At its meeting today, the FCC decided to revamp its Ownership Report filing process – requiring all stations to file Biennial Ownership Reports on FCC Form 323 on November 1 of this year - even stations that have just filed those reports in the normal course in the last few months. All stations will have to file every two years thereafter – on November 1 of every other year. Reports will also be required from Low Power TV stations and Class A TV stations, which have not in the past had to file reports. Reports will also be required from stations that are owned by an individual, and by general partnerships in which all of the partners are individuals (or, in the FCC’s legalese, "natural persons"). In the past, such stations did not have to file reports as any change in ownership would have required, at a minimum, the filing of a Form 316 short-form assignment or transfer application. Finally, the Commission will require the reporting of the interests of currently non-attributable owners who are not attributable simply because there is a single majority shareholder in the licensee.
The FCC is not asking for this information because it wants to track improper transfers, but instead so that it can gather information about the racial and gender make-up of the broadcast ownership universe. This information has been required on ownership reports for the last ten years, but the FCC did not believe that the system was extensive enough to capture all information about the ownership of broadcast properties, as so many stations were not covered by the requirements. Why does the FCC want racial and gender information about the owners of stations? To potentially take more aggressive actions to encourage minority ownership. The FCC has considered such actions in the past, but has not felt that it take actions specifically targeted to minority and female applicants, as there was no record of past discrimination in the broadcast industry. The government can constitutionally only make racial or gender-based decisions if these decisions are to remedy the effects of past discrimination. To justify such acts, the government agency must demonstrate the past discrimination – and these new filing requirements are meant to gather that information through what is called an Adarand study. In the recent past, when it adopted certain diversity initiatives for designated entities (like the ability of a designated entity to buy an expiring construction permit and get an extension, which we recently wrote about here), the Commission had to define a designated entity as a "small business" defined by SBA standards. Chairman Copps today said that this definition did not truly benefit diversity as favoring small businesses "generally benefit white males."
The Commission was also concerned about the completeness and accuracy of the information submitted. To insure that the information is accurate and complete, the FCC will take steps to monitor filings, including random audits of the filings (similar to the process currently used by the FCC for EEO enforcement) . Information that it obtains will also be maintained in a searchable database.
The FCC also asked if it should adopt the same requirements for noncommercial broadcasters - requiring biennial ownership reports on FCC Form 323E reporting on the race and gender of the persons that run these organizations. Racial and gender information is currently not required from noncommercial operators. In addition, the Commission asked if LPFM licensees should also file ownership reports (they currently do not). The Commission asked if these requirements would impose an undue burden on noncommercial broadcasters and how any such burden could be mitigated. Look for the comment dates when the full text of this decision is published by the FCC.