Update on LPFM Window and Foreign Investment in Licenses
Dec 1, 2013 9:00 AM, By Lee Petro
As discussed in last month’s column, the FCC was closed for most of October as a result of the federal government shut down. Since it re-opened its doors, the FCC has been a whirlwind of activity. Two of the most notable activities on the broadcasting front has been the LPFM window and the release of a declaratory ruling relating to foreign investment in broadcast licenses.
In light of the government shutdown, the FCC pushed back the close of the LPFM filing window until Nov. 14. This delay provided applicants additional time to finalize and file their applications. By initial calculations, there were more than 2,800 new LPFM applications, along with approximately 20 applications by existing LPFM licensees to make major changes in their facilities. On Nov. 29, the FCC released a public notice accepting for filing nearly half of the applications, determining that they were not mutually exclusive with any other applications submitted during the filing window.
On Dec. 3, the FCC released a public notice to provide further guidance on the processing of the remaining applications. The public notice indicated that the initial wave of applications had been accepted for filing, and that petitions to deny would be due by the end of December. Unopposed singleton applications will begin to be processed and granted in January 2014.
Next, the FCC stated that a subsequent public notice would be released by the end of December listing the mutually exclusive applications. The release of this public notice will trigger a period of time during which applicants may elect to submit minor amendments to eliminate their mutual exclusivity with the other applications in the group. The FCC made clear, however, that any amendments submitted cannot enhance the comparative standing of the application (i.e., adoption a pledge to provide local programming), nor can the amendment correct site coordinates to correct spacing concerns.
Applicants will also have an opportunity to reach settlement agreements with the other applicants in their group, but the FCC requires that at least one singleton applicant will be created. The applicants that agree to dismiss their applications will be permitted to receive reimbursement of their legitimate and prudent expenses associated with the preparation and prosecution of their applications.
The other option for parties wishing to avoid the comparative process is to reach a time-sharing agreement, again where at least one facility will become a singleton. The time-sharing agreement must detail the specific hours of operation for each party to the agreement; must prohibit simultaneous operation of the station by two or more of the parties; and, each party to the agreement must propose to operate for at least 10 hours per week.
Finally, the public notice discussed the standards by which parties may seek reconsideration and reinstatement of their dismissed applications. As noted above, the FCC will not permit parties to cure spacing concerns, nor will the FCC permit parties to amend applications to exchange an individual name for a non-profit organization. It has been reported that several applicants erroneously listed an individual from their organization as the applicant, and the FCC said these errors cannot be corrected through a petition for reconsideration and reinstatement. On the other hand, if there are other reasons for reconsideration and reinstatement, the applicant may submit the filing within 30 days of the dismissal.
The other item of note for broadcasters is the release of the declaratory ruling for foreign investment in broadcasting licensees. In the past, there have been very few attempts for foreign investors to seek a waiver under the Communications Act to invest in a broadcaster with an interest exceeding more than the 25 percent cap. While the Act indicated the FCC had the discretion to grant such requests, the FCC had only granted one request in the past 30 years.
In response to a request by a group of licensees seeking clarification of the FCC’s policy, the declaratory ruling was released, in which the FCC reasserted that it would, in fact, review each request on a case-by-case basis. The ruling is not expected to result in a land-rush of foreign investment, however, given the need for applicants to file waiver request or petition for declaratory ruling before the investment has taken place. At the very least, however, the current FCC leadership has expressed its interest in permitting such investment to occur.
Stations in Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont continue running License Renewal Post-filing Announcements and stations in New Jersey and New York run License Renewal Pre-Filing Announcements Dec. 16, Jan. 1 and 16.
Commercial radio and television stations file Biennial Ownership Reports (delayed deadline): Dec. 20, 2013.
Deadline for comments in AM Revitalization Rulemaking proceeding: Jan. 21, 2014.
Petro is of counsel at Drinker Biddle & Reath, LLP. Email: [email protected].
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