reasonable assurance of site availability

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Last week, the FCC adopted an order making numerous changes to its processes for selecting winning applicants among mutually-exclusive applicants for new noncommercial broadcast stations, including noncommercial, reserved band full power FM stations and LPFMs. Applicants are “mutually exclusive” when their technical proposals are in conflict – meaning that if one is granted it would create interference to the other so that the other cannot also be allowed to operate. The changes adopted by the FCC, which we wrote about when first proposed here, affect not only the process of applying for new noncommercial stations and the system for resolving conflicts, but also address the holding period for new stations once construction permits are granted, and the length of permits for LPFM stations.

In cases involving mutually exclusive applications for new noncommercial stations, the FCC uses a “points system” to determine which of the mutually-exclusive applicants should have its application granted. The point system relies on paper hearings to determine which applicant has the most points, awarding preferences on factors such as whether they have fewer interests in other broadcast facilities, whether they are local organizations, and whether they are part of state-wide networks. …
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It has been many years since the FCC conducted an auction of new FM channels, principally due to its preoccupation with the TV incentive auction. But that is about to change as the FCC announced yesterday that it is planning a new FM auction starting on April 28, 2020, and issued a request for comment on the procedures to be used for the auction. The FCC is taking comment on the proposed auction procedures through November 6, with reply comments due by November 20. 130 vacant channels will be available for bid. The list of vacant channels is available here. Channels will be available across the country, with Texas and Wyoming having the most vacant channels in this auction list.

Working backward from the anticipated April 28 start date and using prior auctions as a guide, initial filings for the channels would likely be due early in the new year. “Upfront” payments equal to or greater than the minimum payments for the channels that an applicant ultimately wins in the auction will probably be due a month or so before the start of the auction. To protect the allotments during an auction, the FCC typically imposes a freeze on the filing of FM modification applications. So be on the alert for an announcement of such a freeze. (Addendum, 10/14/2019 – the Freeze was imposed on Friday – see our post here for details).…
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There were several recent FCC decisions on application processing matters worthy of note. One deals with the processing of commercial applications for FM stations or FM translators that are involved in an auction to resolve disputes, the others with the processing of noncommercial applications (in this case for LPFM stations). None break new ground – but instead they reinforce earlier decisions that some who have been around the broadcast industry had found surprising, so these decisions are worth noting. The commercial case involved the question of whether an applicant needs to receive “reasonable assurance of transmitter site availability” before specifying a transmitter site after a broadcast auction. The noncommercial cases deals with the dismissal of an application because of a change in the control of its board of directors while the application was pending.

The commercial case involved the application for a new FM translator in New Jersey, where a local broadcaster filed a petition asking that the translator application be denied as the applicant had never received permission to specify the tower site, owned by the petitioner, in the “long-form” application filed by the applicant after the applicant prevailed in an auction. After the petition was filed, the applicant amended his application to specify another transmitter site. But, under an old line of cases, the failure to have “reasonable assurance” of a transmitter site was fatal to an application and could not be corrected by a later amendment to an available site. In this week’s decision, the FCC reiterated a decision that it made a few years ago (see, for instance, our article here) concluding that, where an application is granted as a result of an auction, the applicant need not have “reasonable assurance” of its transmitter site at the time it files its “long-form” application (the application that specifies the technical details of the facilities that the applicant intends to use to operate its station).…
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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?…
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In a decision issued last week, the FCC ruled on 6 applications for LPFM stations from the last LPFM window, dismissing all of them, and warning potential applicants in the upcoming LPFM window to pay attention to the decision so that they can avoid similar issues with their applications. The dismissal of four applicants was the result of those applicants not being legally registered as nonprofit corporations in their states at the time of the FCC filing of their FCC applications. One applicant was dismissed for failing to respond to a Commission request for information in a timely basis. The dismissal of another was upheld based on the applicant’s failure to obtain reasonable assurance of the availability of its transmitter site prior to the submission of its application. These decisions thus resulted in 6 applicants losing their chance to operate LPFM stations in their markets.

Incorporation at the time of filing was deemed important in four cases for different reasons. In connection with two applicants, the failure to be incorporated was deemed fatal to the applications as the application requires a certification at the time of filing that the applicant is either incorporated or in some other form recognized by state law as an existing nonprofit educational entity (or that it is a governmental organization). That existing noncommercial status is required by law. Both applicants falsely certified that they had been incorporated at the time of filing, when in fact they had not. As they had not met the statutory mandate at the time of filing, they were dismissed. In the third case, a group tried to claim that its pre-incorporation activities qualified it as “an unincorporated organization” under state law. But the FCC found that the pre-incorporation activities were simply organizational in nature, and did not qualify the group for a license. 

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In a decision released last week, the FCC’s Audio Division denied the application for a new noncommercial FM station which had tentatively been selected to receive a permit for a new station because the applicant did not have reasonable assurance of transmitter site availability when it originally filed its application.  This case makes clear how important that issue can be in connection with any application for a new broadcast station, and even in connection with applications for site changes by existing broadcasters.  The FCC has long required that a broadcaster, before filing an application for a new or modified station, have reasonable assurance of transmitter site availability. This obligation applies not only to full-power radio and television applications, but also to applications for low power TV (LPTV) or low power FM (LPFM) stations, and to applications for FM or TV translators as well.  The reasonable assurance requirement basically insures that the applicant is making a realistic proposal to the FCC, one that can likely be built, and not just some theoretical proposal for a site at which a station could never be constructed.  If reasonable assurance is not obtained before the application is filed, the application is subject to dismissal, as this case makes clear.

Reasonable assurance has never required a binding legal commitment for the use of a particular transmitter site, but this case makes clear that something more than a mere possibility of the availability of the site is necessary.  In this case, a representative of the application had communicated with the tower owner, who said that the tower was currently at capacity, but that it was possible that, over time, some space on the tower could become available.  The FCC’s Audio Division concluded that was not enough, as it did not demonstrate a present availability to the applicant of the site at the time that the application was filed.  The FCC discussed the need for the applicant and the site owner to have a "meeting of the minds" as to the availability of the site before an applicant can specify it.  The assurance cannot be contingent on a future event that is unlikely to occur.

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