Audio Division may be considering designating some renewal applications for hearing, but practical considerations could, and should, make it think twice. 

Last February my colleague Howard Weiss reported on a decision by the Audio Division that boded ill for radio stations that had been off the air (or operating with inadequate power) for too much of the preceding license term. Faced with a renewal application in which the station had been off the air for approximately one-half of the term, the Division granted the station only a two-year “short term” renewal, instead of the standard eight-year term.

 That decision hinted that more stringent actions might be taken in some situations. And now we hear rumblings that the Division is indeed thinking seriously about putting license renewal applicants who were off the air for more than half their license terms into hearings to determine whether to renew or cancel their licenses.

Under the Communications Act (Section 309(k), to be precise) before it can grant a license renewal application, the Commission must find that the station has served the public interest during the preceding license term. The Division’s staff is concerned that such a public interest finding cannot be made for stations that have been silent for extended periods: if they haven’t operated, the theory goes, how could they have served the public interest? This concern was telegraphed several years ago: When the most recent license renewal cycle for radio began in mid-2011, the newly-revised renewal application form required applicants to certify that they had not been silent (or operating on a less-than-minimal schedule) for any period of more than 30 days. Anybody unable to make that certification was required to identify the periods of silence. 

Of the thousands of renewal applications that have been filed on that new form, we understand that an estimated 70-100 disclosed that the subject stations had been silent for 50% or more of their eight-year license terms. Other stations admitted to silence of two or more years. In most of these cases, the licensees had been expressly authorized by the FCC to remain silent pending resolution of their problems. (Many involved AM stations which had been off the air due to economic problems caused in part by the “Great Recession.”)

Action on the renewal applications of those silent stations has been “deferred”. Even stations which have resumed operations after extended periods of silence are being held in regulatory limbo as the staff ponders their fate. These are the stations that, according to the informal rumblings we have picked up, may be destined for renewal hearings.

The Division’s uber-aggressive saber-rattling is not without its problems.

The staff does not have a particularly wide range of options. In general, the Communications Act specifies that the Commission may only either grant or deny renewal – but before it can deny a renewal, it must first afford the applicant an opportunity to present evidence as to why renewal would serve the public interest. Traditionally, such hearings have been conducted (at least in part) in the licensee’s community of license. Such a “field hearing” has been deemed consistent with the “overriding public interest consideration to conduct fair and impartial hearings and to compile full, complete, and accurate records” by affording local folks – i.e., the public the station is supposed to be serving – an opportunity weigh in on whether the license should be renewed. 

Faced with extinction of their licenses, it is likely that a significant percentage of licensees with deferred renewal applications will insist on such hearings, if for no other reason than to delay the inevitable. License renewal hearings and follow-up appeal procedures can take five or more years to complete.

But if hearings – and, particularly, field hearings held in the stations’ various communities of license – were to be designated, practical problems would arise immediately.

That’s because the Commission lacks the resources to follow through.

A hearing must be conducted before an administrative law judge (ALJ). The FCC currently employs only one ALJ (down from 10 or so back in the early 1990s). While that one ALJ has considerable experience, having held that position for more than 25 years, it is unlikely a single individual could preside effectively over a large number of field hearings. Nor is it likely the FCC will hire more ALJs, thereby diverting resources from broadband deployment and incentive auctions to accommodate renewal hearings for broadcasters. 

In such hearings, the Bureau would have to be represented by trial counsel who would present the government’s case against the incumbent renewal applicant. But, thanks mainly to the fact that broadcast-related hearings have been few and far between since the turn of the century, the Bureau faces a serious lack of experienced trial lawyers. Hiring and training inexperienced lawyers to handle such hearings would be an additional drain on resources that would not likely be acceptable to FCC policy makers.

And even if these cases got to hearing, the Bureau could have a difficult time making its case. As noted, many of the stations that were silent were granted specific authorization – by the Bureau – to remain silent, presumably based on appropriate public interest findings. The Commission could find itself in the uncomfortable position of trying to explain to an appeals court why licensees should lose their licenses for doing something that the Bureau itself had told them they could do.

Let’s not forget the problem of due process – a term that generally refers to overall procedural fairness. Due process often requires that, before the government can penalize a party for doing something, that party must have been given some notice, in advance, that doing that something could result in a penalty. Here, the FCC had neither formally adopted nor otherwise announced any policy about the perils of silence prior to the beginning of their license terms during which the silence occurred. In fact, that remains the case to this date. If the Commission wishes to impose new requirements or alter its historical treatment of particular conduct, the Commission must undertake a formal rulemaking proceeding – or at least issue a formal policy statement – putting everyone on notice of the details of the new requirements and allowing possible appeals. No such rulemaking or policy statement covering the possible designation for hearing of silent stations has been issued.

Due process also normally requires that the relevant standards be clearly articulated so that the ALJ (and all the parties to the hearing) can know precisely what legal consequences will flow from what particular licensee conduct. Again, whatever the Audio Division’s policy with respect to silent stations might be, that policy has not even been formally articulated, much less adopted by the full Commission. So any hearing would be a direction-less exercise.

Due process also entails an element of equal treatment – similarly situated parties should be treated similarly. But the Audio Division staff has informally advised licensees with deferred renewals that stations which were silent for 50% or more of their license terms can expect to be put into hearing, while stations which were silent for two years but less than 50% of their license terms can count on receiving “short-term” (two-year) renewals. Nothing has been published that articulates the reasons for the different treatment of these two categories of renewal applications.

In sum, the Audio Division is frustrated – arguably with good reason – by licensees who do not operate the stations they are authorized to operate. But the remedy the Division appears to prefer is so fraught with drawbacks that it seems unlikely to yield any positive results. Even if the Commission were to provide the necessary resources – which is unlikely – the hearings that would ensue would merely embroil the Commission for years in a multi-front campaign against mostly small-town broadcasters with little to lose by fighting. And in the absence of any discernible legal standards underpinning its crusade, any decision by the Commission to deny a renewal would be subject to effective challenge in the court of appeals.

Whether – and if so, when – the Division will make good on its veiled threat to designate silent stations for hearing remains to be seen. But in view of the multiple hurdles such hearings would face, it seems pointless to start down that path as matters now stand. The better course would be to initiate a rule making proceeding through which reasonable and legally sustainable rules could be developed – and publicized – long before the next renewal cycle begins. Fairness, and plain common sense, support that approach.