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The dates and minimum bids are set – and the next auction for new FM stations is a go for September 1, 2009. Applications to participate in the auction are due during the period June 16 to June 25, and must be filed electronically at the FCC, specifying on which of the 122 available channels an applicant is interested in bidding. Full, detailed auction instructions can be found in the FCC’s Public Notice, and the list of available channels and the minimum bids for each is available here. To give time for applicants to prepare their applications, the Commission has also initiated a variety of freezes on the filing of certain FM applications.

A freeze on any application or Petition for Rulemaking seeking a change in the channel of any channel proposed for use in this auction has been imposed effective immediately. Applications that shortspace any of the reference points for any of these stations are also barred. A subsequent freeze on the filing of any minor change application by an FM licensee will also be imposed during the June window. These freezes are to give applicants for channels the opportunity to evaluate which channels are worth bidding for, and to specify specific transmitter sites for certain channels (different than the reference coordinates) which will be protected during the auction process. Thus, applicants who see the potential for an increase in value of one of these channels that may come through the location of the station at a particular transmitter site can specify that site, protecting it and the value that they see. Continue Reading Rules for September Auction for New FM Stations Set – Application Filing Deadline Is June 25

At its meeting today, the FCC decided to revamp its Ownership Report filing process – requiring all stations to file Biennial Ownership Reports on FCC Form 323 on November 1 of this year – even stations that have just filed those reports in the normal course in the last few months.  All stations will have to file every two years thereafter – on November 1 of every other year.  Reports will also be required from Low Power TV stations and Class A TV stations, which have not in the past had to file reports.  Reports will also be required from stations that are owned by an individual, and by general partnerships in which all of the partners are individuals (or, in the FCC’s legalese, "natural persons").  In the past, such stations did not have to file reports as any change in ownership would have required, at a minimum, the filing of a Form 316 short-form assignment or transfer application.  Finally, the Commission will require the reporting of the interests of currently non-attributable owners who are not attributable simply because there is a single majority shareholder in the licensee.

The FCC is not asking for this information because it wants to track improper transfers, but instead so that it can gather information about the racial and gender make-up of the broadcast ownership universe.  This information has been required on ownership reports for the last ten years, but the FCC did not believe that the system was extensive enough to capture all information about the ownership of broadcast properties, as so many stations were not covered by the requirements.  Why does the FCC want racial and gender information about the owners of stations?  To potentially take more aggressive actions to encourage minority ownership.  The FCC has considered such actions in the past, but has not felt that it take actions specifically targeted to minority and female applicants, as there was no record of past discrimination in the broadcast industry.  The government can constitutionally only make racial or gender-based decisions if these decisions are to remedy the effects of past discrimination.  To justify such acts, the government agency must demonstrate the past discrimination – and these new filing requirements are meant to gather that information through what is called an Adarand study.  In the recent past, when it adopted certain diversity initiatives for designated entities (like the ability of a designated entity to buy an expiring construction permit and get an extension, which we recently wrote about here), the Commission had to define a designated entity as a "small business" defined by SBA standards.  Chairman Copps today said that this definition did not truly benefit diversity as favoring small businesses "generally benefit white males."Continue Reading FCC to Require New Ownership Reports from all Commerical Broadcasters on November 1

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

A recent FCC decision shows how important it is for an applicant for a construction permit for a new or modified broadcast station, which entails the construction of a new tower, to take all steps set out on the the environmental worksheets associated with FCC Form 301 before certifying that the tower will not create environmental issues.  In the recent case, the FCC did not find that any actual environmental issues existed with the applicant’s proposed construction of a new tower, but it nevertheless stated that it would have fined the applicant for a false certification if the statute of limitations for the fine had not passed.  Why?  Simply because the applicant had not touched all of the required bases before making its certification that the tower construction posed no threat to the environment.  The applicant had tried to argue that no environmental study was necessary as the site was a de facto tower farm given that there were already two towers nearby, but that claim was rejected by the FCC, finding that nearby towers do not necessarily constitute a tower farm.

The tower farm issue was interesting in that the applicant pointed to the fact that there were two existing towers within a couple hundred feet of his proposed tower, and thus the existence of these towers, plus the word that he received from local authorities that the site was a good one at which to build a site due to the lack of any perceived impacts, was not sufficient either to make the site a "tower farm" exempt from further environmental processing, nor was it sufficient to demonstrate that there was no need for further environmental study.  The FCC’s staff did a thorough review of the cases about what constitutes a tower farm and, while noting that there was no clear definition in the rules, found that the two nearby towers, as they were substantially shorter than the one proposed by the applicant, were not of the same "character" as that proposed by the applicant, and thus the site was not a tower farm.  Apparently, to some degree, the FCC adopted a "we’ll know it when we see it" approach to the definition of a tower farm, and concluded that they did not see it here.Continue Reading When are a Bunch of Towers Really a Tower Farm – Only the FCC Knows for Sure

A few weeks ago, we wrote about just how outmoded the FCC’s prohibitions on the cross ownership of newspapers and broadcast stations were in an era when newspapers seem to be going out of business at an alarming rate.   We quoted a DC trade press reporter who had mused that the newspaper-broadcast cross-ownership rule could well…

The FCC today released another Public Notice announcing the random audit of the EEO performance of a number of broadcast stations – listing both radio and television stations that have to respond, with stations spread throughout the country.  The FCC has promised to annually audit 5% of all broadcast licensees to assess their compliance with the FCC’s EEO rules.  These rules require the wide dissemination of information about job openings at their stations and "supplemental efforts" to educate their communities about employment opportunities at broadcast stations, even in the absence of employment openings.  The FCC’s audit letter requires the submission of two years worth of the Annual Public File reports that stations prepare each year on the anniversary date of the filing of their license renewal applications.  These reports are placed in the station’s public file and posted on their websites (if they have websites).  The FCC’s public notice about this audit emphasizes the requirement for posting the Annual Report on a station’s website, perhaps confirming rumors that we have heard about the FCC’s staffers browsing station websites to look for these reports.

Stations are given until May 4 to complete the audit responses and submit them to the Commission.  Note that information needs to be supplied not just for the station named on the list, but also for all other stations in the same "station employment unit," i.e. a group of stations under common control, that serve the same general geographic area, and which have at least one common employee.  As recent audits have led to significant FCC fines (see our story here about fines issues just before the holidays), broadcasters who are listed on this audit list should take care in preparing their responses.  The audit notice should also remind other licensees who are lucky enough to avoid having been selected for inclusion on this audit list to review their EEO programs for FCC compliance purposes, as they could very well find themselves not so fortunate when the next FCC audit is announced.Continue Reading FCC Launches New Round of EEO Audits – Highlights the Requirment for Posting Annual Report on Station’s Website

At the end of last year, we wrote about the decision of the Detroit newspapers to go to a 3 day a week publication schedule, and asked the question that we had heard posed by a writer for one of the communications trade publications – "will the FCC rules limiting the cross-ownership of broadcast stations and daily newspapers outlive the newspaper itself."  In the last few weeks, that question has become even more relevant.  The FCC’s decision to relax the cross-ownership restrictions in December 2007 drew widespread condemnation from many big-media opponents, and even attempts to overturn the decision, even though its direct effect was limited to the nation’s largest markets.  One now wonders whether, with the current economic condition of newspapers and broadcast stations, the rules should not be revisited, for purposes of further relaxing those rules, not tightening them.

In the last few weeks, we’ve seen a major newspaper in Denver stop its presses for the last time, and companies owning papers in many major markets, including Minneapolis, Philadelphia and New Haven, all declare bankruptcy.  At the same time, papers in San Francisco and Seattle have warned that they may also shut down if there are not significant savings found or new buyers.  Even venerable papers like the New York Times have been the subject of shut-down rumors, and the Wall Street Journal and other papers in the Rupert Murdoch empire have been said to be dragging down the profits of the News Corporation. Continue Reading Will the Newspaper-Broadcast Cross Ownership Rules Outlive the Newspaper?