. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .In reply refer to:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1800B3-DJF

William D. Silva, Esq.
Law Offices of William D. Silva
5335 Wisconsin Avenue, N.W.
Suite 400 Washington, D.C. 20015-2003

Mark N. Lipp, Esq.
Mullin Rhyne Emmons & Topel, P.C.
1225 Connecticut Avenue, N.W.
Washington, D.C. 20036-2604

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .In re: Boswell Broadcasting Company
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . File No. BPH-950504MF
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rainey Broadcasting, Inc.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . File No. BPH-950525MK

Dear Counsel:

Before the staff is a September 26, 1995 "Joint Request for Approval of Settlement Agreement" filed by Boswell Broadcasting Company ("Boswell Broadcasting") and Rainey Broadcasting, Inc. ("Rainey"). For the reasons set forth below, we deny the joint request.

Boswell Broadcasting and Rainey have pending the above-referenced mutually exclusive applications for new FM stations on Channel 277C3 at Kosciusko, Mississippi. Boswell Broadcasting also has filed for a vacant Durant, Mississippi FM station allocation under our "first come-first served" licensing procedures. File No. BPH-950927MB. The Settlement Agreement requires Boswell Broadcasting to dismiss its Kosciusko application "contingent upon the final grant of [Boswell Broadcasting's] Durant application." If Boswell Broadcasting does not obtain a final grant of the Durant application by September 27, 1996 it could voluntarily dismiss the Durant application and "return to the status quo ante with respect to the Kosciusko application." See Footnote 1.

The Settlement Agreement requires the parties to take other actions if the Commission grants Boswell Broadcasting's Durant application by the specified deadline. Rainey would be required to "seek Commission approval of an amendment to the Kosciusko construction permit to specify a new community of license...." Should the Commission so modify the Rainey authorization, Rainey and Boswell Broadcasting, presumably, would each construct new stations. However, should the Commission deny the city of license "amendment," Boswell would have the option to acquire the Kosciusko construction permit from Rainey. The Settlement Agreement is silent on the fate of the Durant construction permit should Rainey assign the Kosciusko construction permit to Boswell Broadcasting.

The Settlement Agreement proposes actions inconsistent with the Commission's licensing rules and the joint request must be denied on this basis alone. Only applications, not authorizations, can be amended. Rainey would be required to submit a petition for rulemaking to amend the new station's city of license. Rainey could only initiate this proceeding after the issuance of the Kosciusko construction permit. See 47 C.F.R. § 1.420(i). The Mass Media Bureau's Policy and Rules Division would then issue a Notice of Proposed Rulemaking establishing dates for the submission of counterproposals, comments, and reply comments on each of the proposals. See 47 C.F.R. §§ 1.415 and 1.420. To prevail in this proceeding Rainey would need to establish that its proposal is preferred to each of the counterproposals and the current allocation of broadcast facilities under 47 U.S.C. § 307(b). See Eatonton and Sandy Springs, Georgia, and Anniston and Lineville, Alabama, 6 FCC Rcd. 6580 (1991), app. for review filed. This process could likely take more than a year or more to complete, particularly if a counterproposal is submitted.

Even if we ignore the parties' erroneous understanding of the Commission's licensing regulations, we would find that grant of the joint request is not in the public interest. It could result in significant delays in the initiation of service by the new Kosciusko station or the abandonment of the Kosciusko allotment. Effectuating the proposals contemplated by the Settlement Agreement would require the expenditure of substantial Commission resources to, among other things, grant a Kosciusko authorization that Rainey, the would-be permittee, already has indicated it wishes to abandon. Finally, there is no basis on which to evaluate the likelihood of Rainey's or Boswell Broadcasting's success on several licensing matters, which in any event could take years to resolve.

Rainey and Boswell Broadcasting would have great difficulty, based on the representations set forth in the Settlement Agreement, in obtaining Commission consent to the assignment of the unbuilt Kosciusko station to Boswell Broadcasting following the denial of the city of license modification rulemaking. The Commission's rules restrict the assignment of radio station construction permits after the first nine moths of the initial construction period. Rainey could not claim that the pendency of the rulemaking constituted a "circumstance beyond its control." See 47 C.F.R. § 73.3535(b). Boswell Broadcasting would face this same restriction should it attempt to assign the Durant permit during the second half of that station's construction period.

The Commission strongly disfavors settlement agreements contingent on other actions. E.g., Gilbert Broadcasting Corporation, 91 FCC 2d 450, 476 (1982). Such proposals can delay the initiation of service. They are a poor use of limited processing resources. Moreover, favorable consideration of such proposals is particularly unwarranted where the parties have not shown that the terms of the settlement agreement conform to the Commission's rules. See Answer Iowa, Inc., 49 FCC 2d 727, 728 (Rev.Bd. 1974) (settlement agreement found unacceptable because it did not comply with rules and because contingencies could lead to potential service delays and complicate the Commission's work); see also, e.g., Morehead City, North Carolina, 2 FCC Rcd 4146, 4148 n.9 (1987) (rejecting proposed relief which would cause significant administrative burdens and delay the introduction of new service as contrary to the public interest).

Although the request will be denied, we take this action without prejudice to the filing of a new request which complies with the Commission's licensing rules and policies. See Settlement in Comparative Broadcast Proceedings, FCC 96-179 (released April 26, 1996) (reiterating public interest benefits of settlements and permitting the late filing of settlement agreements pursuant to Public Notice, FCC Waives Limitations in Payments to Dismissing Applicants in Universal Settlements of Cases Subject to Comparative Freeze Policy, 10 FCC Rcd 12182 (1995) for "good cause").

For the foregoing reasons, the September 26, 1995 "Joint Request for Approval of Settlement Agreement" filed by Boswell Broadcasting Company and Rainey Broadcasting, Inc. IS DENIED.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sincerely,

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Linda Blair, Chief
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Audio Services Division
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mass Media Bureau

Footnote:

Footnote 1: Petitions to deny Boswell Broadcasting's Durant application must be filed by May 17, 1996. See Report No. NA-194, Notice of Acceptance of FM Broadcast Applications and Notice of Petition to Deny Deadline (released April 15, 1996). If no petition to deny is filed and the staff determines that the application is otherwise grantable, final action on the Durant application could be completed by late summer.