Broadcast Law Blog : Broadcast Lawyer & Attorney : Davis Wright Tremaine Law Firm : Broadcast Law Blog : Seattle, Los Angeles, Washington D.C., New York, San Francisco, Shanghai

Every day, on almost every television channel, it seems as if you can find a presidential candidate making an appearance - and it's not just on the Sunday morning political interview programs.  Last week, it was Hillary Clinton on the David Letterman Show (where her husband is scheduled to appear this week).  In the last two weeks, both Barack Obama and John McCain have made the pilgrimage to talk with John Stewart on the Daily Show.  Mike Huckabee seems to be a fixture on the Colbert Report.  And at the end of last week, TNT reportedly stated that, candidacy or not, it would continue to run episodes of Law and Order featuring Fred Thompson.  With all of these appearances of candidates on television, one might wonder if the FCC's Equal Opportunities (a/k/a the "Equal Time") rules FCC have been repealed.  In fact, it appears that all of these appearances are within exemptions to, or are otherwise not covered by, the Equal Opportunities Doctrine of the FCC. 

That doctrine requires a broadcaster or, in some instances, a cable system, to provide equal opportunities to competing candidates to appear on the air.  In the most common situation, if one candidate buys commercial time on a broadcast station, the station must treat other candidates in the same race equally, and allow them to buy equal amounts of time on the station at equivalent rates to those paid by the first candidate.  In a candidate is given free time, all his or her opponents are entitled to the same amount of free time, if they request it within seven days of the first candidate's appearance.  However, the statute provides many exemptions, and all of these recent appearances appear to fall within these exemptions. 

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With summer and the August Congressional recess drawing to a close, will consideration of the Internet Radio controversy over royalties be on the agenda when the September legislative session begins?  In recent weeks, there has been a settlement between the Digital Media Association (DiMA), representing the largest webcasters, and SoundExchange on the issue of the minimum royalty fee - agreeing that the $500 per channel minimum fee imposed by the Copyright Royalty Board ("CRB"), which might have by itself driven many webcasters like Pandora or Live 365 out of business had it not been resolved, would be capped at $50,000.  SoundExchange has also extended a unilateral offer to small commercial webcasters allowing them to continue to pay a percentage of revenue royalty of 10-12% for use of the music produced by SoundExchange members - but limiting the offer to webcasters with under $1.2 million in annual revenue, and requiring that any webcaster with over 5,000,000 tuning hours in any month to pay at the CRB rates for all listening in excess of that limit.  We wrote about that deal, and some of the concerns that larger small webcasters have, here.  These adjustments to the CRB rates may resolve some issues for some webcasters, but they leave open many other issues as set forth below - but will these tweaks to the CRB decision be enough to take the Congressional heat, in the form of the Internet Radio Equality Act, off of SoundExchange?

What issues remain?  There are still many.  These include:

• The issues of the larger independent webcasters who may currently fit under the Small Webcaster Settlement ("SWSA") Act caps - but may well go over those caps before 2010, and could not afford to pay royalties at the CRB-mandated rates if they exceed the SWSA limits.
• The CRB mandated rates are themselves problematic for virtually all commercial webcasters - and DiMA made clear that the settlement of the minimum fee issue was the first step in resolving the issues that preclude a vibrant webcasting industry under the CRB rates (see the DiMA press release on the settlement, here)
• Noncommercial webcasters have not announced any settlement with SoundExchange - even though many expressed concerns over the fees for large noncommercial webcasters  which will, by the end of the royalty period, increase about 9 times over the rates that they had been paying (and more for larger NPR affiliates), and over recordkeeping and reporting requirements.
• Broadcasters who stream their over-the-air signal over the Internet have not been involved in any of the tweaks to the CRB decision, nor has SoundExchange responded to the NAB's settlement offer made in June (according to the clock on the NAB homepage, the NAB settlement offer has been outstanding without response for 84 days at the time this post is being written). 

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The FCC's Regulatory Fee Filer web site is now available for licensees to prepare and submit their annual regulatory fees in advance of the September 19th deadline.  The website can be accessed here, and allows licensees to submit their fees electronically without the need to fill out a paper Form 159 and mail the fees to the FCC's bank.  Alternatively, if licensees prefer to file in paper with a check, the fee filer web site will allow you to complete and print an FCC Form 159 Remittance Advice to accompany your payment.  A copy of the Commission's Public Notice with the full details is available here.

In addition, the Commission has now released its Media Services Regulatory Fee Fact Sheet with all the pertinent details for broadcast stations.  A copy of the six page Fact Sheet is available here, and provides specifics on fee amounts, payment codes, and how to submit the fees.  Stations are encouraged to start early and make sure their regulatory fees are paid on time to avoid the possibility of a 25% late fee. 

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Yesterday, SoundExchange sent to many small webcasters an agreement that would allow many to continue to operate under the terms of the Small Webcaster Settlement Act as crafted back in 2002, with modifications that would limit the size of the audience that would be covered by the percentage of revenue royalties that a small webcaster would pay. A press release from SoundExchange about the offer can be found on their website by clicking on the "News" tab.  This is a unilateral offer by SoundExchange, and does not reflect an agreement with the Small Commercial Webcasters (the “SCWs”) who participated in the Copyright Royalty Board proceeding to set the rates for 2006-2010 and who are currently appealing the CRB decision to the US Court of Appeals (see our notes on the appeal, here). The SoundExchange offer, while it may suffice for some small operators who do not expect their businesses to grow beyond the limits set out in the SWSA (and who only play music from SoundExchange artists - see the limitations described below), still does not address many of the major issues that the SCWs raised when SoundExchange first made a similar proposal in May, and should not be viewed by Congress or the public as a resolution of the controversy over the webcasting royalties set out by the CRB decision (see our summary of the CRB decision here).

The proposal of SoundExchange simply turns their offer made in May, summarized here, into a formal proposal.  It does not address the criticisms leveled against the offer when first made in May, that the monetary limits on a small webcaster do not permit small webcasters to grow their businesses – artificially condemning them to be forever small, at best minimally profitable operations, in essence little more than hobbies. The provisions of the Small Webcasters Settlement Act were appropriate in 2002 when they were adopted to cover streaming for the period from 1998 through 2005, as the small webcasters were just beginning to grow their businesses in a period when streaming technologies were still new to the public and when these companies were still exploring ways to make money from their operations. Now that the public has begun to use streaming technologies on a regular basis, these companies are looking to grow their businesses into real businesses that can be competitive in the vastly expanding media marketplace. The rates and terms proposed by SoundExchange simply do not permit that to occur. 

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The Commission's Public Notice proposing to limit the number of applications that a single party can file in the October Noncommercial ("NCE") FM filing window to ten applications has been published in the Federal Register.  The deadline for submitting Comments is September 6th, and the deadline for submitting Reply Comments is September 17th.  A copy of the Commission's Public Notice can be found here. By proposing to limit the number of applications that a single entity may file in the window, the FCC seeks to avoid parties filing a large number of speculative filings, which create the potential for extraordinary procedural delays.  All comments must be submitted in MM Docket No. 95-31, and can be filed either in paper or electronically through the FCC's Electronic Comment Filing System.

Further information regarding the October NCE FM filing window can be found in our earlier posts on the topic here. 

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On Friday, in a number of publications, a story was carried questioning the claims made by the NAB that the broadcast performance royalty being sought by the music industry could amount to 10-35% of the revenue of the radio industry.  A post on the Wired Listening Post blog seemed to have started the story.  This is the royalty which would be paid to the copyright holders in the sound recording - and would be in addition to the royalties paid to ASCAP, BMI and SESAC for the composers of music (see our post on the topic, here and here) .  Wired quoted a spokesman for the Music First Coalition (the music industry coalition seeking the performance royalty) claiming that the NAB's claims are overstated - and that any broadcast royalty to be paid to sound recording copyright holders would be similar to those paid in Europe for the use of sound recordings, and similar to the amounts currently paid to ASCAP, BMI and SESAC for the use of the musical compositions, in the range of 3-5% of revenues. Only the Radio and Internet Newsletter seemed to question this statement.  From looking at the history of SoundExchange's claims made in other royalty proceedings, the questions raised by RAIN seem entirely justified.  SoundExchange has consistently argued in connection with all of the other on-going royalty proceedings that the sound recording royalty is far more valuable than the composition royalty - asking for a royalty over 6 times the amount of the composition royalty - 30% of gross revenues.  How can Music First now contend that the royalty will be only a few percent of revenue, when their representaives have consistently requested royalties many multiples of that amount?

At the House Judiciary Committee hearing on the broadcast performance royalty (see our post, here), when committee members asked how much the royalty would be, Marybeth Peters, the Register of Copyrights, suggested that it could a simple matter of applying the "willing buyer, willing seller" criteria of Section 114 of the Copyright Act to broadcasting.  That standard is exactly the same one that led to the current Internet radio royalties which have been so controversial (see our coverage here).  In that proceeding, SoundExchange had asked for royalties of the greater of the per performance royalty that the Copyright Royalty Board imposed or 30% of gross revenue.  While the Copyright Royalty Board did not adopt a percentage of revenue royalty because they feared that it was too difficult to compute for services that had multiple revenue streams, most observers have estimated that the pe performance royalty exceeds 100% of revenue of the small commercial webcasters, and are close to 100% of revenue even for the Internet radio services provided by the major Internet content companies.  In making their offer of a "special deal" to Small Commercial Webcasters on May 23, with royalties between 10 and 12% of gross revenue, SoundExchange specifically stated that it thought that the 10-12% rate was "a below-market rate to subsidize small webcasters ... to help small operators get a stronger foothold" in developing their businesses.  While 10% is suggested to be a "below market" rate in an immature industry still struggling to find a business model, the Music First Coalition now suggests that a royalty less than half that amount is what they would request for broadcast radio.

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In its Public Notice setting out the rules governing the upcoming filing window for applicants seeking new noncommercial FM stations or major changes in existing stations, which we wrote about here, the FCC has put applicants on notice of the many requirements that must be met in order to have an application considered in the upcoming process.  This is the first opportunity in this century for the filing of applications for new noncommercial FM stations. In order to participate, all applicants must make sure that they follow the rules set out by the Commission.  Applications will be due in a filing window that will open on October 12 and close on October 19.

Fundamentally, the FCC's Public Notice reminds interested parties that, to be eligible, an applicant must be a noncommercial entity – a nonprofit corporation or a governmental organization.  Individual applicants or profit-making entities cannot participate.  As eligibility to participate and the comparative qualifications of all applicants are assessed at the time of filing, applicants need to assure their nonprofit status is in order before the upcoming filing window.

The Commission also sets out a number of other requirement for the applications that may be filed during the window. Applications submitted during the window will be filed electronically on FCC Form 340, and must contain very specific technical descriptions of the service they plan. The proposal must specify facilities that don’t interfere with other existing stations or pending “cut-off” noncommercial applications. The applicant must have received reasonable assurance of the availability of its proposed transmitter site (i.e. a legally binding contract is not necessary, but a commitment from the site owner that the site will be available and an idea of the terms on which that availability is premised must be obtained). 

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In July, the FCC released a Notice of Proposed Rulemaking suggesting specific requirements for publicizing the digital television transition and the February 2009 deadline for broadcast stations to convert from analog to digital operations.  We wrote about some of the Commission's specific proposals, including the possibility of mandating public service announcements on television stations, here.  The FCC today released a Public Notice setting the dates for the filing of comments on those proposals.  Comments are due on September 17, and reply comments are to be filed on October 1.  Broadcasters, cable companies, consumer electronics retailers and others who are potentially affected by the Commission's proposals should consider filing comments by the deadlines that have just been announced. 

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The FCC late today released its long-awaited Notice of Proposed Rulemaking proposing to allow FM translators to rebroadcast the signal of AM stations - and potentially to originate programming during those nighttime hours when a daytime-only AM station is not permitted to operate.  The proposal is to permit AM stations to operate FM translators in an area that is the lesser of a circle 25 miles from their transmitter site or within their 2 mv/m daytime service contour.  In proposing the changes in its rules, the Commission raised a number of questions on which it seeks public comment.   These include the following:

• Is allowing the rebroadcast of AM stations on FM translators in the public interest?  What would its impact be on other stations including AM and FM stations, as well as LPFM stations?
• How many translators should each AM station be permitted?
• Should daytime-only AM stations be allowed to originate programming on an FM translator during hours when they have no programming to rebroadcast?
• Should the FCC permit AM stations to begin operating translators all at once - or should the use of these translators be phased in - perhaps permitting daytimers or stations with minimal nighttime power to operate translators first for some transitional period.
• Should there be a restriction on an AM station's use of an FM translator if the AM is co-owned with an FM station in the same market?
• Can an AM station "broker" time on a translator to provide the type of service proposed in this proceeding?

In addition to these operational issues, the FCC poses a few technical issues about these operations.  These include:

• Should any extension beyond the 2 mv/m contour be permitted?  If so, how much and in what circumstances?
• How should the 2 mv/m contour be calculated - using standard FCC predictions, or allowing the measurement of the actual reach of that signal?
• Should the 25 mile zone be extended to 35 miles in Zone II (essentially the less populated areas of the country)?

Comments on the Notice will be due 60 days after publication in the Federal Register, with replies due 30 days later.

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At long last, the Commission's Second Report and Order and Further Notice of Proposed Rule Making regarding Digital Audio Radio or HD Radio, which was adopted by the Commission on March 22, 2007, has been published in the Federal Register establishing the effective date for the new digital rules as September 14th.  As we reported earlier, the Order is aimed at promoting the ultimate transition of terrestrial radio broadcasting to all-digital and, among other things, permits the following:

• FM stations may commence digital operations without prior authority from the FCC and may use separate antennas for the digital and analog signals without the need for an STA.
  
• Stations may operate in extended digital hybrid mode, permitting additional capacity.
  
• AM stations may operate during nighttime hours.
  
• FM translators, boosters, and LPFM stations may operate digitally.

These new operational rules will become effective on September 14, and along with them the following rules regarding policy issues will also go into effect:

• Stations that chose to broadcast in digital must provide a free digital stream that simulcasts the programming of the analog channel.
  
• Stations have the flexibility to provide multiple programming streams, provide data services, or provide the highest quality audio service.
  
• Stations may lease the unused portion of their radio spectrum to third parties.
  
• The existing rules, such as EAS, political, sponsorship ID, and station identification, are extended to all the free streams of programming provided by a station.

Finally, publication of the Order and FNPRM in the Federal Register also establishes the dates for filing comments in response to the Commission's broad array of proposals posited by the Further Notice of Proposed Rule Making.  The FNPRM contains specific proposals to adopt new rules regulating the public interest obligations of radio broadcasters. These proposals include the possible requirements for a standardized disclosure form for a stations public service programs, limits on a station's ability to originate programming from locations other than the station's main studio, and possible limitations on the current ability of stations to operate without manned studios. Comments for this proceeding are due on or before October 15, 2007, and Reply Comments are due on or before November 13, 2007. 

A full summary of the new rules, as well as the proposals contained in the further rule making can be found in our earlier blog here. 

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The FCC announced today that the Office of Engineering and Technology will be hosting a meeting to describe and discuss the findings announced recently regarding the testing of prototype equipment proposed for use in the so-called TV "white spaces".  As we reported yesterday, the FCC's Office of Engineering and Technology recently issued two reports finding that the prototypes of these TV white spaces devices that had been made available for testing appeared to interfere with television signals.  The FCC has asked for comment on its reports, with initial comments are due by August 15, and reply comments due by August 30.  

Given the significance (and contentious nature) of the issue, the Commission has now announced that it will hold a meeting to answer questions, provide an overview of the tests it conducted, and consider suggestions for further testing to evaluate the performance of TV white space devices.  The FCC's meeting will be held on Thursday August 16, 2007 at 1 PM at the Commission’s testing lab in Columbia, Maryland.  Parties interested in attending the meeting should send an e-mail to Patricia.Goff@FCC.gov, identifying the organization and how many individuals plan to attend.  According to the FCC, space is limited.   A copy of the FCC's public notice with the full details is available here. 

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The Commission yesterday released two further Public Notices regarding the upcoming window for new noncommercial (NCE) FM radio stations.  As was previously announced, a filing window will be open from October 12 until October 19 during which time interested parties may submit applications for new NCE stations or for major changes to existing NCE stations.  This window is significant, because it marks the first time in seven years that parties have been able to file for a new NCE FM station.

The first of the public notices released yesterday, which is available here, contains further details about how to submit an application in the window.  Parties interested in learning more about filing an NCE FM application will find useful, step-by-step information about the application and licensing process here.  In addition, the notice announces a filing freeze prior to the opening of the window.  Beginning September 8, 2007 and continuing through the close of the window on October 19, there will be  freeze on the filing of minor change applications for all reserved band channels, and, due to their potential impact on the window filings, on Channel 221, 222, and 223 non-reserved band minor change applications and amendments.  This freeze will stabilize the database and allow applicants filing in the window to know what they need to protect. 

The second public notice released yesterday proposes to restrict the number of applications that a single party can file in the NCE window to ten, and seeks input from interest parties regarding that proposal.  A copy of the notice can be found here, and the deadline for comments is 15 days after the Notice has been published in the Federal Register, with reply comments due ten days after that.  By proposing to limit the number of applications that a single entity may file in  the window, the FCC seeks to avoid parties filing a large number of speculative filings, which create the potential for extraordinary procedural delays.  All filings must be submitted in MM Docket No. 95-31, and can be filed either in paper or electronically through the FCC's Electronic Comment Filing System. 

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Two weeks ago, we wrote about the FCC’s proposal for the auction of the 700 MHz band – the portions of the spectrum that will be reclaimed from television operators after the digital transition.  These channels will be used to provide some form of wireless broadband service. The Commission made its decision on the use of this spectrum last week, reserving at least some of the spectrum for “open access” uses – where the provider will not be able to restrict the devices that can access the network, nor limit or block services that run on the network, as long as the devices and services do not cause damage to the network.  In theory, this will encourage the creation of numerous new devices and services to capitalize on the open wireless network being provided.  While the Commission has not released the full test of this decision yet, a memo from our firm, describing some of the decisions announced at the FCC open meeting and in the subsequent public notice, can be found here.

Whether the provisions that the Commission adopted will be sufficient to entice some of the Internet “content” companies, like Google, to bid, remains to be seen. But this “beachfront spectrum” will no doubt introduce some exciting new uses as it begins to come into operation in the next few years - providing more people more wireless access to mobile content - and more competition to those traditional wireless industries that many consumers have forgotten are both wireless and mobile - those provided by traditional broadcasters. 

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As the digital television transition continues, broadcasters have been concerned about the proposals made by a number of the major computer companies seeking the right to operate low power wireless devices in the spectrum used by television stations – in the so-called "white spaces" between channels. Because of the potential for interference, television obviously don’t operate on every channel in every city. The proposal by the tech companies, about which we wrote here, would allow unlicensed wireless devices to operate at low power within this spectrum, provided that such devices were “smart” enough to detect television signals and to avoid the use of channels that would interfere with these signals. Last week, the FCC’s Office of Engineering and Technology issued a report finding that the prototypes of these devices that had been made available for testing appeared to interfere with television signals. The report did note, however, that this testing should not be viewed as the end of the story on this issue, as further refinements to the devices might be able to eliminate the interference. The FCC has asked for comment on this report. Public comments are due on August 15, with replies on August 30.

The white spaces debate has been a very contentious one. The tech companies who favor it have argued that the efficient use of the television spectrum, and the congestion in other portions of the spectrum used by unlicensed devices, mandate attempts to allow these devices to operate in the television band on the condition that they do not interfere with TV uses. These companies contend that they should be able to create devices that can sense television stations and avoid interference to these stations.

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Last week, the US Court of Appeals in the Ninth Circuit released a decision, finding that the operator of a web site had not given its customers adequate notice of the change in the terms of use of its website. The site had posted the changes on its website, but had not provided specific notice of the changes (though emails, letters or even click through notices) to adequately assure that the user was aware of the changes or had consented to those changes. A post on our firm”s Privacy and Security Blog explains the meaning of this decision to web site operators, and suggests ways in which the operators of web sites can avoid the issues raised by the court decision. For broadcasters or other companies hosting websites, who may from time to time change the terms of use of the site, it worth reading the explanation of the decision as posted on our Privacy and Security blog.

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Despite rules that generally prohibit the assignment or transfer of a low power FM (LPFM) authorization, the FCC today granted a waiver of its rules and allowed Shenandoah County (Virginia) Public Schools (SCPS) to assign an unbuilt LPFM construction permit to Christian Leadership Ministries (CLM).  This action comes on the heels of a Congressional push to authorize more LPFM stations and may signal a loosening of restrictions pertaining to LPFM stations generally.  In today's decision, the FCC stated that the assignment would "advance the goal of maximizing spectrum use for the LPFM service," since CLM committed to complete construction and commence on-air operation.  Furthermore, the $1000 consideration paid by CLM was less than the costs incurred by SCPS for the engineering consultant who prepared its initial application, so the parties could certify that SCPS would not profit from this transaction.  Based on these factors, and the fact that the buyer was otherwise to qualified to hold an LPFM license under applicable FCC rules as it was a nonprofit and local entity, the FCC granted the waiver and approved the transaction.

The Commission mentioned in a footnote that "[n]o LPFM filing window is currently scheduled to take place."   One can only wonder whether allowing assignments of unbuilt LPFM permits may be a backdoor means of placating those who are clamoring for more LPFM stations until such time as the FCC opens another window.

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Late Monday, the FCC released the Seventh Report and Order and Eighth Further Notice of Proposed Rule Making in the DTV proceeding.  This Order adopts the final DTV Table of Allotments and establishes the post-transition channels for all full-power television stations in the country.  This Table of Allotments is the culmination of a several-year process by television stations to elect the channel they wish to keep for future operations, and the channel they wish to return to the FCC following the switch to DTV on February 17, 2009.   The FCC confirmed that this is a hard, statutory and nonwaivable deadline, and that all analog full power stations will have to cease broadcasting on that date.   The deadline does not apply to low power stations and translators, however, which may continue analog broadcasting beyond that date.  The FCC said it would deal with the low power TV transition to DTV at a later date.

A copy of the Order (including the new Table) is available here.  Licensees are encouraged to double-check the information listed for their stations, as this Final DTV Table will become gospel for digital television stations going forward.

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As the summer hurtles to a close, the FCC has adopted its FY2007 Annual Regulatory Fees, and appears to have set September 19^th as the deadline for submitting the annual fees.  (I say “appears to have set” because as of this writing, the FCC has yet to formally announce the deadline for the regulatory fees, but a banner at the top of www.fcc.gov announces that fees are due by September 19, 2007.)  Payment may be made by check or credit card, and can be submitted either in paper or electronically.  Payments not made by 11:59 PM on September 19^th will face the addition of a 25% late fee. 

The Commission has a helpful web page, which includes instructions for submitting the regulatory fees and a “look-up” database to allow stations to confirm the amount owed for their stations.  The site also contains a Frequently Asked Questions section, and links to the database where you can submit the fees electronically.  In addition, for those needing more detail, the Commission’s full Order detailing the fees for all types of licensees is available here.  In addition, the FCC will also release shortly a guide specifically for radio and television broadcast stations with codes, fee amounts, and instructions.  Once that is available from the FCC, we’ll add a link here.      

Licensees are encouraged to submit their fees on time and make sure the payments are accurate.  And be sure to keep a copy of all correspondence or electronic confirmations.  Historically, the FCC’s recordkeeping on regulatory fees has not been the best, and the process seems to be conducted by a third-party contractor, further complicating issues. In addition, failure to timely submit the proper regulatory fee can block the processing of future applications. Accordingly, it is better in the long-run to take some extra time to make sure these fees are paid properly, then to try and deal with the headache later. 

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The FCC last week approved two television "Shared Services Agreements," here and here, each between the proposed Buyer of a television station and a company that owns another television station in the same market.  In each case, the existing owner would sell advertising time for the station being purchased, as well as provide a loan guaranty for the funds necessary for the purchase of the station.  And the station already in the market would receive from the purchaser of the new station an option to purchase the station in the future, if that purchase is permitted under some future set of multiple ownership rules.  It is interesting that these decisions were released in the same week as the FCC issued two requests for public comment on the multiple ownership rules (see our post here).

These decisions probably mark the outside limit of what two stations can do in a television market where they cannot be co-owned without triggering multiple ownership concerns.  In the radio world, such agreements would not be possible to the same extent.  A radio licensee who provides sales services for another station in the same market, where more than 15% of the advertising time on the station is sold pursuant to such an agreement, would result in an "attributable interest," meaning that such services could only be provided to a station that could be owned under the multiple ownership rules. 

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In a Further Notice of Proposed Rulemaking, the FCC last week asked for public comment on a series of initiatives to promote the ownership of broadcast stations by minorities and other Socially Disadvantaged Businesses ("SDBs").  These proposals, which include the potential for the sale without requiring any divestitures of clusters of radio stations which exceed the multiple ownership rules now in effect, and the potential for investors to invest in stations controlled by SDBs, even if such investment would otherwise violate the existing multiple ownership rules.  The Further Notice was issued in response to a petition filed over a year ago by the Minority Media Telecommunications Council, which asked for a withdrawal of the FCC's Notice of Proposed Rulemaking on the Multiple Ownership Rules (which we summarized here) because that Notice did not address the promotion of minority ownership of broadcast stations.  MMTC claimed that the Third Circuit's remand of the 2003 Multiple Ownership decision mandated that consideration.  Comments on the Further Notice, which will be resolved as part of the current multiple ownership proceeding, are due on October 1, and replies on October 15. 

The Notice raises a number of suggestions for regulatory changes to foster the ownership of broadcast stations by minority owners and other SDBs.  In addition to allowing the transfer of grandfathered radio clusters that no longer comply with the multiple ownership rules, these include specific proposals that would accomplish the following:

• Allowing investment by exiting broadcasters and others with attributable media interests into companies controlled by minorities without the investment being counted against the ownership holdings of the investing company
• Allowing minority groups to purchase unbuilt construction permits, and get sufficient time to construct those stations, even if the construction permit is otherwise to expire as it has been outstanding and unbuilt for over three years
• Granting some non-minority owned companies waivers to exceed the multiple ownership limits if they sell stations to SDBs (including a proposal to create tradable credits for creating minority-owned stations)
• Allowing for the waiver of the alien ownership limits if the investment by foreign companies would assist a minority-owned company in getting into the broadcast business.
• Revival of the policies permitting minority distress sales (where a broadcaster against whom there were issues pending which could lead to a revocation of a license could sell their station to a minority group and avoid the revocation proceeding) and minority tax credits  (where a broadcaster who sells to a minority group could defer gains on sale if the money was reinvested into any broadcast company in the future)

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