Ownership reports

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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.Continue Reading July 8 Filing Deadline for Commercial Broadcast Stations Form 323 Ownership Report – Clarifications Issued

At its meeting today, the FCC decided to revamp its Ownership Report filing process – requiring all stations to file Biennial Ownership Reports on FCC Form 323 on November 1 of this year – even stations that have just filed those reports in the normal course in the last few months.  All stations will have to file every two years thereafter – on November 1 of every other year.  Reports will also be required from Low Power TV stations and Class A TV stations, which have not in the past had to file reports.  Reports will also be required from stations that are owned by an individual, and by general partnerships in which all of the partners are individuals (or, in the FCC’s legalese, "natural persons").  In the past, such stations did not have to file reports as any change in ownership would have required, at a minimum, the filing of a Form 316 short-form assignment or transfer application.  Finally, the Commission will require the reporting of the interests of currently non-attributable owners who are not attributable simply because there is a single majority shareholder in the licensee.

The FCC is not asking for this information because it wants to track improper transfers, but instead so that it can gather information about the racial and gender make-up of the broadcast ownership universe.  This information has been required on ownership reports for the last ten years, but the FCC did not believe that the system was extensive enough to capture all information about the ownership of broadcast properties, as so many stations were not covered by the requirements.  Why does the FCC want racial and gender information about the owners of stations?  To potentially take more aggressive actions to encourage minority ownership.  The FCC has considered such actions in the past, but has not felt that it take actions specifically targeted to minority and female applicants, as there was no record of past discrimination in the broadcast industry.  The government can constitutionally only make racial or gender-based decisions if these decisions are to remedy the effects of past discrimination.  To justify such acts, the government agency must demonstrate the past discrimination – and these new filing requirements are meant to gather that information through what is called an Adarand study.  In the recent past, when it adopted certain diversity initiatives for designated entities (like the ability of a designated entity to buy an expiring construction permit and get an extension, which we recently wrote about here), the Commission had to define a designated entity as a "small business" defined by SBA standards.  Chairman Copps today said that this definition did not truly benefit diversity as favoring small businesses "generally benefit white males."Continue Reading FCC to Require New Ownership Reports from all Commerical Broadcasters on November 1

Here we are, almost a full month into the new year, and a number of important dates for broadcasters are already upon us.  As we wrote here, for instance, the payment of a minimum fee to SoundExchange by radio stations streaming their signals on the Internet is due today.  Lowest unit rates are in…