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FCC Overrules Its Media Bureau in KBOO Case

Reverses course on a previously approved application for a new station in Chehalis, Wash.

Sorry, KBOO.

The FCC has overturned a decision by its Media Bureau and rescinded its OK of an application from the KBOO Foundation out of Portland, Ore., to build a noncommercial FM at 89.7 in Chehalis, Wash.

Even as the commissioners voted to overturn the staff decision though, two of them criticized how the rules are set up, with one knocking the “byzantine structure concocted to award NCE FM licenses in the last filing window.”

The dispute dates back nine years and involves the ramifications of changes made to an organization’s governing board while an application is pending.

KBOO — which has an FM in Portland and several translators, and airs a “community radio” format — was one of 17 mutually exclusive applications for the Chehalis slot as part of an NCE FM filing window in 2007. The Chehalis Valley Educational Foundation, licensee of existing Christian-formatted KACS(FM) at 90.5 in Chehalis, was another.

While KBOO’s application was pending, it had a change in membership of its governing board of more than 50 percent in less than a year, so it amended its application. This constituted a “major change,” which is prohibited outside of a filing window, but KBOO asked for a waiver, saying the commission had allowed such changes in other cases when changes in boards took place over the course of up to a decade while applicants were waiting on FCC procedures.

Meantime the commission in 2010 named another applicant as tentative winner of the MX group, but KBOO asked for reconsideration and amended its application to reflect a settlement with other applicants, so its application was now grantable as a “singleton.” The FCC said yes and reinstated the KBOO application.

CVEF objected, saying KBOO didn’t qualify for a waiver because its case was much different than ones it had cited as precedent. KBOO insisted its board turnover had been gradual and routine and did not alter the nature of its organization or break its “continuity of control,” and the commission’s Media Bureau sided with KBOO “in light of the purpose of the rule and the special circumstances it found to be present.”

CVEF appealed, and now the commission has flipped the outcome.

“We find that the bureau erred in finding here that waiver was justified under Section 1.3 of the rules,” it stated, deciding that KBOO had failed to prove special circumstances. “While the bureau on its own motion determined that special circumstances existed because grant of the KBOO application by virtue of a settlement would not preclude grant of another application, we agree with CVEF that the presence of this factor, even if it had been alleged by KBOO, is not unique to this case,” it ruled.

“KBOO is not the first, nor is it likely to be the last, applicant to render its application a grantable singleton via settlement.” In other words, the circumstances weren’t special; the FCC reversed its staff and now has dismissed the KBOO application. The case gets into matters of “transfer of control,” “breaks in continuity,” waiver grants and other specialized licensing and legal considerations. You can read it here. But the upshot seems to be that KBOO is kept out of Chehalis by its own board activity and a careful pursuit of a rules challenge by another Chehalis licensee.

Commissioner Ajit Pai supported the final reading of the case but he does not like the underlying rule and hopes the commission will change it before another NCE FM filing window. He said a nonprofit board will often experience routine turnover and that many members, often volunteers, may decide to resign for a variety of reasons. “It is not the commission’s job to micromanage the governance of nonprofit organizations, and I see no reason why those groups should be put to the choice of preventing routine turnover on their boards of directors or rendering an NCE FM application defective.”

Commissioner Michael O’Rielly called the structure byzantine. “Unfortunately, this is not the only decision regarding NCE FM applications filed in the October 2007 window that has turned on subjective licensing requirements and an unpredictable process used by the commission to award LPFM licenses.” He called for a more straightforward process in any future windows.