FCC:  Practice & Procedure

Fall 1999

Professor William Silva

Outline by

Christopher S. Lee

I.                    The FCC

II.                 Radio Frequency Spectrum

III.               Statutory Basis of FCC Practice & Procedure/Licensing

IV.              Broadcast Applications:  The Auction Process

V.                 Broadcast Applications:  Preparation and Processing

VI.              Hearing Proceedings

VII.            Hearing Proceedings:  From Designation through Initial Decision

VIII.         Reconsideration and Review

IX.              Notice of Appeal/Petition for Review

X.                 The Assignment and Transfer of Control of Commission Licenses

XI.              Rule Making Proceedings:  Ex Parte Rules

XII.            Obtaining Information from the Commission:  FOIA

XIII.         Miscellaneous Broadcast Forms and Procedures

XIV.         Review

I.                    The FCC

A.     FCC Organizational Chart

B.                                                                                                     Created in 1936 to act as traffic cop to prevent AM stations from interfering with one another.

C.                                                                                                     Creation of Congress

D.                                                                                                     Independent Agency

E.                                                                                                      Key Players

1.           5 Commissioners

2.           Congress

a)      Amends Telecom Act

b)      Controls the FCC through Amendments

c)      Budget Authority

d)      Delegates great powers to FCC

3.           President – Sets Policy Agenda

F.      All FCC decisions appealable to the DC Circuit Court

G.     Courts tend to defer to FCC.

H.     Statutory Framework

1.           The Communications Act of 1934

2.           The Telecommunications Act of 1996

3.           Administrative Procedure Act 1966-67

a)      Procedural Due Process

b)      Defined Rules and Guidelines

4.           FCC should enact mandates from Congress and President

I.        Issues

1.           How did it get into Court?

2.           Who can appeal?

3.           Who are the parties?

4.           What process led to the decision?

5.           How did the case get to the Supreme Court?

II.                 Radio Frequency Spectrum

A.     Electromagnetic Spectrum

1.           FM

2.           AM

3.           TV

4.           Digital Broadcasts

B.     Red Lion Broadcasting v. FCC

1.           Fairness Doctrine – No longer enforced.

a)      Obligation to cover important issues.

b)      Must cover both sides of an issue.

2.           If you get a license, you must give free air time to the community.

3.           FCC Actions

a)      Adjudication

b)      Rule Making

4.           NRMP – Notice of Proposed Rule Making

a)      Public discussion of Rule Making

b)      Propose, Adopt, Reject Proposals

5.           Red Lion is still Good Law

C.     Issues

1.           Should broadcast be treated differently than other such as print news?

Yes – Public property, limited resource, scarcity.

2.           What does it mean to be a public trustee?

D.     Fairness Doctrine Today

1.           No longer in Telecom Act of 1996

2.           FCC – Grant of public license serves the public interest, convenience and necessity.

3.           Public Interest – Concept constantly changing

4.           Scarcity – New and Different Issues

5.           Audience – More sophisticated.

III.               Statutory Basis of FCC Practice & Procedure/Licensing

A.     Title III – Radio Waves – All usages

B.     LMA – Local Marketing/Management Agreements

1.           Recent Development (past 10 years)

2.           See WNVC – Northern Virginia TV Station

C.     New Station requires a Construction Permit

D.     Steps for Filing a Petition:

1.           Party

2.           Prima Facie Case – Allege actionable violation of FCC Rules.

3.           Affidavit with person in knowledge OR official notice.

4.           Official Notice – Except for matters of public record or generally known issues.

E.      Goals of Competitive Bidding and New Entrant Bidding Credits

1.           Rapid Deployment of New Technology

2.           Promote Economic Opportunity and Development

3.           Minimum Involvement

4.           Recover Public Costs

5.           Public Use

IV.              Broadcast Applications:  The Auction Process

A.     The Auction Process

1.           Public Notice

2.           Windows

3.           Short Form (175) Upfront Pay

4.           Public Notice Announcing Participants and Details

5.           Auction – Online Bidding

6.           Public Notice Announcing Winners

7.           Within 10 days winner must bring total deposit up to 20% of winning bid.

8.           Long Form (301) within 30 days – Broadcast Construction Permit

9.           Public Notice accepting Form 301 – Triggers Petitions

10.       Petition to Deny within 10 Days

11.       Oppositions within 5 days.

12.       Public Notice announcing Construction Permit to be Awarded.

13.       Balance of winning bid, lump sum within 10 days

14.       Construction Permit Granted – Construction Permit

B.     Notes

1.           35% bidding credit awarded at end of process.

2.           Winner builds station

3.           Submits administrative statement for Broadcast license

4.           FCC Certifies and Authorizes License

C.     PAST:  Choosing Between Certified Applicants

1.           Comparative Hearing Statements

a)      1965 Hearing Criteria

b)      Diversification of Ownership

c)      Integration of Ownership and Management

2.           Goals

a)      Diversification

(1)                  Competing Voices

(2)                  Broad Interests

(3)                  Competition in the Market Place (advertising)

(4)                  Demerits for heavily saturated markets.

b)      Integration of Ownership and Management

(1)                  Premise – If owner works at station and runs it, owner will be more responsive to the community.

(2)                  Credit for full-time management/owners

D.     1993 – Competitive Hearing Process tossed out.

E.                                                                                                      1997 Balanced Budget Act legislates auction for radio licenses; FCC granted auction of license authority.

F.                                                                                                      Women & Minorities are lumped together with new entrant category.

G.                                                                                                     Wives tend to become bidders.  FCC looks at:

1.           Independence

2.           Business History

3.           Financing

4.           Written agreement between spouses.

5.           Community Property Laws

H.                                                                                                     Unjust Enrichment Rule – Can’t win auction and immediately turn around and sell license with the 35% bidding credit within the first 5 years.

I.                                                                                                        Collusion

1.           Detracts from FCC making money.

2.           FCC wants robust, open auction, which makes lots of money.

3.           Contrast between high bidding and minority involvement.

4.           Can’t speak with any parties/bidders after the short form 175 is filed.

5.           Detracts from out of CT settlements.

6.           Effectively eliminates settlement of cases.

V.                 Broadcast Applications:  Preparation and Processing

A.     Parties to Application – Having Attributable Interests (votes, say)

1.           Individual

2.           Partnership – all partners

3.           Limited Partnership

a)      All partners unless

b)      Some partners are insulated; passive, no material involvement;

c)      Similar to bankers.

d)      No vote, no say.

4.           Corporations

a)      Officers

b)      Directors

c)      5% + stockholders

d)      Non-voting stock excluded

5.           Limited Liability Partnership—Limited Partnership

B.     Equity/Debt Plus Application Rule

1.           33% ownership if have equity and/or debt.

2.           Based on Fox Broadcasting’s debt to British Banks

3.           Control of 15% of programming; and

4.           Has attributable interest in market

C.     Control

1.           Finances

2.           Programming

3.           Employment

D.     Character Qualifications

1.           Any Felony Conviction

2.           Honest in FCC Inquiries

3.           Adverse final actions within 30 days notification

VI.              Hearing Proceedings

A.                                                                                                     Spousal Attribution in Broadcast – Not considered at the moment, but may be considered in the future.

B.                                                                                                     Revocation Hearings

C.                                                                                                     Adjudicatory Hearings

1.           On the record

2.           Witnesses sworn

3.           FRE applies

4.           Judges make findings of fact for decisions – Appealable to FCC

D.     Computation of Time

1.           If deadline is less than 7 days, then count intervening weekends and holidays.

2.           If deadline is more than or equal to 7 days, count straight thru.

3.           If deadline is 10 or more days, don’t count mailing days.

4.           Notes

a)      Check certificate of service to note service date.

b)      More than 10 days, no mailing time.

c)      Pleading triggered by FCC action typically

d)      Pleading not triggered by CT determination.

E.      Pleading Request for Relief – Sections 1.16 – 1.229

F.      HDO – Hearing Designation Order

VII.            Hearing Proceedings:  From Designation through Initial Decision

A.     United Church of Christ v. FCC

1.           Benchmark

2.           Expands Definition of Standing

3.           Issue – Do members of an audience suffer injuries that are peculiar to them?

a)      FCC à No

b)      Appeals Court à Yes

4.           Standing – Interference is another method to achieve standing.

5.           Competition in market is another method to achieve standing.

6.           Listeners with genuine and legitimate interests have standing.

7.           AC à Listeners can act as private Attorneys Generals

8.           More recent holdings – AC making it harder to achieve standing.  Must show:

a)      Injury

b)      Relief addressing injury.

B.     Traditional Basis for Standing

1.           Competitor Station

a)      Sanders Brothers v. FCC (1949)

b)      Interest in Market and Standing

2.           Listener or Viewer

a)      United Church of Christ v. FCC (1968)

b)      Southern radio station discrimination issue.

C.     Designation for Hearing

1.           Specific Allegations of fact that taken as true make a prima facie case that would not serve public interests.

2.           Allegations taken together raise a substantial and material question of fact.

3.           Notes

a)      Very Rare

b)      Based on Case Law

D.     Petition to Deny

1.           SEE Handout – Pleading Checklist

2.           Is there a substantial and material Question of Fact?  FCC can dismiss or deny without substantial and material Question of Fact.

E.      Hearing Rules

1.           1980’s – Comparative Hearings for new broadcasters.

2.           1990’s – Auctions

3.           Renewal Hearings

4.           Comparative Renewal Hearings

5.           Revocation Hearings

6.           Generic Rules on Hearings – 1.201 – 1.211

VIII.         Reconsideration and Review

A.     Issue:  What happens if client’s case doesn’t turn out as expected?

B.     Rules in Part I Section 1.101 – 115; 1.200 Hearing Rules

IX.              Notice of Appeal/Petition for Review

A.     Petition to Reconsider

B.     Adverse Final Ruling

C.     Note Deadlines

D.     28 USC 2344 Must contain

1.           Nature and Proceedings for Review

2.           Venue Showing

3.           Grounds for Relief

4.           Relief Prayed for.

E.      28 USC 2348 - Intervention

1.           Party seeking review; or

2.           Party opposing review

F.      Formatting

1.           Concise statement to Nature of the Problem

2.           Concise statement to Nature of the Issue

3.           Filing and Proof of Service with Commission; must serve a Person

X.                 The Assignment and Transfer of Control of Commission Licenses

A.     Notes

1.           Like Real Estate deals

2.           Contracts

3.           Mergers & Acquisitions

4.           No transfer…except upon application to FCC.

B.     Premature Transfer of Control – Change in control prior to FCC approval

C.     Time Brokerage Agreements

1.           Theory

a)      Time Brokered or Borrowed

b)      Similar to Time Share

c)      Standard Practice Today

2.           Elements – Balanced and Weighted

From Southwest Texas Public Broadcasting Counsel (1983)

a)      Who controls personnel; or

b)      Who controls programming; or

c)      Who controls finances

D.     Assignments and Transfers

1.           Assignment – New Licensee

2.           Transfer – No licensee change

3.           Bidding Credit and Unjust Enrichment still Prohibited

4.           FCC Form 314 can be signed by

a)      Corporation – Officer

b)      Partnership – General Partner

c)      Limited Partner – Member, officer

d)      Individual – Individual

XI.              Rule Making Proceedings:  Ex Parte Rules

A.     Rulemaking – Sections 1.399 – 1.429

B.     Ex Parte Communications – Sections 1.1200 – 1.1214

1.           General Rule – Fair Decision Making based on the record, not on arm-twisting

C.     Appealing a Rulemaking

1.           Staff Screwup à Reconsideration

2.           Wrong again à Review with FCC (saves time)

3.           Adverse outcome à CT

D.                                                                                                     Assignment of License – If entity changes (name changes)

E.                                                                                                      Transfer of Control – Licensee same, but stock goes from one party to another.

XII.            Obtaining Information from the Commission:  FOIA

A.     FOIA – Method of Discovery

B.     FCC Reference Room

C.     In adverse ruling for FOIA à File Reconsideration or Review

D.     FOIA derived from Lutheran Church Case

E.      Ownership Reports

F.      Renewal Application – Every 8 years

G.     Fines, Forfeitures and Complaints

1.           Notes

a)      Strict Enforcement

b)      Failure to provide adequate Childrens’ Programming

c)      Howard Stern and other Shock Jocks fined

d)      Failure to file change of ownership forms

e)      Inspection Failures

2.           Procedure

a)      Notice of Forfeiture

b)      Opportunity to Respond

c)      Notice of Apparent Liability

d)      Pay fine or Challenge

3.           FCC can’t enforce fine, but can suspend license.

4.           Refusal to pay fine requires Justice Dept’ action in federal CT where station is located.  Trial de novo.

XIII.         Miscellaneous Broadcast Forms and Procedures

A.     Political Broadcasting – See rules 326 of the Telecom Act – No Censorship

1.           Licensee required to sell time to Nat’l Candidates.

2.           No requirement to sell to local candidates

3.           If time sold to one candidate, must sell option to all other candidates

4.           Equal time – charged at lowest rate; competitive times

5.           Potential for libel and slander without censorship

B.     Regulator Fees

1.           Yearly licensee fee, goes up every year

2.           Opportunity to participate in rule making

C.     Childrens’ Programming

1.           Quarterly filing of form 398

2.           Only for TV stations

3.           3 hours of core programming per week

a)      Instructional

b)      Describe programming and age group

4.           Amount of Advertising in kids’ programming

XIV.         Review