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As part of its order in it proceeding to encourage diversity in broadcast ownership, the FCC adopted a number of new rules, including a rule allowing parties holding construction permits for new broadcast stations to sell those permits to "qualified entities."   The buying qualified entity would then then get 18 months to construct the new station, even if the construction permit would otherwise expire in less than 18 months.  Under prior policy, an FCC construction permit would expire 3 years after it is issued, with no real opportunity for extension (though the construction period could be "tolled" for the period that certain impediments to construction existed, i. e. litigation over zoning, FCC litigation over the validity of the permit, or Acts of God that temporarily stopped construction – but only for the limited period that such an impediment existed).   The new rule was adopted to encourage the sale to new entrants to broadcast ownership who could purchase construction permits that might otherwise expire.  Today, the FCC issued some clarifications of the new rule.

The clarification was issued principally to set out when the sale must take place in order for the buyer to qualify for the 18 month extension.  The FCC’s staff looked at the literal language of the new rule, and concluded that the sale must be approved by the FCC and consummated before the expiration date of the construction permit in order for the buyer to get the 18 month extension.  If the sale is not completed before expiration, the permit would expire.  Thus, the Commission warned applicants planning to take advantage of this new rule to file for the FCC approval of the sale at least 90 days before the expiration of the permit, to give time for the FCC approval of the sale and a consummation.  However, because of the uncertainty of the rule, the Commission decided that it would allow any party wanting to buy an unbuilt construction permit and who files to acquire that permit by May 31 to get the 18 month extension, even if the permit expires while the FCC application for approval of the sale is pending.  But after June 1, the buyer will not get the extension if the sale is not completed before the expiration of the permit. Continue Reading FCC Clarifies Rules on Extension of Broadcast Construction Permits Upon Sale to Qualified Entity

In a decision released this week, the FCC granted the application of an FM station for license renewal, denying petitions filed by two former employees who contended that the station had violated a number of FCC rules.  After the FCC inspected the station and found only a few minor issues with the station’s public file…

In these challenging economic times, it seems like almost every day we see a notice that a broadcast station has gone silent while the owner evaluates what to do with the facility.  This seems particularly common among AM stations – many of which have significant operating costs and, in recent times, often minimal revenues.  The DTV transition deadline (whenever that may be) may also result in a number of TV stations that don’t finish their DTV buildout in time being forced to go dark.  While these times may call for these economic measures to cut costs to preserve the operations of other stations that are bringing in revenue, broadcasters must remember that there are specific steps that must be taken at the FCC to avoid fines or other problems down the road.

One of the first issues to be addressed is the requirement that the FCC be informed of the fact that a station has gone silent.  Once a station has ceased operations for 10 days, a notice must be filed with the the FCC providing notification that the station is not operational.  If the station remains silent for 30 days, specific permission, in the form of a request for Special Temporary Authority to remain silent, must be sought from the FCC.  The rules refer to reasons beyond the control of the licensee as providing justification for the station being off the air.   Traditionally, the FCC has wanted a licensee to demonstrate that there has been a technical issue that has kept the station off the air.  The Commission was reluctant to accept financial concerns as providing justification for the station being silent – especially if there was no clear plan to sell the station or to promptly return it to the air.  Perhaps the current economic climate may cause the FCC to be more understanding – at least for some period of time.Continue Reading Steps to Take When A Broadcast Station Goes Silent

On Thursday, the Obama administration appointed FCC Commissioner Michael Copps to be the Acting FCC Chairman until the administration selects its permanent Chairman, and that person is confirmed by the Senate.  As we’ve written, the rumors are that the permanent Chair will be Julius Genachowski, a former classmate of the President.  But, as far as we know (and according to the White House website’s list of appointments made so far), that appointment has not yet been formally made and sent to the Senate Commerce Committee for the initiation of hearings on the qualifications of the nominee.  Commissioner Copps is the most senior of the remaining three Commissioners (Democrat Jonathan Adelstein and Republican Robert McDowell being the other two remaining Commissioners), and has been an outspoken advocate of more stringent regulation of the public interest performance of broadcasters (see, for instance, our posts here and here).  What will his appointment as interim FCC chairman mean for broadcasters?

Initially, it would seem reasonable to assume that the Acting Chair will be principally occupied with the DTV transition, as least for the next few weeks, and perhaps longer if the pending legislation to delay the transition deadline until June 12 is adopted.  It would also seem reasonable to assume that the Commission, at least for the short term, will not be tackling major regulatory initiatives (like the localism proceeding), until the permanent FCC Chair has taken office.  One of the initial Executive Orders that was issued by the Obama administration was to freeze the actions of administrative executive agencies until the political appointments made by the administration have been confirmed and taken their places, so that the new administration is not saddled by regulations that don’t fit with its overall political agenda.  While many in DC believe that this order does not apply to an "independent agency" like the FCC (which technically does not report to the administration, but instead to Congress), it would be reasonable to assume that the spirit of the order would be followed by the FCC.Continue Reading Commissioner Michael Copps Named As Acting FCC Chairman – What Does It Mean for Broadcasters?

The FCC’s has published in the Federal Register certain aspects of its November decision on closed captioning – most notably the Further Notice of Proposed Rulemaking asking if a broadcaster’s multicast streams should each count as a separate "channel" potentially exempt from closed captioning requirements if that channel doesn’t bring in more than $3 million…

The press was abuzz yesterday with the news that Julius Genachowski is apparently the pick of the Obama Administration for the position of FCC Chairman.  Mr. Genachowski was at the FCC during the Reed Hundt Administration, and has since worked in the private sector in the telecommunications industry, including work with Barry Diller and running a DC-based venture capital fund.  From the positive reactions that the appointment has received from all quarters, the choice would seem to be a great one.  But, in looking at some of the reactions, you have to question whether everyone has to be reading what they want to see into the new Commission.  For instance, while the NAB has praised the choice of Genachowski (stating  that he "has a keen intellect, a passion for public service, and a deep understanding of the important role that free and local broadcasting plays in American life"), so too did media-reform organization Free Press ("This moment calls for bold and immediate steps to spur competition, foster innovation and breathe new life into our communications sector. With his unique blend of business and governmental experience, Genachowski promises to provide the strong leadership we need.")  What will this appointment really mean for broadcasters?

In short – who knows?  When Kevin Martin was appointed Chairman of the FCC, few would have imagined that a former communications attorney, a person deeply involved in the Bush campaign, and a former staffer of FCC Commissioner Harold Furtchgott-Roth (perhaps the most free market Commissioner ever) would have supported sustained, wide-reaching inquiries into the underbrush of FCC regulation – e.g. localism, embedded advertising, indecency.  So we can’t really know what a Chairman will do until he does it.  The Washington Post and the Wall Street Journal both suggest that the new chairman will be focused on Internet issues, and may be less interested in indecency – but who knows?Continue Reading Julius Genachowski as New FCC Chair – What Will It Mean to Broadcasting’s Future?

2009 – a new year, and a whole new cycle of regulatory requirements.  We wrote last week about the potential for changes in regulations that may be forthcoming but, like death and taxes, there are certain regulatory dates each year that broadcasters need to note and certain deadlines that must be met.  Those dates…

Come the New Year, we all engage in speculation about what’s ahead in our chosen fields, so it’s time for us to look into our crystal ball to try to discern what Washington may have in store for broadcasters in 2009. With each new year, a new set of regulatory issues face the broadcaster from the powers-that-be in Washington. But this year, with a new Presidential administration, new chairs of the Congressional committees that regulate broadcasters, and with a new FCC on the way, the potential regulatory challenges may cause the broadcaster to look at the new year with more trepidation than usual. In a year when the digital television transition finally becomes a reality, and with a troubled economy and no election or Olympic dollars to ease the downturn, who wants to deal with new regulatory obstacles? Yet, there are potential changes that could affect virtually all phases of the broadcast operations for both radio and television stations – technical, programming, sales, and even the use of music – all of which may have a direct impact on a station’s bottom line that can’t be ignored. 

With the digital conversion, one would think that television broadcasters have all the technical issues that they need for 2009. But the FCC’s recent adoption of its “White Spaces” order, authorizing the operation of unlicensed wireless devices on the TV channels, insures that there will be other issues to watch. The White Spaces decision will likely be appealed. While the appeal is going on, the FCC will have to work on the details of the order’s implementation, including approving operators of the database that is supposed to list all the stations that the new wireless devices will have to protect, as well as “type accepting” the devices themselves, essentially certifying that the devices can do what their backers claim – knowing where they are through the use of geolocation technology, “sniffing” out signals to protect, and communicating with the database to avoid interference with local television, land mobile radio, and wireless microphone signals.Continue Reading Gazing Into the Crystal Ball – The Outlook for Broadcast Regulation in 2009

As the Obama administration fills its top level government posts, all eyes are now turning to the next levels of government appointments which, at some point, will include a new Chair of the FCC and potentially other new FCC Commissioners. We wrote about our hopes for an Obama administration at the FCC immediately after the election, and now other voices in Washington are weighing in. And, as one might expect, with so many different perspectives, the advice is far from consistent. As we wrote in our analysis, the appointment of the FCC Chair is crucial as it is the FCC Chair, far more than the President or the White House, who sets the tone for Communications policy. This is made clear by the extensive regulations either adopted or proposed for broadcasters by the current Republican FCC, seemingly at the direction of the current chairman, regulations that would not have been expected from a Republican administration.  In light of the economic challenges facing broadcasters, as evidenced by today’s news that two television companies – Tribune and Equity – declared bankruptcy, and another, NBC, has announced a cut back in prime time programming, replacing it with a prime time, 5 day a week Jay Leno program. 

So what should the transition team look to accomplish at the FCC?  In one of the most perceptive articles that I’ve seen recently, Harry Jessell in TV Newsday has urged the new Commission to simply do nothing on broadcast regulation for the next year. The current state of the economy and its ramifications for the advertising that is the lifeblood of the broadcast industry simply leaves no room for broadcasters to have to bear new costs for new regulations.  Broadcasting and Cable magazine has echoed that sentiment last week.  Recently, not only have we seen the economy and the state of the broadcast industry been reflected by the actions announced by Tribune, Equity and NBC today, but we’ve seen numerous mainstream press articles about the economic peril in which the entire broadcast industry finds itself.  In one recent article, radio’s dramatic decline in revenues was highlighted, even as the industry’s listenership remains high (as confirmed by BIA’s recent prediction that radio revenues will decline by 7% in the coming year, coming after declines this year – perhaps the first two year decline in revenues in radio history). I recently attended the Radio Ink Forecast 2009 conference in New York.   While the conference is off the record, I don’t think that I’d be betraying any confidences to state that there was much concern about the short term health of the radio industry. Continue Reading As the FCC Transition Progresses, The Broadcast Industry Shows Economic Strains – Tribune and Equity Declare Bankruptcy and NBC Cuts Programming Costs By Putting Leno on at 10 PM, Five Days A Week

Today FCC Chairman Kevin J. Martin released a tentative agenda for the scheduled December 18, 2008 Open Commission Meeting.  The tentative agenda, available here, contains a number of items that the Chairman has circulated to the other Commissioners for consideration at the upcoming Open Meeting.  Whether these items actually make it to the agenda…