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The full text of the FCC’s revisions to its ownership report filing process was released last week.  The new rules will require that all commercial stations (including LPTV stations) file an updated Form 323 on November 1 every other year – starting in 2009.  The Order does not add much to the summary that we provided when the decision was first announced, though it does make clear that the electronic form will be revised to no longer allow for PDF attachments, instead requiring that all information be provided on the electronic form itself, so that it can be more easily searched.  With complex ownership structures, which are sometimes not easily explained in the confines of an FCC form, this may create some difficulties.  The Order did not seem to freeze the obligations for the filing of Form 323 Ownership Reports on the old version of the form on the current schedule while the new form is being created and approved by the Office of Management and Budget under the Paperwork Reduction Act, so stations in states with June 1 deadlines for their biennial reports should continue their preparation (see our Advisory on the the reports that are due on June 1 for radio stations in Arizona, District of Columbia, Idaho, Maryland, Nevada, New Mexico, Utah, Virginia, West Virginia and Wyoming, and television stations in Michigan and Ohio).

The Order also asked for further comment on the Ownership Report requirements for noncommercial licensees, including LPFM stations.  The Commission asks not only for comments on whether noncommercial operators should be required to file their reports on the same two year cycle as commercial broadcasters, but also for comments on what information should be required from these operators.  As noted by the FCC, the question of who controls a noncommercial station is often not an easy one – as there are varying degrees of control and oversight of station operations at many of the institutions that hold noncommercial licenses.  As noted by the FCC, there has been a Notice of Inquiry into noncommercial broadcast station ownership pending since 1989, trying to set out when there is a transfer of control of such entities that needs prior FCC approval.  Noncommercial stations have been operating under the interim policy set forth in that Notice for almost 20 years.  While the Commission does not seemingly ask for any change in the interim policy at this point, by gathering information about what ownership information should be reported on the new ownership report for a noncommercial entity, a resolution of that long-pending proceeding could potentially be in the works.Continue Reading Rules On New Ownership Reports Released – Including Proposals for Information from Noncommercial Broadcasters

Update – February 25, 2009 – The change in fees did not become effective as planned – see our post here. 

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Months ago, the FCC announced that the fees paid by broadcasters (and other services) for the processing of applications and other filings would be going up.  It was only recently that the notice was published…

The FCC this week issued fines to two broadcasters for issues in connection with the ownership of their stations – in one case the fine was issued simply because the broadcaster did timely not file three consecutive FCC Form 323 Biennial Ownership Reports .  In the second case, the fine was for not requesting FCC approval for a transfer of control of the licensee of the broadcast station.  These cases serve as a reminder that broadcast ownership is closely regulated by the FCC, that broadcasters need to report that ownership once every two years as required by the rules, and to seek approval before any change in control of any company that holds an FCC license.

The station that failed to file the three ownership reports was fined $6000.  As disclosed on the licensee’s license renewal application, the licensee had not filed 2001 and 2003 ownership reports at all, and filed the 2005 report late and did not put it in the station’s public inspection file.  Biennial Ownership Reports on FCC Form 323 must be filed by the licensees of AM, FM and TV station licensees once every two years, on the anniversary date of the filing of their license renewal applications by all licensees except where the licensee is an individual or a general partnership of natural persons (as opposed to a partnership that contains corporations or other business entities as partners).  We regularly send reminders to our clients about the filing of ownership reports.  For more details on the requirements for the biennial filing, see our advisory for reports that were due on August 1 here, and see our schedule of broadcast filing dates for the remainder of 2008 to see if your station has a biennial filing deadline this year).  Continue Reading Fines for Broadcast Ownership Issues – Remember to File Biennial Ownership Reports and to Seek FCC Approval Before a Transfer of Control

In a case just released by the FCC, a broadcaster was fined for enforcing a non-compete agreement that was entered into when a broadcaster sold one of its stations in a market in and agreed that it would not compete in the same format if it ever acquired another station in the same market.  The agreement had prohibited the Seller from competing with the Buyer in a news-talk format.  After the closing of the sale of the station, the Seller acquired another station in the market and adopted a format that a local court found was covered by the non-compete clause in the contract.  The local court issued an injunction against the continuation of the news-talk format.  At that point, the Seller filed a complaint with the FCC, arguing that, by obtaining the injunction, the Buyer had engaged in an unauthorized assumption of control of the station covered by the injunction, without FCC approval.  The FCC agreed with the Seller, and fined the Buyer $8000 for exercising control over the station that Seller had bought.

The FCC’s reasoning in this case, citing a similar letter decision from 2006, is that the restriction on format impedes a licensee’s control over its own programming, and restricts its ability to adjust its operations to account for changing market conditions.  The Commission concluded that, barring the licensee from utilizing a particular format, even for the limited period of the non-compete agreement, was contrary to the public interest.  By obtaining the injunction to prevent the Seller from using the news-talk format, the Buyer had impermissibly exercised control over the station that it had already sold.  In fact, the Commission went further, and found that the exercise of control over the programming, personnel or finances of the station would be a violation of the rules.  Continue Reading Format Noncompete Agreements Can Lead to FCC Fine

In an unusually contentious FCC meeting, the FCC adopted rules that promote Low Power FM ("LPFM") stations seemingly to the detriment of FM translators and improvements in the facilities of full-power FM stations.  While no formal text of the decision has yet been released, the Commission did release a Public Notice summarizing its action.  However, given the lack of detail contained in the Notice as to some of the decisions – including capping at 10 the number of translator applications from the 2003 FM translator window that one entity can continue to process and the adoption of an interim policy that would preclude the processing of full-power FM applications that created interference that could not be resolved to an existing LPFM station – it appears that the Press Release was written before these final details were determined.  And given that the two Republican Commissioners dissented from aspects of this order supported by their Chairman (and also dissented on certain cable items considered later in the meeting), one wonders about the process that resulted in the Republican chairman of the FCC voting with the two Democratic Commissioners on an item that in many respects favors LPFM stations to the detriment of existing broadcast operators.

In any event, specific decisions mentioned in today’s meeting include:

  • Treating changes in the Board of Directors of an LPFM station as minor ownership changes that  can be quickly approved by the FCC
  • Allowing the sale of LPFM stations from one non-profit entity to another
  • Tightening rules requiring local programming on these stations
  • Maintaining requirements that LPFM stations must be locally owned, and limiting groups to ownership of only one station
  • Limiting applicants in the 2003 FM translator window to processing only 10 pending applications each, and requiring that they decide which 10 applications to prosecute before any settlement window opens (the two Republican Commissioners favored allowing applicants to continue to process up to 50 applications)
  • Adopting an interim policy requiring that full-power FM stations that are improving their facilities in such a way that their improvement would interfere with an LPFM station to work with the LPFM to find a way to eliminate or minimize the interference.  If no resolution could be found, the full-power station’s application would not be processed (which we have expressed concerns about before)
  • Urging that Congress repeal the ban on the FCC making any changes that would eliminate protections for full power stations from third-adjacent channel interference from LPFMs

Continue Reading FCC Meeting Adopts Rules Favoring LPFM, Restricting Translator Applications, and Possibly Impeding Full Service FM Station Upgrades