Rant from Riverton: My take on the Saga saga
One piece of advice that I have been giving LPFM stations for quite awhile is to remind them that as renewals are coming up, they need to make sure they are complying with the rules because their dialmates are likely taking notes.
Now with the Petition to Deny period open on the first wave of broadcast renewals, we are starting to see the first signs of that note-taking that I warned about. The first LPFM to get challenged was actually 5 stations, all in Charlottesville, Virginia. While Charlottesville was previously in the news because of aggressors with tiki torches, this time its because of aggressors with blow torches... of the broadcast variety.
As was originally discussed in the REC LPFM Facebook forums and then eventually picked up by multiple trade publications, Tidewater Communications, a subsidiary of Saga Communications filed Petitions to Deny against WKXK-LP, WVAI-LP, WPVC-LP, WREN-LP and WKMZ-LP. In the consolidated petition, Saga claims, among other things, the LPFMs are engaged in a prohibited operating or management agreement, broadcasting commercial announcements and that two are in a simulcast. Saga goes on to claim that the LPFMs have made “false certifications” on their applications and as a result, the stations are not serving the public interest, convenience and necessity.
I will discuss the allegations of the stations being in some kind of operating and management agreement in just a bit, but first, let’s discuss the allegations of commercial advertisements. In the Petition, Saga included transcripts of the allegedly prohibited underwriting acknowledgement announcements and suggested that they had provided the FCC with the recordings of the on-air announcements through a hand or mail filing.
I have reviewed the written transcripts of the alleged announcements. The copy of these announcements are very clearly out-of-bounds for a noncommercial educational station. For example, the message for Able Insurance puts a thought into the listener’s head (“Did you know you could shop local for car insurance?”). Asking the listener a question is clearly an inducement to buy or patronize. The FCC previously reached a similar conclusion in Christian Voice of Central Ohio (“Planning a special occasion?”). Calls to action are clear throughout these messages (King’s Dominion Monster Jam: “Get up close, sit in and even ride with your favorite Monster Jam trucks..”; Elite Auto: “I invite you to bring your vehicle”, “You can reach..”, “or you can go by and see them...”). We have qualitative statements (Modern Smoking Solutions: “Charlottesville’s premier vape shop”) and quantitative statements (Anytime Fitness: “we’ve got over 2,000 square feet...”; Special Touch Cleaning: “Special Touch takes care of floors, your carpets, windows and bathrooms...”). Of course, the examples given are not all inclusive of the violations noted assuming the LPFMs actually did carry these announcements over the air.
Where it comes to underwriting, non-commercial educational (NCE) stations are supposed to identify and not promote. These alleged announcements are clearly promotions. These announcements should be nowhere near an LPFM station. Since they are acknowledgements of a donation, they need to come from the voice of the station, not the voice of the underwriter. In several cases, the voices of the underwriter or someone other than the station was represented. This is clearly not the station thanking a business for their donation but is instead, a station taking their money for the exchange of commercial advertisements.
Put yourself in the shoes of Saga/Tidewater for just a moment. Commercial stations have many requirements including biennial ownership reports, maintenance of a public file with quarterly issues reports, a requirement to place a technical signal over the community of license, the filing of EEO reports, the designation of a chief operator (thus requiring a staff employee or a contract agreement) and every year, they have to pay a regulatory fee for the privilege of being a commercial broadcaster. Under the new 2019 rates, the total annual regulatory fee for the six Saga stations (WWWV, WINA, WVAX, WQMZ, WCNR and WCVL) is $14,075. In addition, commercial stations have to pay higher music licensing fees and have tax obligations. So, imagine if you were a commercial full-power station owner and a local NCE station, especially an LPFM station without the same financial and operation obligations as a primary full-service commercial station is running commercials for revenue generation in a perceived competition with the commercial station.
If these announcements really did operate on the LPFM stations, they are clearly not defendable. Each station running these announcements is subject to enforcement action and it will be up to the FCC to determine how egregious the violations were, if any. This could lead to a forfeiture (fine) or could be simply a admonishment (slap on the wrist). The FCC also has the ability to reach a Consent Decree with the station(s). In that case, the LPFM/NCE admits that they screwed up, they would pay a reduced fine and would have to go on a compliance plan. This just recently happened to San Tan Educational Media in Arizona.
The rhetoric in the media kit for Experience Media, LLC which promotes all of the LPFMs even being bold to include rate cards and asking “is non-commercial radio viable for advertising”, for which they answer with a resounding “yes”. The rhetoric continues to state that noncommercial radio is free from commercials because of “big broadcasting” lobbyists. Noncommercial radio predates by decades the “big broadcasting” (Clear Channel/iHeart) structure we have today. In fact, in the very first order by the Broadcasting Branch of the newly-formed FCC in 1934, as ordered by Congress was to examine and eventually create the NCE service:
The Commission shall study the proposal that Congress by statute allocate fixed percentages of radio broadcasting facilities to particular types or kinds of non-profit radio programs or to persons identified with particular types of non-profit activities , and shall report to Congress, not later than February 1, 1935, its recommendations together with the reasons for the same.
(1 FCC 25, 47 USC §307(c) (1934)).
This was over 60 years prior to the Telecommunications Act and the rise of “big broadcasting” as we know it today. Yes, there were major players prior to 1996, but the floodgates opened with the Telecom Act. It was the aftermath of the Telecom Act and the resulting spike in pirate radio that created LPFM. If anyone told you that “big broadcasting” was the one who wanted LPFM to be noncommercial, that is a complete myth. The biggest backers of LPFM being non-commercial back in 2000 when it was created were actually civil rights organizations including:
- Media Action Network for Asian Americans
- Minority Media and Telecommunications Council
- National Association of Black Journalists
- National Hispanic Media Coalition (now, licensee of KHBG-LP, Pasadena CA)
- Rainbow/PUSH Coalition
- among many others.
Those who opposed non-commercial LPFM were the authors of LPFM petition RM-9208 (Leggett/Shellhardt aka “Amherst Alliance”) who saw this microradio service as so unique, that it should be “free of auctions” and while not in comments, it was also opposed by Rodger Skinner, LPTV speculator and author of RM-9242 (the other LPFM petition) who envisioned LPFM as the new Low Power TV service. In fact, the National Association of Broadcasters (who would represent “big broadcast” at that time) was not even cited in the Report and Order as it relates to commercial vs. non-commercial LPFM. In reaching their decision to make LPFM a non-commercial service, the FCC stated:
“Our goals in establishing this new service are to create opportunities for new voices on the air waves and to allow local groups, including schools, churches and other community-based organizations to provide programming responsive to local community needs and interests. We believe that a commercial service is more likely to fulfill this role than a commercial service. Commercial broadcast stations, by their very nature have commercial incentives to maximize audience in order to improve their ratings and thereby increase their advertising revenues.”
Creation of a Low Power Radio Service, Report and Order, 15 FCC Rcd 2205 (2000) ¶ 17
On Reconsideration, both Amherst and Skinner attempted to make LPFM commercial, but the FCC was not persuaded to make the change.
Now, let’s talk about the concerns about common control. Saga raises some very strong accusations suggesting that the LPFM stations, Experience Media, LLC and the Virginia Radio Coalition, LLC are inter-related and would suggest what REC calls a “shadow owner” (a person or other entity which actually controls one or more LPFM station in order to circumvent the strict ownership rules).
From my understanding, Virginia Radio Coalition, LLC is actually a cooperative that was formed to in order to be the “caretaker” of a common transmitter site for four of the LPFM stations (they are running on a combiner) and to handle a common and from what we understand, subdivided studio facility. The concept of a co-op would be helpful here because of the multiple facility arrangement as a place where the four stations using the common facility can pay into in order to pay the rents, utilities, privilege taxes, insurance and maintenance on the common facility. If this is all that Virginia Radio Coalition is used for and there is no influence by the co-op on the management or programming of the station and every dollar paid by stations into the co-op go directly into periodic payments and a maintenance (rainy-day) fund, then there is no problem here and this accusation can be totally defendable. REC, by position, supports this type of an arrangement where it comes to shared facility as long as the co-op does not influence programming and other management decisions of the stations under its wing.
Of deep concern is the role of Experience Media, LLC. If the documents that Saga has submitted about Experience are authentic, then there is a considerable need for concern. Saga brings up two other LLCs, Experience Media Group, which appears to be based out of Richmond and Experience Media Sales, which seems to be also out of Charlottesville. These are all for-profit limited liability corporations. As much as I don’t really care for this arrangement, I must give the benefit of the doubt here. Is Experience nothing more than just a “sales agent” that recruits potential underwriters and offers them the ability to support up to 5 different stations? Or, is there more than that? Is Experience actually involved in the programming or other management of the station? If Experience is just an agent that fundraises for the 5 LPFMs and nothing else, this could potentially be defendable. In my personal opinion, this is no way to run a NCE station, but my personal opinion does not matter in the long run. What matters is the FCC’s interpretation of regulations and law (i.e. Communications Act).
I think the big question here is, if a business (underwriter) wanted to support more than one station, are they currently writing separate checks payable to each of the LPFM’s license organizations or are they writing a single check (such as to Experience or the co-op)? If Experience or the co-op are involved in the collection of funds, then there may be a problem (again, that’s for the FCC to decide). If the LPFMs directly receive the funds and then pays Experience a “commission”, then there may be less of an issue.
In the Dublab case in Los Angeles (Machine Project, Future Roots & Echo Park Film Project), while it was determined that there was some coordination between three different LPFM authorized entities (only one was licensed at the time), the relationship did not necessarily violate the rules, however the FCC did warn a board member of one organization not to represent themselves as with the other organization, especially to the FCC. The three stations caught up in the Dublab case kept their licenses and are still (barely) operating. Also, unlike Charlottesville, Dublab was a point-stack (3 or more mutually exclusive applicants using suspected “shill” organizations to apply in order to increase their chances of being granted a construction permit) that was barely running at the time where Charlottesville are separate channels, not time sharing and very much in operation at the time of the Petition.
One trade paper stated that attorney Michael Richards is representing the LPFMs. I have a very high respect for Michael Richards and I frequently refer LPFMs needing counsel to him. I have a lot of confidence that he will defend these LPFMs as best as possible within the law. That was a good choice on the LPFM’s part.
Overall, the way I see this ending is that the LPFMs will be given a forfeiture for the announcements. Each station would be fined individually, and those fines could get very big. I feel that there is no way out of any kind of payment to the government unless Saga completely fabricated the recordings and transcripts of the alleged offending announcements. I find the latter to be an extreme longshot and the LPFMs should go ahead and admit that they ran commercials.
An option is the Consent Decree. What would be nice in this case is if the FCC can split the issue of the underwriting announcement content from the issues regarding the roles of the co-op and Experience. This way, the Commission can stop the investigation specifically about the underwriting announcement content, each station would pay a lower “voluntary contribution” to the government and be required to start a compliance program. With the announcements out of the way, the FCC can fully focus on the roles of the co-op and Experience and what, if any, influence these entities had on the programming or other management influence on the 5 LPFM stations. There is also a side issue of the influence of WREN-LP and WKMZ-LP in respect to the simulcast. REC, by position, has no issue with a part time simulcast of LPFM stations as long as the stations are individually managed and that one station does not have any influence on the programming or other management of the other station (the simulcasting station makes their own decision to carry the host station’s programming and is under no contract or obligation to carry such programming, nor does the host station provide any remuneration to the simulcast station in connection with carrying the programming.. or in other words, a time brokerage agreement).
There are some, including other LPFM consultants, advocates and stakeholders claiming that Saga is “bullying” the LPFMs. I disagree. While Saga did take some unnecessary cheap shots (such as suggesting carrying Democracy Now! may be in violation because it is distributed by Pacifica, the licensee of various full-service stations), every concern that they made, the content of the announcements, the role of the co-op and the role of Experience are very valid concerns and are out of the ordinary, even for an LPFM station. This is not bullying. If the LPFM was running compelling community programming, has proper underwriting announcements but just happens to have more “local appeal” than the commercial broadcaster; If the commercial station files a Petition to Deny renewal because of the impact to “competition”, despite the LPFM station following all of the rules (especially underwriting), then that’s bullying.
After reading Saga’s petition, reading the accounts in the trades, reading the social media comments and even having informal conversations with those with direct knowledge of the LPFM’s operations, I don’t see anything here that would result in revocation of any of the licenses. I do see forfeitures or civil penalties coming out of the content of the underwriting.
The only way I could see the LPFM licenses being revoked here is if the LPFMs make willfully false statements to the FCC in their Opposition and in response to any Letter of Inquiry or if they don’t respond to a Commission correspondence, such as a Letter of Inquiry.
They appear to have one of the best LPFM attorneys I know and if they did retain Michael Richards, then they are in good hands and I wish them the best.
I will be watching this case from Riverton. The outcome of this case is very critical in the national advocacy effort, especially as I am trying to get LP-250 back on the table again.
Let’s make this work!
Good luck everyone!