Audio Division announces use-it-or-lose-some-of-it renewal policy.

If you’ve got a license to operate a radio station, you’d better have that station up and running and you’d better keep it that way. That’s the none-too-subtle message in an Audio Division decision imposing a “short-term” renewali.e., a two-year license term instead of the customary eight-year term – on a Texas FM licensee whose station was silent for much of its abbreviated four-year existence. The decision is a clear warning to licensees who fail to operate their stations for extended periods.

The station in question was initially licensed in mid-August, 2009. By March 1, 2011 it was off the air because (according to the licensee) of interference problems. It returned to operation 364 days later, but for only four weeks. Then it was off the air again – still more interference problems of some sort, plus something about tower availability. It came back on 358 days later, less than two weeks before its license renewal application was due. So of the 32 or so months during which the station had been licensed up to that point, it had been off-the-air for more than 19.

Of course, the station’s failure to operate even for that much time was not illegal. To the contrary, the licensee had expressly requested – and been granted – authority to stay silent. And the Communications Act does not prohibit periods of non-operation of 11+ months. (The magic number under the Act? According to Section 312(g), the license of a station which fails to operate for a consecutive 12-month period automatically expires at the end of that period.)

So what’s the Division’s problem anyway?

In the Commission’s view, a broadcast license carries with it an implicit obligation actually to broadcast. The FCC has long railed about the evils of “spectrum warehousing”, i.e., obtaining spectrum authorizations and then sitting on them, unused. A non-broadcasting broadcast licensee may be said to be engaging in that supposedly nefarious practice.

The Commission’s interest in policing non-operation is no secret: when the license renewal application form (Form 303-S) was revised in 2010 in advance of the most recent renewal cycle, a new question was included requiring the applicant to list all periods of more than 30 days when its station was off-the-air. The goal, obviously, was to force non-operating licensees to narc on themselves. (For more on the 2011 revision of Form 303-S, check out this post.)

But if 11 months’ worth of FCC-authorized silence is not illegal, how can the Division justify imposing any punishment at all?

Check out Section 309(k) of the Act, which requires the Commission to grant a renewal application if, among other things, “the station has served the public interest, convenience, and necessity”. As the Audio Division sees it, if a station hasn’t operated, the station provides the FCC no basis from which to conclude that the station has in fact served the public interest, so the FCC can’t make the public interest determination required by the Act.

If the FCC can’t make such a determination, it has limited options. It can designate the application for hearing to sort things out before an administrative law judge. Or it can “grant [the] application on terms and conditions as are appropriate, including renewal for a term less than the maximum otherwise permitted.” In this case the Division took that second option – but it ominously warned that, “[h]ad the [station’s] silence occurred for more than half of the license term, we would have designated this

case for an evidentiary hearing.” (By our calculation, the Texas FM station had been off-the-air for slightly more than half of the relevant license term, but the Division doesn’t seem to think so.)

The Division went a bit further. In a footnote (watch out for those lurking footnotes!) it lumped under-power operation in the same category as non-operation: “If the power level is too low to provide the minimum signal level required under the Rules for service to a station’s community of license, this type of operation is the functional equivalent of silence.”

Don’t say we didn’t warn you that the Division might be moving in this direction. Back in September, 2010 – at the very beginning of the current radio license renewal cycle – we blogged about the Commission’s distaste for warehousing, suggesting that the Division would be on the lookout for non-operating stations. At the time the number of such stations was thought by some in the Commission to be at an all-time high. The staff seemed particularly annoyed by licensees who make a habit of staying silent for 11 months and a couple of weeks, turning on for a brief interlude just in time to avoid the automatic license expiration provision of Section 312(g).

The only real surprise here is that it took the Division more than three years – and nearly the entire radio renewal cycle – to act.

The Division’s hard-nosed approach here is to some degree understandable: when it issues licenses to operate so that the public will be served, it expects that operation will occur and the public will be served. We get that.

But consider the licensee’s perspective. Other than the Section 312(g) 12-consecutive-month requirement, the Communications Act imposes no minimum amount of operation. And the FCC itself has held that operation of just 24 hours is sufficient to reset the 312(g) clock, meaning that a licensee can avoid 312(g) automatic expiration simply by operating one day per year. (Check out Footnote 21 to this 2003 FCC decision.)

And let’s not forget that, in order to stay silent for more than 30 days, a licensee has got to obtain special temporary authority (STA) from the Commission. In order to grant such an STA, the Commission’s staff must make a public interest determination that silence is in the public interest. But if an STA-blessed silence is in the public interest, how then can that same silence later be held not to have been in the public interest?

As for the Division’s dire threat to designate for hearing any station that’s off the air for more than half of its license term, would that treatment apply even if the licensee could demonstrate that its non-operation was caused by circumstances beyond the licensee’s fault? In the case of the Texas FM station, the licensee asserted, albeit somewhat inartfully, that interference considerations and tower availability problems contributed to its non-operation. The Division’s order doesn’t address those factors. It seems to us that, if the Division is trying to discourage warehousing, its draconian policy should not be applied to folks who are clearly not voluntarily “warehousing”.

And in the same vein, if a licensee is trying to operate, albeit at low power, how is that objectionable, or punishable, warehousing? Bear in mind, we are only now beginning to emerge from a brutal recession that has been hard on everybody, and particlarly smaller broadcasters in smaller communities. What message is the Division sending to them? They’re struggling to stay on the air – as the Division wants them to – but often find themselves impossibly squeezed by limits on both their finances and their technical facilities. The Division’s insistence on operation uber alles is jarringly inconsistent with the urgent problems about which it is or should be aware. (The AM Revitalization proceeding, for one example, illustrates some, but by no mean not all, of those problems.) Many radio operators are finding it difficult enough to serve their audiences. The Division’s approach unnecessarily aggravates their unfortunate situations.

As we explained in 2010, the Division feels that the full Commission essentially gave it the go-ahead to whack non-performing licensees back in the 2001 Birach Broadcasting decision. The Division apparently feels that that relatively obscure decision should also have put everybody else on notice of the impending crackdown.

But hold on there. In Birach, the station had been off the air for the licensee’s entire tenure, and its license was still renewed. Sure, in its seven-page opinion the Commission stuck in one sentence cautioning that “a licensee will face a very heavy burden in demonstrating that it has served the public interest where it has remained silent for most or all of the prior license term”. But as Judge Randolph (a member of the D.C. Circuit panel that reviewed the case) observed, the Birach renewal was based at least in part on “the FCC’s repeated assurances that the station could remain silent as it sought to relocate.” That suggests that, having expressly authorized the licensee to stay silent for years, the FCC might not be in a position to beat up on the licensee for its non-operation.

Also, Birach was issued more than a decade ago. Since then the FCC has had plenty of opportunity to impose the “very heavy burden” it threatened there – but it hasn’t done so, even through an entire radio renewal cycle (2003-2006) and nearly a second entire cycle (2011-present). That being the case, licensees might legitimately argue that any notice the Birach decision may have initially provided has been completely diluted by the FCC’s own failure to implement the Birach threat in the 12+ years since.

Regardless of these points, the Audio Division appears determined now to haul out the Big Gun that it thinks the Commission put in the Division’s hands in the Birach decision. It will likely be a risky and expensive problem for anyone that that Big Gun gets aimed at. Our suggestion: avoid the problem entirely by getting your station on the air and keeping it there.

[Blogmeister’s Note: Blogger Howard Weiss asked that we acknowledge Anne Crump’s assistance in the preparation of this post. Consider her acknowledged.]