designation for hearing

Here are some of the regulatory developments of significance to broadcasters from the past week, with links to where you can go to find more information as to how these actions may affect your operations.

  • As widely reported, Gigi Sohn has asked President Biden to withdraw her nomination to become the third Democratic FCC Commissioner

Last week, broadcasters and broadcast journalists were abuzz with discussions of the FCC’s Media Bureau issuing a hearing designation order referring to an Administrative Law Judge questions about the proposed acquisition of the TEGNA broadcast stations by Standard General Broadcasting.  This week brings news that the parties have filed a Motion asking that the Judge certify this designation to the FCC Commissioners to determine whether the case really should have been designated for hearing.  The request that the case be referred to the Commissioners notes that the designation would have the effect of terminating the transaction, as the contract provides the parties only until May to close, and the buyer cannot get the agreement extended.  With so many questions about the TEGNA deal and its designation for hearing, we thought that we would review the hearing designation process and look at the inherent delays in the process which led to the parties’ contention that the designation, if not reviewed by the Commission, will effectively kill the deal.  In a subsequent article, we will look at some of the substantive issues raised by the hearing designation order.

Five years ago, we wrote about the hearing designation process in connection with the last major case where a proposed broadcast transaction was designated for hearing, i.e., Sinclair Broadcast Group’s proposed acquisition of the television stations owned by Tribune Media.  The TEGNA case differs from the Sinclair case in one significant manner, namely that the hearing designation order in the TEGNA case was issued by the Chief of the FCC’s Media Bureau, not by the Commissioners themselves.  In the Sinclair case, the Commissioners issued the hearing designation order, meaning there was no opportunity to ask for the review now being sought by the parties to the TEGNA deal.  When a designation order is issued by a Bureau, the party whose application was designated for hearing can, as in the TEGNA case, ask the presiding Administrative Law Judge to certify the case to the Commissioners before starting the hearing process, if there are questions of law that suggest that the case should not have been set for hearing.  While the Judge can decide to seek the guidance of the full Commission through this kind of certification, the full Commission need not take up the case even if the Judge decides to certify it to them.  Instead, the Commissioners can decide that the hearing should move forward, and that the legal issues can be considered later after the full hearing has taken place.  While that is the procedure set out in the FCC’s rules,  the TEGNA parties argue that were the Judge to certify the case and the Commission did take action, then they intend to directly appeal the matter to the Courts for review (which is normally not allowed until a decision is reached by the ALJ) because the designation for hearing by itself, issued after the application was pending for a year, equates to a the denial of the application.  What in the process for a case once designated for hearing that leads to that conclusion?  Let’s look at the process of setting a case for hearing.Continue Reading Parties to TEGNA Deal Seek Full Commission Review of Hearing Designation Order – Looking at the Process They are Trying to Avoid 

Last week, the FCC issued a hearing designation order, sending to an Administrative Law Judge the question of whether an AM station’s license renewal application should be granted.  The hearing seeks to gather evidence as to whether the renewal should be granted despite the station’s record, under its current licensee, where it was operating for only 36% of the time that the licensee owned the station prior to the renewal being filed, and for only 2 days in the 9 months in 2020 after the renewal was filed.  During much of the period that the station was operating, it operated at less than full power (according to the FCC, often without receiving an STA for that low power operation).

Because of these prolonged periods of silence, the FCC asks whether the licensee was really serving the public interest.  For example, if a station is not operating, it cannot cover local issues or broadcast EAS warnings.  Over the last several years, there have been several cases where the FCC has designated for hearing or revoked licenses of stations with records of non-operation for extended periods during a license renewal term, finding that broadcasters cannot warehouse spectrum.  See our articles here and here about some recent examples.  If a broadcast channel is not used by a licensee, these hearings are held to determine if the public interest might not be better served by taking the channel from its current licensee and awarding it to some other party who will make use of it.
Continue Reading FCC Hearing Designation Order Reminds Broadcasters that Long Periods Where They are Not Operating May Lead to License Renewal Problems

This week, the FCC designated for hearing the license renewal applications for a number of Alabama radio stations because of their owner’s conviction on felony ethics violations, stemming from misconduct while he served in the Alabama legislature.  The hearing is to determine the effect of those felony convictions on the character of the licensee to hold a broadcast license.  The Communications Act requires that a broadcast licensee (and its owners) must have the requisite character to operate the station.  Character is reviewed whenever a party seeks to acquire a broadcast license, including when they file for the renewal of that license.  In egregious circumstances, the FCC can even move to revoke the licenses held by a licensee outside of the license renewal process.  Even the sale of a license by a party without the required character qualifications may be prohibited by the FCC, as the Commission does not want to see a wrongdoer profit from the disposition of what is seen as a government asset – the FCC license.

Character has been defined by the FCC through numerous policy statements issued periodically over the last 50 years, and has been further refined by precedents established in individual cases.  This week’s case gives us the opportunity to look at what conduct the FCC considers in assessing the character of any broadcast application, and the factors that are reviewed in determining the impact of bad conduct on the ability of the applicant to hold an FCC license.
Continue Reading FCC to Hold Hearing to Determine What Felony Conviction of Station Owner Means for License Renewal – What Does the FCC Character Policy Require of Broadcast Applicants?  

Yesterday, the FCC issued a hearing designation order – though one with much lower stakes than the last designation order issued by the FCC which seemingly resulted in the termination of the proposed Sinclair-Tribune merger. Yesterday’s order was at almost the opposite end of the spectrum from a massive merger of TV companies – the upcoming hearing will determine whether to revoke the license of a Low Power FM station. Issues were raised as to whether the licensee in its FCC applications lied to the FCC about whether its board of directors was made up of US citizens – there being substantial evidence that the board members were in fact citizens of other countries.

As we wrote here when the Sinclair acquisition was designated, hearings are most commonly used when the FCC is faced with disputed issues of fact. But hearings are also required in some cases by the Communications Act, including in cases where there is a proposed revocation of an existing license, as appears to be the reason for the order yesterday – though the FCC also lists a number of issues in the LPFM case that need a factual review. These include whether the licensee made misrepresentations to or lacked candor with the FCC (essentially whether the licensee had lied to the FCC in its applications when it said its directors were US citizens), whether the license was controlled by aliens (i.e. foreign citizens), whether the licensee failed to keep information on file at the FCC accurate and up to date, and whether the licensee failed to respond to FCC inquiries (the FCC having asked for information about the apparent foreign ownership and received no response).
Continue Reading Another FCC Broadcast Case Designated for Hearing – With Much Different Stakes

In light of yesterday’s announcement that the FCC Chairman has proposed that portions of the acquisition by Sinclair Broadcast Group of the television stations owned by Tribune Media would be designated for hearing, one question that many have asked is, “What does designation for hearing mean?”  Several decades ago, the process of designating an application for hearing was a common occurrence – used by the FCC to decide between competing applicants for new broadcast (and in some cases non-broadcast) licenses, in connection with determinations of whether or not to grant the license renewal of broadcast stations where substantive petitions or competing applications were filed against such applications, or to deal with enforcement issues when there were questions about the facts of a particular situation.  The FCC had a large staff of Administrative Law Judges who heard these cases, and they were usually quite busy.  But as the staff of ALJs at the FCC has dwindled to one, and as cases referred to that Judge are increasingly infrequent, it might be worth discussing a bit about the hearing process at the FCC.

Congress established, in Sections 309 and 310(d) of the Communications Act, the manner in which the FCC is to process applications filed with it.  In cases involving applications for new stations or for the purchase and sale of stations, applications are filed providing information required by the FCC and such supplemental information as the FCC may request.  Interested parties routinely have 30 days in which to file objections to applications, in which the petitioner needs to submit detailed allegations supported by facts either in the public record or otherwise supported by statements from those with personal knowledge of the facts, arguing why an application should not be granted.  Applicants have the opportunity to respond.  In most cases, the FCC will attempt to resolve any disputes, or any questions that it has on its own, on the basis of the written materials presented in the application, the petitions, and in response to any FCC supplemental request for information.  But Section 309(e) makes clear that, if there is a “substantial and material question of fact” or if the Commission is otherwise not able to determine that an application meets the requirements of the rules, it needs to formally designate the application for hearing.
Continue Reading What Does an FCC Designation for Hearing Mean?

Starting June 1, 2019, just over a year from now, the next broadcast license renewal cycle will begin. By that date, radio stations in DC, Maryland, Virginia and West Virginia must file their renewal applications. Every other month for the next 3 years will bring the filing of radio license renewals in another set of states. And television stations will begin their renewal cycle a year later (June 1, 2020). The FCC’s schedule for radio license renewals can be found here and here. For TV stations, the schedule of renewal filings by state is in the same – just one year later than for radio. Every eight years, broadcast stations have to seek the renewal of their licenses by the FCC by demonstrating their continuing qualifications to be a licensee, including showing that they have not had a history of FCC violations and that they have otherwise served the public interest.

We have already written several times about how, with all broadcasters – both radio and TV – now required to have an online public file, it is important for stations to make sure that those files are complete and are kept up to date on a regular basis (see our articles here, here and here). Given that the contents of the online public file can be viewed by anyone, anywhere, just by launching an Internet browser, we would expect more complaints about incomplete files, and more scrutiny by the FCC of the contents of files that rarely were subject to FCC review in the past. FCC staffers can review public file compliance from their offices or homes, and do not have to rely on the rare field inspection to discover a violation. Thus, stations should be reviewing the contents of their files now to be sure that they are ready for the scrutiny that they will receive in the upcoming renewal cycle. But that is not the only issue about which stations need to be concerned, as illustrated by a decision released by the FCC yesterday, deciding to hold an evidentiary hearing as to whether the license renewal of a broadcast station that had been silent much of the last license renewal term should be granted.
Continue Reading License Renewal Cycle Starts in a Year – Crackdown on Silent Stations and Online Public File Signal Warnings to Broadcasters

The FCC yesterday issued a Hearing Designation Order for two AM stations in Virginia as these stations were silent for most of their license renewal terms. One of the two stations was on the air for only 54 days out of the 3.4 years that the licensee held the station during the license term, and

Last week, we wrote an article which received much attention, addressing the legal issues that could come up if contests are not conducted properly. One issue that we did not anticipate was reflected in an FCC order released yesterday, designating for hearing the license renewal of the Entercom Sacramento radio station that was involved in