******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In re Applications of ) California State University, Sacramento) ) For Extension of Time to Construct,) File Nos. BMPED-951128JB, Modification of Facilities, ) BMPED-960529IB, Replacement of Expired Construction ) BPED-970129JA, and Permit, and License to Cover Construction) BLED-970902KB Permit of Station KKTO(FM) ) Tahoe City, California ) ) MEMORANDUM OPINION AND ORDER Adopted: August 27, 1998 Released: September 14, 1998 By the Commission: 1. The Commission has before it an April 3, 1997, Application for Review filed by Howell Mountain Broadcasting Company ("Howell") of a February 27, 1997, Letter Ruling and related pleadings. The Letter Ruling denied Howell's May 6, 1996, Petition for Reconsideration ("1996 Petition") of an underlying staff action which granted California State University, Sacramento ("CSUS") an extension of time to construct noncommercial educational station KKTO(FM) in Tahoe City, California. The Commission also has before it Howell's April 11, 1997, Petition for Reconsideration ("1997 Petition") of a March 11, 1997, staff action reinstating CSUS's expired construction permit for KKTO(FM) and related pleadings. For the following reasons, we deny Howell's Application for Review and dismiss the 1997 Petition. BACKGROUND 2. CSUS was granted an original construction permit to build new noncommercial educational ("NCE") station KKTO(FM) on September 20, 1991. On December 3, 1992, CSUS filed an application to modify the KKTO construction permit, requesting, inter alia, a change in the location of its antenna to a tower owned by Communications Properties, Inc. ("CPI"). The original construction period ended on March 20, 1993, and the staff granted CSUS's modification application and extended the KKTO(FM) construction permit for a six-month period to December 16, 1994. CSUS states that shortly following the June 16, 1994, grant of the modification and extension of the KKTO(FM) construction permit, CSUS was denied funding by the National Telecommunications and Information Administration ("NTIA") to use a satellite link to deliver programming to the CPI site and in the summer of 1994, it began to search for another antenna site. 3. During the summer of 1994, CSUS located the KREN-TV tower at Slide Mountain, Nevada, which at that time was owned by Sainte Ltd ("Sainte"). The KREN-TV tower had an existing microwave link which could be used to relay the signals of commonly owned NCE FM stations KXPR-FM and KXJZ(FM), Sacramento, California. CSUS obtained a letter dated August 25, 1994, from Sainte, agreeing to lease space on the KREN-TV tower and on November 23, 1994, it filed an application to modify its construction permit to specify the KREN-TV site. The following month, on December 23, 1994, the Commission approved the sale of KREN-TV to Pappas Telecasting Company ("Pappas"). Within days, CSUS contacted Pappas, the new owner of KREN-TV, by letter dated December 30, 1994, to ensure that the terms of CSUS's understanding with the previous owner for use of the tower remained acceptable. In response, Pappas confirmed its willingness to lease tower space to CSUS in a letter dated February 8, 1995. 4. On July 5, 1995, the staff granted CSUS a modification of its construction permit to relocate its antenna to the KREN-TV tower. The staff also granted CSUS an extension of time to construct KKTO at the proposed new antenna site, with construction to be completed by January 5, 1996. Subsequently, CSUS wrote to Pappas, the new owner of KREN-TV, in a letter dated August 14, 1995, requesting negotiations for a formal lease and specifying the technical requirements of its authorized FM facilities. Pappas notified CSUS on October 2, 1995, that it had to conduct additional engineering studies that could not be completed until December 1995. CSUS filed the subject extension application with the Commission on November 28, 1995, asserting that circumstances beyond its control had prevented completion of construction during the relevant construction period. Pappas notified CSUS on March 6, 1996, that the KREN-TV tower was technically insufficient for CSUS's needs. On March 29, 1996, Commission staff granted CSUS an extension of time to construct KKTO for a six month period until September 29, 1996. On May 6, 1996, Howell filed the 1996 Petition seeking both the rescission of the staff decision granting KKTO an extension and also the cancellation of the KKTO construction permit. 5. For approximately six weeks after the March 6, 1996, notification, CSUS continued negotiations with Pappas about the use of the KREN-TV tower and hired an engineering firm to redesign the KKTO antenna, but negotiations ultimately failed. CSUS then decided to return to the previously authorized CPI site which was 0.18 miles south of the KREN-TV tower, and which, as a result of developments in digital telephone line technology, no longer required a satellite relay system. CSUS signed a contract for the CPI site on May 10, 1996, and filed a minor modification application with the Commission on May 29, 1996, to reflect the proposed change in sites. On August 15, 1996, Howell filed an informal objection to CSUS's modification application that proposed the CPI site. 6. On February 27, 1997, the staff issued its Letter Ruling denying the 1996 Petition and informal objection to CSUS's CPI modification application but held in abeyance further action on this application because it was mutually exclusive with a new FM station application in Pollock Pines, California. On April 3, 1997, Howell filed the instant Application for Review. Subsequently, the Pollock Pines applicant amended its application to eliminate the mutual exclusivity with the CSUS modification application. The Commission granted CSUS's CPI modification application on August 11, 1997. On September 2, 1997 CSUS filed an application for a license to cover KKTO's construction permit. This application remains pending. 7. The construction permit for KKTO at the KREN-TV tower expired on September 29, 1996, while the CPI modification application was still pending. CSUS filed an application for reinstatement of its construction permit on January 29, 1997, stating that the basis for its late filing was inadvertence. CSUS explained that the expiration of the construction permit was overlooked during the period when there was a change in management and attorneys. CSUS submitted a one-in-three showing for reinstatement based on "substantial progress" in constructing the KKTO facilities pursuant to 47 C.F.R.  73.3534(b)(2). The staff granted the unopposed CSUS reinstatement application on March 11, 1997. Howell filed the 1997 Petition on April 11, 1997. DISCUSSION I. Application for Review of March 29, 1996, Staff Action Extending KKTO(FM) Construction Permit 8. Howell contends that the Bureau erred in its Letter Ruling in finding that Howell had not raised a substantial and material question of fact concerning CSUS's reasonable assurance of the KREN-TV site. Howell asserts that the Bureau misconstrued its arguments. Howell states that it did not claim that CSUS lacked the site owner's permission to use the KREN-TV site. Rather, it contends that CSUS failed to act with diligence and good faith in proposing to locate its antenna on the KREN-TV tower when it was repeatedly warned by the former and current owners that the tower might not be capable of supporting the KKTO antenna. Howell claims that Pappas's decision to not lease tower space to CSUS should not be treated as a circumstance beyond CSUS's control because the technical suitability of the KREN-TV tower was always in doubt. 9. We reject Howell's contentions as nothing more than a rehash of arguments previously raised and considered. The relevant exhibits plainly establish that CSUS acted reasonably and in good faith in obtaining a permit modification to use the KREN-TV tower. A permittee proposing to collocate its antenna on an existing tower is not required to enter in a binding agreement with the tower owner prior to the grant of the application specifying such tower. We reject Howell's attempt, in essence, to require a permittee to obtain a favorable outcome or risk cancellation of its permit where the tower owner raises, as here, straightforward technical issues and the permittee diligently seeks to resolve these issues in a manner satisfactory to the tower owner. 10. Howell also argues that the Bureau erred by failing to address what Howell terms CSUS's lack of candor by allegedly not disclosing the loss of its antenna site to the Commission when Pappas, the current owner of the KREN-TV tower, rescinded its permission on March 6, 1996. We disagree. CSUS spent approximately six weeks after the March 6th notification attempting to renegotiate with Pappas, and taking such actions as proposing an antenna redesign to address the tower owner's concerns. These efforts indicate that CSUS believed that the Pappas rejection of its technical proposal was not final and that a reversal of this outcome was possible. By mid-April 1996, however, it was clear to CSUS that it had lost the KREN-TV site. Thus, at this point it had an obligation to report this development to the Commission within 30 days, notwithstanding the March 29, 1996, staff grant of its extension application. See 47 C.F.R.  1.65 (application remains "pending" until a Commission grant or denial of application is no longer subject to reconsideration by the Commission or to review by any court). Although CSUS failed to file this required Section 1.65 amendment, it disclosed the loss of the KREN-TV site -- only 6 weeks after this event occurred -- in its May 29, 1996, modification application, a fact which substantially rebuts Howell's lack of candor contention. In any event, Howell's argument must fail because it has not made a prima facie showing of an intent to conceal a decisionally significant fact, or a pattern of repeated violations or other circumstances that would warrant a disqualifying reporting or lack of candor issue. See, e.g., Merrimack Valley Broadcasting, Inc., 99 FCC 2d 680, 683 n.9 (1984); see also David Ortiz Radio Corp. v. FCC, 941 F.2d 1253, 1260-1261. (D.C. Cir. 1991) (applicant's two filings stating or implying applicant's reliance on a transmitter site known to be unavailable evidenced an intent to conceal such that disqualification under Section 1.65 was possible). Intent to deceive is a necessary element of misrepresentation or lack of candor which, given the circumstances, we do not find present here. See Bluegrass Broadcasting Co, 43 FCC 2d 990, 993 (1973); Fox River Broadcasting, Inc., 93 FCC 2d 127 (1983). II. Petition for Reconsideration of the March 11, 1997, Staff Action Reinstating KKTO(FM) Construction Permit 11. The 1997 Petition for reconsideration will be dismissed because Howell does not meet the procedural requirements of 47 C.F.R.  1.106(b)(1). Specifically, Howell is not a party to the reinstatement proceeding and it has not successfully demonstrated that it was not possible for it to participate at the initial phase of that proceeding. Nonetheless, we will consider on our own motion the arguments raised in Howell's petition for reconsideration. See 47 C.F.R.  1.106(c)(2). 12. Howell contends that CSUS prematurely constructed the KKTO facilities prior to the August 11, 1997, grant of the modification application specifying the CPI site in violation of Section 319(a) of the Communications Act of 1934, as amended, 47 U.S.C.  319(a), and that CSUS's premature construction is an attempt to pressure the Commission into post-hoc acceptance. CSUS responds that it had no reason to believe that its minor modification application for a previously authorized site would not be timely granted since it had requested expedited review. It also argued that severe winter weather conditions on Slide Mountain limit opportunities for station construction, and therefore, that it acted reasonably in having the equipment delivered to the CPI site consistent with Patton Communications, Inc., 81 FCC 2d 336 (1980), where the Commission determined that the permittee, prior to the grant of a construction permit by the Commission, did not engage in premature construction by building concrete footings where local weather conditions prevented construction during the winter. 13. We agree with Howell that under Commission precedent, CSUS is not entitled to any credit for construction at the CPI site for which it had only a pending modification application. See Deltaville Communications, 11 FCC Rcd 10793, 10797 (1996) (finding no substantial progress where "progress" was tied entirely to preferred site); Mansfield Christian School, 10 FCC Rcd 12589, 12590 (1995) (finding preferred site activities "not relevant" to evaluating construction efforts, "especially where the applicant has taken no other steps toward constructing the authorized facility"). As a result, CSUS's contention that reinstatement and extension of the CSUS application on the basis of "substantial progress" is wholly without merit. We find, however, that CSUS was prevented from completing construction based on circumstances beyond its control during the March 29, 1996, to September 29, 1996, construction period, and therefore, that the staff action reinstating the permit was warranted. See 47  C.F.R. 73.3534(b)(3). Howell timely sought reconsideration of the March 29, 1996, action extending the CSUS permit and that 1996 Petition remained pending for the rest of the construction period. It is well settled that a permittee is not required to go forward with construction while the grant of a construction permit is clouded by a pending administrative or judicial challenge. See Rainbow Broadcasting Company, 11 FCC Rcd 1167, 1168 (1995); see also Rainbow Broadcasting Company, 12 FCC Rcd 4028, 4061-4062 (ALJ 1997) (finding following designation of case for hearing that construction during pendency of judicial appeal would be unreasonable and therefore that the pendency of such appeal constitutes a circumstance beyond permittee's control); Rainbow Broadcasting Company, Decision, GC Docket No. 95-172, FCC 98-185 at  50 (adopted July 30, 1998, released August 5, 1998) (affirming the ALJ's finding that the permittee's failure to construct was due to reasons beyond its control under Section 73.3534(b)). See also KWQJ(FM), 10 FCC Rcd 8777 (1995) (litigation regarding grant of permit constitutes a reason beyond control of permittee for purposes of Section 73.3534(b)). This policy is designed to avoid the manifest unfairness that would result from requiring a permittee to make further expenditures and continue construction efforts where its permit could be subsequently cancelled. See Channel 16 of Rhode Island, Inc. v. FCC, 440 F.2d 266, 275-76 (D.C. Cir. 1970) (excusing lack of construction where relevant FCC policy remains in limbo). 14. Howell alleges misrepresentation by CSUS in failing to report to the Commission that the construction for which CSUS claimed credit in its reinstatement application was actually premature construction at an unauthorized site. Specifically, Howell contends that CSUS falsely responded "yes" to question 8 on the FCC Form 307 for reinstatement, "Are the representations, including environmental, contained in the application for construction permit still true and correct?" CSUS replies that there was no misrepresentation because in response to question 5 on FCC Form 307, it stated that it had a pending minor modification application for the CPI site. CSUS contends that its response to question 5 and additional references to the pending site authorization in its exhibits to Form 307 sufficiently indicate that construction had taken place at that pending site. 15. With regard to the allegation of misrepresentation, we find that CSUS's failure to clearly report to the Commission that CSUS was building at its pending site was not deliberate, but rather was due to carelessness. However, as stated above, intent to deceive is a necessary element of misrepresentation. "[C]arelessness, exaggeration or slipshoddiness, which lack that necessary element, do not constitute misrepresentation." See F.B.C. Incorporated, 3 FCC Rcd 4595, 4597 (1988) citing John C. Roach, 43 FCC 2d 685, 689 (Rev. Bd. 1973). Although CSUS failed to state explicitly in its reinstatement application that construction activity took place at the CPI tower site, the attached exhibits do provide indications of such activity, including a copy of a lease contract with CPI. 16. Nevertheless, we find that CSUS prematurely constructed the KKTO facilities by installing its antenna, transmitter, transmission line, and related wiring at the CPI tower site prior to the grant of the minor modification of its construction permit. Although CSUS relies on Patton Communications, Inc., 81 FCC 2d 336 (1980), to support its assertion that its construction activities did not constitute premature construction, CSUS's situation is clearly distinguishable from Patton where the permittee went no further than to have concrete footings installed. Compare Global Broadcasting Group, 10 FCC Rcd 5437 (1995) (insufficient evidence to support allegation of premature construction, i.e., that antenna had been mounted onto existing tower and transmitter connected prior to the Commission's grant of minor modification, when policy permits purchase of broadcast equipment prior to grant). We therefore direct the Mass Media Bureau's Enforcement Division to issue a Notice of Apparent Liability consistent with our findings herein. CSUS's license application will be held in abeyance pending any such action. 17. Accordingly, for the reasons stated above, IT IS ORDERED that the Application for Review filed by Howell Mountain Broadcasting Company on April 3, 1997, IS HEREBY DENIED. 18. IT IS FURTHER ORDERED, that the Petition for Reconsideration filed by Howell Mountain Broadcasting Company on April 11, 1997, IS HEREBY DISMISSED. 19. IT IS FURTHER ORDERED, that the application for a license to cover KKTO(FM), Tahoe City, California, filed on September 2, 1997, by California State University, Sacramento, is held in abeyance pending any action taken by the Mass Media Bureau's Enforcement Division. FEDERAL COMMUNICATIONS COMMISSION Magalie Roman Salas Secretary