In the last month, the FCC has released two decisions dealing with efforts by holders of expiring FM construction permits to retain the rights to construct the technical facilities authorized by that permit beyond the expiration date of the permit. In one case, the FCC announced a policy that, from now on, the construction of temporary facilities will be insufficient to warrant the grant of a license application for a new station. In another case, the FCC decided that a station that had an expiring construction permit for modified facilities to upgrade its station from a Class C1 to a Class C0 station, which had twice expired before and been replaced by a new CP each time, was subject to a competing applications filed the day after the expiration of the most recent CP. It is clear from these cases that the FCC’s Audio Division is taking a hard line on the three year deadline on the construction of new facilities for FM stations, and is reluctant to preserve expiring permits, especially if the permit blocks opportunities for the use of the frequency elsewhere.

The first case involved a permittee of a new station who, immediately before the expiration of the three years that it was given by its construction permit to build the station, turned it on and filed a license application that was quickly granted by the FCC. About 10 days later, the new licensee requested authority to go silent while it sought approval of its construction plans for a permanent facility. The station remained silent for almost a year, before recommencing temporary operations from a different transmitter site pursuant to an STA. When the licensee filed for the renewal of its license and another application to move to a different transmitter site and to change city of license, a competitor objected, arguing that the licensee had misrepresented facts to the FCC about whether its station was ready for its initial operations from its original site and contending that the original license should never have been granted.While ultimately deciding that the licensee did not deserve to be stripped of its license as the FCC’s policies in this area had not been clear, the FCC’s Audio Division announced that going forward, its policy would be to require permanent, not temporary, facilities before a license would be granted. To get a license, constructed facilities must “endure beyond the de minimis period necessary for it to file a license to cover its construction permit.” Temporary facilities would not be deemed to be “ready for operation” as required by the Communications Act and the FCC rules, and thus would be forfeited if not timely constructed. Any permittee who constructs a station with the intent of soon dismantling it must notify the FCC if it ceases to operate while a license application is “pending” (which, under FCC rules, may include a period of time after grant when the grant can be reconsidered).

In the second case, an FM station was granted an upgrade from a Class C1 facility to a C0. The station owner allowed that CP to expire, and received a second CP to reinstate the authority granted by the first. That second one also expired without the upgrade being constructed. When the second expired, the station owner filed a third application for the same facilities. On the day after the expiration of the second CP, a third party filed with the FCC a Petition for Rulemaking seeking the allotment of a new FM channel. That new FM channel would be mutually exclusive with the proposal for the replacement CP. As detailed below, the FCC has asked for comments on which of the two proposals would best serve the public interest, meaning that the CP holder could lose the rights to build the C0 facilities.

The FCC determined that, once the CP for the upgraded facilities was granted, those facilities became the protected allotment coordinates for the channel on which the station was operating – even though the upgraded facilities had not been constructed. Until the upgraded facilities were constructed, the station was operating with an “implied STA” on its C1 channel. But, while the permittee had rights to the C0 facility, because it had 7 years to construct the upgraded facilities for the station and it had not done so, the FCC was concerned that the continued protection of the C0 facilities was not in the public interest as it precluded opportunities for new allotments and potentially modifications to other stations. Thus, the FCC issued an Order to Show Cause asking the permittee why its operating channel should not be downgraded back to the C1 facilities with which it was actually operating. At the same time, the permittee and the proponent of the new channel are to each submit arguments to the FCC as to which of their proposals would best serve the public interest. Presumably, if the FCC determines that that new allotment best serves the public, the long-standing permit for the upgrade of the existing station will come to an end, and the station will be stuck with C1 facilities.

These cases show that the FCC is concerned about attempts by stations to extend the life of authorizations beyond their specified term. While the FCC may show some latitude to an existing station that can’t complete construction in one three year period, it appears that the FCC is reluctant to continue such extensions indefinitely – especially when faced with a competing request for the use of the channel. Also, the practice of constructing temporary facilities to meet construction deadlines seems like it has come to an end. So if you have a CP, complete the construction on time, or potentially face the consequences.