If all goes as scheduled, at the beginning of December, commercial broadcasters will file Biennial Ownership Reports on FCC Form 323. As we wrote when the obligation to file the current version of these reports was first adopted, the FCC’s intent was to be able to track the interests of broadcast investors across all of their attributable ownership interests in various broadcast companies to assess broadcast diversity. To do so, these investors needed to get individual FCC Registration Numbers (FRNs) to track these individuals or entities across their various investments – so that the FCC could tell whether the John Smith who was an investor in a station in Albuquerque was the same John Smith who owned an interest in a station in Zanesville, and whether that person was also the John Q. Smith listed in an ownership report for a station in Missoula (all hypothetical, of course). The FCC assigns these FRNs to individuals based on their Social Security Numbers, and providing those numbers to the FCC created much unease among investors in connection with past filing windows. This caused the FCC to adopt temporary measures for investors unwilling to provide their SSNs to the FCC (see our articles here). In a Notice of Proposed Rulemaking released a week ago, the FCC proposed a new method to gather this information – perhaps hoping that it could go into effect before the new Biennial Report filings but, if not, before the next set of reports due in 2017.
The FCC’s new proposal uses a dazzling assortment of acronyms in discussing how best to keep track of unique broadcast investors across their investments. But the bottom line is that the FCC proposes to create a new Restricted Use FRN (or a “RUFRN”) that could be obtained for an individual submitting to the FCC certain information – including name, residence address, birth date and the last four numbers of their Social Security Numbers. The RUFRN would be used by the individual for reporting purposes in whatever broadcast station they may have an attributable interest. The FCC’s computer systems would be programmed to compare such filings to try to make sure that the individuals obtaining an RUFRN were receiving only a single RUFRN, as there have reportedly been problems with the existing interim system (where investors have received a “Special Use FRN” or “SUFRN” randomly generated by the FCC). The problems arose both because single individuals have been obtaining multiple SUFRNs and single SUFRNs have been used to identify multiple people. While thinking that the proposed RUFRNs would be better than SUFRNs (which required no specific identifying information to obtain), the FCC asks for comments on this proposal.
The questions asked include whether these RUFRNs would really be any better than SUFRNs – would they really provide unique identifiers for the FCC? What problems could arise in this proposed new system? While the FCC recites the security that they will take to prevent any data breaches where outsiders could access this data, you can bet that people will still be concerned about providing even a portion of their Social Security Number, as well as their residence address and birth date.
The Commission also proposes to extend this requirement to noncommercial entities, whenever the FCC finally decides just who needs to be reported on noncommercial ownership reports (see our articles here and here on the issues about noncommercial ownership reporting process). I can certainly see Board members of noncommercial groups being reluctant to provide this sort of information in connection with voluntary positions that they hold in licensees of noncommercial stations.
Comments will be due 30 days after this proposal is published in the Federal Register, and replies will be due 15 days thereafter.