In two consent decrees released last week, the FCC’s Enforcement Bureau agreed to significant "voluntary contributions" to the US Treasury to settle noncompliance issues reported in license renewal applications filed by noncommercial radio stations. Both stations had voluntarily reported public inspection file issues in their license renewals. One admitted to having no issues programs lists in its public file and having filed no biennial ownership reports for the license renewal period. The other admitted that it was missing several years worth of quarterly issues programs lists. In the first case, the FCC agreed to a $10,000 contribution in lieu of a fine (see the agreement here), in the other case a $1700 contribution (which was less than might normally be the case, as it was reduced by a financial hardship showing – see the order here and the agreement with the FCC here). These cases demonstrate the significance that the FCC places on public file issues – the biggest source of fines in the last license renewal cycle. With a new license renewal cycle beginning in June 2011, now is the time for all broadcasters – commercial and noncommercial – to make sure that they are ready for the beginning of this cycle by clearing up any outstanding regulatory issues.
The fines also once again demonstrate that the Commission no longer treats noncommercial broadcasters differently than commercial broadcasters – fining noncommercial stations for violations just as it does their commercial brethren (see a previous post on this subject, here). In these cases, the use of Consent Decrees also demonstrate the problems that issues arising at renewal time can cause. If a station’s license renewal reports a problem, such as an incomplete public file, the application is pulled out of the routine processing pile for further scrutiny. Such scrutiny can often take a year, and sometimes several years, to resolve. While the renewal application is in this state of limbo, a sale of the station will not be approved, and sometimes other regulatory actions can be held up (in fact, in one of these cases, a transfer of control of the licensee company was delayed while this issue was being resolved). Thus, to avoid these lengthy delays, stations often decide to pursue the consent decree route to try to resolve the issue more quickly than would be the case if the application were just left with the FCC to run its course.
The Consent Decree route can speed the processing, but the process has its own costs. There is not only the cost of negotiating the agreement and making the voluntary contribution (which is usually about the same amount as a fine would be for the same offense), but the licensee typically must also agree to a compliance program to ensure that the violation does not occur again. Such a program often has the licensee making promises to routinely report to officers of the licensee and the station’s outside counsel to make sure that the routine FCC obligations are being met. Come the next renewal time, not only does this confession invite scrutiny of the offense that originally got the station into trouble, but the promises made in the compliance plan can themselves be the subject of scrutiny, and perhaps even provide an independent basis for a fine should the plan not be followed.
And don’t even think of not reporting in your license renewal application those violations in your public file that you may discover, as the failure to report a violation can cause its own problems – turning a mere rule violation into a misrepresentation issue (see our post here)
Obviously, each of these steps can have costs attached to them. So make sure that you don’t have these problems to begin with – review your operations now to make sure that there are no significant problems to report when your renewal application is filed.