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FCC Policy on Extending Construction Periods Is Being Revisited

Court Decision on July 7 Leads FCC to Re-Evaluate

By Stu Nolan

A side effect of a July 7, 2011, decision by an appellate court has been to place in limbo the FCC's policy of extending construction permits by 18 months where the entity being assigned the permit is a "small business". This has the potential to place in jeopardy many construction permits where applicants were negotiating assignments of their permits to another entity in order to preserve the authorization to build a new facility. The U.S. Court of Appeals for the Third Circuit has found the FCC's preferences for extending the permits of "eligible entities" to be arbitrary and capricious. In Prometheus v. FCC, the Court ordered the FCC to establish a connection between the preference for small businesses and the overall policy goal of trying to promote increased ownership of broadcast media by favored groups pursuant to "identity politics", i.e., in this case, women and minorities. Permit holders should make appropriate contingency plans to meet their construction deadlines if the 18-month extension process is put on hold indefinitely.