FCC Issues $15,000 Fines For Unauthorized Transfer of Control and Main Studio Staffing Violations for LMA Done Wrong
$15,000 per station was the cost of a broadcast licensee’s failure to adequately supervise two stations of which he was the licensee, but which were operated pursuant to time brokerage agreements or LMAs. Like many stations in these tough economic times, this licensee decided to allow a third party to provide the bulk of the programming and retain the bulk of the sales revenues, in exchange for a payment. However, as the licensee remained the licensee, he was required to maintain and exercise control over the station’s operations, and maintain a meaningful staff presence at the station. In reviewing the operations of these stations, the FCC’s Enforcement Bureau in recent decisions (here and here) concluded that the adequacy of that control was insufficient – providing a warning to other station licensees operating under LMA agreements that they must maintain operational control over the stations that they own.
The FCC has long said that a licensee must maintain a meaningful staff presence at a station, even if the station receives the vast majority of its programming from some other source – whether that is a network or programming provided under an LMA. Meaningful presence has required that at least two employees at the station be employed by the licensee, one of whom must be managerial and perform no services for the broker providing the programming under the LMA. This case makes clear that these required licensee employees must be physically present at the station’s main studio on a regular day to day basis – they cannot be located at some distant location supervising the station remotely or only periodically present at the main studio. Failure to have the station’s main studio manned by the required personnel in and of itself accounted for $7000 of the fine in this case.
The decision in the case also faulted the licensee for an unauthorized transfer of control of the station, as the licensee did not adequately control station operations. This was evident to the FCC based not only on the lack of employees, but also based on a number of other factors. First, the LMA agreement by which the station was being operated was not in writing, but was only evidenced by invoices for payment – insufficient in the FCC’s eyes to insure the required degree of control over station operations. The FCC rules require that Time Brokerage Agreements be in writing, with copies in the station's public file. The licensee was also unable to certify, when asked by the FCC, whether certain station functions (like the maintenance of the public file and the broadcast of required EAS tests), were being accomplished, being only able to state that he was told by the broker that these matters were being dealt with. The unauthorized transfer of control made up the remaining $8000 of the $15,000 fine.
After imposing these fines, the FCC said that it would further review the operations of the stations, watching their future operations to insure that the licensee was in fact exercising the required degree of control. For broadcast licensees everywhere, this decision should demonstrate that the FCC is still concerned about the control of your station – make sure that you are doing what is necessary to maintain that control.
