Multiple Ownership Rules

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While many of us were trying to enjoy the holidays, the world of regulation kept right on moving, seemingly never taking time off.  So we thought that we ought to highlight some of the actions taken by the FCC in the last couple weeks and to also remind you of some of the upcoming January regulatory deadlines.

Before Christmas, we highlighted some of the regulatory dates for January – including the Quarterly Issues Programs Lists due to be placed in the online public file of all full-power stations by January 10.  Also on the list of dates in our post on January deadlines are the minimum SoundExchange fees due in January for most radio stations and other webcasters streaming programming on the Internet.  January also brings the deadline for Biennial Ownership Reports (postponed from their normal November 1 filing deadline).

In that summary of January regulatory dates, we had mentioned that the initial filing of the new Annual Children’s Television Programming Report would be due this month.  But, over the holiday week, the FCC extended that filing deadline for that report until March 30 to give broadcasters time to familiarize themselves with the new forms.  The FCC will be doing a webinar on the new form on January 23.  In addition, the FCC announced that many of the other changes in the children’s television rules that were awaiting review under the Paperwork Reduction Act had been approved and are now effective.  See our article here for more details.…
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Late Friday, the FCC issued an Order reinstating the FCC’s 2016 ownership rules, recognizing that the changes made in those rules in 2017 (see our post here) were no longer effective because the Third Circuit Court of Appeals had thrown out the 2017 decision. See our post here on the Third Circuit decision and our article here on the court’s denial of rehearing en banc.  While the FCC may still try to appeal the Third Circuit decision to the Supreme Court, the Third Circuit’s mandate has issued, meaning that its order is effective even if a Supreme Court appeal is filed.

Among the rule changes that have been rendered a nullity are the abolition of the broadcast-newspaper cross-ownership rule (once again reinforcing what we have written several times, that the rule may well outlive the daily newspaper) and the radio-television cross-ownership rule, the local TV ownership rule that had allowed combinations of two TV stations in the same market even if there were not 8 independent voices in the market after the combination, and changes to the FCC’s processing policy with respect to radio embedded markets.  These changes required the FCC to also issue two Public Notices dealing with these changes.…
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In a very short decision issued on Wednesday, the Third Circuit Court of Appeals rejected the FCC’s request for rehearing of the September decision of a panel of three of its judges which overturned the FCC’s 2017 decision changing many of the broadcast ownership rules (including the abolition of the newspaper-broadcast cross-ownership rules).  We…

In September, a three-judge panel of the US Court of Appeals for the Third Circuit released a 2-1 decision overturning the FCC’s 2017 decision modifying many of its ownership rules (see our summary of the Court decision here, and our review of the 2017 decision here).  The Court’s decision not only upset the plans of many media companies for acquisitions based on the changes adopted in the 2017 decision, but also dashed the hope of many radio companies for timely changes in the radio ownership rules that are under consideration by the FCC in its next Quadrennial Review of its ownership rules (see our summary of the issues in the current Quadrennial Review here).  Last week, both the FCC and a number of industry groups who were parties to the Third Circuit case filed Petitions asking that all of the sitting judges on the Third Circuit vote to rehear the decision of the three-judge panel.

The panel’s decision did not find that any of the rule changes adopted by the Commission (including the abolition of the newspaper-broadcast cross-ownership prohibition) were not justified by changes in the media marketplace.  Instead, the panel voided the FCC’s decision because it did not believe that the FCC had enough historical data on minority and female ownership to be able to judge the affects of any ownership changes on diversity of ownership in the media industry.  The FCC Petition for Rehearing centered on an argument that the Commission had plenty of data to support its conclusions – and that Courts have never required government agencies to have perfect information in making any decision.  Instead, agencies are only required to have sufficient factual data to justify their conclusions.  The FCC argued that, where the information that is sought by the panel might simply not exist and where the panel’s insistence on the information has held up the FCC’s attempts to modernize its media ownership rules for a decade and a half as the same judges keep rejecting FCC attempts to justify its ownership decisions, the full Court should step in and conduct a rehearing.  The industry parties emphasized how the decision was overbroad – overturning all aspects of the FCC’s decision – even parts that had not been challenged by the petitioning parties.  The industry participants also pointed to the fact that real hardships were being imposed on media companies as the FCC had not been able make changes in its ownership rules to reflect the changes in the industry that had occurred in what may have been the most dynamic 15 years in the history of the mass media.  With these requests for rehearing on file, what is next?…
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The FCC announced on Friday that it will be hosting a symposium on the state of the broadcast industry on November 21.  On that day, there will be a panel in the morning on the state of the radio industry and one in the afternoon on television.  The Public Notice released Friday lists a diverse group of panelists, but says little beyond the fact that the forum will be occurring.  What could be behind the Commission’s decision to host this session?

The FCC is working on its Quadrennial Review of its ownership rules (see our articles here and here).  There were many who expected that review to be completed either late this year or early next, with relaxation of the radio ownership rules thought to be one of the possible outcomes.  Of course, quick action may have been derailed by the decision of the Third Circuit Court of the Appeals to vacate and remand the Commission’s 2017 ownership order.  The court’s decision unwinds the FCC’s 2017 order which included abolition of the broadcast newspaper cross-ownership rule and the rule that limited one owner from owning two TV stations in the same market unless there were 8 independent television operators in that market – see our article here on the 2017 decision and our article here on the Third Circuit’s decision.  The basis of the Third Circuit decision was that the FCC did not have sufficient information to assess the impact of its rule changes on minority ownership and other potential new entrants into broadcast ownership.  If the FCC did not have enough information to justify the 2017 decisions, many believe any further changes in its rules are on hold until the FCC can either satisfy the court’s desire for more information on minority ownership or until there is a successful appeal of that decision.  Even though FCC changes to its ownership rules may be in abeyance, the November 21 forum can shed light on the current state of the industry and why changes in ownership rules may be justified.…
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November is not one of those months with due dates for renewal filings, EEO public file reports or quarterly issues programs reports. Some of those obligations wait until December, when renewal filings for radio stations in Georgia and Alabama are due by December 2 (as December 1 falls on a weekend). Due for uploading on or before December 1 are EEO public file reports for station employment units with 5 or more full-time employees for radio or television stations in Alabama, Colorado, Connecticut, Georgia, Maine, Massachusetts, Minnesota, Montana, New Hampshire, North Dakota, Rhode Island, South Dakota, and Vermont.

November 1 does signal the first day on which radio and TV stations can file their Biennial Ownership Reports. As we wrote here, the FCC has extended the deadline date for those filings until January 31, 2020 as the FCC is making refinements in its forms in the LMS filing system. Reports are to reflect the licensee’s ownership as of October 1, 2019 so stations have the information that they need and can start filing their reports later this week.…
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Yesterday, a panel of judges from the US Court of Appeals for the Third Circuit decided by a 2 to 1 vote to overturn the FCC’s 2017 decision that made significant changes to its ownership rules (see the decision here).  The Court sent the case back to the FCC for further consideration.  The 2017 decision (see our article here) was the one which ended the ban on the cross ownership of broadcast stations and daily newspapers in the same market and the limits on radio-television cross-ownership.  The 2017 decision also allowed television broadcasters to own two TV stations in markets with fewer than 8 independent owners and made other changes to the radio and TV ownership rules.  Yesterday’s decision also put on hold the FCC’s incubator program meant to assist new owners to acquire radio stations (see our summary of the incubator program here).  All of this was done without any analysis whatsoever as to whether marketplace changes justified the changes to the ownership rules or of the impact that the undoing these rule changes would have on broadcasters and other media companies – including on radio companies hoping for changes in the radio ownership rules in current proceeding to review those rules (see our articles here and here).

What led the Court to overturn the decision if it was not the Court’s disagreement with the FCC’s determination that change in the ownership rules was needed?  This Court, in fact these same three judges, has overturned the FCC three times in the last 15 years, stymieing ownership changes because the Court concluded that the FCC had not sufficiently taken into account the impact that rule changes would have on diversity in the ranks of broadcast owners.  Here, again, the Court determined that the FCC did not have sufficient information on the impact of the rule changes on ownership diversity to conclude that the rule changes were in the public interest – and thus sent the case back to the FCC to obtain that information before making any ownership rule changes.  What led the Court to that conclusion, and what can be done about this decision?…
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The Office of Management and Budget, acting pursuant to the Paperwork Reduction Act, has just approved the FCC’s broadcast incubator program, about which we wrote here.   That approval makes the program effective.  The program permits an established broadcaster to provide assistance to a new broadcaster (generally, a qualified small business) to enter the radio broadcast industry.  If, over a 3-year period, the assistance provided by the existing broadcaster (usually either financial assistance or management training) is deemed a success, the established broadcaster can receive a credit allowing it to purchase a station in excess of the radio ownership limits allowed for broadcasters in a market of similar size to the one in which the incubation occurred.  It is interesting that this rule became effective just as the US Court of Appeals heard oral argument on the question of whether that program does enough to encourage new entrants into broadcast ownership to meet court-imposed obligations to address these issues.

The oral argument is on the appeal of the FCC’s 2017 ownership decision which, among other things, did away with the prohibition on newspaper-broadcast cross-ownership and the rule that required that there be 8 independently owned TV stations in a market before one owner could own two stations in that market.  The appeal, as we wrote here, essentially argues that the FCC has not done enough to promote minorities and other new entrants to get into broadcast ownership.  Reports are that the judges asked the FCC many questions at yesterday’s argument as to whether the FCC had enough data to conclude that the changes that were made in 2017 were in the public interest and would not unduly burden new entrants who want to get into media ownership.…
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The license renewal cycle, about which we have been warning broadcasters for at least the last year (see, for instance, our posts here, here and here), is now upon us. June 3 is the filing deadline for license renewals for radio stations in Maryland, DC, Virginia and West Virginia. Radio stations (including FM translators and LPFMs) licensed to any community in any of those states should be filing their renewal applications in the FCC’s Licensing and Management System (LMS) by Monday’s deadline. The new FCC forms, as we wrote here, have been available since early May, so the renewal and the accompanying EEO program report should either be on file or ready to be filed in LMS by the June 3 filing deadline. These stations should also be running their post–filing license renewal announcements on the 1st and 16th of June, July and August. Radio stations in the next renewal group, in North and South Carolina, should begin their license renewal pre-filing announcements on June 1st and 16th as well, informing the public about the upcoming filing of their renewals due on August 1. See this article on pre-filing announcements for more information.

In addition, broadcasters in Arizona, Idaho, Maryland, Michigan, Nevada, New Mexico, Ohio, Utah, Virginia, West Virginia, Wyoming, and the District of Columbia that are part of an Employment Unit with 5 or more full-time employees should also be preparing to add to their online public inspection file their Annual EEO Public File Report. This report is due to be added to their online public files by June 1. A link to this report should also be placed on the station’s website, if it has a website.…
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The FCC this week released a Public Notice soliciting comments on the request of Univision, which owns US radio and TV stations, to have foreign ownership that exceeds 50%. As we wrote here, the FCC previously permitted foreign ownership of up to 49% of the company. With a restructuring of its investors, the…