Promoting Diversification of Ownership in the Broadcasting Services, 10442-10452 [2015-03988]
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Federal Register / Vol. 80, No. 38 / Thursday, February 26, 2015 / Proposed Rules
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SUPPLEMENTARY INFORMATION:
Dated: February 12, 2015.
Bharat Mathur,
Acting Regional Administrator, Region 5.
[FR Doc. 2015–03790 Filed 2–25–15; 8:45 am]
BILLING CODE 6560–50–P
FEDERAL COMMUNICATIONS
COMMISSION
47 CFR Part 73
[MB Docket No. 07–294, MD Docket. No.
10–234; FCC 15–19]
Promoting Diversification of
Ownership in the Broadcasting
Services
Federal Communications
Commission.
ACTION: Proposed rule.
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AGENCY:
In this document, the Federal
Communications Commission
(Commission) proposes improvements
to the collection of data reported on FCC
Form 323, Ownership Report for
Commercial Broadcast Stations, and
SUMMARY:
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I. Introduction
perspectives are available to the
American people in the content they
receive over the broadcast airwaves. In
pursuit of this goal, the Commission has
a long history of promulgating rules and
regulations designed to foster diversity
in terms of minority and female
ownership. A necessary foundation for
the Commission’s rulemaking efforts is
the collection of comprehensive,
reliable data reflecting the race, gender,
and ethnicity of the owners and other
interest holders in broadcast stations.
Such data are essential to study and
analyze ownership trends effectively, to
assess the impact of Commission rules,
and to determine whether rule changes
would be in the public interest. To be
useful for these purposes, to the greatest
extent possible the data must be capable
of being read, verified, searched,
aggregated, and cross-referenced
electronically.
2. As a part of these efforts, the
Commission herein proposes
improvements to the collection of data
reported on FCC Form 323, Ownership
Report for Commercial Broadcast
Stations, and also to FCC Form 323–E,
Ownership Report for Noncommercial
Broadcast Stations, through the
development of a new functionality in
the Commission’s Registration System
(CORES) for issuing FCC Registration
Numbers (FRNs). Specifically, we seek
comment on a proposal to create a new
mechanism for obtaining an FRN
through CORES. Use of this FRN would
be restricted to the reporting of
individual attributable interest holders
in commercial and noncommercial
broadcast stations on ownership reports.
This ‘‘Restricted Use’’ FRN (RUFRN)
would be supported by identifying
information for attributable individuals
that does not include full Social
Security Numbers (SSNs) and that
would be housed securely on the
Commission’s servers and not made
available to the public. This proposal is
intended to address some of the privacy
and data security concerns that
commenters raised with respect to prior
proposals while still enabling the
Commission to uniquely identify
reported individuals, obtain data
reflecting a more useful, accurate, and
thorough assessment of minority and
female broadcast station ownership in
the United States and reduce certain
filing burdens. Ultimately, such changes
to the Commission’s system could assist
future initiatives promoting diverse
ownership.
1. The Commission has a longstanding goal of promoting ownership
diversity in broadcast stations to ensure
that diverse viewpoints and
II. Background
3. The Commission is engaged in
ongoing efforts to improve the quality,
utility, and reliability of its broadcast
also to FCC Form 323–E, Ownership
Report for Non Commercial Broadcast
Stations, through the development of a
new functionality in the Commission’s
Registration System (CORES) for issuing
FCC Registration Numbers (FRNs).
Specifically the Commission seeks
comment on a proposal to create a new
mechanism for an individual to obtain
an FRN that is usable only for broadcast
ownership reporting purposes through
CORES.
The Commission must receive
written comments on or before March
30, 2015 and reply comments on or
before April 13, 2015. Written
comments on the Paperwork Reduction
Act proposed information collection
requirements must be submitted by the
public, Office of Management and
Budget (OMB), and other interested
parties on or before April 27, 2015.
ADDRESSES: You may submit comments,
identified by MB Docket No 07–294
and/or MD Docket No 10–234, by any of
the following methods:
D Federal Communications
Commission’s Web site: https://
fjallfoss.fcc.gov/ecfs2/. Follow the
instructions for submitting comments.
D People with Disabilities: Contact the
FCC to request reasonable
accommodations (accessible format
documents, sign language interpreters,
CART, etc.) by email: FCC504@fcc.gov
or phone: 202–418–0530 or TTY: 202–
418–0432.
FOR FURTHER INFORMATION CONTACT: Jake
Riehm, Industry Analysis Division,
Media Bureau, FCC, (202) 418–2330. For
additional information concerning the
PRA proposed information collection
requirements contained in the Notice of
Proposed Rulemaking, contact Cathy
Williams at (202) 418–2918, or via the
Internet at PRA@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a
summary of the Commission’s Second
Further Notice of Proposed Rulemaking
and Seventh Further Notice of Proposed
Rulemaking (Second FNPRM and
Seventh FNPRM) in MB Docket Nos. 07–
294 and 10–234; FCC 15–19, adopted
February 11, 2015, and released
February 12, 2015. The complete text of
this document is available for
inspection and copying during normal
business hours in the FCC Reference
Center, 445 12th Street SW.,
Washington, DC 20554.
DATES:
Summary
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Federal Register / Vol. 80, No. 38 / Thursday, February 26, 2015 / Proposed Rules
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ownership data. As part of this
endeavor, in 2009 the Commission
substantially revised Form 323. The
changes to the filing requirements and
the modifications to the form were
intended to facilitate long-term
comparative studies of broadcast station
ownership and to address flaws in the
data collection process identified by the
United States Government
Accountability Office (GAO) and by
researchers. ‘‘To further improve the
ability of researchers and other users of
the data to cross-reference information
and construct ownership structures,’’
filers were required to provide a CORES
FRN for all reported interest holders.1
To obtain a CORES FRN, with some
limited exceptions, a party must submit
a Tax Identification Number (TIN) to the
Commission via CORES. In the case of
an individual, a TIN is his or her SSN.
Because a CORES FRN is backed by a
TIN/SSN, it can serve as a unique
identifier in most instances, which is
crucial to the quality and utility of the
Commission’s broadcast ownership data
and the ability of the Commission and
outside parties to search, aggregate, and
cross-reference that data electronically.
4. OMB Review and Approval of 2009
Form 323. On August 11, 2009, the
Commission submitted the revised Form
323, which included the CORES FRN
requirement, to the Office of
Management and Budget (OMB) for
approval pursuant to the Paperwork
Reduction Act (PRA) requirements and
published the Federal Register notice
initiating a 60-day comment period.2
Many of the comments to OMB objected
to having to report CORES FRNs for
individuals holding attributable
interests, arguing that in order to obtain
a CORES FRN for these individuals,
they would need to provide SSNs to the
Commission, a requirement that they
claimed triggers privacy, data security,
and identity theft concerns.
Commenters also suggested that
obtaining and reporting CORES FRNs
for these individuals would be onerous
1 See generally 323 Order, 24 FCC Rcd at 5903
para. 12. See Promoting Diversification of
Ownership in the Broadcasting Services, 74 FR
56135, Oct. 30, 2009; Promoting Diversification of
Ownership in the Broadcasting Services, 74 FR
56136, Oct. 30, 2009 (Federal Register notices
announcing OMB approval and effective date of
revised Form 323). On October 16, 2009, the
Commission sent a subsequent letter to OMB
acknowledging the Commission’s action in the 323
Order to eliminate the reporting of certain
nonattributable interest holders. Letter from Walter
Boswell, Acting Assoc. Managing Director, PERM,
OMD, FCC, to Nicholas A. Fraser, OMB (Oct. 16,
2009).
2 Public Information Collection Requirement
Submitted to OMB for Review and Approval,
Comments Requested, MB Docket No. 07–294, 74
FR 40188, Aug. 11, 2009.
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for filers, and that in some cases, filers
might be unable to obtain a CORES FRN
for all individual attributable interest
holders because the individuals are
unwilling either to obtain the FRN
themselves or provide their SSN to the
filer for the purpose of obtaining an
FRN. Additionally, commenters
criticized the Commission for failing to
seek comment on requiring these
individuals to obtain CORES FRNs prior
to including this requirement on the
revised form submitted for OMB
approval.
5. On October 6, 2009, the Office of
the Managing Director (OMD) at the
Commission submitted a letter to OMB
addressing the comments filed in
response to the revised Form 323. OMD
explained that requiring CORES FRNs
on Form 323 is an integral part of the
Commission’s effort to ‘‘improve the
quality, reliability, and usability of the
collected data by eliminating
inconsistencies and inadequacies in the
data submitted.’’ Noting that the CORES
FRN is a key tool for ensuring that
ownership data is matched to specific
owners, OMD explained that, without
the CORES FRNs, it would be unable to
accurately determine an interest
holder’s identity when variations of a
single name or other spelling
irregularities appear from form to form.
The Reply Letter also responded to
comments that the Commission erred in
concluding that the revised Form 323
did not implicate the Privacy Act. OMD
stated that because sole proprietors,
officers, and directors are acting in an
entrepreneurial role with respect to
broadcast stations, these persons are not
individuals for purposes of the Privacy
Act. OMD added that, to the extent that
the revisions raise any privacy concerns,
the Commission created a Privacy Act
System of Records (SORN) for Form 323
that would address them.3 The Reply
Letter also rejected allegations that the
Commission failed to comply with the
notice requirements of the PRA. OMD
also disputed commenters’ objections
that the CORES FRN requirement raised
security and identity theft concerns.
OMD noted that ‘‘none of the
commenters identify a single instance of
a security breach’’ of the CORES system.
The Commission utilizes a ‘‘robust
security architecture . . . for CORES
that exceeds Federal guidelines and
recommendations’’ and has deployed
operational controls that comply with
National Institute of Standards and
3 Id. at 7–8. The Commission issued a System of
Records Notice to cover the data contained in
responses to Form 323 that became effective on
December 21, 2009. Privacy Act System of Records,
74 FR 59978, Nov. 19, 2009 (system of records FCC/
MB–1).
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Technology guidance. OMD stated that
its servers are securely located, that its
databases are behind several firewalls,
and that all servers and communications
are monitored. The Reply Letter also
notes that administrative access to the
CORES application is limited and that
all transmission of non-public data is
encrypted.
6. On October 19, 2009, OMB
approved the revised Form 323,
including the requirement that filers
provide a CORES FRN for all
individuals and entities holding an
attributable interest in the licensee.4
After several delayed filing deadlines,
the Commission set July 8, 2010 as the
first biennial filing deadline using the
revised Form 323. In response to
industry concerns about filers’ ability to
obtain CORES FRNs for all individual
interest holders due to individuals’
concerns about privacy, security, and
identity theft, the Media Bureau allowed
filers, as an interim measure, to obtain
a ‘‘Special Use’’ FRN (SUFRN) for one
or more reported individuals in lieu of
obtaining a CORES FRN. When clicking
a button on the electronic version of
Form 323 to generate a SUFRN, filers
were advised via a pop-up box that ‘‘[i]f,
after using diligent and good-faith
efforts’’ a filer is unable to obtain a
social security number from an
individual that must be reported on
Form 323 in order to generate a CORES
FRN, the filer may elect to automatically
generate in the electronic Form 323 a
SUFRN for that individual. The
respondents were also informed that
those who use a SUFRN on Form 323
would be deemed to be fully compliant
with the filing obligations and the lack
of a CORES FRN would not subject a
filer to enforcement action. An
individual does not submit an SSN, or
any other identifying information, to the
Commission when he or she generates a
SUFRN, and SUFRNs are not stored
within CORES. Each individual must
obtain only one SUFRN and must use it
consistently on all broadcast ownership
reports. Filers submitted reports on the
revised version of Form 323 during the
2009, 2011, and 2013 biennial filing
periods, and SUFRNs were available to
4 See Promoting Diversification of Ownership in
the Broadcasting Services, 74 FR 56135, Oct. 30,
2009; Promoting Diversification of Ownership in
the Broadcasting Services, 74 FR 56136, Oct. 30,
2009 (Federal Register notices announcing OMB
approval and effective date of revised Form 323).
On October 16, 2009, the Commission sent a
subsequent letter to OMB acknowledging the
Commission’s action in the 323 MO&O to eliminate
the reporting of certain nonattributable interest
holders. Letter from Walter Boswell, Acting Assoc.
Managing Director, PERM, OMD, FCC, to Nicholas
A. Fraser, OMB (Oct. 16, 2009).
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filers during all three biennial filing
rounds.
7. Quality of Data in Form 323
Biennial Reports. In July 2011, the U.S.
Court of Appeals for the Third Circuit,
as part of its review of the Commission’s
media ownership rules, vacated and
remanded certain aspects of the
Diversity Order; an Order in which the
Commission adopted measures intended
to promote minority and female
ownership of broadcast stations. The
Third Circuit concluded that the
Commission’s decision to adopt a
revenue-based eligible entity definition
to facilitate ownership diversity was
arbitrary and capricious because the
Commission did not show how
determining eligibility for particular
programs and preferences based on such
a definition specifically would assist
minorities and women, who were
among the intended beneficiaries of the
action. The court also remanded each of
the measures adopted in the Diversity
Order that relied on the eligible entity
definition. The court found that the
eligible entity definition was not
supported by ‘‘data attempting to show
a connection between the definition
chosen and the goal of the measures
adopted—increasing ownership of
minorities and women,’’ stressing that
regulations seeking to increase
ownership by women and minorities
must be based upon reliable data. The
court stated that, ‘‘[a]t a minimum, in
adopting or modifying its rules, the FCC
must ‘examine the relevant data and
articulate a satisfactory explanation for
its action[,] including a rational
connection between the facts found and
the choice made.’ ’’ The court also made
plain that ‘‘[i]f the Commission requires
more and better data . . . it must get the
data.’’ The court stated that the actions
taken in the 323 Order and Fourth
Diversity Further Notice to reliably
analyze minority and female ownership
‘‘will, however, lay necessary
groundwork for the Commission’s
actions remand.’’
8. On November 14, 2012, the Media
Bureau released the first electronic
analysis of commercial broadcast
ownership data submitted pursuant to
the revised biennial reporting
requirements for 2009 and 2011 (2012
323 Report). On June 27, 2014, the
Bureau released a similar, second report
for 2013 ownership data (2014 323
Report). The data contained in these
reports are ‘‘snapshots’’ of the status of
minority and female ownership of
commercial television, radio, Class A
television, and LPTV stations and
represent the first three of a planned
series of biennial ‘‘snapshots’’ that can
be used for trend analysis. Preparation
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of the reports revealed continued
difficulties with, and errors within, the
Commission’s broadcast ownership
data. Many commercial broadcast
stations submitted reports with
apparently inaccurate or insufficient
data to permit electronic calculation of
voting interests. Commission staff
required numerous broadcasters to
correct errors contained in their biennial
Form 323 filings via amendments,
which allowed stations covered by those
reports to be properly categorized for
the report. In addition, Commission staff
manually analyzed a large number of
ownership reports, together with other
available information, in order to assign
certain stations to the appropriate
categories manually for purposes of the
report. As the 2012 323 Report stated,
many data problems stemmed, in part,
from the ‘‘complexity of the information
required to accurately file’’ Form 323.
9. The Media Bureau’s Consolidated
Database System (CDBS) reflects that for
each filing round, more than one quarter
of the unique FRNs provided for
individuals were SUFRN. Further, a
combined analysis of the 2009, 2011,
and 2013 filing rounds shows that more
than 30 percent of the total unique FRNs
reported were SUFRNs and the rate at
which filers obtained and reported new
SUFRNs for individuals was higher than
the rate at which they obtained and
reported new CORES FRNS. In addition,
it appears that single SUFRNs have been
used for multiple individuals and that
single individuals have used multiple
SUFRNs despite Bureau guidance to the
contrary. Because it is possible for filers
to improperly report SUFRNs for
individuals—either by reporting
multiple SUFRNs for a single individual
on multiple reports or using the same
SUFRN for multiple individuals on
multiple reports—the number of unique
SUFRNs reported during a given filing
period cannot be relied on to determine
accurately the number of individuals
using a Special Use FRN. The Media
Bureau therefore cannot confidently
determine the number of individuals
reporting a SUFRN.
10. On December 3, 2012, the
Commission issued a Public Notice in
the 2010 Quadrennial Regulatory
Review proceeding offering parties the
opportunity to comment on the 2012
323 Report (2012 323 Report PN). The
notice broadly sought ‘‘additional
comment on data contained in [the 2012
323 Report],’’ specifically referencing
the Commission’s efforts ‘‘to improve its
collection and analysis of broadcast
ownership information’’ and make
‘‘improvements to the reliability and
utility of the data reported in FCC Form
323.’’ Some commenters expressed
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concern that the Commission’s
incomplete and inaccurate ownership
data render it difficult to track broadcast
ownership trends from 2009 and 2011
accurately. One commenter suggested
that the manner in which the
Commission currently provides
broadcast ownership data from Form
323 to the public does not meet the
objective that such data be capable of
being electronically searched,
aggregated, or cross-referenced.
11. On June 27, 2014, the Commission
solicited comment concerning the 2014
323 Report as part of its 2014
Quadrennial Review Proceeding. In
response, commenters acknowledged
that the Commission has taken steps to
improve the quality of its broadcast
ownership data. Nonetheless, some
parties suggested that the Commission
should do more to make its broadcast
ownership data easier to use, search,
aggregate, and cross-reference
electronically, for the benefit of studies
and analysis. Some commenters
supported elimination of the use of
SUFRNs to ensure accuracy, reliability,
and usefulness of the data.
12. Proposals Related to
Noncommercial Broadcast Stations. The
Commission has put forth several
proposals that remain pending to
improve the broadcast ownership
reports focused on making the data
more comprehensive, reliable, and less
burdensome to collect. For instance, the
Fourth Diversity Further Notice, which
accompanied the 323 Order, generally
sought comment on whether to adopt
the same or similar modifications for
Form 323–E for noncommercial stations
(NCEs) as the 323 Order imposed for
commercial stations. The Notice
specifically sought comment on the
proper definition of ‘‘ownership’’ in the
NCE context, asking whether looking at
the composition of the board of
directors or other governing body of an
NCE station would be appropriate for
determining ‘‘ownership’’ for Form 323–
E purposes. Several commenters
support this approach, noting, for
example, that board members have
legally cognizable duties to the licensees
they serve and often are involved in
station operations and hiring decisions,
have final authority over NCE licensees,
and are responsible to the local
communities they serve. This approach
is consistent with the Commission’s
attribution standards, which attribute
ownership interests to officers and
directors of NCE stations. Other
commenters argue that dissimilarities
between the governance of commercial
and NCE stations preclude any
definition of ‘‘ownership’’ in the NCE
context. These parties note that board
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members do not have equity stakes in
the stations they serve; are often
governmental officials, governmental
appointees, individuals elected by
station members, or volunteers; and
often are not involved in day-to-day
station operations. The Fourth Diversity
Further Notice also asked for input
concerning the burden of providing race
and gender information on Form 323–E.
Several commenters argue that requiring
the collection and reporting of such
information would be unduly
burdensome and might discourage
board participation. Other commenters
argue that the collection of such
information is minimally burdensome
and agree that such information is
necessary to construct a complete
picture of minority and female
participation in broadcasting.
13. On January 3, 2013, the
Commission released its Sixth Diversity
Further Notice. It specifically proposed
extending the CORES FRN requirement
to all listed interest holders on Form
323–E if the filing modifications
proposed in the Fourth Diversity Further
Notice are implemented. The Sixth
Diversity Further Notice tentatively
concluded that obtaining and reporting
a CORES FRN for individuals identified
on Form 323–E is not burdensome and
sought comment. Some commenters
believe that the public interest benefits
associated with compiling
comprehensive data on this segment of
the broadcast industry outweigh any
burdens associated with such a plan.
Several commenters argue that the
requirement would be unduly
burdensome for NCEs and that it would
discourage people from serving on the
boards of NCE stations. Parties also state
that licensees may have difficulty
obtaining SSNs from board members,
some of whom are appointed
governmental officials. In addition,
certain commenters suggest that a
CORES FRN is insufficient as a unique
identifier because, for example, (1)
multiple FRNs can be obtained for a
single TIN/SSN, (2) an individual can in
certain circumstances obtain a CORES
FRN without providing an SSN, (3) an
individual may provide an incorrect
SSN, either intentionally or
inadvertently, and (4) researchers
outside the Commission do not have
access to the TIN information in CORES
to permit them to use it as an
underlying unique identifier. Citing the
Privacy Act, multiple commenters
object to a requirement that
noncommercial attributable interest
holders obtain a CORES FRN for Form
323–E filings because it requires
submission of an SSN.
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14. Use of CORES FRNs Versus Use of
SUFRNs. The Sixth Diversity Further
Notice also sought comment on the
Commission’s requirement that
commercial entities filing Form 323
provide a CORES FRN for attributable
interest holders. The Commission
tentatively affirmed its prior
determination that the use of CORES
FRNs was crucial to unique
identification on Form 323 and that
such unique identification is essential to
providing the kind of searchable and
manipulable database needed to support
accurate and reliable studies of
ownership trends. It tentatively
concluded that the reporting of CORES
FRNs on Form 323 was superior to the
reporting of SUFRNs and proposed
eliminating the availability of SUFRNs.
The Commission reasoned that SUFRNs
do not provide a reliable means of
linking a reported interest holder to a
unique individual and the continued
use of the SUFRN undermines the
Commission’s efforts to ‘‘accurately
ascertain the nature and extent of
minority and female ownership of
broadcast properties.’’ Acknowledging
that the Third Circuit in Prometheus II
highlighted the importance of reliable
data to support rulemaking initiatives,
the Sixth Diversity Further Notice asked
for comments on the importance of the
CORES FRN as a unique identifier for
quality, cross-referencing, and
searchability purposes. The Commission
also asked whether it should continue to
permit filers to use the SUFRN in the
event that reportable individuals are
unwilling to provide their SSN to a
third party or unwilling to obtain and
provide a CORES FRN. The Commission
encouraged commenters to offer
alternative proposals to the SUFRN. The
Commission also invited comment on
its tentative conclusion that the Privacy
Act does not prohibit adoption of the
CORES FRN proposal and asked
commenters to discuss the degree of the
risk to privacy the proposal poses.5
15. In response to the Sixth Diversity
Further Notice, some commenters
support the Commission’s proposal to
eliminate the SUFRN, arguing that
5 Sixth Diversity Further Notice, 28 FCC Rcd at
472, para. 18. The Commission also noted that it
has already adopted a Privacy Act System of
Records for CORES and with respect to the Form
323 requirement, which applies to any personally
identifiable information required by Form 323 and
CORES in connection with the CORES FRN
registration process. Id.; see also Reply Letter at 7–
8; Privacy Act System of Records, 74 FR 59978,
Nov. 19, 2009 (system of records FCC/MB–1 for
Form 323); Privacy Act System of Records, 71 FR
17234, Apr. 5, 2006 (system of records FCC/OMD–
9 for CORES). These System of Records Notices
(‘‘SORNS’’) can be viewed at https://www.fcc.gov/
encyclopedia/privacy-act-information#systems
(visited Dec. 15, 2014).
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requiring CORES FRNs ‘‘is a necessary
step’’ to compiling complete and
searchable data. These commenters also
suggest that the availability of the
SUFRN contributed to the instances of
incomplete data that prevented the
Media Bureau from identifying
ownership interests in some stations
that submitted biennial ownership
reports during the 2009 and 2011
reporting periods. No commenters
offered any alternative to the CORES
FRN other than the SUFRN, and no
commenters seriously contend that the
SUFRN provides similar data quality as
CORES FRNs. Instead, some
commenters argue that even a CORES
FRN cannot serve as a unique identifier
because, for instance, the CORES system
allows filers to obtain multiple FRNs
and because outside researchers do not
have access to the underlying TIN as a
unique identifier. Also, while some
commenters support the Commission’s
conclusion that a unique identifier is
essential to allow analysis of the data,
other commenters dispute that position.
16. The Sixth Diversity Further Notice
also sought input concerning proposed
modifications to Form 323 designed to
reduce filing burdens in the
Commission’s Review of Media Bureau
Data Practices proceeding. For instance,
the Commission sought comment on an
NAB suggestion to eliminate a
requirement that a filer disclose the
other attributable newspaper and
broadcast interests of attributable parties
listed in the filing, arguing that portion
of the submission is particularly
burdensome. In comments, NAB
reiterates its support and no
commenters oppose it.
17. In December 2010, the
Commission initiated a rulemaking
proceeding in which it proposed to
update CORES in an effort to enhance
the Commission’s data collection efforts
and to improve customer interface with
CORES.6 The Commission noted that,
‘‘[s]ince the creation of CORES, entities
have been able to obtain multiple FRNs
in order to permit different members of
their corporate family to obtain their
own individual FRNs, regardless of
whether those entities have different
taxpayer identification numbers. . . .’’
The CORES Notice also stated that the
Commission has had difficulty using
CORES to identify all FRNs held by the
6 See generally CORES Notice, 25 FCC Rcd at
17401, para. 1. The CORES Notice was published
in the Federal Register on February 11, 2011. See
Amendment of Part 1 of the Commission’s Rules,
Concerning Practice and Procedure, Amendment of
CORES Registration System; Notice of Proposed
Rulemaking, MD Docket No. 10–234, FCC 10–192,
76 FR 5652, February 1, 2011. Comments and Reply
Comments were due on March 3, 2011 and March
18, 2011, respectively. See id.
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same entity when entities have provided
inconsistent TINs. To address these
issues, the CORES Notice sought
comment on two proposals for requiring
entities and individuals to rely
primarily upon a single CORES FRN.
Under Option 1, an entity would be
required to use a single ten-digit FRN
for all of its dealings with the FCC, but
would have the ability to create an
unlimited number of sub-accounts that
could be assigned to organizational
units, such as a geographic district
served by the entity or a distinct line of
business conducted by the entity, or
even to particular employees. Option 2
would enable entities that currently
hold multiple FRNs to retain all of their
various FRNs, which would be
electronically linked to each other
within the Commission’s database
through the assignment of an identical
prefix that would precede each of the
entity’s ten-digit FRNs. Commenters
generally support Option 2 as a
mechanism for limiting parties’ use of
multiple CORES FRNs.
III. Discussion
18. We propose implementing an
RUFRN for use on Form 323 filings. We
tentatively conclude that this proposal
will provide reasonable assurance of
unique identification of individuals
within our broadcast ownership report
database, which is critical to the
improvement of the Commission’s data
gathering practices. We also tentatively
conclude that RUFRNs provide superior
data quality to SUFRNs and could
enable the Commission to implement a
burden-reducing form modification. We
next consider ways in which the
RUFRN proposal is consistent with
other Commission data gathering and
policy initiatives. Thereafter we propose
to apply RUFRNs to NCE filings if
additional Commission action is
undertaken with respect to broadcast
ownership reporting in the NCE
industry segment. We believe that the
quality of the Commission’s security
systems and the Privacy Act are not a
barrier to the system proposed. In
addition, we tentatively conclude that
the RUFRN proposal is not burdensome.
We ask for comment on whether
SUFRNs should remain available in the
case of recalcitrant individuals. We seek
comment on the costs and benefits of all
the proposals contained herein and any
alternatives commenters propose.
19. RUFRNs Support the
Commission’s Data Gathering and
Policy Making Initiatives. We continue
to believe, as described below, that the
Commission must be able to identify
parties reported on broadcast ownership
reports uniquely for purposes of
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creating reliable and usable data in
support of policy initiatives promoting
diverse ownership. Our RUFRN
proposal is important to the
Commission’s ongoing mission to
improve, streamline, and modernize the
way it collects and uses data. We wish,
however, to balance these Commission
objectives against the privacy, data
security, and identity theft concerns of
individuals with attributable interests in
broadcast stations. The Commission is
particularly sensitive to concerns that
have been expressed in the existing
record in the Diversity proceeding
concerning the proposal that individual
attributable interest holders of broadcast
stations provide an SSN to the
Commission for purposes of broadcast
ownership reporting.
20. Accordingly, we propose to
establish an alternative mechanism
within CORES to identify individuals
uniquely that does not require
submission of a full SSN to the
Commission. This method would allow
an individual to obtain an RUFRN from
CORES by submitting an alternate set of
identifying information—including full
name, residential address, date of birth,
and last four digits of the individual’s
SSN. The CORES system will be
programmed to verify that the submitted
information is complete and does not
duplicate any information that is
already associated with an RUFRN in
CORES. We also propose that when an
applicant obtains an RUFRN the
individual will be asked to list all
CORES FRNs registered to the
individual and all SUFRNs that
individual previously used in any
broadcast ownership report filings since
the 2009 biennial reporting cycle. We
tentatively conclude that such
disclosures will allow the Commission
to identify CORES FRNs, RUFRNs, and
SUFRNs that identify the same
individual, promoting the usefulness of
the broadcast ownership data for
purposes of electronic searching,
aggregating, and cross-referencing and
for trend analysis. Once an RUFRN is
issued, we propose that any ownership
report filing that lists that specific
individual would be required to include
that RUFRN. We propose that
attributable interest holders would not
be required to obtain or use an RUFRN
for Form 323 (or Form 323–E if the
filing obligations proposed in the Fourth
Diversity Further Notice are extended to
NCEs) and could instead opt to use a
CORES FRN. Like SUFRNs, we propose
that RUFRNs would be usable only on
broadcast ownership reporting forms
and only for individuals (not entities)
reported as attributable interest holders.
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We seek comment on these proposals
and tentative conclusions and on the
costs and benefits of using an RUFRN as
described herein for broadcast
ownership reporting purposes.
21. The Commission has previously
recognized that Sections 257 of the 1996
Act and 309(j) of the Act support its
efforts to gather the ownership data
contained in Form 323. In the 1998
Biennial Review Order, the Commission
concluded that, in order to fulfill its
statutory mandates, it must collect race,
gender, and ethnicity information from
all interest holders reported on Form
323. Collecting these data enables the
Commission not only to assess the
current state of minority and female
ownership of broadcast stations but also
to determine the success of programs
that are designed to facilitate
opportunities for women- and minorityowned businesses and to promote a
diversity of media voices. Just as it is
essential for the Commission to collect
these ownership data to fulfill its
mandates, it is important that these data
be reliable, aggregable, and useful for
studies and trend analysis. The
Commission has recognized that CORES
FRNs offer a unique identifier and
therefore play an important role in
promoting the integrity of the data
collected.
22. We tentatively find that flaws in
the current practices related to the
reporting of SUFRNs for individuals
listed on Form 323 compromise the
integrity of the data and thereby
frustrate the Commission’s attempts to
fulfill its statutory mandates under
section 257 and section 309(j). Because
our policy initiatives are dependent on
the quality of the data collected, we
tentatively conclude that requiring an
FRN generated by CORES, either
through existing mechanisms or via the
proposed method to obtain an RUFRN,
for all reportable interest holders on
Forms 323 (and 323–E if proposals in
the Fourth Diversity Further Notice are
adopted) is essential to improve the
quality and usability of the data
collected. We seek comment on these
tentative conclusions.
23. We tentatively conclude that
having reasonable assurance that
attributable interest holders are
uniquely identified on ownership
reports in a manner that ensures the
data can be meaningfully searched,
aggregated, and cross-referenced
electronically is crucial to data quality
and usability. In the Sixth Diversity
Further Notice we tentatively concluded
that TINs/SSNs within CORES were
necessary as underlying unique
identifiers of individuals. Would the
RUFRN system described provide
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sufficient assurances that individuals
are uniquely identified? For instance,
are the specific pieces of identifying
information described in our proposal
(full name, residential address, date of
birth, and last four digits of the
individual’s SSN) sufficient to provide a
reasonable basis for determining that an
individual identified is unique within
the CORES system? Are there a
sufficient number of criteria included in
the proposal or are there additional
pieces of information that would
improve the reliability of the data? Are
there additional or different pieces of
information that better enable the
Commission to ensure that individuals
are uniquely identified? If so, what
additional or different pieces of
information should the Commission
require? What risk would remain that
the system could not uniquely identify
individuals using these pieces of
information?
24. A commenter to the Sixth
Diversity Further Notice asserts that
unique identification of individuals in
ownership data is not necessary to study
broadcast ownership trends over time.
This argument is not convincing
because it presumes incorrectly that the
only utility of the data is to track how
many stations have minority and/or
female owners. Other questions relevant
to evaluating trends in minority and
female ownership include how many
individual minority and/or female
owners exist at a given point and how
those numbers change over time. The
Commission cannot count unique
individual owners without a mechanism
to identify individuals uniquely. The
same commenter also states that the fact
that ownership reports are submitted
under penalty of perjury is sufficient to
ensure that parties report race or gender
information on ownership report filings
accurately. But, as noted above,
examination of ownership reports from
2009, 2011, and 2013 revealed
numerous data reporting errors due in
part to the complexity of the
information required to accurately file
the form. We have no reason to believe
that these errors were the result of filers
attempting to deliberately mislead the
Commission. We tentatively conclude
that the presence of a unique identifier
will improve the quality of our
ownership data by permitting errors to
be identified and remedied. For
example, since an individual’s race
cannot change over time, the presence
of the same individual’s FRN on
multiple reports, along with
inconsistent race information could
indicate one or more reporting errors
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that can then be cured. We seek
comment on these positions.
25. RUFRNs Provide Superior Data
Quality to SUFRNs. We tentatively
conclude that the RUFRN would
provide superior data quality to the
SUFRN and we seek comment on that
tentative conclusion. The SUFRN was
devised as merely a computer generated
number created by clicking a button
within Form 323 itself and not backed
by any identifying information. The
Commission collects no information
when the system generates a new
SUFRN, and there is no database
analogous to CORES that contains
uniquely identifying information
associated with SUFRNs. The SUFRN
therefore offers the Commission no way
to cross reference or trace back reported
information to a single individual.
Because the Commission cannot
determine whether particular
individuals hold one or more SUFRNs
or whether a particular SUFRN is being
used to identify one or more
individuals, it cannot reliably examine
the complete attributable holdings of an
individual reported with a SUFRN
(either at a specific time or over time),
or search, aggregate, and cross-reference
our ownership data using Commission
systems. Any attempt at such analysis
would require manual consideration of
every single entry where a SUFRN
appears together with a subjective
analysis of other textual information
contained on the form or available from
other public sources. Manual, subjective
analysis of thousands of Form 323
entries using various sources of
information compromises data integrity
and data utility. On the other hand, we
tentatively conclude that since RUFRNs
will be backed by identifying
information, and since CORES will not
issue multiple RUFRNs for the same
identifying information, RUFRNs can be
relied upon to identify individuals
uniquely. We seek comment on our
view that the qualities of the proposed
RUFRN provide superior data quality to
the SUFRN.
26. As noted above, some commenters
in the Diversity proceeding argued that
CORES FRNs cannot serve as unique
identifiers because, for example,
multiple FRNs can be obtained for a
single TIN/SSN, an FRN might be
associated with no TIN or an incorrect
TIN, and outside researchers do not
have access to underlying TIN
information within CORES. We observe
that the CORES proceeding has
proposed several options to resolve
some of these issues. Even as the
Commission continues to examine those
issues through its CORES reform
process, we tentatively conclude, for
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several reasons, that, notwithstanding
these possibilities, CORES FRNs and
RUFRNs are still superior to SUFRNs for
the purpose of broadcast ownership
reports. To begin with, exceptions
permitting an individual or entity to
obtain a CORES FRN without a TIN are
legitimately available in a limited
number of cases that would not be
expected to compromise the overall
ownership data submitted. And even
though CORES currently permits an
individual or entity to obtain multiple
FRNs with a single TIN, the
Commission can identify all FRNs that
relate to a single TIN. Also, we expect
that individuals and entities will
comply with our rules and provide
accurate information during the CORES
registration process to the greatest
extent possible. While the Commission’s
obligation to hold the TIN confidential
does limit the direct utility of the TIN
to outside researchers as a unique
identifier, that limitation does not
decrease the benefits for data integrity
and utility to the Commission. With
respect to the RUFRN proposal, we
anticipate that the specificity of the
identifying information required and the
fact that a number of pieces of
information are required will be
sufficient to provide the Commission
with reasonable certainty that the
information identifies a unique filer
within the CORES system. Based on our
experience in the 2009, 2011, and 2013
reporting cycles, we tentatively
conclude that the RUFRN proposal will
improve the reliability and usability of
the broadcast ownership report
database, in furtherance of our statutory
mandates. We seek comment on these
conclusions.
27. RUFRNs May Enable BurdenReducing Form Modification. As noted
above, the Commission and commenters
have identified errors in filings
submitted to the Commission over the
last three filing periods. We tentatively
conclude that some such errors could be
reduced by simplifying the form and
making it less burdensome to complete
and submit. Specifically, the record
reflects proposals that would eliminate
a filer’s obligation to disclose other
attributable broadcast interests of
attributable parties listed in the filing.
We tentatively conclude that in order to
implement this burden-reducing form
modification without compromising the
scope and content of the information
collected, the Commission requires a
unique identifier to allow the filings to
be electronically searched and crossreferenced within a single filing period
and over time. We tentatively conclude
that the existence of unique identifiers
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will permit the Commission to make
this modification while maintaining the
integrity of its ownership data, thereby
reducing burdens on filing parties and
improving the quality of the information
submitted to the Commission. We seek
comment on these conclusions.
28. RUFRN Application in NCE
Context. We specifically seek additional
comment concerning the proposal to use
RUFRNs for Form 323–E if the pending
proposal in the Fourth Diversity Further
Notice to modify NCE ownership
reporting practices to correspond to
commercial requirements and the
proposal in the Sixth Diversity Further
Notice to extend FRN requirements to
noncommercial stations are adopted.
We tentatively conclude that if the
Commission does modify the Form 323–
E requirements as described in the
Fourth Diversity Further Notice then a
CORES-generated FRN, either a
traditional SSN-based CORES FRN or
the RUFRN proposed herein, is a
sufficient and appropriate tool for the
unique identification of individuals
with attributable interests in NCEs for
the same reasons and in the same
manner as commercial stations.
Accordingly, we propose to permit an
individual listed on Form 323–E to
obtain and provide an RUFRN, in lieu
of a CORES FRN, for use on broadcast
ownership filings. We invite comment
on these tentative conclusions and on
the foregoing proposal. As described
above, we note that several commenters
to the Sixth Diversity Further Notice
argue that the CORES FRN requirement
would be unduly burdensome for NCEs
because an SSN disclosure requirement
would discourage people from serving
on the boards of NCE stations and
licensees would have difficulty
obtaining SSNs from board members
who may be government officials. We
seek comment on how and whether
these concerns would arise if RUFRNs
were made available for use in broadcast
ownership reports. We note that officers
and directors of NCE stations already
are reported on Form 323–E and
questions related to the propriety of
requiring disclosure of race, gender, and
ethnicity information on Form 323–E
are pending pursuant to the Fourth
Diversity Further Notice. Here we seek
comment on specifically whether there
are unique considerations with respect
to NCE stations that would lead to a
different conclusion for NCEs than for
commercial stations with regard to the
information proposed to be included to
obtain an RUFRN. If so what are those
unique considerations? Are there other
alternatives for unique identification of
individuals in the NCE context that
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would improve the quality, usability,
and reliability of our broadcast
ownership data and/or help ensure that
our broadcast ownership data can be
searched, aggregated, and crossreferenced electronically? We invite
comment on the application of RUFRNs
to NCEs in the event that the pending
proposals in the Fourth Diversity
Further Notice are adopted.
29. Security of Commission Systems.
In the Sixth Diversity Further Notice, the
Commission sought comment on any
security concerns related to the
requirement that interest holders submit
an SSN, noting that only the FRN is
made public and the SSN is not
disclosed on any Commission
application or form, including Forms
323 and 323–E. Commenters raised
concerns that a CORES FRN
requirement for individuals will open
individuals to threats of identity theft.
Some commenters pointed to a system
breach described in a GAO report on
information security and suggested that
the Commission’s systems are
vulnerable to a security breach.
30. We agree with commenters that
privacy and security with respect to
personally identifiable information are
paramount, and we believe that the
steps taken and the procedures in place
assure the security of the Commission’s
systems. The Commission is not aware
of any breaches to CORES. In addressing
similar security concerns from
commenters, the Commission wrote in
2009 that the CORES architecture
exceeds Federal guidelines and that its
databases are behind several firewalls.
The Commission also explained that
administrative access to the CORES
application is limited and that all
transmission of non-public data is
encrypted. Furthermore, the safeguards
in place in 2009 have been improved.
Certain improvements were underway
prior to completion of the Information
Security GAO Report, and that report
also provided the Commission with
additional, valuable recommendations
for continuing to strengthen our security
environment. We have implemented
enhanced perimeter controls, malware
protection, and monitoring devices and
upgraded workstations to operating
systems with improved security. The
Commission’s security architecture has
strict operational controls in place that
comply with National Institute of
Standards and Technology guidance. As
the Commission explained to OMB in
2009, system servers are located behind
several firewalls and other security
controls to protect CORES data from
intrusion by outsiders as well as the
general Commission population.
Administrative access to CORES
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remains limited to only certain known
internal workstations and all servers are
monitored by automated tools and
operational procedures. Moreover, the
Commission made several upgrades to
all of its systems, including CORES, to
ensure that its systems remain secure.
Security will continue to be one of our
highest priorities. In light of the
foregoing, we seek comment on whether
the elimination of the need for
individual attributable interest holders
to submit an SSN eliminates the privacy
and identity theft concerns existing in
the current record. If not, what privacy
or identity theft concerns remain and
how can they be addressed? Are such
concerns outweighed by the importance
of the data collection?
31. Privacy Act. We tentatively
conclude that the Privacy Act does not
bar the adoption of the RUFRN
requirements described herein. The
Sixth Diversity Further Notice sought
comments on whether the Privacy Act
was a barrier to adoption of the CORES
FRN requirement. No commenters
asserted that the Privacy Act was a
barrier to the requirement for
individuals with attributable interests in
commercial entities. With respect to
application of the CORES FRN
requirement to Form 323–E if the
proposals in the Fourth Diversity
Further Notice are adopted, several
commenters to the Sixth Diversity
Further Notice argue that the Privacy
Act bars application of the SSN
requirement in the NCE context. We
find that elimination of the SSN
requirement from the list of identifying
information that is required in
conjunction with broadcast ownership
reporting would further ensure that the
Privacy Act is not an impediment to the
proposed RUFRN requirement. Also as
described above, we tentatively
conclude that unique identification of
individuals is essential for ownership
data quality, utility, and reliability,
which are critical components of any
future policy initiatives to promote
ownership diversity consistent with our
statutory mandate under the
Communications Act. Further, the
Commission has already adopted a
Privacy Act SORN for CORES and with
respect to the Form 323 requirement,
which applies to any personally
identifiable information required by
Form 323 and CORES in connection
with the CORES FRN registration
process, and to the extent necessary any
modifications required by the
implementation of the RUFRN system
for Form 323 or Form 323–E can be
addressed with modifications to the
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SORN. We request comment on these
tentative conclusions.
32. RUFRNs Are Not Burdensome,
and the Benefits Outweigh the Costs. We
continue to believe that obtaining a
CORES FRN imposes minimal costs and
burdens, if any, on individuals or filers.
As noted in the Sixth Diversity Further
Notice, registering for a CORES FRN is
a one-time process that takes a few
moments to complete. An individual
that already has obtained a CORES FRN
may continue to use his or her CORES
FRN for Form 323 filings, and need not
obtain a RUFRN. Moreover, an
individual that wishes to obtain a
RUFRN can easily locate previouslyregistered CORES FRNs through CORES.
We tentatively conclude that permitting
individuals holding attributable
interests in one or more broadcast
licensees to obtain a RUFRN in lieu of
obtaining a CORES FRN would impose
minimal costs or other burdens. We seek
comment on these tentative conclusions
and on any potential burdens inherent
in the RUFRN proposal. We seek input
on alternatives that might reduce or
eliminate such burdens as well as the
costs and benefits of such alternatives.
To the extent possible, commenters
should quantify any identified costs and
benefits. We note that the vast majority
of individuals reported on Form 323
have obtained and reported CORES
FRNs, and we believe it is likely that
will continue to be the case for future
broadcast ownership filing obligations.
Individuals who already have a CORES
FRN need not obtain an RUFRN and
may continue to use the existing
number. Moreover, any individual that
wishes to obtain a CORES FRN instead
of an RUFRN will be able to do so.
Additionally, as explained above, the
existence of a unique identifier that can
be cross-referenced may make
modifications of the reports possible
that could reduce the burdens on all
filers and, thereby, further improve the
quality of the ownership data submitted
to the Commission. As such, we
tentatively find that the benefits of
improved data collection outweigh any
de minimis costs or burdens associated
with obtaining an FRN described herein
and we seek comment on that
conclusion. To the extent possible,
commenters should quantify relative
costs and benefits.
33. Limited Availability of SUFRNs.
We seek further comment concerning
the elimination of the availability of
SUFRNs for broadcast ownership
reports. The Sixth Diversity Further
Notice solicited input on whether to
retain the SUFRN in the event that
reportable individuals are unwilling to
provide their SSNs to third parties or
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unwilling to obtain and provide CORES
FRNs. In the event that a SUFRN is
reported for an individual, the Sixth
Diversity Further Notice explained that
the Commission could use its
enforcement authority against
individuals who failed to obtain a
CORES FRN. Commenters generally
support the proposal to retain the
SUFRN for this limited purpose and
oppose the Commission’s use of its
enforcement authority. We seek
comment on whether the SUFRN should
continue to be available to Form 323
filers (and Form 323–E filers if the
proposals in the Fourth Diversity
Further Notice are adopted), in the event
that after a filer has used reasonable and
good faith efforts, reportable individuals
are unwilling to provide their
identifying information or unwilling to
obtain and provide a CORES FRN or
RUFRN themselves. Would this limited
availability of SUFRNs appropriately
protect the position of filers in the case
of recalcitrant interest holders? Should
the Commission require filers to take
specific steps to substantiate that they
have made a reasonable good faith
efforts? If so, what steps should be
required? For instance, should the
Commission expect that a filer will
instruct an individual about the
obligation to supply a filer with a
CORES FRN or RUFRN or to provide the
filer with the identifying information
sufficient to obtain one of these
numbers on the individual’s behalf?
Should the filer be expected to instruct
such an individual about potential
enforcement action? Should the filer
itself be exempt from enforcement
action only if such steps are
substantiated? Should an instruction be
included on Form 323 (and Form 323–
E if the proposals in the Fourth Diversity
Further Notice are adopted) informing
reportable interest holders of their
obligations and alerting them to the risk
of enforcement action for the failure to
provide a CORES FRN or RUFRN or to
permit a CORES FRN or RUFRN to be
obtained? We seek comment on these
issues.
IV. Procedural Matters
A. Filing Requirements
34. Ex Parte Rules. The proceeding
this Notice initiates shall be treated as
a ‘‘permit-but-disclose’’ proceeding in
accordance with the Commission’s ex
parte rules. 47 CFR 1.1200 et seq.
Persons making ex parte presentations
must file a copy of any written
presentation or a memorandum
summarizing any oral presentation
within two business days after the
presentation (unless a different deadline
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10449
applicable to the Sunshine period
applies). Persons making oral ex parte
presentations are reminded that
memoranda summarizing the
presentation must (1) list all persons
attending or otherwise participating in
the meeting at which the ex parte
presentation was made, and (2)
summarize all data presented and
arguments made during the
presentation. If the presentation
consisted in whole or in part of the
presentation of data or arguments
already reflected in the presenter’s
written comments, memoranda or other
filings in the proceeding, the presenter
may provide citations to such data or
arguments in his or her prior comments,
memoranda, or other filings (specifying
the relevant page and/or paragraph
numbers where such data or arguments
can be found) in lieu of summarizing
them in the memorandum. Documents
shown or given to Commission staff
during ex parte meetings are deemed to
be written ex parte presentations and
must be filed consistent with rule
1.1206(b). 47 CFR 1.1206(b). In
proceedings governed by rule 1.49(f), 47
CFR 1.49(f), or for which the
Commission has made available a
method of electronic filing, written ex
parte presentations and memoranda
summarizing oral ex parte
presentations, and all attachments
thereto, must be filed through the
electronic comment filing system
available for that proceeding, and must
be filed in their native format (e.g., .doc,
.xml, .ppt, searchable .pdf). Participants
in this proceeding should familiarize
themselves with the Commission’s ex
parte rules.
35. Comments and Reply Comments.
Pursuant to §§ 1.415 and 1.419 of the
Commission’s rules, 47 CFR 1.415,
1.419, interested parties may file
comments and reply comments on or
before the dates indicated on the first
page of this document. Comments may
be filed using the Commission’s
Electronic Comment Filing System
(ECFS). See Electronic Filing of
Documents in Rulemaking Proceedings,
63 FR 24121 (1998).
• Electronic Filers: Comments may be
filed electronically using the Internet by
accessing the ECFS: https://
fjallfoss.fcc.gov/ecfs2/.
• Paper Filers: Parties who choose to
file by paper must file an original and
one copy of each filing. If more than one
docket or rulemaking number appears in
the caption of this proceeding, filers
must submit two additional copies for
each additional docket or rulemaking
number. Filings can be sent by hand or
messenger delivery, by commercial
overnight courier, or by first-class or
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overnight U.S. Postal Service mail. All
filings must be addressed to the
Commission’s Secretary, Office of the
Secretary, Federal Communications
Commission.
• All hand-delivered or messengerdelivered paper filings for the
Commission’s Secretary must be
delivered to FCC Headquarters at 445
12th St. SW., Room TW–A325,
Washington, DC 20554. The filing hours
are 8:00 a.m. to 7:00 p.m. All hand
deliveries must be held together with
rubber bands or fasteners. Any
envelopes and boxes must be disposed
of before entering the building.
• Commercial overnight mail (other
than U.S. Postal Service Express Mail
and Priority Mail) must be sent to 9300
East Hampton Drive, Capitol Heights,
MD 20743.
• U.S. Postal Service first-class,
Express, and Priority mail must be
addressed to 445 12th Street SW.,
Washington, DC 20554.
36. People With Disabilities: To
request materials in accessible formats
for people with disabilities (braille,
large print, electronic files, audio
format), send an email to fcc504@fcc.gov
or call the Consumer & Governmental
Affairs Bureau at 202–418–0530 (voice),
202–418–0432 (tty).
37. Availability of Documents.
Comments, reply comments, and ex
parte submissions will be available for
public inspection during regular
business hours in the FCC Reference
Center, Federal Communications
Commission, 445 12th Street SW., CY–
A257, Washington, DC 20554. Persons
with disabilities who need assistance in
the FCC Reference Center may contact
Bill Cline at (202) 418–0267 (voice),
(202) 418–0432 (TTY), or bill.cline@
fcc.gov. These documents also will be
available from the Commission’s
Electronic Comment Filing System.
Documents are available electronically
in ASCII, Word 97, and Adobe Acrobat.
To request materials in accessible
formats for people with disabilities
(Braille, large print, electronic files,
audio format), send an email to fcc504@
fcc.gov or call the Consumer and
Governmental Affairs Bureau at (202)
418–1400 (voice), (202) 418–0432
(TTY).
38. Information. For additional
information on this proceeding, contact
Jake Riehm at (202) 418–2166 or Warren
Firschein at (202) 418–0844. Press
inquiries should be directed to Janice
Wise at (202) 418–8165.
B. Paperwork Reduction Act Analysis
39. Initial Paperwork Reduction Act
Analysis. This Second FNPRM and
Seventh FNPRM seeks comment on
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potential new or revised information
collection requirements with regard to
CORES, FCC Form 323, and FCC Form
323–E. The Commission invites the
general public, the Office of
Management and Budget (‘‘OMB’’) and
other Federal agencies to comment on
the information collection requirements.
This Notice may result in new or
revised information collection
requirements. If the Commission adopts
any new or revised information
collection requirements, the
Commission will publish a notice in the
Federal Register inviting additional
public comment on the requirements, as
required by the Paperwork Reduction
Act of 1995, Public Law 104–13 (44
U.S.C. 3501–3520). In addition,
pursuant to the Small Business
Paperwork Relief Act of 2002, Public
Law 107–198, see 44 U.S.C. 3506(c)(4),
the Commission seeks specific comment
on how it might ‘‘further reduce the
information collection burden for small
business concerns with fewer than 25
employees.’’ On October 19, 2009, OMB
approved the FCC’s proposal to
implement a CORES FRN requirement
for all individuals holding attributable
interests in the licensee reported on
Form 323. That requirement went into
effect as of October 30, 2009.
40. In addition to filing comments
with the Secretary, a copy of any PRA
comments on the proposed collection
requirements contained herein should
be submitted to the Federal
Communications Commission via email
to PRA@fcc.gov and to Nicholas A.
Fraser, Office of Management and
Budget, via email to nfraser@
omb.eop.gov or via fax at 202–395–5167.
V. Initial Regulatory Flexibility
Analysis
41. As required by the Regulatory
Flexibility Act of 1980, as amended
(RFA), the Commission has prepared
this Initial Regulatory Flexibility
Analysis (IRFA) of the possible
economic impact on small entities by
the policies and rules proposed in this)
Second FNPRM and Seventh FNPRM
(Notice). Written public comments are
requested on this IRFA. Comments must
be identified as responses to the IRFA
and must be filed by the deadlines for
comments on the Notice. The
Commission will send a copy of the
Notice, including this IRFA, to the Chief
Counsel for Advocacy of the Small
Business Administration (SBA). In
addition, the Notice and IRFA (or
summaries thereof) will be published in
the Federal Register.
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A. Need for, and Objectives of, the
Proposed Rules
42. Currently, filers of Form 323
(Ownership Report for Commercial
Broadcasters) must provide an FCC
Registration Number (FRN) generated
via the Commission’s Registration
System (CORES) for each reported
attributable party. To obtain a CORES
FRN, an individual must submit his or
her social security number (SSN) to the
Commission through CORES. CORES
FRNs therefore can be used to uniquely
identify individuals reported on Form
323, which is crucial to the quality and
utility of the Commission’s broadcast
ownership data. However, if a filer uses
diligent and good-faith efforts to obtain
an SSN from an individual that must be
reported on Form 323 in order to
generate a CORES FRN, but is unable to
do so, the filer may provide a Special
Use FRN (SUFRN) for that individual.
Because the SUFRN generation process
does not requires submission of an SSN,
or any other identifying information,
SUFRNs do not provide a reliable means
of linking a reported interest holder to
a unique individual. The existence of
SUFRNs therefore undermines the
usefulness and integrity of the
Commission’s broadcast ownership
data.
43. To address this issue, the Notice
invites comment on a proposal to create
a new type of FRN within CORES—a
Restricted Use FRN (‘‘RUFRN’’)—for use
on Form 323. Under the proposal set
forth in the Notice, an individual
requesting an RUFRN would be required
to submit his or her name, date of birth,
and residential address, along with the
last four digits of his or her SSN, to
CORES. Once obtained, an individual
would be required to use the RUFRN on
all current and future Form 323 filings.
The Notice seeks comment on this
RUFRN proposal, including input
concerning the costs, benefits, and
possible alternative approaches.
44. The Notice explains that the
Commission’s Fourth Diversity Further
Notice requested input on adopting
modifications to Form 323–E
(Ownership Report for Noncommercial
Broadcast Stations) similar to those
previously adopted for Form 323. The
Sixth Diversity Further Notice
specifically proposed requiring Form
323–E filers to provide a CORES FRN
for all attributable parties. In light of the
foregoing, the Notice seeks comment
concerning the future application of the
RUFRN proposal to Form 323–E (if
Form 323–E is modified along the lines
proposed in the Fourth Diversity Public
Notice).
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45. Finally, the Notice indicates that
the Sixth Diversity Further Notice
solicited input on whether to retain the
availability of SUFRNs for ownership
report filings in the event that reportable
individuals are unwilling to provide
their SSN to a third party or unwilling
to obtain and provide a CORES FRN.
Similarly, the Notice asks whether, if
the RUFRN proposal is adopted,
SUFRNs should continue to be available
to Form 323 filers (and Form 323–E
filers if the proposals in the Fourth
Diversity Further Notice are adopted), in
the event that after a filer has used
reasonable and good faith efforts,
reportable individuals are unwilling to
provide their identifying information or
unwilling to obtain and provide a
CORES FRN or RUFRN themselves.
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B. Legal Basis
46. This Notice is adopted pursuant to
sections 1, 2(a), 4(i)–(j), 257, and 303(r),
of the Communications Act of 1934, as
amended, 47 U.S.C. 151, 152(a), 154(i,
j), 257, 303(r).
C. Description and Estimate of the
Number of Small Entities to Which the
Proposed Rules Will Apply
47. The RFA directs agencies to
provide a description of, and, where
feasible, an estimate of the number of
small entities that may be affected by
the proposed rules, if adopted. The RFA
defines the term ‘‘small entity’’ as
having the same meaning as the terms
‘‘small business,’’ ‘‘small organization,’’
and ‘‘small governmental jurisdiction’’
under Section 3 of the Small Business
Act. In addition, the term ‘‘small
business’’ has the same meaning as the
term ‘‘small business concern’’ under
the Small Business Act. A small
business concern is one which: (1) Is
independently owned and operated; (2)
is not dominant in its field of operation;
and (3) satisfies any additional criteria
established by the SBA.
48. Television Broadcasting. The SBA
defines a television broadcasting station
that has no more than $38.5 million in
annual receipts as a small business. The
definition of business concerns
included in this industry states that
establishments are primarily engaged in
broadcasting images together with
sound. These firms operate television
broadcasting studios and facilities for
the programming and transmission of
programs to the public. These firms also
produce or transmit visual programming
to affiliated broadcast television
stations, which in turn broadcast the
programs to the public on a
predetermined schedule. Programming
may originate in their own studio, from
an affiliated network, or from external
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sources. Census data for 2007 indicate
that 808 such firms were in operation
for the duration of that entire year. Of
these, 709 had annual receipts of less
than $25.0 million per year and 99 had
annual receipts of $25.0 million or more
per year. Based on this data and the
associated size standard, the
Commission concludes that the majority
of such firms are small.
49. Additionally, the Commission has
estimated the number of licensed
commercial television stations to be
1,387. According to Commission staff
review of the BIA/Kelsey, LLC’s Media
Access Pro Television Database on
November 25, 2014, about 1,276 of an
estimated 1,387 commercial television
stations (or approximately 92 percent)
had revenues of $38.5 million or less.
The Commission has estimated the
number of licensed noncommercial
educational television stations to be
395. We do not have revenue data or
revenue estimates for noncommercial
stations. These stations rely primarily
on grants and contributions for their
operations, so we will assume that all of
these entities qualify as small
businesses. We note that in assessing
whether a business entity qualifies as
small under the above definition,
business control affiliations must be
included. Our estimate, therefore, likely
overstates the number of small entities
that might be affected by any changes to
the filing requirements for FCC Form
323 or Form 323–E, because the revenue
figures on which this estimate is based
do not include or aggregate revenues
from affiliated companies.
50. An element of the definition of
‘‘small business’’ is that the entity not
be dominant in its field of operation.
The Commission is unable at this time
and in this context to define or quantify
the criteria that would establish whether
a specific television station is dominant
in its market of operation. Accordingly,
the foregoing estimate of small
businesses to which the rules may apply
does not exclude any television stations
from the definition of a small business
on this basis and is therefore overinclusive to that extent. An additional
element of the definition of ‘‘small
business’’ is that the entity must be
independently owned and operated. It is
difficult at times to assess these criteria
in the context of media entities, and our
estimates of small businesses to which
they apply may be over-inclusive to this
extent.
51. Radio Broadcasting. The SBA
defines a radio broadcasting entity that
has $38.5 million or less in annual
receipts as a small business. Business
concerns included in this industry are
those ‘‘primarily engaged in
PO 00000
Frm 00054
Fmt 4702
Sfmt 4702
10451
broadcasting aural programs by radio to
the public.’’ Census data for 2007
indicate that 2,926 such firms were in
operation for the duration of that entire
year. Of these, 2,877 had annual receipts
of less than $25.0 million per year and
49 had annual receipts of $25.0 million
or more per year. Based on this data and
the associated size standard, the
Commission concludes that the majority
of such firms are small.
52. Further, according to Commission
staff review of the BIA/Kelsey, LLC’s
Media Access Pro Television Database
on November 25, 2014, about 11,337 (or
about 99.9 percent) of 11,348
commercial radio stations in the United
States have revenues of $38.5 million or
less. The Commission has estimated the
number of licensed noncommercial
radio stations to be 4,085. We do not
have revenue data or revenue estimates
for these stations. These stations rely
primarily on grants and contributions
for their operations, so we will assume
that all of these entities qualify as small
businesses. We note that in assessing
whether a business entity qualifies as
small under the above definition,
business control affiliations must be
included. Our estimate, therefore, likely
overstates the number of small entities
that might be affected by any changes to
filing requirements for FCC Form 323 or
Form 323–E, because the revenue
figures on which this estimate is based
do not include or aggregate revenues
from affiliated companies.
53. In this context, the application of
the statutory definition to radio stations
is of concern. An element of the
definition of ‘‘small business’’ is that the
entity not be dominant in its field of
operation. We are unable at this time
and in this context to define or quantify
the criteria that would establish whether
a specific radio station is dominant in
its field of operation. Accordingly, the
foregoing estimate of small businesses to
which the rules may apply does not
exclude any radio station from the
definition of a small business on this
basis and is therefore over-inclusive to
that extent. An additional element of the
definition of ‘‘small business’’ is that the
entity must be independently owned
and operated. We note that it is difficult
at times to assess these criteria in the
context of media entities, and our
estimates of small businesses to which
they apply may be over-inclusive to this
extent.
54. Class A TV and LPTV Stations.
The rules and policies adopted herein
apply to licensees of low power
television (‘‘LPTV’’) stations, including
Class A TV stations and, as well as to
potential licensees in these television
services. The same SBA definition that
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applies to television broadcast licensees
would apply to these stations. The SBA
defines a television broadcast station as
a small business if such station has no
more than $38.5 million in annual
receipts. As of September 30, 2014,
there are approximately 430 licensed
Class A stations and 2,115 licensed
LPTV stations. Given the nature of these
services, we will presume that all of
these licensees qualify as small entities
under the SBA definition. We note,
however, that under the SBA’s
definition, revenue of affiliates that are
not LPTV stations should be aggregated
with the LPTV station revenues in
determining whether a concern is small.
Our estimate may thus overstate the
number of small entities since the
revenue figure on which it is based does
not include or aggregate revenues from
non-LPTV affiliated companies.
D. Description of Projected Reporting,
Recordkeeping, and Other Compliance
Requirements
55. There may be changes to reporting
or recordkeeping requirements if the
Commission adopts the RUFRN
proposal for Form 323 and/or Form
323–E. In the event that the RUFRN
proposal is adopted for the Form 323
and/or Form 323–E, filers will have the
option to obtain and report a unique
identifier for individual attributable
interest holders that does not require
submission of a full SSN to the
Commission. Adoption of this proposal
will allow an individual to obtain an
RUFRN from CORES by submitting an
alternate set of identifying information.
Individuals would not be required to
obtain or report an RUFRN on the Form
323 and/or Form 323–E—instead,
individuals could obtain and report a
CORES FRN. An individual who has
provided a CORES FRN on one or more
previous ownership filings may
continue to use that CORES FRN going
forward. There also may be changes to
reporting or recordkeeping requirements
if the Commission limits or eliminates
that availability of SUFRNs for
broadcast ownership reports. Filers may
be obligated to instruct individuals
about their obligation to supply the filer
with a CORES FRN or RUFRN or to
provide the filer with the information
sufficient to obtain one of these
identifiers on the individual’s behalf. A
filer may also be required to inform
individuals about potential enforcement
action for failure to obtain or report a
CORES FRN or RUFRN. Moreover, if a
filer reports an SUFRN for an individual
interest holder, the filer may be required
to show that the filer made reasonable
good faith efforts to obtain a CORES
FRN or RUFRN, or the information
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necessary to obtain a CORES FRN or
RUFRN, on the individual’s behalf.
E. Steps Taken To Minimize Significant
Impact on Small Entities, and
Significant Alternatives Considered
56. The RFA requires an agency to
describe any significant alternatives that
might minimize any significant
economic impact on small entities. Such
alternatives may include the following
four alternatives (among others): (1) The
establishment of differing compliance or
reporting requirements or timetables
that take into account the resources
available to small entities; (2) the
clarification, consolidation, or
simplification of compliance and
reporting requirements under the rule
for small entities; (3) the use of
performance, rather than design,
standards; and (4) an exemption from
coverage of the rule, or any part thereof,
for small entities.
57. As noted, we are directed under
law to describe any such alternatives we
consider, including alternatives not
explicitly listed above. The Notice
proposes to allow individuals reported
on Form 323 to obtain and provide an
RUFRN in lieu of a traditional CORES
FRN. Similarly, the Notice proposes
making RUFRNs available to Form 323–
E filers in the event that Form 323–E is
modified as proposed in the Fourth
Diversity Further Notice. The Notice
also proposes eliminating the
availability of SUFRNs for Form 323
and Form 323–E filings. In the
alternative, the Commission could
decide not to enact the RUFRN proposal
contained in the Notice and not to
modify the availability of SUFRNs. The
Commission also could defer these
actions until a later time. Additionally,
the Commission could decide to treat
noncommercial broadcasters differently
from commercial broadcast stations for
purposes of uniquely identifying and
tracking individual attributable interest
holders reported on the 323–E. While
decisions to adopt the RUFRN proposal
and eliminate the Special Use FRN
might result in increased burdens on
reporting parties, the Notice tentatively
concludes that any such burdens would
be minimal and that the benefits of
having a unique identifier for data
quality, searchability, cross-referencing
and aggregation purposes in order to
further the Commission’s goal of
advancing diversity of ownership in the
broadcast industry would outweigh
those burdens. A unique identifier is
necessary to improve the quality of the
data collected on the Form 323. The
Commission also seeks comment on
whether the Special Use FRN should be
available solely in instances where, after
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Frm 00055
Fmt 4702
Sfmt 4702
reasonable and good faith efforts, filers
are unable to obtain a CORES FRN or
RUFRN from an individual with
reportable interests. This alternative
could reduce the burden for those filers
who are unable to, after reasonable and
good faith efforts, to obtain a CORES
FRN or RUFRN from an individual
attributable interest holder, while
ensuring that the filer will be able to
timely submit the Form 323. This will
allow the Commission to identify the
individual with a reportable interest
that has failed to provide a CORES FRN
or RUFRN.
F. Federal Rules That May Duplicate,
Overlap, or Conflict With the Proposed
Rules
58. None.
VI. Ordering Clauses
59. Accordingly, it is ordered that,
pursuant to the authority contained in
sections 1, 2(a), 4(i,j), 257, and 303(r) of
the Communications Act of 1934, as
amended, 47 U.S.C. 151, 152(a), 154(i)(j), 257, and 303(r), the Second FNPRM
and Seventh FNPRM is adopted.
60. It is further ordered that, pursuant
to the authority contained in sections 1,
2(a), 4(i, j), 257, and 303(r) of the
Communications Act of 1934, as
amended, 47 U.S.C. 151, 152(a), 154(i,
j), 257, 303(r), notice is hereby given of
the proposals described in this Second
FNPRM and Seventh FNPRM.
61. It is further ordered that the
Commission’s Consumer &
Governmental Affairs Bureau, Reference
Information Center, shall send a copy of
the Second FNPRM and Seventh
FNPRM, including the Initial Regulatory
Flexibility Analysis, to the Chief
Counsel for Advocacy of the Small
Business Administration.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 2015–03988 Filed 2–25–15; 8:45 am]
BILLING CODE 6712–01–P
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System
48 CFR Parts 205, 212, 225, and 252
RIN 0750–AI51
Defense Federal Acquisition
Regulation Supplement: Acquisition of
the American Flag (DFARS Case 2015–
D005)
Defense Acquisition
Regulations System, Department of
Defense (DoD).
AGENCY:
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Agencies
[Federal Register Volume 80, Number 38 (Thursday, February 26, 2015)]
[Proposed Rules]
[Pages 10442-10452]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-03988]
=======================================================================
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 73
[MB Docket No. 07-294, MD Docket. No. 10-234; FCC 15-19]
Promoting Diversification of Ownership in the Broadcasting
Services
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: In this document, the Federal Communications Commission
(Commission) proposes improvements to the collection of data reported
on FCC Form 323, Ownership Report for Commercial Broadcast Stations,
and also to FCC Form 323-E, Ownership Report for Non Commercial
Broadcast Stations, through the development of a new functionality in
the Commission's Registration System (CORES) for issuing FCC
Registration Numbers (FRNs). Specifically the Commission seeks comment
on a proposal to create a new mechanism for an individual to obtain an
FRN that is usable only for broadcast ownership reporting purposes
through CORES.
DATES: The Commission must receive written comments on or before March
30, 2015 and reply comments on or before April 13, 2015. Written
comments on the Paperwork Reduction Act proposed information collection
requirements must be submitted by the public, Office of Management and
Budget (OMB), and other interested parties on or before April 27, 2015.
ADDRESSES: You may submit comments, identified by MB Docket No 07-294
and/or MD Docket No 10-234, by any of the following methods:
[ssquf] Federal Communications Commission's Web site: https://fjallfoss.fcc.gov/ecfs2/. Follow the instructions for submitting
comments.
[ssquf] People with Disabilities: Contact the FCC to request
reasonable accommodations (accessible format documents, sign language
interpreters, CART, etc.) by email: FCC504@fcc.gov or phone: 202-418-
0530 or TTY: 202-418-0432.
FOR FURTHER INFORMATION CONTACT: Jake Riehm, Industry Analysis
Division, Media Bureau, FCC, (202) 418-2330. For additional information
concerning the PRA proposed information collection requirements
contained in the Notice of Proposed Rulemaking, contact Cathy Williams
at (202) 418-2918, or via the Internet at PRA@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Second
Further Notice of Proposed Rulemaking and Seventh Further Notice of
Proposed Rulemaking (Second FNPRM and Seventh FNPRM) in MB Docket Nos.
07-294 and 10-234; FCC 15-19, adopted February 11, 2015, and released
February 12, 2015. The complete text of this document is available for
inspection and copying during normal business hours in the FCC
Reference Center, 445 12th Street SW., Washington, DC 20554.
Summary
I. Introduction
1. The Commission has a long-standing goal of promoting ownership
diversity in broadcast stations to ensure that diverse viewpoints and
perspectives are available to the American people in the content they
receive over the broadcast airwaves. In pursuit of this goal, the
Commission has a long history of promulgating rules and regulations
designed to foster diversity in terms of minority and female ownership.
A necessary foundation for the Commission's rulemaking efforts is the
collection of comprehensive, reliable data reflecting the race, gender,
and ethnicity of the owners and other interest holders in broadcast
stations. Such data are essential to study and analyze ownership trends
effectively, to assess the impact of Commission rules, and to determine
whether rule changes would be in the public interest. To be useful for
these purposes, to the greatest extent possible the data must be
capable of being read, verified, searched, aggregated, and cross-
referenced electronically.
2. As a part of these efforts, the Commission herein proposes
improvements to the collection of data reported on FCC Form 323,
Ownership Report for Commercial Broadcast Stations, and also to FCC
Form 323-E, Ownership Report for Noncommercial Broadcast Stations,
through the development of a new functionality in the Commission's
Registration System (CORES) for issuing FCC Registration Numbers
(FRNs). Specifically, we seek comment on a proposal to create a new
mechanism for obtaining an FRN through CORES. Use of this FRN would be
restricted to the reporting of individual attributable interest holders
in commercial and noncommercial broadcast stations on ownership
reports. This ``Restricted Use'' FRN (RUFRN) would be supported by
identifying information for attributable individuals that does not
include full Social Security Numbers (SSNs) and that would be housed
securely on the Commission's servers and not made available to the
public. This proposal is intended to address some of the privacy and
data security concerns that commenters raised with respect to prior
proposals while still enabling the Commission to uniquely identify
reported individuals, obtain data reflecting a more useful, accurate,
and thorough assessment of minority and female broadcast station
ownership in the United States and reduce certain filing burdens.
Ultimately, such changes to the Commission's system could assist future
initiatives promoting diverse ownership.
II. Background
3. The Commission is engaged in ongoing efforts to improve the
quality, utility, and reliability of its broadcast
[[Page 10443]]
ownership data. As part of this endeavor, in 2009 the Commission
substantially revised Form 323. The changes to the filing requirements
and the modifications to the form were intended to facilitate long-term
comparative studies of broadcast station ownership and to address flaws
in the data collection process identified by the United States
Government Accountability Office (GAO) and by researchers. ``To further
improve the ability of researchers and other users of the data to
cross-reference information and construct ownership structures,''
filers were required to provide a CORES FRN for all reported interest
holders.\1\ To obtain a CORES FRN, with some limited exceptions, a
party must submit a Tax Identification Number (TIN) to the Commission
via CORES. In the case of an individual, a TIN is his or her SSN.
Because a CORES FRN is backed by a TIN/SSN, it can serve as a unique
identifier in most instances, which is crucial to the quality and
utility of the Commission's broadcast ownership data and the ability of
the Commission and outside parties to search, aggregate, and cross-
reference that data electronically.
---------------------------------------------------------------------------
\1\ See generally 323 Order, 24 FCC Rcd at 5903 para. 12. See
Promoting Diversification of Ownership in the Broadcasting Services,
74 FR 56135, Oct. 30, 2009; Promoting Diversification of Ownership
in the Broadcasting Services, 74 FR 56136, Oct. 30, 2009 (Federal
Register notices announcing OMB approval and effective date of
revised Form 323). On October 16, 2009, the Commission sent a
subsequent letter to OMB acknowledging the Commission's action in
the 323 Order to eliminate the reporting of certain nonattributable
interest holders. Letter from Walter Boswell, Acting Assoc. Managing
Director, PERM, OMD, FCC, to Nicholas A. Fraser, OMB (Oct. 16,
2009).
---------------------------------------------------------------------------
4. OMB Review and Approval of 2009 Form 323. On August 11, 2009,
the Commission submitted the revised Form 323, which included the CORES
FRN requirement, to the Office of Management and Budget (OMB) for
approval pursuant to the Paperwork Reduction Act (PRA) requirements and
published the Federal Register notice initiating a 60-day comment
period.\2\ Many of the comments to OMB objected to having to report
CORES FRNs for individuals holding attributable interests, arguing that
in order to obtain a CORES FRN for these individuals, they would need
to provide SSNs to the Commission, a requirement that they claimed
triggers privacy, data security, and identity theft concerns.
Commenters also suggested that obtaining and reporting CORES FRNs for
these individuals would be onerous for filers, and that in some cases,
filers might be unable to obtain a CORES FRN for all individual
attributable interest holders because the individuals are unwilling
either to obtain the FRN themselves or provide their SSN to the filer
for the purpose of obtaining an FRN. Additionally, commenters
criticized the Commission for failing to seek comment on requiring
these individuals to obtain CORES FRNs prior to including this
requirement on the revised form submitted for OMB approval.
---------------------------------------------------------------------------
\2\ Public Information Collection Requirement Submitted to OMB
for Review and Approval, Comments Requested, MB Docket No. 07-294,
74 FR 40188, Aug. 11, 2009.
---------------------------------------------------------------------------
5. On October 6, 2009, the Office of the Managing Director (OMD) at
the Commission submitted a letter to OMB addressing the comments filed
in response to the revised Form 323. OMD explained that requiring CORES
FRNs on Form 323 is an integral part of the Commission's effort to
``improve the quality, reliability, and usability of the collected data
by eliminating inconsistencies and inadequacies in the data
submitted.'' Noting that the CORES FRN is a key tool for ensuring that
ownership data is matched to specific owners, OMD explained that,
without the CORES FRNs, it would be unable to accurately determine an
interest holder's identity when variations of a single name or other
spelling irregularities appear from form to form. The Reply Letter also
responded to comments that the Commission erred in concluding that the
revised Form 323 did not implicate the Privacy Act. OMD stated that
because sole proprietors, officers, and directors are acting in an
entrepreneurial role with respect to broadcast stations, these persons
are not individuals for purposes of the Privacy Act. OMD added that, to
the extent that the revisions raise any privacy concerns, the
Commission created a Privacy Act System of Records (SORN) for Form 323
that would address them.\3\ The Reply Letter also rejected allegations
that the Commission failed to comply with the notice requirements of
the PRA. OMD also disputed commenters' objections that the CORES FRN
requirement raised security and identity theft concerns. OMD noted that
``none of the commenters identify a single instance of a security
breach'' of the CORES system. The Commission utilizes a ``robust
security architecture . . . for CORES that exceeds Federal guidelines
and recommendations'' and has deployed operational controls that comply
with National Institute of Standards and Technology guidance. OMD
stated that its servers are securely located, that its databases are
behind several firewalls, and that all servers and communications are
monitored. The Reply Letter also notes that administrative access to
the CORES application is limited and that all transmission of non-
public data is encrypted.
---------------------------------------------------------------------------
\3\ Id. at 7-8. The Commission issued a System of Records Notice
to cover the data contained in responses to Form 323 that became
effective on December 21, 2009. Privacy Act System of Records, 74 FR
59978, Nov. 19, 2009 (system of records FCC/MB-1).
---------------------------------------------------------------------------
6. On October 19, 2009, OMB approved the revised Form 323,
including the requirement that filers provide a CORES FRN for all
individuals and entities holding an attributable interest in the
licensee.\4\ After several delayed filing deadlines, the Commission set
July 8, 2010 as the first biennial filing deadline using the revised
Form 323. In response to industry concerns about filers' ability to
obtain CORES FRNs for all individual interest holders due to
individuals' concerns about privacy, security, and identity theft, the
Media Bureau allowed filers, as an interim measure, to obtain a
``Special Use'' FRN (SUFRN) for one or more reported individuals in
lieu of obtaining a CORES FRN. When clicking a button on the electronic
version of Form 323 to generate a SUFRN, filers were advised via a pop-
up box that ``[i]f, after using diligent and good-faith efforts'' a
filer is unable to obtain a social security number from an individual
that must be reported on Form 323 in order to generate a CORES FRN, the
filer may elect to automatically generate in the electronic Form 323 a
SUFRN for that individual. The respondents were also informed that
those who use a SUFRN on Form 323 would be deemed to be fully compliant
with the filing obligations and the lack of a CORES FRN would not
subject a filer to enforcement action. An individual does not submit an
SSN, or any other identifying information, to the Commission when he or
she generates a SUFRN, and SUFRNs are not stored within CORES. Each
individual must obtain only one SUFRN and must use it consistently on
all broadcast ownership reports. Filers submitted reports on the
revised version of Form 323 during the 2009, 2011, and 2013 biennial
filing periods, and SUFRNs were available to
[[Page 10444]]
filers during all three biennial filing rounds.
---------------------------------------------------------------------------
\4\ See Promoting Diversification of Ownership in the
Broadcasting Services, 74 FR 56135, Oct. 30, 2009; Promoting
Diversification of Ownership in the Broadcasting Services, 74 FR
56136, Oct. 30, 2009 (Federal Register notices announcing OMB
approval and effective date of revised Form 323). On October 16,
2009, the Commission sent a subsequent letter to OMB acknowledging
the Commission's action in the 323 MO&O to eliminate the reporting
of certain nonattributable interest holders. Letter from Walter
Boswell, Acting Assoc. Managing Director, PERM, OMD, FCC, to
Nicholas A. Fraser, OMB (Oct. 16, 2009).
---------------------------------------------------------------------------
7. Quality of Data in Form 323 Biennial Reports. In July 2011, the
U.S. Court of Appeals for the Third Circuit, as part of its review of
the Commission's media ownership rules, vacated and remanded certain
aspects of the Diversity Order; an Order in which the Commission
adopted measures intended to promote minority and female ownership of
broadcast stations. The Third Circuit concluded that the Commission's
decision to adopt a revenue-based eligible entity definition to
facilitate ownership diversity was arbitrary and capricious because the
Commission did not show how determining eligibility for particular
programs and preferences based on such a definition specifically would
assist minorities and women, who were among the intended beneficiaries
of the action. The court also remanded each of the measures adopted in
the Diversity Order that relied on the eligible entity definition. The
court found that the eligible entity definition was not supported by
``data attempting to show a connection between the definition chosen
and the goal of the measures adopted--increasing ownership of
minorities and women,'' stressing that regulations seeking to increase
ownership by women and minorities must be based upon reliable data. The
court stated that, ``[a]t a minimum, in adopting or modifying its
rules, the FCC must `examine the relevant data and articulate a
satisfactory explanation for its action[,] including a rational
connection between the facts found and the choice made.' '' The court
also made plain that ``[i]f the Commission requires more and better
data . . . it must get the data.'' The court stated that the actions
taken in the 323 Order and Fourth Diversity Further Notice to reliably
analyze minority and female ownership ``will, however, lay necessary
groundwork for the Commission's actions remand.''
8. On November 14, 2012, the Media Bureau released the first
electronic analysis of commercial broadcast ownership data submitted
pursuant to the revised biennial reporting requirements for 2009 and
2011 (2012 323 Report). On June 27, 2014, the Bureau released a
similar, second report for 2013 ownership data (2014 323 Report). The
data contained in these reports are ``snapshots'' of the status of
minority and female ownership of commercial television, radio, Class A
television, and LPTV stations and represent the first three of a
planned series of biennial ``snapshots'' that can be used for trend
analysis. Preparation of the reports revealed continued difficulties
with, and errors within, the Commission's broadcast ownership data.
Many commercial broadcast stations submitted reports with apparently
inaccurate or insufficient data to permit electronic calculation of
voting interests. Commission staff required numerous broadcasters to
correct errors contained in their biennial Form 323 filings via
amendments, which allowed stations covered by those reports to be
properly categorized for the report. In addition, Commission staff
manually analyzed a large number of ownership reports, together with
other available information, in order to assign certain stations to the
appropriate categories manually for purposes of the report. As the 2012
323 Report stated, many data problems stemmed, in part, from the
``complexity of the information required to accurately file'' Form 323.
9. The Media Bureau's Consolidated Database System (CDBS) reflects
that for each filing round, more than one quarter of the unique FRNs
provided for individuals were SUFRN. Further, a combined analysis of
the 2009, 2011, and 2013 filing rounds shows that more than 30 percent
of the total unique FRNs reported were SUFRNs and the rate at which
filers obtained and reported new SUFRNs for individuals was higher than
the rate at which they obtained and reported new CORES FRNS. In
addition, it appears that single SUFRNs have been used for multiple
individuals and that single individuals have used multiple SUFRNs
despite Bureau guidance to the contrary. Because it is possible for
filers to improperly report SUFRNs for individuals--either by reporting
multiple SUFRNs for a single individual on multiple reports or using
the same SUFRN for multiple individuals on multiple reports--the number
of unique SUFRNs reported during a given filing period cannot be relied
on to determine accurately the number of individuals using a Special
Use FRN. The Media Bureau therefore cannot confidently determine the
number of individuals reporting a SUFRN.
10. On December 3, 2012, the Commission issued a Public Notice in
the 2010 Quadrennial Regulatory Review proceeding offering parties the
opportunity to comment on the 2012 323 Report (2012 323 Report PN). The
notice broadly sought ``additional comment on data contained in [the
2012 323 Report],'' specifically referencing the Commission's efforts
``to improve its collection and analysis of broadcast ownership
information'' and make ``improvements to the reliability and utility of
the data reported in FCC Form 323.'' Some commenters expressed concern
that the Commission's incomplete and inaccurate ownership data render
it difficult to track broadcast ownership trends from 2009 and 2011
accurately. One commenter suggested that the manner in which the
Commission currently provides broadcast ownership data from Form 323 to
the public does not meet the objective that such data be capable of
being electronically searched, aggregated, or cross-referenced.
11. On June 27, 2014, the Commission solicited comment concerning
the 2014 323 Report as part of its 2014 Quadrennial Review Proceeding.
In response, commenters acknowledged that the Commission has taken
steps to improve the quality of its broadcast ownership data.
Nonetheless, some parties suggested that the Commission should do more
to make its broadcast ownership data easier to use, search, aggregate,
and cross-reference electronically, for the benefit of studies and
analysis. Some commenters supported elimination of the use of SUFRNs to
ensure accuracy, reliability, and usefulness of the data.
12. Proposals Related to Noncommercial Broadcast Stations. The
Commission has put forth several proposals that remain pending to
improve the broadcast ownership reports focused on making the data more
comprehensive, reliable, and less burdensome to collect. For instance,
the Fourth Diversity Further Notice, which accompanied the 323 Order,
generally sought comment on whether to adopt the same or similar
modifications for Form 323-E for noncommercial stations (NCEs) as the
323 Order imposed for commercial stations. The Notice specifically
sought comment on the proper definition of ``ownership'' in the NCE
context, asking whether looking at the composition of the board of
directors or other governing body of an NCE station would be
appropriate for determining ``ownership'' for Form 323-E purposes.
Several commenters support this approach, noting, for example, that
board members have legally cognizable duties to the licensees they
serve and often are involved in station operations and hiring
decisions, have final authority over NCE licensees, and are responsible
to the local communities they serve. This approach is consistent with
the Commission's attribution standards, which attribute ownership
interests to officers and directors of NCE stations. Other commenters
argue that dissimilarities between the governance of commercial and NCE
stations preclude any definition of ``ownership'' in the NCE context.
These parties note that board
[[Page 10445]]
members do not have equity stakes in the stations they serve; are often
governmental officials, governmental appointees, individuals elected by
station members, or volunteers; and often are not involved in day-to-
day station operations. The Fourth Diversity Further Notice also asked
for input concerning the burden of providing race and gender
information on Form 323-E. Several commenters argue that requiring the
collection and reporting of such information would be unduly burdensome
and might discourage board participation. Other commenters argue that
the collection of such information is minimally burdensome and agree
that such information is necessary to construct a complete picture of
minority and female participation in broadcasting.
13. On January 3, 2013, the Commission released its Sixth Diversity
Further Notice. It specifically proposed extending the CORES FRN
requirement to all listed interest holders on Form 323-E if the filing
modifications proposed in the Fourth Diversity Further Notice are
implemented. The Sixth Diversity Further Notice tentatively concluded
that obtaining and reporting a CORES FRN for individuals identified on
Form 323-E is not burdensome and sought comment. Some commenters
believe that the public interest benefits associated with compiling
comprehensive data on this segment of the broadcast industry outweigh
any burdens associated with such a plan. Several commenters argue that
the requirement would be unduly burdensome for NCEs and that it would
discourage people from serving on the boards of NCE stations. Parties
also state that licensees may have difficulty obtaining SSNs from board
members, some of whom are appointed governmental officials. In
addition, certain commenters suggest that a CORES FRN is insufficient
as a unique identifier because, for example, (1) multiple FRNs can be
obtained for a single TIN/SSN, (2) an individual can in certain
circumstances obtain a CORES FRN without providing an SSN, (3) an
individual may provide an incorrect SSN, either intentionally or
inadvertently, and (4) researchers outside the Commission do not have
access to the TIN information in CORES to permit them to use it as an
underlying unique identifier. Citing the Privacy Act, multiple
commenters object to a requirement that noncommercial attributable
interest holders obtain a CORES FRN for Form 323-E filings because it
requires submission of an SSN.
14. Use of CORES FRNs Versus Use of SUFRNs. The Sixth Diversity
Further Notice also sought comment on the Commission's requirement that
commercial entities filing Form 323 provide a CORES FRN for
attributable interest holders. The Commission tentatively affirmed its
prior determination that the use of CORES FRNs was crucial to unique
identification on Form 323 and that such unique identification is
essential to providing the kind of searchable and manipulable database
needed to support accurate and reliable studies of ownership trends. It
tentatively concluded that the reporting of CORES FRNs on Form 323 was
superior to the reporting of SUFRNs and proposed eliminating the
availability of SUFRNs. The Commission reasoned that SUFRNs do not
provide a reliable means of linking a reported interest holder to a
unique individual and the continued use of the SUFRN undermines the
Commission's efforts to ``accurately ascertain the nature and extent of
minority and female ownership of broadcast properties.'' Acknowledging
that the Third Circuit in Prometheus II highlighted the importance of
reliable data to support rulemaking initiatives, the Sixth Diversity
Further Notice asked for comments on the importance of the CORES FRN as
a unique identifier for quality, cross-referencing, and searchability
purposes. The Commission also asked whether it should continue to
permit filers to use the SUFRN in the event that reportable individuals
are unwilling to provide their SSN to a third party or unwilling to
obtain and provide a CORES FRN. The Commission encouraged commenters to
offer alternative proposals to the SUFRN. The Commission also invited
comment on its tentative conclusion that the Privacy Act does not
prohibit adoption of the CORES FRN proposal and asked commenters to
discuss the degree of the risk to privacy the proposal poses.\5\
---------------------------------------------------------------------------
\5\ Sixth Diversity Further Notice, 28 FCC Rcd at 472, para. 18.
The Commission also noted that it has already adopted a Privacy Act
System of Records for CORES and with respect to the Form 323
requirement, which applies to any personally identifiable
information required by Form 323 and CORES in connection with the
CORES FRN registration process. Id.; see also Reply Letter at 7-8;
Privacy Act System of Records, 74 FR 59978, Nov. 19, 2009 (system of
records FCC/MB-1 for Form 323); Privacy Act System of Records, 71 FR
17234, Apr. 5, 2006 (system of records FCC/OMD-9 for CORES). These
System of Records Notices (``SORNS'') can be viewed at https://www.fcc.gov/encyclopedia/privacy-act-information#systems (visited
Dec. 15, 2014).
---------------------------------------------------------------------------
15. In response to the Sixth Diversity Further Notice, some
commenters support the Commission's proposal to eliminate the SUFRN,
arguing that requiring CORES FRNs ``is a necessary step'' to compiling
complete and searchable data. These commenters also suggest that the
availability of the SUFRN contributed to the instances of incomplete
data that prevented the Media Bureau from identifying ownership
interests in some stations that submitted biennial ownership reports
during the 2009 and 2011 reporting periods. No commenters offered any
alternative to the CORES FRN other than the SUFRN, and no commenters
seriously contend that the SUFRN provides similar data quality as CORES
FRNs. Instead, some commenters argue that even a CORES FRN cannot serve
as a unique identifier because, for instance, the CORES system allows
filers to obtain multiple FRNs and because outside researchers do not
have access to the underlying TIN as a unique identifier. Also, while
some commenters support the Commission's conclusion that a unique
identifier is essential to allow analysis of the data, other commenters
dispute that position.
16. The Sixth Diversity Further Notice also sought input concerning
proposed modifications to Form 323 designed to reduce filing burdens in
the Commission's Review of Media Bureau Data Practices proceeding. For
instance, the Commission sought comment on an NAB suggestion to
eliminate a requirement that a filer disclose the other attributable
newspaper and broadcast interests of attributable parties listed in the
filing, arguing that portion of the submission is particularly
burdensome. In comments, NAB reiterates its support and no commenters
oppose it.
17. In December 2010, the Commission initiated a rulemaking
proceeding in which it proposed to update CORES in an effort to enhance
the Commission's data collection efforts and to improve customer
interface with CORES.\6\ The Commission noted that, ``[s]ince the
creation of CORES, entities have been able to obtain multiple FRNs in
order to permit different members of their corporate family to obtain
their own individual FRNs, regardless of whether those entities have
different taxpayer identification numbers. . . .'' The CORES Notice
also stated that the Commission has had difficulty using CORES to
identify all FRNs held by the
[[Page 10446]]
same entity when entities have provided inconsistent TINs. To address
these issues, the CORES Notice sought comment on two proposals for
requiring entities and individuals to rely primarily upon a single
CORES FRN. Under Option 1, an entity would be required to use a single
ten-digit FRN for all of its dealings with the FCC, but would have the
ability to create an unlimited number of sub-accounts that could be
assigned to organizational units, such as a geographic district served
by the entity or a distinct line of business conducted by the entity,
or even to particular employees. Option 2 would enable entities that
currently hold multiple FRNs to retain all of their various FRNs, which
would be electronically linked to each other within the Commission's
database through the assignment of an identical prefix that would
precede each of the entity's ten-digit FRNs. Commenters generally
support Option 2 as a mechanism for limiting parties' use of multiple
CORES FRNs.
---------------------------------------------------------------------------
\6\ See generally CORES Notice, 25 FCC Rcd at 17401, para. 1.
The CORES Notice was published in the Federal Register on February
11, 2011. See Amendment of Part 1 of the Commission's Rules,
Concerning Practice and Procedure, Amendment of CORES Registration
System; Notice of Proposed Rulemaking, MD Docket No. 10-234, FCC 10-
192, 76 FR 5652, February 1, 2011. Comments and Reply Comments were
due on March 3, 2011 and March 18, 2011, respectively. See id.
---------------------------------------------------------------------------
III. Discussion
18. We propose implementing an RUFRN for use on Form 323 filings.
We tentatively conclude that this proposal will provide reasonable
assurance of unique identification of individuals within our broadcast
ownership report database, which is critical to the improvement of the
Commission's data gathering practices. We also tentatively conclude
that RUFRNs provide superior data quality to SUFRNs and could enable
the Commission to implement a burden-reducing form modification. We
next consider ways in which the RUFRN proposal is consistent with other
Commission data gathering and policy initiatives. Thereafter we propose
to apply RUFRNs to NCE filings if additional Commission action is
undertaken with respect to broadcast ownership reporting in the NCE
industry segment. We believe that the quality of the Commission's
security systems and the Privacy Act are not a barrier to the system
proposed. In addition, we tentatively conclude that the RUFRN proposal
is not burdensome. We ask for comment on whether SUFRNs should remain
available in the case of recalcitrant individuals. We seek comment on
the costs and benefits of all the proposals contained herein and any
alternatives commenters propose.
19. RUFRNs Support the Commission's Data Gathering and Policy
Making Initiatives. We continue to believe, as described below, that
the Commission must be able to identify parties reported on broadcast
ownership reports uniquely for purposes of creating reliable and usable
data in support of policy initiatives promoting diverse ownership. Our
RUFRN proposal is important to the Commission's ongoing mission to
improve, streamline, and modernize the way it collects and uses data.
We wish, however, to balance these Commission objectives against the
privacy, data security, and identity theft concerns of individuals with
attributable interests in broadcast stations. The Commission is
particularly sensitive to concerns that have been expressed in the
existing record in the Diversity proceeding concerning the proposal
that individual attributable interest holders of broadcast stations
provide an SSN to the Commission for purposes of broadcast ownership
reporting.
20. Accordingly, we propose to establish an alternative mechanism
within CORES to identify individuals uniquely that does not require
submission of a full SSN to the Commission. This method would allow an
individual to obtain an RUFRN from CORES by submitting an alternate set
of identifying information--including full name, residential address,
date of birth, and last four digits of the individual's SSN. The CORES
system will be programmed to verify that the submitted information is
complete and does not duplicate any information that is already
associated with an RUFRN in CORES. We also propose that when an
applicant obtains an RUFRN the individual will be asked to list all
CORES FRNs registered to the individual and all SUFRNs that individual
previously used in any broadcast ownership report filings since the
2009 biennial reporting cycle. We tentatively conclude that such
disclosures will allow the Commission to identify CORES FRNs, RUFRNs,
and SUFRNs that identify the same individual, promoting the usefulness
of the broadcast ownership data for purposes of electronic searching,
aggregating, and cross-referencing and for trend analysis. Once an
RUFRN is issued, we propose that any ownership report filing that lists
that specific individual would be required to include that RUFRN. We
propose that attributable interest holders would not be required to
obtain or use an RUFRN for Form 323 (or Form 323-E if the filing
obligations proposed in the Fourth Diversity Further Notice are
extended to NCEs) and could instead opt to use a CORES FRN. Like
SUFRNs, we propose that RUFRNs would be usable only on broadcast
ownership reporting forms and only for individuals (not entities)
reported as attributable interest holders. We seek comment on these
proposals and tentative conclusions and on the costs and benefits of
using an RUFRN as described herein for broadcast ownership reporting
purposes.
21. The Commission has previously recognized that Sections 257 of
the 1996 Act and 309(j) of the Act support its efforts to gather the
ownership data contained in Form 323. In the 1998 Biennial Review
Order, the Commission concluded that, in order to fulfill its statutory
mandates, it must collect race, gender, and ethnicity information from
all interest holders reported on Form 323. Collecting these data
enables the Commission not only to assess the current state of minority
and female ownership of broadcast stations but also to determine the
success of programs that are designed to facilitate opportunities for
women- and minority-owned businesses and to promote a diversity of
media voices. Just as it is essential for the Commission to collect
these ownership data to fulfill its mandates, it is important that
these data be reliable, aggregable, and useful for studies and trend
analysis. The Commission has recognized that CORES FRNs offer a unique
identifier and therefore play an important role in promoting the
integrity of the data collected.
22. We tentatively find that flaws in the current practices related
to the reporting of SUFRNs for individuals listed on Form 323
compromise the integrity of the data and thereby frustrate the
Commission's attempts to fulfill its statutory mandates under section
257 and section 309(j). Because our policy initiatives are dependent on
the quality of the data collected, we tentatively conclude that
requiring an FRN generated by CORES, either through existing mechanisms
or via the proposed method to obtain an RUFRN, for all reportable
interest holders on Forms 323 (and 323-E if proposals in the Fourth
Diversity Further Notice are adopted) is essential to improve the
quality and usability of the data collected. We seek comment on these
tentative conclusions.
23. We tentatively conclude that having reasonable assurance that
attributable interest holders are uniquely identified on ownership
reports in a manner that ensures the data can be meaningfully searched,
aggregated, and cross-referenced electronically is crucial to data
quality and usability. In the Sixth Diversity Further Notice we
tentatively concluded that TINs/SSNs within CORES were necessary as
underlying unique identifiers of individuals. Would the RUFRN system
described provide
[[Page 10447]]
sufficient assurances that individuals are uniquely identified? For
instance, are the specific pieces of identifying information described
in our proposal (full name, residential address, date of birth, and
last four digits of the individual's SSN) sufficient to provide a
reasonable basis for determining that an individual identified is
unique within the CORES system? Are there a sufficient number of
criteria included in the proposal or are there additional pieces of
information that would improve the reliability of the data? Are there
additional or different pieces of information that better enable the
Commission to ensure that individuals are uniquely identified? If so,
what additional or different pieces of information should the
Commission require? What risk would remain that the system could not
uniquely identify individuals using these pieces of information?
24. A commenter to the Sixth Diversity Further Notice asserts that
unique identification of individuals in ownership data is not necessary
to study broadcast ownership trends over time. This argument is not
convincing because it presumes incorrectly that the only utility of the
data is to track how many stations have minority and/or female owners.
Other questions relevant to evaluating trends in minority and female
ownership include how many individual minority and/or female owners
exist at a given point and how those numbers change over time. The
Commission cannot count unique individual owners without a mechanism to
identify individuals uniquely. The same commenter also states that the
fact that ownership reports are submitted under penalty of perjury is
sufficient to ensure that parties report race or gender information on
ownership report filings accurately. But, as noted above, examination
of ownership reports from 2009, 2011, and 2013 revealed numerous data
reporting errors due in part to the complexity of the information
required to accurately file the form. We have no reason to believe that
these errors were the result of filers attempting to deliberately
mislead the Commission. We tentatively conclude that the presence of a
unique identifier will improve the quality of our ownership data by
permitting errors to be identified and remedied. For example, since an
individual's race cannot change over time, the presence of the same
individual's FRN on multiple reports, along with inconsistent race
information could indicate one or more reporting errors that can then
be cured. We seek comment on these positions.
25. RUFRNs Provide Superior Data Quality to SUFRNs. We tentatively
conclude that the RUFRN would provide superior data quality to the
SUFRN and we seek comment on that tentative conclusion. The SUFRN was
devised as merely a computer generated number created by clicking a
button within Form 323 itself and not backed by any identifying
information. The Commission collects no information when the system
generates a new SUFRN, and there is no database analogous to CORES that
contains uniquely identifying information associated with SUFRNs. The
SUFRN therefore offers the Commission no way to cross reference or
trace back reported information to a single individual. Because the
Commission cannot determine whether particular individuals hold one or
more SUFRNs or whether a particular SUFRN is being used to identify one
or more individuals, it cannot reliably examine the complete
attributable holdings of an individual reported with a SUFRN (either at
a specific time or over time), or search, aggregate, and cross-
reference our ownership data using Commission systems. Any attempt at
such analysis would require manual consideration of every single entry
where a SUFRN appears together with a subjective analysis of other
textual information contained on the form or available from other
public sources. Manual, subjective analysis of thousands of Form 323
entries using various sources of information compromises data integrity
and data utility. On the other hand, we tentatively conclude that since
RUFRNs will be backed by identifying information, and since CORES will
not issue multiple RUFRNs for the same identifying information, RUFRNs
can be relied upon to identify individuals uniquely. We seek comment on
our view that the qualities of the proposed RUFRN provide superior data
quality to the SUFRN.
26. As noted above, some commenters in the Diversity proceeding
argued that CORES FRNs cannot serve as unique identifiers because, for
example, multiple FRNs can be obtained for a single TIN/SSN, an FRN
might be associated with no TIN or an incorrect TIN, and outside
researchers do not have access to underlying TIN information within
CORES. We observe that the CORES proceeding has proposed several
options to resolve some of these issues. Even as the Commission
continues to examine those issues through its CORES reform process, we
tentatively conclude, for several reasons, that, notwithstanding these
possibilities, CORES FRNs and RUFRNs are still superior to SUFRNs for
the purpose of broadcast ownership reports. To begin with, exceptions
permitting an individual or entity to obtain a CORES FRN without a TIN
are legitimately available in a limited number of cases that would not
be expected to compromise the overall ownership data submitted. And
even though CORES currently permits an individual or entity to obtain
multiple FRNs with a single TIN, the Commission can identify all FRNs
that relate to a single TIN. Also, we expect that individuals and
entities will comply with our rules and provide accurate information
during the CORES registration process to the greatest extent possible.
While the Commission's obligation to hold the TIN confidential does
limit the direct utility of the TIN to outside researchers as a unique
identifier, that limitation does not decrease the benefits for data
integrity and utility to the Commission. With respect to the RUFRN
proposal, we anticipate that the specificity of the identifying
information required and the fact that a number of pieces of
information are required will be sufficient to provide the Commission
with reasonable certainty that the information identifies a unique
filer within the CORES system. Based on our experience in the 2009,
2011, and 2013 reporting cycles, we tentatively conclude that the RUFRN
proposal will improve the reliability and usability of the broadcast
ownership report database, in furtherance of our statutory mandates. We
seek comment on these conclusions.
27. RUFRNs May Enable Burden-Reducing Form Modification. As noted
above, the Commission and commenters have identified errors in filings
submitted to the Commission over the last three filing periods. We
tentatively conclude that some such errors could be reduced by
simplifying the form and making it less burdensome to complete and
submit. Specifically, the record reflects proposals that would
eliminate a filer's obligation to disclose other attributable broadcast
interests of attributable parties listed in the filing. We tentatively
conclude that in order to implement this burden-reducing form
modification without compromising the scope and content of the
information collected, the Commission requires a unique identifier to
allow the filings to be electronically searched and cross-referenced
within a single filing period and over time. We tentatively conclude
that the existence of unique identifiers
[[Page 10448]]
will permit the Commission to make this modification while maintaining
the integrity of its ownership data, thereby reducing burdens on filing
parties and improving the quality of the information submitted to the
Commission. We seek comment on these conclusions.
28. RUFRN Application in NCE Context. We specifically seek
additional comment concerning the proposal to use RUFRNs for Form 323-E
if the pending proposal in the Fourth Diversity Further Notice to
modify NCE ownership reporting practices to correspond to commercial
requirements and the proposal in the Sixth Diversity Further Notice to
extend FRN requirements to noncommercial stations are adopted. We
tentatively conclude that if the Commission does modify the Form 323-E
requirements as described in the Fourth Diversity Further Notice then a
CORES-generated FRN, either a traditional SSN-based CORES FRN or the
RUFRN proposed herein, is a sufficient and appropriate tool for the
unique identification of individuals with attributable interests in
NCEs for the same reasons and in the same manner as commercial
stations. Accordingly, we propose to permit an individual listed on
Form 323-E to obtain and provide an RUFRN, in lieu of a CORES FRN, for
use on broadcast ownership filings. We invite comment on these
tentative conclusions and on the foregoing proposal. As described
above, we note that several commenters to the Sixth Diversity Further
Notice argue that the CORES FRN requirement would be unduly burdensome
for NCEs because an SSN disclosure requirement would discourage people
from serving on the boards of NCE stations and licensees would have
difficulty obtaining SSNs from board members who may be government
officials. We seek comment on how and whether these concerns would
arise if RUFRNs were made available for use in broadcast ownership
reports. We note that officers and directors of NCE stations already
are reported on Form 323-E and questions related to the propriety of
requiring disclosure of race, gender, and ethnicity information on Form
323-E are pending pursuant to the Fourth Diversity Further Notice. Here
we seek comment on specifically whether there are unique considerations
with respect to NCE stations that would lead to a different conclusion
for NCEs than for commercial stations with regard to the information
proposed to be included to obtain an RUFRN. If so what are those unique
considerations? Are there other alternatives for unique identification
of individuals in the NCE context that would improve the quality,
usability, and reliability of our broadcast ownership data and/or help
ensure that our broadcast ownership data can be searched, aggregated,
and cross-referenced electronically? We invite comment on the
application of RUFRNs to NCEs in the event that the pending proposals
in the Fourth Diversity Further Notice are adopted.
29. Security of Commission Systems. In the Sixth Diversity Further
Notice, the Commission sought comment on any security concerns related
to the requirement that interest holders submit an SSN, noting that
only the FRN is made public and the SSN is not disclosed on any
Commission application or form, including Forms 323 and 323-E.
Commenters raised concerns that a CORES FRN requirement for individuals
will open individuals to threats of identity theft. Some commenters
pointed to a system breach described in a GAO report on information
security and suggested that the Commission's systems are vulnerable to
a security breach.
30. We agree with commenters that privacy and security with respect
to personally identifiable information are paramount, and we believe
that the steps taken and the procedures in place assure the security of
the Commission's systems. The Commission is not aware of any breaches
to CORES. In addressing similar security concerns from commenters, the
Commission wrote in 2009 that the CORES architecture exceeds Federal
guidelines and that its databases are behind several firewalls. The
Commission also explained that administrative access to the CORES
application is limited and that all transmission of non-public data is
encrypted. Furthermore, the safeguards in place in 2009 have been
improved. Certain improvements were underway prior to completion of the
Information Security GAO Report, and that report also provided the
Commission with additional, valuable recommendations for continuing to
strengthen our security environment. We have implemented enhanced
perimeter controls, malware protection, and monitoring devices and
upgraded workstations to operating systems with improved security. The
Commission's security architecture has strict operational controls in
place that comply with National Institute of Standards and Technology
guidance. As the Commission explained to OMB in 2009, system servers
are located behind several firewalls and other security controls to
protect CORES data from intrusion by outsiders as well as the general
Commission population. Administrative access to CORES remains limited
to only certain known internal workstations and all servers are
monitored by automated tools and operational procedures. Moreover, the
Commission made several upgrades to all of its systems, including
CORES, to ensure that its systems remain secure. Security will continue
to be one of our highest priorities. In light of the foregoing, we seek
comment on whether the elimination of the need for individual
attributable interest holders to submit an SSN eliminates the privacy
and identity theft concerns existing in the current record. If not,
what privacy or identity theft concerns remain and how can they be
addressed? Are such concerns outweighed by the importance of the data
collection?
31. Privacy Act. We tentatively conclude that the Privacy Act does
not bar the adoption of the RUFRN requirements described herein. The
Sixth Diversity Further Notice sought comments on whether the Privacy
Act was a barrier to adoption of the CORES FRN requirement. No
commenters asserted that the Privacy Act was a barrier to the
requirement for individuals with attributable interests in commercial
entities. With respect to application of the CORES FRN requirement to
Form 323-E if the proposals in the Fourth Diversity Further Notice are
adopted, several commenters to the Sixth Diversity Further Notice argue
that the Privacy Act bars application of the SSN requirement in the NCE
context. We find that elimination of the SSN requirement from the list
of identifying information that is required in conjunction with
broadcast ownership reporting would further ensure that the Privacy Act
is not an impediment to the proposed RUFRN requirement. Also as
described above, we tentatively conclude that unique identification of
individuals is essential for ownership data quality, utility, and
reliability, which are critical components of any future policy
initiatives to promote ownership diversity consistent with our
statutory mandate under the Communications Act. Further, the Commission
has already adopted a Privacy Act SORN for CORES and with respect to
the Form 323 requirement, which applies to any personally identifiable
information required by Form 323 and CORES in connection with the CORES
FRN registration process, and to the extent necessary any modifications
required by the implementation of the RUFRN system for Form 323 or Form
323-E can be addressed with modifications to the
[[Page 10449]]
SORN. We request comment on these tentative conclusions.
32. RUFRNs Are Not Burdensome, and the Benefits Outweigh the Costs.
We continue to believe that obtaining a CORES FRN imposes minimal costs
and burdens, if any, on individuals or filers. As noted in the Sixth
Diversity Further Notice, registering for a CORES FRN is a one-time
process that takes a few moments to complete. An individual that
already has obtained a CORES FRN may continue to use his or her CORES
FRN for Form 323 filings, and need not obtain a RUFRN. Moreover, an
individual that wishes to obtain a RUFRN can easily locate previously-
registered CORES FRNs through CORES. We tentatively conclude that
permitting individuals holding attributable interests in one or more
broadcast licensees to obtain a RUFRN in lieu of obtaining a CORES FRN
would impose minimal costs or other burdens. We seek comment on these
tentative conclusions and on any potential burdens inherent in the
RUFRN proposal. We seek input on alternatives that might reduce or
eliminate such burdens as well as the costs and benefits of such
alternatives. To the extent possible, commenters should quantify any
identified costs and benefits. We note that the vast majority of
individuals reported on Form 323 have obtained and reported CORES FRNs,
and we believe it is likely that will continue to be the case for
future broadcast ownership filing obligations. Individuals who already
have a CORES FRN need not obtain an RUFRN and may continue to use the
existing number. Moreover, any individual that wishes to obtain a CORES
FRN instead of an RUFRN will be able to do so. Additionally, as
explained above, the existence of a unique identifier that can be
cross-referenced may make modifications of the reports possible that
could reduce the burdens on all filers and, thereby, further improve
the quality of the ownership data submitted to the Commission. As such,
we tentatively find that the benefits of improved data collection
outweigh any de minimis costs or burdens associated with obtaining an
FRN described herein and we seek comment on that conclusion. To the
extent possible, commenters should quantify relative costs and
benefits.
33. Limited Availability of SUFRNs. We seek further comment
concerning the elimination of the availability of SUFRNs for broadcast
ownership reports. The Sixth Diversity Further Notice solicited input
on whether to retain the SUFRN in the event that reportable individuals
are unwilling to provide their SSNs to third parties or unwilling to
obtain and provide CORES FRNs. In the event that a SUFRN is reported
for an individual, the Sixth Diversity Further Notice explained that
the Commission could use its enforcement authority against individuals
who failed to obtain a CORES FRN. Commenters generally support the
proposal to retain the SUFRN for this limited purpose and oppose the
Commission's use of its enforcement authority. We seek comment on
whether the SUFRN should continue to be available to Form 323 filers
(and Form 323-E filers if the proposals in the Fourth Diversity Further
Notice are adopted), in the event that after a filer has used
reasonable and good faith efforts, reportable individuals are unwilling
to provide their identifying information or unwilling to obtain and
provide a CORES FRN or RUFRN themselves. Would this limited
availability of SUFRNs appropriately protect the position of filers in
the case of recalcitrant interest holders? Should the Commission
require filers to take specific steps to substantiate that they have
made a reasonable good faith efforts? If so, what steps should be
required? For instance, should the Commission expect that a filer will
instruct an individual about the obligation to supply a filer with a
CORES FRN or RUFRN or to provide the filer with the identifying
information sufficient to obtain one of these numbers on the
individual's behalf? Should the filer be expected to instruct such an
individual about potential enforcement action? Should the filer itself
be exempt from enforcement action only if such steps are substantiated?
Should an instruction be included on Form 323 (and Form 323-E if the
proposals in the Fourth Diversity Further Notice are adopted) informing
reportable interest holders of their obligations and alerting them to
the risk of enforcement action for the failure to provide a CORES FRN
or RUFRN or to permit a CORES FRN or RUFRN to be obtained? We seek
comment on these issues.
IV. Procedural Matters
A. Filing Requirements
34. Ex Parte Rules. The proceeding this Notice initiates shall be
treated as a ``permit-but-disclose'' proceeding in accordance with the
Commission's ex parte rules. 47 CFR 1.1200 et seq. Persons making ex
parte presentations must file a copy of any written presentation or a
memorandum summarizing any oral presentation within two business days
after the presentation (unless a different deadline applicable to the
Sunshine period applies). Persons making oral ex parte presentations
are reminded that memoranda summarizing the presentation must (1) list
all persons attending or otherwise participating in the meeting at
which the ex parte presentation was made, and (2) summarize all data
presented and arguments made during the presentation. If the
presentation consisted in whole or in part of the presentation of data
or arguments already reflected in the presenter's written comments,
memoranda or other filings in the proceeding, the presenter may provide
citations to such data or arguments in his or her prior comments,
memoranda, or other filings (specifying the relevant page and/or
paragraph numbers where such data or arguments can be found) in lieu of
summarizing them in the memorandum. Documents shown or given to
Commission staff during ex parte meetings are deemed to be written ex
parte presentations and must be filed consistent with rule 1.1206(b).
47 CFR 1.1206(b). In proceedings governed by rule 1.49(f), 47 CFR
1.49(f), or for which the Commission has made available a method of
electronic filing, written ex parte presentations and memoranda
summarizing oral ex parte presentations, and all attachments thereto,
must be filed through the electronic comment filing system available
for that proceeding, and must be filed in their native format (e.g.,
.doc, .xml, .ppt, searchable .pdf). Participants in this proceeding
should familiarize themselves with the Commission's ex parte rules.
35. Comments and Reply Comments. Pursuant to Sec. Sec. 1.415 and
1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested
parties may file comments and reply comments on or before the dates
indicated on the first page of this document. Comments may be filed
using the Commission's Electronic Comment Filing System (ECFS). See
Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121
(1998).
Electronic Filers: Comments may be filed electronically
using the Internet by accessing the ECFS: https://fjallfoss.fcc.gov/ecfs2/.
Paper Filers: Parties who choose to file by paper must
file an original and one copy of each filing. If more than one docket
or rulemaking number appears in the caption of this proceeding, filers
must submit two additional copies for each additional docket or
rulemaking number. Filings can be sent by hand or messenger delivery,
by commercial overnight courier, or by first-class or
[[Page 10450]]
overnight U.S. Postal Service mail. All filings must be addressed to
the Commission's Secretary, Office of the Secretary, Federal
Communications Commission.
All hand-delivered or messenger-delivered paper filings
for the Commission's Secretary must be delivered to FCC Headquarters at
445 12th St. SW., Room TW-A325, Washington, DC 20554. The filing hours
are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together
with rubber bands or fasteners. Any envelopes and boxes must be
disposed of before entering the building.
Commercial overnight mail (other than U.S. Postal Service
Express Mail and Priority Mail) must be sent to 9300 East Hampton
Drive, Capitol Heights, MD 20743.
U.S. Postal Service first-class, Express, and Priority
mail must be addressed to 445 12th Street SW., Washington, DC 20554.
36. People With Disabilities: To request materials in accessible
formats for people with disabilities (braille, large print, electronic
files, audio format), send an email to fcc504@fcc.gov or call the
Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (tty).
37. Availability of Documents. Comments, reply comments, and ex
parte submissions will be available for public inspection during
regular business hours in the FCC Reference Center, Federal
Communications Commission, 445 12th Street SW., CY-A257, Washington, DC
20554. Persons with disabilities who need assistance in the FCC
Reference Center may contact Bill Cline at (202) 418-0267 (voice),
(202) 418-0432 (TTY), or bill.cline@fcc.gov. These documents also will
be available from the Commission's Electronic Comment Filing System.
Documents are available electronically in ASCII, Word 97, and Adobe
Acrobat. To request materials in accessible formats for people with
disabilities (Braille, large print, electronic files, audio format),
send an email to fcc504@fcc.gov or call the Consumer and Governmental
Affairs Bureau at (202) 418-1400 (voice), (202) 418-0432 (TTY).
38. Information. For additional information on this proceeding,
contact Jake Riehm at (202) 418-2166 or Warren Firschein at (202) 418-
0844. Press inquiries should be directed to Janice Wise at (202) 418-
8165.
B. Paperwork Reduction Act Analysis
39. Initial Paperwork Reduction Act Analysis. This Second FNPRM and
Seventh FNPRM seeks comment on potential new or revised information
collection requirements with regard to CORES, FCC Form 323, and FCC
Form 323-E. The Commission invites the general public, the Office of
Management and Budget (``OMB'') and other Federal agencies to comment
on the information collection requirements. This Notice may result in
new or revised information collection requirements. If the Commission
adopts any new or revised information collection requirements, the
Commission will publish a notice in the Federal Register inviting
additional public comment on the requirements, as required by the
Paperwork Reduction Act of 1995, Public Law 104-13 (44 U.S.C. 3501-
3520). In addition, pursuant to the Small Business Paperwork Relief Act
of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the Commission
seeks specific comment on how it might ``further reduce the information
collection burden for small business concerns with fewer than 25
employees.'' On October 19, 2009, OMB approved the FCC's proposal to
implement a CORES FRN requirement for all individuals holding
attributable interests in the licensee reported on Form 323. That
requirement went into effect as of October 30, 2009.
40. In addition to filing comments with the Secretary, a copy of
any PRA comments on the proposed collection requirements contained
herein should be submitted to the Federal Communications Commission via
email to PRA@fcc.gov and to Nicholas A. Fraser, Office of Management
and Budget, via email to nfraser@omb.eop.gov or via fax at 202-395-
5167.
V. Initial Regulatory Flexibility Analysis
41. As required by the Regulatory Flexibility Act of 1980, as
amended (RFA), the Commission has prepared this Initial Regulatory
Flexibility Analysis (IRFA) of the possible economic impact on small
entities by the policies and rules proposed in this) Second FNPRM and
Seventh FNPRM (Notice). Written public comments are requested on this
IRFA. Comments must be identified as responses to the IRFA and must be
filed by the deadlines for comments on the Notice. The Commission will
send a copy of the Notice, including this IRFA, to the Chief Counsel
for Advocacy of the Small Business Administration (SBA). In addition,
the Notice and IRFA (or summaries thereof) will be published in the
Federal Register.
A. Need for, and Objectives of, the Proposed Rules
42. Currently, filers of Form 323 (Ownership Report for Commercial
Broadcasters) must provide an FCC Registration Number (FRN) generated
via the Commission's Registration System (CORES) for each reported
attributable party. To obtain a CORES FRN, an individual must submit
his or her social security number (SSN) to the Commission through
CORES. CORES FRNs therefore can be used to uniquely identify
individuals reported on Form 323, which is crucial to the quality and
utility of the Commission's broadcast ownership data. However, if a
filer uses diligent and good-faith efforts to obtain an SSN from an
individual that must be reported on Form 323 in order to generate a
CORES FRN, but is unable to do so, the filer may provide a Special Use
FRN (SUFRN) for that individual. Because the SUFRN generation process
does not requires submission of an SSN, or any other identifying
information, SUFRNs do not provide a reliable means of linking a
reported interest holder to a unique individual. The existence of
SUFRNs therefore undermines the usefulness and integrity of the
Commission's broadcast ownership data.
43. To address this issue, the Notice invites comment on a proposal
to create a new type of FRN within CORES--a Restricted Use FRN
(``RUFRN'')--for use on Form 323. Under the proposal set forth in the
Notice, an individual requesting an RUFRN would be required to submit
his or her name, date of birth, and residential address, along with the
last four digits of his or her SSN, to CORES. Once obtained, an
individual would be required to use the RUFRN on all current and future
Form 323 filings. The Notice seeks comment on this RUFRN proposal,
including input concerning the costs, benefits, and possible
alternative approaches.
44. The Notice explains that the Commission's Fourth Diversity
Further Notice requested input on adopting modifications to Form 323-E
(Ownership Report for Noncommercial Broadcast Stations) similar to
those previously adopted for Form 323. The Sixth Diversity Further
Notice specifically proposed requiring Form 323-E filers to provide a
CORES FRN for all attributable parties. In light of the foregoing, the
Notice seeks comment concerning the future application of the RUFRN
proposal to Form 323-E (if Form 323-E is modified along the lines
proposed in the Fourth Diversity Public Notice).
[[Page 10451]]
45. Finally, the Notice indicates that the Sixth Diversity Further
Notice solicited input on whether to retain the availability of SUFRNs
for ownership report filings in the event that reportable individuals
are unwilling to provide their SSN to a third party or unwilling to
obtain and provide a CORES FRN. Similarly, the Notice asks whether, if
the RUFRN proposal is adopted, SUFRNs should continue to be available
to Form 323 filers (and Form 323-E filers if the proposals in the
Fourth Diversity Further Notice are adopted), in the event that after a
filer has used reasonable and good faith efforts, reportable
individuals are unwilling to provide their identifying information or
unwilling to obtain and provide a CORES FRN or RUFRN themselves.
B. Legal Basis
46. This Notice is adopted pursuant to sections 1, 2(a), 4(i)-(j),
257, and 303(r), of the Communications Act of 1934, as amended, 47
U.S.C. 151, 152(a), 154(i, j), 257, 303(r).
C. Description and Estimate of the Number of Small Entities to Which
the Proposed Rules Will Apply
47. The RFA directs agencies to provide a description of, and,
where feasible, an estimate of the number of small entities that may be
affected by the proposed rules, if adopted. The RFA defines the term
``small entity'' as having the same meaning as the terms ``small
business,'' ``small organization,'' and ``small governmental
jurisdiction'' under Section 3 of the Small Business Act. In addition,
the term ``small business'' has the same meaning as the term ``small
business concern'' under the Small Business Act. A small business
concern is one which: (1) Is independently owned and operated; (2) is
not dominant in its field of operation; and (3) satisfies any
additional criteria established by the SBA.
48. Television Broadcasting. The SBA defines a television
broadcasting station that has no more than $38.5 million in annual
receipts as a small business. The definition of business concerns
included in this industry states that establishments are primarily
engaged in broadcasting images together with sound. These firms operate
television broadcasting studios and facilities for the programming and
transmission of programs to the public. These firms also produce or
transmit visual programming to affiliated broadcast television
stations, which in turn broadcast the programs to the public on a
predetermined schedule. Programming may originate in their own studio,
from an affiliated network, or from external sources. Census data for
2007 indicate that 808 such firms were in operation for the duration of
that entire year. Of these, 709 had annual receipts of less than $25.0
million per year and 99 had annual receipts of $25.0 million or more
per year. Based on this data and the associated size standard, the
Commission concludes that the majority of such firms are small.
49. Additionally, the Commission has estimated the number of
licensed commercial television stations to be 1,387. According to
Commission staff review of the BIA/Kelsey, LLC's Media Access Pro
Television Database on November 25, 2014, about 1,276 of an estimated
1,387 commercial television stations (or approximately 92 percent) had
revenues of $38.5 million or less. The Commission has estimated the
number of licensed noncommercial educational television stations to be
395. We do not have revenue data or revenue estimates for noncommercial
stations. These stations rely primarily on grants and contributions for
their operations, so we will assume that all of these entities qualify
as small businesses. We note that in assessing whether a business
entity qualifies as small under the above definition, business control
affiliations must be included. Our estimate, therefore, likely
overstates the number of small entities that might be affected by any
changes to the filing requirements for FCC Form 323 or Form 323-E,
because the revenue figures on which this estimate is based do not
include or aggregate revenues from affiliated companies.
50. An element of the definition of ``small business'' is that the
entity not be dominant in its field of operation. The Commission is
unable at this time and in this context to define or quantify the
criteria that would establish whether a specific television station is
dominant in its market of operation. Accordingly, the foregoing
estimate of small businesses to which the rules may apply does not
exclude any television stations from the definition of a small business
on this basis and is therefore over-inclusive to that extent. An
additional element of the definition of ``small business'' is that the
entity must be independently owned and operated. It is difficult at
times to assess these criteria in the context of media entities, and
our estimates of small businesses to which they apply may be over-
inclusive to this extent.
51. Radio Broadcasting. The SBA defines a radio broadcasting entity
that has $38.5 million or less in annual receipts as a small business.
Business concerns included in this industry are those ``primarily
engaged in broadcasting aural programs by radio to the public.'' Census
data for 2007 indicate that 2,926 such firms were in operation for the
duration of that entire year. Of these, 2,877 had annual receipts of
less than $25.0 million per year and 49 had annual receipts of $25.0
million or more per year. Based on this data and the associated size
standard, the Commission concludes that the majority of such firms are
small.
52. Further, according to Commission staff review of the BIA/
Kelsey, LLC's Media Access Pro Television Database on November 25,
2014, about 11,337 (or about 99.9 percent) of 11,348 commercial radio
stations in the United States have revenues of $38.5 million or less.
The Commission has estimated the number of licensed noncommercial radio
stations to be 4,085. We do not have revenue data or revenue estimates
for these stations. These stations rely primarily on grants and
contributions for their operations, so we will assume that all of these
entities qualify as small businesses. We note that in assessing whether
a business entity qualifies as small under the above definition,
business control affiliations must be included. Our estimate,
therefore, likely overstates the number of small entities that might be
affected by any changes to filing requirements for FCC Form 323 or Form
323-E, because the revenue figures on which this estimate is based do
not include or aggregate revenues from affiliated companies.
53. In this context, the application of the statutory definition to
radio stations is of concern. An element of the definition of ``small
business'' is that the entity not be dominant in its field of
operation. We are unable at this time and in this context to define or
quantify the criteria that would establish whether a specific radio
station is dominant in its field of operation. Accordingly, the
foregoing estimate of small businesses to which the rules may apply
does not exclude any radio station from the definition of a small
business on this basis and is therefore over-inclusive to that extent.
An additional element of the definition of ``small business'' is that
the entity must be independently owned and operated. We note that it is
difficult at times to assess these criteria in the context of media
entities, and our estimates of small businesses to which they apply may
be over-inclusive to this extent.
54. Class A TV and LPTV Stations. The rules and policies adopted
herein apply to licensees of low power television (``LPTV'') stations,
including Class A TV stations and, as well as to potential licensees in
these television services. The same SBA definition that
[[Page 10452]]
applies to television broadcast licensees would apply to these
stations. The SBA defines a television broadcast station as a small
business if such station has no more than $38.5 million in annual
receipts. As of September 30, 2014, there are approximately 430
licensed Class A stations and 2,115 licensed LPTV stations. Given the
nature of these services, we will presume that all of these licensees
qualify as small entities under the SBA definition. We note, however,
that under the SBA's definition, revenue of affiliates that are not
LPTV stations should be aggregated with the LPTV station revenues in
determining whether a concern is small. Our estimate may thus overstate
the number of small entities since the revenue figure on which it is
based does not include or aggregate revenues from non-LPTV affiliated
companies.
D. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements
55. There may be changes to reporting or recordkeeping requirements
if the Commission adopts the RUFRN proposal for Form 323 and/or Form
323-E. In the event that the RUFRN proposal is adopted for the Form 323
and/or Form 323-E, filers will have the option to obtain and report a
unique identifier for individual attributable interest holders that
does not require submission of a full SSN to the Commission. Adoption
of this proposal will allow an individual to obtain an RUFRN from CORES
by submitting an alternate set of identifying information. Individuals
would not be required to obtain or report an RUFRN on the Form 323 and/
or Form 323-E--instead, individuals could obtain and report a CORES
FRN. An individual who has provided a CORES FRN on one or more previous
ownership filings may continue to use that CORES FRN going forward.
There also may be changes to reporting or recordkeeping requirements if
the Commission limits or eliminates that availability of SUFRNs for
broadcast ownership reports. Filers may be obligated to instruct
individuals about their obligation to supply the filer with a CORES FRN
or RUFRN or to provide the filer with the information sufficient to
obtain one of these identifiers on the individual's behalf. A filer may
also be required to inform individuals about potential enforcement
action for failure to obtain or report a CORES FRN or RUFRN. Moreover,
if a filer reports an SUFRN for an individual interest holder, the
filer may be required to show that the filer made reasonable good faith
efforts to obtain a CORES FRN or RUFRN, or the information necessary to
obtain a CORES FRN or RUFRN, on the individual's behalf.
E. Steps Taken To Minimize Significant Impact on Small Entities, and
Significant Alternatives Considered
56. The RFA requires an agency to describe any significant
alternatives that might minimize any significant economic impact on
small entities. Such alternatives may include the following four
alternatives (among others): (1) The establishment of differing
compliance or reporting requirements or timetables that take into
account the resources available to small entities; (2) the
clarification, consolidation, or simplification of compliance and
reporting requirements under the rule for small entities; (3) the use
of performance, rather than design, standards; and (4) an exemption
from coverage of the rule, or any part thereof, for small entities.
57. As noted, we are directed under law to describe any such
alternatives we consider, including alternatives not explicitly listed
above. The Notice proposes to allow individuals reported on Form 323 to
obtain and provide an RUFRN in lieu of a traditional CORES FRN.
Similarly, the Notice proposes making RUFRNs available to Form 323-E
filers in the event that Form 323-E is modified as proposed in the
Fourth Diversity Further Notice. The Notice also proposes eliminating
the availability of SUFRNs for Form 323 and Form 323-E filings. In the
alternative, the Commission could decide not to enact the RUFRN
proposal contained in the Notice and not to modify the availability of
SUFRNs. The Commission also could defer these actions until a later
time. Additionally, the Commission could decide to treat noncommercial
broadcasters differently from commercial broadcast stations for
purposes of uniquely identifying and tracking individual attributable
interest holders reported on the 323-E. While decisions to adopt the
RUFRN proposal and eliminate the Special Use FRN might result in
increased burdens on reporting parties, the Notice tentatively
concludes that any such burdens would be minimal and that the benefits
of having a unique identifier for data quality, searchability, cross-
referencing and aggregation purposes in order to further the
Commission's goal of advancing diversity of ownership in the broadcast
industry would outweigh those burdens. A unique identifier is necessary
to improve the quality of the data collected on the Form 323. The
Commission also seeks comment on whether the Special Use FRN should be
available solely in instances where, after reasonable and good faith
efforts, filers are unable to obtain a CORES FRN or RUFRN from an
individual with reportable interests. This alternative could reduce the
burden for those filers who are unable to, after reasonable and good
faith efforts, to obtain a CORES FRN or RUFRN from an individual
attributable interest holder, while ensuring that the filer will be
able to timely submit the Form 323. This will allow the Commission to
identify the individual with a reportable interest that has failed to
provide a CORES FRN or RUFRN.
F. Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rules
58. None.
VI. Ordering Clauses
59. Accordingly, it is ordered that, pursuant to the authority
contained in sections 1, 2(a), 4(i,j), 257, and 303(r) of the
Communications Act of 1934, as amended, 47 U.S.C. 151, 152(a), 154(i)-
(j), 257, and 303(r), the Second FNPRM and Seventh FNPRM is adopted.
60. It is further ordered that, pursuant to the authority contained
in sections 1, 2(a), 4(i, j), 257, and 303(r) of the Communications Act
of 1934, as amended, 47 U.S.C. 151, 152(a), 154(i, j), 257, 303(r),
notice is hereby given of the proposals described in this Second FNPRM
and Seventh FNPRM.
61. It is further ordered that the Commission's Consumer &
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of the Second FNPRM and Seventh FNPRM, including the Initial
Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of
the Small Business Administration.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 2015-03988 Filed 2-25-15; 8:45 am]
BILLING CODE 6712-01-P