CommLawBlog : Broadcast & Communications Lawyers & Attorneys : Fletcher Heald & Hildreth Law Firm : Telecommunications, FCC Regulation, Communications Act

The case involved a little corner north of Dallas, Texas. Back in the late 1990s the licensee of KIKT in beautiful Greenville, TX, asked to have its channel moved over to (apparently more beautiful) Cooper, TX. In early 2002 the Commission granted that request and promptly modified the FM Table of Allotments to reflect the change. Once the Table had been changed, the station’s continued operation in Greenville was technically inconsistent with the rules – but the Commission sensibly sidesteps that problem by conjuring up an “implied” special temporary authorization (STA). That implied STA permits the licensee to continue operation in its former community while taking care of the follow-up chores necessary to effectuate the move.

One of those chores, obviously, was obtaining a construction permit to cover the move to Cooper. The FCC gave the licensee 90 days to file its CP application. After six months’ worth of extensions, the licensee filed that application, and eventually a construction permit to move over to Cooper was granted in 2003 – with an expiration date in 2006.

When that expiration date rolled around, however, the new facilities still hadn’t been built, and the CP expired. But wait! The same day, the licensee filed another application for the same Cooper facilities. That application was granted, with an expiration date of 2009.

That’s when things started getting interesting.

During the second CP period (2006-2009), the licensee of a station in Krum, TX, filed an application to improve its facilities. The Krum application was based on the amended Table of Allotments as of 2002 – that is, it assumed that KIKT’s channel was in Cooper, even though KIKT was still operating in Greenville pursuant to its implied STA. The Commission granted the Krum application, but with a condition preventing it from cranking up its modified facilities until KIKT moved over to Cooper.

The Krum licensee wasn’t tickled pink about that condition, and asked the FCC to remove the condition and force KIKT to move to Cooper. That request – which KIKT opposed – rested undisturbed at the Commission until the end of 2009, when KIKT’s second permit expired. And on the same day, KIKT filed a third application for the same Cooper facilities. At that point the Krum licensee renewed its request to remove the condition and terminate KIKT’s implied STA, pointing out that KIKT had already had more than six (count ’em, six) years in which to construct. KIKT countered that it was “not subject to any order that requires construction . . . by any specific date” and, oh yeah, the Bureau doesn’t have the authority to cancel KIKT’s implied STA in any event.

The Audio Division was not impressed with KIKT’s arguments. It concluded that KIKT had lost “all protection rights” relative to its Greenville facilities back in 2002, when the initial reallotment order moving KIKT’s channel to Cooper became final. As a result, the condition on the Krum CP could be deleted, even though the modified Krum facilities would interfere with KIKT’s implied STA operation in Greenville. And as to the claim that KIKT wasn’t really required to get its modified facilities by any specific date, well, the Division disagreed with that, too: KIKT’s outstanding permit (that would be Permit No. 3) requires completion by its expiration date.

And finally, perhaps the most chilling news. In the Division’s view, an implied STA is “subject to summary cancellation if such action is necessary to accommodate the operation of any FM station pursuant to its authorization.” Yikes! That means that, if your channel has been modified in such a way as to put you on an implied STA pending completion of the modifications, your ability to continue to operate in that mode could be summarily whacked. While the Division stopped just short of doing that to KIKT here, the thrust of the decision was loud and clear: get the Cooper facilities built now or risk losing authority to continue to operate at all with the Greenville facilities.

The sternness of the Division’s reaction may be a function of the facts before it. The Division appears to have concluded that KIKT was involved in spectrum warehousing and may not have been acting in good faith – a conclusion apparently arising from KIKT’s practice of getting CPs, letting them expire, and reapplying for them. And KIKT’s somewhat in-your-face arguments – that it was under no obligation to construct and that the Division couldn’t shut it down anyway – probably didn’t sit all that well, either.

But whatever may be the case, all licensees are now on notice of a couple of important things: (a) implied STAs are fragile things; and (b) the Audio Division, at least, is prepared to step in and act when it determines that an implied STA is being used for warehousing purposes. This should provide considerable incentive to anyone in the middle of a move involving a reallotment (and, thus, an implied STA). The Division’s clear message: Get ’er done.

But the Commission itself is not entirely without blame here. It was the Commission, after all, which granted one CP, and then another when the first one expired, and then appeared open to granting a third. More than a decade ago the Commission tried to put a stop to the practice of repeated CP extensions by simply declaring that it would no longer grant any extensions. The practice of apply-let expire-reapply arguably serves the same purpose as extensions. Still, in order to produce the supposedly desired result (i.e., extra time to build), that practice requires the agency’s cooperation: reapplying for a CP doesn’t work if the FCC doesn’t grant the reapplication.

Of course, there may be strong and valid reasons for letting a CP expire and then reapplying for it. Indeed, it’s possible that KIKT itself had such reasons. But that approach can still have negative consequences, including undue delay in the introduction of new service. It will be interesting to see whether, in the wake of this decision, the Division becomes more hesitant to grant serial CP applications.

Following a lengthy investigation, the Audio Division concluded that two NCE licensees under the control of a single individual – Great Lakes Community Broadcasting, Inc. and Great Lakes Broadcast Academy, Inc. (we’ll refer to them collectively as “Great Lakes”) – had lied to the Commission. In at least nine license applications – five for full-power NCE stations and four for translators – Great Lakes had certified, falsely, that CP-specified facilities had been constructed when they hadn't.

Various complaints and petitions from broadcasters (including some I authored for WYCE, Wyoming, Michigan) brought some of Great Lakes's shenanigans to the Commission's attention. With that start, the FCC pursued Great Lakes through a combination of Enforcement Bureau on-site inspections, an Audio Division letter of inquiry and, as described in an earlier post, even some cyber-sleuthing. In instance after instance the Division found that Great Lakes's claims that it had constructed the facilities specified in CPs issued to it just weren’t true. In one case, no facilities had been constructed at all, notwithstanding a certification in the license application to the contrary. In other cases, facilities of some sort apparently had been built, but they were at the wrong site, the wrong height and/or the wrong power.

The Division ruled it was not good enough for Great Lakes to just throw something up in the general vicinity of the CP sites. (The horseshoes/hand grenades axiom is fully applicable here.) CPs for four full-power stations and two translators were automatically forfeited because the facilities authorized had not been constructed before the CPs expired. Great Lakes did escape cancellation of one CP because grant of the license application had already become final, but that escape may be temporary: the Audio Division concluded the facilities specified in the CP and license application were never constructed, so that station will be the subject of a forthcoming hearing designation order.

That hearing designation order will also examine the character qualification of the Great Lakes entities, their owner and Great Lakes's engineering consultant David C. Shaberg to hold other FCC authorizations.  

Great Lakes' varied and sometimes contradictory proffered reasons for its false certifications had, in my admittedly biased view, the persuasive power of a sixth-grader's excuses for not doing his home work. 

For example, Great Lakes argued that the facilities it constructed complied with its authorizations because they did not exceed the antenna heights and power levels set in the CPs and therefore would not cause interference to other stations. Without breaking a sweat, the Audio Division swatted that down: except in very specific instances covered in the FCC's rules, the Division observed, "we do not allow permittees to self-approve modifications to their construction permits."  The Audio Division continued that parties like Great Lakes cause "substantial harm when they hoard spectrum by holding authorizations for full-service FM stations but operate minimal facilities" that might not have been approved had they actually been presented to the FCC.

Great Lakes also claimed that problems getting accurate readings from its GPS unit led to construction of facilities at considerable distance from the FCC-authorized sites. In that regard Great Lakes seems to have been oddly unperturbed when it kept getting different readings, as if it were to be expected that a particular site really ought to have at least a couple of different sets of geographical coordinates. In any case, the Division was unconvinced.

The vigor with which the Audio Division is going after Great Lakes may be a harbinger of a "get tough" policy with respect to spectrum warehousing and false construction certifications. If you’ve found yourself blocked by an operation akin to Great Lakes, that should be good news – the Federales may be on the way to help you out. But on the other hand, if you hold a CP for unbuilt facilities, you are well advised to "get 'er done" within the time provided. If you don’t get finished in time, you are equally well advised to fess up and suffer the consequences. While it may not might nice to try to fool Mother Nature, it's downright dangerous to try to fool the FCC.

[Blogmeister Note: This post was revised in January, 2012.]

In a recent decision, the Audio Division pulled the curtain back, at least a tad, on the information available to the FCC from the back-end of CDBS. 

The case involved a couple of entities (we’ll refer to them collectively as “Great Lakes”) which had acquired CPs and licenses for a bunch of NCE FM full-power stations and translators in Michigan. Complaints and petitions had raised questions about whether Great Lakes had been honest in many of its applications. In one instance, for example, Great Lakes had filed a license application claiming that the station in question had been constructed and was up and running – even though an Enforcement Bureau inspection of the site three days after the application was filed turned up no station at all. 

The license application in question had not been “signed” by a Great Lakes officer; rather, it had been “signed” by Great Lakes’s engineering consultant. That opened the door for the Division to write to Great Lakes advising it of that particular deficiency. (While the FCC’s decision does not say so, it sure looks like, in so notifying Great Lakes, the Commission was setting a trap by giving Great Lakes yet another opportunity to mess up.) Sure enough, a week later an amendment to the license application was filed, this time bearing an appropriate name in the “signature” block. The Commission then sprung the trap, notifying Great Lakes of the results of the Enforcement Bureau’s inspection and asking for an explanation for why Great Lakes claimed, in its application and amendment, that the station was up and running when it, er, wasn’t.

Not surprisingly, Great Lakes had an explanation. The original license application had been placed in the CDBS queue “to have the information readily available for our internal review”, or maybe “as an internal reminder that this was a priority”. In any event, it had been filed by mistake. Who knew? It could happen to anybody! And when the deficiency letter rolled in, well, the Great Lakes principal merely supplied his “signature” without realizing the application which he was amending should not have been filed in the first place.

This is where things get interesting. After receiving that response, the FCC staff – apparently acting on its own initiative – checked its CDBS logs. It determined that the license application had been started on a particular date at a particular time (down to the minute) from a particular Internet address (i.e., a 12-digit IP address).    The Commission then found that that IP address was registered to a company listing a particular street address. (The decision doesn’t say how it did this, but it’s not that hard with, e.g., a simple WHOIS search.) It then found that that street address was the same as the address listed in the driver’s license and voter registration of Great Lakes’s consulting engineer. (Ditto.)

The staff then reviewed the CDBS logs relative to the amendment in which the corrected “signature” was submitted. While Great Lakes’s response certainly seemed to indicate that the Great Lakes principal had prepared and filed that amendment by himself, the logs seemed to tell a different story.  That amendment was started, completed and filed all within a six-minute period from the IP address associated with Great Lakes’s consulting engineer.

The FCC decision indicates that Great Lakes will soon be placed in a hearing to delve into this instance and a series of others, all of which strongly suggest misrepresentation or lack of candor. It’s always possible that some innocent explanation really does exist here, but it’s hard to imagine what that explanation might be. We shall see.

For the rest of us, though, it bears noting that the Commission does have considerable ability to ferret out information, both from its own internal records and from the same Internet resources we all have. And this case demonstrates that the Audio Division, at least, is not shy about digging for facts when investigation seems warranted. It is always a good policy to be completely honest with the Commission; it’s also unwisely short-sighted to think that you might be able to get away with anything less.