2001 Regulatory Fees


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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 $10.00.

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, 2001.

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 regulations.

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 actions.

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 martin@fhh-telcomlaw.com.

Dateline

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.



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