FCC on Pirate Radio: From Paper Tiger to Puffer Fish

At the 2018 NAB Show in Las Vegas last month, FCC Chairman Ajit Pai highlighted the agency’s extensive efforts to combat unlicensed broadcasting. In addition to announcing that, in 2017, the agency issued “210 Notices of Unlicensed Operation” (I can only confirm 171), Pai said the agency “fined illegal broadcasters $143,800” (it’s actually $158,800) and “proposed fines totaling $323,688” (it’s actually $204,344). He also mentioned the recent raid of pirate stations in Boston, and reported “that we recently took similar action against a pirate operator in Miami and another operator in Queens, New York.”

Considering that station-raids tend to generate a lot of publicity, both among local media in affected markets and in the radio industry trade-press, I was surprised that the Queens and Miami raids have not been reported on at all. This may be because they didn’t actually happen – or happened on dates and at times that don’t fit Chairman Pai’s narrative. In addition, further information has come to light that casts doubt on just how effective the FCC’s recent activity in Boston really was.

First, let’s break down the Queens case. This involves a guy by the name of Jose Luis Gerez and a station he used to run (and actually may still be running) called “Mambo FM.” According to an unsealed complaint dated last November, this station first appeared on the FCC’s radar in July 2013, when agents in the New York field office observed “what appeared to be an unlicensed broadcast station operating at 95.1 MHz in Queens, New York.” They tracked the signal to an apartment building on Gleane Street, less than a three-mile drive from LaGuardia Airport. After interviewing the superintendent of the apartment building, agents found an FM antenna on the roof with a coaxial cable running into the basement, where a transmitter and desktop computer providing the station’s programming was found. Agents sent a Notice of Unlicensed Operation to the property-owner, who subsequently reported that the station had been removed from the premises. Read More

Raids, Bills, Staff Moves: FCC Enforcement Changes Afoot?

The Federal Communications Commission is making new moves to demonstrate the seriousness with which it takes the “problem” of unlicensed broadcasting. This is being reflected in several ways, including the deployment of more tools in field enforcement, legislative activity, and staff changes.

First, enforcement: on Monday, March 26 the agency, in conjunction with Federal Marshals and the Boston Police Department, conducted two station-raids and equipment seizures. Both stations were effectively co-located on the same block of Blue Hill Avenue in the Dorchester neighborhood, which is populated by two-story structures with businesses on the ground floor and apartments above, as well as an old theater which now houses a Baptist church.

In reality, this was an easy two-fer for the FCC: minimum effort expended for maximum impact. The court complaints make for interesting reading. (All publicly available documents involving previous enforcement actions against these stations can be found in our Enforcement Action Database.) Read More

FCC Getting Shady With Anti-Pirate Enforcement?

When it comes to pirate-hunting, the FCC’s off to a relatively sedate start in 2018. The total number of enforcement actions reported so far for January stands at 15, which is six more than were reported in 2017, but equal to the number reported in 2016, the final full year of previous (Democratic) chairman Tom Wheeler’s tenure. So far this month there have been eight actions, as opposed to 11 in February 2017 and 12 in February 2016.

Many of these cases originated last year. The most notable at present is the case of “Gerlens Cesar,” who was sent a Notice of Unlicensed Operation earlier this month for operating four pirate stations on two FM frequencies in Boston and its surrounding suburbs. Interestingly, a principal by the name of “Cesar Gerlens” has already run afoul of the FCC – having received multiple visits and warning-letters in the latter half of last year – some of which named additional collaborators – for operating unlicensed stations in the Boston area.

I e-mailed the chief of the FCC’s Enforcement Bureau, Rosemary Harold, to ask about this apparent discrepancy: had the agency mistakenly transposed the first and last names of the principal in this case, or are there two distinct individuals who just happen to share identical name-elements working in Boston? So far, no response, but also no correction from the agency. In any case, Cesar Gerlens/Gerlens Cesar seems a likely candiate for a negotiated forfeiture-settlement similar to the one worked out with a prolific pirate in Florida last moth, if/when the agency consolidates the information gleaned in this case. Read More

iHeartMedia Bankruptcy Reorganization Imminent

After spending several years shuffling money between subsidiaries (including creating new ones to raise/preserve capital) and playing footsie with creditors holding more than $20 billion dollars of its debt, iHeartMedia, the nation’s largest radio conglomerate, skipped a scheduled $106 million interest payment on some of its loans earlier this month, triggering a 30-day default-clock. iHeart is portraying this move as something done to increase its leverage over creditors, who might be compelled to agree to new terms and avoid restructuring – but this is precisely what tripped Cumulus Media into Chapter 11 bankruptcy late least year.

None other than the Wall Street Journal calls what’s likely to happen between now and March 3 a “costly reckoning.” If iHeart follows the Cumulus bankruptcy model, preferred (institutional) investors will get a greater share of the restructured company, while others will lose everything. The firms who took iHeart private last decade may not be compensated at all in restructuring, but the WSJ reports that they’ve already “managed to offset virtually all of the potential loss of iHeart’s equity,” and will generally be able to walk away after more than doubling the company’s debt in the buyout process. Read More

Paper Tiger Roars in 2017 – To What End?

There are still a few pirate radio enforcement-cases from 2017 that the FCC has yet to release, but by and large the numbers from last year are in and they most definitely show an uptick in the number of enforcement actions against unlicensed broadcasters. As of today, there were 383 enforcement-actions across 18 states, compared to 207 actions in 2016 covering just nine states. For the second year running, Florida tops the list of states with the most anti-pirate enforcement, followed by Massachusetts and New York.

FCC Anti-Pirate Enforcement Actions Enforcement Actions by Year, 1997-20182017 ranks as the fifth-busiest year for enforcement activity in the 20-year history of the Enforcement Action Database, eclipsed only by a tear the FCC’s Enforcement Bureau went on during the end of President Bush II’s second term and Obama’s first term, when a proposed expansion of LPFM was being debated. Of the activity logged last year, the vast majority were station-visits (201, or 52%) or Notices of Unlicensed Operation (aka warning letters, 168, or 44%). The remaining 4% of enforcement actions included Notices of Apparent Liability (aka pre-fines, of which there were four) and Forfeiture Orders (nine).

In 2016, the FCC’s Enforcement Bureau issued nine NALs and five Forfeiture Orders, so on balance there’s no real movement or improvement in the agency’s escalation-protocol beyond initial contact(s). Read More