Article for Radio Shopper October 2000

"We have an FCC License"

By Ken Orchard and Kelly Orchard

"We have an FCC License! Without it, we have no business." Exclaims Barry Skildelsky, an attorney and consultant from New York.

Skildelsky was one of three panelists in San Francisco during the Convention of National Association of Broadcaster’s Session titled "FCC Rule Enforcement".

The description for this session was "The FCC’s new Enforcement Bureau is active. This session lets you know which areas of radio compliance are being hit with thousands of dollars worth of fines and forfeitures. Find out the rules you must follow to keep your stations from being fined."

As promised last month, we made the trip to San Francisco to attend some sessions and get back to you with some very interesting information. This Friday session was held in a "standing room only" meeting room with many owners, managers, attorneys and a few FCC officials.

Having attended FCC Compliance sessions before, we’ve usually been disappointed in the lack of interest by broadcasters in this very important area for our industry. Our overall impression changed drastically when we looked around the room and saw that it was full to capacity! The panel was knowledgeable and helpful, and even gave us a few laughs! (FCC Enforcement can be fun? Who knew!)?

Now, about Mr. Skidelsky’s comment about having an FCC License. It was a very poignant comment, as it is the ultimate truth in broadcasting. Why take ANY chances with your license? Because, without it… you are out of business!

If you were to put your license in jeopardy for any reason at all, what difference would it make if your station was top in ratings that quarter, or had garnered the largest revenue share in your market? Who cares if you have a number one morning team if you haven’t complied with FCC regulations and have a difficult time renewing your license, or even worse, have someone file a petition to deny your renewal for just about any reason at all?

"Even the slightest complaint to the FCC will be addressed and answered." explained David Solomon, Director of the Federal Communications Commission Enforcement Bureau.

As we have commented before, the FCC isn’t out to make broadcasting difficult or impossible, but they are enforcing the rules, and broadcasters must adhere. The FCC Enforcement Bureau wants broadcasters to be in compliance of the rules.

The most critical mission of the Enforcement Bureau right now is technical. Tower maintenance and Public Safety are huge issues. Proper tower maintenance, including painting, lighting and fencing are the most common non-compliance issues at the top of the FCC’s list.

"Anything that has to do with Public Safety is our first concern", says Solomon. FAA has regulations that broadcasters must follow for aircraft safety. These aren’t the 747 passenger planes that fly thousands of feet in the sky. Broadcast towers affect medivac units, police helicopters, news choppers, etc.

Another technical issue at the top of the FCC’s list is Interference with other signals. Interference Resolution will be dealt with seriously, and the FCC is poised to issue fines and forfeitures for stations in non-compliance.

The new Enforcement Bureau is coming up on its one-year anniversary in November. Solomon has done a good job. There are now about 130 to 140 inspectors in the field now, (up from 100) in 25 or more locations throughout the country. There have been a tremendous amount of "notice of violation and forfeitures" served this year, and Solomon stated that he was surprised how many violations there were in this area.

Additionally, the Emergency Alert System, and EEO Compliance made the list of critical elements to your stations overall compliance. This area is especially being taken seriously with the Enforcement Bureau.

The June general election of new EEO Compliance, which now includes the responsibility of licensee’s to post and advertise all job openings (along with proof placed in your Public File), hasn’t been taken seriously enough by broadcasters yet.

"I talk to my clients and ask if they have the notice placed in their Public File, and they haven’t done it yet". Says Barry Umansky, an attorney from Washington DC and member of this panel.

Umansky has an incredible resume’, including having spent nearly twenty years as Deputy General Counsel of the National Association of Broadcasters.

Umansky wrote an article that was recently published in another radio trade magazine. He gave us permission to use some of his comments here.

According to Umansky, "EEO now has returned as perhaps the most vigorously enforced area at the Commission." Also in this article, he comments, "The Mass Media Bureau recently announced it will be conducting random audits of stations to check on their EEO compliance".

Let’s just give a hypothetical situation now. Actually, it’s not so hypothetical, it’s a true situation, which happens all too often, but we’ll keep names out of it.

Recently, the Retail Marketing Director of a group of stations resigned his position to take another job. The group did not advertise the job posting for his replacement, but quietly moved a qualified current employee in to that role. Not only did they not give notice to the existing staff, where about three others were equally qualified, they didn’t advertise outside the station and in to the community about the position.

These existing employees were not given the fair opportunity to apply and interview for this position, and feel betrayed by management by the oversight. One in particular feels an increasing amount of dissatisfaction with the company, and is considering filing a complaint, even at the risk of losing their existing position with the company.

Question: Is this group just ignorant of the new EEO standards for broadcasters? Were they hoping to "get away" with promoting from within, without regard to other current employees? What would happen should this one disgruntled employee choose to file a formal complaint with the FCC?

"In response to a complaint (of any nature) the FCC may conduct inspections of a station." Umansky continues, "Once it has determined that a violation has occurred, the FCC next decides on the appropriate enforcement action."

This action could range anywhere from a "letter of admonishment" or "warning" (like a parking ticket), to a Notice of Violation, Monetary Forfeiture, having their license revoked, and in serious situations, the FCC can even seek criminal prosecution.

Of course the latter is for extreme circumstances. Since we are talking about EEO Compliance, no one would go to jail. But, the fine for non-compliance with EEO Rules is $9,000. Plus attorney fees! Wouldn’t placing an ad, posting the position and interviewing candidates cost much less?

Don’t believe you are in the clear though if you are only issued a "letter of admonishment". Even in its simplest form, when the FCC issues a "letter of admonishment", it does not end with that. The proverbial "red flag" has now been raised, and more than likely, the FCC will be coming to inspect the station. Severe fines will be issued if the station continues with this violation. Remember, this is ANY violation. We only used EEO as an example.

One of the questions brought before the panel was, "What are the most significant violations made by broadcasters?"

All three panelists agreed that "misrepresentation or lack of candor" were the significant violations.

For those of us who do not practice law, Skidelsky and Umansky pointed out specific definitions of what that means.

"Misrepresentation" – To lie, intent to deceive.

This ranges anywhere from lying in the process of filing your application for license renewal, (even by checking the box that states you have kept your Public File in order for the license period), to fraudulent applications, unauthorized transfer of control, etc.

"Lack of Candor" – is defined as "concealment or evasion". What you know but don’t tell can get you into trouble. Your efforts to cover up are more severe than making a simple mistake.

The panel didn’t completely agree with what a station should do if they know they are not in full FCC Compliance in one area or another. It really depends on the severity of the matter. If the light bulb on your tower has been burnt out for months and someone has filed a complaint, it would be wise to report your efforts to rectify the matter as soon as possible. But, if you are missing your Issues and Program list in your Public File for one quarter, you don’t necessarily need to call the FCC and let them know; just get it taken care of!

We were fortunate enough to have had a conversation with Mr. Umansky prior to the beginning of the session. After explaining to him the Public File services offered by Orchard Media Services, he made an extremely interesting comment.

"Preventative maintenance of your stations daily compliance efforts and record keeping are crucial to that momentous day when you file your application for renewal". He said with a smile. There is a slight chance that you never will be inspected. Just like a tornado, or a bolt of lightening, you might be missed. But, do you really want to gamble your license, or even deal with the headache of fixing a problem after it has been uncovered?

The FCC Enforcement Bureau is looking for groups of stations that are not paying attention to the rules. This was brought up on more than one occasion during this rule enforcement session. With consolidation and clustering in full swing, commonly owned stations with similar fines are being watched carefully. If it is uncovered that a specific cluster of stations in one specific market is violating similar rules, this will send a warning to FCC inspectors to look at the entire group ownership, as it would be quite possible that the ownership as a whole is not complying with FCC Rules and Regulations. Group owners beware. Give your cluster managers enough leverage and ability to keep their cluster of stations in compliance, or the entire group could be in jeopardy of FCC scrutiny.

Lets recap: Tower Maintenance, Public Safety, Technical, EEO Compliance, Emergency Alert System, Misrepresentation and Lack of Candor, and proper record keeping (which is your Public Inspection File, and if your station is running political commercials your Political File), and your weekly station log are at the top of the FCC’s list. Are they at the top of yours?

Occasionally, I’ll get an email or two from readers asking how they can get a copy of FCC Rules. One of the great advantages of attending the NAB Convention is the opportunity to network and learn about other support services available to broadcasters. I found "Rules Service Company" out of Rockville, MD. They offer a service that publishes up to date FCC Rules on CD Rom, and offer it available through its membership services. You can find them on the web at www.ruleserv.com. We’ll be getting our copy soon. We hope you will look them up and order yours too. It can be time consuming trying to download material from the FCC Web site. Sometimes the site is down or our digital line is down. You are supposed to have a copy of the FCC Rules and having your own CD of the rules is a convenient way to go. This way you can cut and paste the actual rule on your "Memo to the boss" about what might be wrong.

Once again, remember the comment made by Barry Skidelsky. "We have an FCC license. Without it, we have no business."

As you go about the business of operating your radio station(s), don’t forget the most important element. Your license. Without it, it won’t matter that you made your projected budget for third quarter!

As a former station owner and engineer, Ken Orchard recognized a fundamental industry need: The quality organization, updating and maintenance of the common Public Inspection File. With every radio station, TV station and Cable Company mandated to provide and maintain a complete, current and compliant Public Inspection File, it was clear that the time had come for a professional P.I.File compilation and maintenance service. This is what we do.

As we were just about to go to print on this article, we learned that a station was just fined $10,000 for not showing the stations Public File to somebody. That person filed a complaint with the FCC, which led to this large fine. Remember $10,000 for no file at all and $3500 for missing paperwork in that Public File. Next month more on the NAB in San Francisco and about this station with the Public File problems.

Ken or Kelly Orchard, (Kelly is my daughter and according to the San Francisco FCC Compliance Inspector, is the cute one) can be reached in Southern California at: 760-243-4733 Or E mail at PIFILE@aol.com.