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

So just what legal, regulatory and legislative issues are currently facing broadcasters in Washington?  On Tuesday, I did a panel at the Connecticut Broadcasters Association's Annual Convention in Hartford with Kelly Cole, the Senior Vice President for Government Relations at the NAB.  In putting together our presentation, one of the most striking things to me was the number of different issues facing broadcasters with which the NAB is dealing.  57 different issues are set forth on the slides from the presentation (available here).  They range from Congressional matters such as spectrum auction authority (about which we recently wrote here), retransmission consent reform, and the performance royalty; to FCC regulatory issues including ownership reform, rural radio issues and the FM translator/LPFM debate; to issues pending in many other venues - including international intellectual property reforms and issues at the FTC and Copyright Office.  Even this list is incomplete, as there are other slides that we discussed during our presentation, including issues such as the upcoming consideration at the FCC meeting next week of an online public inspection file requirement for broadcasters (see our recent article here), video captioning of internet programming repurposed by broadcasters from materials already shown over-the-air (see our article here) to more mundane but nevertheless very important issues like the December 1 deadline for Biennial Ownership Reports for commercial broadcasters (see our article here). Also, as set out in the slides, there are all sorts of new deadlines coming up for broadcasters in addition to the Biennial Ownership Report, including the National EAS Test, the implementation of the CALM Act and the requirements for captioning video repurposed to the web, political broadcasting lowest unit rate windows  that may be open or opening in many states, as well as license renewal deadlines for many broadcasters.

Plenty to be concerned about, and plenty to follow and, where appropriate, to let your voice be heard on the many topics of importance. 

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The FCC Form 323 is now available for filing by all commercial broadcasters.  The Form must be submitted by December 1 of this year.  In 2009, the FCC adopted the requirement for a biennial ownership report for all commercial stations, to be filed by November 1 every other year, with information accurate as of October 1.  In 2009, the new electronic form had issues, so filing deadlines were delayed until June.  This year, the FCC recently announced that the deadline would be extended until December 1, to give broadcasters more time to complete the  reports - especially the cumbersome filings required for companies that own multiple stations.  Nevertheless, the information on the reports is still supposed to be current as of October 1.  The form is now available online, and commercial broadcast licensees can file the report at any time.

The FCC Public Notice links to a series of frequently asked questions about the report.  These questions remind broadcasters that the report is to be filed by all commercial licensees (not permittees of unbuilt stations) of AM, FM, TV, LPTV and Class A TV stations.  Translators (radio and TV) are not included in the requirement.  Noncommercial stations (including LPFM stations) need not file the report on the new form or at the same time as commercial licensees.  Noncommercial licensees continue to file every other year on the anniversary date of the due date for their last license renewal (note that this means that some noncommercial stations in states with December renewals will need to file by December 1, not because they are covered by the commercial requirements discussed above, but because their filing deadline just happens to fall on that date).  Noncommercial licensees also do not use the new electronic Form 323 used by commercial licensees, but instead use Form 323E.  (See our most recent advisory to noncommercial broadcasters on their ownership obligations, here).  Whether commercial or noncommercial, remember to file your ownership reports by the required deadlines!

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In 2009, the FCC adopted a uniform deadline for all commercial broadcast licensees to file an FCC Form 323 Biennial Ownership Report.  The due date for that report was supposed to be November 1 of that year, but was postponed until July of 2010 when problems popped up with the new forms.  The next Biennial Ownership reporting date was scheduled to be November 1 of this year (two years after the originally scheduled date for the first report to use the new form) - but the FCC today issued a Public Notice postponing the filing deadline for one month, to December 1.  This delay was justified so as to give broadcasters, especially those with many media interests held in different companies, more time to complete what can be a cumbersome process of filling out all of the reports and exhibits that need to be submitted.  Reports need to be filed by December 1, but all information still needs to be reported as of October 1 of this year - a standard reporting date that will remain constant each year to give the FCC a snapshot of the composition of ownership in the broadcast world.

The revised ownership report filing processwas adopted so that the FCC could get an accurate report on the ownership of broadcast properties by minorities and women, a goal that has taken on added significance in light of the Third Circuit Court of Appeal's recent decision in Prometheus Radio Project v FCC, rejecting the FCC's efforts to diversify ownership in the media through the use of a system giving preferences to qualified entities, i.e. small businesses.  As we wrote last month, the Court found that the FCC's goal was to promote minority and female ownership, which was not fostered by its concentration on small businesses.  One of the issues on which the Court faulted the FCC was the lack of information about the current broadcast ownership interests of minorities and women, so that the FCC could do a "Adarand study" as to whether there are effects of past discrimination reflected in the current ownership of broadcast stations that need to be remedied by affirmative action efforts based on race or gender.  These new ownership reports are designed to help to provide that information.

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The long-delayed revised Biennial ownership reports (about which we last wrote here) for commercial broadcast stations, on the new Form 323, are due on July 8, and the FCC is in the process of clarifying what it needs.  The Commission just released a Public Notice reminding broadcasters that the report is supposed to be detailing station ownership as of November 1, 2009 (when the reports were originally supposed to be filed).  Yet, in the 8 months since that date, many stations have changed ownership.  Is a new owner supposed to get the old owner to complete the form?  What if the old owner is off somewhere on a cruise, or simply wants nothing more to do with the station?  The FCC's Public Notice clarifies (to some extent) what to do in that case - indicating that stations in that situation can file a waiver request, detailing why they can't provide the ownership information for the owners who held the station license on November 1, 2009, and asking that the FCC waive its rules and excuse the filing of a report for this particular station.  This obligation to file the waiver request is on the current owner.  Note that the FCC does not say that it will grant all such waiver requests, and it specifically excludes from these waiver situations "pro forma" assignments or transfers, i.e. ones where the actual control has not changed but the legal entity holding that control has changed such as in a corporate reorganization where a station license is moved from a parent company to a subsidiary, or from a corporation to an LLC which is controlled by the same individual. 

Another looming issue may also create issues for the July 8 filings.  A group of state broadcast associations and broadcast owners has asked the US Court of Appeals to once again put the filing obligation on hold until the FCC justifies the information that is being collected.  Last week, the Court asked the Commission to justify its requirement that each person with an attributable interest in a station (i.e. anyone who would have to be reported on the Form 323) obtain an FRN (a unique identifier) which can only be obtained by furnishing  a Social Security Number.  While this may indicate that the Court is concerned about forcing every investor and officer and director of a broadcast company to provide this information, even if the Court forbids the collection of that information, it is possible that the FCC would move forward anyway with the Form 323 filing obligation - just removing the FRN from the required filing.  So don't count on the July 8 deadline being pushed back - start preparing now to be on file by the deadline.

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In two consent decrees released last week, the FCC's Enforcement Bureau agreed to significant "voluntary contributions" to the US Treasury to settle noncompliance issues reported in license renewal applications filed by noncommercial radio stations.  Both stations had voluntarily reported public inspection file issues in their license renewals.  One admitted to having no issues programs lists in its public file and having filed no biennial ownership reports for the license renewal period.  The other admitted that it was missing several years worth of quarterly issues programs lists.  In the first case, the FCC agreed to a $10,000 contribution in lieu of a fine (see the agreement here), in the other case a $1700 contribution (which was less than might normally be the case, as it was reduced by a financial hardship showing - see the order here and the agreement with the FCC here).  These cases demonstrate the significance that the FCC places on public file issues - the biggest source of fines in the last license renewal cycle.  With a new license renewal cycle beginning in June 2011, now is the time for all broadcasters - commercial and noncommercial - to make sure that they are ready for the beginning of this cycle by clearing up any outstanding regulatory issues.

The fines also once again demonstrate that the Commission no longer treats noncommercial broadcasters differently than commercial broadcasters - fining noncommercial stations for violations just as it does their commercial brethren (see a previous post on this subject, here).  In these cases, the use of Consent Decrees also demonstrate the problems that issues arising at renewal time can cause.  If a station's license renewal reports a problem, such as an incomplete public file, the application is pulled out of the routine processing pile for further scrutiny.  Such scrutiny can often take a year, and sometimes several years, to resolve.  While the renewal application is in this state of limbo, a sale of the station will not be approved, and sometimes other regulatory actions can be held up (in fact, in one of these cases, a transfer of control of the licensee company was delayed while this issue was being resolved).  Thus, to avoid these lengthy delays, stations often decide to pursue the consent decree route to try to resolve the issue more quickly than would be the case if the application were just left with the FCC to run its course.

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As we expected, the FCC has set the date for the filing of the newly revised Ownership Reports on the revised FCC Form 323.  All commercial broadcast stations nationwide will need to file by December 15, according to the Public Notice released today.  According to the Public Notice, the Form will be available in the FCC's CDBS electronic filing system by approximately November 16, and licensees can start to file as soon as the form is available.  The new report replaces the biennial ownership reports that had been filed every two years on the anniversary date of the filing of a station's license renewal.  Now, there will be a single nationwide filing deadline of November 1 every other year.  The revised form is intended to give the Commission greater information about broadcast station owners, so that the Commission can better evaluate the status of diversity in broadcast ownership (see our post here for more information).

The FCC promises a Frequently Asked Questions website on the new form, to be available in the near future.  Watch for it, and be prepared to file by December 15. 

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Affected Stations:  

• Radio Stations in Michigan and Ohio
• Television Stations in Arizona, Idaho, Maryland, Nevada, New Mexico, Utah, Virginia, West Virginia and Wyoming, as well as the District of Columbia

Just a reminder that by June 1, 2008, radio stations in Michigan and Ohio, and television stations in Arizona, Idaho, Maryland, Nevada, New Mexico, Utah, Virginia, West Virginia and Wyoming, as well as the District of Columbia, must prepare and file electronically an FCC Form 323 Biennial Ownership Report with the Federal Communications Commission (FCC).  Similarly, noncommercial stations in these states must file a Biennial Ownership Report on FCC Form 323-E by that date.

Ownership Reports are to be filed every other year, reporting on changes in the licensee's ownership and updating the information requested by the form. Ownership information must be provided for all attributable owners of the licensee.  The timing for the filing of the Biennial Ownership Report and the preparation of the Annual EEO Public File Report is based on the anniversary of the filing of the station's license renewal.  In turn, the renewal cycles are organized by state and type of service, and are staggered based on the FCC's prearranged schedule. Periodically, we will remind groups of stations as to their upcoming deadlines, and stations should be vigilant to make these required filings.  A copy of our complete reminder memo containing additional information on this filing deadline can be found here. 

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