The Federal Communications Commission (FCC) oversees the publicly owned broadcast spectrum. In this capacity, it issues exclusive licenses for stations to broadcast at certain frequencies. A license lasts for eight years, as does a renewal of an existing license. The FCC may issue a license if it serves public convenience, interest, and necessity, and if the applicant meets additional requirements. These include:
Citizenship: Licenses generally are not granted to individual non-citizens, foreign governments, corporations with a non-citizen officer or director, or corporations in which non-citizens or representatives of foreign governments own more than 20 percent of the stock.
Character: An applicant must act honestly. Intentional misrepresentations greatly increase the risk of a license denial. Criminal conduct may or may not disqualify an applicant. When reviewing competing applications, though, an applicant who has no character issues is more likely to receive the license than an applicant with a legal violation on their record, even if it is minor.
Financial requirements: An applicant starting a new station must be financially able to build and operate the proposed facility for one year. If they are buying an existing station, they generally must be financially able to maintain operations without revenues for the first three months. However, if they are buying an existing station that is facing financial problems, they must show that they can make a profit within the first year of operating it.
Technical requirements: Among other things, an applicant must use transmitting equipment approved by the FCC and must operate the station during hours appropriate to its frequency.
Getting a License
The FCC can grant a license without holding a hearing. However, it will hold a hearing if it believes that the license would not be in the public interest, or if the application raises substantial and material factual issues. In some cases, a hearing occurs when another broadcast licensee fears that granting a license to an applicant might undermine their financial position.
Generally, an ordinary person cannot intervene in the licensing process or demand a hearing. Individuals or organizations may file a petition with the FCC, though, if granting the license would cause specific harm to them. This may result in a hearing if a petition raises a substantial and material factual issue.
Spectrum Auctions for Radio Licenses
The range of frequencies used to communicate via radio waves is known as a spectrum. In FCC spectrum auctions on the Internet, prospective licensees can bid on license assignments. Any person or entity can enter the auction if the FCC determines that they are qualified upon receiving their application and payment.
Keeping a License
A licensee is not entitled to an automatic renewal of their license. A station must apply to renew their license within the statutory period to retain access to their frequency. The FCC also may revoke a license before the term expires, although the licensee must receive notice and an opportunity to be heard during this process. The agency must have a reasonable basis to revoke the license, and it must state this basis in writing. If the licensee wants to challenge this decision, they can appeal to the US Court of Appeals for the District of Columbia.
Licenses for Multiple Stations
The FCC historically has been reluctant to allow the same individual or entity to own many stations. This could reduce the diversity of opinions presented in the media. Initially, each licensee was limited to one station in a market and to a certain number of AM, FM, and television stations nationwide.
However, Congress wiped out the national licensing restrictions for radio stations in the Telecommunications Act of 1996, and it ordered the FCC to reduce local licensing restrictions for radio stations. Licensees are no longer subject to limits on television station ownership, although they are limited to reaching a certain percentage of the national audience. The law also ended a ban on ownership of local television broadcast stations by cable operators.