The Three C’s of Radio

Competition, Compliance and Contradictions

By Ken and Kelly Orchard

With a combined 65 plus years in the radio business, we have heard just about every story imaginable…and then some, when it comes to the three C’s of radio. It comes as no surprise, in today’s economy and business climate, its apparent that in corporate radio, competition and winning your share of market revenue is on top of the agenda. But, in the essence of this article, we uncovered many contradictions from broadcasters on the direction of radio in the near and distant future. And when it comes to compliance, there are still many broadcasters that believe the word "deregulation" means they don’t have to do anything for the community they are licensed to serve.

Kelly writing: I recently attended the Southern California Chapter of American Women in Radio and Television’s annual luncheon. The subject for the guest panel was "Los Angeles Radio 2002", and was filled with programmers, GM’s and Sales Vice Presidents from Los Angeles stations. It was interesting to me because all of the questions directed at the panelists had to do with competition, revenues, and how radio will compete with other mediums for their share of the business. Only one time did one of the GMs respond with the fact that their primary job is to "A: protect the license of the station, and B: Increase overall earnings". I wanted to ask him if he knew exactly HOW to protect the license of the station.

I uncovered a lot of contradictions in comments made. On one hand, they all agreed about the need to "remain locally oriented" in order to serve their listening audience when it came time to compete with XM radio, but when asked about "local talent", they touted the opportunities for syndication.

I was personally aware of a small market station having been deluged with complaint letters about a syndicated disc jockey because of his subject matter in morning drive. Of course, since they were specifically speaking about Los Angeles radio, but I found the contradictions to be quite compelling.

When the XM issue was brought up, I wish that a had 100 copies of the February 2002 issue of Radio Guide with me so I could have handed out the opinion of Ray Topp publisher of Radio Guide who wrote about XM on the front cover. Since many may have tossed last months issue let me quote Ray’s editorial comment.

Once again, this exposes a severe contradiction in broadcasting today. It appears to be all about revenues. That’s a shame.

I also had the pleasure of meeting many women in broadcasting, and was amused by the comment from a General Sales Manager from a top LA station, when I was explaining what Orchard Media Services does, she commented, "but what is there to do, I thought all that was deregulated!" Yes, even upper management radio people in major markets are still un-educated about the facts of compliance. However, it isn’t the responsibility of the sales manager to protect the license, that is the job of the general manager. They all still need to continually educate themselves on the changes made in FCC rules.

Ken Writing: I had the duty this month of hosting another education seminar for one of our primary clients, Clear Channel. It’s always a pleasure to host these, and with each one, we find new material to include. This particular session found not only the pertinent employees in attendance, but also the Chief engineer and General Manager. Once again, we find contradictions in broadcasting. This particular General Manager with Clear Channel wanted to educate himself, and Kelly found a manager who thought all FCC regulations were history.

I applaud managers like this one at Clear Channel who want to be educated and encourage their staff to learn more about FCC Compliance, Public Files as well as engineering mandated requirements.

In all visits I try and leave a status letter about compliance problems, or articles that we have written about a particular violation so the station staff from manager to engineer can educate themselves about that violation such as station log violations or maybe public files, so they will be compelled to implement a strategy right away and bring their station into full FCC compliance.

Quality broadcasters will continue to educate themselves on the constantly changing environment of the broadcast industry. You should take time to surf the web and go to the Federal Communications Website at www.fcc.gov. Look for the link to the "Enforcement Bureau" and read some of these "FCC opinion and orders" that are printed each month. It’s a real eye opener, and anyone who claims that the FCC is not out there, enforcing the rules is uninformed. It’s amazing to me, and I still wonder: Why do Radio and TV stations constantly make the same mistakes over and over and receive large fines?

I want to get off the track for a moment. I have a web site, KenOrchard.com, I had a friend help me by getting my site on the internet. I want to change it but I want to understand what I’m doing. So I went to the local bookstore and purchased some Web Site Design books. They were over my head. I have mastered many programs with my computer but this was hard for me to understand even thought I got some of those Web design books for "Dummies." Well I am now enrolled in our Local College taking a web design class. So I hope that in a few months our web site will reflect a change. So if you are having a difficulty in understanding all the FCC rules and regulations on Public Files and all other mandated requirements then give us a call. I have not run across"FCC Compliance for Dummies" on Public Files yet. Maybe we should write one! That’s why the educational approach with live seminars can help both the new manager, and the veteran manger continue to educate them self and their staff be in full FCC compliance.

On a recent visit to another manager, I realized that what I was saying about FCC Compliance was way over his head and he passed me on the employee that was working on the Public File, but struggling to figure out what or what not was to be included.

This visit had come about because somebody had come into the station asking to see the Public File. The current staff was uneducated about the procedure, and since they couldn’t help, this person wrote an email to the Local FCC Office. So right away the station received a letter from the FCC asking the following questions:

#1 Where is the exact location of your public inspection files?

#4 Provide an inventory of the contents with reference of Section 73.3526 (e).

Do you have your act together right now that if you received a letter like this that you could comply?

Now, we move on to the third, but most important area of broadcasting: Compliance. There have been many articles lately, in regular newspapers about radio and television. There are still so many independent small market stations across America, doing an incredible job of serving the community. From a local newspaper insert, we found a story written about a station in Abilene, Texas, and its owner Jim Baum. He says, "When you get a license from the FCC to operate a radio station, you have to prove to them that you’re going to serve the community. They’re not interested in whether you make money, lose money, or anything else." We couldn’t have said it any better than that.

The FCC issued a huge fine to one of the larger groups, which we found to be quite interesting, and it combines all of the three C’s of radio. Of course, the FCC is upholding the $21,500 fine to this group. We will show you the argument in dialogue form to make the reading more interesting.

Background:

The FCC received an anonymous complaint about this station that was suspected of violating the "Main Studio Rule". When the FCC inspector finished his inspection, he cited more than ten violations, including Station Log, EAS, Main Studio, failure to establish a local telephone number in the community of license, and having no Public Inspection File. The total amount of fines were $22,000.

The station responds:

The station of course responded by disputing the amount of forfeitures that were placed on them, and the following is the argument that ensued:

Station Claims:

The FCC inspector didn’t ask to see the Public Inspection file

FCC Claims:

The FCC inspector requested to see the Public File two different times and it was never made available to him.

Station Claims:

The GM says they were at the transmitter site when the inspector asked about the Public File, and maybe the inspector was just confused because the station shares its facility with another station.

FCC Claims:

When the GM was asked if they had a Public File, he said, "not yet" and that the GM who is responsible for day-to-day operations should have known whether or not they have a Public File.

Station Claims:

The station wants the FCC to meet its Burden of Proof that they asked to see the Public File

FCC Claims:

FCC’s record of inspection is proof that the inspector asked to see the file twice, but the station still has not shown proof that they have a Public File.

Station Claims:

Station asks for leniency since they have only owned station for five months

FCC Claims:

FCC maintains that as an experienced broadcaster, with 20 years in ownership, they should be well aware of its responsibility to comply with Commission’s Rules and policies.

Station Claims:

Station asks that their "overall" compliance record be considered in the factoring of forfeitures, and the FCC should lower it.

FCC Claims:

FCC indicates that the station has been cited very recently for several violations, which still appear to be in neglect.

In the case of Station vs. FCC, the FCC upholds the fine on the station. The moral of this story is: There is only one-way to do FCC Compliance, and that is doing it the right way.

Remember that this particular station was turned in by an anonymous complaint, what if a new breed of complaints are waiting in the wings to file a petition to Deny your station license or even the transfer to a new buyer. And whom you might ask is this new breed of troublemakers? Maybe it’s a coalition group who will come out of the woodwork soon.