Rapid City ND Radio: KXMZ Sale To Pandora Stalls

In a setback to its music licensing plans, Pandora has received word from the FCC that it is no longer processing its application for the transfer of the ownership of broadcasting license for KXMZ 102.7 FM, the Rapid City, South Dakota radio station it acquired last June, according to billboard.com.

In making that acquisition, Pandora had hoped to take advantage of the lower rates that internet streaming services owned by terrestrial radio stations enjoy. That rate is the result of agreement with the Radio Music Licensing Committee and ASCAP in 2012, which allowed for internet radio stations to pay 1.7% of revenue, less standard deductions.

After making that acquisition, Pandora claimed in the ASCAP rate court, and likely the BMI rate court too, that its entire service should be eligible for the lower 1.7% rate, and the 1.7% rate it pays BMI.

KXMZ 102.7 FM 60dBu Coverage

That combined rate of 3.4% is lower than the 3.6% rate Pandora has been paying the two Performance Rights Organizations ASCAP and BMI. That rate is also lower than the pro-rated 10% of revenue that ASCAP and BMI are getting in their deals with iTunes Radio

But the FCC has sent Pandora letter, according to an ASCAP filing with the rate court, that says that Pandora hasn't adequately complied with supplying the agency with ownership information so it can determine if Pandora is at least 75% owned by U.S. citizens,  which means foreign ownership must be capped at 25%

Since Pandora only supplied mailing addresses, the FCC said that is not enough to determine if the owners are indeed citizens of the U.S. "Therefore Pandora may not rely on this data in making its foreign ownership certification," the FCC letter stated.

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