The battle between the NAB and GeoBroadcast Solutions, the company seeking the FCC’s permission to allow program origination on an FM booster — the linchpin for the commercialization of GBS’s “ZoneCasting” technology — has turned ugly.
In an ex parte brief filed by the association late Thursday with the FCC, the NAB not only reiterates its concerns with the proposed rulemaking’s merits but is now doing so in the context of what it believes are “credible and public accusations regarding the questionable business dealings” of GBS founder and CEO Chris Devine.
The “brief,” a 70-page document downloadable by clicking here, outlines to the Commissioners the details of a Tuesday telephone conference with Shiva Goel, who works in the office of Geoffrey Starks. Representing the NAB: Rick Kaplan, EVP and Chief Legal Officer; Patrick McFadden, Deputy General Counsel; and Associate General Counsel Larry Walke.
On the call, the NAB again made its case that “nearly every radio broadcaster” with the NAB has spoken opposes GBS’s proposal and that GBS’s claim of significant industry support “is demonstrably false.”
But the bigger takeaway is that the NAB, for the first time in front of the FCC, is raising “serious concerns” with the Commission “relying on GBS’s representations and that of Devine. “NAB believes that Mr. Devine’s track record requires the Commission to examine the underlying information carefully and reject his petition,” the trio of NAB legal leaders believe.
Thus, the tussle between GBS and the NAB has entered a whole new chapter, one that perhaps goes beyond the NAB’s assertions that ZoneCasting would “inevitably damage radio’s technical integrity and reputation” and serve “as a lever for advertisers to force radio broadcasters to artificially reduce rates.”
During the conversation, NAB shared what is says is publicly available information detailing some of the instances where Devine has been credibly accused of fraudulent and deceitful conduct.
One example shared was a 2009 lawsuit against Devine by Robert Allen III, who alleged Devine had defrauded Allen of roughly $70 million. As reported by Chicago media observer Robert Feder in December 2014, Devine ran the former Marathon Media for Allen. Marathon ceased operations after Allen’s heirs sued Devine on claims of racketeering, fraud and embezzlement. “It’s all been settled and put to bed,” Devine said to Feder in 2014, dismissing reports of criminal charges against him as “uninformed.”
The NAB also dregs up Devine’s purported tie to U.S. Road Sports, which at the time operates marathon races, and how his Devine Sports was selling the Salt Lake City Marathon to U.S. Road Sports in 2012. It went further into the past, sharing stories of Devine’s “tattered reputation” from 2009.
While “immoral” business practices based on accusations from years past may not be enough to sway the Commission, the NAB’s legal team claims the Commission itself has asserted that Devine has been untruthful.
To illustrate its argument, the NAB references a 29-year-old investigation of Devine for allegedly engaging in a sham assignment of a radio station license to circumvent the Commission’s ownership rules. The then-known Mass Media Bureau considered the information provided by Devine regarding the transfer of a station in Spanish Fork, Utah to an employee who quit soon thereafter.
The matter was widely reported in trade publications across 1993 and 1994. As reported by Radio & Records in July 1993, the license renewals for the two stations were designated for hearing because of allegations that KBER-FM 101.1 in Ogden, Utah, licensee “C. Devine Media Inc.” and KQOL-FM 106.5 in Spanish Fork licensee “Street Stryder” shared common ownership.
To terminate the proceedings, Devine agreed to spin each of the stations to minority-controlled companies in distress sales. First, KQOL in February 1994 was sold, with Bajamar Broadcasting the buyer. Then, after the first buyer couldn’t consummate the deal, Devine in December 1994, Devine through his Chestnut Broadcasting Inc. agreed to sell KBER. The FCC in February 1995 approved the KBER deal, valued at less than 75% of the fair market value for the station. That concluded the matter, and effectively settled allegations that KBER and KQOL-FM in Spanish Fork came under common ownership before duopolies became permissible under FCC regulations.
While some may consider that matter ancient history, the NAB seeks to demonstrate that a “documented pattern of dealings” has been painted and is “directly relevant” to the proceeding.
There’s more. The NAB also asserts that, “predictably, given Mr. Devine’s conduct, some curious patterns quickly emerge.” First, the NAB says, the “vast majority of comments” from broadcasters supporting GBS’s proposal are identical form letters.
“These forms are not signed by the broadcaster whose name appears on the form, and no contact person or telephone number for the broadcaster is listed,” the NAB legal team asserts in the ex parte filing. “In fact, the forms contain no substantive indication that the comments were reviewed or endorsed by the named broadcaster.”
The letters, representing 93 of the 109 stations that say they support GBS identifiable by the NAB, were filed under the signature of noted Washington, D.C., communications attorney Aaron P. Shainis of Shainis & Peltzman. Shainis is a longtime counsel to GBS
Lastly, the NAB takes issue with more than half of the filers, as they have service areas covering fewer than 50,000 people. This, in the NAB’s opinion, makes ZoneCasting “not remotely financially sustainable for their operations.” Further, about 25% of the filers are non-commercial stations, which cannot accept advertising.
GBS has not stated if ZoneCasting is reserved specifically for commercially licensed broadcasters, as the technology allows for localization. This could involve community-focused informational, sports, or religious programming or even traffic and weather updates a non-commercial radio station may wish to broadcast.
That possibility is one that the NAB has no desire to see come to fruition, either.
“NAB encourages the Commission to stick to the facts and adhere to its rigorous standards for testing,” Kaplan concluded. “If the Commission proceeds in that fashion, it is quite clear that GBS’s proposal should be rejected.”
‘A DESPERATE ATTEMPT AT CHARACTER ASSASINATION’
In response to RBR+TVBR’s request for comment, a GBS spokesperson issued a prepared statement midday Friday (9/23).
The company said:
“In a desperate attempt at character assassination, the NAB’s tabloid filing omits one critical but publicly known fact: the lawsuit that gave rise to all of these allegations that the NAB launders before the FCC was voluntarily dismissed by the plaintiff with prejudice. Frivolous lawsuits and accusations happen in
