You Can Only Push FCC So Far

By on Jun, 21 2016 with Comments 0

FCCdoorIn a complicated case that involves five licensees, the owners of five California radio stations have been fighting to keep their stations since at least 2003. They faced charges of lack of candor, misrepresentation and unauthorized transfer of control, among others. Did their tenacity pay off?

The owners and permittees are: the Estate of Linda Ware, Cynthia Ramage, Executor (Ware

Estate); the Estate of H.L. Charles, Robert Willing, Executor (Charles Estate); William L. Zawila

(Zawila); Avenal Educational Services, Inc. (AES); and Central Valley Educational Services, Inc. All five of their stations were slated for a revocation hearing, but in 2003, the commission relented to allow them to pursue a minority distress sale to Lazer Broadcasting Corporation in 2004.

Three applications were kicked because the companies didn’t pay the regulatory fees for KZPE(FM), KZPO(FM), and KNGS(FM). Zawila, Charles Estate, and Ware Estate asked to pay later, but lost those arguments.

They did not re-file seeking approval of the sale to Lazar. Instead, by 2015 they filed new applications to see the stations to Big Radio Pro, Inc., as a minority distress sale. AES and CVES objected and the Media Bureau sided with them, saying the distress sale policy had been discontinued. The bureau also said the replacement, a policy allowing distressed sales to “eligible entities” had been suspended after an appeals court vacated the definition.

Zawila, Charles Estate, and Ware Estate appealed and the commission denied that so they appealed again.

The full commission has now agreed with the bureau, saying the bureau acted appropriately. The agency clarified the minority distress sale policy, and the subsequent eligible entity distress sale policy, were exceptions to the general rule that a licensee or permittee may not assign its authorization when character issues are pending against the proposed assignor. In a distress sale, an authorization subject to a hearing on character issues could be assigned, for less than the station’s appraised value, to a qualified entity in order to promote broadcast ownership diversity.

All iterations of this type of sale are suspended and the FCC ruled it is not compelled to allow the three applicants to pursue a minority distress sale.

 

About The Author: Leslie Stimson has been a reporter for 35+ years, starting in radio news. She’s spent the last 20 years reporting for radio trades.

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