$1250 FCC Fine for Not Having Licensee's Articles of Incorporation in Station's Public File
In a decision by the FCC's Enforcement Bureau, the Commission issued a $1250 fine to a station that did not have its licensee's Articles of Incorporation and By-Laws in its public file when a listener came to check the file. While the rules allow such documents to be left out of the file if there is a list of ownership-related documents in the file and the documents themselves are provided within 7 days of a request, here the licensee did not provide the missing documents for over a month of the request. After investigating the complaint from the person who had looked at the file, the Commission arrived at the $1250 fine. But there is another troubling aspect to this case, and that deals with the decisions references to the Alternate Broadcast Inspection Program ("ABIP").
The Alternate Broadcast Inspection Program is run by state broadcast associations, in cooperation with the FCC. These plans are meant to encourage broadcasters to voluntarily police themselves, by having private inspectors hire by the state associations, inspect their stations. If violations are found and corrected, the FCC will often be lenient or give the station a pass altogether (as in many reporting violations found in renewal applications). In addition, the FCC's own inspectors are supposed to not single out a station that has had an ABIP inspection for a random FCC field inspection. Here, the station had participated in several ABIP inspections, and the inspector had not found the public file violation. Nevertheless, the Commission stated that a station is responsible for compliance with the FCC Rules, and it cannot delegate that responsibility to anyone else. So, even though the inspector had not seen the problem, the station was still liable. The ABIP program does not give a station immunity from an FCC action in response to a complaint, or from stepping in where there is a threat to safety or other immediate danger. Even though this action by the FCC, taken in response to a complaint, may not technically be prohibited from the terms of the alternate inspection program, one wonders if the Commission, in this circumstance, is not being a little harsh. The document missing from the public file was not one fundamental to station operations, or even to the mission of the FCC. The failure to have it in the file did not cause interference between broadcast stations, nor likely did it have any discernible impact on the content of the broadcasts from the station. Yes, its absence may have technically been against the FCC's rules, but wouldn't an admonition have gotten the message across just as well as a fine in this case, particularly where the participation in several ABIP inspections made clear that the licensee was operating in good faith - trying to comply with the FCC's rules?
The alternate inspection programs should be encouraged by the FCC, as the FCC itself simply does not have the resources to visit most stations on any regular basis. The voluntary ABIP program is thus the best way for the FCC to ensure that stations are complying with the Commission's rules. The Commission should be giving stations an incentive to participate in the program by showing some understanding to those stations that have voluntarily gone through the program and, in good faith, thought that they were operating in compliance with the rules. To dismiss the participation in the manner that was done in this case seems to provide the wrong motivation to stations with respect to these programs.
As to the violation itself, corporate entities are supposed to have their articles of incorporation in their files. Licensees are also supposed to have in their public file other documents reflecting any future ownership rights in the station (options, pledges, warrants, etc) and any documents that significantly restrict the actions of the licensee (e.g. many security agreements). All must either be in the file or otherwise listed in the file and available for inspection within a week. For more information about public inspection file obligations, see our Guide to the Basics of the Public File Rules for Commercial Broadcast Stations. Check it out to avoid issues like this one, and look for future clarifications on the ABIP issue as this case makes its way through the halls of the FCC.
I see nothing even in your "Guide to the Basics of the Public File Rules for Commercial Broadcast Stations" that would indicate the need for either the articles of incorporation or by-laws to be in the public file, unless there was some special clause that would merit including them in the ownership report.
"Harsh" is not the proper word. "Greedy" is.
In our Guide, there is a reference to needing to put in the file the Ownership Report and all documents that are exhibits or attachments to the report - which does include Articles and By-Laws. In light of this decision, we will update the Guide to make that requirement more explicit
All due respect David, I see nothing in Part 73 which specifically requires the AoI to be part of the Public File. The related documents aspect in (e(1)) pertain more to the distribution and allocation of shared/stock, controlling or attributable interest, ownership distribution as well as any contracts related to same. AoI's rarely define that to any great detail. Those are generally contained in the By-Laws. And again, if the actual distribution of overship attribution is clearly defined in the ownership report, then the by-laws are also not needed as the by-laws are not statements of fact.
In my opinion, the licensee has grounds for an appeal and ajudication at that appeal. This sets a terrible precedent on how the FCC's meddling into a corporation's operation is being executed through a very arcane and ambigious at best rule interpretation.
MM
Mike:
Actually, the rules do require the filing of Articles of Incorporation - in a roundabout way. Section 73.3526(e)(5) requires the filing of Ownership Reports and all related documents including the contracts that must be listed in the Ownership Report (as specified in Section 73.3613) - which includes the Articles of Incorporation of a corporation.