The Federal Communications Commission is flexing its regulatory muscle to help resolve an impasse between two radio licensees — as the two argue over channel changes, reimbursement details and whether an escrow account should be required to ensure proper payment.
The situation began when Entravision Holdings LLC filed an application proposing to upgrade one of its stations, KVVA(FM) in Apache Junction, Ariz., by changing the the station’s transmitter location and shifting its community of license to Sun Lakes, Ariz. To facilitate this, Entravision proposed moving one of its other stations — KDVA(FM) — from Channel 295 to Channel 294, a change that would require another licensee to move the station it currently operates on Channel 294 to Channel 295. When that licensee, Prescott Valley Broadcasting Co., modified KPPV(FM)’s license to Channel 295, Entravision said it would reimburse Prescott for the costs of the channel change.
The Media Bureau then notified Prescott of Entravision’s proposal and asked the licensee to show cause why KPPV’s license should not be modified. The bureau reminded Prescott that these types of involuntary channel changes are allowed in instances where such a change would allow for new or expanded service in another community.
But Prescott balked at the request, saying it could not support modification of the KPPV license unless Entravision agreed to deposit an estimate of the reasonable costs into an escrow account. While Entravision said it was committed to reimburse Prescott, the reimbursement amount Prescott requested —$2.75 million — “far exceeded” the amount typically specified in moves such as this, Entravision said. Entravision then alleged that Prescott was abusing commission processes and filed an objection to simply delay the channel change, otherwise known as a bad-faith strike pleading.
And so began an exchange of character-related attacks and insults by Entravision and Prescott, the bureau said.
In the midst of these back-and-forth battles, the Media Bureau took several steps. The bureau granted Entravision’s applications in July 2020, issued construction permits for KVVA and KDVA, modified KPPV’s license to operate on Channel 295 instead of Channel 294, and directed Prescott to file an application to implement the channel change by Oct. 19, 2020.
As is customary in an involuntary channel change situation such as this, the bureau placed special operating conditions on the permits it issued to Entravision. As a result, Entravision is not permitted to commence program tests or officially license the new channel as its own until the Prescott station is officially licensed and begins tests from its new location.
The bureau also reminded Entravision that it must reimburse Prescott for “reasonable and prudent” costs incurred in changing KPPV’s channel, though Entravision would not be required to place funds in an escrow account. The bureau also dismissed Entravision’s allegation that Prescott was filing a strike pleading.
Prescott filed a minor modification application to implement the program change (which was granted by the bureau) but the licensee also argued against the bureau’s decision not to require an escrow deposit. Entravision opposed that petition, again accusing Prescott of filing a strike pleading.
More name-calling ensued. According to the Media Bureau, Prescott accused Entravision of engaging in reprehensible and unprofessional behavior, accusing the licensee of stonewalling. Prescott further charged Entravision with obfuscation, disingenuousness, bullying and intimidation. According to Prescott, the bureau should reconsider its decision and require Entravision to place funds in an escrow account because, Prescott said, Entravision’s trustworthiness should be questioned.
Again, the bureau issued several denials. It denied Prescott’s request, saying the licensee had not shown adequate reasoning to require an escrow account, and it denied Entravision’s allegation that the latest Prescott petition was another strike pleading. Another round of objections were filed with the bureau again dismissing Prescott’s request for an escrow account.
By January 2021, Entravision filed a request asking the bureau to remove the special operating condition initially placed on the construction permit for KDVA because the licensee had “no idea whether or when [Prescott] will commence construction.” Because of the various delays, Entravision said that KPPV should no longer be entitled to protection on that channel.
But eliminating protections to its station would result in interference to more than 300,000 listeners, Prescott responded. The licensee again characterized Entravision’s moves as a way to avoid its reimbursement obligations.
The two licensees also accused the other of other blunders, including defective filings, late-filed pleadings, mislabeled mailings and wrongly routed packages.
But in its most recent order on the issue, the commission made several things clear.
It upheld the Media Bureau’s decision not to require Entravision to deposit funds into an escrow account. The commission also found no merit in Entravision’s assertion that Prescott’s pleadings were simply to cause a delay. And the commission upheld the bureau’s earlier decision to modify Prescott’s channel of license because, as the bureau wrote at the time, such a change would “promote the public interest, convenience and necessity.”
The commission also declined Prescott’s request that the FCC modify its reimbursement rules so that Entravision would also cover the cost of moving an FM translator (Prescott’s FM translator would also be affected by the channel move).
The FCC reminded Prescott that FM translators are authorized as a secondary service and can be subject to displacement by a full-service station. (Any related costs would fall to the translator licensee — not the station causing displacement — because in constructing an FM translator station, the licensee knew the risks and accepted the secondary status of the translator construction permit.)
The commission also denied Entravision’s request that the FCC remove the special operating condition on the station that prevents Entravision from conducting tests on its new channel.
Finally, the commission addressed the contentious negotiations between Entravision and Prescott, directing the Media Bureau to monitor the situation and make a decision on which expenses are covered if the two licensees cannot come to an agreement.
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