The Greenmail Scam Revealed


Moneyby Ken Benner

Alternative FCC Inspector Ken Benner, president of K.J. Benner & Associates, makes readers aware of a former “greenmail” scam and how that affected some applicants. He suggests how some station application costs can be better managed today.

Thirty-some years ago trucking around the Midwest performing annual required “audio proof of performance” reports, i.e. noise, modulation levels, measurements for audio frequency response, RF bandwidth limits, modulation levels, etc., I became aware of something that really bothered me.

A station license up for renewal, or an individual applying for a license following submission of the application and subsequently disclosed publicly by the FCC as required, applicants in several cases would face multiple threats of an application challenge.

An offer to withdraw such a competing petition or “informal objection challenge,” the “blackmail” figure was generally in the neighborhood of $50K. It appeared there were very few individuals that were quite adept at the process which became known as “Greenmail.”

Among the challenges facing the initial applicant were the financial ability to research for: a site, an open channel, a location availability for a new tower, plus of course, substantial legal costs for “professional assistance.”

By the time all these challenges were met and paid for, a new station applicant could easily put out $100K, plus he better have another at least $100K to construct, purchase equipment, for installation costs, etc. It was at this point the “Greenmail” letter would show up advising yet another challenge for the applicant was underway.

I wrote the commission suggesting a modification to the rules and advising that this appeared to be a scam. My suggestion was promptly acted upon in that it became illegal to offer to withdraw an application challenge for a price.

It is still possible to file a “petition to deny” subject to conditions nicely described on Pg.16, item “a) Agreements to withdraw opposition” in the most recent edition of the NAB Legal Guide — a well-worthwhile read for anyone considering an application to construct or renew.

The preceding is to illustrate another costly concern involving the FCC lists of AM and FM stations silent over two months. As of the 5/17 listing, 72 AMs silent, 94 FMs silent along with 124 Low-Power FM, boosters and repeaters also silent.

As illustrated above, to get an AM or FM on the air is going to cost an applicant a minimum of $200K. My trusty slide rule computes those 166 AMs and FMs sitting silent have had to cost a minimum of $33.2 million, ignoring the additional expenses for those repeaters and boosters, like costs associated with rusting towers, satellite dishes, abandoned and vandalized studios.

What a waste of time, talent, money and broadcast service to American listeners!

Perhaps it’s time the FCC, NAB, RAB, TVB, State Broadcasters’ Associations, and more importantly, the licensees themselves contact their members of Congress to ease the outrageous legal burdens that have caused this costly mess that in no way serves the “Public Interest, Convenience and Necessity” — the criteria for obtaining and retaining a broadcaster’s license.

Benner is an FCC Alternative Independent FCC Compliance Certification Inspector and former, news-writer, commentator, columnist, station manager, talk show host and engineer. He’s also Chairman of the Coalition for Transparency, Clarification & Simplification. Contact him at: [email protected]/

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