Multiple Ownership Rules

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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…

With the June 3 filing deadline fast approaching for license renewals for radio stations in Maryland, DC, Virginia and West Virginia, stations (including FM translators and LPFMs) licensed to any community in any of those states should be beginning to prepare their applications. As we wrote here, the FCC forms should be available next week, so once May 1 rolls around, early birds in those states can start to file their renewal applications and the accompanying EEO program report. These stations should also be running their pre-filing license renewal announcements on the 1st and 16th of May. Radio stations in the next renewal group, stations in North and South Carolina, should be prepared to begin their license renewal pre-filing announcements in June – so in May they should be recording and scheduling that announcement to run for the first time on June 1 (see this article on pre-filing announcements for more information).

While May is one of those months with no other regularly scheduled regulatory filing deadlines, it is full of other FCC deadlines including comment dates in several proceedings of importance to broadcasters. 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 – due to be added to their files by June 1.…
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Questions about regulations from Washington don’t disappear just because you are spending time in Las Vegas, and this week’s NAB Convention brought discussion of many such issues. We’ll write about the discussion of antitrust issues that occurred during several sessions at the Convention in another post. But, today, we will report on news about more imminent actions on other issues pending before the FCC.

In his address to broadcasters at the conference, FCC Chairman Pai announced that the order on resolving translator interference complaints has been written and is now circulating among the Commissioners for review. The order is likely to be adopted at the FCC’s May meeting. We wrote here about the many suggestions on how to resolve complaints from full-power stations about interference from FM translators. While the Chairman did not go into detail on how the matter will be resolved, he did indicate that one proposal was likely to be adopted – that which would allow a translator that is allegedly causing interference to the regularly used signal of a full-power broadcast station to move to any open FM channel to resolve the interference. While that ability to change channels may not resolve all issues, particularly in urban areas where there is little available spectrum, it should be helpful in many other locations.…
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April, as we wrote last month, begins the start of the radio license renewal process, with stations in Maryland, Virginia, West Virginia and the District of Columbia having to run on the 1st and 16th of the month public notices of the planned filing of their license renewals at the beginning of June.  As we also noted last month, April also brings a requirement that, by the 10th of the month, stations add to their online public file Quarterly Issues Programs Lists for the prior quarter, setting out the most important issues facing their communities in the prior quarter, and the programming that they aired to address those issues.  We have written about the importance of these quarterly reports to the FCC to show how you served the public interest and the fines that can be imposed at renewal time if the lists are not properly prepared and uploaded to the online public file.  So don’t forget the obligation this obligation that applies to all full-power stations (and Class A TV stations).  We expect that the FCC will be watching (and in fact already is, as evident from some of their recent warnings to stations)!

In addition, April 1 brings the obligation for radio and television stations in Delaware, Indiana, Kentucky, Pennsylvania, Tennessee, and Texas that are part of an Employment Unit with 5 or more full-time employees, to add to their online public inspection file their Annual EEO Public Inspection File Report.  This report documents the full-time employment openings at the station in the prior year, the recruitment sources used to fill those positions, and the non-vacancy specific outreach efforts (the menu options) that stations use to inform their community about broadcast job openings and the efforts they make to train their staffs to assume more involved roles at their stations.  TV stations in Pennsylvania and Delaware will also file with the FCC their Form 397 EEO Mid-Term Reports – likely the last mid-term reports to be filed as the FCC’s order abolishing these reports should become effective before the next such reports are due to be submitted (see our articles here and here on the FCC’s abolition of the Mid-Term Report and its continued enforcement of the EEO rules through EEO audits).…
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The Notice of Proposed Rulemaking in the next Quadrennial Review of the FCC’s ownership rules was adopted in December and was published today in the Federal Register, starting the 60 day period for public comments. Comments on the NPRM will be due on April 29 with reply comments due on May 29. The FCC is looking at numerous issues, including one issue, the rules setting out the limits on the number of radio stations that one company can own in a market, that has not been reviewed in depth in recent Quadrennial Reviews. On the TV side, the FCC is again looking at local TV ownership (specifically combinations of Top 4 stations in a market and shared services agreements) and also at the dual network rule restricting common ownership of two of the Top 4 TV networks. In addition, the FCC is reviewing additional ideas on how to increase diversity in broadcast ownership. Today, let’s look at the FCC’s questions on the local radio ownership rules.

The review of the radio ownership rules may well be the most fundamental issue facing the Commission in this proceeding, as no real changes have been made in those rules since they were adopted as part of the 1996 Telecommunications Act. As we wrote here, the marketplace has certainly changed since 1996 – which was at least a decade before Google and Facebook became the local advertising giants that they now are; and before Pandora, Spotify, YouTube and many other web services offered by tech giants became competitors for the audience for music entertainment. And spoken word entertainment competition was also virtually non-existent – “audiobooks” were a niche product and the concept of a “podcast” would have been totally foreign when the current rules were written. So what are some of the questions about the radio ownership rules that are being asked by the FCC?…
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