Promoting Diversification of Ownership in the Broadcasting Services, 25163-25168 [E9-12312]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 74, Number 100 (Wednesday, May 27, 2009)]
[Rules and Regulations]
[Pages 25163-25168]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-12312]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 73 and 74

[MB Docket Nos. 07-294, 06-121, 02-277, 04-228; MM Docket Nos. 01-235, 
01-317, 00-244; FCC 09-33]


Promoting Diversification of Ownership in the Broadcasting 
Services

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: The Report and Order adopts changes to the reporting 
requirements on FCC Form 323, ``Ownership Report for Commercial 
Broadcast Stations'' to improve Form 323 data collection in order to 
obtain an accurate, reliable, and comprehensive assessment of minority 
and female broadcast ownership in the United States. The FCC also is 
broadening Form 323 reporting requirements to require low power 
television station licensees, including Class A stations, to file 
biennially.

DATES: The amendments to Sec. Sec.  73.3615, 73.6026, and 74.797 
contain information collection requirements that have not been approved 
by OMB. The FCC will publish a document in the Federal Register 
announcing the effective date.

FOR FURTHER INFORMATION CONTACT: Mania Baghdadi, (202) 418-2330, Amy 
Brett (202) 418-2703.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report 
and Order (R&O) adopted April 8, 2009, and released May 5, 2009. The 
full text of this document is available for public inspection and 
copying during regular business hours in the FCC Reference Center, 
Federal Communications Commission, 445 12th Street, SW., CY-A257, 
Washington, DC 20554. These documents will also be available via ECFS 
(https://www.fcc.gov/cgb/ecfs). The complete text may be purchased from 
the Commission's copy contractor, 445 12th Street, SW., Room CY-B402, 
Washington, DC 20554.

Summary of the Report and Order

    1. In the (R&O) (1) the FCC enlarges the class of licensees 
required to file ownership reports biennially to include LPTV stations, 
including Class A stations, as well as commercial broadcast stations 
licensed to sole proprietors and partnerships composed of natural 
persons; (2) for purposes of defining the class of interests that are 
reportable, the FCC will not apply two attribution exemptions--the 
single majority shareholder exemption and the exemption for interests 
held in eligible entities that would be attributable but for the higher 
Equity/Debt Plus (``EDP'') thresholds adopted in the Diversity Order; 
(3) the FCC set a uniform biennial filing date in place of the filing 
date tied to stations' renewal anniversaries; and (4) the FCC set an 
initial filing date of no later than November 1, 2009. To effectuate 
these changes, as discussed more fully below, the FCC delegates 
authority to staff to (1) revise the FCC Form 323 according to the 
parameters adopted in the (R&O); (2) revise the electronic interface so 
that the ownership data is incorporated into the database, is 
searchable, and can be aggregated and cross-referenced; (3) build 
additional checks into Form 323 to perform verification and review 
functions and to preclude the filing of incomplete or inaccurate data; 
and (4) conduct audits on a random basis to ensure accuracy of Form 323 
Reports.
    2. Currently, full power broadcast stations are required to 
periodically file Form 323 Ownership Reports to identify their 
organizational and ownership structures. Form 323 also requires 
stations to provide information on owners' race, ethnicity, and gender. 
Currently, full power commercial broadcast licensees are required to 
file Form 323: (1) When filing the station's license renewal 
application; (2) following the consummation of an assignment or 
transfer of control of the station license; (3) within 30 days after 
the grant of a construction permit for a new commercial radio or 
television station; and (4) at two-year intervals on the anniversary 
date of the station's renewal application filing date. The biennial 
reporting requirement does not apply, however, where the licensee is a 
sole proprietor or a partnership that is composed entirely of natural 
persons. In lieu of filing a new report, a licensee with a current and 
unamended report may certify that it has reviewed its current report 
and that it is accurate. The Commission does not require LPTV stations, 
including Class A stations, to file Form 323. If a full power 
commercial licensee or permittee is directly or indirectly controlled 
by another entity or if another entity holds an attributable interest 
in such licensee or permittee, a separate Form 323 is required to be 
submitted for such entity. To determine which interests are reportable 
on Form 323, the Commission uses its broadcast attribution rules, 
including the multiplier, which applies when an interest in a licensee 
is held indirectly by any party through one or more intervening 
entities in a vertical ownership chain. Form 323 defines the term 
``respondent'' as either the licensee or permittee or an entity 
controlling or holding an attributable interest in the licensee or 
permittee. Each respondent, other than a natural person, is required to 
list its officers, directors, stockholders, and other entities with 
attributable interests, its non-insulated partners, and/or its members.
    3. In 1998, the Commission began collecting data on minority and 
female broadcast ownership to fulfill the Commission's statutory 
mandate under Section 257 of 1996 Telecom Act of 1996 and Section 
309(j) of the Communications Act of 1934 to promote opportunities for 
small businesses and businesses owned by women and minorities in the 
broadcasting industry. The Commission revised Form 323 to

[[Page 25164]]

require filers to identify the gender and race or ethnicity of 
individuals with attributable interests in the licensee. The Commission 
concluded that the information was needed to ``determine accurately the 
current state of minority and female ownership of broadcast facilities, 
to determine the need for measures designed to promote ownership by 
minorities and women, and to chart the success of any such measures 
that the Commission may adopt.''
    4. It became apparent that the current collection methodology is 
inadequate and incomplete and cannot accurately be used to determine 
the state of minority and female broadcast ownership. Study authors who 
attempted to use the data contend that the data are incomplete, 
inaccurate, duplicative, and subject to significant measurement error. 
Specific problems cited include ownership percentages exceeding 100%, 
inconsistent racial classifications from year to year, missing and 
inaccurate information, and missing filings. The authors also note that 
because the biennial filing deadlines are tied to the station's renewal 
application filing date, it is impossible to obtain a snapshot of 
broadcast ownership at any one particular moment in time to use as a 
benchmark or for analytical purposes. The authors recommend that the 
Commission collect race and gender data on a regular basis not only 
from commercial broadcasters that are currently exempt from the 
biennial reporting requirement, but also from non-commercial licensees. 
Researchers object to the use of attachments for submitting ownership 
data because the attachments cannot be electronically searched in the 
database or cross-referenced with other forms. Researchers also state 
that the filing of multiple forms by separate entities for a single 
station creates additional difficulties for performing analysis.
    5. GAO Study. In March 2008, the United States Government 
Accountability Office (``GAO'') released a report recommending that the 
FCC identify processes and procedures to improve the reliability of its 
data on gender, race, and ethnicity so that it can more effectively 
monitor and report on the status of female and minority broadcast 
ownership. The GAO identifies three weaknesses of the data: (1) 
Exemptions from the biennial filing requirement for certain types of 
broadcast stations, (2) inadequate data quality procedures, and (3) 
problems with data storage and retrieval. First, the GAO concludes that 
because individuals, partnerships of natural persons, low power 
stations, and non-commercial broadcast stations are exempt from filing 
Form 323 biennially, it is not possible to identify the full universe 
of broadcast stations owned by minorities and women.
    The GAO criticizes the Commission for not verifying or periodically 
reviewing the gender, race, and ethnicity data submitted on Form 323. 
The GAO finds that reporting of ownership data on attachments is 
problematic because the data are not entered into the database, which 
renders the database unreliable and unusable for electronic queries. 
The GAO also criticizes the Commission for retaining outdated ownership 
forms in its database, even when a form has been updated. The GAO 
commends the Commission for taking several measures to address these 
concerns, noting, for instance, that the Commission now allows owners 
to modify information on a previously submitted Form 323, instead of 
requiring modifications to be submitted on a new form, and it precludes 
electronic submissions of incomplete forms. However, the GAO faults the 
Commission for continuing to allow respondents to file ownership 
information on attachments to Form 323, for not having any regular 
review process, and for not imposing consequences for misfiling that 
would encourage accurate, complete, and timely submission of Form 323.
    6. On March 5, 2008, the Commission released the Diversity Order to 
increase participation in the broadcasting industry by new entrants and 
small businesses, including minority- and women-owned businesses, which 
historically have not been well represented in the broadcasting 
industry. The Commission adopted a number of new rules and policies 
intended to encourage ownership diversity and new entry in 
broadcasting. The Commission discussed the benefits of conducting 
``longitudinal studies'' of minority and female ownership in order to 
track ownership trends over time and agreed to begin research once the 
Commission improved the data collection process and gathered the 
necessary data. The Commission concluded that such studies could help 
parties to assess the impact of changes in the media ownership rules on 
minority and female ownership and provide real-time feedback on the 
impact of the Commission's rules and policies on licensing, access to 
capital, availability of spectrum, and opportunities for minority and 
female ownership. The Commission stated that it would modify Form 323 
Ownership Report to improve the quality and usefulness of the data and 
sought comment on specific proposals.
    7. Form 323. In the Third Further Notice, the Commission sought 
comment on whether to create a new form to collect data on minority and 
female ownership or to modify the existing Form 323. The Commission 
tentatively concluded that it should modify the existing Form 323 and 
not create a new form for this purpose and commenters agreed. The FCC 
continues to believe that use of Form 323 is the most efficient and 
least burdensome method of collecting minority and female broadcast 
ownership data. Broadcasters are familiar with the form and how to 
complete it. In the R&O, the FCC decides to continue to use Form 323 to 
collect data on minority and female ownership and will retain the 
existing biennial reporting interval for the form. Commission staff is 
directed to modify the existing FCC Form 323 consistent with the 
discussion in the R&O. The FCC delegates to staff the authority to 
modify the format, structure, content, and placement of questions 
designed to elicit empirical information as to minority and female 
ownership within the boundaries of the policies adopted in the R&O. In 
designing the appropriate questions to elicit the information, the R&O 
states that staff should balance the goals of increasing data quality 
and comprehensiveness with that of minimizing burdens on respondents 
wherever possible.
    8. Enlarging the Class of Stations Required to File Biennially. In 
order to obtain comprehensive, up-to-date ownership data, the FCC is 
requiring all full power commercial broadcast stations and all low 
power television stations, including Class A stations, to file FCC Form 
323 every two years. Therefore, the FCC is eliminating the exemption 
from the biennial reporting requirement that currently applies to sole 
proprietorships and partnerships of natural persons that are licensees 
of commercial broadcast stations. The R&O finds that any additional 
filing burdens imposed by this action are counterbalanced by the need 
to ensure the completeness and accuracy of the data collection efforts. 
Because the FCC is modifying the form to include additional requests 
for information and establishing a uniform filing date, the FCC will 
require all licensees and respondents to file a complete Form 323 by 
the initial filing date established in the Order. This will allow the 
first snapshot to be complete and provide a baseline of comparison for 
later filings every two years. The Commission staff

[[Page 25165]]

is directed to revise Form 323 as indicated in the R&O.
    9. Reportable Interests. Currently, Form 323 requires respondents 
to provide information, including gender, race, and ethnicity, for all 
entities with attributable interests in any station that is subject to 
the reporting requirement. The R&O finds that there are certain areas 
in which the comprehensiveness of the FCC's minority and female 
ownership data collection efforts will be materially advanced by 
deviating from the attribution rules, and the FCC believes that it can 
do so without unreasonably burdening respondents. While the Commission 
considers only attributable interest holders in determining whether 
licensees are in compliance with the media ownership rules, the balance 
struck in defining what interests should be counted for purposes of 
implementing the ownership rules may not be appropriate for collecting 
data on interests held by minorities and women. Specifically, the FCC 
believes it is important to collect information from holders of equity 
interests in a licensee that would be attributable but for the single 
majority shareholder exemption and from holders of interests that would 
be attributable but for the higher Equity/Debt Plus (``EDP'') 
thresholds adopted in the Diversity Order for purposes of determining 
attribution of certain interests in eligible entities. The single 
majority shareholder exemption provides that a minority shareholder's 
voting interests will not be attributed where a single shareholder owns 
more than 50 percent of the outstanding voting stock. Accordingly, 
shareholders holding voting stock interests of 5 percent or more in 
corporations with a single majority shareholder are required to be 
reported. Under the Commission's equity/debt plus (``EDP'') standard, 
an interest is held attributable under the Commission's rules if, 
aggregating both equity and debt, the interest exceeds 33 percent of 
the total asset value (all equity plus all debt) of a broadcast station 
licensee, cable television system, daily newspaper or other media 
outlet subject to the Commission's broadcast multiple ownership or 
cross-ownership rules--and the interest holder also (1) holds an 
attributable interest in another media outlet in the same market that 
is subject to the multiple or cross-ownership rules, or (2) supplies 
over 15 percent of the total weekly broadcast programming hours of the 
station in which the interest is held. The Diversity Order adopted a 
mechanism to allow an interest holder to exceed the 33 percent 
threshold without triggering attribution if the investment would enable 
an ``eligible entity'' (as that term is defined in the Diversity Order) 
to acquire a broadcast station provided that (1) the combined equity 
and debt of the interest holder in the eligible entity is less than 50 
percent, or (2) the total debt of the interest holder in the eligible 
entity does not exceed 80 percent of the asset value of the station 
being acquired by the eligible entity and the interest holder does not 
hold any equity interest, option, or promise to acquire an equity 
interest in the eligible entity or any related entity. In order to 
obtain a broader scope of ownership data, the FCC will require entities 
holding interests in licensees that would otherwise be deemed non-
attributable by virtue of the ``eligible entity'' exemption to be 
reported. Accordingly, Commission staff is directed to modify Form 323 
so that these two attribution exemptions will not apply for purposes of 
defining the class of interests that are reportable and the entities 
that are required to file Form 323.
    10. Database Functionality. To address criticism of the 
Commission's current data storage and retrieval system, Commission 
staff is directed to modify Form 323 so that ownership data is 
incorporated into the database, is searchable, and can be aggregated 
and cross-referenced electronically. To further improve the ability of 
researchers and other users of the data to cross-reference information 
and construct complete ownership structures, the FCC will require each 
attributable entity above the licensee in the ownership chain to list 
on Form 323, the FCC Registration Number (FRN) of the entity in which 
it holds an attributable interest. In other words, each filing entity 
must identify by FRN the entity below it in the chain. For example, 
Licensee A is wholly owned by Corp. B, and Corp. B is wholly owned by 
Corp. C. Corp. C is required to include on its Form 323, Corp. B's FRN. 
Corp. B is required to include on its Form 323 the Licensee's FRN. The 
R&O directs staff to revise Form 323 accordingly. While the FCC 
believes that these measures will resolve concerns regarding the 
usefulness of the data, the FCC delegates authority to the staff to 
revisit this issue if additional modifications of the form are 
determined to be necessary.
    11. Uniform Reporting Date. The Commission sought comment on 
whether to establish a uniform filing date for all respondents. 
Currently, filing and reporting requirements are tied to stations' 
renewal cycles, and new data are continually incorporated into the 
database as it is filed, mixing new data and old data. The FCC's 
experience with the data has made it apparent that the current use of 
rolling filing dates has impeded the ability to perform time-related 
comparisons using its database. None of the commenters opposes a 
uniform filing date. To make the data easier to work with, to address 
the problems created by the staggered ownership report filing deadlines 
currently in effect, and to facilitate studies of ownership, the FCC 
establishes a uniform filing date and a uniform date on which 
respondents must biennially identify ownership information as it exists 
on that date. Therefore, on or before November 1, 2009, and every two 
years thereafter, all commercial, full power broadcast licensees, LPTV, 
and Class A licensees, and entities with attributable interests in 
those licensees are required to file the revised Form 323. The reported 
ownership information must be current as of October 1 of the year in 
which the filing is being made. Therefore, for the first filing, all 
ownership information must be current as of October 1, 2009. The 
provision of ownership information on a uniform filing date every two 
years, instead of on a rolling or ad hoc basis, will facilitate 
comparisons among stations and rigorous analysis.
    12. To address additional quality control issues, Commission staff 
is directed to build additional checks into Form 323 to perform 
verification and review functions and to preclude the filing of 
incomplete or inaccurate data. In addition, as discussed above, staff 
is directed to modify the form to ensure that all ownership data will 
be filed in a format that can be electronically searched, aggregated, 
and cross-referenced. As another measure to improve the quality of the 
ownership data, the Commission directs the Media Bureau to conduct 
audits on a random basis to ensure the accuracy of the Ownership 
Reports. The FCC authorizes the Bureau to make revisions to Form 323, 
its instructions, and the electronic database, as necessary in order to 
conduct random audits.
    13. The Commission sought comment on the penalties to be imposed 
for licensees that file inaccurate information. The GAO Report 
recommends that the Commission adopt additional penalties for entities 
that fail to file the form or that file inaccurate information. NAB 
opposes the adoption of such penalties. The FCC concludes that current 
policies and rules are adequate to assure the accuracy of the 
information reported and that additional penalties are unnecessary. The 
truthfulness, accuracy, and completeness of information submitted

[[Page 25166]]

on a Form 323 must be certified by the individual permittee or 
licensee, a general partner in the licensee or permittee partnership, 
or an appropriate officer in the licensee or permittee corporation or 
association. Licensees are required to exercise reasonable due 
diligence before certifying to the accuracy of any information that is 
submitted to the Commission. The FCC determined that the current 
enforcement procedures are sufficient to ensure that licensees comply 
with its rules and procedures.

Final Paperwork Reduction Analysis

    14. The R&O contains both new and modified information collection 
requirements subject to the Paperwork Reduction Act of 1995 (``PRA''), 
Public Law 104-13. OMB, the general public, and other Federal agencies 
are invited to comment on the new and modified information collection 
requirements contained in this R&O. The Commission will submit the 
information collection requirements to the Office of Management and 
Budget (OMB) for review and approval under Section 3507(d) of the PRA 
and OMB, the general public, and other Federal agencies will again be 
invited to comment on the new and modified information collection 
requirements contained in this R&O. Comments should address: (a) 
Whether the proposed collection of information is necessary for the 
proper performance of the functions of the Commission, including 
whether the information shall have practical utility; (b) the accuracy 
of the Commission's burden estimates; (c) ways to enhance the quality, 
utility, and clarity of the information collected; and (d) ways to 
minimize the burden of the collection of information on the 
respondents, including the use of automated collection techniques or 
other forms of information technology.
    Submit PRA comments on or before July 27, 2009 to Nicholas A. 
Fraser, Office of Management and Budget, via Internet at Nicholas_A._Fraser@omb.eop.gov or via fax at (202) 395-5167 and to Cathy Williams, 
Federal Communications Commission, Room 1-C823, 445 12th Street, SW., 
Washington, DC or via Internet at Cathy.Williams@fcc.gov or 
PRA@fcc.gov.
    Pursuant to the Small Business Paperwork Relief Act of 2002, Ex. 
Public Law 107-98, see 44 U.S.C. 3506(c)(4), the FCC has considered how 
the Commission might ``further reduce the information collection burden 
for small business concerns with fewer than 25 employees.'' The FCC 
finds that the modified requirements must apply fully to small entities 
(as well as to others) to protect consumers and further other goals, as 
described in the R&O.

Final Regulatory Flexibility Analysis

    15. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was 
incorporated in the Third Further Notice of Proposed Rulemaking (FNPRM) 
in MB Docket No. 07-294. The Commission sought written public comment 
on the proposals in the FNPRM including comment on the IRFA. The 
Commission also prepared a Supplemental Initial Regulatory Flexibility 
Analysis (Supplemental IRFA) and a Second Supplemental Initial 
Regulatory Flexibility Analysis (Second Supplemental IRFA) of the 
possible significant economic impact on small entities of the proposals 
in the Further Notice of Proposed Rulemaking (Further Notice) and the 
Second Further Notice of Proposed Rulemaking (Second Further Notice), 
respectively. The Commission sought written public comment on the 
Further Notice, including comment on the Supplemental IRFA, and written 
public comment on the Second Further Notice, including comment on the 
Second Supplemental IRFA. This Final Regulatory Flexibility Analysis 
(FRFA) conforms to the RFA.

A. Need for, and Objectives of, the Report and Order

    16. The R&O adopts changes to FCC Form 323, Ownership Report for 
Commercial Broadcast Stations, and the filing requirements for Form 
323, to improve the Commission's collection of data on minority and 
female broadcast ownership so that the Commission can more accurately 
assess and effectively promote diversity of ownership in the broadcast 
industry. The R&O broadens the reporting requirements to require low 
power television stations (``LPTV'') licensees, Class A television 
station licensees, and full power commercial broadcast licensees that 
are sole proprietors and partnerships comprised of natural persons, to 
file the form biennially. The R&O also requires entities with financial 
interests that would be attributable (1) but for the single majority 
shareholder attribution exemption or (2) the higher Equity/Debt Plus 
threshold adopted in the Diversity Order for purposes of attributing 
certain interests in eligible entities, to file Form 323 every two 
years. To ensure that the entire collection of minority and female 
ownership data is current as of a single date for each filing cycle, 
the R&O states that filers must file Form 323 no later than November 1, 
with reported ownership information to be current as of October 1 of 
filing year. The first filings using the new Form 323 will be due on or 
before November 1, 2009. To address quality control issues, the R&O 
delegates authority to the Media Bureau staff to perform random audits, 
and to improve the electronic interface process in order to perform 
verification and review functions and preclude the filing of incomplete 
or inaccurate data. The R&O revises 47 CFR 73.3615 and adds 47 CFR 
74.797 to implement these changes.

B. Legal Basis

    17. The R&O is adopted pursuant to sections 1, 2(a), 4(i), 303, 
307, 309, and 310 of the Communications Act of 1934, as amended, 47 
U.S.C. 151, 152(a), 154(i), 303, 307, 309, and 310.

C. Summary of Significant Issues Raised by Public Comments in Response 
to the IRFA and the Supplemental IRFAs

    18. The Commission received no comments in direct response to the 
IRFA, the Supplemental IRFA, or the Second Supplemental IRFA. However, 
the Commission received comments that discuss the additional burdens on 
broadcast licensees, including small entities. The National Association 
of Broadcasters and American Women in Radio and Television opposed 
requiring full power commercial broadcast licensees that are sole 
proprietors to file FCC Form 323 on a biennial basis. Instead, the 
commenters asked the Commission to retrieve the ownership data for 
minorities and women from either applications to request an assignment 
or transfer control of a broadcast station, or to require currently 
exempt entities to file Form 323 once, and not on a biennial basis. The 
Commission considered other ways to collect the ownership data, instead 
of a biennial filing, but determined that the biennial filings from the 
broader class of entities is needed to collect complete and accurate 
data, and ultimately to promote broadcast ownership among new entrants 
and small businesses, including minority- and women-owned businesses.

D. Description and Estimate of the Number of Small Entities to Which 
the Rules Will Apply

    19. 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 entity'' 
under

[[Page 25167]]

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.
    20. Television Broadcasting. In this context, the application of 
the statutory definition to television stations is of concern. The 
Small Business Administration defines a television broadcasting station 
that has no more than $14 million in annual receipts as a small 
business. Business concerns included in this industry are those 
``primarily engaged in broadcasting images together with sound.'' 
According to Commission staff review of the BIA Financial Network, Inc. 
Media Access Pro Television Database as of February 19, 2009, about 918 
(71 percent) of the 1,292 commercial television stations in the United 
States have revenues of $14 million or less. About 180 (14 percent) of 
the 1,292 commercial television stations are owned by sole 
proprietorships or partnerships and would be subject to new reporting 
requirements. However, these figures take into account all 
partnerships, and only partnerships comprised of natural persons are 
subject to new reporting requirements. Therefore, the FCC's estimate 
likely overstates the number of small entities that might be affected. 
In addition, the FCC notes that in assessing whether a business entity 
qualifies as small under the above definition, business control 
affiliations must be included. Its estimate, therefore, likely 
overstates the number of small entities that might be affected by any 
changes to the filing requirements for FCC Form 323, because the 
revenue figures on which this estimate is based do not include or 
aggregate revenues from affiliated companies.
    21. 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 
the FCC's estimate of small businesses to which the rules may apply may 
be over-inclusive to this extent.
    22. Radio Broadcasting. The Small Business Administration defines a 
radio broadcasting entity that has $7 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.'' According to Commission staff review of the 
BIA Financial Network, Inc. Media Access Radio Analyzer Database as of 
February 19, 2009, about 10,600 (96 percent) of 11,050 commercial radio 
stations in the United States have revenues of $7 million or less. 
About 1,440 (13 percent) of the 11,050 commercial radio stations are 
owned by sole proprietors or partnerships, and would be subject to the 
new reporting requirements. However, these figures take into account 
all partnerships, and only partnerships comprised of natural persons 
are subject to new filing requirements. Therefore, the FCC's estimate 
likely overstates the number of small entities that would be affected. 
In addition, the FCC notes that in assessing whether a business entity 
qualifies as small under the above definition, business control 
affiliations must be included. The FCC's estimate, therefore, likely 
overstates the number of small entities that might be affected by any 
changes to the ownership rules, because the revenue figures on which 
this estimate is based do not include or aggregate revenues from 
affiliated companies.
    23. 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. The FCC is 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. The FCC notes that 
it is difficult at times to assess these criteria in the context of 
media entities, and its estimate of small businesses to which the rules 
may apply may be over-inclusive to this extent.
    24. Class A TV and LPTV stations. The rules and policies adopted 
herein apply to licensees of Class A TV stations and low power 
television (``LPTV'') stations, as well as to potential licensees in 
these television services. The same SBA definition that 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 $14.0 million in annual receipts. Currently, 
there are approximately 554 licensed Class A stations and 2,300 
licensed LPTV stations. Given the nature of these services, the FCC 
will presume that all of these licensees qualify as small entities 
under the SBA definition. The FCC notes, 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. The FCC's 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.

E. Description of Projected Reporting, Recordkeeping and Other 
Compliance Requirements

    25. Currently, the Commission requires certain full power 
commercial radio and television broadcast stations to periodically file 
Form 323 Ownership Report to identify their organizational and 
ownership structures, including information on owners' race, ethnicity, 
and gender. Licensees of full power commercial stations that are sole 
proprietors and partnerships comprised of natural persons, and 
licensees of low power broadcast stations are not required to file Form 
323 biennially. The R&O expands the class of entities that are required 
to file the Form 323 biennially to include all commercial licensees. 
Thus, sole proprietorships, partnerships of natural persons, and LPTV 
licensees, including, Class A licensees, must file the Form 323 
biennially. In addition, the R&O broadens the filing requirements to 
include holders of two classes of nonattributable ownership interests: 
(1) Equity interests in a licensee that would be attributable but for 
the single majority shareholder exemption and (2) interests that would 
be attributable but for the higher Equity/Debt Plus thresholds adopted 
in the Diversity Order for purposes of determining attribution of 
certain interests in eligible entities. The R&O sets a deadline of no 
later than November 1, 2009, and every two years thereafter, as the 
biennial filing deadline for Form 323. The R&O also states that 
ownership data must be current as of October 1 of the filing year.

[[Page 25168]]

F. Steps Taken To Minimize Significant Impact on Small Entities and 
Significant Alternatives Considered

    26. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its proposed approach, 
which 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.
    27. In order to minimize the administrative burdens on licensees, 
including small businesses, the Commission considered and declined to 
create a new form to collect the data on minority and female ownership. 
Instead, the Commission concluded that collecting the information on 
the current FCC Form 323 is the most efficient and least burdensome 
method of collecting minority and female broadcast ownership data. The 
R&O considered as an alternative whether to enlarge the class of 
stations that are required to file Form 323 biennially and concluded 
that the most effective way to obtain comprehensive ownership data is 
to require all full power commercial broadcast stations, LPTV, and 
Class A stations to file the revised Form 323 biennially. Currently, if 
a licensee is directly or indirectly controlled by another entity, or 
if another entity has an attributable interest in such licensee or 
permittee, a separate Form 323 must be submitted for each such entity. 
As suggested by NAB, the Commission considered the alternative of 
revising the reporting requirement so that a single form could be filed 
for all of the entities ultimately controlled by the same parent 
company or a single form for each licensee. The Commission did not 
revise the current reporting requirement because it was not convinced 
that requiring broadcasters to obtain all ownership data for parent 
corporations and attributable entities on a single form would be less 
burdensome. For instance, the Commission stated that licensees may find 
it burdensome to collect ownership information as to certain entities 
that hold interests in the licensee indirectly through a vertical 
ownership chain. However, to further improve the ability of researchers 
and other users of the data to cross-reference information and 
construct complete ownership structures, the Commission is requiring 
each attributable entity above the licensee in the ownership chain to 
list, on Form 323, the FCC Registration Number of the entity in which 
it holds an attributable interest. The Commission considered the 
alternative of modifying the existing rolling filing schedule which is 
tied to a station's renewal cycle. In order to permit rigorous analysis 
based on data that is current as of the same date for all filers, the 
Commission concluded that it is necessary to establish a uniform 
submission date for the biennial filings. Therefore, the R&O states 
that files must file Form 323 no later than November 1, 2009, and every 
two years thereafter. The R&O also states that ownership data must be 
current as of October 1 of the filing year.

G. Report to Congress

    28. The Commission will send a copy of this R&O, including this 
FRFA, in a report to Congress and the Government Accountability Office, 
pursuant to the Congressional Review Act. In addition, the Commission 
will send a copy of this R&O, including this FRFA, to the Chief Counsel 
for Advocacy of the Small Business Administration.

List of Subjects in 47 CFR Parts 73 and 74

    Radio, Television.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Final Rules

0
For the reasons stated in the preamble, the Federal Communications 
Commission amends 47 CFR parts 73 and 74 as follows:

PART 73--RADIO BROADCAST SERVICES

0
1. The authority citation for part 73 continues to read as follows:

    Authority:  47 U.S.C. 154, 303, 334, 336 and 339.


0
2. Section 73.3615 is amended by revising paragraph (a) introductory 
text to read as follows:


Sec.  73.3615  Ownership reports.

    (a) The Ownership Report FCC Form 323 must be electronically filed 
no later than November 1, 2009, and every two years thereafter by each 
licensee of a commercial AM, FM, or TV broadcast station (``Licensee'') 
and each entity that holds an interest in the licensee that is 
attributable for purposes of determining compliance with the 
Commission's multiple ownership rules (see Notes 1-3 to 47 CFR 73.3555) 
or would be attributable but for the single majority shareholder 
exemption (see former Note 2(b) of 47 CFR 73.3555 and Order 16 FCC Rcd 
22310 (2001)) or the higher threshold for attribution of certain 
interests in eligible entities under the Equity Debt Plus attribution 
standard (see Note 2(i) to 47 CFR 73.3555) (``Respondent''). A Licensee 
or Respondent with a current and unamended Report on file at the 
Commission, which was filed on or by the November 1, 2009 initial 
filing date or thereafter, may electronically certify that it has 
reviewed its current Report and that it is accurate, in lieu of filing 
a new Report. Ownership Reports shall provide the following information 
as of October 1 of the year in which the report is filed:
* * * * *


0
3. Section 73.6026 is amended by adding the following entry to the end 
of the list as follows:


Sec.  73.6026  Broadcast regulations applicable to Class A television 
stations.

* * * * *
    Sec.  73.3615(a) and (g) Ownership reports.

PART 74--EXPERIMENTAL RADIO, AUXILIARY, SPECIAL BROADCAST AND OTHER 
PROGRAM DISTRIBUTIONAL SERVICES

0
4. The authority citation for part 74 continues to read as follows:

    Authority:  47 U.S.C. 154, 303, 334, 336 and 339.


0
5. Add Sec.  74.797 to subpart G to read as follows:


Sec.  74.797  Biennial Ownership Reports.

    The Ownership Report FCC Form 323 must be electronically filed no 
later than November 1, 2009, and every two years thereafter by each 
licensee of a low power television station or Respondent (as defined in 
Sec.  73.3615(a) of this chapter). Beginning with the 2011 filing, a 
licensee or Respondent with a current and unamended Report on file at 
the Commission may certify electronically that it has reviewed its 
current Report and that it is accurate, in lieu of filing a new Report. 
Ownership Reports shall provide information as of October 1 of the year 
in which the report is filed. For information on filing requirements, 
filers should refer to Sec.  73.3615(a) of this chapter.

[FR Doc. E9-12312 Filed 5-26-09; 8:45 am]
BILLING CODE 6712-01-P