This was the case at one time, but it no longer applies. Today, there is no restriction on the location of NCE FM translators in the reserved band (88.1~91.9 MHz) and their program delivery method as long as the primary station is full-service (and not LPFM) and the both the translator and the primary station are in the reserved band and they are both commonly owned.
"Alternate delivery" means the delivery of program material of a full-service primary station to an FM translator using methods other than the translator receiving the primary station (or another translator of that primary station) over the air. These methods can include, but are not limited to, satellite, microwave and internet.
Translators for LPFM stations must use over the air delivery from their primary stations, this is regardless of whether the translator is commonly owned by the LPFM licensee or a third party (third parties can't use alternate delivery for NCE translators).
Also note that for fill-in translators (commercial and noncommercial) where the service contour of the translator is entirely inside the service contour of the primary station and the primary station is not an LPFM, alternate delivery can be used.
I can see the reason for the confusion because of the extensive language in §74.1231(b) which suggests that in order for an NCE to use alternate program delivery using that method and in situations where the translator is more than 80 km from the primary station or less than 160 km from any full-service NCE station a study needs to show that there is more than one channel available for translators in the service area proposed by the translator. This was the rule at one time.
The ability for NCE FM translators to use alternate delivery over longer distances (what we call the "satellator" rule) was first adopted in a Report and Order in 1988. As a result of that order, a petition for reconsideration was filed by NAB, Maximum Service Television and Salem Broadcasting in this proceeding. Subsequently a "Joint Proposal for Noncommercial Educational FM Translators" was filed jointly by Moody, NPR, NFCB, IBS and Family Stations proposing several amendments for a compromise leading to the references to the additional showings required for proposed translators more than 80 km from their primary station or within 160 km of another NCE station. These provisions were put in place for a three year transition period from 1989 to 1992.
These distance provisions in §74.1231(b)(1) and (2) no longer apply as they were sunsetted on October 1, 1992 (as codified in §74.1231(b)(1)(iv)).
MM Docket 86-112, Report and Order, 3 FCC Rcd. 2196 (1988) (adopted rules to allow NCE FM translators to use alternate delivery)
MM Docket 86-112, Memorandum Opinion and Order, 4 FCC Rcd. 6459 (1989) (on reconsideration, adopted a 3-year transition period where showings of additional spectrum availability were required. Those studies are no longer required.)
47 CFR §73.860 Cross Ownership (Commonly-owned translators for LPFM stations must use the over the air delivery method.)
47 CFR §74.1231 Purpose and permissible service (Includes rules regarding the methods of which programming to translators and boosters can be delivered. Portions of this rule are overridden by §73.860 for LPFM stations.)
