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A few weeks ago, FCC Chairman Carr announced the beginning of the “Delete, Delete, Delete” proceeding at the FCC – looking at “alleviating unnecessary regulatory burdens” on the companies that it regulates, across all industries, to unleash companies to innovate, invest, and expand.  Comments are due April 11 and replies April 28.  With less than a week to go before comments are filed in this latest attempt to lessen the regulatory burden on broadcasters, we thought that we would look at some of the issues that may come up in this proceeding, and some of the policies that stubbornly remain on the books but should be addressed.

Broadcasters are expected to advance many ideas.  But, before considering some of the issues likely to be addressed, it is important to put this proceeding in context.  This is not the first time broadcasters have been asked to engage in this kind of exercise.  In the 1980s, the FCC conducted multiple proceedings to address the “regulatory underbrush,” eliminating, among other things, rules that had required specific amounts of news and public affairs programming on every station, rules mandating a specific number of PSAs, rules requiring specific program and engineering logs as official records for every station, and policies restricting advertising for certain perceived vices like parimutuel betting and fortune tellers.  In the 1990s, as a result of the 1996 Telecommunications Act, other obligations were changed (including the adoption of the current local radio ownership rules, the abolition of the ability of any party to file a competing application contending that it should get the right to operate a broadcast station every time a license renewal was filed, and extending the license renewal term from three to eight years (see our article on some of those changes, here).  Just eight years ago, FCC Chairman Pai initiated the Modernization of Media Regulation Initiative (see our article here).  That proceeding resulted in the abolition or streamlining of many FCC rules, such as the main studio rule (see our articles  here and here), some children’s television rules (see our posts here and here), and rules prohibiting same-service radio program duplication by commonly owned stations, although the prohibition on FM/FM duplication by commonly owned stations serving the same area was reinstated by the last administration, though that action remains subject to a reconsideration petition (see our articles here, here, here, and here on some of the other changes brought about by Chairman Pai’s initiative).  However, there were many other obligations left unaddressed.  There are so many rules applicable to broadcasters, and so many competitive changes in the market have  impacted the relevance of many of those rules, that no proceeding ever seems to address every issue it should.  But we expect that many rules will be addressed in this “Delete” proceeding. Continue Reading Less Than a Week to Go Before “Delete, Delete, Delete” Proposals on Eliminating Unnecessary FCC Regulations Are Due – What Should Be Included?

It is not every year that the FCC seriously asks broadcasters for suggestions as to what rules it should abolish or modify, but that is exactly what the FCC is doing in its Modernization of Media Regulation proceeding (about which we wrote here and here). Comments due the week after next, on July 5, and broadcasters should accept the invitation and suggest rules that are ripe for repeal or amendment. I recently spoke at the Wisconsin Broadcasters Association’s annual convention and the broadcaster who chaired the association’s Federal legislative committee urged all broadcasters in attendance to register their ideas for reforms. That comment made me realize that many broadcasters may not be taking this invitation seriously.

The number of changes already made in broadcast regulations in the less than 6 months that Chairman Pai has headed the agency (e.g. reinstating the UHF discount, abolishing the requirements for letters from the public in the public file, allowing online recruitment to be the sole means of EEO wide dissemination of job openings, relaxing the location restrictions on FM translators for AM stations, relaxing the limitations on noncommercial fundraising, abolishing the obligation for noncommercial stations to report the social security numbers of their board members, the rescission of FCC enforcement actions for political violations, and the revocation of a policy statement against shared services agreements) demonstrate that this Commission is serious about deregulation. There has perhaps never been as real an opportunity as now to make your voice heard about the broadcast rules that should be relaxed as part of this proceeding. What rules should be examined by the FCC?
Continue Reading Modernization of Media Regulation – What Rule Changes Should Broadcasters be Requesting?

How do you secure a loan to an FCC broadcast licensee? This was the issue discussed by a case released by the Commission last week – addressing the FCC’s policies prohibiting a station creditor from foreclosing on a broadcast license and also restricting the sale of a “bare license.” While this case involved an action for collection by a judgment creditor, it is instructive as to how any broadcast creditor, including a lender to a broadcast licensee, should act to secure loans or other financial obligations of a broadcaster, and how the creditor can exercise its rights in the event of a default. It is also instructive as to how to proceed to enforce a loan obligation to any FCC licensee – in the broadcast services or in the other services regulated by the FCC.  As the FCC has a long-standing policy prohibiting a lender from taking a security interest directly in an FCC license, lenders need to pay careful attention in documenting loans and in enforcing security agreements upon defaults to make sure that their interests are protected. 

Lenders cannot foreclose directly on a license when a broadcaster defaults on its obligations, as the FCC has made clear that a license is not a property right that can be used for security. The FCC has said that a license is not subject to “mortgage, security interest, or lien, pledge, attachment, seizure, or similar property right.”   As the license cannot be attached, to get at the value of the license if there is a default and the debtor won’t cooperate in a voluntary foreclosure, the Lender has to go to court and have a receiver or trustee appointed to oversee the assets of the debtor. An involuntary transfer to a trustee or receiver pursuant to a court order can be approved by the FCC expeditiously on a “short form” (Form 316 in the broadcast services) transfer application. Once appointed, the trustee can sell the sell the station (pursuant to FCC approval on a subsequent "long-form" application) and distribute the proceeds to the creditors. In the case decided last week, the actions of the local court that was attempting to enforce the rights of the creditor gave the Commission pause.Continue Reading Securing a Loan to a Broadcaster – Part 1 – FCC Case Clarifies How a Creditor Enforces Its Rights After a Default