This Week in Regulation for Broadcasters: September 25-September 30, 2023

Here are some of the regulatory developments of significance to broadcasters from the past week, with links to where you can go to find more information as to how these actions may affect your operations.

  • In a last-minute reprieve, the House and Senate agreed on Saturday, September 30 to fund the government for another 45 days, through mid-November, averting an October 1 shutdown of the federal government.  While the FCC’s website indicated that it had sufficient leftover funds to stay open through October 20, a shutdown would have nevertheless created issues for broadcasters, not just in connection with its general economic impact, but also with processing issues that might arise from other government agencies, like the cessation of publication of the Federal Register (in which certain FCC actions must be published to become effective).  But, with the shutdown averted for now, FCC operations should be unaffected through mid-November.  Thus, the Nationwide EAS test (see our Broadcast Law Blog article posted on Friday) and other October deadlines including the public file upload of must-carry/retransmission consent elections and quarterly issues programs lists will move forward as scheduled (other October requirements are listed in our summary of regulatory dates for October). 
  • On September 25, Anna Gomez was sworn in as the fifth FCC Commissioner (see the FCC’s announcement here).  Her announcement as to who will be on her staff, including her Acting Legal Advisor on media (e.g., broadcast) matters is available here.  With her arrival, the FCC appears to be ready to revisit “net neutrality” matters at their meeting this month (see the agenda for the monthly meeting released this week).  We wrote on our blog about broadcast issues that the FCC may now consider with a full complement of Commissioners. 
  • The U.S. Court of Appeals for the D.C. Circuit issued an Order directing the FCC to complete its 2018 Quadrennial Regulatory Review of its broadcast ownership rules by December 27, 2023, or show cause why the National Association of Broadcasters’s (NAB) Petition for Writ of Mandamus should not be granted.  The NAB’s petition, filed in April 2023, requests that the D.C. Circuit compel the FCC to conclude the agency’s still-pending 2018 review.  We wrote here about the FCC’s failure to complete the Quadrennial Review in December, and how the inaction has forestalled any review of the radio ownership rules, the dual network rule (prohibiting one company from controlling two of the top 4 broadcast TV networks), and the adoption of specific standards for approving waivers to allow the combination of two of the Top 4 TV stations in a market, all issues teed up in the 2018 Quadrennial Review.
  • The FCC’s Media Bureau issued a Declaratory Ruling allowing Alpha Media Holdings Inc. to exceed the 25% limit on foreign investment established in section 310(b)(4) of the Communications Act.  Alpha, which holds broadcast licenses through indirect, wholly owned subsidiaries, received approval for specific foreign investors to each hold equity and/or voting interests of more than 5% in the company (each being allowed to hold up to 49.99% of the company), ultimately allowing these approved foreign investors to hold in the aggregate up to a 100% interest in the company.  The Declaratory Ruling was necessary due to changes in Alpha’s ownership structure that were an outgrowth of the bankruptcy reorganization of the company and its subsidiaries.  The decision notes that the foreign investors who were approved come from countries with friendly relations with the United States, and these investors were reviewed and approved by the executive agencies of the federal government which assess foreign investments in US companies for security concerns.  We wrote more about the FCC’s process of approving foreign ownership of US broadcast stations on our blog here and here
  • The Media Bureau entered into a Consent Decree with a Virginia college where the college surrendered the license for its noncommercial educational station and agreed to pay a $10,000 fine in order to conclude an investigation into the station’s operations.  The station lost its transmitter site and began to operate from a new site under an STA, but continued to operate after the STA expired, apparently from yet another site.  The licensee admitted in the Consent Decree that it operated its station for more than 5 years at variance from its licensed parameters without authorization and that the station’s licensee provided the FCC with incorrect information regarding those operations.  While the Consent Decree stipulated that the station’s licensee did not intentionally deceive the FCC regarding the station’s operations because it believed in good faith that the change in the station’s tower site was merely a correction of licensed coordinates rather than a site change, it nevertheless required that the license be surrendered.  This action is consistent with the FCC’s precedent under Section 312(g) of the Communications Act, which states that a station operating from an unauthorized site for more than one year automatically has its license cancelled unless the FCC finds some unique public interest reason to excuse the station’s failure to operate (see our article here on that policy). 
  • The Bureau entered into two consent decrees with stations that had transferred control of their operations without prior FCC approval.  These cases show that any change of control, even when the result of the death of an owner or because of routine estate planning, require FCC approvals.
    • In one case, the Bureau entered into a Consent Decree with the licensee of two North Carolina AM stations to resolve the licensee’s failure to file applications for involuntary transfer of control within 30 days of the deaths of two of its owners.  When each of these owners died, their spouses, who were also shareholders, assumed the interests of the deceased spouse, giving the surviving spouse 50% “negative control” of the company – the ability to veto company actions.  Each assumption of negative control by an existing shareholder should have been approved on a Form 316 application.  When one of surviving spouses died, her stock passed to her estate and was then controlled by a niece who was the administrator of the estate.  The assumption of the negative control by the niece (who had not previously been approved by the FCC as a shareholder) should have been approved on a Form 315 application.  The licensee agreed to pay a $1,000 penalty to resolve these violations. 
    • In the second case, the Bureau entered into a Consent Decree with the licensee of a Montana AM station and an FM translator for failing to seek prior FCC consent for the transfer of control that occurred when the controlling interests of a husband and wife were transferred to trusts.  Their children where the controlling trustees of these new trusts.  The licensee did not seek FCC approval for the transfer of the interests to the trusts until approximately 6 months after the transfers occurred.  The licensee agreed to pay a $8,000 penalty and to implement a compliance plan to prevent such violations in the future.
  • The Bureau entered into a Consent Decree with a New York LPFM licensee to resolve its admitted operation of an FM broadcast booster station for over 14 months without FCC authorization, an operation which the licensee attributed to a misunderstanding of the rules that permit LPFM boosters (but which require FCC approval before they can commence operations). The licensee agreed to pay a $1,500 penalty and adopt a compliance plan to prevent such violations in the future.
  • The FCC’s Enforcement Bureau issued a Notice of Violation to a Maryland antenna structure owner (who also was the licensee of an AM station), directing it to respond to the Bureau’s findings that it had violated a variety of FCC rules about the painting and lighting of antenna structures and the proper registration of antenna structures.  According to the Notice, the required tower paint was faded and flaking, the tower’s lights were not operational as required by its license, and the FAA had not been notified of the lighting failure so that the FAA had not issued a Notice to Air Missions warning pilots of the dark tower until notified by the FCC of the problem.  In addition, the Notice said that the FCC attempted to contact the licensee about the issues but received no response, and that the lights had been out for several months after the FCC inspection without any repairs being made.  In addition, the tower registration appeared to have an incorrect address for the structure.  The tower owner must respond to this notice to provide all relevant facts about the issues and how they will be addressed.  After the response, the FCC will evaluate whether further actions will be taken against the tower owner. 
  • The Media Bureau proposed to assess a $1,500 per station fine against a licensee of five television translator stations and, separately, a licensee of seven television translator stations for failing to file timely license renewal applications.  The failure to file a timely renewal application will normally require a base fine of $3,000 per station.  However (consistent with recent practice), the Bureau reduced the proposed per station fine to $1,500, citing the fact that television translators only provide a secondary service, but at the same time provide valuable fill-in service for those without off-air access to full power television stations.  In a third consent decree involving the untimely filing of a license renewal application, the licensee of a student-run noncommercial educational (NCE) FM station agreed to pay a $500 penalty and adopt a compliance plan to prevent such violations in the future, a penalty consistent with the Bureau’s more lenient treatment of student-run NCE stations.
  • The Bureau requested comment on a proposal to allot reserved noncommercial educational (NCE) television channel 4 to Jacksonville, Oregon as the community’s first local television service and its first NCE television service.  Comments and reply comments are due 30 and 45 days, respectively, after the proposal is published in the Federal Register.

Courtesy Broadcast Law Blog