A Reprieve -- and a Lesson -- for Class A TV Stations?

Three decisions recently released by the Federal Communications Commission propose fining Class A television stations for failing to file all of their children's television reports rather than seeking to revoke their Class A status.

Specifically, the FCC proposed fining two of the licensees $13,000 each, and the third licensee $26,000 (because it had two stations that failed to file all of their reports). Each $13,000 fine consisted of $3000--the base fine for failing to file a required form--and an additional $10,000, which is the base fine for having such documents missing from a station's public file. While a $13,000 fine is painful, particularly for a low power station, loss of Class A status could be far more devastating for these stations, and for Class A stations in general. Setting aside spectrum auction considerations, buyers, lenders and investors will be hesitant to risk their money on Class A stations that could suddenly lose their Class A status, and shortly thereafter be displaced out of existence. Stated differently, those considering buying, lending to, or investing in Class A stations will want to do a thorough due diligence on such stations' rule compliance record before proceeding.