Promoting Diversification of Ownership in the Broadcasting Services, 2925-2934 [2013-00578]
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(3) In choosing among alternative
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generate, disseminate, and promote the
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Dated: January 9, 2013.
Michael Yudin,
Acting Assistant Secretary for Special
Education and Rehabilitative Services.
[FR Doc. 2013–00580 Filed 1–14–13; 8:45 am]
BILLING CODE 4000–01–P
FEDERAL COMMUNICATIONS
COMMISSION
[MB Docket No. 07–294; FCC 12–166]
Promoting Diversification of
Ownership in the Broadcasting
Services
Federal Communications
Commission.
ACTION: Notice of proposed rulemaking.
AGENCY:
In this document, the
Commission seeks further comment on
its requirement that licensees and other
entities filing the FCC Form 323,
Ownership Report for Commercial
Broadcast Station, provide an FCC
SUMMARY:
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Registration Number (FRN) generated by
the Commission’s Registration System
(CORES) (CORES FRN) for attributable
individuals reported on the Form 323.
The Sixth Further Notice of Proposed
Rulemaking (Sixth FNPRM) also seeks
comment on the Commission’s proposal
to eliminate the ‘‘Special Use’’ FRN for
individuals reported on the Form 323
and on a proposal to amend the Form
323–E, Ownership Report for
Noncommercial Educational Broadcast
Station to require filers to report the
CORES FRN for individuals with
attributable interests in licensees
reported on the Form 323–E. The
Commission also invites comment on
whether it should extend the CORES
FRN requirements, as they apply to
entities and individuals, to any nonattributable interest holders that the
Commission might ultimately conclude
should be reported on the Form 323, as
proposed by the Fifth Further Notice of
Proposed Rulemaking (Fifth FNPRM).
Finally, comment is sought on a
proposal to extend the biennial
ownership report filing period and on
proposed revisions to the Form 323 as
submitted in comments in the Review of
Media Bureau Data Practices
proceeding.
DATES: The Commission must receive
written comments on or before February
14, 2013 and reply comments on or
before March 1, 2013. Written
comments on the Paperwork Reduction
Act (PRA) proposed information
collection requirements must be
submitted by the public, Office of
Management (OMB) and other
interested parties on or before March 18,
2013.
ADDRESSES: You may submit comments,
identified by MB Docket. No. 07–294, by
any of the following methods:
• Federal Communications
Commission’s Web Site: https://
fjallfoss.fcc.gov/ecfs2/. Follow the
instructions for submitting comments.
• 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 detailed instructions for
submitting comments and additional
information on the rulemaking process,
see the SUPPLEMENTARY INFORMATION
section of this document.
FOR FURTHER INFORMATION CONTACT: For
additional information on this
proceeding, contact Judith Herman of
the Media Bureau, Industry Analysis
Division, at (202) 418–2330. For
additional information concerning the
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Federal Register / Vol. 78, No. 10 / Tuesday, January 15, 2013 / Proposed Rules
Paperwork Reduction Act information
collection requirements contained in the
Notice of Proposed Rulemaking contact
Cathy Williams at (202) 418–2918 or
send an email to PRA@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a
summary of the Commission’s Sixth
Further Notice of Proposed Rulemaking
in MB Docket No. 07–294, FCC 12–166,
adopted December 21, 2012, and
released January 3, 2013. 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.,
Washington, DC 20554. These
documents will also be available via
ECFS (https://fjallfoss.fcc.gov/ecfs/) and
may be purchased from the
Commissions copy contractor, BCPI,
Inc. at their Web site https://
www.bcpi.com or call 1–800 378–3160.
Initial Paperwork Reduction Act of
1995 Analysis
This Notice of Proposed Rulemaking
may result in a new or revised
information collection requirement. If
the Commission adopts any new or
revised information collection
requirements, the Commission will
publish a notice in the Federal Register
inviting the public to comment on the
requirement, 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 further
comment on how it might ‘‘further
reduce the information collection
burden for small business concerns with
fewer than 25 employees.’’
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Summary of the Sixth Further Notice of
Proposed Rulemaking
I. Introduction
1. In this Sixth FNPRM, we seek
further comment on the Commission’s
requirement that licensees and other
entities filing the FCC Form 323,
Ownership Report for Commercial
Broadcast Station, provide an FCC
Registration Number (FRN) generated by
the Commission’s Registration System
(CORES) (CORES FRN) for attributable
individuals reported on Form 323.
Obtaining a CORES FRN requires users
to identify themselves uniquely. This
unique identification is achieved by
requiring users to submit their taxpayer
identification number (TIN), which for
entities is generally their employer
identification number (EIN) and for
individuals is generally their social
security number (SSN). As discussed
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below, unique identification of entities
and individuals filing and being
reported on Form 323 is crucial to
ensuring the accuracy and reliability of
Form 323 data and the usefulness of
those data to the Commission and other
researchers.
2. We seek comment herein also on
eliminating the interim, ‘‘Special Use’’
FRN alternative to obtaining a CORES
FRN for individuals reported on Form
323. The Commission has long required
licensees and other entities filing Form
323 to obtain and provide a CORES
FRN. The revised Form 323, adopted in
2009 pursuant to the 323 Order, 74 FR
25163 (2009), and the 323 MO&O, 74 FR
56131 (2009) in this proceeding,
requires filers to obtain and include a
CORES FRN not only for themselves but
also for entities and individuals whose
attributable interests are reported on the
form. Two parties sought
reconsideration of the requirement to
obtain CORES FRNs for individuals
holding attributable interests, arguing
that the CORES FRN requirement for
individuals is overly burdensome and
raises privacy and data security issues
and that the Commission provided
inadequate notice of this requirement.
To address the concerns of the
petitioners and others who raised this
issue in comments, the Media Bureau
implemented a ‘‘Special Use’’ FRN as an
alternative, temporary measure to
obtaining a CORES FRN for individuals
holding attributable interests reported
on the form. The Special Use FRN
allows Form 323 filers to obtain an FRN
for use with Form 323 for such
individuals without submitting a TIN
through CORES. As a rule, all filers
must provide an FRN for all persons and
entities reported on Form 323. If, after
using diligent and good-faith efforts, a
filer is unable to obtain or does not have
permission to use an SSN in order to
generate an FRN for an individual
holding an attributable interest in the
licensee, the filer may use the Special
Use FRN. Filers who use a non-SSN
based Special Use FRN will be deemed
fully compliant with the Form 323 filing
obligation for purposes of the 323 filing,
and the lack of SSN-based FRNs in
response to Section II, Question 3(a) and
will not subject Respondents to
enforcement action. We now seek
comment on eliminating this temporary
measure. We also seek comment on our
proposal to permit filers to use a Special
Use FRN solely in instances where the
filer is unable to obtain a CORES FRN
from an individual with reportable
interests.
3. In addition, we seek comment on
our proposal to amend the Form 323–E,
Ownership Report for Noncommercial
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Educational Broadcast Station, to
require filers to report a CORES FRN for
individuals with attributable interests in
licensees reported on this form. Further,
we seek comment on whether we
should extend the CORES FRN
requirements, as they apply to entities
and individuals, to any non-attributable
interest holders that we might
ultimately conclude should be reported
on Form 323, as proposed in the Fifth
FNPRM. Finally, we seek comment on
our proposal to extend the biennial
ownership report filing period and on
the proposed revisions to Form 323
submitted in comments in the Review of
Media Bureau Data Practices
proceeding.
II. Background
4. It has been a longstanding goal of
the Commission to promote diverse
ownership of broadcast stations,
including ownership by women and
minorities. In order to gather accurate
and usable data about these and other
ownership categories, the Commission
substantially revised its biennial
ownership reporting form in 2009. As
the Commission previously has stated,
the changes to the filing requirements
and the modifications to the form are
intended to facilitate long-term
comparative studies of broadcast station
ownership. In addition, the changes
address flaws in the data collection
process identified by the United States
Government Accountability Office
(GAO) and by researchers who have
attempted to use the data submitted on
previous versions of Form 323. In 2008,
GAO cited several shortcomings with
the Commission’s data collection
process: (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. To address GAO’s concerns
and to improve the quality and
suitability of the data for the
Commission’s use, the Commission
adopted several significant changes.
First, it set a uniform ‘‘as of’’ date of
October 1 for the ownership data being
reported in the biennial filing and
established a uniform filing deadline for
the data of November 1. Thus, all filers
must report their ownership interests as
they exist on the ‘‘as of’’ date of the
filing year and submit their reports no
later than one month thereafter. These
uniform dates make it possible to
discern statistically valid trends in
minority and female ownership over
time, which was not possible using the
previous rolling filing procedures, and
ensure timely collection of the data.
Second, the Commission also expanded
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the class of licensees that must file the
report biennially to include sole
proprietors and partnerships of natural
persons as well as low-power television
and Class A licensees.
5. Third, the Commission delegated to
the Media Bureau authority to (1) Revise
Form 323’s electronic interface so that
the ownership data incorporated into
the database are searchable, and can be
aggregated and cross-referenced; (2)
build additional checks into Form 323
to perform verification and review
functions; and (3) conduct audits to
ensure the accuracy of the Form 323
reports. The Commission also stated
that ‘‘to further improve the ability of
researchers and other users of the data
to cross-reference information and
construct complete ownership
structures, we will require each
attributable entity above the licensee in
the ownership chain to list on Form
323, the [CORES] FRN of the entity in
which it holds an attributable interest.’’
This requirement to reference the next
layer down in an ownership chain by
using a unique identifier, the FRN,
fulfills a need for unmistakable identity
in the face of often complex ownership
structures involving numerous parties
and multiple layers or links in the
ownership chain, a need which cannot
be fulfilled by identification based
entirely on names and addresses. In
other words, the Commission concluded
that without a single, unique identifier,
researchers could not confirm the
accuracy of aggregated records. While
the Commission believed that these
measures would resolve concerns
regarding the usefulness of the data, it
nevertheless delegated authority to the
Media Bureau staff to revisit the CORES
FRN issue if it determined that
additional changes were necessary. In
response, the Media Bureau revised and
improved the instructions and questions
in all sections of the form in order to (1)
Clarify the information sought in the
form, (2) ensure that the data are
collected in machine-readable formats
that can be incorporated in database
programs used to prepare economic and
policy studies, and (3) simplify
completion of the form by giving
respondents menu-style or checkboxstyle options to enter data. The Bureau
also included built-in edit checks and
pre-fill capabilities to assure greater
accuracy and ease of completion.
6. On August 11, 2009, the
Commission submitted the revised Form
323 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. Among other things,
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the revised form required each filer to
include a CORES FRN of entities one
step above and one step below it in the
ownership chain and to identify the
CORES FRNs of its attributable officers,
directors, and shareholders reported on
the form. Many of the commenters in
their comments to OMB objected to
having to report CORES FRNs for
individuals holding attributable
interests, arguing that in order to obtain
a CORES FRN from 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
and would present a hardship to 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 to
either 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. They also
claimed that the decision was
inconsistent with the CORES FRN
requirement applicable to wireless
licensees, who, they alleged, are not
required to provide CORES FRNs or
other similar information for officers,
directors, and board members. Two
Petitions for Writs of Mandamus were
filed with the Court of Appeals for the
D.C. Circuit to stay the FCC from
implementing revisions to the form.
Both were denied.
7. On October 6, 2009, the
Commission submitted a letter to OMB
in response to the comments. The FCC’s
response 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.’’
The Reply Letter identified the CORES
FRN as a key tool for ensuring that the
ownership data is matched with specific
owners. Also, without the CORES FRNs,
the Commission explained that it would
be unable to accurately determine the
identity of a person when variations of
a single name or other spelling
irregularities appear from form to form.
The Reply Letter also noted that the
FRN has been used as a unique
identifier for reports that collect data on
individuals and entities that hold
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attributable interests in wireless services
and concluded that requiring filers to
provide a CORES FRN for individual
attributable interest holders on the Form
323 ‘‘will allow the Commission to
harmonize its processes between
different licensing divisions and
directly improve the quality and
usefulness of the collected data * * *.’’
The Reply Letter rejected allegations
that the Commission failed to comply
with the notice requirements of the
PRA. After the Commission submitted
the revised form to OMB, the
Commission issued a further order, the
323 MO&O, and explained that each
filer was required to identify the CORES
FRNs of its attributable officers,
directors, and shareholders, explaining
‘‘[i]n the process of modifying Form 323
on delegated authority, the Bureau
determined that it was necessary to
expand the class of [CORES] FRNs to be
included to ensure the usefulness of the
data.’’
8. On October 19, 2009, OMB
approved the revised Form 323,
including the requirement that filers
identify the CORES FRN for individuals
holding an attributable interest in the
licensee. After several delayed filing
deadlines, the Commission set July 8,
2010, as the first biennial filing deadline
using the revised form. Generally, the
Bureau’s experience during the filing
process was that most filers complied
with the CORES FRN requirement.
Nevertheless, in response to industry
concerns about filers’ ability to obtain
FRNs from all individuals holding
attributable interests due to individuals’
concerns about privacy, security, and
identify theft, the Bureau allowed filers,
as an interim measure, to obtain a
Special Use FRN for individuals
reported on the form in lieu of obtaining
a CORES FRN. Individuals do not need
to provide an SSN in order to generate
the Special Use FRN.
9. In December 2010, the Commission
initiated a rulemaking proceeding in
which it proposes to update CORES in
an effort to enhance the Commission’s
data collection efforts and to improve
customer interface with CORES. In the
Notice of Proposed Rulemaking, 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
Commission stated that it has had
difficulty using CORES to identify all
FRNs held by the same entity when
entities have not provided TINs or have
provided inconsistent TINs. It also
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observed that some filers erroneously
invoked exceptions to the general
requirement to provide a TIN and that
these entities or individuals also would
be difficult to track. The Commission
has proposed several options to resolve
these issues. In addition, the
Commission has asked whether it
should expand the availability of
‘‘special use’’ FRNs for purposes other
than the filing of Form 323.
10. In July 2011, the 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.
The court 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 such a
definition specifically would assist
minorities and women, who were
among the intended beneficiaries of this
action. The court also remanded each of
the measures adopted in the Diversity
Order that relied on the revenue-based
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 female
and minority ownership must be based
upon reliable data. The court stated, ‘‘At
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
Order and Fourth FNPRM to reliably
analyze minority and female ownership
‘‘will, however, lay necessary
groundwork for the Commission’s
actions on remand.’’
III. Discussion
11. By this FNPRM, we seek to
supplement the record regarding the use
of CORES FRNs. First, we tentatively
affirm the Commission’s prior
determination that the use of CORES
FRNs as unique identifiers is necessary
in order to improve the quality of the
data collected on Form 323, and we
propose to discontinue the Special Use
FRN for Form 323. We propose to
require all individual attributable
interest holders to obtain a CORES FRN
and to require all Form 323 filers to
provide the CORES FRN for these
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individuals. Second, we seek comment
on whether we should require the
individual and entities holding nonattributable interests that would be
reportable on the Form 323 under the
proposal set forth in the Fifth FNPRM to
obtain a CORES FRN and require all
Form 323 filers to report these CORES
FRNs. Third, we seek comment on
revising Form 323–E to include the
same CORES FRN and attributable
interest reporting obligations as those
applicable to Form 323. Finally, we seek
comment on proposed revisions to the
Form 323 submitted in comments in the
Review of Media Bureau Data Practices
proceeding.
12. Elimination of Special Use FRN
for Form 323. Special Use FRNs do not
afford the Commission a reliable means
of tracing a reported interest holder to
a unique individual and their use
therefore undermines the purpose of our
data collection effort, which seeks to
accurately ascertain the nature and
extent of minority and female
ownership of broadcast properties.
Without the ability to track an FRN to
a unique individual, it may be difficult,
if not impossible, to accurately crossreference broadcast ownership interests.
The Third Circuit has highlighted the
importance of collecting reliable data to
support the Commission’s rulemaking
initiatives.
We seek comment on the use of the
CORES FRN as a means of associating
non-unique information (names,
addresses, race, gender, and ethnicity)
with a unique identifier for data quality,
searchability, cross-referencing, and
aggregation purposes solely for use with
FCC Form 323 as a means of identifying
attributable interests. How effective,
relatively speaking, is the CORES FRN
as a unique identifier for the
Commission’s purposes? If no unique
numeric or other identifier is associated
with an ownership record, how can
researchers and other members of the
public adequately verify and/or make
use of the collected data? How can
complete ownership structures be
compiled reliably? What alternatives are
there to the use of the CORES FRN as
a unique identifier? We invite comment
on other measures the Commission
could use as a unique identifier in lieu
of the CORES FRN and its underlying
TIN basis.
13. We tentatively affirm the
Commission’s prior determination that
the use of CORES FRNs as unique
identifiers is necessary in order to
improve the quality of the data collected
on Form 323, and we propose to
eliminate the availability of Special Use
FRNs and require the universal use of
CORES FRNs for all biennial and non-
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biennial Form 323s. We tentatively
conclude 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. We
also tentatively conclude that the
reporting of CORES FRNs on Form 323
that are obtained after supplying the
Commission with a TIN is superior to
reporting the Special Use FRNs now
permitted for individuals. We seek
comment on these tentative
conclusions, and particularly encourage
those who may have used the dataset
created from the first set of Form 323
biennial filings that were required to
include FRNs for attributable entities
and individuals to address these issues.
Furthermore, the use of CORES FRNs is
consistent with Commission precedent
in the wireless services context, as
applicable to attributable interest
holders. We seek comment on any
justifications to treat broadcasters
differently with respect to CORES FRN
requirements.
14. We note that other government
agencies also use SSNs when necessary
to ensure program integrity and for
statistical and research purposes. For
example, the Census Bureau uses SSNs
reported on income tax returns in order
to prepare annual population estimates
for states and counties to determine
immigration rates between localities.
The Department of Agriculture has
statutory authority to collect the SSNs of
both food stamp recipients and officers
and owners of retail and wholesale food
concerns that accept and redeem food
stamps. The Small Business
Administration (SBA) requires that
applicants for SBA-backed loans
provide their past business and personal
income tax returns, which contain their
SSNs. The Department of Housing and
Urban Development (HUD) requires
SSNs as a condition of eligibility for
participation in HUD programs
involving loans, grants and other
assistance. The Veterans Administration
requires individuals to provide their
SSNs to be eligible for compensation or
pension benefits programs. The
Treasury collects the SSNs of all savings
bond purchasers. The Department of
Labor requires all workers
compensation claimants to provide an
SSN. The Department of Homeland
Security uses SSNs in its E-Verify
database as the basis for its employment
verification system. Health and Human
Services collects SSNs to verify
citizenship status. Agencies also collect
and share SSNs for purposes of
collecting debts owed to the
government, as well as using employees’
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SSNs for activities such as payroll, wage
reporting, and providing employee
benefits. We seek comment on the use
of SSNs as unique identifiers by other
governmental agencies as it relates to
the Commission’s proposed CORES FRN
requirement for individuals.
15. Although we are seeking comment
in our separate CORES proceeding on
measures to improve the CORES FRN
system and the possible expansion of
special use FRNs, we tentatively
conclude that it is not necessary to
await the outcome of that proceeding to
improve further the Form 323 data
collection process by discontinuing the
Special Use FRN for Form 323. Unlike
many of our filing obligations, the
fundamental objective of the biennial
Form 323 filing requirement is to track
trends in media ownership by
individuals with particular racial,
ethnic, and gender characteristics. In
this context, it is especially critical to
ensure that we can identify uniquely
each individual reported on the form.
As noted above, the Commission cannot
ensure that each individual is assigned
only one Special Use FRN and that it is
used consistently throughout the Form
323 reporting process because no
unique identifier is available to track the
Special Use FRN back to a single
individual. For instance, CDBS does not
have any mechanism to prevent a filer
from obtaining multiple Special Use
FRNs for the same individual. In
contrast, even though multiple CORES
FRNs can be obtained by the same
individual or entity, the SSN or TIN
underlying these FRNs generally
permits the Commission to identify the
specific person or entity using any such
FRNs in a Commission report or form.
Because CORES FRNs are backed by a
TIN whereas Special Use FRNs are not
backed by any unique identifier, the
CORES FRN offers a superior means of
sorting and aggregating Form 323 data.
We seek comment on these views.
16. We also seek comment on the
costs and benefits of eliminating the
Special Use FRN for Form 323.
Commenters objecting to the CORES
FRN requirement for individuals with
attributable interests that are reported
on the form argue that the requirement
would be burdensome. In the Reply
Letter, the Commission disagreed that
the process is as onerous as commenters
describe. Filers must only register one
time to obtain a CORES FRN, which can
be used for current and all future Form
323 filings and other Commission
filings. The CORES database registration
process takes only a few moments to
complete and users easily can obtain
previously-registered CORES FRNs
using the search tool in CORES.
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Moreover, in addition to not being a
burdensome requirement, the CORES
FRN is an essential part of the
Commission’s effort to improve the
reliability, quality, and usability of the
data collected, as the Commission as
noted in identifying the CORES FRN as
a key tool for ensuring that ownership
data are matched with specific owners.
Is the requirement to obtain a CORES
FRN for individual attributable interest
holders onerous on small businesses?
On large corporations? On individuals?
A small number of commercial
broadcast licenses are held by
governmental entities, tribal
organizations, and not-for-profit groups.
Is compliance with the CORES FRN
requirement more burdensome for these
entities? What factors contribute to any
difficulties businesses may have in
complying with the CORES FRN
requirement? On balance, we believe the
benefits of the proposed revisions will
outweigh any costs. We seek comment
on this analysis. Commenters should
describe the benefits and any costs
associated with eliminating the Special
Use FRN or with any alternative
proposal, explain any underlying
assumptions, submit all relevant data
and, if possible, quantify the potential
effects.
17. We also seek comment on whether
we should continue to allow filers to
obtain a Special Use FRN solely in
instances where, after reasonable and
good faith efforts, they are unable to
obtain a CORES FRN from an individual
with reportable interests. We expect that
filers will either obtain a CORES FRN
for such individuals after obtaining the
individuals’ SSNs in order to do so, or,
if the individuals are reluctant to
disclose their SSNs to the filer, to
instruct such individuals how to obtain
a CORES FRN on their own. As we have
noted before, this latter approach would
avoid the need for individuals to
disclose their SSNs to any party other
than the Commission. In the event that
an individual is unwilling to provide
the filer with sufficient information for
it to obtain a CORES FRN and is
unwilling to obtain and provide a
CORES FRN separately, we wish to
ensure that a filer will still be able to
timely file a Form 323 and to report the
recalcitrant attributable interest holder.
To permit this and to identify
individuals who have failed to provide
the required FRN, we seek comment on
whether we should reserve the use of
special use FRNs solely for those cases
in which an individual with a
reportable interest has failed to provide
a responsible filer with a valid CORES
FRN or to provide the filer with the
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means of obtaining one. We note that in
such instances, the Commission can use
its enforcement authority to impose a
forfeiture against such individuals. In
this connection, we also seek comment
on whether we should require filers to
notify individuals with reportable
interests of the Commission’s
enforcement authority in such
instances.
18. We also invite comment on any
privacy concerns the CORES FRN
requirement may raise as it relates to
Form 323 and the identification of
attributable interests. CORES FRNs are
intended to provide a unique
identification system for entities and
individuals that does not require the
disclosure of a TIN or SSN on
Commission applications and forms.
TIN data are needed only to obtain a
CORES FRN in the first instance and
those data are secured by the
Commission and not used publicly.
Does this requirement raise any
potential adverse consequences? We
invite comment in particular on the
applicability of the Privacy Act to the
CORES FRN requirement. The
Commission does not consider sole
proprietors and officers and directors to
be persons who are subject to the
Privacy Act of 1974, as amended, since
they are acting in an entrepreneurial
capacity. In addition, the Commission
already has adopted Privacy Act
Systems of Records for the CORES
system and for the Form 323
requirement, which apply to any
personally identifiable information
required by the Form 323 and by CORES
in connection with the FRN registration
process. We tentatively conclude that
the Privacy Act does not bar our
adoption of the CORES FRN proposals
discussed in this Further Notice. To the
extent commenters believe the
requirement presents a risk of any
adverse consequences affecting
individuals’ privacy, what is the degree
of risk involved and is it outweighed by
the benefits of obtaining more accurate
and verifiable ownership data?
19. We also invite comment as to
whether it is necessary to clarify that
any individual with reportable interests
must obtain an FRN. Currently, our
rules do not explicitly require these
individuals to obtain an FRN. Rather,
the Form 323 requires licensees and
other respondents to report the FRN of
individuals holding attributable
interests. A requirement for individuals
with reportable interests to obtain FRNs
would address concerns that filers may
be unable to obtain FRNs from
unwilling individual attributable
interest holders. In this regard, we seek
comment on Petitioner Koerner &
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Olender’s request to ‘‘redefine or
reinterpret’’ § 1.8002 of our rules, which
establishes the Commission’s generic
FRN requirement, to include within the
scope of the rule the holders of interests
reportable on Form 323. Section 1.8002
states that persons ‘‘doing business’’
with the Commission must obtain an
FRN and lists examples of the types of
activities or interests that trigger the
requirement. It does not state that the
listed categories are the only
circumstances under which an entity or
individual must obtain an FRN. In the
wireless context, the Commission has
determined that individuals holding
attributable interests in wireless
licensees are ‘‘doing business with’’ the
Commission and that wireless licensees
must provide the FRNs for such
individuals on the Form 602, FCC
Ownership Disclosure Information for
the Wireless Telecommunications
Services. Should we amend § 1.8002 to
explicitly include any interests of
individuals or entities that are
reportable on Form 323, either because
the holders of these interests are
deemed to be ‘‘doing business’’ with the
Commission or because the Commission
has, for other reasons, determined that
these interest-holders should obtain an
FRN? We seek comment on these
matters, including comments on the
costs and benefits of any rule
amendment.
20. Requiring CORES FRNs for
additional reportable interests. In the
Fifth FNPRM, we are concurrently
seeking comment on whether to expand
the biennial ownership reporting
requirement to include interests, entities
and individuals that are not attributable
because of (a) the single majority
shareholder exemption and (b) the
exemption for interests held in eligible
entities pursuant to the higher EDP
threshold. We propose herein that if the
Commission requires these interest
holders to be reported on the biennial
ownership form, they should be
required to obtain and provide CORES
FRNs. We seek comment on what
impact such a requirement would have
on these interest holders and whether
the benefits of unique identification
described above are equally applicable
to individuals subject to such a
requirement. Would a CORES FRN
requirement for these interest holders
present different burdens for small
businesses, other types of firms, or
individuals? Would this requirement
present privacy concerns? As requested
above, commenters should address in
detail the costs and benefits of
expanding the existing FRN
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requirements to the additional interests
at issue in the Fifth FNPRM.
21. Reporting FRNs on Form 323–E.
We also seek comment on our proposal
to require that CORES FRNs be provided
for all entities and individuals reported
on Form 323–E, Ownership Report for
Noncommercial Broadcast Stations. In
the 323 Fourth FNPRM, the Commission
sought comment on whether to modify
the Form 323–E to include gender, race,
or ethnicity data questions, similar to
the revisions adopted in the 323 Order
in order to further the Commission’s
goal of advancing diversity of
ownership in the broadcast industry.
NPR objects to extending the CORES
FRN requirement to Form 323–E,
contending that it raises ‘‘unique
privacy issues and administrative
burdens’’ for the noncommercial sector.
In comments submitted in response to
the 323 Fourth FNPRM, NPR states that
in many instances the governing board
members are elected officials, or
political appointees, who are volunteers
that are not compensated for their
services. Therefore, NPR argues that
none of these board members would
hold any equity interest in the station
and would not provide meaningful
‘‘ownership’’ information to the
Commission. We seek comment on this
view. Are there unique attributes of
noncommercial broadcasters, or of the
ownership structure of noncommercial
entities, that would make the
application of an FRN requirement for
their officers and directors particularly
burdensome? Generally, we seek
comment on the benefits, potential costs
or other effects, and possible
alternatives to imposing the same
CORES FRN requirements on Form 323–
E filers and holders of reportable
interests as those applicable to Form
323 filers and attributable interest
holders. Are there other advantages or
drawbacks to applying these
requirements to the Form 323–E? If the
Commission elects not to include a
CORES FRN requirement for individuals
with attributable interests reported on
Form 323–E, how can it ensure the
accuracy of the data submitted? What
alternatives to the CORES FRN, if any,
are available that could provide
sufficient data verification? We invite
comment on these issues. Commenters
should describe the benefits and costs of
applying the existing FRN requirements
to the Form 323–E or any alternative
proposal, explain any underlying
assumptions, submit all relevant data
and, if possible, quantify the potential
effects.
22. Due date for Biennial Ownership
Reports. Currently, 47 CFR 73.3615(a)
requires biennial reports to be filed by
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November 1 of odd-numbered years and
states that each report must be accurate
as of October 1 of the year in which it
is filed. In order to provide parties with
additional time to complete and submit
their reports, we propose to move the
due date from November 1 to December
1, with the October 1 ‘‘as of’’ date
unchanged. We believe that providing
filers with an additional 30 days to
produce the Form 323 report will lead
to more accurate reporting, and will not
significantly delay the collection of
data. We seek comment on this
proposal.
23. Proposals submitted in the Review
of Media Bureau Data Practices
proceeding. We also are seeking
comment on proposals regarding the
Form 323 that were submitted in the
Review of Media Bureau Data Practices
proceeding, which was initiated ‘‘to
improve the way the Commission
collects, uses and disseminates data.’’ In
that proceeding, the Bureau encouraged
commenters to provide
recommendations regarding: (1) The use
and rationale of its existing data
collections, (2) additional data that
should be collected, (3) how it can
improve the collection and analysis
process for its existing collections, and
(4) how it may improve the
dissemination of its reports and
analyses. Based on its experiences
completing the revised Form 323, NAB
suggests that the Commission modify
the electronic version of Form 323 to
allow for cross-referencing to
information on other reports. Second,
NAB suggests that an entity with several
wholly-owned licensee subsidiaries
should be able to list all of the licensees
(and their respective stations) in Section
I, Item 7. We seek comment on this
proposal and ask whether it should be
limited to wholly-owned subsidiary
licensees or whether a parent entity
instead should be able to list all the
licensees in which it has an attributable
interest (and their respective stations) in
Section I, Item 7. We believe that such
a change will significantly reduce the
filing burdens on some entities, without
compromising the data collected. NAB
also proposes that the Bureau consider
eliminating Section II–B, Item 3(c) as
duplicative. NAB further suggests that
the Commission modify the instructions
to Form 323 to eliminate inconsistent
information, such as the instructions for
Section II–B, Items 1, 3(a), and 3(c).
MMTC recommends simplifying the
public display of Form 323 filings;
requiring only one Form 323 filing per
station with all the racial/ethnic/gender
ownership of the attributable interest
holders; creating a separate filing
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trustees, debtors-in-possession or trusts;
and changing from a biennial filing to
an annual filing requirement.
Accordingly, we seek comment on these
proposals regarding Form 323,
including the costs and benefits of these
proposals.
IV. Procedural Matters
24. Ex Parte Rules. The proceeding
this FNPRM initiates shall be treated as
a ‘‘permit-but-disclose’’ proceeding in
accordance with the Commission’s ex
parte rules. 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
§ 1.1206(b). In proceedings governed by
§ 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.
25. 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
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be filed using the Commission’s
Electronic Comment Filing System
(ECFS). See Electronic Filing of
Documents in Rulemaking Proceedings,
63 FR 24121 (1998).
D Electronic Filers: Comments may be
filed electronically using the Internet by
accessing the ECFS: https://
fjallfoss.fcc.gov/ecfs2/.
D 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
overnight U.S. Postal Service mail. All
filings must be addressed to the
Commission’s Secretary, Office of the
Secretary, Federal Communications
Commission.
D All hand-delivered or messengerdelivered paper filings for the
Commission’s Secretary must be
delivered to FCC Headquarters at 445
12th Street 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.
D 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.
D U.S. Postal Service first-class,
Express, and Priority mail must be
addressed to 445 12th Street SW.,
Washington, DC 20554.
26. 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).
Initial Regulatory Flexibility Analysis
27. 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
Sixth FNPRM. 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 FNPRM. The
Commission will send a copy of the
FNRPM, including this IRFA, to the
Chief Counsel for Advocacy of the Small
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2931
Business Administration (‘‘SBA’’). In
addition, the FNPRM and IRFA (or
summaries thereof) will be published in
the Federal Register.
28. Need for, and Objectives of, the
Proposed Rules. The FNPRM invites
comment on the Commission’s prior
determination that the use of CORES
FRNs as unique identifiers is necessary
in order to improve the quality of the
data collected on the Form 323 and on
the proposal to eliminate the ‘‘Special
Use’’ FRN feature for the Form 323. The
FNPRM also seeks comment on the
burdens of eliminating the Special Use
FRN, of requiring all individual holders
of interests reportable on the Form 323
to obtain an FRN through the
Commission’s Registration System
(CORES), and of requiring all filers of
Form 323 to report the FRNs for these
individuals. The FNPRM invites
comment on the use of social security
numbers as unique identifiers by other
governmental agencies as it relates to
the Commission’s proposed CORES FRN
requirement for individuals.
29. The objective of the information
collection undertaken to establish a
CORES FRN is to obtain a special,
unique identifier that will allow the
Commission and researchers to crossreference information and create
complete ownership structures in order
to promote its long standing goal to
promote diverse ownership of broadcast
stations, including by women and
minorities.
30. The FNPRM also notes that the
Commission, in the Fifth FNPRM, is
concurrently seeking comment on
whether to expand the biennial
ownership reporting requirement to
include interests, entities and
individuals that are not attributable
because of (a) the single majority
shareholder exemption and (b) the
exemption for interests held in eligible
entities pursuant to the higher EDP
threshold. If the Commission requires
these interest holders to be reported on
the biennial ownership form, the
Commission proposes, in this FNPRM,
that these interest holders should be
required to obtain and provide CORES
FRNs. The FNPRM invites comment on
the impact of this requirement on these
interest holders and whether the
benefits of unique identification
described in the FNPRM are equally
applicable to individuals subject to such
a requirement. As described at
paragraph 13 of the FNPRM, a unique
identifier is essential to providing the
searchable database necessary to
support accurate and reliable studies of
ownership trends.
31. The FNPRM also seeks comment
on the Commission’s proposal to require
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that CORES FRNs be provided for all
entities and individuals reported on
Form 323–E, Ownership Report for
Noncommercial Broadcast Stations.
Based on potential unique attributes of
noncommercial entities, the
Commission seeks comment on whether
the proposed data collection imposes a
significant burden for such entities,
which may be smaller entities by nature.
The Commission also seeks comment on
the usefulness, potential effects, and
possible alternatives to imposing the
same CORES FRN requirements on
Form 323–E filers and holders of
reportable interests as those applicable
to Form 323 filers and attributable
interest holders.
32. The FNPRM also seeks comment
on a proposal to amend the
Commission’s rules to clarify that an
individual with reportable interests
must obtain a CORES FRN. The
Commission also invites comment on
whether the Commission should reserve
the use of Special Use FRNs solely for
cases in which an individual with a
reportable interest has failed to provide
the filer with sufficient information for
it to obtain a CORES FRN and is
unwilling to obtain and provide a
CORES FRN separately. The
Commission also seeks comment on
whether it should require filers to notify
individuals with reportable interests of
the Commission’s enforcement authority
to impose a forfeiture against such
individuals.
33. The Commission invites comment
on its proposal to extend the filing
period for the Biennial Ownership
Reports by moving the due date from
November 1, to December 1, with the
October 1 ‘‘as of’’ date unchanged. The
FNPRM also invites comment on the
proposed revisions to Form 323 that
were submitted in the Review of Media
Bureau Data Practices proceeding. The
Commission also seeks comment on
NAB’s proposal in that proceeding that
an entity with several wholly-owned
licensee subsidiaries should be able to
list all of the licensees and respective
stations in Section I, Item 7 of the Form
323 and asks whether the proposal
should be limited to wholly-owned
subsidiary licensees or whether a parent
entity instead should be able to list all
the licensees in which it has an
attributable interest in Section I, Item 7.
34. Legal Basis. This FNPRM 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).
35. Description and Estimate of the
Number of Small Entities to Which the
Proposed Rules Will Apply. The RFA
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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.
36. 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.’’ The
Commission has estimated the number
of licensed commercial television
stations to be 1,387. According to
Commission staff review of the BIA
Kelsey Inc. Media Access Pro Television
Database as of May 2, 2012, 1070 (77
percent) of the 1,399 commercial
television stations in the United States
have revenues of $14 million or less.
The Commission has estimated the
number of licensed noncommercial
educational television stations to be
396. 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.
37. 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
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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.
38. 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
Kelsey Inc. Media Access Radio
Analyzer Database as of May 2, 2012,
about 10,750, (97 percent) of 11,093
commercial radio stations in the United
States have revenues of $7 million or
less. The Commission has estimated the
number of licensed noncommercial
radio stations to be 3,712. 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.
39. 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
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Federal Register / Vol. 78, No. 10 / Tuesday, January 15, 2013 / Proposed Rules
they apply may be over-inclusive to this
extent.
40. 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
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 million in annual
receipts. As of March 31, 2012, there are
approximately 479 licensed Class A
stations and 2,001 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.
41. Description of Projected
Reporting, Recordkeeping, and Other
Compliance Requirements. There may
be changes to reporting or
recordkeeping requirements if the
Commission eliminates the ‘‘Special
Use’’ FRN requirement. We do not
anticipate any other changes in
recording or recordkeeping
requirements for commercial broadcast
entities, as we are proposing to maintain
the existing requirement. In addition,
there may be a change in reporting or
recordkeeping compliance for
noncommercial entities if a CORES FRN
requirement is adopted for the Form
323–E. See, paragraph 21.
42. Steps Taken to Minimize
Significant Impact on Small Entities,
and Significant Alternatives Considered.
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.
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16:42 Jan 14, 2013
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43. As noted, we are directed under
law to describe any such alternatives we
consider, including alternatives not
explicitly listed above. The Notice
proposes to continue to require
individuals reported on a Form 323 to
obtain a CORES-registered FRN and to
eliminate the ‘‘Special Use’’ FRN. In the
alternative, the Commission could
decide not to eliminate the Special Use
FRN for the Form 323, or it could defer
these actions until a later time. While
the option to retain the CORES FRN
requirement and to eliminate the
Special Use FRN might result in an
increased burden on those required to
obtain and provide a CORES FRN, the
benefits of having a unique identifier for
data quality, searchability, crossreferencing and aggregation purposes in
order to further the Commission’s goal
of advancing diversity of ownership in
the broadcast industry outweigh the
burdens. The CORES FRN as 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 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 from an individual
attributable interest holder, while
ensuring that the filer will be able to
timely submit the Form 323 and
allowing the Commission to identify the
individual with a reportable interest
that has failed to provide a CORES FRN.
44. In the FNPRM, the Commission
proposes that CORES FRNs be reported
for the two classes of non-attributable
interests that would be reportable if the
Commission adopts the pending
proposal in the Fifth FNPRM to make
these interests reportable. In the
alternative, the Commission could
decide not to extend the CORES FRN
requirement to these interests if they are
deemed reportable, or the Commission
could defer these actions until a later
time. While the option to extend the
CORES FRN to these classes of nonattributable interests might impose an
increased burden on those required to
obtain and provide a CORES FRN, the
benefits of having a unique identifier for
data quality, searchability, crossreferencing and aggregation purposes in
order to further the Commission’s goal
of advancing diversity of ownership in
the broadcast industry outweigh the
burden of obtaining a CORES FRN.
45. In the FNPRM, the Commission
proposes to impose a CORES FRN
PO 00000
Frm 00026
Fmt 4702
Sfmt 4702
2933
requirement for all entities and
individuals reported on the Form 323–
E, Ownership Report for
Noncommercial Broadcast Stations in
order to further the Commission’s goal
of advancing diversity of ownership in
the broadcast industry. In the
alternative, the Commission could
decide not to expand the CORES FRN
requirement to the holders of
attributable interests in non-profit
licensees that file Form 323–E, or the
Commission could defer this action
until a later date. While the option to
extend the CORES FRN requirement to
entities and individuals reported on the
323–E could impose an increased
burden on those required to obtain and
provide a CORES FRNs the benefits of
having a unique identifier for
aggregating data related to noncommercial licensees outweighs the
burdens associated with obtaining a
CORES FRN.
46. The FNPRM proposes to amend
the Commission’s rules to clarify that an
individual with reportable interests
must obtain a CORES FRN. The
Commission seeks comment on how to
reduce or eliminate the costs imposed
by this proposal to amend the
Commission’s rules on small businesses.
The Commission invites comment on its
proposal to extend the filing deadline
for the Biennial Ownership Reports. By
providing filers with additional time to
file the Biennial Ownership Report, this
proposal will reduce the burden on
filers. The Commission also seeks
comment on the recommendations
regarding the Form 323 from NAB and
other commenters in the Media Bureau
Data Practices proceeding and the costs
and benefits associated with these
proposals for small businesses.
47. Federal Rules that May Duplicate,
Overlap, or Conflict With the Proposed
Rules. None.
V. Ordering Clauses
48. 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), this Sixth Further
Notice of Proposed Rulemaking is
adopted.
49. 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 Sixth
Further Notice of Proposed Rulemaking.
50. It is further ordered that the
Commission’s Consumer &
Governmental Affairs Bureau, Reference
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Federal Register / Vol. 78, No. 10 / Tuesday, January 15, 2013 / Proposed Rules
Information Center, shall send a copy of
the Sixth Further Notice of Proposed
Rulemaking, including the Initial
Regulatory Flexibility Analysis, to the
Chief Counsel for Advocacy of the Small
Business Administration.
51. It is further ordered, that the
Emergency Petition for Immediate
Revision of Instructional/Informational
Materials Relative to Form 323, filed on
September 14, 2011 by Fletcher, Heald
& Hildreth, P.L.C., is dismissed.
Federal Communications Commission.
Cecilia Sigmund,
Acting Associate Secretary.
[FR Doc. 2013–00578 Filed 1–14–13; 8:45 am]
BILLING CODE 6712–01–P
FEDERAL COMMUNICATIONS
COMMISSION
47 CFR Part 73
[MB Docket Nos. 07–294, 06–121, 02–277,
04–228; MM Docket Nos. 01–235, 01–317,
00–244; FCC 09–92]
Promoting Diversification of
Ownership in the Broadcasting
Services
Federal Communications
Commission.
ACTION: Notice of proposed rulemaking.
AGENCY:
The Commission seeks
comment on whether 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 EDP
thresholds adopted in the Diversity
Order, published May 16, 2008, for
purposes of determining attribution of
certain interests in eligible entities.
DATES: The Commission must receive
written comments on or before February
14, 2013 and reply comments on or
before March 1, 2013. Written
comments on the Paperwork Reduction
Act (PRA) proposed information
collection requirements must be
submitted by the public, Office of
Management (OMB) and other
interested parties on or before March 18,
2013.
ADDRESSES: You may submit comments,
identified by MB Docket. No. 07–294, by
any of the following methods:
• Federal Communications
Commission’s Web Site: https://
fjallfoss.fcc.gov/ecfs2/. Follow the
instructions for submitting comments.
• People with Disabilities: Contact the
FCC to request reasonable
accommodations (accessible format
tkelley on DSK3SPTVN1PROD with
SUMMARY:
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16:42 Jan 14, 2013
Jkt 229001
documents, sign language interpreters,
CART, etc.) by email: FCC504@fcc.gov
or phone 202–418–0530 or TTY: 202–
418–0432.
For detailed instructions for submitting
comments and additional information
on the rulemaking process, see the
SUPPLEMENTARY INFORMATION section of
this document.
FOR FURTHER INFORMATION CONTACT: For
additional information on this
proceeding, contact Judith Herman of
the Media Bureau, Industry Analysis
Division, at (202) 418–2330. For
additional information concerning the
Paperwork Reduction Act information
collection requirements contained in the
Notice of Proposed Rulemaking contact
Cathy Williams at (202) 418–2918 or
send an email to PRA@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a
summary of the Commission’s Fifth
Notice of Proposed Rulemaking in MB
Docket No. 07–294 is available for
public inspection and copying during
regular business hours in the FCC
Reference Center, Federal
Communications Commission, 445 12th
Street SW., Washington, DC 20554.
These documents will also be available
via ECFS (https://fjallfoss.fcc.gov/ecfs/)
and may be purchased from the
Commissions copy contractor, BCPI,
Inc. at their Web site https://
www.bcpi.com or call 1–800 378–3160.
Initial Paperwork Reduction Act of
1995 Analysis
This Notice of Proposed Rulemaking
may result in a new or revised
information collection requirement. If
the Commission adopts any new or
revised information collection
requirements, the Commission will
publish a notice in the Federal Register
inviting the public to comment on the
requirement, 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 further
comment on how it might ‘‘further
reduce the information collection
burden for small business concerns with
fewer than 25 employees.’’
I. Introduction
1. The Commission seeks comment on
whether 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 EDP
thresholds adopted in the Diversity
Order, published May 16, 2008, 73 FR
PO 00000
Frm 00027
Fmt 4702
Sfmt 4702
28361, for purposes of determining
attribution of certain interests in eligible
entities. In the 323 Order, 74 FR 25163
(2009), the Commission determined
that, in order to measure the extent of
minority and female ownership of
broadcast outlets and assess the need for
and effectiveness of any policies
designed to promote minority and
female ownership, it is important to
obtain information on holders of certain
nonattributable interests, as well as on
holders of attributable interests. The
Commission concluded that while it
considers only attributable interest
holders in determining whether
licensees are in compliance with our
media ownership rules, the balance
struck in defining what interests should
be counted for purposes of
implementing our ownership rules may
not be appropriate for collecting data on
interests held by minorities and women.
As noted above, we did not receive
comments on this issue prior to
adopting these conclusions. Therefore,
in order to obtain a complete record on
this question, we are commencing a
Further Rulemaking on whether to
expand the reporting requirements to
include certain nonattributable entities.
Specifically, we seek comment on
whether 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 EDP
thresholds adopted in the Diversity
Order for purposes of determining
attribution of certain interests in eligible
entities.
2. The single majority shareholder
exemption provides that a minority
shareholder’s voting interests will not
be attributed where a single shareholder
holds more than 50 percent of the
outstanding voting stock of the
corporation in question. In the 323
Order, the Commission explained why
reporting of information about minority
shareholders in a corporation with a
single majority shareholder is
important: ‘‘For purposes of assessing
levels of minority ownership * * * we
believe that we should err on the side
of comprehensiveness based on
criticisms of the current collection
scheme. The minority interests that are
exempt from attribution under the
single majority shareholder exemption
can be quite substantial—nearly 50%.
Including these interest holders would
make the data set more complete and
help determine whether nonattributable
interests could be a source of
attributable minority and female owners
in the future. Thus, collection of this
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[Federal Register Volume 78, Number 10 (Tuesday, January 15, 2013)]
[Proposed Rules]
[Pages 2925-2934]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-00578]
=======================================================================
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
[MB Docket No. 07-294; FCC 12-166]
Promoting Diversification of Ownership in the Broadcasting
Services
AGENCY: Federal Communications Commission.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: In this document, the Commission seeks further comment on its
requirement that licensees and other entities filing the FCC Form 323,
Ownership Report for Commercial Broadcast Station, provide an FCC
Registration Number (FRN) generated by the Commission's Registration
System (CORES) (CORES FRN) for attributable individuals reported on the
Form 323. The Sixth Further Notice of Proposed Rulemaking (Sixth FNPRM)
also seeks comment on the Commission's proposal to eliminate the
``Special Use'' FRN for individuals reported on the Form 323 and on a
proposal to amend the Form 323-E, Ownership Report for Noncommercial
Educational Broadcast Station to require filers to report the CORES FRN
for individuals with attributable interests in licensees reported on
the Form 323-E. The Commission also invites comment on whether it
should extend the CORES FRN requirements, as they apply to entities and
individuals, to any non-attributable interest holders that the
Commission might ultimately conclude should be reported on the Form
323, as proposed by the Fifth Further Notice of Proposed Rulemaking
(Fifth FNPRM). Finally, comment is sought on a proposal to extend the
biennial ownership report filing period and on proposed revisions to
the Form 323 as submitted in comments in the Review of Media Bureau
Data Practices proceeding.
DATES: The Commission must receive written comments on or before
February 14, 2013 and reply comments on or before March 1, 2013.
Written comments on the Paperwork Reduction Act (PRA) proposed
information collection requirements must be submitted by the public,
Office of Management (OMB) and other interested parties on or before
March 18, 2013.
ADDRESSES: You may submit comments, identified by MB Docket. No. 07-
294, by any of the following methods:
Federal Communications Commission's Web Site: https://fjallfoss.fcc.gov/ecfs2/. Follow the instructions for submitting
comments.
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 detailed instructions for submitting comments and additional
information on the rulemaking process, see the SUPPLEMENTARY
INFORMATION section of this document.
FOR FURTHER INFORMATION CONTACT: For additional information on this
proceeding, contact Judith Herman of the Media Bureau, Industry
Analysis Division, at (202) 418-2330. For additional information
concerning the
[[Page 2926]]
Paperwork Reduction Act information collection requirements contained
in the Notice of Proposed Rulemaking contact Cathy Williams at (202)
418-2918 or send an email to PRA@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Sixth
Further Notice of Proposed Rulemaking in MB Docket No. 07-294, FCC 12-
166, adopted December 21, 2012, and released January 3, 2013. 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., Washington, DC 20554.
These documents will also be available via ECFS (https://fjallfoss.fcc.gov/ecfs/) and may be purchased from the Commissions copy
contractor, BCPI, Inc. at their Web site https://www.bcpi.com or call 1-
800 378-3160.
Initial Paperwork Reduction Act of 1995 Analysis
This Notice of Proposed Rulemaking may result in a new or revised
information collection requirement. If the Commission adopts any new or
revised information collection requirements, the Commission will
publish a notice in the Federal Register inviting the public to comment
on the requirement, 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 further comment on how it might
``further reduce the information collection burden for small business
concerns with fewer than 25 employees.''
Summary of the Sixth Further Notice of Proposed Rulemaking
I. Introduction
1. In this Sixth FNPRM, we seek further comment on the Commission's
requirement that licensees and other entities filing the FCC Form 323,
Ownership Report for Commercial Broadcast Station, provide an FCC
Registration Number (FRN) generated by the Commission's Registration
System (CORES) (CORES FRN) for attributable individuals reported on
Form 323. Obtaining a CORES FRN requires users to identify themselves
uniquely. This unique identification is achieved by requiring users to
submit their taxpayer identification number (TIN), which for entities
is generally their employer identification number (EIN) and for
individuals is generally their social security number (SSN). As
discussed below, unique identification of entities and individuals
filing and being reported on Form 323 is crucial to ensuring the
accuracy and reliability of Form 323 data and the usefulness of those
data to the Commission and other researchers.
2. We seek comment herein also on eliminating the interim,
``Special Use'' FRN alternative to obtaining a CORES FRN for
individuals reported on Form 323. The Commission has long required
licensees and other entities filing Form 323 to obtain and provide a
CORES FRN. The revised Form 323, adopted in 2009 pursuant to the 323
Order, 74 FR 25163 (2009), and the 323 MO&O, 74 FR 56131 (2009) in this
proceeding, requires filers to obtain and include a CORES FRN not only
for themselves but also for entities and individuals whose attributable
interests are reported on the form. Two parties sought reconsideration
of the requirement to obtain CORES FRNs for individuals holding
attributable interests, arguing that the CORES FRN requirement for
individuals is overly burdensome and raises privacy and data security
issues and that the Commission provided inadequate notice of this
requirement. To address the concerns of the petitioners and others who
raised this issue in comments, the Media Bureau implemented a ``Special
Use'' FRN as an alternative, temporary measure to obtaining a CORES FRN
for individuals holding attributable interests reported on the form.
The Special Use FRN allows Form 323 filers to obtain an FRN for use
with Form 323 for such individuals without submitting a TIN through
CORES. As a rule, all filers must provide an FRN for all persons and
entities reported on Form 323. If, after using diligent and good-faith
efforts, a filer is unable to obtain or does not have permission to use
an SSN in order to generate an FRN for an individual holding an
attributable interest in the licensee, the filer may use the Special
Use FRN. Filers who use a non-SSN based Special Use FRN will be deemed
fully compliant with the Form 323 filing obligation for purposes of the
323 filing, and the lack of SSN-based FRNs in response to Section II,
Question 3(a) and will not subject Respondents to enforcement action.
We now seek comment on eliminating this temporary measure. We also seek
comment on our proposal to permit filers to use a Special Use FRN
solely in instances where the filer is unable to obtain a CORES FRN
from an individual with reportable interests.
3. In addition, we seek comment on our proposal to amend the Form
323-E, Ownership Report for Noncommercial Educational Broadcast
Station, to require filers to report a CORES FRN for individuals with
attributable interests in licensees reported on this form. Further, we
seek comment on whether we should extend the CORES FRN requirements, as
they apply to entities and individuals, to any non-attributable
interest holders that we might ultimately conclude should be reported
on Form 323, as proposed in the Fifth FNPRM. Finally, we seek comment
on our proposal to extend the biennial ownership report filing period
and on the proposed revisions to Form 323 submitted in comments in the
Review of Media Bureau Data Practices proceeding.
II. Background
4. It has been a longstanding goal of the Commission to promote
diverse ownership of broadcast stations, including ownership by women
and minorities. In order to gather accurate and usable data about these
and other ownership categories, the Commission substantially revised
its biennial ownership reporting form in 2009. As the Commission
previously has stated, the changes to the filing requirements and the
modifications to the form are intended to facilitate long-term
comparative studies of broadcast station ownership. In addition, the
changes address flaws in the data collection process identified by the
United States Government Accountability Office (GAO) and by researchers
who have attempted to use the data submitted on previous versions of
Form 323. In 2008, GAO cited several shortcomings with the Commission's
data collection process: (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. To address GAO's concerns and to improve the quality and
suitability of the data for the Commission's use, the Commission
adopted several significant changes. First, it set a uniform ``as of''
date of October 1 for the ownership data being reported in the biennial
filing and established a uniform filing deadline for the data of
November 1. Thus, all filers must report their ownership interests as
they exist on the ``as of'' date of the filing year and submit their
reports no later than one month thereafter. These uniform dates make it
possible to discern statistically valid trends in minority and female
ownership over time, which was not possible using the previous rolling
filing procedures, and ensure timely collection of the data. Second,
the Commission also expanded
[[Page 2927]]
the class of licensees that must file the report biennially to include
sole proprietors and partnerships of natural persons as well as low-
power television and Class A licensees.
5. Third, the Commission delegated to the Media Bureau authority to
(1) Revise Form 323's electronic interface so that the ownership data
incorporated into the database are searchable, and can be aggregated
and cross-referenced; (2) build additional checks into Form 323 to
perform verification and review functions; and (3) conduct audits to
ensure the accuracy of the Form 323 reports. The Commission also stated
that ``to further improve the ability of researchers and other users of
the data to cross-reference information and construct complete
ownership structures, we will require each attributable entity above
the licensee in the ownership chain to list on Form 323, the [CORES]
FRN of the entity in which it holds an attributable interest.'' This
requirement to reference the next layer down in an ownership chain by
using a unique identifier, the FRN, fulfills a need for unmistakable
identity in the face of often complex ownership structures involving
numerous parties and multiple layers or links in the ownership chain, a
need which cannot be fulfilled by identification based entirely on
names and addresses. In other words, the Commission concluded that
without a single, unique identifier, researchers could not confirm the
accuracy of aggregated records. While the Commission believed that
these measures would resolve concerns regarding the usefulness of the
data, it nevertheless delegated authority to the Media Bureau staff to
revisit the CORES FRN issue if it determined that additional changes
were necessary. In response, the Media Bureau revised and improved the
instructions and questions in all sections of the form in order to (1)
Clarify the information sought in the form, (2) ensure that the data
are collected in machine-readable formats that can be incorporated in
database programs used to prepare economic and policy studies, and (3)
simplify completion of the form by giving respondents menu-style or
checkbox-style options to enter data. The Bureau also included built-in
edit checks and pre-fill capabilities to assure greater accuracy and
ease of completion.
6. On August 11, 2009, the Commission submitted the revised Form
323 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. Among other
things, the revised form required each filer to include a CORES FRN of
entities one step above and one step below it in the ownership chain
and to identify the CORES FRNs of its attributable officers, directors,
and shareholders reported on the form. Many of the commenters in their
comments to OMB objected to having to report CORES FRNs for individuals
holding attributable interests, arguing that in order to obtain a CORES
FRN from 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 and would present a hardship to 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 to
either 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. They also claimed that the
decision was inconsistent with the CORES FRN requirement applicable to
wireless licensees, who, they alleged, are not required to provide
CORES FRNs or other similar information for officers, directors, and
board members. Two Petitions for Writs of Mandamus were filed with the
Court of Appeals for the D.C. Circuit to stay the FCC from implementing
revisions to the form. Both were denied.
7. On October 6, 2009, the Commission submitted a letter to OMB in
response to the comments. The FCC's response 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.'' The Reply Letter identified the CORES FRN as a key tool
for ensuring that the ownership data is matched with specific owners.
Also, without the CORES FRNs, the Commission explained that it would be
unable to accurately determine the identity of a person when variations
of a single name or other spelling irregularities appear from form to
form. The Reply Letter also noted that the FRN has been used as a
unique identifier for reports that collect data on individuals and
entities that hold attributable interests in wireless services and
concluded that requiring filers to provide a CORES FRN for individual
attributable interest holders on the Form 323 ``will allow the
Commission to harmonize its processes between different licensing
divisions and directly improve the quality and usefulness of the
collected data * * *.'' The Reply Letter rejected allegations that the
Commission failed to comply with the notice requirements of the PRA.
After the Commission submitted the revised form to OMB, the Commission
issued a further order, the 323 MO&O, and explained that each filer was
required to identify the CORES FRNs of its attributable officers,
directors, and shareholders, explaining ``[i]n the process of modifying
Form 323 on delegated authority, the Bureau determined that it was
necessary to expand the class of [CORES] FRNs to be included to ensure
the usefulness of the data.''
8. On October 19, 2009, OMB approved the revised Form 323,
including the requirement that filers identify the CORES FRN for
individuals holding an attributable interest in the licensee. After
several delayed filing deadlines, the Commission set July 8, 2010, as
the first biennial filing deadline using the revised form. Generally,
the Bureau's experience during the filing process was that most filers
complied with the CORES FRN requirement. Nevertheless, in response to
industry concerns about filers' ability to obtain FRNs from all
individuals holding attributable interests due to individuals' concerns
about privacy, security, and identify theft, the Bureau allowed filers,
as an interim measure, to obtain a Special Use FRN for individuals
reported on the form in lieu of obtaining a CORES FRN. Individuals do
not need to provide an SSN in order to generate the Special Use FRN.
9. In December 2010, the Commission initiated a rulemaking
proceeding in which it proposes to update CORES in an effort to enhance
the Commission's data collection efforts and to improve customer
interface with CORES. In the Notice of Proposed Rulemaking, 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 Commission stated that it has had
difficulty using CORES to identify all FRNs held by the same entity
when entities have not provided TINs or have provided inconsistent
TINs. It also
[[Page 2928]]
observed that some filers erroneously invoked exceptions to the general
requirement to provide a TIN and that these entities or individuals
also would be difficult to track. The Commission has proposed several
options to resolve these issues. In addition, the Commission has asked
whether it should expand the availability of ``special use'' FRNs for
purposes other than the filing of Form 323.
10. In July 2011, the 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. The court
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 such a
definition specifically would assist minorities and women, who were
among the intended beneficiaries of this action. The court also
remanded each of the measures adopted in the Diversity Order that
relied on the revenue-based 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 female and minority
ownership must be based upon reliable data. The court stated, ``At 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 Order and Fourth FNPRM
to reliably analyze minority and female ownership ``will, however, lay
necessary groundwork for the Commission's actions on remand.''
III. Discussion
11. By this FNPRM, we seek to supplement the record regarding the
use of CORES FRNs. First, we tentatively affirm the Commission's prior
determination that the use of CORES FRNs as unique identifiers is
necessary in order to improve the quality of the data collected on Form
323, and we propose to discontinue the Special Use FRN for Form 323. We
propose to require all individual attributable interest holders to
obtain a CORES FRN and to require all Form 323 filers to provide the
CORES FRN for these individuals. Second, we seek comment on whether we
should require the individual and entities holding non-attributable
interests that would be reportable on the Form 323 under the proposal
set forth in the Fifth FNPRM to obtain a CORES FRN and require all Form
323 filers to report these CORES FRNs. Third, we seek comment on
revising Form 323-E to include the same CORES FRN and attributable
interest reporting obligations as those applicable to Form 323.
Finally, we seek comment on proposed revisions to the Form 323
submitted in comments in the Review of Media Bureau Data Practices
proceeding.
12. Elimination of Special Use FRN for Form 323. Special Use FRNs
do not afford the Commission a reliable means of tracing a reported
interest holder to a unique individual and their use therefore
undermines the purpose of our data collection effort, which seeks to
accurately ascertain the nature and extent of minority and female
ownership of broadcast properties. Without the ability to track an FRN
to a unique individual, it may be difficult, if not impossible, to
accurately cross-reference broadcast ownership interests. The Third
Circuit has highlighted the importance of collecting reliable data to
support the Commission's rulemaking initiatives.
We seek comment on the use of the CORES FRN as a means of
associating non-unique information (names, addresses, race, gender, and
ethnicity) with a unique identifier for data quality, searchability,
cross-referencing, and aggregation purposes solely for use with FCC
Form 323 as a means of identifying attributable interests. How
effective, relatively speaking, is the CORES FRN as a unique identifier
for the Commission's purposes? If no unique numeric or other identifier
is associated with an ownership record, how can researchers and other
members of the public adequately verify and/or make use of the
collected data? How can complete ownership structures be compiled
reliably? What alternatives are there to the use of the CORES FRN as a
unique identifier? We invite comment on other measures the Commission
could use as a unique identifier in lieu of the CORES FRN and its
underlying TIN basis.
13. We tentatively affirm the Commission's prior determination that
the use of CORES FRNs as unique identifiers is necessary in order to
improve the quality of the data collected on Form 323, and we propose
to eliminate the availability of Special Use FRNs and require the
universal use of CORES FRNs for all biennial and non-biennial Form
323s. We tentatively conclude 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. We
also tentatively conclude that the reporting of CORES FRNs on Form 323
that are obtained after supplying the Commission with a TIN is superior
to reporting the Special Use FRNs now permitted for individuals. We
seek comment on these tentative conclusions, and particularly encourage
those who may have used the dataset created from the first set of Form
323 biennial filings that were required to include FRNs for
attributable entities and individuals to address these issues.
Furthermore, the use of CORES FRNs is consistent with Commission
precedent in the wireless services context, as applicable to
attributable interest holders. We seek comment on any justifications to
treat broadcasters differently with respect to CORES FRN requirements.
14. We note that other government agencies also use SSNs when
necessary to ensure program integrity and for statistical and research
purposes. For example, the Census Bureau uses SSNs reported on income
tax returns in order to prepare annual population estimates for states
and counties to determine immigration rates between localities. The
Department of Agriculture has statutory authority to collect the SSNs
of both food stamp recipients and officers and owners of retail and
wholesale food concerns that accept and redeem food stamps. The Small
Business Administration (SBA) requires that applicants for SBA-backed
loans provide their past business and personal income tax returns,
which contain their SSNs. The Department of Housing and Urban
Development (HUD) requires SSNs as a condition of eligibility for
participation in HUD programs involving loans, grants and other
assistance. The Veterans Administration requires individuals to provide
their SSNs to be eligible for compensation or pension benefits
programs. The Treasury collects the SSNs of all savings bond
purchasers. The Department of Labor requires all workers compensation
claimants to provide an SSN. The Department of Homeland Security uses
SSNs in its E-Verify database as the basis for its employment
verification system. Health and Human Services collects SSNs to verify
citizenship status. Agencies also collect and share SSNs for purposes
of collecting debts owed to the government, as well as using employees'
[[Page 2929]]
SSNs for activities such as payroll, wage reporting, and providing
employee benefits. We seek comment on the use of SSNs as unique
identifiers by other governmental agencies as it relates to the
Commission's proposed CORES FRN requirement for individuals.
15. Although we are seeking comment in our separate CORES
proceeding on measures to improve the CORES FRN system and the possible
expansion of special use FRNs, we tentatively conclude that it is not
necessary to await the outcome of that proceeding to improve further
the Form 323 data collection process by discontinuing the Special Use
FRN for Form 323. Unlike many of our filing obligations, the
fundamental objective of the biennial Form 323 filing requirement is to
track trends in media ownership by individuals with particular racial,
ethnic, and gender characteristics. In this context, it is especially
critical to ensure that we can identify uniquely each individual
reported on the form. As noted above, the Commission cannot ensure that
each individual is assigned only one Special Use FRN and that it is
used consistently throughout the Form 323 reporting process because no
unique identifier is available to track the Special Use FRN back to a
single individual. For instance, CDBS does not have any mechanism to
prevent a filer from obtaining multiple Special Use FRNs for the same
individual. In contrast, even though multiple CORES FRNs can be
obtained by the same individual or entity, the SSN or TIN underlying
these FRNs generally permits the Commission to identify the specific
person or entity using any such FRNs in a Commission report or form.
Because CORES FRNs are backed by a TIN whereas Special Use FRNs are not
backed by any unique identifier, the CORES FRN offers a superior means
of sorting and aggregating Form 323 data. We seek comment on these
views.
16. We also seek comment on the costs and benefits of eliminating
the Special Use FRN for Form 323. Commenters objecting to the CORES FRN
requirement for individuals with attributable interests that are
reported on the form argue that the requirement would be burdensome. In
the Reply Letter, the Commission disagreed that the process is as
onerous as commenters describe. Filers must only register one time to
obtain a CORES FRN, which can be used for current and all future Form
323 filings and other Commission filings. The CORES database
registration process takes only a few moments to complete and users
easily can obtain previously-registered CORES FRNs using the search
tool in CORES. Moreover, in addition to not being a burdensome
requirement, the CORES FRN is an essential part of the Commission's
effort to improve the reliability, quality, and usability of the data
collected, as the Commission as noted in identifying the CORES FRN as a
key tool for ensuring that ownership data are matched with specific
owners. Is the requirement to obtain a CORES FRN for individual
attributable interest holders onerous on small businesses? On large
corporations? On individuals? A small number of commercial broadcast
licenses are held by governmental entities, tribal organizations, and
not-for-profit groups. Is compliance with the CORES FRN requirement
more burdensome for these entities? What factors contribute to any
difficulties businesses may have in complying with the CORES FRN
requirement? On balance, we believe the benefits of the proposed
revisions will outweigh any costs. We seek comment on this analysis.
Commenters should describe the benefits and any costs associated with
eliminating the Special Use FRN or with any alternative proposal,
explain any underlying assumptions, submit all relevant data and, if
possible, quantify the potential effects.
17. We also seek comment on whether we should continue to allow
filers to obtain a Special Use FRN solely in instances where, after
reasonable and good faith efforts, they are unable to obtain a CORES
FRN from an individual with reportable interests. We expect that filers
will either obtain a CORES FRN for such individuals after obtaining the
individuals' SSNs in order to do so, or, if the individuals are
reluctant to disclose their SSNs to the filer, to instruct such
individuals how to obtain a CORES FRN on their own. As we have noted
before, this latter approach would avoid the need for individuals to
disclose their SSNs to any party other than the Commission. In the
event that an individual is unwilling to provide the filer with
sufficient information for it to obtain a CORES FRN and is unwilling to
obtain and provide a CORES FRN separately, we wish to ensure that a
filer will still be able to timely file a Form 323 and to report the
recalcitrant attributable interest holder. To permit this and to
identify individuals who have failed to provide the required FRN, we
seek comment on whether we should reserve the use of special use FRNs
solely for those cases in which an individual with a reportable
interest has failed to provide a responsible filer with a valid CORES
FRN or to provide the filer with the means of obtaining one. We note
that in such instances, the Commission can use its enforcement
authority to impose a forfeiture against such individuals. In this
connection, we also seek comment on whether we should require filers to
notify individuals with reportable interests of the Commission's
enforcement authority in such instances.
18. We also invite comment on any privacy concerns the CORES FRN
requirement may raise as it relates to Form 323 and the identification
of attributable interests. CORES FRNs are intended to provide a unique
identification system for entities and individuals that does not
require the disclosure of a TIN or SSN on Commission applications and
forms. TIN data are needed only to obtain a CORES FRN in the first
instance and those data are secured by the Commission and not used
publicly. Does this requirement raise any potential adverse
consequences? We invite comment in particular on the applicability of
the Privacy Act to the CORES FRN requirement. The Commission does not
consider sole proprietors and officers and directors to be persons who
are subject to the Privacy Act of 1974, as amended, since they are
acting in an entrepreneurial capacity. In addition, the Commission
already has adopted Privacy Act Systems of Records for the CORES system
and for the Form 323 requirement, which apply to any personally
identifiable information required by the Form 323 and by CORES in
connection with the FRN registration process. We tentatively conclude
that the Privacy Act does not bar our adoption of the CORES FRN
proposals discussed in this Further Notice. To the extent commenters
believe the requirement presents a risk of any adverse consequences
affecting individuals' privacy, what is the degree of risk involved and
is it outweighed by the benefits of obtaining more accurate and
verifiable ownership data?
19. We also invite comment as to whether it is necessary to clarify
that any individual with reportable interests must obtain an FRN.
Currently, our rules do not explicitly require these individuals to
obtain an FRN. Rather, the Form 323 requires licensees and other
respondents to report the FRN of individuals holding attributable
interests. A requirement for individuals with reportable interests to
obtain FRNs would address concerns that filers may be unable to obtain
FRNs from unwilling individual attributable interest holders. In this
regard, we seek comment on Petitioner Koerner &
[[Page 2930]]
Olender's request to ``redefine or reinterpret'' Sec. 1.8002 of our
rules, which establishes the Commission's generic FRN requirement, to
include within the scope of the rule the holders of interests
reportable on Form 323. Section 1.8002 states that persons ``doing
business'' with the Commission must obtain an FRN and lists examples of
the types of activities or interests that trigger the requirement. It
does not state that the listed categories are the only circumstances
under which an entity or individual must obtain an FRN. In the wireless
context, the Commission has determined that individuals holding
attributable interests in wireless licensees are ``doing business
with'' the Commission and that wireless licensees must provide the FRNs
for such individuals on the Form 602, FCC Ownership Disclosure
Information for the Wireless Telecommunications Services. Should we
amend Sec. 1.8002 to explicitly include any interests of individuals
or entities that are reportable on Form 323, either because the holders
of these interests are deemed to be ``doing business'' with the
Commission or because the Commission has, for other reasons, determined
that these interest-holders should obtain an FRN? We seek comment on
these matters, including comments on the costs and benefits of any rule
amendment.
20. Requiring CORES FRNs for additional reportable interests. In
the Fifth FNPRM, we are concurrently seeking comment on whether to
expand the biennial ownership reporting requirement to include
interests, entities and individuals that are not attributable because
of (a) the single majority shareholder exemption and (b) the exemption
for interests held in eligible entities pursuant to the higher EDP
threshold. We propose herein that if the Commission requires these
interest holders to be reported on the biennial ownership form, they
should be required to obtain and provide CORES FRNs. We seek comment on
what impact such a requirement would have on these interest holders and
whether the benefits of unique identification described above are
equally applicable to individuals subject to such a requirement. Would
a CORES FRN requirement for these interest holders present different
burdens for small businesses, other types of firms, or individuals?
Would this requirement present privacy concerns? As requested above,
commenters should address in detail the costs and benefits of expanding
the existing FRN requirements to the additional interests at issue in
the Fifth FNPRM.
21. Reporting FRNs on Form 323-E. We also seek comment on our
proposal to require that CORES FRNs be provided for all entities and
individuals reported on Form 323-E, Ownership Report for Noncommercial
Broadcast Stations. In the 323 Fourth FNPRM, the Commission sought
comment on whether to modify the Form 323-E to include gender, race, or
ethnicity data questions, similar to the revisions adopted in the 323
Order in order to further the Commission's goal of advancing diversity
of ownership in the broadcast industry. NPR objects to extending the
CORES FRN requirement to Form 323-E, contending that it raises ``unique
privacy issues and administrative burdens'' for the noncommercial
sector. In comments submitted in response to the 323 Fourth FNPRM, NPR
states that in many instances the governing board members are elected
officials, or political appointees, who are volunteers that are not
compensated for their services. Therefore, NPR argues that none of
these board members would hold any equity interest in the station and
would not provide meaningful ``ownership'' information to the
Commission. We seek comment on this view. Are there unique attributes
of noncommercial broadcasters, or of the ownership structure of
noncommercial entities, that would make the application of an FRN
requirement for their officers and directors particularly burdensome?
Generally, we seek comment on the benefits, potential costs or other
effects, and possible alternatives to imposing the same CORES FRN
requirements on Form 323-E filers and holders of reportable interests
as those applicable to Form 323 filers and attributable interest
holders. Are there other advantages or drawbacks to applying these
requirements to the Form 323-E? If the Commission elects not to include
a CORES FRN requirement for individuals with attributable interests
reported on Form 323-E, how can it ensure the accuracy of the data
submitted? What alternatives to the CORES FRN, if any, are available
that could provide sufficient data verification? We invite comment on
these issues. Commenters should describe the benefits and costs of
applying the existing FRN requirements to the Form 323-E or any
alternative proposal, explain any underlying assumptions, submit all
relevant data and, if possible, quantify the potential effects.
22. Due date for Biennial Ownership Reports. Currently, 47 CFR
73.3615(a) requires biennial reports to be filed by November 1 of odd-
numbered years and states that each report must be accurate as of
October 1 of the year in which it is filed. In order to provide parties
with additional time to complete and submit their reports, we propose
to move the due date from November 1 to December 1, with the October 1
``as of'' date unchanged. We believe that providing filers with an
additional 30 days to produce the Form 323 report will lead to more
accurate reporting, and will not significantly delay the collection of
data. We seek comment on this proposal.
23. Proposals submitted in the Review of Media Bureau Data
Practices proceeding. We also are seeking comment on proposals
regarding the Form 323 that were submitted in the Review of Media
Bureau Data Practices proceeding, which was initiated ``to improve the
way the Commission collects, uses and disseminates data.'' In that
proceeding, the Bureau encouraged commenters to provide recommendations
regarding: (1) The use and rationale of its existing data collections,
(2) additional data that should be collected, (3) how it can improve
the collection and analysis process for its existing collections, and
(4) how it may improve the dissemination of its reports and analyses.
Based on its experiences completing the revised Form 323, NAB suggests
that the Commission modify the electronic version of Form 323 to allow
for cross-referencing to information on other reports. Second, NAB
suggests that an entity with several wholly-owned licensee subsidiaries
should be able to list all of the licensees (and their respective
stations) in Section I, Item 7. We seek comment on this proposal and
ask whether it should be limited to wholly-owned subsidiary licensees
or whether a parent entity instead should be able to list all the
licensees in which it has an attributable interest (and their
respective stations) in Section I, Item 7. We believe that such a
change will significantly reduce the filing burdens on some entities,
without compromising the data collected. NAB also proposes that the
Bureau consider eliminating Section II-B, Item 3(c) as duplicative. NAB
further suggests that the Commission modify the instructions to Form
323 to eliminate inconsistent information, such as the instructions for
Section II-B, Items 1, 3(a), and 3(c). MMTC recommends simplifying the
public display of Form 323 filings; requiring only one Form 323 filing
per station with all the racial/ethnic/gender ownership of the
attributable interest holders; creating a separate filing
[[Page 2931]]
category for transfers to bankruptcy trustees, debtors-in-possession or
trusts; and changing from a biennial filing to an annual filing
requirement. Accordingly, we seek comment on these proposals regarding
Form 323, including the costs and benefits of these proposals.
IV. Procedural Matters
24. Ex Parte Rules. The proceeding this FNPRM initiates shall be
treated as a ``permit-but-disclose'' proceeding in accordance with the
Commission's ex parte rules. 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 Sec. 1.1206(b). In proceedings governed by
Sec. 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.
25. 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).
[ssquf] Electronic Filers: Comments may be filed electronically
using the Internet by accessing the ECFS: https://fjallfoss.fcc.gov/ecfs2/.
[ssquf] 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 overnight U.S.
Postal Service mail. All filings must be addressed to the Commission's
Secretary, Office of the Secretary, Federal Communications Commission.
[ssquf] All hand-delivered or messenger-delivered paper filings for
the Commission's Secretary must be delivered to FCC Headquarters at 445
12th Street 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.
[ssquf] 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.
[ssquf] U.S. Postal Service first-class, Express, and Priority mail
must be addressed to 445 12th Street SW., Washington, DC 20554.
26. 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).
Initial Regulatory Flexibility Analysis
27. 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 Sixth FNPRM.
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 FNPRM. The Commission will send a copy of the
FNRPM, including this IRFA, to the Chief Counsel for Advocacy of the
Small Business Administration (``SBA''). In addition, the FNPRM and
IRFA (or summaries thereof) will be published in the Federal Register.
28. Need for, and Objectives of, the Proposed Rules. The FNPRM
invites comment on the Commission's prior determination that the use of
CORES FRNs as unique identifiers is necessary in order to improve the
quality of the data collected on the Form 323 and on the proposal to
eliminate the ``Special Use'' FRN feature for the Form 323. The FNPRM
also seeks comment on the burdens of eliminating the Special Use FRN,
of requiring all individual holders of interests reportable on the Form
323 to obtain an FRN through the Commission's Registration System
(CORES), and of requiring all filers of Form 323 to report the FRNs for
these individuals. The FNPRM invites comment on the use of social
security numbers as unique identifiers by other governmental agencies
as it relates to the Commission's proposed CORES FRN requirement for
individuals.
29. The objective of the information collection undertaken to
establish a CORES FRN is to obtain a special, unique identifier that
will allow the Commission and researchers to cross-reference
information and create complete ownership structures in order to
promote its long standing goal to promote diverse ownership of
broadcast stations, including by women and minorities.
30. The FNPRM also notes that the Commission, in the Fifth FNPRM,
is concurrently seeking comment on whether to expand the biennial
ownership reporting requirement to include interests, entities and
individuals that are not attributable because of (a) the single
majority shareholder exemption and (b) the exemption for interests held
in eligible entities pursuant to the higher EDP threshold. If the
Commission requires these interest holders to be reported on the
biennial ownership form, the Commission proposes, in this FNPRM, that
these interest holders should be required to obtain and provide CORES
FRNs. The FNPRM invites comment on the impact of this requirement on
these interest holders and whether the benefits of unique
identification described in the FNPRM are equally applicable to
individuals subject to such a requirement. As described at paragraph 13
of the FNPRM, a unique identifier is essential to providing the
searchable database necessary to support accurate and reliable studies
of ownership trends.
31. The FNPRM also seeks comment on the Commission's proposal to
require
[[Page 2932]]
that CORES FRNs be provided for all entities and individuals reported
on Form 323-E, Ownership Report for Noncommercial Broadcast Stations.
Based on potential unique attributes of noncommercial entities, the
Commission seeks comment on whether the proposed data collection
imposes a significant burden for such entities, which may be smaller
entities by nature. The Commission also seeks comment on the
usefulness, potential effects, and possible alternatives to imposing
the same CORES FRN requirements on Form 323-E filers and holders of
reportable interests as those applicable to Form 323 filers and
attributable interest holders.
32. The FNPRM also seeks comment on a proposal to amend the
Commission's rules to clarify that an individual with reportable
interests must obtain a CORES FRN. The Commission also invites comment
on whether the Commission should reserve the use of Special Use FRNs
solely for cases in which an individual with a reportable interest has
failed to provide the filer with sufficient information for it to
obtain a CORES FRN and is unwilling to obtain and provide a CORES FRN
separately. The Commission also seeks comment on whether it should
require filers to notify individuals with reportable interests of the
Commission's enforcement authority to impose a forfeiture against such
individuals.
33. The Commission invites comment on its proposal to extend the
filing period for the Biennial Ownership Reports by moving the due date
from November 1, to December 1, with the October 1 ``as of'' date
unchanged. The FNPRM also invites comment on the proposed revisions to
Form 323 that were submitted in the Review of Media Bureau Data
Practices proceeding. The Commission also seeks comment on NAB's
proposal in that proceeding that an entity with several wholly-owned
licensee subsidiaries should be able to list all of the licensees and
respective stations in Section I, Item 7 of the Form 323 and asks
whether the proposal should be limited to wholly-owned subsidiary
licensees or whether a parent entity instead should be able to list all
the licensees in which it has an attributable interest in Section I,
Item 7.
34. Legal Basis. This FNPRM 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).
35. Description and Estimate of the Number of Small Entities to
Which the Proposed Rules Will Apply. 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.
36. 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.'' The
Commission has estimated the number of licensed commercial television
stations to be 1,387. According to Commission staff review of the BIA
Kelsey Inc. Media Access Pro Television Database as of May 2, 2012,
1070 (77 percent) of the 1,399 commercial television stations in the
United States have revenues of $14 million or less. The Commission has
estimated the number of licensed noncommercial educational television
stations to be 396. 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.
37. 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.
38. 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 Kelsey Inc. Media Access Radio Analyzer Database as of May 2, 2012,
about 10,750, (97 percent) of 11,093 commercial radio stations in the
United States have revenues of $7 million or less. The Commission has
estimated the number of licensed noncommercial radio stations to be
3,712. 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.
39. 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
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they apply may be over-inclusive to this extent.
40. 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 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 million in annual receipts. As of March
31, 2012, there are approximately 479 licensed Class A stations and
2,001 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.
41. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements. There may be changes to reporting or
recordkeeping requirements if the Commission eliminates the ``Special
Use'' FRN requirement. We do not anticipate any other changes in
recording or recordkeeping requirements for commercial broadcast
entities, as we are proposing to maintain the existing requirement. In
addition, there may be a change in reporting or recordkeeping
compliance for noncommercial entities if a CORES FRN requirement is
adopted for the Form 323-E. See, paragraph 21.
42. Steps Taken to Minimize Significant Impact on Small Entities,
and Significant Alternatives Considered. 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.
43. As noted, we are directed under law to describe any such
alternatives we consider, including alternatives not explicitly listed
above. The Notice proposes to continue to require individuals reported
on a Form 323 to obtain a CORES-registered FRN and to eliminate the
``Special Use'' FRN. In the alternative, the Commission could decide
not to eliminate the Special Use FRN for the Form 323, or it could
defer these actions until a later time. While the option to retain the
CORES FRN requirement and to eliminate the Special Use FRN might result
in an increased burden on those required to obtain and provide a CORES
FRN, 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 outweigh the burdens. The CORES FRN as 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 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 from an individual attributable
interest holder, while ensuring that the filer will be able to timely
submit the Form 323 and allowing the Commission to identify the
individual with a reportable interest that has failed to provide a
CORES FRN.
44. In the FNPRM, the Commission proposes that CORES FRNs be
reported for the two classes of non-attributable interests that would
be reportable if the Commission adopts the pending proposal in the
Fifth FNPRM to make these interests reportable. In the alternative, the
Commission could decide not to extend the CORES FRN requirement to
these interests if they are deemed reportable, or the Commission could
defer these actions until a later time. While the option to extend the
CORES FRN to these classes of non-attributable interests might impose
an increased burden on those required to obtain and provide a CORES
FRN, 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 outweigh the burden of obtaining a CORES FRN.
45. In the FNPRM, the Commission proposes to impose a CORES FRN
requirement for all entities and individuals reported on the Form 323-
E, Ownership Report for Noncommercial Broadcast Stations in order to
further the Commission's goal of advancing diversity of ownership in
the broadcast industry. In the alternative, the Commission could decide
not to expand the CORES FRN requirement to the holders of attributable
interests in non-profit licensees that file Form 323-E, or the
Commission could defer this action until a later date. While the option
to extend the CORES FRN requirement to entities and individuals
reported on the 323-E could impose an increased burden on those
required to obtain and provide a CORES FRNs the benefits of having a
unique identifier for aggregating data related to non-commercial
licensees outweighs the burdens associated with obtaining a CORES FRN.
46. The FNPRM proposes to amend the Commission's rules to clarify
that an individual with reportable interests must obtain a CORES FRN.
The Commission seeks comment on how to reduce or eliminate the costs
imposed by this proposal to amend the Commission's rules on small
businesses. The Commission invites comment on its proposal to extend
the filing deadline for the Biennial Ownership Reports. By providing
filers with additional time to file the Biennial Ownership Report, this
proposal will reduce the burden on filers. The Commission also seeks
comment on the recommendations regarding the Form 323 from NAB and
other commenters in the Media Bureau Data Practices proceeding and the
costs and benefits associated with these proposals for small
businesses.
47. Federal Rules that May Duplicate, Overlap, or Conflict With the
Proposed Rules. None.
V. Ordering Clauses
48. 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), this Sixth Further Notice of Proposed Rulemaking
is adopted.
49. 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 Sixth Further
Notice of Proposed Rulemaking.
50. It is further ordered that the Commission's Consumer &
Governmental Affairs Bureau, Reference
[[Page 2934]]
Information Center, shall send a copy of the Sixth Further Notice of
Proposed Rulemaking, including the Initial Regulatory Flexibility
Analysis, to the Chief Counsel for Advocacy of the Small Business
Administration.
51. It is further ordered, that the Emergency Petition for
Immediate Revision of Instructional/Informational Materials Relative to
Form 323, filed on September 14, 2011 by Fletcher, Heald & Hildreth,
P.L.C., is dismissed.
Federal Communications Commission.
Cecilia Sigmund,
Acting Associate Secretary.
[FR Doc. 2013-00578 Filed 1-14-13; 8:45 am]
BILLING CODE 6712-01-P