FCC Application Processing Decisions – No Reasonable Transmitter Site Assurance Necessary for Auction Applications, Change in Control of Nonprofit Governing Board Fatal to Pending Applications

There were several recent FCC decisions on application processing matters worthy of note. One deals with the processing of commercial applications for FM stations or FM translators that are involved in an auction to resolve disputes, the others with the processing of noncommercial applications (in this case for LPFM stations). None break new ground – but instead they reinforce earlier decisions that some who have been around the broadcast industry had found surprising, so these decisions are worth noting. The commercial case involved the question of whether an applicant needs to receive “reasonable assurance of transmitter site availability” before specifying a transmitter site after a broadcast auction. The noncommercial cases deals with the dismissal of an application because of a change in the control of its board of directors while the application was pending.

The commercial case involved the application for a new FM translator in New Jersey, where a local broadcaster filed a petition asking that the translator application be denied as the applicant had never received permission to specify the tower site, owned by the petitioner, in the “long-form” application filed by the applicant after the applicant prevailed in an auction. After the petition was filed, the applicant amended his application to specify another transmitter site. But, under an old line of cases, the failure to have “reasonable assurance” of a transmitter site was fatal to an application and could not be corrected by a later amendment to an available site. In this week’s decision, the FCC reiterated a decision that it made a few years ago (see, for instance, our article here) concluding that, where an application is granted as a result of an auction, the applicant need not have “reasonable assurance” of its transmitter site at the time it files its “long-form” application (the application that specifies the technical details of the facilities that the applicant intends to use to operate its station).

Instead, if issues about the site are raised, the applicant can later amend it application to fix any defects – including the lack of assurance for its site. The Commission directed its Media Bureau to amend the instructions to its Form 301, the Application for a Construction Permit, to reflect this change in policy, as the form currently requires reasonable assurance for all applications. In all non-auction cases, an applicant still needs reasonable assurance before specifying a site so that the FCC does not need to waste its time processing an application that will not be built (see e.g. the case we wrote about here involving a non-auction noncommercial FM application) – but in the case of an application decided by auction, the FCC seems to be saying that if an applicant is willing to pay the price that it has agreed to pay in the auction, it has an incentive to find a usable site on its own. The FCC won’t impose the death sentence on the application if its initial filing is for a site for which it does not have assurance. The FCC may have to process a second application later for a site on which the applicant actually can build its station, but the applicant has apparently paid for that privilege in the auction.

The recent noncommercial cases make clear that a noncommercial applicant needs to have a majority of its Board stay in place while an application is pending or risk having that application dismissed. We wrote about a similar decision that was a bit more controversial, where Commissioners expressed some reluctance about its decision to dismiss an application where a majority of the Board had changed over a about a year time in light of past cases where waivers of the rules to permit the processing of applications which had Boards that had gradually changed over longer periods of time. There was less reluctance in the recent cases. In one of those cases, Commissioner Clyburn acknowledged a concern about dismissing an application targeting the minority community where a majority of the volunteer board members had changed over time. But the Commission noted that there were no clear facts to indicate that this was a gradual change in control that might have been excused by waiver, and dismissed the applicant. In the most recent decision, however, where the entire Board was changed within a year of the filing of the application, the application was dismissed without comment by any of the Commissioners. The takeaway from this decision is that any noncommercial applicant that is applying for an FCC license need to be careful in making board changes while the application is pending, as any change in control which occurs in a short period of time will likely result in the dismissal of the pending application.