Filing of Contracts; Modernization of Media Regulation Initiative, 6823-6830 [2018-03098]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 83, Number 32 (Thursday, February 15, 2018)]
[Proposed Rules]
[Pages 6823-6830]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-03098]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 73

[MB Docket Nos. 18-4, 17-105; FCC 18-8]


Filing of Contracts; Modernization of Media Regulation Initiative

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, the Federal Communications Commission 
(Commission) seeks comment on whether and how to modernize the 
Commission's rules, which requires each licensee or permittee of a 
commercial and noncommercial AM, FM, television, or international 
broadcast station to file certain contracts and other documents with 
the Commission within 30 days after execution. This document continues 
the Commission's efforts to modernize its regulations and reduce 
unnecessary requirements that can impede competition and innovation in 
the media marketplace.

DATES: Comments are due on or before March 19, 2018. Reply comments are 
due on or before April 2, 2018.

ADDRESSES: Interested parties may submit comments and replies, 
identified by MB Docket Nos. 18-4, 17-105, by any of the following 
methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Federal Communications Commission's website: https://www.fcc.gov/cgb/ecfs/. Follow the instructions for submitting comments.
     Mail: Filings can be sent by hand or messenger delivery, 
by commercial overnight courier, or by first-class or overnight U.S. 
Postal Service mail (although the Commission continues to experience 
delays in receiving U.S. Postal Service mail). All filings must be 
addressed to the Commission's Secretary, Office of the Secretary, 
Federal Communications Commission.
     People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by email: [email protected] or phone: 202-418-
0530 or TTY: 202-418-0432.

[[Page 6824]]

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: Christopher Clark of the Industry 
Analysis Division, Media Bureau, at (202) 418-2609.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice 
of Proposed Rulemaking (NPRM), FCC 18-8, adopted and released on 
January 30, 2018. The full text of this document is available 
electronically via the FCC's Electronic Document Management System 
(EDOCS) website at https://apps.fcc.gov/edocs_public/attachmatch/FCC-18-8A1.pdf. Documents will be available electronically in ASCII, 
Microsoft Word, and/or Adobe Acrobat. This document is also available 
for public inspection and copying during regular business hours in the 
FCC Reference Information Center, Federal Communications Commission, 
445 12th Street SW, CY-A257, Washington, DC 20554. Alternative formats 
are available for people with disabilities (Braille, large print, 
electronic files, audio format), by sending an email to [email protected] 
or calling the Commission's Consumer and Governmental Affairs Bureau at 
(202) 418-0530 (voice), 202 418-0432 (TTY).

Synopsis

    1. Background. Since the late 1930s, the Commission has required 
broadcast station licensees and permittees to file with the Commission 
copies of certain contracts and other documents relating to ownership 
and operation of stations. Historically, this filing requirement was 
intended to keep the Commission and the public informed with respect to 
the ownership and control of broadcast stations and to enable the 
Commission to be advised of compliance with its rules relating to those 
matters. In the past, the Commission has also used the information 
contained in some of these agreements to formulate certain broadcasting 
policies and rules or to enhance its understanding of the broadcast 
industry. At the time, requiring that broadcast licensees and 
permittees submit paper copies to the Commission was the most efficient 
mechanism available for the Commission to obtain copies of the 
documents and helped ensure that certain documents were also available 
for public inspection.
    2. Beginning in 1965, broadcast licensees and permittees were also 
required to make copies of these documents available via a local public 
inspection file. This additional obligation provided another source for 
public inspection of documents relating to ownership and control of a 
broadcast station for those able to travel to a station's main studio 
during regular business hours. In 1998, the Commission amended its 
public file rules to give broadcast licensees and permittees the option 
of maintaining an up-to-date list of such documents in the public file 
and providing copies of the actual documents to requesting parties 
within seven days, in lieu of maintaining the documents themselves in 
the file. In 2012, the Commission amended its public file rules in 
general to require that public file materials be posted to an online 
database hosted by the Commission rather than maintained in a paper 
file at the station. Under the 2012 amendment to the rules, licensees 
and permittees that choose to retain a list of Section 73.3613 (47 CFR 
73. 3613) documents in the public file must continue to provide a copy 
of any such documents to requesting parties within seven days. 
Television stations completed their transition to the online public 
file in 2014. The last group of remaining radio stations to transition 
must begin using the online file by March 2018. The transition to 
online public inspection files enables greater public access to the 
contents of the files, including documents filed pursuant to Section 
73.3613--which are either placed directly in the public file or 
provided on demand based on an up-to-date list--particularly for those 
who are unable to travel to a station or the Commission during regular 
business hours.
    3. The Commission has periodically re-evaluated the paper filing 
requirement in Section 73.3613 and revised the rule as necessary to 
eliminate unnecessary paperwork and reduce administrative burdens on 
licensees and the Commission. For example, prior to the late 1970s, the 
Commission revised Section 73.3613 on multiple occasions to eliminate 
the obligation to routinely submit paper copies of several documents 
and instead require that certain documents be kept at the station and 
made available upon request. Beginning in the late 1970s, the 
Commission took several steps to eliminate unnecessary paperwork 
burdens resulting from the requirement that stations submit paper 
copies of certain network affiliation contracts that the Commission no 
longer needed to collect routinely. For example, the Commission 
eliminated the requirement that radio stations file network affiliation 
and transcription contracts with the Commission, and it limited the 
mandatory filing of television network affiliation contracts to just 
those agreements with national networks. The Commission subsequently 
proposed to eliminate the routine filing requirement for national 
television network affiliates as well and instead require that 
television licensees make their national network affiliation agreements 
available to the Commission upon request. This proposal remained 
pending until the Commission terminated the proceeding in 2011.
    4. The types of documents that must be filed with the Commission 
under the current rule include network affiliation agreements between a 
television station and a national network; documents that relate to 
ownership or control of the licensee or permittee; contracts that 
relate to management of a station by someone other than a regular 
employee, officer, or director of the station, or by any person where 
the contract also provides for both a percentage of profits and sharing 
in losses; attributable time brokerage agreements; and attributable 
joint sales agreements. In addition, the current rule also requires 
that the following documents be kept at the station and made available 
for inspection upon request by the Commission: Subchannel leasing 
agreements for Subsidiary Communications Authorization operation; 
franchise/leasing agreements for operation of telecommunications 
services on the television vertical blanking interval and in the visual 
signal; time sales contracts with the same sponsor for four or more 
hours per day, except where the length of the events broadcast is not 
under control of the station; and contracts with chief operators.
    5. In May 2017, the Commission issued a Media Modernization 
Initiative Public Notice launching a review of its media regulations to 
eliminate or modify those that are outdated, unnecessary, or unduly 
burdensome. In response to that Media Modernization Initiative Public 
Notice, several commenters in the Media Modernization proceeding urged 
the Commission to eliminate the existing paper filing requirements in 
Section 73.3613. These commenters generally assert that the 
Commission's and the public's information needs can be sufficiently met 
through the existing public file requirements. No commenters opposed 
these recommendations.
    6. AM, FM, and Television Stations. We tentatively conclude that 
the Section 73.3613 paper filing requirement for licensees and 
permittees of commercial

[[Page 6825]]

and noncommercial AM, FM, and television stations should be eliminated. 
While paper filings may have previously been the most efficient 
mechanism for ensuring that the Commission and the public had ready 
access to these materials, we believe that is no longer the case. The 
vast majority of Commission forms are now filed electronically, and the 
Commission has taken many recent steps to eliminate or streamline paper 
submissions and other document retention obligations. For example, the 
transition to online public files, which is largely complete and will 
be finalized in March 2018, has significantly reduced burdens on 
stations and provided both the Commission and the public with easy 
access to station information and documents retained in the public 
inspection file.
    7. Indeed, the Section 73.3613 documents of commercial and 
noncommercial AM, FM, and television stations are already available via 
their public inspection files, and such access will continue even 
without the Section 73.3613 paper filing requirement. Licensees and 
permittees of these stations currently file ownership reports 
electronically on FCC Forms 323 and 323-E, and on these ownership 
reports licensees and permittees are required to list all documents 
required to be filed pursuant to Section 73.3613 for all of the 
stations covered by the report. Our public file rules, contained in 
Section 73.3526 (commercial broadcast stations) and Section 73.3527 
(noncommercial broadcast stations) of our rules, require that the 
licensees and permittees of these stations make the documents listed in 
their ownership reports--i.e., their Section 73.3613 documents--
available for public inspection via their public files. Specifically, 
the public file rules require these licensees and permittees, at their 
discretion, to either (i) retain in their public inspection files 
copies of the documents listed in their ownership reports or (ii) 
maintain an up-to-date list of such documents in their public 
inspection files and provide copies to a requesting party within seven 
days. Our public file rules also require licensees and permittees to 
retain copies of time brokerage agreements and joint sales agreements 
involving a commercial AM, FM, or television station in the station's 
public file. In light of this existing requirement and after evaluating 
our own document needs, we believe that eliminating the paper filing 
requirement as discussed herein will not meaningfully impact the 
ability of the Commission and other interested parties to review 
Section 73.3613 documents, and will reduce burdens on licensees.
    8. Accordingly, consistent with comments to the Media Modernization 
Initiative Public Notice, we tentatively conclude that relying on the 
existing public file rules--subject to the proposed modifications 
discussed herein--will provide the Commission and the public with 
sufficient access to Section 73.3613 documents for commercial and 
noncommercial AM, FM, and television stations. We seek comment on this 
tentative conclusion. Our existing public file rules provide these 
stations with flexibility to select the disclosure method that is less 
burdensome with respect to Section 73.3613 documents. We therefore 
propose to eliminate the Section 73.3613 requirement that licensees and 
permittees of commercial and noncommercial AM, FM, and television 
stations file paper copies of such documents with the Commission. 
Instead, we propose that stations make such documents available to the 
Commission and the public via the options set forth in the existing 
public file requirement. We seek comment on this proposal.
    9. As discussed above, our existing public file rules currently 
give stations the option of either (i) retaining copies of the 
documents listed in their ownership reports in the public file or (ii) 
maintaining an up-to-date list of such documents in the public file and 
providing copies to a requesting party within seven days. In order to 
preserve the current level of access to these documents, we propose to 
clarify that a station must ensure that its inventory of Section 
73.3613 documents in its public file is up to date, regardless of 
whether the station chooses to retain copies or a list of documents in 
the public file, and provide copies of its Section 73.3613 documents to 
the Commission and the public within seven days upon request. We seek 
comment on this proposal.
    10. For additional clarity, we also seek comment on whether to 
revise the relevant public file rules to refer specifically to Section 
73.3613, instead of referencing the documents listed in ownership 
reports (which are the same as the Section 73.3613 documents). In the 
alternative, we seek comment on whether to eliminate Section 73.3613 of 
the rules entirely--subject to the discussion of international 
broadcast stations below--and instead list these same documents in 
Sections 73.3526 and 73.3527 of our rules. Which approach would most 
effectively keep licensees informed of their obligations? If we 
eliminate Section 73.3613, how should we address the documents 
currently specified in Section 73.3613(e), which need not be filed with 
the Commission but must be kept at the station and made available for 
inspection upon request by the Commission under the current rule? 
Similarly, how should we address Section 73.3613(a)(1), which currently 
includes a definition of ``network'' that is cross-referenced in the 
Telecommunications Act of 1996 and in the Commission's Dual Network 
Rule? We seek comment on these issues.
    11. Under Section 73.3613, documents are required to be filed 
within 30 days after execution. By contrast, the public file rules do 
not explicitly state how quickly licensees and permittees must add the 
documents listed in their most recent ownership report or update the 
list of such documents, though licensees and permittees are expected to 
update their files in a timely fashion and to maintain orderly files. 
Is the existing practice for public file updates sufficient or should 
we adopt a specific timeframe for updating the Section 73.3613 
documents in the station's public file? If so, how long (e.g., continue 
to require updates within 30 days after execution, consistent with the 
current practice under Section 73.3613)? In addition to the specific 
issues discussed in Section B of this NPRM, we invite comment on any 
other modifications or conforming changes to Section 73.3613, or any 
other Commission rule, that are necessary or appropriate to implement 
the proposals discussed in this NPRM and on any alternative proposals 
for making these documents available in a less costly and more 
effective manner.
    12. International Broadcast Stations. Unlike AM, FM, and television 
stations, international broadcast stations do not serve local 
communities in the United States. These stations, which are authorized 
on a seasonal basis, employ frequencies allocated to the broadcasting 
service between 5900 and 26100 kHz, the transmissions of which are 
intended to be received in foreign countries. Currently, two seasons 
exist: A summer season and a winter season. International broadcast 
stations, which are often operated by churches and other religious 
organizations, typically do not have network affiliations and do not 
enter into time brokerage arrangements or joint sales agreements. As of 
December 13, 2017, there were 16 international broadcast stations 
operating. These stations are subject to the Section 73.3613 filing 
requirements but do not have public file obligations like those 
applicable to AM, FM, and television stations. Similarly, these 
stations are not currently subject to the

[[Page 6826]]

routine ownership reporting obligations applicable to other broadcast 
services.
    13. Based upon our review, we tentatively conclude that the current 
justifications for requiring disclosure of Section 73.3613 documents by 
commercial and noncommercial AM, FM, and television stations do not 
apply to international broadcast stations. As mentioned above, for 
example, licensees and permittees of commercial and noncommercial AM, 
FM, and television stations are required to list Section 73.3613 
documents in the broadcast ownership reports they file with the 
Commission and make copies of such documents available via a public 
inspection file, but international broadcast stations are not subject 
to such obligations. Previously, international broadcast stations were 
subject to the ownership reporting requirements that applied to AM, FM, 
and television stations, but this is no longer the case. While the 
disclosure of Section 73.3613 documents by commercial and noncommercial 
AM, FM, and television stations supplements the ownership information 
that they must routinely report to the Commission, the same is not true 
for international broadcast stations. Furthermore, these stations are 
not subject to the ownership rules applicable to commercial AM, FM, and 
television stations, nor are they subject to the relevant operational 
provisions applicable to noncommercial stations. Moreover, it does not 
appear that the Section 73.3613 documents that international broadcast 
stations are required to file with the Commission have been reviewed by 
Commission staff in the recent past. Accordingly, we tentatively 
conclude that there is no need to continue requiring the licensees and 
permittees of international broadcast stations to routinely file 
Section 73.3613 documents with the Commission.
    14. Instead, we believe that the Commission's information needs can 
be met by retaining our ability to obtain these documents from 
licensees and permittees of international broadcast stations upon 
request, as needed. For example, if there are concerns about the 
ownership or control of an international broadcast station, the 
Commission could request copies of the relevant Section 73.3613 
documents as part of an investigation. For purposes of enforcing the 
statutory bar against de facto transfers of control of an international 
broadcast station without prior Commission authorization, we believe 
that it is sufficient to retain our ability to obtain Section 73.3613 
documents from licensees and permittees of international broadcast 
stations upon request. We seek comment on how to implement this 
requirement. Should the Commission's rules continue to delineate the 
documents subject to disclosure (either in Section 73.3613 or in a new 
rule section relevant only to international broadcast stations) or is 
the Commission's general authority to request relevant information 
during an investigation or to otherwise fulfill its statutory 
obligations sufficient?
    15. We seek comment on these proposals. Is there a continuing need 
for these licensees and permittees to routinely file paper copies of 
Section 73.3613 documents with the Commission? What is the value, if 
any, of retaining the Section 73.3613 paper filing requirement for 
international broadcast stations for the Commission and the public? 
Would eliminating the requirement and retaining our ability to obtain 
Section 73.3613 documents upon request adequately ensure that the 
Commission will have access to information concerning ownership and 
control of international broadcast stations and compliance with our 
rules? Are there any reasons that would support a requirement that 
international broadcast stations make these documents available to 
members of the public? If so, what is the least costly and most 
effective manner of doing so? We note that these stations transmit 
programming that is intended to be received in foreign countries and 
are not required to have public inspection files, and thus do not 
currently make Section 73.3613 documents available to the U.S. public 
in that manner. And, considering the very small number of stations 
operating nationally, Section 73.3613 documents of international 
broadcast stations may be of little relevance to the U.S. public. We 
seek comment on these issues.
    16. Time Brokerage Agreements and Joint Sales Agreements. A time 
brokerage agreement (TBA), also referred to as local marketing 
agreement (LMA), involves the sale by a licensee of discrete blocks of 
time to a broker that supplies the programming to fill that time and 
sells the commercial spot announcements in it. A joint sales agreement 
(JSA) is an agreement that authorizes a broker to sell some or all of 
the advertising time on the brokered station. Pursuant to Section 
73.3613(d), attributable TBAs and attributable JSAs must be filed with 
the Commission by the brokering station. In addition, our existing 
public file rule for commercial stations requires that all TBAs and 
JSAs involving commercial stations, regardless of their attribution 
status, also be placed in the public inspection file for all 
participating stations; that is, under the current rules commercial 
broadcast stations cannot elect merely to list these agreements in 
their public files. Because Section 73.3613(d) duplicates an existing 
public file requirement for a limited subset of TBAs and JSAs, we 
tentatively conclude that we may eliminate this requirement as it 
applies to commercial stations. We believe that elimination is 
appropriate, regardless of the disclosure requirement that may 
ultimately be selected. Under the current rule, attributable TBAs and 
attributable JSAs--like all other Section 73.3613 documents--must be 
filed with the Commission within 30 days of execution. However, our 
existing public file rules do not explicitly state how quickly 
licensees and permittees must add these documents to their public file. 
As noted above, however, we are seeking comment on whether to adopt a 
specific timeframe for updating Section 73.3613 documents. We seek 
comment on this issue.
    17. Unlike commercial stations, noncommercial stations are not 
currently required to maintain copies of all TBAs or JSAs in their 
public inspection files; rather, under our public file rules, these 
stations have the option of only maintaining a list of all Section 
73.3613 documents, including certain TBAs and JSAs, and must provide a 
copy of these documents to requesting parties. When the Commission 
adopted the public file rules requiring that all TBAs and/or JSAs 
involving commercial stations be placed in the public inspection file, 
it did not discuss a similar requirement for noncommercial stations. 
Given the nature of and rules applicable to the noncommercial service, 
it is likely that TBAs and JSAs involving noncommercial stations are 
not as prevalent as those involving commercial stations. Accordingly, 
no change to Section 73.3613(d) is necessary with respect to 
noncommercial stations, which are already required to list these 
agreements in their public files and make them available upon request. 
We seek comment on this issue.
    18. Redaction of Confidential or Proprietary Information. Section 
73.3613 explicitly allows the redaction of confidential or proprietary 
information for attributable TBAs and JSAs, provided that unredacted 
versions of the agreements shall be provided to the Commission upon 
request. A similar rule applies to TBAs and JSAs required to be placed 
in the public inspection file. Section 73.3613 does not currently 
provide for redaction of other agreements filed pursuant to the 
provision. However, the Commission's

[[Page 6827]]

general rules provide a procedure for seeking such redactions, and 
other agreements filed pursuant to this section that contain 
confidential or proprietary information are routinely submitted to the 
Commission in both redacted and unredacted forms along with a request 
for confidential treatment. We have no evidence that this practice--
both the specific provisions allowing the redaction of TBAs and JSAs 
and the routine submission of redacted and unredacted versions of other 
73.3613 documents pursuant to Section 0.459 of the Commission's rules--
has impaired the ability of the Commission or other interested parties 
to evaluate these agreements. Accordingly, we tentatively conclude that 
Section 73.3613's specific provision allowing the redaction of TBAs and 
JSAs, including the requirement that unredacted copies shall be made 
available to the Commission upon request, should apply to all Section 
73.3613 documents to the extent that they contain confidential or 
proprietary information. Under our proposal herein, redaction would 
only be necessary when a document is posted to the online public file 
or provided to the Commission or the public upon request. We seek 
comment on this tentative conclusion.

Procedural Matters

    19. Initial Paperwork Reduction Act Analysis. This document 
contains proposed modified information collection requirements. The 
Commission, as part of its continuing effort to reduce paperwork 
burdens, invites the general public and the Office of Management and 
Budget (OMB) to comment on the information collection requirements 
contained in this document, as required by the Paperwork Reduction Act 
of 1995, Public Law 104-13. In addition, pursuant to the Small Business 
Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 
3506(c)(4), we seek specific comment on how we might further reduce the 
information collection burden for small business concerns with fewer 
than 25 employees.
    20. Ex Parte Rules. This proceeding 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 rule 1.1206(b). In proceedings governed by 
rule 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.
    21. Comments and Replies. Pursuant to sections 1.415 and 1.419 of 
the Commission's rules, 47 CFR 1.415 and 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). Electronic Filing 
of Documents in Rulemaking Proceedings, 63 FR 24121 (1998).
     Electronic Filers: Comments may be filed electronically 
using the internet by accessing the ECFS: https://fjallfoss.fcc.gov/ecfs2/.
     Paper Filers: Parties who choose to file by paper must 
file an original and one copy of each filing. If more than one docket 
or rulemaking number appears in the caption of this proceeding, filers 
must submit two additional copies for each additional docket or 
rulemaking number.
    Filings can be sent by hand or messenger delivery, by commercial 
overnight courier, or by first-class or overnight U.S. Postal Service 
mail. All filings must be addressed to the Commission's Secretary, 
Office of the Secretary, Federal Communications Commission.
     All hand-delivered or messenger-delivered paper filings 
for the Commission's Secretary must be delivered to FCC Headquarters at 
445 12th St. SW, Room TW-A325, Washington, DC 20554. The filing hours 
are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together 
with rubber bands or fasteners. Any envelopes and boxes must be 
disposed of before entering the building.
     Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9050 Junction Drive, 
Annapolis Junction, MD 20701.
     U.S. Postal Service first-class, Express, and Priority 
mail must be addressed to 445 12th Street SW, Washington, DC 20554.
    22. Availability of Documents. Comments, reply comments, and ex 
parte submissions will be available for public inspection during 
regular business hours in the FCC Reference Center, Federal 
Communications Commission, 445 12th Street SW, CY-A257, Washington, DC 
20554. These documents will also be available via ECFS. Documents will 
be available electronically in ASCII, Microsoft Word, and/or Adobe 
Acrobat.
    23. People with Disabilities. To request materials in accessible 
formats for people with disabilities (Braille, large print, electronic 
files, audio format), send an email to [email protected] or call the FCC's 
Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice), 
(202) 418-0432 (TTY).
    24. Additional Information. For additional information on this 
proceeding, contact Christopher Clark of the Industry Analysis 
Division, Media Bureau, at (202) 418-2609.

Initial Regulatory Flexibility Act Analysis

    25. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA) the Commission has prepared this Initial Regulatory 
Flexibility Act Analysis (IRFA) of the possible significant economic 
impact on a substantial number of small entities by the policies and 
rules proposed in this NPRM. 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 provided on the first page 
of the NPRM. The Commission will send a copy of the NPRM, including 
this IRFA, to the Chief Counsel for Advocacy of the Small Business 
Administration (SBA).

[[Page 6828]]

    26. Need for, and Objectives of, the Proposed Rules. In this NPRM, 
the Commission seeks comment on how to modernize Section 73.3613 of the 
Commission's rules, which requires each licensee or permittee of a 
commercial and noncommercial AM, FM, television, or international 
broadcast station to file certain contracts and other documents with 
the Commission within 30 days after execution. The types of documents 
that must be filed with the Commission under the current rule include 
network affiliation agreements between a television station and a 
national network; documents that relate to ownership or control of the 
licensee or permittee; contracts that relate to management of a station 
by someone other than a regular employee, officer, or director of the 
station, or by any person where the contract also provides for both a 
percentage of profits and sharing in losses; attributable time 
brokerage agreements; and attributable joint sales agreements. In 
addition, the current rule also requires that the following documents 
be kept at the station and made available for inspection upon request 
by the Commission: Subchannel leasing agreements for Subsidiary 
Communications Authorization operation; franchise/leasing agreements 
for operation of telecommunications services on the television vertical 
blanking interval and in the visual signal; time sales contracts with 
the same sponsor for four or more hours per day, except where the 
length of the events broadcast is not under control of the station; and 
contracts with chief operators. The potential rule changes discussed in 
the NPRM stem from a Public Notice issued by the Commission in May 2017 
launching an initiative to modernize the Commission's media 
regulations. Several commenters in the proceeding have argued that the 
Commission should amend Section 73.3613 to eliminate the paper filing 
requirement and other duplicate or unnecessary filing requirements.
    27. The NPRM proposes to eliminate the Section 73.3613 paper filing 
requirement for licensees and permittees of commercial and 
noncommercial AM, FM, television, and international broadcast stations. 
In addition, the NPRM also seeks comment on other proposed 
modifications to broadcasters' current obligations under Section 
73.3613, including, among other things, eliminating certain redundant 
filing obligations and providing enhanced confidentiality protections. 
The rule revisions on which the NPRM seeks comment are intended to 
reduce unnecessary regulation and regulatory burdens that can impede 
competition and innovation in the media marketplace.
    28. Legal Basis. The proposed action is authorized pursuant to 
Sections 1, 4(i), 4(j), 303(r), 309, 310, and 336 of the Communications 
Act of 1934, as amended, 47 U.S.C. 151, 154(i), 154(j), 303(r), 309, 
310, and 336.
    29. Description and Estimates 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 generally defines the term ``small entity'' as having 
the same meaning as the terms ``small business,'' ``small 
organization,'' and ``small governmental jurisdiction.'' 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. Application of the 
statutory criteria of dominance in its field of operation and 
independence are sometimes difficult to apply in the context of 
broadcast television. Accordingly, the Commission's statistical account 
of television stations may be over-inclusive.
    30. The rules proposed herein will directly affect small radio, 
television, and international broadcast stations. Below, we provide a 
description of these small entities, as well as an estimate of the 
number of such small entities, where feasible.
    31. Radio Stations. This Economic Census category comprises 
establishments primarily engaged in broadcasting aural programs by 
radio to the public. Programming may originate in their own studio, 
from an affiliated network, or from external sources. The SBA has 
established a small business size standard for this category as firms 
having $38.5 million or less in annual receipts. Economic Census data 
for 2012 shows that 2,849 radio station firms operated during that 
year. Of that number, 2,806 firms operated with annual receipts of less 
than $25 million per year, 17 with annual receipts between $24,999,999 
and $50 million, and 26 with annual receipts of $50 million or more. 
Therefore, based on the SBA's size standard the majority of such 
entities are small entities.
    32. According to Commission staff review of the BIA/Kelsey, LLC's 
Media Access Pro Radio Database on January 8, 2018, about 11,372 (or 
about 99.9 percent) of 11,383 commercial radio stations had revenues of 
$38.5 million or less and thus qualify as small entities under the SBA 
definition. The Commission has estimated the number of licensed 
commercial AM radio stations to be 4,639 stations and the number of 
commercial FM radio stations to be 6,744, for a total number of 11,383. 
We note the Commission has also estimated the number of licensed 
noncommercial (NCE) FM radio stations to be 4,120. Nevertheless, the 
Commission does not compile and otherwise does not have access to 
information on the revenue of NCE stations that would permit it to 
determine how many such stations would qualify as small entities.
    33. We also note, that in assessing whether a business entity 
qualifies as small under the above definition, business control 
affiliations must be included. Business concerns are affiliates of each 
other when one concern controls or has the power to control the other, 
or a third party or parties controls or has power to control both. The 
Commission's estimate therefore likely overstates the number of small 
entities that might be affected by its action, because the revenue 
figure on which it is based does not include or aggregate revenues from 
affiliated companies. In addition, to be determined a ``small 
business,'' an entity may not be dominant in its field of operation. We 
further note that it is difficult at times to assess these criteria in 
the context of media entities, and the estimate of small businesses to 
which these rules may apply does not exclude any radio station from the 
definition of a small business on these basis; thus, our estimate of 
small businesses may therefore be over-inclusive. Also, as noted above, 
an additional element of the definition of ``small business'' is that 
the entity must be independently owned and operated. The Commission 
notes that it is difficult at times to assess these criteria in the 
context of media entities, and the estimates of small businesses to 
which they apply may be over-inclusive to this extent.
    34. Television Broadcasting. This Economic Census category 
comprises establishments primarily engaged in broadcasting images 
together with sound. These establishments operate television broadcast 
studios and facilities for the programming and transmission of programs 
to the public. These establishments also produce or transmit visual 
programming to affiliated broadcast television stations, which in turn 
broadcast the programs to

[[Page 6829]]

the public on a predetermined schedule. Programming may originate in 
their own studio, from an affiliated network, or from external sources. 
The SBA has created the following small business size standard for such 
businesses: Those having $38.5 million or less in annual receipts. The 
2012 Economic Census reports that 751 firms in this category operated 
in that year. Of this number, 656 had annual receipts of $25 million or 
less, 25 had annual receipts between $24,999,999 and $50 million, and 
70 had annual receipts of $50 million or more. Based on this data we 
therefore estimate that the majority of commercial television 
broadcasters are small entities under the applicable SBA size standard.
    35. The Commission has estimated the number of licensed commercial 
television stations to be 1,377. Of this total, 1,257 stations had 
revenues of $38.5 million or less, according to Commission staff review 
of the BIA Kelsey Inc. Media Access Pro Television Database (BIA) on 
January 8, 2018, and therefore these licensees qualify as small 
entities under the SBA definition. In addition, the Commission has 
estimated the number of licensed noncommercial educational (NCE) 
television stations to be 390. Notwithstanding, the Commission does not 
compile and otherwise does not have access to information on the 
revenue of NCE stations that would permit it to determine how many such 
stations would qualify as small entities.
    36. We note, however, that in assessing whether a business concern 
qualifies as ``small'' under the above definition, business (control) 
affiliations must be included. Business concerns are affiliates of each 
other when one concern controls or has the power to control the other 
or a third party or parties controls or has the power to control both. 
Our estimate, therefore, likely overstates the number of small entities 
that might be affected by our action, because the revenue figure on 
which it is based does not include or aggregate revenues from 
affiliated companies. In addition, another element of the definition of 
``small business'' requires that an entity not be dominant in its field 
of operation. We are unable at this time to define or quantify the 
criteria that would establish whether a specific television broadcast 
station is dominant in its field of operation. Accordingly, the 
estimate of small businesses to which rules may apply does not exclude 
any television station from the definition of a small business on this 
basis and is therefore possibly over-inclusive. Also, as noted above, 
an additional element of the definition of ``small business'' is that 
the entity must be independently owned and operated. The Commission 
notes that it is difficult at times to assess these criteria in the 
context of media entities and its estimates of small businesses to 
which they apply may be over-inclusive to this extent.
    37. International Broadcast Stations. Neither the Commission nor 
the SBA has developed a definition of small entities specifically 
applicable to International Broadcast Stations. The closest applicable 
SBA size standards and U.S. Census Bureau category is Radio Stations. 
Establishments in this industry are primarily engaged in broadcasting 
aural programs by radio to the public with programming that may 
originate in their own studio, from an affiliated network, or from 
external sources. The SBA small business size standard for this 
category is firms having $38.5 million or less in annual receipts. U.S. 
Census Bureau data for 2012 shows that 2,849 radio station firms 
operated during that year. Of that number, 2,806 firms operated with 
annual receipts of less than $25 million per year, 17 with annual 
receipts between $24,999,999 and $50 million, and 26 with annual 
receipts of $50 million or more. Therefore, based on the SBA's size 
standard the majority of entities in this industry are small entities.
    38. According to the Commission's records there were 16 
international broadcast stations operating as of December 13, 2017. The 
Commission however does not request nor collect annual revenue 
information; therefore, the Commission is unable to estimate the number 
of international broadcast stations that would constitute a small 
business under the SBA definition.
    39. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements. In this section, we identify the reporting, 
recordkeeping, and other compliance requirements proposed in the NPRM 
and consider whether small entities are affected disproportionately by 
any such requirements.
    40. Reporting Requirements. The NPRM seeks comment on how quickly 
licensees and permittees must update the Section 73.3613 documents in 
their public file or update the list of such documents. Presently, 
licensees and permittees are expected to update their files in a timely 
fashion and to maintain orderly files. The NPRM seeks comment on 
whether to retain the existing practice for public file updates or to 
adopt a specific timeframe for updating the Section 73.3613 documents 
in the station's public file (e.g., continue to require updates within 
30 days after execution, consistent with the current practice under 
Section 73.3613).
    41. Recordkeeping Requirements. The existing public file rules 
currently give stations the option of either (i) retaining copies of 
the documents listed in their ownership reports in the public file or 
(ii) maintaining an up-to-date list of such documents in the public 
file and providing copies to a requesting party within seven days. To 
preserve the current level of access to these documents, the NPRM 
proposes to clarify that a station must maintain an up-to-date 
inventory of its Section 73.3613 documents in its public file, 
regardless of whether the station chooses to retain copies or a list of 
documents in the public file, and provide copies of its Section 73.3613 
documents to the Commission and the public within seven days upon 
request.
    42. Other Compliance Requirements. Section 73.3613 explicitly 
allows the redaction of confidential or proprietary information for 
attributable TBAs and JSAs, provided that unredacted versions of the 
agreements shall be provided to the Commission upon request. The rule 
does not currently provide for redaction of other agreements filed 
pursuant to the provision. The NPRM tentatively concludes that Section 
73.3613's specific provision allowing the redaction of TBAs and JSAs, 
including the requirement that unredacted copies shall be made 
available to the Commission upon request, should apply to all Section 
73.3613 documents to the extent that they contain confidential or 
proprietary information. Under this proposal, redaction would only be 
necessary when a document is posted to the online public file or 
provided to the Commission or the public upon request.
    43. The proposed revisions to Section 73.3613 will relieve affected 
broadcast stations, including smaller stations, of the obligation to 
file certain information with the Commission. And although there were 
not any comments filed providing specific information quantifying the 
costs and administrative burdens of complying with the existing Section 
73.3613 filing requirements, and we cannot precisely estimate the 
impact on small entities of eliminating those requirements, no party in 
the Media Modernization proceeding, including smaller entities, has 
opposed the proposals discussed in the NPRM. We therefore find it 
reasonable to conclude that the benefits of adopting the proposals 
discussed therein would outweigh any costs.
    44. Steps Taken to Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered. The RFA requires an

[[Page 6830]]

agency to describe any significant, specifically small business, 
alternatives that it has considered in reaching its proposed approach, 
which may include the following four alternatives (among others): (1) 
The establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance and reporting requirements under the rule for such 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.
    45. The NPRM proposes to amend Section 73.3613 to eliminate the 
paper filing requirement for Section 73.3613 documents, and seeks 
comment on other proposed modifications to broadcasters' current 
obligations under Section 73.3613, including, among other things, 
eliminating certain redundant filing obligations and providing enhanced 
confidentiality protections. Under the proposal in the NPRM, redaction 
of confidential or proprietary information would only be necessary when 
a document is posted to the online public file or provided to the 
Commission or the public upon request. The rule changes proposed in the 
NPRM, if adopted, would relieve broadcast licensees and permittees, 
including small entities, of the time and expense associated with 
filing paper copies of Section 73.3613 documents with the Commission.
    46. For licensees and permittees of commercial and noncommercial 
AM, FM, and television stations, the NPRM proposes to rely instead on 
the Commission's existing public file rules, which already require that 
these licensees and permittees make copies of Section 73.3613 documents 
available to the public. The existing public file rules provide these 
licensees and permittees with flexibility to select the disclosure 
method that is less burdensome with respect to Section 73.3613 
documents, while still ensuring timely access to the documents by the 
public and the Commission. For international broadcast stations, the 
NPRM proposes that the Commission retain its ability to obtain Section 
73.3613 documents from licensees and permittees of these stations upon 
request, as needed.
    47. We anticipate that affected small entities will only benefit 
from the revisions proposed in the NPRM. However, in an effort to 
better understand the impact and identify alternative actions that can 
be taken to minimize any significant economic impact on small entities, 
the Commission has invited comment on modifications or conforming 
changes to Section 73.3613, or any other Commission rule, that are 
necessary or appropriate to implement the proposals discussed in the 
NPRM and on any alternative proposals for making these documents 
available in a less costly and more effective manner. The Commission 
will review and analyze any information received in promulgating any 
final rules in this proceeding.
    48. Federal Rules that May Duplicate, Overlap, or Conflict with the 
Proposed Rule. None.
    49. Ordering Clauses. Accordingly, it is ordered that, pursuant to 
the authority found in sections 1, 4(i), 4(j), 303(r), 309, 310, and 
336 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 
154(i), 154(j), 303(r), 309, 310, and 336, this Notice of Proposed 
Rulemaking is adopted.
    50. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Notice of Proposed Rulemaking, including the Initial 
Regulatory Flexibility Act Analysis, to the Chief Counsel for Advocacy 
of the Small Business Administration.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 2018-03098 Filed 2-14-18; 8:45 am]
BILLING CODE 6712-01-P