$8000 FCC Fine for Noncommercial Station Not Making Public Inspection File Available Upon Request

In a decision just released, the FCC fined a noncommercial FM station $8000 for failing to make its public inspection file available when it was requested.  The FCC made clear that past cases where a noncommercial station was given only an admonition for similar violations were no longer good law, finding that the public file was an important part of the station's obligations to the public and the failure to make it available was a serious violation.  This case should serve as a warning to all stations, commercial and noncommercial, that they need to have people at the station at all times who know where the public file is located, and that all visitors who request access to the file need to be given such access.

This case was perhaps a bit more egregious than most, as the visitor who requested access to the fine was known to the station, as the person was employed by a college that had tried unsuccessfully to buy the station.  After its request to purchase the station was turned down, the prospective buyer had allegedly filed a number of pleadings at the FCC trying to force the licensee to sell the station.  When the person appeared at the station to request access to the public file, the person was first told to return another day.  After protesting that was illegal, an official of the College which is the station licensee, arrived at the scene and told the visitor that he had to leave, and could only view the public file after having made a prior appointment with the college's attorney.  When reached by phone, the attorney allegedly told the visitor to leave the premises or he would be arrested.  Only when he returned another day, after being initially turned down yet again, was the visitor eventually able to persuade the station employees that refusal to give him access to the file was illegal.  When he was finally able to gain access to the file, he stated that he found it to be incomplete.

Obviously, this kind of action should never occur at any station - commercial or noncommercial.  The public file is to be made available to visitors immediately upon request.  Thus, station employees need to be trained as to where the file is located, and know that anyone can review it, without harassment or questioning as to their motivation for doing so.

The case is also important in the language about the importance of the public file.  Most broadcasters would probably say that it is exceedingly rare that anyone ever visits the public file, and when someone does, it is usually either a student in a local broadcast journalism program making the inspection as a class project or it is someone who is not looking for information about the station, but instead already has formed an opinion about station operations and is looking for a "gotcha" - finding a shortcoming that can be reported to the FCC in an attempt to seek some sort of sanctions.  Many have complained that the burden of maintaining the public file far outweighs the minimal benefit that those few legitimate visitors to a station may derive from its maintenance.  

Because of these perceptions, some have suggested that the public file obligations be reduced or eliminated.  However, in recent years, the FCC seems to be moving in the opposite direction, making the requirements more stringent.  See, for example, the requirements of FCC Form 355 which has been adopted but not yet become effective for television broadcasters.  This case seems to indicate that the Commission is not backing away from its enforcement of public file rules, so broadcasters need to take their obligations seriously. 

Shape of Things To Come: New Public Interest Obligations, Changes in TV DMAs and More Flexibility For LPFM

As the Commission held its last localism hearing in Washington on Halloween night, FCC Chairman Kevin Martin's views on how the FCC should insure that stations are responsive to their communities became somewhat clearer.  In his opening statement, the Chairman outlined a set of actions that could be taken by the FCC to insure more service to the public.  While emphasizing the importance of efforts to encourage new entrants into broadcast ownership, the Chairman's proposals to add new regulatory requirements, including requiring that a station be manned during all hours of operation, may well have the result of making it more difficult for any new entrant (or for existing smaller operators) to profitably operate their stations.  In addition, he has offered proposals that would seemingly require cable and satellite carriage of in-state television stations not in a system's DMA - a proposal sure to cause concern to stations in DMAs that straddle state lines.

The Chairman's statement includes the following proposals:

  • Requirements for uniform filings by broadcasters quantifying their public service - presumably their news and information programming and the public service announcements that they provide
  • Requiring that stations have manned main studios during all hours of operations (not just during business hours)
  • Allowing flexibility for LPFM stations to be sold, but adopting new rules to insure that such stations are used for local programming, not something provided from a network or other programming source
  • Providing television viewers the ability to get an in-state television stations on cable and satellite even if the county in which they reside is "home" to a DMA with stations in another state
  • Capping the number of applications accepted from the 2003 FM translator filing window - which might result in the dismissal of hundreds of applications that have effectively been frozen for 4 years

The Chairman's statement makes much of the efforts of the Commission to promote new entrants into broadcast ownership, citing efforts to bring back a tax certificate for minority ownership, efforts to allow minority groups to acquire and construction unbuilt stations even if they may have expiring construction permits, and waiving Equity Debt Plus requirements (allowing more financing by companies that might be prohibited by the ownership rules from providing more than 1/3 of the financial backing to an applicant)(see our summary of some of the pending proposals to enhance minority ownership, here).   However, some of his other proposals actually make ownership by new entrants problematic.

On the radio side, requiring the manning of a studio 24 hours a day for stations operating full time may be an expense that a multi-station cluster in a large market would have no trouble handling.  However, the costs that the adoption of such a proposal would entail for a small, stand-alone station in a small market could be prohibitive.  The financial return in a small market from operating all night is slight, but stations continue such operations as a service to their listeners.  Years ago, when the FCC required manned main studios, many smaller stations would sign off in late evenings and overnight hours to avoid the costs of such operations.  Re-imposing a requirement that the station be manned whenever it is operated might bring back such limited service during overnight hours, or force smaller stations to consolidate so that the costs of overnight operations could be spread over multiple stations.  And to what end?  The rules already require that stations be controlled during all hours of operation.  With modern technology, the FCC recognized a decade ago when doing away with the requirement that studios be manned, control can be exerted without someone sitting at the studio, and can even originate programming without physically having someone present at the station.  And stations should be able to provide contact information to emergency officials so that they can respond to any overnight developments that might take place during unmanned hours. 

Communications with emergency officials is really the key - not whether the station has someone sitting at a studio.  The proposed new requirements seems to stem from the notorious "Minot" incident, when local authorities made claims that the largest cluster of radio stations in that community were not manned at night and could not respond to an emergency when a rail car carrying dangerous chemicals derailed creating a toxic cloud in parts of the city.  In fact, I have heard that general manager of those stations state that the stations were manned, and quickly had reporters covering the story, but that local officials simply did not know the how to activate their EAS system, and thus their phones were flooded by calls, which prevented them from reaching the station (which was in fact trying to call the police to obtain updated official information but prevented by the same overloaded phone system).  See Clear Channel's press release on the matter, here 

The DMA (Designated Market Area - the area defined by the Nielsen ratings service as being the primary service area of a television station) issue is another concern to small market operators.  A number of Congressional bills started popping up early in the year, seeking to either permit or require cable and satellite operators to carry in-state television stations to all counties in a state, even if those counties fell within a DMA where the television service originated from stations in a different state.  While that sounds like a noble idea -giving viewers access to news from an in-state TV station - it caused major consternation among many stations who operate in markets straddling a state border.  Especially in small markets, many station operators felt that such a rule would only expand the power of large market stations that would be imported into the market, while cutting into audiences of the small market stations and making their existence more difficult.  Some of these stations felt that, in the long term, such rules might cause the disappearance of some small markets as the big-market stations gained statewide carriage.  The disappearance of small market stations would then cause a loss in real local news in exchange for some degree of state-wide news coverage.  Again, a seemingly simple idea that can cause many real world problems.

The FM translator issue while, again seeming like a simple issue, could cause many problems.  The FCC received thousands of applications for new FM translators when it opened a filing window in 2003.  While many hundred were processed and granted, in 2004 the FCC put a 6 month moratorium on further processing, while the Commissars considered the relationship of FM translators to LPFM stations.  That 6 month moratorium has now effectively been in place for over 3 years, with no end in sight.  While the Chairman's proposal to limit the number of applications that will be processed may seem like a good idea, it may well cause problems.  First, there are a number of applicants with many pending applications who spent considerable sums to file applications (including clients of our firm).  Is it fair to change the rules on these applicants in mid-stream, after these applications were filed in good faith?  And what will the impact of the limitation be - especially on the efforts to provide AM stations with FM translators?  With so many translator applications, if these were processed and granted, there would no doubt be a secondary market in excess construction permits that would allow AM stations to acquire FM translators for their use (which is being permitted on a temporary basis now, see our post here).  If these applications are dismissed or strictly limited, there will likely be a much more limited secondary market, and AM stations may well end up having to fight LPFM applicants for rights to use this spectrum.  With the potential of a preference for LPFM applicants, this could seriously curtail the ability of AM operators to obtain FM translators for their use.

All in all, this goes to show that there are no easy answers to the complex problems of the broadcast world.  The FCC's seeming interest in intervening in the markets to force the coverage of local issues, and to mandate what it perceives to be in the public interest, may well lead to significant unintended results that actually harm those efforts.  Watch these efforts closely.

 

FCC Says No To City of License Change Taking Away Community's Only Radio Service

Twice this week, the FCC released decisions denying applications proposing city of license changes for AM stations proposing to take away the only station licensed to one community and move it to another.  In its order adopting simplified city of license changes (see our previous posts including those here and here), the FCC refused to change its policy of not allowing the removal of an established radio station which is the only station licensed to a community except in cases where an extraordinary showing justifying a  waiver of the rules could be made.  The two cases decided this week show that merely moving to a community with greater population (even one which has no other station licensed to it) will not, in and of itself, justify a waiver of the rules.  Thus, stations which are the only station licensed to their communities are effectively blocked from changing cities of license without  providing a "back-fill", i.e. moving another station so that it can be licensed to the community that would otherwise be abandoned.

In one case decided this week, the broadcaster proposed to move its AM station to a community that had three times the population of the one that it was proposing to leave.  The Commission rejected the move, finding that the residents of the current community should be able to rely on continued service from that station.  This was true even though other stations could be received in the community, as the Commission reminded licensees that their primary responsibility is to serve the needs of their city of license, and that this primary service cannot be duplicated by the secondary service provided by a station licensed to another town or city. 

The second case was similarly decided. There, the Commission made clear that, while the community to which the applicant proposed to move would have been favored over its current community had the choice been between which one most deserved a new station, the fact that the the station was already licensed and operating in the first community meant that its listeners had a presumption that the service should be retained.  Even though the station was not physically moving its transmitter site and would not change its coverage, the Commission found that change in city of license would result in the loss of an outlet required to serve the community as its primary obligation.  Together, these cases make clear that stations licensed to a community cannot be easily moved without some as yet undefined unique circumstance, or unless another station can be moved to the first community to replace the station that is being moved.