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Time Brokerage Agreement Payments Result in Fine

Consent Decree resolves issues around sale of North Carolina NCE station

Timing is critical when it comes to brokering the sale of a station. That’s a fact that two Southernfirms found out the hard way, resulting in a $10,000 joint fine as part of a Media Bureau consent decree.

A time brokerage agreement (TBA) was set up in August 2003 between Asheville Educational Association (AEA) and the Radio Training Network (RTN). Under terms of that agreement, AEA agreed to sell the NCE station WLFA(FM) to RTN and in return would receive series of escalating monthly payments.

But a Media Bureau investigation into the TBA found that the agreement amounted to an unauthorized transfer of control of the station license.

Section 73.503(c) of the rules state that an NCE FM broadcast station may indeed broadcast programs that are produced by someone other than the licensee as long as no other consideration — other than program costs — are received. In this case, a series of payments — starting at $6,750 per month in 2003 and then increasing by 5% per year for the following four years and then again beyond that — amounted to violation of the rules. By accepting these TBA fees, AEA violated the rules, the bureau stated in the consent decree.

In addition, the bureau found that both AEA and RTN improperly allowed RTN to assume control of the station without prior commission authorization, a violation of both the Communications Act and Section 73.3540 of the rules. The investigation found that AEA improperly delegated core licensee responsibilities that it should have handled itself — such as retaining station employees at the main studio and maintaining station equipment. Ultimate responsibility for essential station matters, such as personnel, programming and finances, remains the responsibility of the licensee, the FCC said.

In October, to bring the matter to a close, the Media Bureau adopted a consent decree between the bureau, AEA and RTN. “Proceedings that might result from the violations would be time-consuming and require a substantial expenditure of public and private resources,” the order said, and in an effort to resolve the matter, it was agreed that the two firms will collectively join together to make a $10,000 civil penalty payment.