACTION: Final rules.

No opposition was received to many of NTIA's proposed changes to the regulations, including the following: Priority 1B, deletion of the reference in the 1987 rules to "cable penetration" in the criteria used to determine the priority of television station activations; Priority 2, clarification of the criteria by expressly including "urgency" in the discussion of funding considerations; addition of 2301.15(f), which clarifies appropriate applicant-NTIA contacts during the application review period; additional assurances in 2301.5(d)(2)(xx) required of applicants regarding the maintenance of a drug-free workplace and disclosure of lobbying activities; and the reinsertion and revision of several sections regarding administrative procedures to place all PTFP Rules and requirements in one convenient document. These sections are 2301.11(a) -- public availability of PTFP applications; 2301.16(d) -- method of calculation of final total project cost; 2301.18 -- Payment of the Federal Grant, 2301.19 -- Retention of Records; 2301.20 -- Completion of Projects; 2301.21 -- Annual Status Report for Construction Projects; 2301.22 -- Conditions Attached to the Federal Grant; 2301.23 -- Grant Suspensions, Terminations, and Transfers; and 2301.24 -- Equipment. The proposed changes have been incorporated into the Final Rules.

A. Priorities

Priority 1C - Downlinks

There was widespread support for NTIA's proposal to establish Priority 1C for satellite downlinks that would provide the first satellite-distributed public radio programming to the applicant's service area.3/ NFCB and IBS recommended that all downlinks be included in Priority 1. Both respondents cited "diversity of program service"4/ as supporting expansion of this Priority to include all radio downlink applications. NTIA recognizes the desirability of providing diverse program radio services to an area, but believes that the current ranking of Priority 2, to maintain the sole broadcast signal in an area, and Priority 3, to establish the first local service in an area, accurately reflect the objectives of the Act.5/ For this reason, NTIA has created a new category, Priority 4A, with which to highlight the need for satellite downlinks for stations in areas already served by another public radio station (discussed below).

RMCPB proposed that, for consistency, Priority 1C should be applied to low-power television as well.6/ NTIA's establishment of Priority 1C was done in response to the recommendations of the Public Radio Expansion Task Force, to actions by the Corporation for Public Broadcasting, and to actions by operators of the public radio satellite distribution system to promote access to satellite-distributed programming by small public radio stations. While NTIA is unaware of any similar need on the part of low-power public television stations, the Agency agrees that the policy should include both radio and television facilities that can provide the first nationally distributed programming to an unserved area. The language of Priority 1C has been changed to add television in the Appendix to the Final Rules.

OSBE proposed that NTIA make broadcast equipment replacement, especially transmission equipment, the PTFP's first priority, in place of the NTIA's current Priority 1, which is the establishment of a first radio and television signal to an unserved geographic area. OSBE's purpose in making this proposal was "to recognize and reinforce congressional intent in establishing and maintaining support for PTFP as a vital means of providing universal public broadcasting services to the American public."7/ NTIA believes, however, that the current Priority 1 reflects the basic goal of the legislation authorizing the PTFP, which emphasizes that the extension of service to unserved areas is the primary of the three purposes for the PTFP.8/ Congress has also explicitly stated that "PTFP's primary goal must be to ensure that unserved areas of the country receive access to public broadcast programming to the maximum extent practicable".9/ NTIA will continue, therefore, to assign Priority 1 status only to projects that will provide first service to unserved areas.

Priority 4A - Replacement and Improvement

A number of respondents commented on NTIA's proposal to accord somewhat higher status under Priority 4 to applications to replace or improve equipment from broadcast stations that produce a high percentage of public broadcasting's nationally-distributed programming. MPR and the APTS/ PBS joint submission supported the proposal.10/ NPR, NFCB, RMCPB, and IBS strongly opposed it.11/

Opponents of the proposal felt that favoritism, or a perception of favoritism, toward such stations might result from its implementation. In addition, they expressed the fear that the proposal would lead to diminished funding for other projects. RMCPB was concerned with "improvement/replacement grants to less advantaged stations", while NFCB and IBS were concerned about "the development and improvement of emerging stations."

The APTS/PBS joint submission and the NPR comments noted that the expression "high percentage of programming" is vague and asked for a definition. The joint submission also suggested that the proposal's focus should be exclusively on production-related equipment and recommended that NTIA consider establishing a "distribution threshold above which stations would automatically qualify under Priority 4A".12/

In response, NTIA observes that any time a cluster of stations is made the subject of a distinct priority or sub-priority, a perception of "favoritism" or "discriminatory treatment" may arise. NTIA asserts, however, that this proposal does not represent an attempt at favoritism and that the PTFP record in awarding grants to such stations for these purposes bears this out and will continue to bear it out.

Admittedly, this proposal pertains far more to public television than to public radio. It stems from NTIA's observation that a disproportionate amount of public television's national programming originates from a relatively few stations located in major urban markets served by more than one public broadcast signal. Given PTFP's priority structure, applications from these stations -- no matter how urgent the demonstrated need for replacement equipment -- can never qualify for a Priority 2. This places these few, critical stations at a perpetual disadvantage in the competition for funding. This situation, NTIA thinks, warrants the slight additional emphasis -- from Priority 4 to Priority 4A -- on such applications. On a related point, NTIA concedes that the expressions "high percentage" and "significant amount" are imprecise. Nonetheless, because the universe of potential beneficiaries is so small, and because the application of a "percentage-of-programming" yardstick might be considered by many to be impermissibly arbitrary, NTIA has concluded that no distribution threshold is called for. The proposal, with the "significant amount" language, has thus been retained in the Final Rules.

Finally, NTIA agrees with APTS and PBS that its intent in suggesting this Priority 4A subcategory was to assist the stations in question with production-related equipment and the language in the Final Rules has been changed accordingly.

The attention of those who fear that smaller or emerging stations may be put at a disadvantage by this proposal is directed to several factors that protect such stations. First, station activations in unserved areas remain Priority 1. Second, the upgrading and improvement of "emerging" public radio stations have become a matter of NTIA's special attention, in good part as a result of the Public Radio Expansion Task Force deliberations. Third, applications for equipment replacement from stations in small communities usually merit a Priority 2, because they generally provide the sole signal or the only locally originated signal to a service area. Stations that are located in multi-station markets and therefore cannot qualify for Priority 2 will be considered in Priority 4A for equipment replacement. The stations in multi-station markets and national producers therefore will be considered in the same Priority in the Final Rules, just as they were considered in the same Priority under the 1987 Final Rules.

Priority 4A - Downlinks

NTIA proposed that another element of the new Priority 4A would be for the acquisition of satellite downlinks by public radio stations in areas already served by one or more full-service public radio stations. In such situations, the applicant would have to demonstrate that it would broadcast a program schedule that would not merely duplicate what is already available in its service area, and certify that it will continue to provide such a schedule for a minimum of five years after project completion.

CPB supported this proposal.13/ NFCB, NPR, and IBS strongly opposed certain aspects of it,14/ and RMCPB raised a question about the five-year certification.15/

NPR, NFCB, and IBS objected to the program schedule requirement. IBS commented that "NTIA should not include in its new rules any PTFP policy that directs or mandates a particular program schedule in order to secure PTFP funding".16/

NPR characterized the requirement as "an unprecedented and unwise intervention into local programming authority".17/ It asserted, "The requirement that a station certify its program schedule in any way is directly contrary to the fundamental structure of public broadcasting that was established by Congress....NTIA's proposal threatens to compromise the authority over programming that the Federal government has long delegated solely to the local station licensee."18/ NPR also stated that "program content is best judged by the marketplace" and that a "federal `Big Brother' that reviews program content and scheduling is inefficient, unwarranted, and sets a dangerous precedent."19/

NTIA believes that NPR, IBS, and NFCB have misinterpreted the Agency's purpose in this proposal and have misread its intentions. It was never NTIA's design to direct or mandate a program schedule or pass judgment on its applicants' program content. The Agency agrees that such actions would be improper. NTIA does hold, however, that, in a world of scarce Federal resources and intense competition for those resources, it has a responsibility to ensure that PTFP's relatively limited funds are not used to enable a station merely to offer a community a service that, for all practical purposes, it already has. NTIA strongly believes that a grant award for such a purpose would represent wasteful grants management.

NTIA hastens to assure the public broadcasting community that in implementing this proposal it will restrict itself to ensuring that, in the most general terms, the program schedule of the applicant in question will not substantially duplicate the service already provided to the community. The Agency wishes to emphasize the expression "in the most general terms". It certainly will not direct or mandate that an applicant offer "a particular program schedule in order to secure PTFP funding" nor will it review "program scheduling and content". NTIA will confine itself to an overview of an applicant's program schedule and the audience the applicant wishes to reach with that schedule.

Moreover, the Agency agrees with NPR that marketplace forces should play an important role in program selection. If these forces are not considered, the likelihood of the applicant's remaining on-air for the full period of Federal interest in the PTFP-funded equipment is diminished and the Federal interest in the equipment is to that extent jeopardized. NTIA suggests, however, that these forces should be considered before the entity applies for a PTFP grant award and that its deliberations should be evident in the application, preferably in the form of a commitment to a non- duplicative program schedule.

NTIA has thus retained the requirement that, to be assigned to this element of the new Priority 4A, the applicant must demonstrate that its program schedule will not substantially duplicate that of the other station or stations serving the area.

At the same time, NTIA has reassessed its proposed requirement that an applicant in this priority certify that it will continue to provide an alternative schedule for a minimum of five years after project completion. This was done in response to comments from RMCPB and IBS. The former noted the discrepancy between the five-year certification and the 10-year period of Federal interest in the project equipment.20/ The latter recommended that successful applicants be required to submit to PTFP, in lieu of the certification, "an annual report outlining the programming obtained through use of the downlink equipment within the past year" for the first five years of the Federal interest period.21/

NTIA believes that IBS's recommendation would be at least as burdensome and more intrusive to grant recipients than would be the certification. Furthermore, NTIA has concluded that such a certification is too vague and might give rise to needless controversy. It has, therefore, deleted references to a five-year certification and has decided against a five-year annual reporting requirement.

As noted above, however, NTIA will review Priority 4A downlink applications for evidence of a non-duplicative program schedule and will, to a great extent, rely on such evidence in assigning the application its priority and in considering its competitiveness.

Priority 4A - Basic Complement of Equipment

RMCPB and NPR supported the proposal to place into Priority 4A applications from public broadcasting stations that have gone on the air sometime in the preceding five years without PTFP support and with a complement of equipment well short of what PTFP considers to be basic for effective operation.22/

NPR pointed out, however, that NTIA offered no justification for limiting this proposal to stations that have gone on-air "sometime in the preceding five years". NPR recommended that this part of the proposal be deleted. In response, NTIA reassessed its own thinking on this issue and has concluded that the five-year limitation was arbitrary and might exclude from this priority worthy applications from stations that have been struggling successfully to survive for more than five years and, having accumulated sufficient funds to match a Federal grant, are ready to upgrade their services. The above-quoted phrase has been deleted from the Final Rules.

Priority 4B

RMCPB expressed some reservations about NTIA's proposal to move certain types of station activation projects from the Special Applications category to Priority 4B, which includes the improvement and non-urgent replacement of equipment at any public broadcasting station.23/ The projects of concern to RMCPB would activate public broadcast stations in areas already served by a station or stations with local origination capability when the proposed stations would not merit substantial Special Consideration because of significant participation by minorities or women. RMCPB also questioned NTIA's statement that the change would cluster virtually all broadcast applications in the Priorities. RMCPB suggested that it would be more desirable to keep such activation applications in the Special Applications category because such consideration "has the virtue of requiring services different from those in place and responsive to community needs and is thus consonant with the intent to emphasize unique `service'".

NTIA re-evaluated its proposal in response to RMCPB's comments and concluded that such station activation projects fall outside the logical scope of the five PTFP Priorities. It also noted that such "second-service" stations, even those without substantial involvement of women or minorities, often offer the promise of greatly enriched program service to a community and, by considering these applications in Special Applications, PTFP reserves the right to elevate them in fundability to the level of the highest priorities. NTIA has decided, therefore, that it is wiser to continue placing these applications into the Special Applications category. The proposed change has thus been deleted from the Final Rules.

Special Applications

WGBH questioned whether the language of the Special Applications section is sufficiently inclusive.24/ The comments stressed the importance of extending public and instructional television to disabled individuals, especially to the deaf and hearing impaired, the blind and visually impaired, and to speakers of languages other than English. They also asked that granting funds for research and development become part of the PTFP mission, and that disabled people be accorded the same special consideration that the PTFP statute accords women and minorities.25/ These comments reflect a misunderstanding about PTFP. Accordingly, NTIA takes this opportunity to reduce possible confusion.

NTIA agrees with WGBH's general statement that PTFP's central mission is to extend public telecommunications. This is mandated by PTFP's authorizing legislation to "extend delivery of public telecommunications services to as many citizens of the United States as possible..."26/ WGBH further noted that the PTFP Rules benefit and guarantee participation of racial and ethnic minorities and women,27/ and urged that disabled Americans get the same benefits. NTIA is sensitive to the needs of disabled Americans and will continue to fund projects that benefit them. Until Congress supplies more specific direction, however, applications that benefit disabled Americans will have to be evaluated without the advantage of Special Consideration [see 2301.3].

WGBH also urged that PTFP grant funds for research and development. In this matter, NTIA is constrained by the PTFP's authorizing legislation. The statute authorizes grants for the "planning and construction of public telecommunications facilities"28/ and specifies that the Federal government shall retain an interest in any PTFP- funded equipment for a period of ten years after project completion.29/ These provisions are intended to ensure continuity of service to the public for a ten-year period. NTIA interprets this statutory mandate to preclude grants for purposes of research and development. Also, each year NTIA must defer almost two thirds of the applications it receives. Thus, even if the Agency were not restricted by the statutory mandate noted above, NTIA could not afford to grant PTFP funds for research and development.

No disagreement was expressed with NTIA's proposal to establish a process to timely accept applications from public broadcast stations that suffer catastrophic damage and need assistance to restore public telecommunications services to their communities. APTS and PBS pointed out, however, that the Rule as proposed might be read as making "stations with legally mandated self-insurance regimes" ineligible for assistance under this Rule.30/ This was not NTIA's intention, and 2301.5(g)(3) has been revised in the Final Rules.

Three commenters expressed concern about the elimination of the 45-day period after the closing date during which applicants formerly were permitted to submit additional information and to make minor changes in their applications.31/ The concerns related to the fact that "problems beyond the applicant's reasonable control may arise and not be capable of resolution by the PTFP's closing date."32/ NTIA has long recognized that certain documents and information needed for a full evaluation of an application may not be available by the closing date if they are to be supplied by independent third parties. This concern is addressed in the Final Rules by the requirement that applicants "must immediately provide...two copies of information received after the closing date that materially affects the application" (emphasis supplied) [see 2301.6(b)].

As suggested by APTS and PBS,33/ NTIA's intent now as in the past is to accept for filing and evaluation applications that are substantially complete. The Rules provide that "substantially incomplete applications will be returned by the Agency" [see 2301.9(c)].

NTIA intends to continue its established practice of requesting additional information that may be needed to permit evaluation of the application, as provided in 2301.6(a). The Final Rules set a 15-day deadline for applicant response to such requests. RMCPB was concerned that delays in the mail could interfere with applicants' ability to meet the deadline.34/ The deadline was established in order to keep the PTFP application review and evaluation process on schedule, and the 15-day period is consistent with the way in which the PTFP has long handled other notices to applicants and grantees.

RMCPB asked that NTIA state explicitly that it will consult with state telecommunications agencies during review and evaluation of PTFP applications, and it noted language inconsistencies in two passages in the Rules -- 2301.7(b) and 35/ Since it seeks input on applications from such agencies and the consultation is clearly implied by the requirement that an applicant serve a copy of its application on these state agencies [see 2301.7(b)], NTIA has revised the wording of 2301.12(b) to state the matter plainly in the Final Rules, as well as to make consistent the language between it and 2301.7(b) and 2301.15(b).

RMCPB also noted a difference in the language of the opening paragraphs of 2301.13 and 36/ NTIA appreciates having this called to its attention, and 2301.14 has been changed to be consistent with D. Withdrawals and Deferrals of Applications

NPR supported the addition to the Rules of a provision for the formal withdrawal of an application without affecting future funding decisions.37/ In addition, it asked that applicants be notified formally when their applications are deferred and given the reasons for the deferral. NTIA presently notifies applicants when their applications have been deferred and will continue doing so, but believes it is impractical to write several hundred "rejection letters" detailing the reasons for deferral. At the same time, NTIA points out that PTFP Program Officers are available to discuss deferred or prospective applications during the period between the time grants are awarded in one cycle and the closing date for the next cycle.

RMCPB agreed that it is desirable to provide for the withdrawal of an application, but it disagreed with the proposal to treat requests for deferral as requests for withdrawal. It saw this as a burden to applicants because they have to file new applications if they wish to have their projects considered later. It also described the limit of two reactivations for any deferred application as "overkill".38/ Since the reactivation of a deferred application requires the applicant to submit a new application form and to bring all other elements of the original application up to date [see 2301.5(e)(4)], NTIA believes the submission of a completely new application is a minor issue and it continues to believe that after three years applicants need to re-evaluate their applications before they are submitted for a fourth time. The Agency, therefore, retains the proposed Rule unchanged in the Final Rules except for the removal of minor discrepancies in language in 2301.9(g)(1) and (2). Deferred applications that have been reactivated two or more times when these Final Rules are published will be permitted one (1) additional reactivation in the 1992 grant round before a new application must be submitted in order to receive continued consideration of the same project.

No comments were received on NTIA's proposal to formalize a policy previously distributed to all 1991 applicants. It is restated here for the convenience of interested parties.

As a publicly funded discretionary grant program, NTIA must follow procedures that are fair and impartial to all applicants. To avoid the appearance of impropriety, NTIA has formalized in the Final Rules its guidelines on the topic [see 2301.15(f)]. In particular, in order to maintain the integrity of the application review process, NTIA/PTFP staff are not authorized to discuss the merits of an application while it is under review. Some contacts during the grant review cycle are appropriate, however, and they are indicated in the Final Rules.

There was general support for NTIA's proposals to accept and process applications for facilities such as television translators and low-power television stations before FCC construction permit applications are filed when the FCC's filing "window" occurs after the PTFP closing date, and to allow later filing of FCC applications for STL's, remote pick-up units, C-band downlink facilities, and Very Small Aperture Terminals (VSATs). APTS and PBS suggested "this provision should also apply in the future to any other facilities that may be subject to FCC restrictions on filing dates."39/ It is NTIA's present intention to do so, but prudence forbids a blanket provision in the PTFP Rules without the particulars needed for a proper assessment of the situation. If it concludes that the general principles behind this Rule should apply to additional FCC filings in the future, the Agency can advise applicants of this fact and give instructions on how to proceed in the guidelines booklet that is included in the application package each year.

Since the proposed rule was published, it has come to NTIA's attention that the FCC has decided to register, instead of license, C-band satellite downlinks. The FCC requires construction of the downlinks to be completed within six months of frequency coordination. NTIA recognizes that it is not practical for PTFP applicants to complete their frequency coordination prior to the submission of a PTFP application and meet the FCC deadline, since the PTFP application review process itself takes more than six months. Therefore, NTIA has added a new 2301.8(c) to indicate that submission of FCC registration for C-band downlinks must be submitted to PTFP by grantees prior to, and will be a condition for, the release of Federal funds for C-band downlink construction.

No comments were received on NTIA's proposed clarification of its policy concerning the support of salary expenses for construction projects. The statement is repeated here for the convenience of all interested parties.

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 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 [see 2301.17(b)(3)].

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 rarely will 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.

RMCPB endorsed NTIA's proposal to remove the inconsistency between two references regarding the permissible date for applicant obligation of non-Federal funds [2301.16(a)(3) and 2301.16(c)], but recommended that the reference be to the date when an applicant files its application, rather than to the NTIA closing date. RMCPB suggested that permitting applicants to expend the non-Federal portion of the proposed project upon the filing of the application would result in significant cost savings due to purchase of equipment before price increases and in faster completion of projects due to avoidance of weather delays.40/

In NTIA's experience few if any applications are submitted more than a week or two before the closing date. The opportunity for cost or time savings is therefore minimal. The closing date for receipt of applications is a uniform date that applies to all applicants and is included by the Department of Commerce Office of Federal Assistance, in the official award document as the effective date when non-Federal funds may be obligated. It would not be feasible to have that date be different for every grant awarded, and the Agency has retained the proposed language in the Final Rules.

RMCPB objected to a change in the wording of 2301.5(d)(2)(vi) from, "Documentation that the applicant will have, when needed, the funds to match any grant the Agency may provide," to, "Documentation that the applicant will have, when needed, the funds to construct any facilities for which the Agency has granted matching funds." RMCPB felt that the new language is not as "inclusive" as the old.41/ NTIA believes, however, that the new wording is more inclusive than the old since it requires applicants to certify that they will have not only the local funds to match a PTFP grant, if awarded, but also the local funds to pay any costs that are ineligible for PTFP support, but which must be paid in order for the project to be constructed.

In a related area, RMCPB recommended that NTIA change the requirement that applicants provide information on their Federal and non-Federal support during the three preceding fiscal years. [See 2301.5(d)(2)(viii).] RMCPB finds this requirement "unclear... confusing...considerable waste of time," and requested "clarification and simplification."42/

NTIA has found the information contained in the three-year financial statement (Exhibit A of the PTFP Application Form) to be useful in evaluating the applicant's financial resources to construct the requested facility and to continue operating the facility during the ten-year period of Federal interest. To lessen the administrative burden on applicants in meeting this requirement, NTIA not only permits but recommends that applicants qualified to receive funds from the Corporation for Public Broadcasting (which is the vast majority of PTFP applicants) use copies of their CPB Annual Reports (Schedule A and Certification of Non-Federal Financial Support) in lieu of the forms provided as Exhibit A by PTFP. The information contained in the three-year financial statements is particularly valuable in evaluating applications from nonbroadcast entities. Since nonbroadcast entities are eligible to receive PTFP funding only for the construction or expansion of a facility, they usually do not have a past history with PTFP and are, therefore, unknown to the program.

NTIA provides guidance on submitting this information in the application material sent to all potential applicants. The material is updated each year. The guidelines request that if the entity that is the subject of the PTFP application, such as a radio station or ITFS facility, is a unit of a larger institution, such as a university, the information submitted for the three-year financial statement should pertain to the revenue of the facility that is the subject of the application (e.g., an ITFS facility) rather than the revenue of the larger unit (e.g., a university). Where revenue information is not available for the entity that is the subject of the PTFP application, the applicant should provide revenue information for the entire institution and should explain the reason for submitting information for the entire institution.

PTFP staff is available to provide technical assistance regarding the completion of the PTFP application form during the weeks preceding the application closing date. Applicants are encouraged to contact the PTFP staff regarding clarification of any aspect of preparation of the PTFP application form.

Two parties had negative comments about the way NTIA is required to treat debt delinquency.43/ The Rules prohibit release of funds to an entity that has outstanding debts to any agency of the Federal government.44/ The prohibition applies to all sub-units of an entity. The comments stated that applicants should not be penalized for the outstanding debts of other sub-units. KCSU feared that this could penalize an applicant unfairly. NPR suggested that a waiver provision of OMB Circular A-129 be specifically incorporated into the PTFP Rule.

The Federal government's policy is to collect all outstanding debts. In furtherance of this policy all entities, even those with many sub-units, are treated as one. The Department of Commerce may permit waiver of the ban on granting funds to entities with outstanding debt to the Federal government "upon a specific determination that it is in the best interest of the government."45/ As a general matter, NTIA will consider requests for such waivers. A waiver may be granted if the applicant makes a strong showing that it is in the best interest of the government to do so. It should be noted, however, that the general rule, discussed above, militates against granting such a waiver except in rare circumstances.

K. Site Rights Documentation

The proposed new Rules included formalization of a procedural change for documenting that site rights have been obtained for a project. The change requires a letter of certification from a local attorney that the site rights meet PTFP requirements.

RMCPB indicated that the new site rights Rule appears to be "advantageous to applicants, but if it allows no alternative to an attorney's opinion letter, it may unnecessarily increase a new station's costs."46/ NTIA's experience with attorney letters of certification is positive. Site rights can be processed and funds released to grantees quicker than under the prior system whereby NTIA's Office of Chief Counsel reviewed each lease or deed. The cost of the attorney's letter of certification appears to be minimal. NTIA strongly urges the submission of an attorney's letter of certification. The Final Rule does provide, however, for NTIA's right to review site rights documentation "if deemed necessary".

Based on further consideration, NTIA takes this opportunity to revise the timing of when the attorney's letter of certification is required. NTIA formerly required site rights to be obtained prior to the submission of an application, but this posed difficulties for applicants who were reluctant to purchase property or enter into a lease before knowing whether a project would be funded. Section 2301.5(d)(2)(ix) has been changed to require that the application include a letter or letters of intent with the prospective lessor or seller, if the applicant does not already have rights to the necessary site(s). NTIA will expect grantees to finalize the site rights within six months of the beginning of the project period. Language regarding the attorney's certification has been relocated from 2301.5(d)(2)(ix) to a new 2301.22(a)(4). This section indicates that the attorney's letter of certification will not be required until after an award is made, and will be a condition for the release of Federal funds for the project.

APTS and PBS questioned NTIA's requirement that an initial lien on grant-funded equipment be filed with the Federal government within 90 days of the start of the project period, usually before any equipment is purchased or Federal funds expended. [See 2301.22(a)(2).] After project completion, NTIA requires the filing of a lien that includes manufacturers' names and the model and serial numbers of equipment actually purchased as a result of the competitive bidding process. APTS and PBS indicated that this "two step process...is an unnecessary and expensive burden on grantees."47/ NTIA believes that the initial lien, which usually costs only a nominal filing fee, is not an expensive burden. In any event, it is necessary to protect adequately the Federal interest in the equipment. Completion of PTFP-funded projects often takes two years or longer. Delay in filing a lien on the Federally funded equipment until the project is completed would leave the Federal interest in the equipment unprotected for a lengthy period. Further, the initial lien, filed within 90 days of the start of a project, protects the Federal interest on equipment in the event that the project is not completed by the end of the award period.

NPR raised several issues regarding NTIA's standard for equipment purchased with PTFP funding. NPR said that "NTIA's historic reliance on the phrase `professional broadcast equipment' no longer ensures high quality, reliability, or durability."48/ NPR recommended that NTIA provide applicants with an "NTIA-sanctioned list of equipment, by make and model numbers,...to ensure that their equipment selections will meet fully NTIA's standards for performance quality, reliability and durability." 49/

NTIA supplements the "professional broadcast quality" standard mentioned in 2301.24 with detailed equipment lists contained in the guideline materials sent to all potential applicants. These equipment lists, which ran 14 pages in the 1991 application guidelines, are updated each year and are developed by NTIA after consultation with national public telecommunications organizations and from feedback from grantees. The field of telecommunications equipment is vast and constantly changing. NTIA does not believe it practical to establish a list of all approved equipment by make and model numbers as proposed, and also believes that such a list, if prepared, would be of limited use. Many PTFP grantees indicate that items on the approved equipment list must be changed simply because new equipment is introduced between the time the application is prepared and the time that equipment is purchased. NTIA encourages applicants to discuss their equipment proposals with PTFP staff before submission of applications. NTIA also encourages grantees to contact PTFP regarding possible changes in the equipment list in response to the availability of new equipment on the market.

NPR also suggested that frequent changes in equipment product lines, particularly in broadcast studio equipment, coupled with significant advances in consumer electronics, may warrant NTIA's review of the Federal 10-year interest in PTFP funded equipment.50/ NPR recognized that NTIA's ten-year interest is based statutory51/ and encouraged NTIA to conduct a detailed agency review which could lead to a revision of the statute. NTIA appreciates NPR's view on this issue and will take its recommendation under advisement.

PTFP requires grantees to provide information on any pending discrimination complaints or adverse judgments. For non-profit institutions, colleges or universities the discrimination information must cover the entire organization. State or municipal agencies, however, report only for themselves, not the entire state or municipal government [see 2301.21(b)(1)(ii)]. RMCPB called the distinction inequitable and discriminatory.52/

The distinction is statutory, and NTIA has no discretion to change it. Congress directed Federal agencies such as NTIA that extend financial assistance to prevent discrimination on the basis of race, color or national origin.53/ Congress then mandated, for the purposes of the statute, that the operations of an entire corporation are included.54/ For state or municipal governments only the operations of "a department, agency, special purpose district, or other instrumentality of a State or of a local government" are specified.55/ The PTFP reporting requirements reflect this distinction.

Under Executive Order (E.O.) 12291, the Department must determine whether a regulation 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. These rules are 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 consumer, individual industries...; or (3) significant adverse effects on competition, employment, investment, productivity or innovation...." Therefore, preparation of a Regulatory Impact Analysis is not required.

A Regulatory Flexibility Analysis is not required under The Regulatory Flexibility Act (5 U.S.C. 601 et seq.), because as explained above, 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 proposed 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.

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 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.

Administrative procedure, Grant programs - communications, telecommunications.

Administrator

PART 2301 - PUBLIC TELECOMMUNICATIONS FACILITIES PROGRAM
Subpart A - Definitions, Program Purposes and Special Consideration

Sec.
2301.1   Definitions.
2301.2   Program Purposes.
2301.3   Special Consideration.

Subpart B - Eligibility and Application Procedures

2301.4   Eligible Organizations and Projects.
2301.5   Application Procedures.
2301.6   Additional Information.
2301.7   Service of Applications.
2301.8   Federal Communications Commission Authorization.
2301.9   Acceptance for Filing.
2301.10  Appeals.
2301.11  Public Comments.
2301.12  Coordination with Interested Agencies and
         Organizations.
2301.13  Funding Criteria for Construction Applications.
2301.14  Funding Criteria for Planning Applications.
2301.15  Action on All Applications.

Subpart C - Federal Financial Participation

2301.16  Amount of the Federal Grant.
2301.17  Items and Costs Ineligible for Federal Funding.
2301.18  Payment of the Federal Grant.

Subpart D - Accountability for Federal Funds

2301.19  Retention of Records.
2301.20  Completion of Projects.
2301.21  Annual Status Report for Construction Projects.

Subpart E - Control and Use of Facilities

2301.22  Conditions Attached to the Federal Grant.
2301.23  Grant Suspensions, Terminations, and Transfers.
2301.24  Equipment.

Subpart F - Waivers

2301.25  Waivers.

Appendix to Part 2301 -- Special Application and Priorities

Subpart A - Definitions, Program Purposes and Special Consideration

2301.1 Definitions

"Act" means Part IV of Title III of the Communications Act of 1934, 47 U.S.C. 390-394 and 397-399b, as amended.

"Administrator" means the Assistant Secretary for Communications and Information of the United States Department of Commerce.

"Agency" means the National Telecommunications and Information Administration of the United States Department of Commerce.

"Broadcast" means the distribution of electronic signals to the public at large using television (VHF or UHF) or radio (AM or FM) technologies.

"Construction" (as applied to public telecommunications facilities) means acquisition (including acquisition by lease), installation, and improvement of public telecommunications facilities and preparatory steps incidental to any such acquisition, installation or improvement.

"Department" means the United States Department of Commerce.

"FCC" means the Federal Communications Commission.

"Federal interest period" means the period of time during which the Federal government retains a reversionary interest in all facilities constructed with Federal grant funds. This period begins with the purchase of the facilities and continues for ten (10) years after the official completion date of the project.

"Nonbroadcast" means the distribution of electronic signals by a means other than broadcast technologies. Examples of nonbroadcast are Instructional Television Fixed Service (ITFS), teletext, and cable.

"Noncommercial educational broadcast station" or "public broadcast station" means a television or radio broadcast station that is eligible to be licensed by the FCC as a non-commercial educational radio or television broadcast station and that is owned (controlled) and operated by a state, a political or special purpose subdivision of a state, public agency or nonprofit private foundation, corporation, institution, or association, or owned (controlled) and operated by a municipality and transmits only noncommercial educational, cultural or instructional programs.

"Noncommercial telecommunications entity" means any enterprise that is owned (controlled) and operated by a state, a political or special purpose subdivision of a state, a public agency, or a nonprofit private foundation, corporation, institution, or association; and that has been organized primarily for the purpose of disseminating audio or video noncommercial educational, cultural or instructional programs to the public by means other than a primary television or radio broadcast station, including, but not limited to, coaxial cable, optical fiber, broadcast translators, cassettes, discs, satellite, microwave or laser transmission.

"Non-Federal financial support" means the total value of cash and the fair market value of property and services received,

(1) as gifts, grants, bequests, donations, or other contributions for the construction or operation of noncommercial educational broadcast stations, or for the production, acquisition, distribution, or dissemination of educational, cultural or instructional television or radio programs, and related activities, from any source other than (i) the United States or any agency or instrumentality of the United States; or (ii) any public broadcasting entity; or,

(2) as gifts, grants, donations, contributions, or payments from any State, or any educational institution, for the construction or operation of noncommercial educational broadcast stations or for the production, acquisition, distribution, or dissemination of educational, cultural or instructional television or radio programs, or payments in exchange for services or materials with respect to the provision of educational, cultural or instructional television or radio programs.

"Operational cost" means those approved costs incurred in the operation of an entity or station such as overhead labor, material, contracted services (such as building or equipment maintenance), including capital outlay and debt service.

"Pre-operational expenses" means all nonconstruction costs incurred by new public telecommunications entities before the date on which they began providing service to the public, and all nonconstruction costs associated with the expansion of existing stations before the date on which such expanded capacity is activated, except that such expenses shall not include any portion of the salaries of any personnel employed by an operating public telecommunications entity.

"PTFP" means the Public Telecommunications Facilities Program, which is administered by the Agency. "PTFP Director" means the Agency employee who recommends final action on public telecommunications facilities applications and grants to the Administrator.

"Public telecommunications entity" means any enterprise which is a public broadcast station or noncommercial telecommunications entity and which disseminates public telecommunication services to the public.

"Public telecommunications facilities" means apparatus necessary for production, interconnection, captioning, broadcast, or other distribution of programming, including but not limited to studio equipment, cameras, microphones, audio and video storage or processors and switchers, terminal equipment, towers, antennas, transmitters, remote control equipment, transmission line, translators, microwave equipment, mobile equipment, satellite communications equipment, instructional television fixed service equipment, subsidiary communications authorization transmitting and receiving equipment, cable television equipment, optical fiber communications equipment and other means of transmitting, emitting, storing, and receiving images and sounds or information, except that such term does not include the buildings to house such apparatus (other than small equipment shelters that are part of satellite earth stations, translators, microwave interconnection facilities, and similar facilities).

"Public telecommunications services" means noncommercial educational and cultural radio and television programs, and related noncommercial instructional or informational material that may be transmitted by means of electronic communications. It does not include essentially sectarian programming.

"Sectarian" means that which has the purpose or function of advancing or propagating a religious belief.

"State" includes each of the fifty states, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, the Northern Mariana Islands, and the Trust Territory of the Pacific Islands.

"System of public telecommunications entities." means any combination of public telecommunications entities acting cooperatively to produce, acquire or distribute programs, or to undertake related activities.

(a) The Agency's determination to fund an application and the amount of the grant awarded shall be governed by whether the application will, in the following order of priority, result in:

(1) The establishment of new public telecommunications facilities to extend services to areas not currently receiving such services;

(2) The expansion of the service areas of existing public telecommunications entities; or,

(3) The improvement of the capabilities of existing licensed public broadcasting stations to provide public telecommunications services.

In accordance with 392(f) of the Act, the Agency will give special consideration to applications that foster ownership or control of, operation of, and participation in public telecommunications entities by minorities and women. The Agency interprets "ownership" and "owned" as meaning control of an entity through the possession or exercise of the normal incidents of ownership, such as participation on the governing board or holding corporate offices. The Agency will accord special consideration only where women and/or minorities hold more than fifty (50) percent control of the applicant. The Agency will consider the composition of the applicant's governing body, management levels, or policy-making positions.

Subpart B - Eligibility and Application Procedures

Section 2301.4 Eligible Organizations and Projects

(a) Eligible applicants (Construction Grants). In order to apply for and receive a PTFP Construction Grant, an applicant must be:

(1) A public or noncommercial educational broadcast station;

(2) A noncommercial telecommunications entity;

(3) A system of public telecommunications entities;

(4) A nonprofit foundation, corporation, institution, or association organized primarily for educational or cultural purposes; or,

(5) A state or local government or agency, or a political or special purpose subdivision of a state.

(1) Any of the organizations described in paragraph (a) of this section; or,

(2) A nonprofit foundation, corporation, institution, or association organized for any purpose except primarily religious.

(1) The provision of new public telecommunications facilities to extend service to areas currently not receiving public telecommunications services;

(2) The expansion of the service areas of existing public telecommunications entities;

(3) The establishment of new public telecommunications entities serving areas currently receiving public telecommunications services; or,

(4) The improvement of the capabilities of existing licensed public broadcast stations to provide public telecommunications services.

(e) An applicant whose proposal requires an authorization from the FCC must be eligible to receive such authorization.

(f) Preliminary determination of eligibility. In order to obtain a preliminary determination of applicant or proposal eligibility, a prospective applicant must send a letter requesting such determination to the Agency.

(1) The request letter should be addressed to: PTFP Director, NTIA/DOC, 14th Street and Constitution Avenue, N.W., Room H-4625, Washington, DC 20230.

(2) In the request letter the prospective applicant must:

(i) Describe the proposed project;

(ii) Include a copy of the organization's articles of incorporation and bylaws, or other similar documentation, which specifies the nature and powers of the prospective applicant (unless the prospective applicant has received a PTFP grant within the last ten (10) years, in which case only a copy of the most recent Annual Report or Quarterly Performance Report and any changes in the articles of incorporation and bylaws since the last grant must be provided); and,

(iii) If the prospective applicant is a nonprofit foundation, corporation, institution, or association which has not received a PTFP grant within the previous ten (10) years, provide a copy of a letter from the Internal Revenue Service granting the prospective applicant tax exempt status under 501(c)(3) of the Internal Revenue Code, or other legal documentation of nonprofit status.

(3) A favorable preliminary determination of eligibility does not guarantee that the Agency will accept a future application for filing or award a subsequent grant.

(4) A prospective applicant may appeal an unfavorable preliminary determination of eligibility to the Administrator under 2301.10.

(a) Address. The following address should be used for all communications with the Agency: Public Telecommunications Facilities Program, NTIA/DOC, 14th Street and Constitution Avenue, N.W., Room H-4625, Washington, DC 20230.

(b) Application materials may be obtained from the address listed in paragraph (a).

(c) Closing date. The Administrator shall select and publish in the Federal Register a date by which applications for funding in a current fiscal year are to be filed.

(d) New applications. (1) All applications, whether mailed or hand delivered, must be received by the Agency at the address listed in the annual Federal Register announcement requesting applications at or before 5:00 P.M. on the closing date.

(2) A complete application must include an original and one copy of the Agency application form with the signature of an officer of the applicant who is legally authorized to sign for the applicant, and all the information required by the Agency application materials, which shall include:

(i) A brief narrative statement (of not more than four (4) pages) describing the proposed project with particular attention to satisfying the appropriate funding criteria as listed in 2301.13 or 2301.14 of these Rules;

(ii) If the applicant has not received a PTFP grant within the previous ten (10) years, a copy of the applicant's articles of incorporation, bylaws, a list of the members of the board of directors, and other similar documentation specifying the nature and powers of the applicant, except that state or local government entities need only provide a reference to the statutory or other authority under which they operate;

(iii) If the applicant is a nonprofit foundation, corporation, institution or association which has not received a PTFP grant within the previous ten (10) years, a copy of a letter from the Internal Revenue Service granting the applicant tax exempt status under 501(c)(3) of the Internal Revenue Code, or other legal documentation of nonprofit status.

(iv) If the applicant received a PTFP grant within the previous ten (10) years, then it must reference the number of the previous grant, provide a copy of the most recent Annual Report or Quarterly Performance Report submitted to the PTFP, and submit a copy of any changes in the applicant's articles of incorporation or bylaws which have taken effect since the last grant was awarded;

(v) If the applicant applied for a preliminary determination of eligibility and received a positive determination, it may submit a copy of the official notification from the PTFP in lieu of the eligibility requirements of this section;

(vi) Documentation that the applicant will have, when needed, the funds to construct any facilities for which the Agency has granted matching funds;

(vii) Documentation that the applicant will have the funds necessary to operate and maintain those facilities once constructed;

(viii) Documentation of the amount of Federal and non-Federal financial support received by the applicant organization during each of the preceding three fiscal years or for the length of time the organization has been in existence if less than three years;

(ix) Information about the applicant's leasehold or ownership rights to the premises on which the facilities requested will be located. If the applicant does not yet have an executed lease or has not purchased the site(s) involved, a copy of a letter or letters of intent with the proposed lessor(s) or seller(s) must be filed with the application. The applicant must have the right to occupy, construct, maintain, operate, inspect, and remove the project equipment without impediment, and nothing must prevent the Federal government from entering the property and reclaiming or securing PTFP-funded property. The Agency reserves the right to review an applicant's site rights documents if deemed necessary;

(x) An inventory of all equipment (if any) currently owned by the applicant that corresponds to the type of equipment requested in the current application or that would be closely associated with the proposed project. The inventory should include manufacturers' names, model numbers, production years, and the dates of acquisition;

(xi) Within the narrative or as an optional exhibit no longer than two pages, a five-year plan outlining the applicant's projected facilities requirements and the projected costs of such requirements;

(xii) If special consideration is requested under 2301.3, information detailing the basis for the request on the exhibit form provided by the Agency;

(xiii) Copies of letters transmitting a copy of the application to each of the entities required under 2301.7; (xiv) Significant documentation supporting the applicant's request for equipment, including as necessary the proper FCC authorization(s) cited in 2301.8 and 2301.9, and if applicable, documentation indicating high incidence of repair or periods of inoperability;

(xv) Evidence that the applicant has participated (or, in the case of a planning grant, will participate) in comprehensive planning for the proposed project, including community involvement, an evaluation of alternate technologies and coordination with state telecommunications agencies, if any;

(xvi) Assurance that during the period in which the applicant possesses or uses the Federally funded facilities (whether or not this period extends beyond the Federal interest period), the applicant will not use or allow the use of the Federally funded equipment for essentially sectarian purposes;

(xvii) A detailed list and explanation of any complaints of discrimination (see 2301.22(b)(15), below) currently pending or decided against the applicant before any court or governmental agency;

(xviii) A copy of any Environmental Impact Statement or other environmental assessment document prepared in conjunction with the proposed project as may be required by any Federal, state, or local law or regulation;

(xix) Assurance of compliance with all applicable Federal laws, rules or regulations relating to the project, as described on the application form provided by the Agency;

(xx) Assurance of compliance with all provisions of the Drug-Free Workplace Requirements and the Certifications for Contracts, Grants, Loans and Cooperative Agreements found in the application form;

(xxi) Assurance that the applicant has taken into account all non-Federal sources of financial support for this project; that the non-Federal share stated by the Applicant as being available for this project is the maximum amount available from such sources; and that the applicant will initiate and complete the work within the applicable time frame after receipt of approval from the Agency; and,

(xxii) Assurance that the applicant will make the most economical and efficient use of the Federal funds.

(2) An applicant may reactivate a deferred application only during the two consecutive years following the application's initial acceptance for filing by the Agency.

(3) To reactivate a deferred application, the applicant must file the information described in (4), below, whether mailed or hand delivered, at or before 5:00 P.M. on the closing date.

(4) To file a complete reactivation request, the applicant must submit an original and one copy of the following:

(i) Part I of the approved Agency application form with the original signature of an officer of the applicant who is legally authorized to sign for the applicant, with a notation of the file number of the earlier application;

(ii) A brief narrative statement (not more than four (4) pages) describing the project proposed in the current application;

(iii) An update of the availability of operating funds and the necessary non-Federal share of the project;

(iv) An update of the financial information required by paragraph (d)(2)(viii) of this section;

(v) A revised listing of current eligible project costs, if necessary;

(vi) A revised inventory as described in paragraph (d)(2)(x) of this section. Applicants having previously submitted an inventory need submit only updated information;

(vii) A revised five-year plan as described in paragraph (d)(2)(xi) of this section outlining the applicant's projected facilities requirements and the projected costs of such requirements;

(viii) If special consideration is requested under 2301.3, current information detailing the basis for the request on the exhibit form provided by the Agency;

(ix) Copies of letters transmitting a copy of the current application to each of the entities required under 2301.7;

(x) An updated explanation of any complaints of discrimination currently pending or decided against the applicant before any court or governmental agency; and,

(xi) Assurance of compliance with all applicable Federal laws, rules or regulations relating to the project, as described on the application form provided by the Agency.

(g) Applications resulting from catastrophic damage. (1) An application may be filed with a request for a waiver of the closing date, as provided in 2301.25, when an eligible broadcast applicant suffers catastrophic damage to the basic equipment essential to its continued operation as a result of a natural or manmade disaster and is in dire need of assistance in funding replacement of the damaged equipment.

(2) The request for a waiver must set forth the circumstances that prompt the request and be accompanied by appropriate supporting documentation.

(3) A waiver will be granted only if it is determined that the applicant either carried adequate insurance or had acceptable self-insurance coverage.

(4) Applications filed and accepted pursuant to this paragraph must contain all of the elements stipulated in paragraphs (d) or (e), above, and will be subject to the same review and evaluation process followed for applications accepted for filing in the normal application cycle, although the Administrator may establish a special timetable for review and evaluation to permit an appropriately timely decision.

(a) The Agency may request from the applicant any additional information that the Agency deems necessary or pertinent. Applicants must provide to the Agency two copies of any additional information that the Agency requests within fifteen (15) days of the date of the Agency's notice.

(b) Applicants must immediately provide to the Agency two copies of information received after the closing date that materially affects the application, including:

(1) State Single Point of Contact and State Telecommunications Agency comments on applications;

(2) FCC file numbers and changes in the status of FCC applications necessary for the proposed project;

(3) Changes in the status of proposed local matching funds, including notification of the passage (including reduction or rejection) of a proposed state appropriation or receipt (or denial) of a proposed substantial matching gift;

(4) Changes in the licensee, in the licensee's board structure, in the applicant's IRS 501(c)(3) status, or in the applicant's Articles of Incorporation or Bylaws;

(5) Changes in the status of proposed production, participation or distribution agreements (if relevant to the proposed project);

(6) Changes in lease or site rights agreements; and

(7) Complete failure of major items of equipment for which replacement costs have been requested or changes in the status of the needs of the equipment requested.

(d) Potential grant recipients may be subject to the following Department Pre-Award Administrative Requirements and Policies:

(1) Name Check forms (Form CD-346) may be used to ascertain background information on key individuals associated with potential grantees. The Name Check requests information to determine if any key individuals in the organization have been convicted of, or are under indictment or have been charged with criminal offenses such as fraud, theft, perjury, or other matters pertinent to management honesty or financial integrity;

(2) Potential grantee organizations may also be subject to reviews of Dun and Bradstreet data or other similar credit checks.

On or before the closing date all new or deferred applicants must serve a copy of the application on the following agencies:

(a) In the case of an application for a construction grant for which FCC authorization is necessary, the Secretary, Federal Communications Commission, 1919 M Street, N.W., Washington, DC 20554;

(b) The state telecommunications agency(-ies), if any, having jurisdiction over the development of broadcast and/or nonbroadcast telecommunications in the state(s) and the community (-ies) to be served by the proposed project; and,

(c) The state office established to review applications under Executive Order 12372 as amended by Executive Order 12416, if the state has established such an office and wishes to review these applications.

(a) Each applicant whose project requires FCC authorization must file an application for that authorization on or before the closing date. Recommended submission date for applications to the FCC is at least 60 days prior to the closing date. The applicant should clearly identify itself to the FCC as a PTFP applicant.

(b) In the case of FCC authorizations where it is not possible or practical to submit the FCC license application with the PTFP application, such as C-band satellite uplinks, low power television stations and translators, remote pickups, studio-to-transmitter links, and Very Small Aperture Terminals, a copy of the FCC application as it will be submitted to the FCC, or the equivalent engineering data, must be included in the PTFP application.

(c) Applications requesting C-band downlinks do not have to submit the FCC application, or equivalent engineering data, as part of the PTFP application. When such a project is funded, however, grantees must submit evidence of FCC registration of the C-band downlink prior to the release of Federal funds.

(d) Any FCC authorization required for the project must be in the name of the applicant for the PTFP grant.

(e) If the project is to be associated with an existing station, FCC operating authority for that station must be current and valid.

(f) For any project requiring new authorization(s) from the FCC, the applicant must file a copy of each FCC application and any amendments with the Agency.

(g) If the applicant fails to file the required FCC application(s) by the closing date, or if the FCC returns, dismisses, or denies an application required for the project or any part thereof, or for the operation of the station with which the project is associated, the Agency may return the application.

(h) No grant will be awarded until confirmation has been received from the FCC that any necessary authorization will be issued.

After the closing date, the Agency will examine each application for timeliness, completeness, eligibility, and FCC authorization.

(a) The Agency will publish a notice in the Federal Register listing all applications accepted for filing. Acceptance of an application for filing does not preclude subsequent return or disapproval of the application, nor does it assure that the application will be funded. Publication merely operates to qualify the application to compete for funding with other applications accepted for filing.

(b) The notice of acceptance for filing will also include a request for comments on the applications from any interested party. The procedural requirements of 2301.11 will be set forth in the notice.

(c) Substantially incomplete applications will be returned by the Agency.

(d) Any application, amendment to an application, or request to reactivate a deferred application that is filed after the closing date will be returned by the Agency.

(e) When the Agency finds that either the applicant or the project is ineligible under the Act and/or these Rules, it will return the application and inform the applicant of the denial of eligibility.

(f) If the Agency finds that a proposed project requires authorization from the FCC and that the applicant did not tender its application for such authorization, the Agency will return the application.

(g) With respect to requests to withdraw or to defer applications from consideration:

(1) Applicants may request withdrawal of an application from consideration for funding without affecting future funding decisions. Withdrawn applications will be returned by the Agency.

(2) Applicants may not request that the Agency defer an application for subsequent consideration. If such a request is received, the Agency will treat it as a request for withdrawal.

(b) The notice of appeal must show that the denial of eligibility or determination of incompleteness is factually or legally incorrect. If the applicant relies on any written documents or other materials to dispute the Agency's action, the applicant should list and attach a copy of each item or indicate that the Agency has a copy of the item in its possession.

(c) Upon receipt of the notice of appeal, the Administrator will review the appeal in consultation with the Chief Counsel and the PTFP Director and will render a written decision within 30 calendar days.

(d) If the Administrator sustains the denial of eligibility or the determination of incompleteness, the Agency will return the application to the applicant.

(e) All decisions of the Administrator made under paragraph (c) of this section are final.

(a) The applicant shall make a copy of its application available at its offices for public inspection during normal business hours.

(b) Any interested party may file comments with the Agency supporting or opposing an application and setting forth the grounds for support or opposition. Such comments must contain a certification that a copy of the comments has been delivered to the applicant. Comments must be sent to the address listed in 2301.5(a).

(c) The Agency will incorporate all comments from the public and any replies from the applicant in the applicant's official file.

In acting on applications and carrying out other responsibilities under the Act, the Agency shall consult with:

(a) The FCC, with respect to functions that are of interest to, or affect other functions of the FCC;

(b) The Corporation for Public Broadcasting, state telecommunications agencies, if any, public broadcasting agencies, organizations, other agencies, and institutions administering programs which may be coordinated effectively with Federal assistance provided under the Act; and,

(c) The state office established to review applications under Executive Order 12372 as amended by Executive Order 12416, if the state has established such an office and wishes to review these applications.

In determining whether to approve or defer a construction grant application, in whole or in part, and the amount of such grant, the Agency will evaluate all the information in the application file and consider the following factors, each of which has equal weight:

(a) The extent to which the project meets the program purposes set forth in 2301.2 as well as the specific program priorities set forth in the Appendix of these Rules;

(b) The adequacy and continuity of financial resources for long-term operational support;

(c) The extent to which non-Federal funds will be used to meet the total cost of the project;

(d) The extent to which the applicant has:

(1) Assessed specific educational, informational, and cultural needs of the community(-ies) to be served, and the extent to which the proposed service will not duplicate service already available;

(2) Evaluated alternative technologies and the bases upon which the technology was selected;

(3) Provided significant documentation of its equipment requirements, and the urgency of acquisition or replacement;

(4) Provided documentation of an increasing pattern ofsubstantial non-Federal financial support;

(5) Provided other evidence of community support, such as letters from elected or appointed policy-making officials, and from agencies for which the applicant produces or will produce programs or other materials;

(f) The extent to which various items of eligible apparatus proposed are necessary to, and capable of, achieving the objectives of the project and will permit the most efficient use of the grant funds;

(g) The extent to which the eligible equipment requested meets current broadcast industry performance standards;

(h) The extent to which the applicant will have available sufficient qualified staff to operate and maintain the facility and provide services of professional quality;

(i) The extent to which the applicant has planned and coordinated the proposed services with other telecommunications entities in the service area;

(j) The extent to which the project implements local, statewide or regional public telecommunications systems plans, if any; and,

(k) The readiness of the FCC to grant any necessary authorization.

In determining whether to approve or defer a planning grant application, in whole or in part, and the amount of such grant, the Agency will evaluate all the information in the application file and consider the following factors, each of which has equal weight:

(a) The extent to which the applicant's interests and purposes are consistent with the purposes of the Act and the pri