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The availability of broadband Internet service in apartment buildings, condominiums, and office buildings, or what the FCC calls multiple tenant environments (MTE), was the subject of a Notice of Proposed Rulemaking (NPRM) and Declaratory Ruling released on Friday of last week.  Prior FCC decisions have attempted to strike a balance between promoting competitive access to tenants and preserving adequate incentives for the initial service providers to deploy, maintain, and upgrade infrastructure.  For example, the Commission prohibits cable providers and telecommunications carriers from entering into contracts with MTEs that grant a single provider exclusive access to the MTE, but permits exclusive marketing agreements.

The NPRM follows a 2017 Notice of Inquiry in which  the FCC sought comment on certain agreements between MTEs and service providers, including sale-and-leaseback of inside wiring, exclusive marketing agreements, and revenue sharing agreements, whereby a provider agrees to pay the MTE owner a share of the revenue generated from the tenants’ subscription service fees.  The NPRM seeks to refresh the record from the earlier proceeding, and seeks comment on the impact that these arrangements have on broadband deployment and competition within MTEs.

In addition, the NPRM asks whether the FCC “should act to increase competitive access to rooftop facilities, which are often subject to exclusivity agreements.”  Wireless providers use MTE rooftops to locate facilities that establish or enhance wireless services.  The Commission seeks comment on, among other things, the benefits and drawbacks of rooftop exclusivity agreements, the prevalence of such agreements, and common terms and conditions of such agreements that may affect broadband deployment.

The FCC also seeks comment on any other arrangements and practices between MTEs and service providers that may hinder competition among broadband, telecommunications, and video service providers in MTEs, and on any state and local regulations that promote or deter broadband deployment, competition, and access to MTEs.

Comments on the NPRM are due 30 days after it is published in the Federal Register, with replies due 30 days thereafter.

In the Declaratory Ruling released along with the NPRM, the FCC granted in part a 2017 Petition filed by a coalition of service providers seeking preemption of a 2016 San Francisco Ordinance that prohibited building owners from “interfer[ing] with the right of an occupant to obtain communications services from the communications services provider of the occupant’s choice.”  The Ordinance at issue states that a building owner interferes by not allowing a communications provider to (1) “install the facilities and equipment necessary to provide communications services,” or (2) “use any existing wiring to provide communications services as required by this [Ordinance].”

The FCC preempted the Ordinance “to the extent it requires the sharing of in-use facilities in MTEs.”  The Commission explained that the Ordinance, while ambiguous on its face, appears to require the sharing of a building owner’s in-use wiring because it does not explicitly limit sharing to unused wiring, and instead uses the terminology “any existing wiring.”  The Commission noted that San Francisco has failed to clarify whether the Ordinance requires the sharing of in-use wiring, and that such a requirement is the only one of its kind in the country.

The FCC reasoned that preemption is necessary because the in-use sharing requirement “deters broadband deployment, undercuts the Commission’s carefully-balanced rules regarding control of cable wiring in residential MTEs, and threatens the Commission’s framework to protect the technical integrity of cable systems.”  The Commission explained that the Ordinance deters investment by MTEs because they no longer control the wiring they expended resources to install.  Similarly, the FCC stated that the Ordinance deters investment by service providers who are hesitant to install and convey the wiring to an MTE if that wiring can be accessed by a competitor who bore none of the installation costs.  The FCC also stated that the Ordinance has caused confusion as to who is responsible for maintenance of wiring.

The Commission’s preemption of the Ordinance became effective immediately upon release of the Declaratory Ruling.

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Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others.  This month’s issue includes:

  • Investigation Into Undisclosed Radio Station Owner With a History of Felonies Leads to Hearing Designation Order
  • FCC Settles With Alaskan Broadcaster After Disastrous Station Inspection
  • FCC Reinstates Licenses for Tennessee and Alabama Radio Stations, Then Immediately Threatens to Revoke Them

Troubled Past: Alleged Misrepresentations Lead FCC to Designate Applications for Hearing

In a recent Hearing Designation Order (“HDO”), the FCC’s Media Bureau raised serious concerns over the control of several midwestern AM stations.

The ordeal began when a father sought to help his adult son get a start in the radio business.  According to the HDO, the father established a trust in 2006 for the purpose of acquiring radio station assets, and appointed his son as the sole beneficiary and a family friend/local attorney as the sole trustee.  This trust was formed orally and not put in writing until 2012.  For the next several years, the father provided the trust with millions of dollars to acquire AM stations in Missouri and Illinois.  Unbeknownst to the FCC, however, was the father’s felonious past, having been convicted for obstruction of justice and bank fraud.  The FCC’s assignment and transfer application forms specifically ask whether any parties to the application have been convicted of felonies.  The FCC’s view is that such behavior casts doubt on whether that person’s involvement with a station would be in the public interest.

Shortly after the trust’s creation, the son supposedly formed a separate company which, according to the trust, managed all of the stations’ operations, including employment and finances.  According to the trust, this agreement, like the 2006 trust agreement, was an oral agreement, and never reduced to writing.

Suspicions regarding control over the trust arose in 2012, when a local resident and listener filed a Petition to Deny the stations’ license renewal applications.  He had sought a job with the stations and was directed to speak to the father.  This raised red flags for the listener, who subsequently began perusing the stations’ Public Inspection Files.  In them, he found indications that the father was running the stations’ day-to-day operations, such as communications from the trust’s counsel to the father regarding basic station operations and business matters.

To complicate matters further, the son (and sole beneficiary of the trust) passed away in 2015, leaving the trust’s assets, including the station licenses, to his father.  According to the trust, however, the father declined them and a year later assigned the beneficial interests in the trust to his girlfriend.  In the meantime, the trust entered into a programming and marketing agreement with another broadcaster.

Once the girlfriend was made the beneficiary, she and the family friend/trustee entered into an agreement to assign the trust’s assets, including the station licenses, to a new trust, and filed assignment of license applications to seek FCC approval for that assignment.  The petitioner filed another Petition to Deny the assignment applications, claiming that the assignments were a “subterfuge” to enable the father to continue to control the stations.

In its review of the multiple pending applications, the FCC determined that substantial and material questions were raised regarding whether: (1) an undisclosed transfer of control to the father took place either before or after the son’s death; (2) the father is an undisclosed real party-in-interest to the applications; (3) the original trust was used to shield the father or other trust beneficiaries from the FCC’s ownership attribution requirements; and (4) the trust engaged in misrepresentations and/or a lack of candor in its applications and other communications with the FCC.

Further complicating the investigation, the FCC noted that the trust had failed to provide significant documentary evidence for many of its claims, with the trust blaming this in part on the destruction of “a great majority of [the stations’] business records” that took place shortly after the son’s death.

To resolve these questions and to determine whether the applications should be granted, the applications have been designated for a hearing before an Administrative Law Judge.  It is not uncommon for such hearing proceedings to take years to be resolved.

Seward’s Folly: Alaskan FM Station Settles With FCC Over 6-Year-Old Violations

The FCC recently entered into a Consent Decree involving numerous rule violations by an FM station licensed to Seward, Alaska, including infractions relating to the now-repealed Main Studio rule, and basic station monitoring and Emergency Alert System requirements.  According to the FCC, the licensee also failed to respond to multiple Notices of Violation (“NOVs”) previously issued to the station. Continue reading →

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Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others.  This month’s issue includes:

  • FCC Settles With Golf Club Operator Over Unauthorized Transfer of 108 Private Wireless Licenses
  • FCC Warns Traffic Management Company Over Unlicensed Radio Operations
  • Months-Long Tower Lighting Outage Leads to Warning

Par for the Course: FCC Settles With Golf Club Operator Over Unauthorized Transfers

The FCC recently entered into a Consent Decree with a holding company for violating the FCC’s Rules governing transfers of control.  The company admitted to transferring 108 private wireless licenses without prior approval from the FCC in connection with its acquisition of a company that owned or operated over 200 golf clubs, country clubs, and business and alumni clubs.

Section 310 of the Communications Act (“Act”) prohibits the transfer of control of a private wireless license without prior FCC approval.  Under Section 1.948 of the FCC’s Rules, parties seeking consent to a transfer of control of such a license must first file FCC Form 603 and await Commission approval before consummating the transfer.

In September 2017, the holding company acquired the golf club operator.  It subsequently realized that the transaction included 108 private wireless licenses for which prior FCC approval had been needed.  As a result, in February 2018, the holding company filed transfer of control applications seeking nunc pro tunc (retroactive) approval.  The Wireless Bureau subsequently referred the matter to the Enforcement Bureau, which opened an investigation.

The clubs in question utilize wireless licenses to control day-to-day operations on their properties.  According to the Consent Decree, the licenses at issue are used to coordinate maintenance, golf shop personnel, and security, among other things.  And while the clubs’ operations and management have not significantly changed since the company’s acquisition, the change in ultimate ownership required prior FCC approval.

To resolve the Enforcement Bureau’s investigation of the transaction, the acquiring holding company entered into a Consent Decree with the FCC.  Under the terms of the Consent Decree, the company agreed to: (1) admit liability for violations of the FCC’s unauthorized transfer rules; (2) implement and adhere to a three-year compliance plan to prevent future violations of the FCC’s Rules; and (3) pay a $24,975 civil penalty to the United States Treasury.

Mean Streets: Traffic Control Company Pulled Over for Unlicensed Radio Operations

A Pennsylvania-based traffic management company received a Warning of Unlicensed Operation (“Warning”) from the FCC for operating radio transmission equipment on various frequencies in the Land Mobile Radio Service, General Mobile Radio Service, and Family Radio Service bands without authorization.

The FCC allocates various frequency bands for particular operations and with different licensing requirements.  For example, users of Land Mobile Radio Service (“LMRS”) frequencies are typically companies, government entities or similar organizations who use these channels to communicate with fleet vehicles and personnel spread out over a wide area.  In contrast, the General Mobile Radio Service (“GMRS”) is available only to individuals (and their families) for short-distance two-way communications.  Both LMRS and GMRS require an FCC license.

A third type of private voice radio service is the Family Radio Service (“FRS”).  Like GMRS, this service is intended for use by individuals, but unlike GMRS, does not require an FCC license.  However, devices used for FRS transmissions must still be approved by the FCC for that use.

The FCC began an investigation when it received information that the company, which dispatches personnel to monitor and control traffic at construction and emergency sites, was operating radio equipment across all three services in the mid-Atlantic region.  According to the Warning, the company did not have licenses to operate LMRS or GMRS equipment, and apparently did not have radios approved for FRS use.

The Warning notes that unauthorized operations subject the responsible party to monetary fines, equipment seizure, and criminal sanctions, including imprisonment.  The company was given ten days to respond with evidence that it was in fact authorized to operate on the various frequencies.  The FCC will then assess that response and any other relevant information to determine what enforcement action it will pursue against the company. Continue reading →

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Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others.  This month’s issue includes:

  • FCC Revokes License for Unpaid Regulatory Fees; Warns Other Stations of Similar Fate
  • Texas Station Warned Over Multiple Tower and Transmission Violations
  • FCC Nabs Massachusetts Pirate While Commission Continues to Push for Anti-Piracy Legislation

Winter Comes for FM Station With Unpaid Regulatory Fees

The FCC’s Media Bureau published a trio of orders this month relating to the unpaid regulatory fees of three unrelated FM stations.  In the most severe case, the Media Bureau revoked the license of a Massachusetts station, ordering it to cease operations immediately.  The Bureau also initiated license revocation proceedings for overdue fees from stations in Illinois and Louisiana.

The Communications Act requires the FCC to assess and collect regulatory fees for certain regulated activities, including broadcast radio.  The FCC assesses a 25 percent penalty on any late or missing payments.  Failure to pay these regulatory fees or related penalties is grounds for license revocation.

The Media Bureau initially sent the Massachusetts licensee several Demand Letters requiring payment of delinquent fees.  The licensee did not respond to them.  Subsequently, in November 2018, the Media Bureau issued an Order to Pay or to Show Cause, which required the licensee to either pay its overdue fees or demonstrate why it did not owe them.  As we discussed at the time, between fiscal years 2014 and 2018, the licensee had accumulated a debt to the FCC of $9,641.73 in unpaid fees and related charges.  After the licensee failed to respond to the November Order, the Media Bureau issued a Revocation Order.  This “death sentence” terminates the licensee’s authority to operate the station and deletes the station’s call sign from FCC databases.

Shortly after releasing the Revocation Order, the Media Bureau issued two separate Orders to Pay or to Show Cause to the licensees of FM stations in Louisiana and Illinois.  According to the Media Bureau, the Louisiana licensee owes the FCC $11,386.77 in regulatory fees, interest, penalties, and other charges for fiscal years 2009, 2011-2014, and 2017, and the Illinois licensee owes $17,296.21 for fiscal years 2007, 2009, 2010, 2012, and 2013.  The Media Bureau had previously sent various notices and Demand Letters to the licensees regarding the overdue amounts without success.

The Louisiana and Illinois licensees each have 60 days in which to submit evidence showing that either full payment has been made, or that payment should be waived or deferred, lest they suffer the same fate as the Massachusetts FM station.

Who Monitors the Monitoring Points?  FCC Warns Texas AM Station Over Multiple Tower and Transmission Violations

The FCC’s Enforcement Bureau issued a Notice of Violation (“NOV”) against the tower owner and licensee of a Dallas-area AM station for improper tower painting and lighting and for operating at variance from its license. Continue reading →

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Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others.  This month’s issue includes:

  • Oregon LPFM Station Warned Over Emergency Alert System Violations
  • Pennsylvania Man Accused of Interfering With Local Fire Department Operations
  • Earth Station Transmission Problems Lead to Warning Against Florida Wireless Licensee

This is Not a Test: Low Power FM Station Warned Over Emergency Alert Violations

The FCC’s Enforcement Bureau presented a Notice of Violation (“NOV”) to the licensee of a Portland, Oregon low-power FM radio station for a number of violations relating to the Emergency Alert System. The licensee is a local cultural community center that broadcasts Russian-language programming to the area’s Eastern European community.

The Emergency Alert System (“EAS”) is a nationwide warning system that allows authorized state and national public agencies to alert the public about urgent situations, including natural disasters and other incidents that require immediate attention.  The EAS is jointly operated by the FCC, the Federal Emergency Management Agency, and the National Oceanographic Atmospheric Administration.  Local radio stations make up a vital component of the system by monitoring authorized sources for alerts and rapidly relaying these emergency messages.  Such stations are referred to as “EAS participants.”  Each state is responsible for creating a state EAS plan, which includes designating in-state stations that other stations must constantly monitor for alerts.

Section 11.15 of the FCC’s Rules requires that a copy of the EAS Operating Handbook be located “at normal duty stations or EAS equipment locations when an operator is required to be on duty.”  Section 11 of the Rules also requires EAS participants to monitor two sources, which are specified in each state’s respective EAS plan.

In February 2019, Enforcement Bureau agents inspected the Portland station and discovered two violations of the EAS Rules.  According to the NOV, the station was unable to produce its copy of the EAS Operating Handbook.  The agents also discovered a monitoring error.  The most recent Oregon State Emergency Alert Plan required the station to monitor two specific Portland area FM stations.  During the inspection, the agents found the LPFM station had instead been monitoring a different station.

The licensee has 20 days to respond to the NOV.  In its response, it must provide: (1) an explanation of each violation; (2) a description of the licensee’s corrective actions; and (3) a timeline for completion of these actions.  The FCC will then consider the licensee’s responses and all relevant information to determine what, if any, enforcement action it will take against the licensee for the violations.

State Your Emergency: FCC Accuses Pennsylvania Man of Interfering With Safety Services

In a Notice of Unlicensed Operation and Notification of Harmful Interference (“Notice”), the FCC accused a man of using a two-way radio to cause harmful interference to a local emergency services operation by making unauthorized transmissions on a frequency reserved for public safety.

As we discussed last year, Chairman Pai has noted that protecting public safety and emergency response communications is of the utmost importance.  The Enforcement Bureau has recently responded aggressively to interference complaints from first responders and emergency service departments, including issuing multi-thousand dollar fines.

Section 301 of the Communications Act prohibits the transmission of radio signals without prior FCC authorization.  Section 90.20 of the Rules establishes the requirements for obtaining authorization to use public safety frequencies.  The FCC reserves certain bands for first responders as “public safety spectrum.” Unauthorized transmissions on such bands can pose a threat to first responders and the general public by interfering with local emergency service operations, including police, EMS, or in this case, the fire department.

The Enforcement Bureau began its investigation after being contacted by an eastern Pennsylvania county’s Emergency Management Association.  According to the complaint, harmful interference and unauthorized transmissions were occurring on 155.190 MHz, a frequency used for local fire department communications.  The Enforcement Bureau identified a local individual as the source of the interfering transmissions.

According to the Notice, the individual admitted to operating a VHF-UHF two-way radio at 155.190 MHz, despite not being authorized to operate on that frequency.

The individual was given 10 days to respond to the Notice.  In his response, the individual must explain the steps he is taking to avoid operating on unauthorized frequencies and causing harmful interference.  It will then be up to the FCC to determine whether further enforcement action, including fines or other sanctions, is appropriate. Continue reading →

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Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others.  This month’s issue includes:

Headlines:

  • FCC Fines Kentucky Men $144,344 for Illegally Operating LPTV Station for 18 Years
  • North Carolina Radio Station Settles With FCC Over Decades of Unauthorized Transfers
  • Connecticut Radio Station Warned for Inspection and Antenna Violations

Pay Up: FCC Fines Two Kentucky Men for Illegally Operating LPTV Station for 18 Years

The FCC issued a Forfeiture Order imposing a $144,344 penalty against the operators of a Kentucky unlicensed low-power television (“LPTV”) station.  The station had been operating without FCC authorization since 1998.  The Communications Act prohibits the operation of a broadcast station without FCC authorization.  As we reported in 2017, the FCC previously adopted a Notice of Apparent Liability (“NAL”) against the individuals.  This Forfeiture Order affirms the NAL.

The first individual (“Individual 1”) initially applied for and was granted the LPTV license in 1990, as well as a subsequent renewal term that ran from July 1993 through August 1998.  By the time that term expired, however, the individual licensee had failed to file a license renewal application or seek special temporary authorization to operate the station, and by August 1998, the station was operating without any FCC authorization.  In 2004, the FCC’s Media Bureau sent a letter to the individual asking whether he had filed a license renewal application.  Receiving no response, the Media Bureau sent a letter notifying the licensee that the station’s license had been cancelled.

Fast forward eight years, to 2016, when the Media Bureau learned that the station might still be operating.  The matter was referred to the Enforcement Bureau, which confirmed that the station was still on the air.  During the investigation, Enforcement Bureau field agents interviewed Individual 1 as well as a second individual who identified himself as the station’s studio manager and operations manager (“Individual 2”).  During their meeting with Individual 2 at the station, the agents issued a Notice of Unlicensed Radio Operation (“NOUO”) demanding the station cease operations and warning of possible further enforcement action.  In Individual 2’s response to the NOUO, he argued that the station was actually still licensed and referred to the NOUO as only a “request” to shut down.

Field agents returned a few months later to find the station still operating.  The Enforcement Bureau subsequently issued the NAL.

Both men responded individually to the NAL.  Individual 1 claimed, among other things, that the license should still be in effect because he filed a license renewal application in 2004 and included $1,155 to cover license renewal fees for three of his stations through 2022.  He further claimed that the station should remain on air because of the benefits it provides to local residents.  At the same time, however, Individual 1 also claimed to have “never operated a TV station” in the area and had not visited the station in over 15 years.  Finally, Individual 1 sought a reduction in the proposed penalty due to an inability to pay.

The FCC outright rejected all of Individual 1’s claims.  Regarding the late license renewal application, besides filing the application six year late, the filing would only have covered the preceding license term.  Further, the Media Bureau could not have accepted the application because while the funds could have covered the stations’ accumulated annual regulatory fees, Individual 1 did not include application processing fees, without which the Media Bureau cannot review an application.

In response to the claims about benefiting the local community, the FCC stated that any alleged benefit from operations “does not absolve [the operator] from liability.”  The FCC also rejected Individual 1’s claim that he never operated the station, noting that the claim conflicted with the evidence, which included filings and statements made by both individuals to the contrary.

Individual 2’s response to the NAL similarly did not gain much traction with the FCC, despite a few novel theories.  In his response, Individual 2 claimed that the FCC lacks jurisdiction over the station because its signal was not intended to reach beyond the state of Kentucky.  Further, Individual 2 included a petition signed by over 100 local residents urging the FCC to allow the station to continue operating.  Individual 2 also claimed that he lacked the financial resources to pay the penalty.

The FCC rejected Individual 2’s federalism argument as contradicting the plain language of the Communications Act, which prohibits making unauthorized intrastate or interstate transmissions.  Further, the Commission gave no weight to the station’s “community support,” as it had no bearing on the unlicensed operation of a broadcast station.

The FCC also declined to reduce the penalty amount for either party, who it found jointly and individually liable.  Beyond a lack of evidence of inability to pay, the FCC determined that the severity of the violation warranted the penalty, which was calculated by multiplying the $10,000 per day base penalty amount by 22 days of unauthorized operations.  In fact, the Forfeiture Order states that the only reason the penalty was not greater is because $144,344 is the statutory maximum permitted under the Communications Act for a continuing violation.  The FCC also reminded the parties that an ability to pay is only one consideration in adjusting a penalty amount.  Here, the violation lasted over 18 years, and the parties were notified or directly warned at several points over that period about the consequences of operating without a license.

History of an Error: North Carolina Licensee Settles with FCC Over Decades of Unauthorized Transfers and Missing Ownership Reports

The Media Bureau entered into a Consent Decree with the licensee of a North Carolina AM radio station and FM translator station for violating the FCC’s rules governing transfers of control and the filing of ownership reports.

Section 310 of the Communications Act and Section 73.3540 of the FCC’s Rules prohibit the transfer of control of broadcast licenses from one individual, entity, or group to another without prior FCC approval.  In the case of full-power broadcast stations, parties must file FCC Form 315 applications and receive FCC consent before a transfer of control can be consummated.

The transfer of control applications ultimately leading to the Consent Decree were filed with the FCC in April 2018, but the licensee’s problems began over thirty years earlier, shortly after the FCC approved an assignment of the AM station’s license.  The FCC believes that, in 1986, the licensee had five attributable shareholders (the FCC states in a footnote that it is unable to locate the licensee’s original assignment application).  However, over the next few years, over 50% of the licensee’s stock changed hands without FCC consent.  Again, in 1992, more than 50% of the licensee’s stock was transferred without consent, and new directors were appointed to control the licensee.  In 1994, another unauthorized transfer transpired when a minority shareholder acquired a 66% interest in the licensee without prior Commission approval. Continue reading →

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Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others.  This month’s issue includes:

Headlines:

  • Alabama FM Licensee Admits to On-Air Contest and Unauthorized Transfer of Control Violations
  • Silicon Valley Start-Up Agrees to Pay $900,000 Penalty for Unauthorized Satellite Launches
  • Michigan AM Licensee Faces Proposed $18,000 Fine and Reduced License Term for a Variety of Violations

No-Win Situation: FM Licensee Settles with FCC Over On-Air Contest and Unauthorized Transfer of Control Violations

The FCC’s Enforcement Bureau entered into a Consent Decree with the licensee of an Alabama FM radio station for violating the FCC’s rules governing on-air contests and transfers of control.

The FCC regulates licensee-conducted contests in order to protect the public against deceptive and misleading practices.  Section 508 of the Communications Act (“Act”) prohibits a licensee from knowingly deceiving the public by manipulating or predetermining the results of a contest.  Section 73.1216(a) of the FCC’s Rules requires a licensee to “fully and accurately disclose the material terms of the contest” and the contest must be conducted in accordance with those announced terms.

Section 310 of the Act and Section 73.3540 of the FCC’s Rules prohibit the transfer of control of a broadcast license without prior FCC approval.  A de facto transfer occurs when a licensee no longer retains ultimate control over vital aspects of a station’s operations, including its programming, personnel, and finances.

In August 2016, the FCC received a complaint alleging that the licensee “prematurely ended” an on-air contest and failed to award the advertised prizes. According to the complaint, the station instead kept the prizes and provided them to its own employee.

The Enforcement Bureau responded nearly a year later by issuing a Letter of Inquiry (“LOI”) to the licensee seeking information about the contest. In its response, the licensee denied any knowledge of the contest nor was it was able to find any records related to the contest.  According to the Consent Decree, the licensee’s professed lack of knowledge about the contest “raised questions about the Licensee’s control over the Station.”  As a result, in July 2018, the Enforcement Bureau issued a supplemental LOI to the licensee investigating the apparent de facto unauthorized transfer of control to the third party that conducted the contest, who had a time brokerage agreement with the station.  According to the FCC, it had not approved, nor had the licensee applied for, a transfer of control of the license.

To resolve the FCC’s investigation, the licensee entered into a Consent Decree with the Enforcement Bureau.  Under the terms of the Consent Decree, the licensee agreed to (1) admit liability for violations of the FCC’s contest and unauthorized transfer of control rules; (2) pay a $12,000 civil penalty; and (3) develop and implement a compliance plan to prevent further violations of the FCC’s Rules.

Space Oddity: Start-Up Agrees to Pay $900,000 to Settle Investigation into Unauthorized Satellite Operations

After a bizarre string of events involving unauthorized communications satellites, space launches from India, and experimental weather balloons over California, the FCC entered into a Consent Decree with a Silicon Valley satellite start-up.

Section 301 of the Act and Section 25.102 of the FCC’s Rules prohibit the operation of any device for the transmission of energy, communications, or signals by space or earth stations unless in accordance with an FCC authorization.  Section 25.113 of the FCC’s Rules requires FCC authorization before deployment and operation of a space satellite. Continue reading →

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Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others.  This month’s issue includes:

Headlines:

  • Unpaid Regulatory Fees Bring License Revocation Proceeding for Massachusetts FM Station
  • Unregistered Tower and Unauthorized Silence Spell Trouble for North Carolina AM Station
  • FCC Issues Warning to Denver Trucking Company for Unauthorized Transmissions on Public Safety Frequency

The Check is (Not) in the Mail: Massachusetts Station Risks Revocation over Missing Regulatory Fees

The FCC’s Media Bureau issued an Order to Pay or to Show Cause (“Order”) to the licensee of a Massachusetts FM station for failing to pay five years’ worth of regulatory fees and the corresponding penalty fees.  In response to the Order, the licensee must either pay the overdue fees or demonstrate why it does not owe regulatory fees.  The Order also launches a proceeding to revoke the station’s broadcast license.

Section 9 of the Communications Act (“Act”) requires the FCC to “assess and collect regulatory fees” for certain regulated activities, including broadcast radio.  Should a party fail to timely pay such fees, the FCC will assess a 25% late fee, as well as interest, penalties and administrative costs.  The FCC may also revoke licenses for failure to pay.

The licensee failed to pay its regulatory fees between fiscal years 2014 and 2018, and has accumulated a debt of $9,641.73 in unpaid fees and related charges.  The FCC repeatedly sent the licensee Demand Letters calling for payment but received no response.  The FCC eventually transferred the licensee’s debt for fiscal years 2014-2017 to the Treasury Department for collection.  At the FCC’s request, the Treasury Department recently transferred this debt back to the FCC in order to consolidate the collection process.

The licensee has 60 days to either: (1) provide the FCC with documented evidence that all its regulatory fee debt has been paid, or (2) show cause for why such payment is either “inapplicable or should otherwise be waived or deferred.”

Failure to provide a satisfactory response to the Order may result in the revocation of the licensee’s sole FM station license.

Silent Night: FCC Investigates North Carolina Licensee for Unregistered Tower and Other Violations

The FCC’s Enforcement Bureau issued a Notice of Violation (“NOV”) to the licensee of a North Carolina AM radio station for failing to register and light its tower, and for failure to operate its station in accordance with the FCC’s Rules.

Part 17 of the FCC’s Rules requires a tower owner to comply with various registration, lighting and painting requirements.  With limited exceptions, a tower that exceeds 200 feet in height above ground level must be registered with the FCC.  Further, towers must be painted and lighted in compliance with FAA requirements, and any extinguished or improperly functioning lights must be reported to the FAA if the problem is not corrected within 30 minutes.

Part 73 of the FCC’s Rules sets minimum operating hours for commercial broadcast stations.  A commercial AM station must operate for at least two-thirds of the total hours it is authorized to operate between the hours of 6 a.m. and 6 p.m., and two-thirds of the total hours it is authorized to operate between 6 p.m. and midnight every day except Sunday.  A station that expects to be silent for over 30 days must seek and obtain Special Temporary Authority (“STA”) from the FCC to be silent for such an extended period. Continue reading →

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Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others.  This month’s issue includes:

Headlines:

  • Premature Construction Turns Texas LPFM’s Minor Change into a Major Fine
  • FCC Issues Notice of Violation to Miami LPFM Licensee for Unauthorized Antenna Location
  • California Man Pleads Guilty to FCC Bomb Threat, Fatal “Swatting” Hoax

Houston, We Have a Problem: Media Bureau Proposes $5,000 Fine for Unapproved Construction of a Broadcast Facility

The FCC’s Media Bureau issued a Notice of Apparent Liability (“NAL”) to the licensee of a Houston-area low power FM (“LPFM”) station for engaging in premature construction of broadcast facilities.

Section 319(a) of the Communications Act (“Act”) prohibits the FCC from licensing an applicant to operate broadcast facilities unless that applicant has previously obtained a construction permit from the FCC to build those specific facilities.  A construction permit sets out the facilities and operating parameters for a proposed station, including the station’s frequency allotment.  Though an applicant may initiate certain pre-construction measures, including site clearance and purchase of broadcast equipment that is not specific to the station (e.g., generic studio equipment, but not a frequency-tuned antenna), the applicant may not take more substantive steps until it has a construction permit in hand.

In seeking a construction permit, an applicant must show that its proposed service contour is sufficiently distant from other stations operating on the same or adjacent frequencies as to ensure no interference will be created to existing stations.  If the proposed LPFM facilities do not satisfy the minimum geographic distances set out in Section 73.807 of the FCC’s Rules, the applicant must obtain a waiver of those requirements by demonstrating that the proposed operation will not result in actual interference.  For example, an applicant might be able to demonstrate that intervening terrain (mountains) will block the interfering signal.

According to the NAL, the LPFM applicant filed for a construction permit to modify its existing facilities.  Because the proposed site would not satisfy the minimum distance requirements for two local second-adjacent FM stations, the licensee also filed a waiver request purporting to demonstrate that the proposed service contour would not reach the two FM stations’ potential listeners.

Before the Commission granted either of these requests, it received a Petition to Deny from another local station, alleging that the licensee had prematurely begun construction on the proposed site without prior FCC approval.  The petition alleged that the licensee had mounted an antenna on an existing tower and had already proceeded to attach a transmission line to the antenna, in contravention of the prohibition on premature construction.

The petition also alleged that the waiver request was “flawed” because it did not sufficiently protect local listeners of the two second-adjacent FM stations.  According to the petition, the waiver application assumed its contour would only reach one-story structures, when, in fact, several surrounding structures were two-story.

In response, the applicant swiftly removed its equipment from the tower only three weeks after it had installed it.  In a later amendment, the applicant also proposed operating at a lower power level with a different antenna to reduce the likelihood of interference to nearby two-story buildings.

Nearly ten months later, the Media Bureau issued the NAL, proposing a $5,000 fine for the applicant’s premature construction.  Though the FCC’s Rules establish a base fine of $10,000 for unauthorized construction, the Media Bureau adjusted this amount downward, citing the brief duration of the violation and the licensee’s prior history of compliance.

The Media Bureau indicated that once the fine was “resolved,” and assuming no additional issues emerged, it intended to grant the waiver and related modification application, finding that the applicant’s new engineering solution was sufficient to prevent interference to the nearby second-adjacent stations.

Technical Foul: Miami Licensee Cited for Unauthorized Facilities

In another case involving an LPFM, the Enforcement Bureau presented a Notice of Violation (“NOV”) to the licensee of a Miami station for operating at variance from the station’s authorization.  As with all other broadcast operations, LPFM stations must operate in compliance with the Commission’s technical rules and with the station’s own authorization.

In August of this year, FCC field agents investigated the Miami LPFM and found violations in nearly every aspect of the station’s operation.  At the time of the investigation, the station’s license authorized it to operate on 107.9 MHz in southern Miami at a height of 62 meters.  Two months prior, the station had been granted a construction permit to operate four miles west of its original location on a new frequency and at a height of 15 meters.

When the field agents located the actual transmission facilities, however, they found that the licensee was operating at a completely different location several miles away from both its licensed and newly-authorized coordinates.  The station was also using an antenna located 45 meters above ground. Continue reading →

Published on:

Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others.  This month’s issue includes:

Headlines:

  • Ownership Questions Lead to Hearing Designation Order for LPFM Licensee
  • NC Man Hit with $40,000 Fine for Unauthorized Transmissions Over Public Safety Radio
  • FCC Issues Notice to Hospital Paging System Licensee for Harmful Interference

FCC Launches Hearing in Response to LPFM’s Undisclosed Foreign Ownership

The FCC has designated for hearing a Low Power FM (“LPFM”) licensee’s modification application after an investigation into whether the licensee misrepresented the makeup and citizenship of its ownership in various Commission filings.

Under Section 309 of the Communications Act (“Act”), the FCC must first determine that the public interest will be served before it can grant a station license or modification application.  If there is a substantial question that prevents the Commission from making that determination, it must designate the application for a hearing before an Administrative Law Judge (“ALJ”).  The FCC can revoke the license if an ALJ determines that the applicant lacks the “requisite qualifications” to be a licensee, taking into consideration the applicant’s record, character, and truthfulness in dealings with the FCC.

The Act also prohibits entities with greater than 20% alien ownership or voting control from holding a broadcast license where the FCC finds such foreign ownership is not in the public interest.  Many FCC filings require the licensee to identify all officers, directors, and entities with attributable ownership interests in the licensee, including their citizenship.

According to the Hearing Designation Order (“HDO”), the Missouri-based licensee initially applied for a construction permit for a new LPFM station in 2013.  In that application, the licensee listed five individuals as board members and identified all of them as U.S. citizens.  In two separate modification applications in January and November 2017, the licensee identified the same board members as U.S. citizens.

The Enforcement Bureau began its investigation after another licensee alleged that four of the five listed board members were not actually U.S. citizens.  The Bureau discovered that one of the board members had, only weeks before the licensee’s January application, lost an appeal before a federal court to reopen his deportation order to Guatemala.  The court decision referred to him as a Guatemalan citizen.  His wife, another board member, had already been deported to Guatemala.  These revelations indicated that foreign ownership and control of the licensee not only exceeded 20 percent, but that the licensee had also falsely certified the U.S. citizenship of the two board members.

In addition to questions of citizenship, the Bureau also found evidence that the licensee may not have even identified all individuals with attributable interests in the licensee.  Specifically, in documents filed with the Missouri Secretary of State, the licensee listed several officers and board members that it had not disclosed to the FCC.

According to the FCC, these discoveries raised a “substantial and material question of fact” as to whether the licensee misrepresented to the Commission both the makeup and the citizenship of its attributable owners.

The FCC sent the licensee two Letters of Inquiry seeking information about the licensee’s board members, but never received any response.  Failure to respond to a Commission inquiry is also a violation of the FCC’s Rules.

As a result, the FCC commenced an administrative hearing to determine whether the licensee: (1) made misrepresentations in its applications; (2) violated the Commission’s foreign ownership rules; (3) failed to maintain the accuracy of its pending application; and (4) failed to respond to the FCC’s inquiries.

In light of these questions, the ALJ must also examine the facts to determine whether granting the licensee’s pending application is in the public interest, and whether the licensee is even qualified to hold an FCC license at all.

FCC Proposes $40,000 Fine for Impersonating a Firefighter

In a Notice of Apparent Liability (“NAL”), the FCC found a North Carolina man apparently liable for transmitting on a frequency licensed to local first responders while impersonating a member of the local Volunteer Fire Department. Continue reading →