FCC Halts Ownership Reports, Proposes Expanded Reporting

Everyone Files In November

Last month, the FCC made an important change in ownership reporting. The timing of biennial ownership reporting was changed; it expanded the ownership reporting form to include gender and racial classification of most attributable owners of commercial broadcast stations.

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 Media Bureau was ordered 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 1st of each odd-numbered year, beginning in 2009, with all data current as of October 1st. The Commission will then be able to provide a "snapshot" of ownership every two years, allowing meaningful comparisons over time.

Entities Required to File - Sole proprietorships and partnerships composed only of natural persons, previously exempt from biennial reporting, will also be required to file. Exemptions for low-power TV and Class A TV stations have been eliminated.

Reportable Interests - All interests that exceed the 33% EDP threshold must now be reported, including those previously sheltered by the single majority shareholder rule and the exemptions from the "Equity/Debt Plus" rule for "eligible" entities.

Attachments - All data must be submitted in the body of the online form itself, rather than through attachments. Parents and other attributable entities may still report their interests on separate forms.

Enforcement - The online pre-filing verification tests will be tightened to reject incomplete forms. In order to ensure the accuracy of data, the Media Bureau will conduct random audits and penalizing those who submit inaccurate reports.

In addition, the Comments were requested on proposals to expand its ownership report for noncommercial licensees (Form 323-E) and to require gender, race and ethnic information, so as to provide a comprehensive picture of broadcast ownership.

Note that the order had the strong support of the two Democratic commissioners. Acting Chairman Copps, expected to remain on the Commission following the arrival of Julius Genachowski as the new Chairman, emphasized the need to obtain data upon which to base further diversity initiatives, saying, "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/F CC-09-3 3A 1 .pdf.

This column is provided for general information purposes only and should not be relied upon as legal advice pertaining to any specific factual situation. Legal decisions should be made only after proper consultation with a legal professional of your choosing.