The FCC has proposed a new schedule of annual regulatory fees.
While still subject to public comment, the differences in fees
between last year and 2001 will likely be as follows:
AM construction permittees would pay $280.00; FM permittees
would pay $925.00; and the Part 74 auxiliary stations fee will be
FM auction postponed
The FCC has postponed until December 5, 2001, the FM auction
that was scheduled to commence on May 9, 2001. Although the FCC did
not officially provide a reason for the postponement, the decision
is said to be in response to a Motion for Stay filed by National
Public Radio (NPR). NPR asked the FCC to postpone the auction until
a federal court rules on NPR's appeal of new FCC rules requiring
noncommercial educational FM applicants to bid in the auction
against commercial applicants.
The new filing window for FM auction applications will run from
September 24, 2001 until October 5, 2001. Upfront payments will be
due November 5, 2001, and the auction will commence on December 5,
The six-month hiatus gives participants an opportunity to review
further the list of markets and permits involved in the auction and
conduct due diligence on them.
Of particular concern for some of the allocations to be
auctioned is the availability of a suitable transmitter site. FCC
spacing constraints, FAA clearances and local zoning considerations
all should be addressed in advance by would-be bidders. The
inability to locate a suitable site post-auction could result in a
substantial financial loss. Indeed, a successful bidder who cannot
follow through for technical reasons would be responsible for 100%
of the difference between its bid and the ultimate sale price of
the permit, plus a 3% penalty. If no permittee ultimately emerges,
the first winning applicant would have to pay 100% of its winning
bid and the 3% penalty.
FCC designates license revocation hearing
The FCC has set a license revocation hearing against an AM/FM
licensee on the basis of repeated rule violations. FCC agents
raided the studios and transmitters of the stations six times in
five years and found continuing noncompliance with the FCC's
The agents discovered both the AM and FM transmitters were
located at the same site, even though the FM transmitter should
have been located elsewhere. Moreover, the FCC noted the stations
were operating at reduced power levels and without locked fences
around transmitters, without operating EAS equipment and without a
properly maintained public file.
In their initial raid, agents interviewed local business people
and determined that the licensee had been evicted from its FM
transmitter location. The licensee later filed documents admitting
that it had been experiencing difficulty in renegotiating the lease
for the FM transmitter site. The FCC claims that the licensee, upon
losing its lease, co-located its FM transmitter at its AM site.
Four more searches by FCC agents revealed that the FM transmitter
remained co-located with the AM station. Following a sixth visit
from the agents, the licensee finally applied for special temporary
authority to operate its FM transmitter from the AM location. In
its application for temporary authority, the licensee claimed that
both the AM and FM transmitters were operating at variance from
their licenses due to a 1999 hurricane. The FCC granted special
temporary authority in order to allow the station to continue
operating; however, the FCC noted that the station's actions prior
to the issuance of the STA were not exempt from future enforcement
The raids also revealed that the stations, at first, did not
have proper EAS equipment and that while the equipment was
eventually ordered, it was never installed. Further, the licensee
had not been maintaining a public file, nor were its licenses
properly posted. Finally, the FCC agents observed that the
transmitter towers were not properly fenced and that attempts to
fence them were inadequate.
Citing the two key elements of FCC character qualifications
— truthfulness and reliability — the FCC charged that
the licensee may lack both. The licensee's truthfulness is subject
to scrutiny because, when the licensee applied for special
temporary authority, it falsely claimed that the FM transmitter
relocation was a result of a hurricane in 1999. In addition, the
FCC found that the licensee's reliability was questionable as a
result of its continued failure to maintain a public file, install
and operate EAS equipment, and properly secure its transmitters.
The FCC also referenced several unanswered letters and notices sent
to the licensee.
Every licensee must operate within the parameters that are
established by their FCC licenses or promptly seek an STA. In
addition, every licensee must honestly and completely answer FCC
inquiries regarding their stations. Failure to respond to the FCC
was a significant factor that led the FCC to this potential
revocation of license.
The licensee's apparent lack of candor with the agency left
little room for a graceful escape.
Harry Martin is an attorney with Fletcher, Heald &
Hildreth, PLC., Arlington, VA. E-mail
Radio stations in the following locations must file their
biennial ownership reports on or before June 1, 2001: Arizona, DC,
Idaho, Maryland, Michigan, Nevada, New Mexico, Ohio, Utah,
Virginia, West Virginia and Wyoming.