SPLC guide to broadcast license challenges

Legal

With budgetary realities hitting universities andcolleges hard across the country, and administrators seeking to limit all“non-essential” expenditures, student-run campus radio station have been amongthe targets. In addition to reduced operating budgets, several stations havebeen sold or transfer to non-student organizations. According to a recentreport released by College Broadcasters, Inc.,1at least 13 formerly student-run stations recently have been, or are underthreat of being, converted to stations with little-to-no student involvement.The June 2011 sale of Vanderbilt University’s over-the-air FM station provokedan outcry from alumni of the broadcasting program.2Student broadcasters confronted with an impending transfer/sale of theirstation may well wonder what legal avenues they could pursue in attempting tochallenge the transfer.

As generalbackground, one should know all transfers of broadcast radio stations aresubject to the approval of the Federal Communications Commission. As a result,objectors do have a better legal outlet to air their grievances, than theymight have if their neighborhood coffee shop or hardware store were bought outby a national chain. Ultimately, though, the vast majority of legal challengesto a transfer are unsuccessful.3This guide attempts to answer the questions that campus broadcasters frequentlyask about how the FCC considers whether to approve or block a transfer.

A radio licensure primer

Q: What criteriadoes the FCC use in evaluating an attempt to sell a radio station?A: First, thetransferor must file an application with the FCC, which will then determine whether “the public interest, convenience,and necessity will be served by the granting of such application”.4The FCC will treat the transfer proposal no differently than a originalapplication for license.5The law does not permit the FCC to consider whether another purchaser wouldbetter serve the “public interest, convenience or necessity”.6

Q: What is thetimeline and FCC procedure for filing a challenge to the transfer/sale of aradio station?A: Challengers may file a petition to deny theapplication “not later than 30 days after the issuance of a public notice ofthe acceptance for filing of the applications.”7Filings can be found electronically at http://fjallfoss.fcc.gov/ecfs/.

Q: Who can makesuch a challenge?A: Any “party ininterest” may challenge the transfer by filing with the Commission a petitionto deny the application for proposed sale.8Any person may also submit informal objections in signed letter form.9

Q: On what basiswould the FCC rule on a petition to deny?A: If theCommission finds that there are “no substantial and material questions of fact”and that the transfer serves the public interest, convenience and necessity, itwill grant the application and issue a concise list of reasons. If theCommission finds otherwise, it will designate the application for hearing.10

Q: What recourseis there if the FCC rules unfavorably?A: A person whois aggrieved or whose interests are adversely affected by any order of theCommission has a right to appeal to the United States Court of Appeals for theDistrict of Columbia (“the D.C. Circuit”).11

Q: What exactlydoes the standard in service of “the public interest, convenience, andnecessity” mean?A: First of note,the Court of Appeals will give substantial deference to the Commission’sjudgment on the public interest.12In fact, federal courts have suggested that the term “public interest” isintentionally nebulous so as to give the Commission great discretion.13

Can transfers be prevented?

Although every circumstance is unique, and notions of“public interest” are particularly ineffable, the following is a partial listof arguments that have often been unsuccessful in preventing transfers:

  1. The adverse economic impact on employees of the transferorstation.14
  2. Diversity in entertainment formats.15

The following is a list of arguments that have had greatersuccess in preventing transfers:

  1. Diversification of ownership in newspapers and broadcastmedia in the same location (i.e. antitrust concerns).16
  2. Direct misrepresentation or intentional omissions on behalfof the applicant.17

Other factors which might play a role in the determinationof whether an assignment or transfer is in the public interest include communitysupport or lack thereof.18In Lakewood Broadcasting Service, Inc.,v. F.C.C., the D.C. Circuit reviewed FCC approval, without hearing, of aradio station transfer that also would have entailed a format change from an“all news” to a “country and western” format. The D.C. Circuit reasoned that “[w]here a “significant minority” of thosewhom a station is obligated to serve voice discontent over a proposedentertainment format change, the format change becomes an issue to be dealtwith by the Commission in its determination that the assignment comports withthe public interest, convenience, and necessity.”19However, ultimately, even community dissension was insufficient to require theFCC to hold a hearing on the issue of the “public interest.” Further, the Courtdid determine that “The Commission had to consider the public interest, butthat does not in all situations require a survey to determine the exact degreeof support for the old format.”20This suggests that even widespread public dislike of the new format is not byitself enough to make a transfer contrary to the “public interest” for FCClicensure purposes.

Non-FCC alternatives

If theprospect of winning an FCC licensure challenge is remote, then what canstudents aggrieved by the sale of a beloved station do? The best advice mightbe to take advantage of local political channels and organize the studentcommunity (particularly generous alumni donors, if possible) against the sale.

At a publicinstitution, proposed sales often require approval of the board of regents ortrustees (assuming that the university is the holder of the FCC license, whichis common.) Board members will make decisions based on their perception of theschool’s economic interests. If a potential transfer provokes enough outrageamong the student body, alumni and local community, or if keeping the stationcan be shown to be economically advantageous, then school officials mayhesitate to approve the transfer. Board members are generally politicalappointees and will be responsive to political pressure, so attempting toinvolve allies in the state legislature and governor’s office – as well as theprofessional news media – may prove strategically helpful. Ultimately, the bestdefense is to build a broad listener and fan base for the station, including anactive alumni association of former employees, so that the college cannot pointto lack of audience support to justify a sale.

Endnotes

  1. Available at http://www.askcbi.org/?p=2041.
  2. “Vanderbilt student radio station sold, pulled off the air hours later,” SPLC News Flash, available at http://www.splc.org/news/newsflash.asp?id=2234.
  3. Please note that this guide only covers regulatory challenges under the FCC’s authority. Broadcasters wishing to void transfers may also have viable arguments under state contract law.
  4. 47 U.S.C § 310(d).
  5. Id.
  6. Id.
  7. 47 C.F.R. § 73.3584.
  8. 47 U.S.C. § 309(d).
  9. 47 C.F.R 73.3587.
  10. § 309(d)(2), (e).
  11. § 402(b)(6).
  12. F.C.C v. WNCN Listeners Guild, 450 U.S. 582 (1981).
  13. See e.g., F.C.C. v. RCA Communications, 346 U.S. 86 (1953).
  14. National Ass’n of Broadcast Employees and Technicians, AFL-CIO v. F.C.C., 346 F.2d 839 (D.C. Cir. 1965).
  15. See e.g., F.C.C. v. WNCN Listeners Guild, 450 U.S. 582 (1981).
  16. See e.g., F.C.C. v. National Citizens Committee for Broadcasting, 436 U.S. 775 (1978). See also 47 C.F.R. 73.3555(a).
  17. See, Swan Creek Communications, Inc. v. F.C.C., 39 F.3d 1217, 1222 (D.C. Cir. 1994).
  18. See e.g., Lakewood Broadcasting Service, Inc. v. F.C.C., 478 F.2d 919 (D.C. Cir. 1973).
  19. Id. at 922.
  20. Id. at 924 n.12.