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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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Each full power and Class A TV station being repacked must file its next quarterly Transition Progress Report with the FCC by July 10, 2019.  The Report must detail the progress a station has made in constructing facilities on its newly-assigned channel and in terminating operations on its current channel during the months of April, May and June 2019.[1]

Following the 2017 broadcast television spectrum incentive auction, the FCC imposed a requirement that television stations transitioning to a new channel in the repack file a quarterly Transition Progress Report by the 10th of January, April, July, and October of each year.  The first such report was due on October 10, 2017.

The next quarterly Transition Progress Report must be filed with the FCC by July 10, 2019, and must reflect the progress made by the reporting station in constructing facilities on its newly-assigned channel and in terminating operations on its current channel during the period from April 1 through June 30, 2019.  The Report must be filed electronically on FCC Form 2100, Schedule 387 via the FCC’s Licensing and Management System (LMS), accessible at https://enterpriseefiling.fcc.gov/dataentry/login.html. Continue reading →

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The next Quarterly Issues/Programs List (“Quarterly List”) must be placed in stations’ Public Inspection Files by July 10, 2019, reflecting information for the months of April, May and June 2019.

Content of the Quarterly List

The FCC requires each broadcast station to air a reasonable amount of programming responsive to significant community needs, issues, and problems as determined by the station.  The FCC gives each station the discretion to determine which issues facing the community served by the station are the most significant and how best to respond to them in the station’s overall programming.

To demonstrate a station’s compliance with this public interest obligation, the FCC requires the station to maintain and place in the Public Inspection File a Quarterly List reflecting the “station’s most significant programming treatment of community issues during the preceding three month period.”  By its use of the term “most significant,” the FCC has noted that stations are not required to list all responsive programming, but only that programming which provided the most significant treatment of the issues identified.

Given that program logs are no longer mandated by the FCC, the Quarterly Lists may be the most important evidence of a station’s compliance with its public service obligations.  The lists also provide important support for the certification of Class A television station compliance discussed below.  We therefore urge stations not to “skimp” on the Quarterly Lists, and to err on the side of over-inclusiveness.  Otherwise, stations risk a determination by the FCC that they did not adequately serve the public interest during the license term.  Stations should include in the Quarterly Lists as much issue-responsive programming as they feel is necessary to demonstrate fully their responsiveness to community needs.  Taking extra time now to provide a thorough Quarterly List will help reduce risk at license renewal time.

It should be noted that the FCC has repeatedly emphasized the importance of the Quarterly Lists and often brings enforcement actions against stations that do not have fully complete Quarterly Lists or that do not timely place such lists in their Public Inspection File.  The FCC’s base fine for missing Quarterly Lists is $10,000.

Preparation of the Quarterly List

The Quarterly Lists are required to be placed in the Public Inspection File by January 10, April 10, July 10, and October 10 of each year.  The next Quarterly List is required to be placed in stations’ Public Inspection Files by July 10, 2019, covering the period from April 1, 2019 through June 30, 2019.

Stations should keep the following in mind: Continue reading →

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For many consumers, answering a phone call from an unknown number has effectively turned into a gamble.  Is it a potential new client?  A medical emergency?  Or, more likely, is it an incredible offer-to-stay-at-a-Caribbean-resort-of-your-choosing-please-hold-for-a-representative?

Not surprisingly, no issue generates more complaints at the Federal Communications Commission (FCC) and the Federal Trade Commission than robocalls – according to one estimate there were 47 billion illegal and unwanted calls in 2018.  In response, the FCC last week released a Declaratory Ruling and Third Further Notice of Proposed Rulemaking (CG Docket No. 17-59, WC Docket No. 17-97) clarifying that voice service providers may offer consumers call-blocking tools through an opt-out process rather than an opt-in basis, as is typically done today.   The FCC issued this clarification to address concerns that the majority of consumers are not requesting available call-blocking services.

Alongside this growing chorus for more robust call blocking, however, are concerns by legitimate callers of over-blocking.  Calling parties fear that the adoption of widespread call blocking may result in unintended consequences as call-blocking tools rely on analytics to determine when calls are likely to be illegal, spam or telemarketing.  The challenge is that legitimate calls may share some of the same analytical tendencies (e.g., a high volume of short duration calls originating from a toll-free number), resulting in the blocking of wanted calls, such as credit card fraud notifications, flight delays or school closing alerts.

To this end, the Declaratory Ruling clarifies when voice service providers may implement call-blocking programs, what other types of call-blocking tools they may offer to customers, and what options, if any, calling parties have to challenge over-blocking.

a. Opt-Out Method

First, the Declaratory Ruling clarifies that voice providers may implement call-blocking programs to subscribers on an opt-out basis.  Many voice providers only offer call-blocking services on an opt-in basis, requiring subscribers to specifically request these services.  However, either because of a lack of awareness of options, or just general inertia, the vast majority of subscribers have not opted to use such services.

And rather than set specific rules for which calls are blocked, the Declaratory Ruling permits calls to be blocked based on “any reasonable analytics designed to identify unwanted calls.”  Such “reasonable analytics” can be based on a broad combination of factors, including: callers with a large number of complaints, large bursts of calls within a short time period, calls with low average call duration, invalid numbers placing large numbers of calls, sequential dialing patterns, and other indicia of illegal calling.  Regardless, providers must apply such analytics in a “non-discriminatory, competitively neutral manner.” 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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The state-by-state license renewal cycle for radio stations that will take place over the next three years commenced on April 1, 2019.  That was when the first batch of radio broadcasters (DC, MD, VA, and WV) began airing their pre-filing announcements ahead of the June 1, 2019[1] filing date for their license renewal applications.  The cycle then repeats, with a license renewal application deadline (based on state) occurring on the first day of every other month until 2022, by which time all full power, FM translator, and LPFM stations should have filed applications seeking a new eight-year license term.  Stations can determine their license renewal date by reviewing the FCC’s state-by-state license renewal timeline.

The FCC’s license renewal application form (FCC Form 2100, Schedule 303-S) may at first appear straightforward, consisting mostly of yes/no questions.  However, appearances can be deceiving, as evidenced by the countless fines, consent decrees, and other enforcement actions levied against stations that either failed to verify the accuracy of their certifications before filing, failed to timely file their license renewal application, or whose failure to comply with the FCC’s rules over their eight-year license term became apparent at license renewal time.

Those risks have increased significantly in this license renewal cycle, as it will be the first one in which all broadcast station Public Inspection Files are online.   The ability of the FCC, petitioners, and anyone else to review a station’s Public Inspection File online, at any time of day or night, and to peruse the electronic time stamps indicating exactly when documents were uploaded, creates a regulatory minefield for any applicant that has not been fastidious in preparing for its license renewal and in completing its license renewal application.

The bulk of the license renewal application consists of certifications whereby the applicant confirms its compliance with various FCC rules and requirements.  If an applicant certifies it has complied with those rules and requirements, and that assertion is not contested by a petitioner or the FCC’s own records, the FCC will generally not request additional evidence of compliance and will grant the station’s license renewal application.  Where the application is challenged by a petitioner with evidence that one or more of the station’s certifications is false, the FCC may ask the applicant for additional information to determine if grant of the license renewal application will serve the public interest.

One of the certifications that carries the highest risk of generating a fine is the certification that the station has timely placed all required documents in its Public Inspection File.  The base fine for a Public Inspection File violation is $10,000, and the FCC can adjust that amount upward if it finds multiple or egregious violations have occurred.

That means a station whose online Public Inspection File is not complete is already subject to a sizable fine. Falsely certifying compliance in the license renewal application creates the risk of additional fines, and in extreme cases, may persuade the FCC that license renewal is simply not in the public interest.

As a result, before completing the license renewal application, stations should thoroughly review their Public Inspection File to ensure it is complete and that the time stamps indicate all documents were timely uploaded.  If the Public Inspection File is not complete, stations should upload the missing documents as quickly as possible and be prepared to disclose that fact in their license renewal application.  With the Public Inspection File now online, it is easy for the FCC or a petitioner to challenge the accuracy of a station’s license renewal certifications—quite different from the days when a broadcast employee might reach retirement age without ever encountering a Public Inspection File visitor.  It is therefore even more important to a station’s well-being during this renewal cycle to fix any problems spotted as promptly as possible rather than just pretending those problems don’t exist when certifying rule compliance in the license renewal application.

The License Renewal Process

The first point to note is that a license renewal application is just that—an application—and not a guarantee of a new license term.  The Communications Act of 1934, as amended (the “Act”) requires all radio broadcasters to obtain from the FCC an authorization to operate.  By filing Schedule 303-S, an applicant requests its authorization be extended for another eight years.  The Act requires the FCC to grant such an application only if it finds that during the preceding license term: (1) the station has served the public interest, convenience, and necessity; (2) the licensee has not committed any serious violations; and (3) there have been no other violations by the licensee of the FCC’s rules and regulations which, taken together, would constitute a pattern of abuse.  To this end, the FCC invites petitions to deny, informal objections, and comments from the public for every license renewal application, and will review the application and these other submissions to make a determination as to whether the station at issue is deserving of license renewal. 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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In a Public Notice released this afternoon, the FCC waived certain quarterly Transition Progress Report requirements for stations in Phases 3, 5, and 8 of the post-auction repack process.

As subscribers to Pillsbury’s legal advisories are aware, stations that were assigned a new channel as part of the post-Incentive Auction repacking process must file Transition Progress Reports on FCC Form 2100, Schedule 387, at various times throughout the transition process.  Along with other reports closer to phase completion, stations must file a report every quarter (“Quarterly Report”) and a report ten weeks out from a station’s phase completion date (“10-Week Report”).

However, as many observers have pointed out, the deadlines for the Quarterly Report and 10-Week Report often fall within days of each other, meaning that a transitioning station would have to expend time and energy on filing one report, only to have to file a near-duplicate report a few days later.

To address this inefficiency, in today’s Public Notice the FCC waived the filing of the April 10 Quarterly Report for Phase 3 stations, the July 10 Quarterly Report for Phase 5 stations, and the January 10, 2020 Quarterly Report for Phase 8 stations.  These stations will still be required to timely file their 10-Week Reports.

This late reprieve may not offer much solace for Phase 3 stations that were already set for their dual Transition Progress Report filings on April 10 and April 12, but better late than never.

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The next Quarterly Issues/Programs List (“Quarterly List”) must be placed in stations’ Public Inspection Files by April 10, 2019, reflecting information for the months of January, February and March 2019.

Content of the Quarterly List

The FCC requires each broadcast station to air a reasonable amount of programming responsive to significant community needs, issues, and problems as determined by the station.  The FCC gives each station the discretion to determine which issues facing the community served by the station are the most significant and how best to respond to them in the station’s overall programming.

To demonstrate a station’s compliance with this public interest obligation, the FCC requires the station to maintain and place in the Public Inspection File a Quarterly List reflecting the “station’s most significant programming treatment of community issues during the preceding three month period.” By its use of the term “most significant,” the FCC has noted that stations are not required to list all responsive programming, but only that programming which provided the most significant treatment of the issues identified.

Given that program logs are no longer mandated by the FCC, the Quarterly Lists may be the most important evidence of a station’s compliance with its public service obligations.  The lists also provide important support for the certification of Class A television station compliance discussed below.  We therefore urge stations not to “skimp” on the Quarterly Lists, and to err on the side of over-inclusiveness.  Otherwise, stations risk a determination by the FCC that they did not adequately serve the public interest during the license term.  Stations should include in the Quarterly Lists as much issue-responsive programming as they feel is necessary to demonstrate fully their responsiveness to community needs.  Taking extra time now to provide a thorough Quarterly List will help reduce risk at license renewal time.

It should be noted that the FCC has repeatedly emphasized the importance of the Quarterly Lists and often brings enforcement actions against stations that do not have fully complete Quarterly Lists or that do not timely place such lists in their Public Inspection File.  The FCC’s base fine for missing Quarterly Lists is $10,000.

Preparation of the Quarterly List

The Quarterly Lists are required to be placed in the Public Inspection File by January 10, April 10, July 10, and October 10 of each year.  The next Quarterly List is required to be placed in stations’ Public Inspection Files by April 10, 2019, covering the period from January 1, 2019 through March 31, 2019. Continue reading →

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Each full power and Class A TV station being repacked must file its next Transition Progress Report with the FCC by April 10, 2019.  The Report must detail the progress a station has made in constructing facilities on its newly-assigned channel and in terminating operations on its current channel during the months of January, February and March 2019.[1]

In a March 28, 2019 Public Notice, the FCC waived the quarterly Transition Progress Report requirement with regard to Phase 3 stations for the report due on April 10, 2019, with regard to Phase 5 stations for the report due on July 10, 2019, and with regard to Phase 8 stations for the report due on January 10, 2020.  In all three cases, the quarterly deadline falls within days of the deadline for those stations’ 10-Week Report (which stations must continue to timely file), making the quarterly report redundant.  See infra.

Following the 2017 broadcast television spectrum incentive auction, the FCC imposed a requirement that television stations transitioning to a new channel in the repack file a quarterly Transition Progress Report by the 10th of January, April, July, and October of each year.  The first such report was due on October 10, 2017.

The next quarterly Transition Progress Report must be filed with the FCC by April 10, 2019, and must reflect the progress made by the reporting station in constructing facilities on its newly-assigned channel and in terminating operations on its current channel during the period from January 1 through March 31, 2019.  The Report must be filed electronically on FCC Form 2100, Schedule 387 via the FCC’s Licensing and Management System (LMS), accessible at https://enterpriseefiling.fcc.gov/dataentry/login.html.

The Transition Progress Report form includes a number of baseline questions, such as whether a station needs to conduct a structural analysis of its tower, obtain any non-FCC permits or FAA Determinations of No Hazard, or order specific types of equipment to complete the transition.  Depending on a station’s response to a question, the electronic form then asks for additional information regarding the steps the station has taken towards completing the required item.  Ultimately, the form requires each station to indicate whether it anticipates that it will meet the construction deadline for its transition phase. Continue reading →