I The Balanced Budget Act of 1997 Does Not Authorize The FCC To Use Auctions Where An Applicant Proposes A Noncommercial Educational Broadcast Service
The Commission has proposed the use of auctions to decide among mutually-exclusive applications for non-reserved broadcast frequencies – whether or not one or more of the applicants is a public broadcaster – based in part on its understanding that auctions are either mandatory or authorized under Section 3002 of the Balanced Budget Act of 1997, as codified at Section 309(j) of the Communications Act. However, the Balanced Budget Act neither requires nor authorizes the use of auctions when a public broadcaster files an application for a license to construct and operate a new or modified noncommercial educational broadcast station, regardless of whether the station is on a reserved or non-reserved frequency.
The Balanced Budget Act of 1997 provides that the competitive bidding authority granted by the Act "shall not apply to licenses or construction permits issued by the Commission … for stations described in section 397(6) of this Act." Section 397(6) of the Communications Act refers to a "television or radio broadcast station" which:
Section 397(6) is not limited to stations located on the few FM and television channels reserved for noncommercial educational broadcasters, but applies on its face to all noncommercial educational broadcasters regardless of their location on the AM, FM or television band.
Moreover, the legislative history underlying the auction provisions of the Balanced Budget Act demonstrates Congress’s intent to exempt public broadcasting applicants regardless of whether the particular frequency applied for is in the reserved or non-reserved spectrum. The original House and Senate bills, which were not enacted, would have expressly limited the auction exemption to applications for "channels reserved for noncommercial use." However, the House-Senate conference eliminated this distinction between reserved and unreserved spectrum. Under well-established canons of statutory construction, "[w]here Congress includes limiting language in an earlier version of a bill but deletes it prior to enactment, it may be presumed that the limitation was not intended." Accordingly, the auction exemption cannot be limited to reserved noncommercial frequencies.
As further evidence of Congress’s intent to exempt all noncommercial broadcasters from auctions, it is important to note that the reservation of certain channels for noncommercial use is not a function of Federal law, but of FCC rules. These rules, which were designed to guarantee the availability of a minimum, rather than a maximum, of spectrum for public broadcasters, permit public broadcasters to operate throughout the broadcast spectrum. The Commission routinely issues licenses and construction permits to stations described in Section 397(6) throughout the AM, FM and TV spectrum upon the simple filing of an application demonstrating the applicant’s eligibility for a noncommercial educational broadcast station. Noncommercial educational FM stations operating on unreserved channels are governed by the same rules that are applicable to noncommercial educational FM stations in the reserved band, with the exception of certain technical rules. Moreover, noncommercial FM translators are defined as any "FM broadcast translator station which rebroadcasts the signals of a noncommercial educational FM radio broadcast station," regardless of whether the translator or full-service station are located on the reserved or unreserved band.
Thus, based on the plain language of the statute and Congressional intent, the Balanced Budget Act exempts from auctions all applications for new or modified noncommercial educational broadcast permits or licenses, whether or not the applications are for stations on reserved or unreserved frequencies. Accordingly, the allocation of facilities for public broadcast stations must be made pursuant to the Commission’s long-standing authority to issue broadcast licenses as the public convenience, interest or necessity dictates.