Procedure for FM License Transfer

F. Peter Franck, Attorney @ Law
Intellectual Property, Cultural and Constitutional Rights

1610 Tiburon Boulevard, Tiburon, CA 94920
415.381.9960; fax 415.381.9963; email

August 6, 1999

Michael Wagner
Supervisory Attorney
Federal Communications Commission
445 12th Street, S.W.
Washington D.C.  20554

RE: Procedure for FM License Transfer

Dear Michael Wagner:
Thanks very much for taking the time to speak with me this week with respect to current FCC procedures for FM broadcast license transfers.  I would like to summarize here my understanding of the situation, to make sure that I have it correctly.  (This summary also reflects some of my prior conversation with Bruce, who gave me some information I did not need to have you repeat in our conversation.)

As I understand it, a broadcast license is considered to be just that, a license and not property.  Therefore, any transfer of a license must be approved by the Commission.  The Commission must find that a transfer is in the public interest, convenience and necessity.  However, Bruce did point out, that the Commission rarely disapproves a transfer, and that in the line of cases in which listener groups objected to sales involving change of format (usually classical to pop)  the courts have held that the Commission had broad discretion with respect to such transfers, and refused to overturn a Commission approval of contested license transfer.

You said that if an organization wants to sell or otherwise transfer a license to another entity they must file an Application to do so with the Commission.  The Commission will issue a Notice of such Application in your Daily Releases (which can be viewed daily on your web page)  and, in addition, the Applicant must publish notice of the application twice a week for two weeks in a newspaper of general legal circulation in the signal area of the station in question.  In addition, the station must broadcast, during the second week after filing the Application a notice about the proposed transfer, at least once a day for four days and those broadcasts must be between seven and nine a.m. or four and six p.m.  You indicated that all this  is codified at 47 Code of Federal Regulations 73.3580.

I understand that after the Application is filed, parties wishing to oppose a transfer have 30 days in which to file a formal Petition to Deny which must be served on both parties by mail.  I also understand that informal objection may be received at any time.  You and Bruce both indicated that the FCC’s action on a Petition to Deny is normally done on written briefs and that a hearing will be held only if there are substantial questions of fact in dispute.  You indicated that normally such hearings are held before an FCC Administrative Law Judge in Washington D.C., but that in at least one fairly recent case a hearing was held in the community of the station’s license.

In my discussion with Bruce, I also raised the question of whether the value of the broadcast license could be used as security for a loan, i.e. whether a licensee could borrow against the value of the frequency.  Bruce told me that this can not be done, in that the license is considered to belong to the public interest and not to the particular broadcast entity holding it.  Apparently, bankers frequently call with this question and are uniformly told that the value of the license cannot be pledged as security against a loan.

Michael, I want to thank you very much for your information and time.
Very truly yours,

Peter Franck

Peter Franck

Cc: Parties concerned with the Pacifica Foundation Licenses

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