The FCC and You

| March 7, 2012

By Steven J. J. Weisman
TALKERS MAGAZINE
Legal Editor 

BOSTON – The Federal Communications Commission (FCC) is the federal agency that regulates the radio, television, wire, satellite and cable industries.  Although we are all cognizant of this organization, most broadcasters are not as knowledgeable about the FCC as they should be and with this agency’s power to order significant fines as well as even revoke a broadcasting license, it is imperative that all broadcasters be more familiar with what the FCC is and how it operates.  This article is the first of a series of articles as an abridgement of an ebook I have written that describes in great detail what you need to know to broadcast safely and efficiently in today’s regulatory environment. In future installments, I will discuss:

  1.  The FCC’s rules on programming including: obscenity, indecency, broadcast of telephone conversations, parodies, libel and hoaxes;
  2. The FCC’s complaint procedure;
  3. The FCC’s rules on advertising which is a most important topic today;
  4. The FCC’s rules on political advertising, particularly in the light of the decision of the United States Supreme Court in the Citizens United case;
  5. The FCC’s rules on payola, plugging and kickbacks; and
  6. The FCC’s rules on time brokerage and barter agreements.

WHAT IS THE FCC?

The FCC was created by the Communications Act of 1934 to regulate media, which at that time meant radio.  Since that time, the FCC’s authority has spread out into many, but not all, types of media.  Knowing the limitations of the FCC’s authority is an important part of operating in the world of media today.

The FCC’s work is directed by five commissioners who are appointed by the President and confirmed by the Senate.  The term for a commissioner is five years.  Both Republicans and Democrats must be represented on the Board of Commissioners and no more than three may be enrolled in any one political party.

Much of the work of the FCC is done by its various bureaus which process applications for licenses and renewals, consider complaints, conduct investigations and hearings and develop regulations that have the force of law.

Primary among the bureaus that are of interest to broadcasters and others involved in the media are the Enforcement Bureau which is charged with enforcing the law regarding FCC rules and regulations and the Media Bureau which administers the law regarding licenses relating to electronic media including radio.

 LICENSE RENEWALS

All radio station broadcast licenses go through a renewal cycle.  The most recent cycle began in 2011 and will proceed through 2014.  All radio station broadcast licenses are covered in this present cycle.  Applications for license renewal must be filed by license holders four months before the expiration date of their license, at which time, they must also file a Broadcast Equal Employment Opportunity Program Report.  During the license renewal period, listeners of the stations up for renewal of its license have the opportunity to file a Petition to Deny or an informal objection against renewal.  Listeners can also take this opportunity to file positive comments about the licensee station as well during this time.

Those opposing the renewal of the broadcast license may file either a Petition to Deny or an Informal Objection.  In order to qualify to file a Petition to Deny, the person or entity filing it must be a “party in interest” or have “standing” to file the petition.  Generally this requirement can be met merely by being a regular listener to the station.  A Petition to Deny must be supported by an affidavit of someone with personal knowledge of the allegations contained in the petition.  The requirements for filing an Informal Objection are less formal than those for filing a Petition to Deny, but still have some statutory requirements that must be met.

Meeting the filing deadlines is a requirement about which stations should not have to be reminded, yet in the last cycle of renewals many stations failed to properly comply with the filing deadlines.  Some applicants missing the deadlines were station groups that broadcast in different states with different filing deadlines.  Suffice it to say that the repercussions of failing to file on time can include significant fines or even a denial of the license renewal application.

During the license renewal process, not just the FCC, but the public has the right to review the licensee’s conduct over the most recent license period to determine whether the station is still in compliance with the rules and regulations of the FCC, most importantly of which is the amorphous standard of “serving the public interest.”    During the renewal period, the public is invited to review the licensee’s filings for the past eight years and you can expect not just individual members of the public to do so, but also various public interest groups as well as your competitors and, of course, the FCC itself.  Making sure your filings are accurate and complete is of the highest importance.

Various public interest groups may have their own agendas that do not coincide with yours and making sure that your filings are done in a manner to withstand the inevitable challenges of such public interest groups is critical.  In 2003 “Essential Information” which is a public interest group that says that it provides information to the public on important topics neglected by the mainstream media filed a complaint urging the FCC to deny the license renewal for sixty-three radio stations operated by Clear Channel Communications alleging poor character and illegal behavior including but not limited to, misleading the public about radio contests, deceptive advertising, broadcasting conversations without permission and broadcasting indecent material.  Being aware of the kinds of attacks that various “public interest” groups may make is the first step in combatting those attacks.

Two months prior to the actual submission of the license renewal application, stations are required to broadcast announcements at specified dates that the station is in the process of filing a license renewal application with the FCC.  As a required part of these announcements, listeners are advised that they may contact the FCC with their thoughts on the renewal and may visit the station and have the right to review the station’s Public Inspection File.

Among the documents that must be contained in the Public Inspection File are:

  1.  A copy of the current FCC license;
  2. A copy of all FCC license applications and related documents;
  3. The station’s ownership reports, which are required to be filed every two years;
  4. Documents relating to broadcasts on the station by political candidates;
  5. Documents relating to the station’s Equal Employment Opportunity policy; and
  6. Documents relating to any and all FCC investigations and complaints against the station.

The Public Inspection File must be either accessible to the public in a hard copy paper format or accessible on the Internet.

Inadequacies in the Public Inspection File are generally the most significant source of problems and fines for stations filing renewal applications.  Obviously every station should make sure that its Public Inspection File is in proper order and complete prior to filing a license renewal.

Some of the most common failings with Public Inspection Files have included failures to include Quarterly Issues Programs Lists.  These lists are of paramount importance in the license renewal process because they represent the only document that indicates the programming that the station has broadcast indicating that it has met the public interest needs of its listeners.

Another common failing with the Public Inspection File is neglecting to file and include mandatory Equal Employment Opportunity filings.  The FCC is particularly vigilant in making sure that these filing requirements are adhered to by applicants for license renewals.

Yet another important document that must appear in the Public Information File is the Ownership Report which lists the owners of the station.  Companies owning radio stations must be sure to include in the Public Inspection File copies of their Articles of Organization and corporate by-laws.  A failure to comply with this requirement has resulted in a number of fines in the past.

Although the renewal application itself may appear to be relatively simple and user friendly due to the fact that it essentially consists of a number of certifications and  yes or no questions, these questions may not always be as simple as they may appear.  For instance, the certification found in the application that the licensee and its officers, partners, directors and any shareholders owning more than a 5% voting interest have not had any adverse final action made against it or any of these individuals by a court or administrative agency either civilly or criminally involving felonies, mass media related antitrust laws, the making of fraudulent statements to any governmental entity, or violations of discrimination laws can be quite extensive to determine.

A new requirement in the present cycle of renewals is a certification that the station has not discriminated in the sale of advertising time on the basis of race or ethnicity.  Additionally all advertising agreements now must affirmatively carry a nondiscrimination clause.  All stations should make sure that they are complying with this new requirement.  Not to do so is to puts their license in jeopardy.

Once all filings have been made to the FCC, the next step in the renewal process is for the station to broadcast required post-filing announcements at required dates in which the station again invites listeners to participate in the license renewal process.  The precise language of the announcements is mandated by the FCC and must be precisely complied with.

A license renewal is a complex process with many precise requirements that must be met in order to be successful.  As always, it is easier to prepare a successful license renewal if you have been complying with the precise requirements of the law throughout the period of the license by adhering to the applicable laws and regulations.

Steven J.J. Weisman, a practicing attorney, is a senior partner in the talent management firm Harrison Strategies, LLC. He is also legal editor for TALKERS magazine. He can be e-mailed at: stevenjjweisman@aol.com.

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Category: Legal