Rules regarding the processing FM applications – particularly those involving upgrade applications that require the forced change of the channel on which another station is operating – can be very complicated. In a decision released the week before last, the FCC looked at all sorts of issues that can be raised by one of these applications – including clarifying the timing of the required reimbursement for the costs of the station that is being forced to change channels, the timing of required channel changes, and the ability of an applicant to file an upgrade while a license application is pending for initially constructed facilities of a station. For any radio operator contemplating an upgrade involving coordination of channel changes with other stations, this decision is worth a read.

The issue of reimbursement of the costs of a forced channel change is one that comes up in numerous upgrade applications. A station that wants to upgrade its facilities can ask the FCC to change the channel of another FM station to clear room on the dial for that upgrade – and that other station can be moved on the FM dial even if it does not want to change its channel. The FCC will order the other station to change channels as long as the upgrade proponent is able to find another channel for that station which is technically feasible at that station’s current transmitter site and is fully-spaced under the FCC rules governing required mileage separations between FM stations. Unless there is a unique issue about the channel to which the forced station is being moved, there are very few objections that can be raised to one of these involuntary channel changes. However, the station that is upgrading has an obligation to reimburse the changing station for all of the costs of the forced relocation.

It is the reimbursement of costs that is usually the biggest issue, and the one that was at issue here. Under an old FCC decision, called the Circleville case, the party that is forcing the change must reimburse all of the reasonable costs of that change. That applies not only to technical costs of new equipment and engineering services to make the change, but also to soft costs like FCC filing fees, costs of legal counsel to help with required FCC filings, and even the costs of a reasonable amount of publicity for the channel change and the costs of reprinting stationery, bumper stickers, and billboards to include the new channel number. Sometimes there are fights over the amount of such costs, and the FCC usually stays out of the fights – pushing the parties to amicably resolve them.

In the recent case, the fight was not over the amount of the reimbursement costs, but instead over the timing of those payments. The station that was forced to change channels filed an FCC application to do so, but that application was dismissed because the filing fees were not submitted. The station claimed that it did not pay the fees as it expected that the station doing the forcing would advance those fees to the station being forced to change its channel. The FCC decision admonishes the forced station for not promptly pursuing the move and prosecuting this application, finding that the reimbursement required under Circleville was just that – reimbursement – and the forcing station did not need to make those payments upfront. Thus, the failure to timely take steps to implement even a forced move can be an FCC issue – and the FCC seems to be putting the initial cost burden on the party who is being forced to move – with their only recourse being to get reimbursed after the costs have been laid out.

Practically speaking, in many cases, these reimbursement plans are worked out in advance, as the upgrading station has every incentive to get the station that is being forced to move to accomplish its channel change quickly, so that the upgrade that is being sought can also happen quickly. But where there is a financial issue with one party or the other (e.g., where the forced station does not have the money to pay in advance for the move or where that party is afraid that the forcing party will not have the money to pay the reimbursement), these issues can arise.

The decision also looked at the question of the FCC Audio Division’s newly implemented policy that conditions the grant of a license for a new station on the new station staying on the air at the licensed site for at least a year – to avoid situations where there is temporary construction to meet the FCC deadline on an expiring construction permit. See our articles on this policy requiring permanent construction to meet the deadlines set out in expiring construction permits, here and here. In this case, the party objecting to the forced move argued that the party trying to upgrade, which had only recently commenced operations, could not request an upgrade for two reasons – (1) its license for the new site had not yet been granted and (2) the license, when granted, would require that the station operate from the licensed site for a year so an upgrade from a different site would be inconsistent with that condition.

The FCC rejected both arguments. First, it found that a station that has fully constructed its station can file for new or upgraded facilities before it has a license, even when the license application is pending. That question comes up from time to time, and the Audio Division has now provided a seemingly definitive answer.

The FCC also said that the one-year operational requirement was not necessarily a bar, as any construction permit issued for upgraded facilities would be for three years, so the new facilities very well might not be built until well after the one-year period expired. Alternatively, if the new facilities were built quickly, the station could ask that the one-year operational condition be waived. That kind of waiver would seem likely, as the condition was meant to stop stations from turning on only for long enough that a license could be granted and then going silent, not for stations operating all along and merely wanting to better their operations and service to the public by providing superior facilities.

This is an interesting case covering many issues – worth reading if you are planning a complicated FM upgrade.