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Licensees Accept $8K Penalty After LMA Issues

FCC assents to requested assignment of two stations

Image from KCHE’s website
The Federal Communications Commission has adopted a consent decree involving two Iowa stations and a local marketing agreement. The case gets into what companies can and cannot do under an LMA.

The Media Bureau says an LMA set up in 2011 in effect allowed unauthorized transfer of control of KCHE(AM) and KCHE(FM) in Cherokee, Iowa, from J&J Radio Corp. to Better Broadcasting.

The two companies later jointly filed applications requesting the formal reassignment of licenses, and included their LMA in those applications. Subsequently, the FCC staff launched an investigation into the LMA and found that J&J had improperly delegated core licensee responsibilities by allowing Better Broadcasting to make direct payments of the stations’ operational expenses and debts, including the salaries of two employees.

The LMA also granted Better Broadcasting possession and use of all of the stations’ equipment, vehicles, furniture, personal property, fixtures, towers and transmitter.

LMAs are allowed as long as ownership rules are not violated and the participating licensee “maintains ultimate control over its facilities.” The FCC pointed out that a licensee maintains such control “when it holds ultimate responsibility for essential station matters such as programming, personnel and finances.”

This February, J&J and Better Broadcasting amended their applications to notify the commission that they had terminated the LMA.

As it has in the past when parties can come to agreement, the FCC decided that the public interest would best be served by terminating its investigation. The consent decree requires J&J and Better Broadcasting to pay a collective $8,000 penalty.

Six days after releasing the consent decree, the commission approved the groups’ assignment request, and formally approved assignment of KCHE(AM) and KCHE(FM) to Better Broadcasting.