Last week, there were two decisions that clarified FCC processing policies for new broadcast stations – one dealing with applications for commercial stations, and the other with applications for noncommercial FM stations. The commercial case made clear that an applicant for a new FM station in the auction process need not have reasonable assurance of the transmitter site that it specifies in its application at the time it files the application, as long as it amends to an available site before the application is granted. The second, a decision of the US Court of Appeals, upholds the grant of a new noncommercial FM station as a result of a point system analysis, and clarifies the 307(b) preference and when it can be decisive in noncommercial comparative cases.
In the commercial case, a bidder who lost a broadcast auction complained to the FCC that the winning bidder for a new FM station did not have “reasonable assurance” of the availability of the transmitter site that it specified after it filed its “long-form application” on Form 301 after being the successful bidder in an FCC auction for the new channel. The long-form application, filed shortly after the conclusion of a broadcast auction, is supposed to contain the complete engineering showing of the applicant specifying the technical facilities for the new station that it plans to construct. The facilities that are specified in this application are reviewed by the FCC staff to make sure that they comply with all FCC technical rules. In this case, the tower site proposed in the Form 301 was apparently owned by one of the owners of the petitioner, and the high bidder did not approach the tower owner for permission to specify her site in the application. Nevertheless, the FCC agreed to grant the application after the winning applicant amended its application to specify an available site. So what was the issue?
As a general proposition, the FCC has held that, when an applicant specifies a transmitter site in an application, there is an implicit certification that the applicant has obtained “reasonable assurance” of the site’s availability. The failure to do so has traditionally resulted in the dismissal of an applicant’s application – no amendment being allowed if that initial specification of a site is done without obtaining assurance. We have written about cases involving applicants for new LPFM stations and for new noncommercial FM stations that were dismissed because they had specified sites without first obtaining reasonable assurance of their availability – a general meeting of the minds with the site owner that the site is available and the general terms of that availability.
In last week’s decision involving an applicant for a commercial station who was successful in a broadcast auction, the Commission concluded that the rules are different for applications filed in an auction. The decision finds that the prohibition on amending an application to specify a fully-spaced transmitter site was based on a requirement that good cause be shown for an amendment that is contained in one section of the FCC’s rules – a requirement absent from the rules for auction applicants. Thus, the FCC allowed the amendment to the new site.
What the case leaves unanswered is whether an applicant for a construction permit even has to even bother trying, initially, to specify a “real” transmitter site. In this case, the FCC found that the winning applicant had not misrepresented the availability of the site, as the petitioner did not show that the winner intentionally specified a site to which it did not have reasonable assurance. But as the tower was owned by a principal of the petitioner, it seemed pretty clear that the winning bidder did not get the assurance that would have been required in a non-auction application. The Commission does not answer the question of what would have happened had the petitioner been able to show that the winning bidder knew that the initial site would not be available – or if it would have been OK if the winner had just picked a random piece of property in the area to locate where there was no broadcast tower at all, and promised to build one without the landowner’s consent. Presumably, that question will be answered in a later case, but it appears that the FCC will be lenient when someone pays money for a new frequency, but it won’t extend such lenience in a case where there is no auction (e.g., an application for a new noncommercial station or an LPFM or a minor change application for a commercial station).
We will write about the noncommercial case tomorrow.