FCC proposes expanded ownership reporting

by Peter Gutmann, RBR.com

The FCC has released the text of its Report and Order that will change the timing of biennial ownership reporting and expand the scope to include gender and racial classification of most attributable owners of commercial broadcast stations. An accompanying Notice of Proposed Rulemaking may extend the requirements to noncommercial entities.

The Report and Order affirms the Commission’s commitment to implementing the Congressional mandate to promote business opportunities in broadcasting for women and minorities. Although it has been collecting gender and racial ownership data since 1998, the FCC seeks to improve the reliability of its data in order to foster diversity and to bolster any new policies against judicial challenge, should it choose to pursue more race- or gender-based approaches to remedy the “dismal” level of minority and female ownership that it perceives in the broadcast industry.

The Commission has ordered its Media Bureau to modify the current commercial ownership report form (FCC Form 323) to implement the following changes:

  • Uniform Filing Date – All commercial broadcasters will be required to file their ownership reports by November 1 of each odd-numbered year, beginning in 2009. All data is to be current as of October 1. In that way, the Commission intends to obtain every two years a “snapshot” of ownership that will permit meaningful comparison, which it feels cannot be done with the current “rolling” reporting system keyed to each licensee’s renewal filing date.
  • Entities Required to File – The Commission has eliminated the exemption for low power TV and Class A TV stations. Sole proprietorships and partnerships composed only of natural persons, previously exempt, will also be required to file.
    Reportable Interests – The form will depart from the current attribution rules to require reporting by persons sheltered by the single majority shareholder rule and the exemptions from the “Equity/Debt Plus” rule implemented last year for “eligible” entities. As a result, all interests that exceed the 33% EDP threshold must now be reported.

  • Attachments – In order to facilitate electronic retrieval and evaluation, all data must be submitted in the body of the on-line form itself, rather than through attachments. The Commission will continue to permit parents and other attributable entities to report their interests on separate forms.
  • Enforcement – The Commission believes that many forms currently on file omit a substantial amount of data. Thus, the Commission will tighten its on-line pre-filing verification tests to reject incomplete forms. In order to ensure the accuracy of data, the Commission directed its Media Bureau to conduct random audits and has committed itself to penalizing those who submit inaccurate reports.

    In addition to these changes, which are to take effect following publication in the Federal Register, the Commission requests comment on a proposal to expand its ownership report for noncommercial licensees (Form 323-E) to require gender, race and ethnic information, so as to provide a comprehensive picture of broadcast ownership. The Commission questions how to define ownership in the noncommercial context, where trustees and board members have been treated as tantamount to the financial stakeholders in commercial entities. The Commission is sensitive to the burden of imposing all the requirements of commercial stations upon noncommercial entities, especially low power FM stations.

    In a strong supporting statement, Acting Chairman Copps emphasized the need to obtain data upon which to base further diversity initiatives which, he feels, until now have failed to improve minority and female ownership – “We will never get to where we need to go unless we know where we are.” Commissioner McDowell cautioned, however, that while he advocates a regulatory environment that is more attractive to private investment, he wants to avoid inadvertent negative effects and he contends that “to change our existing broadcast attribution rules … in the midst of such economic uncertainty would be foolhardy.”

    A complete copy of the Report and Order and the Further Notice of Proposed Rulemaking can be downloaded from the FCC website at: http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-09-33A1.pdf.

  • article originally published at RBR.com.

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