Before the Federal Communications Commission Washington, D.C

BEFORE THE FEDERAL COMMUNICATIONS COMMISSION WASHINGTON, D.C. 20554

In the matter of ) ) GLR Southern California, LLC ) IB Docket No. 19-144 ) File No. 325-STA-20180710-00002 Application for a Section 325(c) Permit to ) File No. 325-NEW-20180614-00001 Deliver Programs to Foreign Broadcast ) Stations for Delivery of Mandarin Chinese ) Programming to Mexican Station XEWW- ) AM, Rosarito, Baja California Norte, Mexico ) )

To: Office of the Secretary Attn.: Chief, International Bureau

PETITION FOR RECONSIDERATION OF ORDER DISMISSING APPLICATION TO DELIVER FOREIGN PROGRAMMING

Paige K. Fronabarger David Oxenford Christopher D. Bair

WILKINSON BARKER KNAUER, LLP 1800 M Street, NW, Suite 800N Washington, D.C. 20036 (202) 783-4141 Counsel to GLR Southern California, LLC and H&H Group USA LLC

July 22, 2020

TABLE OF CONTENTS

EXECUTIVE SUMMARY ...... ii INTRODUCTION ...... 2 DISCUSSION ...... 5 I. Dismissal of the 325(c) Permit Application was Arbitrary and Capricious and a Violation of the APA...... 5 A. The Bureau Erred in Finding that it Lacked Adequate Information to Complete a Public Interest Analysis of the Application...... 5 1. The Bureau Had More Than Enough Information to Reach a Decision on the Merits of the Application...... 5 2. Grant of the 325(c) Permit Application is in the Public Interest and Consistent with Commission Policies...... 7 B. The Bureau’s Decision Appears to be Based on External Political Motivations Not Discussed in the Order...... 9 C. The Bureau Should Have Provided an Opportunity to Amend the Application Rather Than Dismissing...... 11 II. The Order Violates the Commission’s Rules, the Communications Act, and the First Amendment...... 13 A. The Bureau’s Dismissal of the Applications is Discriminatory and a Violation of the Communications Act...... 13 1. Applicants’ Control of the Station is Consistent with Arrangements Used by Other Broadcasters...... 13 2. The Programming Content Cannot Provide the Basis for Dismissal...... 16 B. The Bureau Exceeded its Delegated Authority in Denying the Application...... 18 CONCLUSION ...... 21

EXECUTIVE SUMMARY

For two years GLR Southern California, LLC and its parent company, H&H Group USA

LLC (collectively “Applicants”), have delivered Mandarin Chinese-language programming from a studio in the Los Angeles area to Mexican radio station XEWW-AM, Rosarito, Baja California

Norte (the “Station”) pursuant to a Special Temporary Authority (“STA”) granted by the

International Bureau (“Bureau”) while waiting for action by the Bureau on Applicants’ pending

325(c) permit application. Despite patiently and cooperatively working with the Bureau through this protracted process, during which Applicants have likely undergone more scrutiny than any other 325(c) permit application ever filed, the Bureau dismissed Applicants’ 325(c) permit application and Applicants’ pending STA renewal on procedural grounds, never reaching any conclusion as to the substance of the application, in an order on June 22, 2020 (the “Order”), depriving Southern California residents of the Station’s valuable programming. In taking this action, the Bureau violated the Administrative Procedure Act (“APA”), the Communications Act

(the “Act”), the First Amendment to the Constitution, and the Commission’s own rules.

The APA requires a federal agency like the Federal Communications Commission to undertake reasoned decision-making, and provides that a decision is arbitrary and capricious if the agency fails to consider an important aspect of the problem, offers an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise. The Order fails to satisfy these legal requirements. The Bureau’s decision to dismiss the applications because it lacked sufficient information was arbitrary and capricious given the volumes of information that

Applicants’ have freely provided about their operations. The Order also appears to have been based on external political considerations which are never explained in the Order. Furthermore, the Bureau’s decision to dismiss both the pending STA renewal and 325(c) application was ii arbitrary given that the Bureau frequently offers applicants an opportunity to amend applications rather than dismissing them outright. As the Bureau had no trouble repeatedly asking Applicants for other information for the record, asking for an amendment to cure the perceived defect should have been done.

In addition to violations of the APA, precedent dictates that applications seeking approval under Section 325(c) are to be treated the same as any application for a domestic broadcast station. The Bureau ignored this precedent, as no broadcast application would undergo the scrutiny to which this application was subjected, nor would it be dismissed on the novel grounds asserted here. An application cannot be dismissed based on the content of the broadcasts without running afoul of the provisions of Section 326 of the Communications Act and the First

Amendment to the Constitution. Yet it appears that this application was dismissed without substantive consideration merely because Applicants have contracted for programming on the

Station to be provided by a company with ties to China. Such a result cannot stand.

For the foregoing reasons, the Order should be reversed, the STA reinstated, and the

Bureau should expeditiously grant Applicants’ 325(c) permit application.

iii

BEFORE THE FEDERAL COMMUNICATIONS COMMISSION WASHINGTON, D.C. 20554

PETITION FOR RECONSIDERATION OF ORDER DISMISSING APPLICATION TO DELIVER FOREIGN PROGRAMMING

Pursuant to Section 1.106 of the Federal Communications Commission’s (“FCC’s” or

“Commission’s”) rules, GLR Southern California, LLC (“GLR SC”) and its parent company,

H&H Group USA LLC (“H&H”) (collectively “Applicants”), by their attorneys, hereby file this petition for reconsideration of the International Bureau’s (“Bureau’s”) order (“Order”)1 dismissing the application for a 325(c) permit to deliver foreign programming and dismissing the

Special Temporary Authority (“STA”) pursuant to which Applicants delivered programming from a studio in the Los Angeles area to Mexican radio station XEWW-AM, Rosarito, Baja

California Norte (the “Station”).2

1 GLR Southern California; Application for a Section 325(c) Permit to Deliver Programs to Foreign Broadcast Stations for Delivery of Mandarin Chinese Programming to Mexican Station XEWW-AM, Rosarito, Baja California Norte, Mexico, LLC, Order, DA 20-649, IB Docket No. 19-144 (IB rel. Jun. 22, 2020) (“Order”). 2 Applicants will imminently be filing a new 325(c) permit application and new STA to export programming from the United States to Mexico including Phoenix Radio US, Inc. as a co- applicant as requested by the Bureau in the Order. Notwithstanding Applicants’ opposition to the Bureau’s decision in the Order, Applicants recognize that grant of the new permit application will render action on this petition for reconsideration moot. Applicants would welcome the grant INTRODUCTION

For the past two years Applicants have provided Mandarin Chinese-language programming from the Station to listeners across Southern California pursuant to an STA granted by the International Bureau. Under the name URadio, the Station provides valuable music and lifestyle programming to an underserved segment of the community. The programming is supplied through a programming agreement between Applicants and Phoenix

Radio US, Inc. (“Phoenix”).

For the past two years Applicants have faced a barrage of spurious claims about the programming broadcast by the Station, ranging from seemingly unrelenting claims that the

Station would harm the economics of another local radio station to unfounded allegations by a prominent politician about Chinese Communist Party control of the station. Through all this opposition Applicants have patiently and diligently responded to the allegations that have been made, as well as to the follow-up inquiries from the Bureau which involved the production of thousands of documents for the Bureau’s review. The Applicants have provided full insight into every aspect of their operations, displaying complete transparency concerning the scope of the operations of the Station as well as the communications, agreements, and interactions between

Applicants and Phoenix.

Despite weathering this two-year process, during which the 325(c) permit application has likely undergone more scrutiny than any such application ever filed, and where Applicants have cooperated with the Bureau and responded honestly and thoroughly to its inquiries, the Bureau chose not to act on that application or to even address the merits that have been so thoroughly discussed. Instead, the Bureau chose to dismiss the application on novel procedural grounds. As of the new application making its arguments here moot, but advance these arguments to preserve them should the Bureau not act promptly on the new application.

2 set forth herein, the Order ignores the body of evidence before it, is inconsistent with precedent, and appears to violate the Commission’s obligations under the Administrative Procedure Act

(“APA”), the Communications Act, the First Amendment to the Constitution, and the

Commission’s own rules.

The APA requires the Commission to undertake reasoned decision-making, and provides that conclusions not supported by such reasoning cannot stand.3 The Commission must

“examine the relevant data and articulate a satisfactory explanation for its action including a

‘rational connection between the facts found and the choice made.’”4 A decision is arbitrary and capricious if the agency “failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.”5 The Bureau’s Order fails to satisfy these basic legal requirements.

The Bureau’s decision to dismiss the applications because it lacked sufficient information was arbitrary and capricious given the volumes of information that the Bureau has on Applicants and their operations. Moreover, the Bureau’s decision appears to have been based on external political considerations that are never explained in the Order and cannot be sustained on the facts, and therefore these considerations are an inappropriate basis for the Bureau’s decision.

The Bureau further abused its discretion by dismissing the applications rather than offering

Applicants an opportunity to amend, despite this being common practice by the Bureau, and

3 Fox v. Clinton, 684 F.3d 67, 74-75 (D.C. Cir. 2012). 4 Motor Vehicle Mfrs. Ass’n of the U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). 5 Id. See also 5 U.S.C. § 557(c)(3)(A); Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416 (1971).

3 notwithstanding the Bureau’s repeated requests to Applicants for other information and

Applicants’ repeated offers to amend the Application or programming agreement as needed.

Moreover, precedent dictates that applications seeking approval under Section 325(c) are to be treated as is any application for a domestic broadcast station.6 That precedent was ignored here, as no broadcast application would undergo the scrutiny to which this application was subjected, nor would it be dismissed on the novel grounds asserted here. Nor can an application be dismissed based on the content of the broadcasts that an applicant proposes without running afoul of the provisions of Section 326 of the Communications Act and the First Amendment to the Constitution.7 Yet it appears that the application was dismissed without substantive consideration merely because Applicants have contracted for programming on the Station to be provided by a company with ties to China, even though that company is a commercial operation that has been providing programming that serves the public interest. Such a result cannot stand.

For the foregoing reasons, the Order should be reversed, the STA reinstated, and the

Bureau should expeditiously grant the Applicants’ 325(c) permit application.

6 Application of Fox Television Stations, Inc. For a Permit to Transmit Program Material to Mexican television station XETV, Tijuana, Mexico, Memorandum Opinion and Order, 11 FCC Rcd 14870, 14878 ¶¶ 24-25 (1996) (“Fox 325(c) Permit”). 7 This absolute statement assumes that the content of the broadcasts in question are legal. Nothing has been suggested here that the programming that has been run on the Station for the last two years violates any law or any rule of the FCC. Absent a showing of such illegal content, the application cannot be rejected.

DISCUSSION

I. DISMISSAL OF THE 325(C) PERMIT APPLICATION WAS ARBITRARY AND CAPRICIOUS AND A VIOLATION OF THE APA.

A. The Bureau Erred in Finding that it Lacked Adequate Information to Complete a Public Interest Analysis of the Application.

The Bureau’s decision to dismiss Applicants’ 325(c) permit application and associated

STA hinges on its being “unable to evaluate whether this Application, as filed, would serve the public interest.”8 This conclusion is unsupportable on the record. The Bureau has long had sufficient information from Applicants to reach a decision and the evidence before it clearly supports grant of the 325(c) application.

1. The Bureau Had More Than Enough Information to Reach a Decision on the Merits of the Application.

As the Bureau is well aware, Applicants have made numerous filings with the

Commission over the past two years and provided voluminous material with which to evaluate the merits of Applicants’ 325(c) permit application, likely more than has ever been provided to evaluate any such application in the history of the FCC. In addition to the initial Form 308 filing and associated exhibits, Applicants have made multiple filings in response to filings made by

Chinese Sound of Oriental and West Heritage,9 and responded to the Bureau’s extensive information request of February 15, 2019 asking for responses to many questions concerning the relationship between Applicants and Phoenix.10 The response to the Bureau’s request alone

8 Order at ¶ 13. 9 See GLR Southern California, LLC and H&H Group USA LLC Response to Unauthorized Filings, IBFS File No. 325-NEW-20180614-0001 (filed Sept. 24, 2018); GLR Southern California, LLC and H&H Group USA LLC Opposition to Petition to Deny, IBFS File No. 325- NEW-20180614-00001 (Aug. 29, 2018). 10 See Information Request, IBFS File No. 325-NEW-20180614-0001 (Feb. 15, 2019) (“Information Request”); see Response to Information Request of GLR Southern California, LLC 5 required review and submission of thousands of pages of confidential documents. Applicants’ response to the Bureau’s information request fully detailed Applicants’ operations and business relationships, including those with Phoenix. The document request also required Applicants to submit information about the ownership and control of Phoenix – information provided to the

Bureau.

The idea that the Bureau could not reach a decision on the merits of the application based on the materials before it cannot be supported on the record of this proceeding. Typical 325(c) permit applications are granted with hardly more than a complete Form 308 and a handful of pages of materials. In one example filed by Local Media San Diego several months after

Applicants’ own application, the Bureau received a mere four pages of exhibits.11 Nothing in the public record for the Local Media San Diego application suggests that the Bureau needed anything more than that limited amount of information to reach a decision on the merits of the application, which the Bureau did only five months after the application was filed.12 Local

Media San Diego is not an exception, but reflects the fact that the Bureau routinely grants 325(c) permit applications based on threadbare application materials.13 The idea that the Bureau can ordinarily render a decision on a 325(c) permit within a few months of filing and a few pages of materials, but could not reach a decision on Applicants’ filing after two years and thousands of

and H&H Group USA LLC, IBFS File No. 325-NEW-20180614-00001 (filed Mar. 22, 2019) (“Response to Information Request”). 11 See Local Media San Diego, LLC, IBFS File No. 325-NEW-20181128-00004, Comprehensive Exhibit. 12 Permit to Permit To Deliver Programs To Foreign Broadcast Stations, re: Actions Taken, Public Notice, (Mar. 21, 2019) 13 See, e.g., Stereorey Mexico, S.A., IBFS File No. 325-NEW-20170322-00002 (granted within two months of filing based on only 6 pages of exhibits).

6 pages of materials is the essence of the sort of arbitrary and capricious action by federal agencies that the APA is intended to prevent. On this basis alone, the Order should be reversed.

2. Grant of the 325(c) Permit Application is in the Public Interest and Consistent with Commission Policies.

Not only does the Bureau have adequate information to reach a decision on the merits of

Applicants’ 325(c) permit application, but Applicants have also demonstrated that any such grant would serve the public interest. While Applicants have made this case in numerous filings, it bears repeating again.

During his tenure as Chairman of the FCC, Chairman Pai has repeatedly emphasized the importance of diversity in telecommunications, and has said that his “highest priority would be bringing the benefits of the digital age to all Americans—regardless of race, gender, religion, sexual orientation, or anything else.”14 Applicants’ operation of the Station achieves exactly the sort of diversity that Chairman Pai spoke about.

Applicants are owned principally by Ms. Vivian Huo, a minority woman and a U.S. citizen. For the past two years, Applicants have provided a full range of Mandarin Chinese- language programming on the Station to Southern California. This programming includes music, entertainment, weather reports, local (Los Angeles) traffic reports, and local Chinese community news. Forty percent of the total programming over the course of a week is music, punctuated by commercials and station identifications. The music features Mandarin Chinese-language songs from the Chinese mainland, Taiwan, and Hong Kong, while the remaining programming includes news, information content, and entertainment programs. For the most part, this content

14 See Remarks of FCC Chairman Ajit Pai at the Advisory Committee on Diversity and Digital Empowerment Broadcast Symposium (Mar. 7, 2019), https://docs.fcc.gov/public/attachments/DOC-356473A1.pdf. See also Rules and Policies to Promote New Entry and Ownership Diversity in the Broadcasting Services, Report and Order, 33 FCC Rcd 7911 (2017) (statement of Chairman Ajit Pai).

7 addresses local issues in Southern California (e.g., local traffic and weather), as well as entertainment and programming about lifestyle matters such as shopping, food, life insurance, and investment.

The non-music content is produced pursuant to an agreement between Applicants and

Phoenix at Phoenix’s studio in California. News headlines are broadcast as part of world news updates and are drawn from a variety of reputable sources, including news sources from Taiwan, as well as internationally recognized providers in the United States, such as the Associated Press,

Reuters, the Los Angeles Times, NPR, and the BBC.15 To the knowledge of the Applicants, no objections about the nature of the programming have been submitted to the FCC, and the

Commission has never raised any concerns about that programming with the Applicants.

This programming was broadcast from the Station until the Bureau dismissed Applicants’

STA on June 22. Since the effective date of the dismissal, the Station has continued to broadcast only a fixed loop of music and recorded commercials from Applicants’ Tijuana studio as necessary to maintain their Mexican broadcasting authorization.16 However, without the programming provided by Phoenix originating in Los Angeles, Applicants lack the ability to provide timely and relevant programming responsive to the needs of their listeners. In dismissing the 325(c) application and associated STA, the Bureau has denied timely issue- responsive programming to hundreds-of-thousands of Mandarin Chinese-speaking listeners in

Southern California, imperiled the existence of the Station, and undermined Applicants’ ability to serve this community going forward. Given the inoffensive nature of the Station’s

15 A representative sampling of that programming was provided to the Bureau in response to its request for documents on March 22, 2019, so the Bureau is fully aware of the nature of the programming that was transmitted from the station. 16 Applicants, to economically sustain the operation, have allowed new commercials recorded outside the United States to be added to the current looped music programming.

8 programming, Applicants remain baffled by the accusations that the Station is somehow being used to spread propaganda for the Chinese Communist Party. The Station broadcasts entertainment and lifestyle programming that contains no propaganda or other objectionable content. Restoring the origination of the programming from its U.S. studios certainly does not harm the public. There is no public interest reason for the Bureau to have dismissed the application and cancelled the STA.

B. The Bureau’s Decision Appears to be Based on External Political Motivations Not Discussed in the Order.

While Applicants have long been aware that outside interests have been attempting to influence the Bureau’s decision through baseless accusations,17 Applicants trusted that if they cooperated with the Bureau and presented it with facts, then the Bureau would grant the Section

325(c) permit. Unfortunately, it appears that the decision to dismiss the application may have been influenced by the prevailing political climate rather than the facts before the agency.

Applicants have repeatedly expressed a willingness to cooperate with the Bureau to ensure that the application satisfies all the Bureau’s concerns and the Commission’s rules. In addition to their response to the substantial information request, attorneys for Applicants had productive dialogue with the Bureau and the Commission’s Office of General Counsel in late

2019 to respond to questions concerning the relationship between Phoenix and Applicants, and

17 See Letter from Ted Cruz, U.S. Senator, to Ajit Pai, Chairman, FCC (Sept. 11, 2018); see Petition to Deny of Chinese Sound of Oriental and West Heritage, IBFS File No. 325-NEW- 20180614-00001 (filed Aug. 8, 2018); Supplement to Petition to Deny of Chinese Sound of Oriental and West Heritage, IBFS File No. 325-NEW-20180614-00001 (filed Sept. 4, 2018); Reply to Opposition to Petition to Deny of Chinese Sound of Oriental and West Heritage, IBFS File No. 325-NEW-20180614-00001 (filed Sept. 11, 2018); Reply to Response to Unauthorized Filings of Chinese Sound of Oriental and West Heritage, IBFS File No. 325-NEW-20180614- 00001 (filed Oct. 17, 2018).

9 particularly the programming and sales agreement.18 Applicants answered these questions and believed that further dialogue would follow, if not a grant.

Despite this productive dialogue, the Order came on June 22 without warning, and both the tone and nature of the document came as a surprise to Applicants given the Bureau’s behavior up to that point. Given that the Order was released on the same day as a U.S. State

Department released a statement designating four Chinese media entities to be “foreign missions,”19 and just a week before the FCC designated two companies with ties to the Chinese government as national security threats,20 it appears that Applicants and Phoenix have been inadvertently caught up in the ongoing U.S.-China political debate. As Applicants have repeatedly stated, they are U.S.-owned and operated, and are neither controlled by the Chinese nor any other foreign government. That Applicants broadcast Chinese-language programming from the Station in no way alters these facts. Phoenix itself is a publicly traded commercial company that has been open to criticizing the Chinese government. While Applicants recognize the U.S.-government’s legitimate concerns about entities that are actually controlled by the

Chinese government, the record plainly demonstrates that such concerns about Applicants are unfounded.

18 Letter from Paige K. Fronabarger, Counsel to H&H Group USA LLC and GLR Southern California, LLC, to Marlene H. Dortch, Secretary, FCC, IB Docket No. 19-144 (filed Dec. 26, 2019). 19 See Designation of Additional Chinese Media Entities as Foreign Missions, Press Statement, U.S. Department of State (Jun. 22, 2020). Notably Phoenix is not among those entities designated in the press release. 20 See Protecting Against National Security Threats to the Communications Supply Chain Through FCC Programs – ZTE Designation, Order, DA 20-691 (rel. Jun 30, 2020); Protecting Against National Security Threats to the Communications Supply Chain Through FCC Programs – Huawei Designation, Order, DA 20-690 (rel. Jun 3, 2020).

C. The Bureau Should Have Provided an Opportunity to Amend the Application Rather Than Dismissing.

While much of the Bureau’s decision calls into question the independent judgment and good faith execution of its delegated authority, the most baffling part of the Order is the Bureau’s decision to dismiss the STA and pending 325(c) application rather than to request additional information or an amendment. It is common practice for the Bureau to afford applicants an opportunity to amend applications when it identifies problems, but the Bureau never offered

Applicants such an opportunity.

While the Bureau might be excused for failing to offer an opportunity to amend had it never asked for other information from Applicants, the Bureau has repeatedly sought more information from Applicants concerning their 325(c) application. As discussed above, the

Bureau issued to Applicants an extensive information request which entailed review and submission of thousands of pages of documents to the Bureau. Applicants’ response to the request included information about Applicants’ relationship with Phoenix, and also included detailed information not in Applicants’ possession about the ownership and control of Phoenix itself.21 The Bureau had this information for well over a year and never once suggested that

Applicants would need to amend their application to include Phoenix or otherwise suggested that the information that had been submitted was somehow inadequate. Asking for an amendment to the application would have been trivial compared to the Bureau’s sweeping information request.

The Bureau again sought information from Applicants in December of 2019 when the staff of the International Bureau reached out to Applicants’ counsel to discuss the nature of the

21 See Information Request (for example, question 25 asks for information from Applicants and Phoenix about ownership by any foreign government and question 26 requests an organization chart showing the complete ownership structure of Phoenix).

11 arrangement between Phoenix and Applicants.22 At no point during this discussion did the

Bureau express concern that Phoenix did not appear as an applicant on the Form 308.

To be clear, it took the Bureau two years and thousands of pages of pages of information to determine that Phoenix’s absence from the application was such a material a deficiency as to justify dismissal, and yet the Bureau remained silent on this point the whole time. This very question of whether Applicants should include the programmer on the application was one on which Applicants requested advice from the Bureau before filing. They received no response.23

Applicants have repeatedly demonstrated a willingness to cooperate with the Commission’s staff and to make any modifications to the application or supporting materials necessary to comply with the Commission’s rules and policies. Had the staff thought that Phoenix was an indispensable party to the application, they could have simply requested that the application be amended to include Phoenix, as Applicants have repeatedly offered to do.24 In light of the

Bureau’s other actions regarding the application and its own practice of providing applicants

22 See Letter from Paige K. Fronabarger, Counsel to H&H Group USA LLC and GLR Southern California, LLC, to Marlene H. Dortch, Secretary, Federal Communications Commission, IB Docket No. 19-144, IBFS File No. 325-NEW-20180614-00001 (filed Dec. 26, 2019). 23 See Email from Howard Liberman, Counsel to H&H Group USA LLC, to Janice Shields, FCC (Nov. 15, 2017). Not only did counsel for Applicants provide a draft of the application to staff before it was filed (which staff did not comment on), but Applicants informed the Bureau at the beginning of this process via email in November of 2017, that H&H intended to apply for the Section 325(c) permit “to deliver the programming to the foreign radio station and has an agreement with that station” but would be “acting as sort of an intermediary” and “will be receiving the programming from someone else.” Thus, the Bureau was long aware that Applicants would not be providing the programming and could have asked even before the application was filed that the programmer appear on the application. 24 Response to Information Request at 3. Any such amendment might have required a further public notice, but the staff could have proceeded to review the amended application with all of the information it already possessed, rather than starting anew with a brand-new application. Such an amendment also would not have required the termination of the STA.

12 with an opportunity to amend filings, the Bureau’s decision to deny Applicants an opportunity to amend here was arbitrary and capricious.

II. THE ORDER VIOLATES THE COMMISSION’S RULES, THE COMMUNICATIONS ACT, AND THE FIRST AMENDMENT.

A. The Bureau’s Dismissal of the Applications is Discriminatory and a Violation of the Communications Act.

Since the Bureau sent Applicants its information request in February 2019, it has been clear that the Bureau’s primary concerns about the application are (1) whether Applicants control the Station and can exercise oversight required by Commission rules and precedent, and (2) whether the airing of programs produced by Phoenix somehow constitutes a threat to national security or otherwise constitutes a violation of the Commission’s rules.25 Dismissing the 325(c) permit application for either reason treats Applicants’ differently from other broadcasters and is therefore a discriminatory application of the Communications Act.

1. Applicants’ Control of the Station is Consistent with Arrangements Used by Other Broadcasters.

Concerning the level of control of Applicants, the documents submitted to the Bureau demonstrate plainly that Phoenix produces content for Applicants, but that Applicants retain ultimate control over the programming through contract mechanisms, including requiring

Phoenix to comply with Applicants’ programming standards and enabling Applicants to preempt programming in specified circumstances, including where programming fails to comply with the programming standards. The Bureau has copies of the programming and sales agreement between Phoenix and Applicants as well as Applicants’ programming standards. The documents provided to the Bureau demonstrate that Ms. Huo is heavily involved in day-to-day operations of

25 Applicants noted this concern in their March 22, 2019 response to the Bureau’s information request. See generally Response to Information Request.

13 the Station and that Applicants generally satisfy the long-standing tests established by

Commission precedent for establishing control over the Station’s operations.

The programming arrangement between Applicants and Phoenix is in all material respects akin to the relationship between a programmer and a station licensee in a time brokerage agreement or “LMA,” or that between a network affiliate and the network which provides programming to it. In either of these cases, the licensee (here the Applicants) controls the station, seeks a source of reliable programming that will reach its intended audience and, in many cases, a source of reliable income with which to operate its station.26 In relationships of this nature, or anytime a broadcaster airs programming from any network or syndicated radio source, the broadcaster is not required to control the studios where the programming is produced, and they routinely do not pay the specific employees who produce the programs and sell the advertising that is included in this third-party programming. The licensee is not required to directly control each element of the program production process. Rather, the licensee is required to have ultimate control over what gets broadcast on the station and bears the burden of ensuring that all third-party programming complies with applicable law, meets the objectives of the licensee, and conforms with the contractual limitations established between the licensee and the programmer. And in none of these arrangements is the party providing programming necessarily named as an applicant in any FCC application.27

26 While in television, most major networks no longer pay compensation directly to their affiliates, in the past, such payments were common. Today, many radio networks provide compensation to affiliates in major markets who clear the network’s commercials, and even some smaller and regional television networks provide similar payments. 27 While the Commission is routinely informed of time brokerage or local marketing agreements in place at the time of an application, the programmer is never listed as an applicant. Network programming is not routinely disclosed in any broadcast application.

Applicants and their principal, Ms. Vivian Huo, initiated and negotiated the terms for the seller financed acquisition of GLR SC; worked with her counsel (and counsel for the seller) to prepare, submit, and prosecute the subject application; and engaged in arms-length negotiations with Phoenix over terms for the provision of programming. Ms. Huo has also continuously maintained active oversight and control over the Station and the programming it airs. The documents submitted in response to the Bureau’s information request show that Applicants and

Phoenix are (and have always been) separate, independent companies. Ms. Huo is not a current or former officer, director, employee, or owner of Phoenix and no officer, director, employee, or owner of Phoenix is an officer, director, employee, or owner of Applicants. While many programming agreements in other contexts grant the programmer an option to acquire the Station and credit all or apply a portion of their brokerage payments towards the purchase price, Phoenix does not have either right.

The Commission and its Media Bureau have reviewed countless programming arrangements that are legally and functionally indistinguishable from the one that Applicants have with Phoenix. Indeed, in situations where contesting parties have put forth far more evidence of control of an applicant by outside parties than has been offered here, the

Commission has not even requested that an applicant produce any documents probing the relationship between the parties.28 In the present case, there is no evidence that the Applicants are not in control of the Station.

28 See, e.g., WLDA(FM), Slocomb, Alabama, et. al., 27 FCC Rcd 13363 (Audio Division, 2012) (where local station owner was contacted about station purchase that he could not make consistent with the radio ownership rules, he located a former employee who acquired the stations and immediately entered into a programming agreement with the local owner’s brother – the Division denied petitions to deny without requesting any documents finding that these facts, standing alone, did not raise questions that the Commission needed to investigate).

To treat the arrangement between Phoenix and Applicants differently from other LMAs simply because it is a 325(c) permit and not a typical broadcast application is contrary to precedent and an unlawful application of the Communications Act. Applications for a Section

325(c) permit are to be treated in the same manner and under the same criteria as other broadcast applications for stations in the United States.29 As no programmer in a position similar to that of

Phoenix would be required to be named as a co-applicant on any broadcast application, the

Bureau was wrong to require that action here.

2. The Programming Content Cannot Provide the Basis for Dismissal.

The content of the Station’s programming cannot form the basis for the Bureau’s dismissal. The Commission made clear in Fox Television that, under the North American Free

Trade Agreement (“NAFTA”), treatment of stations applying for permission to export programming under Section 325 cannot be different than the treatment of applications for a station license in the United States.30 As the Commission stated in that case:

By applying the same criteria here we use for domestic stations and by not considering whether it is possible or desirable to require Fox to affiliate with any U.S. station as an alternative to XETV, we also do not violate the provision of NAFTA recognized by the Court that we are “prohibited from considering a foreign station’s nationality for purposes of favoring a competing United States station.”31

Thus, the Applicants cannot be treated differently from any application for a U.S. station, but that is exactly what the Bureau has done in this case. There are already stations operating within the United States running programming from entities that are actually controlled by foreign governments. This includes radio stations whose licenses have been renewed in the

29 Fox 325(c) Permit, 11 FCC Rcd 14878 ¶¶ 24-25. 30 Id. 31 Id. at 14878 ¶ 25.

16 current license renewal cycle and are broadcasting programming from China Radio International or Radio Sputnik.32 These stations continue to operate, and the Commission has even renewed their licenses.

The Commission cannot deny an application simply because the programmer, a publicly traded, commercial company from Hong Kong, has a minority owner in which the Chinese government has an indirect stake, while at the same time granting the license renewals of radio stations broadcasting programming from foreign government-owned programming sources.

Denial on such a basis is even more unlawful where, as in the present case, such programmer’s entire role at the station is limited by the terms of a contract with the station operator and provides only music and lifestyle programming, not polemics, propaganda, or government- influenced news coverage. Nothing in Applicants’ 325(c) permit application, the ownership of

Phoenix, or Applicants’ relationship with Phoenix suggest any threat to society or violation of any Commission rules, and thus this application cannot be denied while other applications of

U.S. stations with actual control by foreign states and more suspect programming are approved.

Again, the fact that this is a 325(c) permit application and not a broadcast application does not warrant disparate treatment, and to do so is an unlawful application of the Communications Act, as well as the APA and the Constitution.

The apparent discrimination against this programming simply because it originates with a company whose parent is based in Hong Kong, and not because it contains any illegal content, is precluded by Section 326 of the Communications Act which forbids censorship by the FCC and does not allow it to take any action which interferes with free speech.33 That protection is also

32 In the Washington, DC area, Radio Sputnik is currently broadcast from WZHF, and China Radio International is broadcast on WCRW. 33 47 U.S.C. § 326.

17 enshrined in the First Amendment which equally governs Commission action.34 Just because the

FCC or others in the government may not like the speaker or their origin does not give the

Commission the right to deny an application based on that speech. Nothing has been suggested that the programming of the station is in any way contrary to the public interest, much less illegal. Thus, the protections of the First Amendment and Section 326 must extend to this application as well.

B. The Bureau Exceeded its Delegated Authority in Denying the Application.

Even assuming arguendo that the Bureau has a colorable argument that Phoenix must appear as an applicant on the Section 325(c) permit application, there is no precedent for the

Bureau’s significant reinterpretation of the requirements of Section 325(c). Such a fundamental reinterpretation of Section 325(c) must be made by the full Commission. The Bureau therefore exceeded its authority in acting on the application in the manner in which it did.

Section 0.261 of the Commission’s rules circumscribes the scope of the Bureau’s authority to act under delegated authority.35 Notably Section 0.261(b)(1)(iii) states that Bureau does not have authority to act on, among other things, applications that “[c]annot be resolved under outstanding precedents and guidelines after consultation with appropriate Bureaus or

Offices.”36 The Bureau’s basis for dismissal of Applicants’ application presents just such a new precedent.

34 FCC, THE PUBLIC AND BROADCASTING (Aug. 2019), https://www.fcc.gov/media/radio/public-and-broadcasting (“The First Amendment, as well as Section 326 of the Communications Act, prohibits the Commission from censoring broadcast material and from interfering with freedom of expression in broadcasting. The Constitution’s protection of free speech includes programming that may be objectionable to many viewers or listeners. Therefore, the FCC cannot prevent the broadcast of any particular point of view.”). 35 47 CF.R. § 0.261. 36 47 CF.R. § 0.261(b)(1)(iii).

Critical to the Bureau’s decision in the Order that Phoenix should appear as an applicant is the fact that “the record indicates that the Applicants and Phoenix Radio each perform certain key activities for the provisioning of the proposed service within the scope of section 325(c),”37 but the Bureau cites no precedent for this proposition that all parties performing “certain key activities” must appear as applicants for a 325(c) permit to be granted, nor have Applicants found any such precedent to cite. As noted above, the Order is contrary to the outcome in innumerable decisions made in the broadcast services. Indeed, Applicants based their Section 325(c) permit application on review of past examples of permits granted by the Bureau. Applicants found no examples where the Bureau required the programmer to appear on the application as it requires in the Order.

Not only is there no precedent for the Bureau’s interpretation, but the “key activities” standard that it has put forth has no reasonable limit. Applicants admit that, as the provider of programming on the Station, Phoenix undoubtedly performs “key activities” necessary to

“locate, use, or maintain” the studio, but so too does the internet service provider that connects the Phoenix studio to the Station and allows for transmission of the programming. Likewise, the security company retained by Applicants performs key activities and ensures the continued operation of the Station by preventing access by unauthorized personnel. And nothing in the

Form 308 application or in the precedent on Section 325(c) applications states that program providers need to be identified as co-applicants. As set forth above, this is contrary to practice in other broadcast services, where the party exercising ultimate control over the broadcast license is the applicant whose qualifications are reviewed by the FCC. By the Bureau’s sweeping interpretation of 325(c), any party with which Applicants have contracted to provide vital

37 Order ¶ 19.

19 services to the Station should appear as a party to the application, which is simply unsupported by Commission rules or practices.

The Bureau has created this “key activities” requirement without guidance from the law or from the Commission. This requirement fundamentally changes the standards as to the parties who must be named in any application for a Section 325(c) permit, and is a novel reshaping of how Section 325(c) of the Communications Act is interpreted. If indeed the Bureau’s interpretation of the Communications Act is correct and an entity like Phoenix, whose sole role is to provide programming pursuant to a programming agreement that can be amended or terminated at any time, must appear on the application, then such interpretation constitutes a fundamental reinterpretation of the requirements of Section 325(c) and the Bureau should have referred the application to the Commission rather than dismissing it on delegated authority.

CONCLUSION

Given the amount of information about Applicants’ operations and agreements already in the Bureau’s possession, and the lack of substantive questions about such operations, the

Bureau’s decision to dismiss Applicants’ 325(c) permit application and associated STA was an arbitrary and capricious act contrary to the APA. Further, the dismissal contravenes the

Communications Act, precedent, and the First Amendment, and such a consequential reinterpretation of Section 325(c) exceeds the Bureau’s delegated authority under the

Commission’s rules. To enable Applicants to continue to provide valuable Mandarin Chinese- language programming to the Southern California area, the Bureau should grant this petition for reconsideration, reverse its Order, and find on the merits that grant of Applicants’ 325(c) permit application is within the public interest.

Respectfully submitted,

By: /s/ Paige K. Fronabarger Paige K. Fronabarger David Oxenford Christopher D. Bair

WILKINSON BARKER KNAUER, LLP 1800 M Street, NW, Suite 800N Washington, D.C. 20036 (202) 783-4141 Counsel to GLR Southern California, LLC and H&H Group USA LLC

CERTIFICATE OF SERVICE

I, Christopher D. Bair, of Wilkinson Barker Knauer, LLP, hereby certify that on this 22nd day of July, 2020, and pursuant to the agreement of counsel to Chinese Sound of Oriental and

West Heritage, made on July 22, 2020, to accept service by email, I caused a copy of the foregoing Petition for Reconsideration of H&H Group USA LLC and GLR Southern California,

LLC to be served via email on the following:

James L. Winston Walter E. Diercks RUBIN, WINSTON, DIERCKS, HARRIS & COOKE, LLP 1250 Connecticut Avenue, NW Suite 700 Washington, DC 20036 (202) 861-0870 [email protected] Counsel to Chinese Sound of Oriental and West Heritage

/s/ Christopher D. Bair