The FCC issued a Public Notice today, extending the date for the filing of the new Form 323 Biennial Ownership Report until January 11, 2010. As stated in the Notice, the Commission has yet to finish testing the new form in its electronic filing system, so it is not yet ready to be used. Given
Update 11/23/2009 – the Commission has just extended the filing deadline for the Form 323 until January 11, 2010. See our post here for more details.
December 15 is that date on which the new FCC Form 323 Ownership Report is to be filed at the FCC – yet the revised form is not yet available in the FCC’s CDBS electronic filing database. What is a broadcaster to do? The form will require significantly more work to complete than was necessary on prior versions – and it requires more information provided in a different manner than on the old form. The information on the old form cannot simply be imported into the new form – everything needs to be re-entered. And information that used to be provided by exhibit in older versions of the form has to be manually entered into separate searchable fields on the new form. For broadcasters with many principals who have many broadcast interests, the form will take significant time to complete. All commercial licensees, including LPTV licensees who have never before had to file, must submit the report. Each attributable owner of each licensee (see our Advisory for a very basic explanation of attributable interests) will also need to have his or her own FCC registration number ("FRN") in order to complete the form – all to be done by December 15. But will that date potentially change?
While the FCC has issued a series of Questions and Answers about the form (and we have published our own Advisory to prepare for the filing of the form, here), licensees can’t start filling out the form yet as the revised for is not yet available electronically. So the difficulties that will no doubt be discovered as hundreds of broadcasters try to complete the form for the first time have yet to even be fully identified. Even if the form does become available today, there still will be a significant potential for a very messy filing window. Confusion will likely occur as every commercial broadcaster must file the form, some for the first time, and many will no doubt have questions about the process. From the calls that we are getting already, the anxiety and confusion among broadcasters is great. The prospects of a filing "trainwreck" has been the subject of much talk in Washington among lawyers like us who represent broadcasters. With much of next week taken up with the Thanksgiving holiday, there simply will not be time for every question to be answered, and for every broadcaster to be ready to file by the December 15 deadline. This week, one law firm went so far as to formally request that the Commission postpone the filing date. We would not be surprised if this petition is successful, or if the Commission on its own motion decides to extend the deadline. But the filing deadline has not yet been delayed, so broadcasters should still plan on meeting the current deadline (and, even if extended, any delay will not be indefinite, so broadcasters still need to be getting ready). What can a broadcaster do now?
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."