COMMERCIAL BROADCAST STATION OWNERSHIP REPORT IN THIS ISSUE FCC SETS FILING DEADLINE FOR COMMERCIAL BROADCAST STATION OWNERSHIP REPORT...

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1 NOVEMBER 2009 IN THIS ISSUE FCC SETS FILING DEADLINE FOR COMMERCIAL BROADCAST STATION OWNERSHIP REPORT... 1 FCC HOLDS WORKSHOPS ON MEDIA OWNERSHIP REVIEW... 2 FCC SEEKS INFO ON PROTECTING CHILDREN IN MEDIA... 3 TV BROADCAST SPECTRUM VS. BROADBAND EFFORTS... 3 LOW-POWER FM CORRECTION... 3 PENALTY BOX... 4 DATES TO REMEMBER... 5 ATTACHMENT A COMMERCIAL VACANT ALLOTMENTS RESERVED FOR NON-COMMERCIAL EDUCATIONAL USE FCC SETS FILING DEADLINE FOR COMMERCIAL BROADCAST STATION OWNERSHIP REPORT At the end of October, the FCC announced by Public Notice that the Office of Management and Budget (OMB) had approved the Media Bureau s revised FCC Form 323. With that approval, the FCC announced that the biennial filing deadline for licensees and other entities required to file FCC Form 323 is December 15, The final electronic version of the form has not yet been made available online, although the FCC had previously estimated that it would become available on or about November 16, One reliable FCC source has advised that the form will probably become electronically available sometime next week. It is not clear whether the delay in the e-form s availability will trigger a further delay in the filing deadline. We have learned that a motion for stay of the filing requirement has been filed at the FCC, and we understand that it is being considered. The primary justification for the stay request relates to the requirement that certain individuals and entities provide their social security number or taxpayer identification number to the FCC in order to obtain an FCC registration number (FRN), which is a new requirement for the revised Form 323. The stay proponents claim that the addition of this requirement violated the Administrative Procedure Act, and that notwithstanding OMB approval of the form, the FRN requirement is unlawful. The FCC has not publicly acknowledged the filing of the motion for stay. As previously set forth in this newsletter, the information submitted on this biennial ownership report should be current as of November 1, In addition, the new form requires the use of FCC registration numbers (FRN) for certain individuals and entities. These can be applied for via the FCC s website. It is paramount that commercial station licensees timely and accurately file the new form. The FCC has repeatedly fined stations for failing to timely file ownership reports. Most commonly, those fines arise out of the renewal application process, in which licensees must certify whether they have timely filed and placed ownership reports in their public file during the entire eight-year license term.

2 HCCB has previously communicated with those clients of the firm that it is assisting in filing the ownership report. If you are a client of the firm and have not been contacted by us, or otherwise require assistance, please let us know. We welcome calls from non-clients as well. We are available to answer any and all questions regarding the completion and filing of the report. Filing Window for 67 Vacant Commercial FM Allotments Reserved for Non-Commercial Use Rescheduled to February 2010; Associated Minor Mod Freeze also Rescheduled In last month s newsletter, we included an article that the FCC had announced a filing window from December 11-18, 2009 for a total of 67 vacant commercial FM allotments that were previously reserved for non-commercial use. The FCC has now issued a Public Notice rescheduling this filing window to February 19-26, The allotments for this filing window are in several different states and were reserved for noncommercial use at various times over the past 6-7 years. A complete list of the 67 vacant allotments is included at the end of this newsletter. Applicants in this window must be non-profit entities and competing applications will be determined under the FCC s NCE Points System. Applicants for several of the allotted channels must meet stringent criteria for first and second NCE service areas. Applicants should carefully evaluate the criteria for claiming points. Due to certain complex technical requirements, applicants wishing to submit a viable application should retain qualified consulting engineering advice. In addition, because several specific legal requirements must be met in these applications, applicants should also consider retaining qualified communications counsel. As a reminder, applicants must obtain reasonable site assurance for the proposed station transmitting location prior to submitting the application to the FCC. Failure to obtain such reasonable assurance can result in dismissal of an application. The attorneys at Hardy, Carey, Chautin & Balkin are available to advise and assist you in filing such applications. Interested parties are urged to act quickly as the application process and the steps necessary to prepare the application can be timeconsuming. In connection with the announcement of the rescheduled filing window, the FCC has also shifted a pre-filing window freeze on FM commercial and non-commercial minor change applications. That freeze will now commence at 11:59 p.m. on February 5, 2010 and continue in effect until the close of the filing window on February 26, Licensees and permitees should review the attached vacant allotments list to determine whether or not any of the vacant allotments will potentially be affected by the filing freeze. FCC HOLDS WORKSHOPS ON MEDIA OWNERSHIP REVIEW Pursuant to the Telecommunications Act of 1996, the Commission is required to review the Media Ownership Rules every four years to determine whether any of the rules remain necessary in the public interest as a result of competition. By law, the Commission is required to repeal or modify any regulation it determines to be no longer in the public interest. In connection with this requirement, the FCC recently held workshops and sought comment on the statutory review of five ownership rules the newspaper/broadcast cross ownership rule, the radio/television cross ownership rule, the local television ownership rule, the local radio ownership rule, and the dual network rule. The FCC sought comment on a variety of issues including competition, diversity and localism as part of its review. In remarks given by Commissioner Michael J. Copps to a media ownership public interest group panel on November 3, 2009, he placed great emphasis on minority and female ownership and recent recommendations given to the Commission by an appointed diversity committee. According to Copps, some of those suggestions include tools for incentivizing minority ownership. In addition, Commissioner Copps focused on localism, voicing strident opposition to those who have, in his words, tried to make localism a dirty word. Copps believes that a further emphasis on local news and information, local music and cultural diversity are 2

3 needed. Finally, Copps made significant comments about the Commission s licensing regime for broadcasters, claiming that slam-dunk license renewals every eight years without proper public interest review are simply not credible. In the past, Copps has suggested 3-year license renewal terms as a way to further test whether a licensee is operating in the public interest. FCC SEEKS INFORMATION ON PROTECTING CHILDREN IN MEDIA In mid-october, the FCC released a Notice of Inquiry seeking information on how children can be served and protected and parents can be further empowered in the new digital media landscape. The notice comes nearly 20 years after enactment of the Children s Television Act and follows the FCC s recently issued Child Safe Viewing Act Report, which examined parental control technologies for video and audio programming. The inquiry asks to what extent children are using electronic media today, the benefits and risks this presents, and the ways in which parents, teachers and children can help reap the benefits while minimizing the risks of using these technologies. The inquiry also recognizes that academic research and studies exist on these issues and asks commenters to identify additional data and studies and indicate whether further study is needed. This inquiry is the latest in a series of recent efforts by the Commission to evaluate and potentially modify or enact new regulations on broadcast and other media licensees designed to protect children from harmful content. Chairman Julius Genachowski has repeatedly affirmed that some modification of the FCC s children s rules protecting children from harmful content and excessive commercial matter will be forthcoming. We will continue to advise on developments in this area as warranted. TV BROADCAST SPECTRUM VS. BROADBAND EFFORTS Several weeks ago, as part of the FCC s ongoing efforts to adopt broadband rules and deploy new broadband services, suggestions were made by FCC Commissioners and the FCC Chairman that the amount of spectrum needed for broadband deployment was significantly more than what was currently available. These announcements led to a suggestion that in its search for more spectrum, the FCC was considering potentially recapturing additional broadcast television spectrum, in addition to other potential spectrum sources. That suggestion has set off a flurry of filings and comments by the wireless and broadcast industry, teeing up a coming battle on spectrum use. In a November 18 th public notice identifying key gaps to universal broadband deployment, an FCC task force specifically cited a lack of spectrum, as well as the lengthy process for identifying, reallocating and assigning the spectrum. The task force has been assigned the task of identifying options for bridging the identified gaps, and will be doing so in coming weeks. The FCC has until February 17, 2010 to submit a National Broadband Plan to Congress. Major broadcasters were recently approached by the FCC to discuss a cash-for-spectrum possibility, where broadcasters would voluntarily return spectrum in exchange for cash from the broadband auction. Those broadcasters rejected that concept, and have since taken the position that provision of video and other services using digital television spectrum is more efficient and a necessary alternative to wireless broadband services. This debate is only beginning, and the positions of the broadcast and wireless industries and the FCC will evolve over time. This is an important area for television broadcasters to monitor. In our view, an outright broadcast spectrum grab by the FCC appears unlikely at this juncture, and even if it occurred, significant opposition and legal challenges would greatly frustrate, rather than assist, broadband deployment efforts. LOW-POWER FM CORRECTION In last month s newsletter, we reported on the progress of legislation that would potentially allow the addition of several more low-power FM stations into the radio band. Part of that article made reference to the current ability of LPFM stations to be licensed near full-power stations on various 3

4 adjacent channels. By way of correction to the information we provided, LPFM stations may be licensed on fourth adjacent channels and, on a waiver basis, on second adjacent channels. Third adjacent channel location is currently prohibited by law, but an anticipated change in that prohibition is pending in Congress. Co-channel and first adjacent channel licensing of LPFM stations is currently not allowed, and will not be allowed in the legislation likely to be passed into law by Congress. Should you have any questions, please let us know. PENALTY BOX RADIO STATION LICENSE CANCELLED The FCC has cancelled the license of radio station KRAT(FM), Altamont, Oregon. KRAT filed its license renewal application in January, 2006, but the application was dismissed in April 2007 under the FCC s red light rules, which prohibit the staff from granting an application when an applicant is delinquent on debts owed to the Commission. The station did not file a petition for reconsideration of the dismissal. The red light debt dismissal arose from the station s failure to have paid regulatory fees. Given that the regulatory fees had still not been paid and that the renewal application had not been re-filed in over two years, the FCC concluded that KRAT s license expired on February 1, The FCC then cancelled the license and ordered KRAT to cease broadcast operations immediately. Under current filing systems, if an applicant has a red light issue, an electronic notice appears at the time of the application filing. At that point, stations should take immediate action to eliminate the debt owed, or risk the application being dismissed. In this case, the application dismissal and lack of further action by the station resulted in the most severe consequences cancellation of the license. LICENSEE ADMONISHED FOR FAILURE TO TIMELY FILE LICENSE APPLICATION The FCC has granted a waiver of its rule requiring that a station be built within the 3-year construction permit period, but admonished a licensee for failing to timely file the license application after a facility was built. In this case, the FCC had taken no formal action to dismiss or cancel the permit. Rather, the licensee inadvertently failed to timely file a covering license application prior to the permit s expiration, and the permit expired automatically as a matter of law pursuant to the FCC s rules requiring completion of construction and a license application to be filed within three years. When the licensee discovered the problem, it sought special temporary authority from the Commission to continue operations, given that it had earlier built and begun operations of the station four months before the permit expired. The licensee later requested a waiver of the Commission s rule regarding automatic forfeiture of permits. The Commission admonished the licensee, but granted the request for waiver of its rule pursuant to a narrow policy where the Commission has, in the past, granted license applications filed after permit expiration dates provided that the permittee has conclusively demonstrated timely construction in accordance with the terms of the permit. In this case, given the licensee s construction well in advance of the expiration date, and an affidavit and other evidence (electricity bills, etc) proving construction at that earlier date, the Commission found that a waiver of its rule was warranted. In addition to this evidence, the FCC cited legal precedents establishing that unintended consequences of a rule are a significant factor favoring a rule waiver, and noting that automatic forfeiture of an authorization of an operating station is a severe penalty which the Commission has been reluctant to impose absent an egregious violation of its rules. Although the licensee here prevailed by having available detailed evidence proving its earlier operation of the station prior to the permit expiration, permittees are advised to vigilantly track 4

5 permit expiration dates and ensure that both full construction is complete and a license application filed prior to a permit expiration date. Failing to do so, absent a waiver and the additional cost, time and expense of seeking relief at the Commission, puts the licensee at risk for having built a facility that cannot be licensed and that will be ordered to cease operations by the Commission. CONSENT DECREE FOR NCE RADIO LICENSEE VIOLATING UNDERWRITING RULES In early-november, the FCC adopted an order recognizing a consent decree entered into between the FCC s Enforcement Bureau and Long Island University Public Radio Network, the licensee of two non-commercial educational FM stations in New York. The consent decree terminated an investigation by the Bureau regarding multiple violations by the licensee of the FCC s underwriting rules. The alleged violations occurred in July, August and October In exchange, the licensee agreed to make a voluntary contribution to the United States Treasury in the amount of $24,000 payable in four installments of $6,000 each. In exchange for the consent decree and a termination of the FCC s investigation, the licensee had to adopt a detailed compliance plan related to future compliance with the underwriting rules. The compliance plan includes a multi-level review procedure for underwriting content, employee training, efforts to obtain advance copies of programming, and a plan to educate prospective underwriters about appropriate underwriting content. In that respect, the licensee will be required for the next three years to summarize the underwriting rules for each client before it accepts any contract with the prospective underwriter to air underwriting messages over the stations. In addition, the licensee must file a compliance report with the Commission on the first, second and third anniversaries of the consent decree. The report must include a compliance certificate from an officer stating that the licensee has established and maintained operating procedures intended to ensure compliance with the consent decree along with a statement explaining the basis for that certification. Non-commercial educational stations should vigilantly police and enforce the FCC s existing underwriting rules when accepting and airing underwriting acknowledgments for their stations. This consent decree follows a series of published decisions in which the FCC has fined NCE stations for underwriting rule violations. DATES TO REMEMBER August 25, 2009 through January 25, 2010: FCC will begin accepting first-come, first-served applications for rural area only new digital-only LPTV and TV translator stations, major changes to existing analog and digital LPTV and TV translators, and for digital companion channels for incumbent analog stations. December 1, 2009: ALL full power TV, Class A and LPTV stations operating licensed digital facilities, or holding a permit but operating in digital pursuant to temporary reduced power digital authorizations during the period from October 1, 2008 September 30, 2009: complete and electronically file FCC Form 317 (Annual DTV Ancillary/Supplementary Services Report) setting forth whether the station provided any ancillary/supplementary digital services at any time during the 12-month period ending September 30, 2009, and, for any ancillary/supplementary service for which a payment or subscription fee or charge is required in order to receive the service, or directly/indirectly paid by a third party in exchange for programming transmission, remit to the FCC 5% of gross revenues derived from such fees, charges or payments. Certain exceptions apply to the fee payment requirement consult your counsel. December 1, 2009: NCE ONLY AM & FM Stations in Alabama and Georgia: complete and electronically file your biennial ownership report via Form 323-E. Also complete annual EEO public file, file in public file and post on station website (if applicable). Commercial AM & FM Stations in Alabama and Georgia: complete annual EEO public file report, file in public file and post on website (if applicable). 5

6 NCE ONLY AM & FM Stations in Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont: complete and electronically file your mid-term EEO review report via Form 397 (if applicable). Also complete annual EEO public file report, attach to Form 397, file in public file, and post on station website (if applicable). Finally, complete and electronically file your biennial ownership report via Form 323-E. Commercial AM & FM Stations in Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont: complete and electronically file your mid-term EEO review report via Form 397 (if applicable). Also complete annual EEO public file report, attach to Form 397, file in public file and post on website (if applicable). NCE ONLY TV Stations in Colorado, Minnesota, Montana, N. Dakota, and S. Dakota: complete and electronically file your mid-term EEO review report via Form 397 (if applicable). Also complete annual EEO public file report, attach to Form 397, file in public file and post on website (if applicable). Finally, complete and electronically file your biennial ownership report via Form 323-E. January 1, 2010 TV Stations Intending to Claim an Exemption from Closed Captioning based on 2009 Revenue: Verify with accounting department that 2009 revenue did not exceed exemption levels. If not, consult counsel for new captioning obligations. January 10, 2010 TV, Class A TV, AM & FM Stations (Commercial and NCE): Complete fourth quarter 2009 quarterly issues/program lists and place in your public inspection file. TV & Class A TV Stations (Commercial Only): Complete and electronically file FCC Form 398 Children s Television Programming Report and place copy in public January 25, 2010 Applications for new digital-only LPTV and TV translators, digital companion channels, and major modifications to existing analog and digital stations regardless of geographic location will begin to be accepted on a first-come, first-served basis. No applications for new analog facilities will be accepted. Commercial TV & Class A Stations in Colorado, Minnesota, Montana, N. Dakota, and S. Dakota: complete and electronically file your mid-term EEO review report via Form 397 (if applicable). Also complete annual EEO public file report, attach to Form 397, file in public file and post on website (if applicable). All AM & FM Radio stations in Colorado, Minnesota, Montana, N. Dakota and S. Dakota: complete annual EEO public file report, file in public file and post on website (if applicable). All TV & Class A TV Stations in Alabama, Georgia, Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont: complete annual EEO public file report, file in public file and post on website (if applicable). December 15, 2009: commercial full-power TV, Class A, LPTV, TV translator, AM, and FM stations, including those owned by sole proprietors and partnerships made up of individuals, must file biennial ownership report on revised Form 323, with information that is accurate as of Nov. 1, Note: this filing date may be pushed back since the revised form has not been released. 6

7 Attachment A Commercial Vacant Allotments Reserved for Noncommerical Educational Use No. State City Channel Class 1 AL Anniston** 261 C3 2 AZ Pima** 296 A 3 AZ Somerton** 260 C3 4 AZ Willcox** 223 C3 5 CA Hemet** 273 A 6 CA McKinleyville** 277 C3 7 CA Sutter Creek** 298 A 8 CA Westley** 238 A 9 CO Olathe** 270 C2 10 CO Olathe** 293 C 11 FL Big Pine Key** 239 A 12 FL Horseshoe Beach** 234 C3 13 FL Live Oak** 261 A 14 FL Otter Creek** 240 A 15 GA Reynolds** 245 A 16 IA Keosauqua** 271 C3 17 IA Moville** 246 A 18 IA Rudd** 268 A 19 ID Weiser** 247 C1 20 IL Canton** 277 A 21 IL Cedarville** 258 A 22 IL Clifton** 297 A 23 IL Freeport** 295 A 24 IL Pinckneyville** 282 A 25 IN Columbus** 228 A 26 IN Farmersburg** 242 A 27 IN Fowler** 291 A 28 IN Madison** 265 A 29 IN Terre Haute** 298 B 30 KS Council Grove** 281 C3 31 KY Smith Mills** 233 A 32 LA Golden Meadow** 289 C2 33 LA Homer** 272 A 34 LA Ringgold** 253 C3 35 MA West Tisbury** 282 A 36 MI Hubbardston** 279 A 37 MO Huntsville** 278 C2 38 MO Laurie** 265 C3 Page 1

8 Attachment A No. State City Channel Class 39 MT Bozeman 240 C3 40 NC Dillsboro** 237 A 41 ND Berthold** 264 C 42 NM Alamo Community** 298 A 43 NY Amherst** 221 A 44 NY Rhinebeck 273 A 45 OK Cordell** 229 A 46 OK Weatherford** 286 A 47 OK Wynnewood** 283 A 48 OR Dallas** 252 C3 49 OR Madras** 251 C1 50 OR The Dalles 268 C3 51 PA Liberty** 298 A 52 PA Susquehanna** 227 A 53 SC Barnwell** 256 C3 54 TX Burnet** 240 A 55 TX Denver City** 248 C2 56 TX Van Alstyne** 260 A 57 UT Fountain Green** 260 A 58 VA Shenandoah** 296 A 59 VI Charlotte Amalie 226 A 60 WA Chewelah 274 C3 61 WA Oak Harbor** 233 A 62 WI Ashland 275 A 63 WI Augusta** 268 C3 64 WI Hayward** 232 C2 65 WI Washburn 284 A 66 WV St. Marys** 287 A 67 WY Jackson** 294 C2 ** - Allotments identified with a double asterisk were reserved by means of the third reservation test, i.e., would provide a first or second NCE radio service to at least ten percent of the population within the 1mV/m contour. Applicants for these identified allotments must satisfy, again, the first or second NCE service provisions. Page 2

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