Here are some of the regulatory developments of significance to broadcasters from the past week, with links to where you can go to find more information as to how these actions may affect your operations.
- The FCC continues to consider its Second Notice of Proposed Rulemaking seeking comment on proposals to enhance the FCC’s requirements that each broadcaster verify that any program time sold to third parties (or any pre-produced programming received for free) does not come from a “foreign government entity,” i.e., a foreign government or one of its agents (see our articles here and here). Among other things, the FCC’s Second Notice proposes the adoption of a detailed form that any buyer of program time on a station would need to sign so that the licensee can certify whether the buyer is or is not a “foreign governmental entity.” NAB, in tandem with several broadcasters, recently submitted an ex parte filing highlighting the burden imposed by the detailed form which could intimidate buyers of broadcast time, especially local buyers like churches and community groups who may want to buy blocks of time. The NAB stated that “[t]he burden of the rules falls almost entirely on broadcasters that have never aired – and will never air – foreign propaganda.” NAB thus urges the FCC to lighten this burden by clarifying that the foreign sponsorship identification diligence requirements do not apply to advertisements for commercial products and/or services of any length or format or to leases involving religious programming or locally produced and distributed programming. Also, citing the FCC’s less regulatory approach for ensuring nondiscrimination in advertising sales agreements, NAB et al. ask the FCC to “seriously consider ways to streamline substantially its regulatory approach to foreign sponsorship identification.”
- In connection with the continuing battle by Standard General to acquire TEGNA’s television stations (find previous updates on this proceeding on our Broadcast Law Blog noted here), including the FCC’s designation of the associated assignment/transfer applications for hearing before an Administrative Law Judge (ALJ), we previously reported that Senator Ted Cruz and Rep. Cathy McMorris Rodgers sent a joint letter to FCC Chairwoman Rosenworcel asking the FCC to provide detailed information about, among other things, the circumstances surrounding and the FCC’s rationale for designating the matter for hearing. In her recent response, Chairwoman Rosenworcel stated that the FCC’s ability to share the requested information was limited because the matter was subject to pending litigation, and because the proposed transaction remains active at the FCC. The Chairwoman also stated that “many of the questions contained in your letter are addressed in either the Hearing Designation Order issued in this case or the Commission’s Opposition to Petition for Writ of Mandamus filed recently with the Court of Appeals for the D.C. Circuit,” both of which are publicly available documents.
- The FCC’s Media Bureau and Office of Managing Director jointly issued an Order to Pay or Show Cause initiating a proceeding to revoke an AM station’s license due to the licensee’s failure to pay delinquent FCC regulatory fees and associated interest, administrative costs, and penalties. Specifically, the licensee had unpaid regulatory fee debts for fiscal years 2014, 2016, 2017, 2018, 2020, 2021 and 2022. Consistent with the FCC’s prior practice, the Order gives the licensee 60 days to either submit documented evidence that all debts have been paid in full or show cause why the payment is inapplicable or should be waived or deferred. The Order further notifies the licensee that failure to provide such evidence of payment or to show cause within the time specified may result in revocation of its license.
- The FCC issued a Public Notice requesting comment on an FM licensee’s request for an FCC ruling that would allow it to transfer control of its FM station in Cape Vincent, New York, near the Canadian border and the Ontario city of Kingston, where the new foreign ownership would be in excess of the 25% foreign ownership benchmarks set forth in Section 310(b)(4) of the Communications Act. The requested ruling would (1) permit up to 100% aggregate foreign investment (voting and equity) in the licensee, and (2) specifically approve certain foreign investors to hold more than 5% equity and/or voting interest in the licensee. The ruling was necessitated by a proposed transfer of 100% control of the licensee to a Delaware corporation whose sole shareholder is a Canadian corporation, which is in turn is owned by two Canadian citizens and their respective family trusts. In total, the transaction requires the FCC to specifically approve six Canadian entities, individuals or trusts that would hold indirect ownership interests in the licensee. Comments are due June 5, and reply comments are due June 20. On our Blog, we’ve noted other cases where the FCC has approved 100% foreign ownership of US broadcast stations (see, for instance, our articles here and here).