An Advisory from the law firm of Pillsbury Winthrop Shaw Pittman

by Lauren Lynch Flick and Scott R. Flick

The FCC’s Media Bureau has announced that a new version of the Biennial Ownership Report Form for commercial broadcast stations, FCC Form 323, will be available on its website as of April 9, 2010. All commercial broadcast station owners must file their biennial ownership reports using the new form by July 8, 2010. However, the data used to complete the form must be accurate as of November 1, 2009.

The FCC originally announced its intent to implement a new version of the Form 323 in an Order released in May 2009 as part of its Promoting Diversification in the Broadcasting Services proceeding. The revision required, among other things, that each holder of a direct or indirect attributable interest in a licensee secure an FCC-issued Federal Registration Number (“FRN”). The revision also mandated that information regarding attributable interest holders and their other broadcast interests be reported repeatedly and in a precisely structured manner. As a result, the number of reports and the time to complete each report increased dramatically for many broadcasters with the ultimate result that the FCC’s electronic filing system ground to a near halt and did not reliably save information entered into it. Based on these technical difficulties, the FCC stayed the filing obligation until it could improve the functioning of the form to account for these difficulties.

The FCC sent its revisions to the form to the Office of Management and Budget (“OMB”) for approval on March 25, and OMB approved the modified form on March 26. The revised form uses a new XML Spreadsheet template that will allow information to be entered into the spreadsheet and then uploaded to the form, thereby reducing the time and effort needed to enter the data. The spreadsheet must be downloaded from the FCC form and comes with detailed instructions regarding the proper use of the XML Spreadsheet. Of particular note are the following:

The XML Spreadsheet comes with 25 empty rows for data entry that contain embedded validation codes necessary for the proper functioning of the form. Any licensee needing more than 25 lines must copy and paste the original 25 lines as many times as necessary and not create new lines.

The XML Spreadsheet must be saved with an .xml extension, not the .xls or .xlsx extensions that the Excel program will assign by default. Licensees must not change or delete any data in Cell B1. Information must be entered in all capital letters. The new version of the form also retains the requirement that each attributable interest holder secure an FRN. The instructions state that where, after a good faith effort, a licensee is unable to secure an interest holder’s social security number, which is needed to  complete the FRN registration process, a button on the form will allow the licensee to secure a Special Use FRN. The instructions to the form state that the Special Use FRN can only be used for the Biennial Ownership Report filing, and not for any other filing, such as a post-consummation Ownership Report filing.

The Commission’s May 2009 Order also adopted November 1 as a new uniform reporting date for all commercial stations nationwide, regardless of the station’s license renewal filing anniversary (the deadline previously used by the FCC). Because the original November 1, 2009 filing requirement was stayed while the form was revised, the reports filed by the new July 8, 2010 deadline must still reflect the ownership data as it existed November 1, 2009.

The substantial difference in time between the new filing deadline and the time for which ownership information is being reported leads to some interesting questions. For example, where a station has been sold since November 2009, should the report be filed under the name of the new licensee or the prior licensee? If it is to be filed by the new licensee, how will the FCC deal with the fact that the new licensee may not have any personal knowledge of the prior licensee’s November 2009 ownership structure? These questions may be answered by a follow up public notice from the FCC, but if not, we will be pursuing them with the FCC’s staff.

A legal advisory by Scott R. Flick and Lauren Lynch Flick of the law firm Pillsbury Winthrop Shaw Pittman

Amendments must be filed by May 24, 2010. A $705 filing fee is required.

The FCC released a Public Notice last week identifying several hundred pending applications for new analog LPTV or TV Translator stations that must be amended to specify digital operation. The FCC’s list of applications that must be amended is attached hereto. The Public Notice indicates that applications that are not amended will not be processed. The amendments must be filed electronically, along with a filing fee of $705.00 per application. Most of the listed applications were filed in a window held in 2000 and were filed in paper. The deadline to amend these applications is May 24, 2010. The Public Notice states that this action is being taken in furtherance of the nationwide transition to digital television. However, the staff’s National Broadband Plan released last week urged the FCC to set a deadline by which all analog LPTV and TV Translator stations must convert to digital operation. This action appears to be a first step in that process. Accordingly, LPTV and TV Translator stations should be alert to the possibility of a further Public Notice establishing a similar transition requirement for existing stations.

Advisory from law firm of Pillsbury Winthrop Shaw Pittman:

by John K. Hane, Scott R. Flick, and Paul A. Cicelski

The National Broadband Plan (“NBP”) proposes immediate and sweeping steps that, if adopted, could displace many television broadcasters from their existing spectrum. Specifically, FCC staff proposes a “voluntary” surrender by some television broadcasters of their spectrum as well as repacking of the spectrum to minimize the portion dedicated to television broadcasting. An expected flood of FCC proceedings and possible surprises still to play out are likely to keep television broadcasters playing catch-up. The growth of both broadband and broadcasting are not necessarily incompatible goals if the proper mechanisms are put in place. However, the current version of the NBP places the broadcast industry in a defensive position by assuming that broadband can only grow by displacing television broadcasters.

Introduction

Details of the NBP, released yesterday, have been widely reported. This Alert summarizes the highlights, but focuses on what the NBP means for television broadcasters and what is likely to happen next. A more detailed analysis of the reallocations proposed by the FCC will be discussed in a separate Pillsbury Client Advisory.

Highlights

The NBP proposes a fast-track rulemaking process that will focus on five steps for reducing the spectrum used for television broadcasting. The FCC reportedly will circulate a draft working paper soon, leading to one or more notices of proposed rule making relating to these steps. The proceedings would address:

• Shrinking the service areas of television stations to reduce spectrum usage and facilitate aggressive repacking of broadcast licenses.
• Establishing rules for two stations to share one 6 MHz channel. These rules would apply to both voluntary and forced sharing arrangements.
• Setting rules for an auction of broadcast spectrum by 2012 or 2013, with band clearing by 2015.
• Exploring technical, policy and other options to reclaim broadcast spectrum if service area shrinkage, voluntary give-backs, and repacking do not free up the desired quantity of spectrum for wireless broadband.
• Taking other steps to encourage efficiency of spectrum usage in the television band, including spectrum fees, digital conversion of LPTV stations, and rule changes to  improve television broadcast service in the VHF bands, which will need to accommodate many of the re-packed stations.

The FCC’s Message: The Commission Does Not Need Congressional Authority to

Undertake Wholesale Restructuring and Reduction of the Television Broadcast Service

The Broadband Task Force has previously expressed frustration with broadcasters’ generally cool reception to the prospect of turning in spectrum for a share of auction proceeds. The tone and substance of the NBP reflect the task force’s response to that coolness. In the text and the subtext, the NBP takes the position that the FCC does not need congressional authority to shrink service areas, reduce licenses to less than 6 MHz, force channel sharing, require broadcasters to adopt costly changes to their technical facilities or impose financially damaging spectrum fees.

Whether or not the FCC chooses to attempt these steps and whether or not they are politically viable, the subtext is that the FCC believes it already has the necessary tools at its disposal and may be prepared to use them.

What Happens Next?

Expect to see many rule making proceedings launched and hearings scheduled in the coming weeks and months. The deadlines will be short and the issues will be challenging. It is likely that broadcasters will face pressure from other sources too, both from inside the Administration and from some in Congress. Reallocation proponents have already drafted proposed legislation to advance their cause, and their allies in the House and Senate will circulate and introduce bills to that end. Many members of Congress are skeptical of a broadcast reallocation, particularly given that Congress is currently considering legislation that would require the Federal government, as a threshold matter, to determine what spectrum is currently being used and the efficiency of that usage.

The FCC has created extensive models to analyze various reallocation scenarios. The models have not been made available to broadcasters, but the NBP indicates that summaries of the results will be released at a later date. Those models will reveal the extent of service area reductions and other technical changes that the NBP anticipates. The models will show significant reductions in broadcast spectrum usage in the dozen or so largest markets, but the ripple effects will probably extend to most, if not all, markets nationwide. The models will probably show more stations packed into the VHF bands and most or all stations above Channel 30 being packed into the lower UHF and the VHF bands.

Stations already in the VHF band or in the lower UHF bands may not be immune from these proceedings. Channel changes, reduced service areas, or other adverse factors may come into play for all stations in order to accommodate band clearing.

We recommend that broadcasters obtain and analyze these models at the first opportunity to assess the likely impact upon their stations. More generally, broadcasters need allies at the FCC and in Congress, and allies include voting members and influential staff members.

Broadcast trade associations are ramping up for the broader questions being raised in these proceedings, but each television station licensee, with the assistance of their engineering and regulatory advisors, needs to make its own assessment of the likely impact on it of the various approaches the FCC is considering. In that regard, this process will be similar to navigating the DTV transition, where stations have to keep an eye on both the big picture changes as well as each station’s individual legal and technical situation.

The idea of an upside for individual stations from such spectrum reallocation seems unlikely, even for those inclined to “sell” their spectrum, given the number of ways such auction proceeds would need to be divided (assuming Congress allows the licensee any share of auction proceeds at all). Overall, some of the NBP’s recommendations represent a huge negative for the broadcast industry. However, even while asserting that it will implement some of its stated goals by regulatory force, the Broadband Task Force has acknowledged that it needs the cooperation of broadcasters to achieve the best results for all. If substantial reduction in broadcast service nationwide is a topic of credible debate, then substantial reform of broadcast regulations should be on the table as well.

Good news for those of you who participate in our Association’s Alternative Broadcast Inspection Program.  As a result of the efforts of the National Alliance of State Broadcasters Associations (“NASBA”), of which your Association is an active member, I am pleased to report on two recent decisions of the FCC’s Media Bureau, one relating to radio and the other to television, that significantly expands the benefits of successfully participating in your Association’s ABIP Program.  In the radio case, the Audio Division awarded a station a significant “downward adjustment” in a fine for a public inspection file violation (that the licensee disclosed to the Commission in its application for renewal of license) due to the station’s successful participation in the Virginia Association of Broadcasters’ ABIP Program.  In the television case, the Video Division relied upon “the licensee’s responsive efforts and participation in a review and certification by the Iowa Broadcasters Association as to its public file compliance” in concluding that the petitioner had not raised an issue with respect to a violation of “any specific FCC rule or requirement.”  NASBA’s Counsel, Dick Zaragoza, recommends that stations which have disclosed, or may be required to disclose in the future, public inspection violations to the FCC should consult with their communications counsel to determine the applicability of these new decisions to their circumstances.   If you currently hold a Certificate of Compliance under our ABIP Program, I urge you to renew it.  If you have not participated in our ABIP Program, I urge you to give serious consideration to doing so by signing up today.

From the law firm of Pillsbury Winthrop Shaw Pittman:

2010 Political Broadcasting Advisory