"One Fine Day",

And We Do Mean Fine

By Ken and Kelly Orchard

It’s been a year since we reported on the FCC Compliance Sessions from the 2001 National Association of Broadcasters Convention in Las Vegas. In 2001, the Head of the FCC’s Enforcement Bureau, Mr. David Solomon, said he was really surprised that broadcasters keep making the same mistakes when it comes to being compliant with the FCC rules and regulations. The list on his agenda included:

By the time this article and the Radio Guide for April is printed, we will be at the 2002 NAB convention in Las Vegas. We are fairly confident that the same list will be brought up at the FCC Compliance session. Why? Because we have seen all year long, one case after another of stations making the same mistakes when it comes to addressing their compliance issues. Is it simply ignorance? Or is the radio industry filled with novice broadcasters who need to be trained?

Solomon also added at a NAB State Leadership Conference that the FCC Enforcement Bureau is especially looking for stations with patterns of enforcement violations among ownership groups. For example, if one company owns 50 stations, the FCC knows about your group, has a list of your stations and can match them up in their computer to see if there is a pattern of non-compliance at all or any of the stations under that one ownership.

Procrastination might be the culprit with when it comes to FCC compliance. Certainly broadcasters are not completely ignorant of the rules, or are they? Is it really possible that the FCC will issue violations again this year that these stations could have addressed if they had simply paid attention to what has been happening since the inception of the Enforcement Bureau?

Throughout the month, we gather notes from various sources about the activities of the FCC in regards to broadcaster compliance issues, so that we report here the information needed for our readers to know. So, as we look at the FCC’s website and through different industry trade publications, we learn that a station was fined for not having their towers registered; another station was fined $6000 for airing an answer machine message without permission of its owner. The person that owned the machine filed a complaint about the station into the FCC. This same ownership had received a similar fine not too long ago, in a different market for a similar violation. Did the group not learn from the other experience? Are these groups too large now that they are impossible to manage?

Two years ago Orchard Media Services was contracted to provide our services and reorganize and complete the Public File for a large group owner. This station was not considered part of their larger markets, but more of a secondary station, so not as important as it generates little income. As it was, the Public File was completely a mess and of course not updated in years. After we finished that file, we gave the owners a list of some potential problems and warned them they could be fined. Plus, the station log was not being handled properly, and there was possibly a violation for the lack of appropriate staff operating the station.

Well two years have gone by, and guess what? The group did not head the warnings and take the initiative to remedy their compliance issues, and the FCC showed up to inspect the station. Here’s a cliché, the staff were out to lunch. The fine was $10,000.

You cannot assume that the FCC is not going to come and inspect your station. If you, the owner or manager believe that your station will never get inspected, you are very misled. There are several elements that could trigger an FCC Inspection. It could be a random inspection because the FCC records indicate the station hasn’t been inspected for a number of years, or, a disgruntled employee or listener could file a complaint.

Procrastination needs to be addressed. So, here is some sound advice. All states have a Broadcast Association. Of course there is the National Association, and most broadcasters only attend the convention to look at the newest technology. But each state has an association whose primary job is to assist broadcasters. Some of you belong to them but many don’t. Perhaps the reason is, that it costs money to join these state associations and many broadcasters don’t wish to lay out this annual fee. Unfortunately, many broadcasters don’t see the benefits of belonging to these State Associations. The humble, yet fragile ego of management sometimes has the attitude, "I work for a huge corporation, and our legal department handles all of our FCC Issues. I don’t need to join my state association; I need to network with advertisers and other financial partners. That’s my job."

But, we also hear managers claim that they have two jobs. One is to increase profits, but the other is to protect the license of the station. How are you going about doing that? And are you absolutely sure that you are?

So, here comes the blatant pitch. Call up or e-mail your states Broadcast Association and ask them about their Alternative Broadcast Inspection Program. (ABIP). Regardless if you’re a member or not today, call them and join. Most State Association offer this ABIP. How it works is, your station pays a fee and the program inspector comes out to your station. Now keep in mind, this inspector is from the State Association and not from the FCC. Just as we are program supervisors for California, this inspector would be for your state and is contracted to be an advocate for the broadcaster. This is a group of state association inspectors are honest, ethical professionals, with a great deal of radio and TV experience. They are experts in this particular area of the broadcast arena. You should get to know these inspectors, get their phone numbers and call them, don’t be afraid to ask questions.

You’ll find that when the FCC came up with this program, to use state associations to assist with this important regulatory requirement, it can and will make a difference in FCC compliance. Make a copy of that check and application form for the inspection and while this process is going on you will have some protection from the FCC if they should show up for a station inspection, just show them your copy of check and application and they will go away, unless they received a complaint or are inspecting for specific items. If your station is compliant, your state association program director will issue your station a "Certificate of Compliance" or, as we like to call it, your "Get out of jail free card". Now you can place this certificate in your public file and a copy will be sent to the local FCC Bureau will be notified that you passed and you won’t see the FCC for 2-3 years pending on the state association.

If I was buying a station in "Anyplace, USA" I would have this as part of my purchase agreement. That the seller of the station should have to pay for a ABIP inspection and compliance work if it is needed to be in full FCC compliance. The contract between seller and buyer already has similar language, that the seller will deliver to you a fully compliant station. I don’t care if the purchase price is $250,000 for a station of $300,000,000. It just makes good sense to have this inspection done.

Ken: We make it a regular practice to visit our state’s FCC Enforcement offices, so we can stay abreast of the most current issues. California is blessed with three FCC Offices, one in San Diego, Los Angeles, and San Francisco. These three offices are in charge of inspecting a large amount of stations in the Western United States. Last week, I was told at my visit, just how many inspectors and engineers work at that one office. I was told just how many radio and television stations are in their district area, and yes the new FCC 2002 budget did give the FCC more money for travel expenses to inspect these stations. It appears that each inspector has about 100 stations to inspect in his district. I was told that in 2001 over 1,000 letters were sent to stations about violations. Those station violations were sometimes for only one item and sometimes the letter to the station listed up to 10 violations. So it’s possible that, on the average 3000 violations were sent out last year. So for 2002, the FCC has a bigger budget, the FCC knows that they have many personnel retiring this year and have hired more staff; also because of this increase in FCC budget they have the money for more inspections.

So you do the math. Statistically, how much time do you have before the FCC comes walking through your door and says, "I’m here to inspect your station."

In my notes for my April 2002 article is the story of a station in February 2002 that received an FCC inspection and had not just one violation but the following:

What did the station do? Well they stated that the station would implement a Compliance Plan to ensure its future compliance with the Commission’s Rules and will make a $10,000 voluntary contribution to the United Sates Treasury.

Now the question to be asked is if they are going to implement a compliance program then they must have known all along how to keep their station in full compliance. Or did they? Or did they just procrastinate until it was too late.

Notice that one of the violations was for Issue/Program list that is to be placed into their Public File every quarter. Now the license is for 8 years, we’ll say 1997 to 2005 like in California. That is 8x4; a total of 32 inserts into their Public File on how this station was to serve the community that this station was located in. When 2005 comes along this station will file a renewal application and in that application will be a question: Did you place into your Public File all of your requirements? Now in this particular station I would assume he is going to have to talk with his attorney as to how they are going to answer that question.

I have a friend who produces a Public Affairs, generic in nature, never the less, a program that complies with this issue list and sends it out to many stations across the nation. Since this FCC requirement is mandated and not an option, all stations have to do this regardless of format. So he was surprised when he got a call canceling his service because the station was changing format and would not need the issue list and program material for the new format. In this situation, I have to wonder if it is procrastination or just plain ignorance of FCC rules. Give this station a dunce cap….

So, one fine day when the FCC Inspector walks in to your station, will you wish you hadn’t procrastinated making the decision to be sure of your station’s compliance? Or will you feel confident because you took pre-emptive steps to assure that you are a responsible broadcaster?