A recent Notice of Apparent Liability for Forfeiture issued by the Commission highlights the need for licensees to ensure that local marketing agreements, joint sales agreements, shared services agreements, trust agreements and similar documents comport with FCC requirements concerning licensee control of programming, personnel and finances of their stations. It also serves as a reminder that parties to such agreements must abide by their terms.
In the case before the Commission, a broadcaster had assigned several FM stations to a trust, under an agreement that provided that the trustee would have absolute and complete control over those stations. The agency found that certain subsequent activities by the broadcaster ran afoul of Commission requirements. Among other things, the FCC noted that certain announcements aired on a trust station indicated that the broadcaster was the licensee. Such announcements, the Commission held, indicated that the broadcaster did not always properly insulate programming decision-making with respect to the stations placed in trust. Similarly, the FCC found that ad rate sheets covering both the broadcaster's stations and the trust stations suggested that the broadcaster had retained some authority over the trust stations' finances. Irregularities such as these, coupled with the fact that the trust used broadcaster-owned equipment and staff employed by the broadcaster, led the FCC to conclude that the broadcaster took insufficient steps to separate its stations from the trust stations and, therefore, that an unauthorized transfer of control had occurred. The agency issued an $8000 forfeiture.