[Federal Register Volume 80, Number 38 (Thursday, February 26, 2015)]
[Proposed Rules]
[Pages 10442-10452]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-03988]


=======================================================================
-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 73

[MB Docket No. 07-294, MD Docket. No. 10-234; FCC 15-19]


Promoting Diversification of Ownership in the Broadcasting 
Services

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: In this document, the Federal Communications Commission 
(Commission) proposes improvements to the collection of data reported 
on FCC Form 323, Ownership Report for Commercial Broadcast Stations, 
and also to FCC Form 323-E, Ownership Report for Non Commercial 
Broadcast Stations, through the development of a new functionality in 
the Commission's Registration System (CORES) for issuing FCC 
Registration Numbers (FRNs). Specifically the Commission seeks comment 
on a proposal to create a new mechanism for an individual to obtain an 
FRN that is usable only for broadcast ownership reporting purposes 
through CORES.

DATES: The Commission must receive written comments on or before March 
30, 2015 and reply comments on or before April 13, 2015. Written 
comments on the Paperwork Reduction Act proposed information collection 
requirements must be submitted by the public, Office of Management and 
Budget (OMB), and other interested parties on or before April 27, 2015.

ADDRESSES: You may submit comments, identified by MB Docket No 07-294 
and/or MD Docket No 10-234, by any of the following methods:
    [ssquf] Federal Communications Commission's Web site: http://fjallfoss.fcc.gov/ecfs2/. Follow the instructions for submitting 
comments.
    [ssquf] People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by email: <a href="/cdn-cgi/l/email-protection#266065651316126640454508414950"><span class="__cf_email__" data-cfemail="9ed8ddddabaeaadef8fdfdb0f9f1e8">[email protected]</span></a> or phone: 202-418-
0530 or TTY: 202-418-0432.

FOR FURTHER INFORMATION CONTACT: Jake Riehm, Industry Analysis 
Division, Media Bureau, FCC, (202) 418-2330. For additional information 
concerning the PRA proposed information collection requirements 
contained in the Notice of Proposed Rulemaking, contact Cathy Williams 
at (202) 418-2918, or via the Internet at <a href="/cdn-cgi/l/email-protection#7e2e2c3f3e181d1d50191108"><span class="__cf_email__" data-cfemail="da8a889b9abcb9b9f4bdb5ac">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Second 
Further Notice of Proposed Rulemaking and Seventh Further Notice of 
Proposed Rulemaking (Second FNPRM and Seventh FNPRM) in MB Docket Nos. 
07-294 and 10-234; FCC 15-19, adopted February 11, 2015, and released 
February 12, 2015. The complete text of this document is available for 
inspection and copying during normal business hours in the FCC 
Reference Center, 445 12th Street SW., Washington, DC 20554.

Summary

I. Introduction

    1. The Commission has a long-standing goal of promoting ownership 
diversity in broadcast stations to ensure that diverse viewpoints and 
perspectives are available to the American people in the content they 
receive over the broadcast airwaves. In pursuit of this goal, the 
Commission has a long history of promulgating rules and regulations 
designed to foster diversity in terms of minority and female ownership. 
A necessary foundation for the Commission's rulemaking efforts is the 
collection of comprehensive, reliable data reflecting the race, gender, 
and ethnicity of the owners and other interest holders in broadcast 
stations. Such data are essential to study and analyze ownership trends 
effectively, to assess the impact of Commission rules, and to determine 
whether rule changes would be in the public interest. To be useful for 
these purposes, to the greatest extent possible the data must be 
capable of being read, verified, searched, aggregated, and cross-
referenced electronically.
    2. As a part of these efforts, the Commission herein proposes 
improvements to the collection of data reported on FCC Form 323, 
Ownership Report for Commercial Broadcast Stations, and also to FCC 
Form 323-E, Ownership Report for Noncommercial Broadcast Stations, 
through the development of a new functionality in the Commission's 
Registration System (CORES) for issuing FCC Registration Numbers 
(FRNs). Specifically, we seek comment on a proposal to create a new 
mechanism for obtaining an FRN through CORES. Use of this FRN would be 
restricted to the reporting of individual attributable interest holders 
in commercial and noncommercial broadcast stations on ownership 
reports. This ``Restricted Use'' FRN (RUFRN) would be supported by 
identifying information for attributable individuals that does not 
include full Social Security Numbers (SSNs) and that would be housed 
securely on the Commission's servers and not made available to the 
public. This proposal is intended to address some of the privacy and 
data security concerns that commenters raised with respect to prior 
proposals while still enabling the Commission to uniquely identify 
reported individuals, obtain data reflecting a more useful, accurate, 
and thorough assessment of minority and female broadcast station 
ownership in the United States and reduce certain filing burdens. 
Ultimately, such changes to the Commission's system could assist future 
initiatives promoting diverse ownership.

II. Background

    3. The Commission is engaged in ongoing efforts to improve the 
quality, utility, and reliability of its broadcast

[[Page 10443]]

ownership data. As part of this endeavor, in 2009 the Commission 
substantially revised Form 323. The changes to the filing requirements 
and the modifications to the form were intended to facilitate long-term 
comparative studies of broadcast station ownership and to address flaws 
in the data collection process identified by the United States 
Government Accountability Office (GAO) and by researchers. ``To further 
improve the ability of researchers and other users of the data to 
cross-reference information and construct ownership structures,'' 
filers were required to provide a CORES FRN for all reported interest 
holders.\1\ To obtain a CORES FRN, with some limited exceptions, a 
party must submit a Tax Identification Number (TIN) to the Commission 
via CORES. In the case of an individual, a TIN is his or her SSN. 
Because a CORES FRN is backed by a TIN/SSN, it can serve as a unique 
identifier in most instances, which is crucial to the quality and 
utility of the Commission's broadcast ownership data and the ability of 
the Commission and outside parties to search, aggregate, and cross-
reference that data electronically.
---------------------------------------------------------------------------

    \1\ See generally 323 Order, 24 FCC Rcd at 5903 para. 12. See 
Promoting Diversification of Ownership in the Broadcasting Services, 
74 FR 56135, Oct. 30, 2009; Promoting Diversification of Ownership 
in the Broadcasting Services, 74 FR 56136, Oct. 30, 2009 (Federal 
Register notices announcing OMB approval and effective date of 
revised Form 323). On October 16, 2009, the Commission sent a 
subsequent letter to OMB acknowledging the Commission's action in 
the 323 Order to eliminate the reporting of certain nonattributable 
interest holders. Letter from Walter Boswell, Acting Assoc. Managing 
Director, PERM, OMD, FCC, to Nicholas A. Fraser, OMB (Oct. 16, 
2009).
---------------------------------------------------------------------------

    4. OMB Review and Approval of 2009 Form 323. On August 11, 2009, 
the Commission submitted the revised Form 323, which included the CORES 
FRN requirement, 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.\2\ Many of the comments to OMB objected to having to report 
CORES FRNs for individuals holding attributable interests, arguing that 
in order to obtain a CORES FRN for 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 for 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 
either to 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.
---------------------------------------------------------------------------

    \2\ Public Information Collection Requirement Submitted to OMB 
for Review and Approval, Comments Requested, MB Docket No. 07-294, 
74 FR 40188, Aug. 11, 2009.
---------------------------------------------------------------------------

    5. On October 6, 2009, the Office of the Managing Director (OMD) at 
the Commission submitted a letter to OMB addressing the comments filed 
in response to the revised Form 323. OMD 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.'' Noting that the CORES FRN is a key tool for ensuring that 
ownership data is matched to specific owners, OMD explained that, 
without the CORES FRNs, it would be unable to accurately determine an 
interest holder's identity when variations of a single name or other 
spelling irregularities appear from form to form. The Reply Letter also 
responded to comments that the Commission erred in concluding that the 
revised Form 323 did not implicate the Privacy Act. OMD stated that 
because sole proprietors, officers, and directors are acting in an 
entrepreneurial role with respect to broadcast stations, these persons 
are not individuals for purposes of the Privacy Act. OMD added that, to 
the extent that the revisions raise any privacy concerns, the 
Commission created a Privacy Act System of Records (SORN) for Form 323 
that would address them.\3\ The Reply Letter also rejected allegations 
that the Commission failed to comply with the notice requirements of 
the PRA. OMD also disputed commenters' objections that the CORES FRN 
requirement raised security and identity theft concerns. OMD noted that 
``none of the commenters identify a single instance of a security 
breach'' of the CORES system. The Commission utilizes a ``robust 
security architecture . . . for CORES that exceeds Federal guidelines 
and recommendations'' and has deployed operational controls that comply 
with National Institute of Standards and Technology guidance. OMD 
stated that its servers are securely located, that its databases are 
behind several firewalls, and that all servers and communications are 
monitored. The Reply Letter also notes that administrative access to 
the CORES application is limited and that all transmission of non-
public data is encrypted.
---------------------------------------------------------------------------

    \3\ Id. at 7-8. The Commission issued a System of Records Notice 
to cover the data contained in responses to Form 323 that became 
effective on December 21, 2009. Privacy Act System of Records, 74 FR 
59978, Nov. 19, 2009 (system of records FCC/MB-1).
---------------------------------------------------------------------------

    6. On October 19, 2009, OMB approved the revised Form 323, 
including the requirement that filers provide a CORES FRN for all 
individuals and entities holding an attributable interest in the 
licensee.\4\ After several delayed filing deadlines, the Commission set 
July 8, 2010 as the first biennial filing deadline using the revised 
Form 323. In response to industry concerns about filers' ability to 
obtain CORES FRNs for all individual interest holders due to 
individuals' concerns about privacy, security, and identity theft, the 
Media Bureau allowed filers, as an interim measure, to obtain a 
``Special Use'' FRN (SUFRN) for one or more reported individuals in 
lieu of obtaining a CORES FRN. When clicking a button on the electronic 
version of Form 323 to generate a SUFRN, filers were advised via a pop-
up box that ``[i]f, after using diligent and good-faith efforts'' a 
filer is unable to obtain a social security number from an individual 
that must be reported on Form 323 in order to generate a CORES FRN, the 
filer may elect to automatically generate in the electronic Form 323 a 
SUFRN for that individual. The respondents were also informed that 
those who use a SUFRN on Form 323 would be deemed to be fully compliant 
with the filing obligations and the lack of a CORES FRN would not 
subject a filer to enforcement action. An individual does not submit an 
SSN, or any other identifying information, to the Commission when he or 
she generates a SUFRN, and SUFRNs are not stored within CORES. Each 
individual must obtain only one SUFRN and must use it consistently on 
all broadcast ownership reports. Filers submitted reports on the 
revised version of Form 323 during the 2009, 2011, and 2013 biennial 
filing periods, and SUFRNs were available to

[[Page 10444]]

filers during all three biennial filing rounds.
---------------------------------------------------------------------------

    \4\ See Promoting Diversification of Ownership in the 
Broadcasting Services, 74 FR 56135, Oct. 30, 2009; Promoting 
Diversification of Ownership in the Broadcasting Services, 74 FR 
56136, Oct. 30, 2009 (Federal Register notices announcing OMB 
approval and effective date of revised Form 323). On October 16, 
2009, the Commission sent a subsequent letter to OMB acknowledging 
the Commission's action in the 323 MO&O to eliminate the reporting 
of certain nonattributable interest holders. Letter from Walter 
Boswell, Acting Assoc. Managing Director, PERM, OMD, FCC, to 
Nicholas A. Fraser, OMB (Oct. 16, 2009).
---------------------------------------------------------------------------

    7. Quality of Data in Form 323 Biennial Reports. In July 2011, the 
U.S. 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; an Order in which the Commission 
adopted measures intended to promote minority and female ownership of 
broadcast stations. The Third Circuit 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 determining eligibility for particular 
programs and preferences based on such a definition specifically would 
assist minorities and women, who were among the intended beneficiaries 
of the action. The court also remanded each of the measures adopted in 
the Diversity Order that relied on the eligible entity 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 
ownership by women and minorities must be based upon reliable data. The 
court stated that, ``[a]t 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 323 Order and Fourth Diversity Further Notice to reliably 
analyze minority and female ownership ``will, however, lay necessary 
groundwork for the Commission's actions remand.''
    8. On November 14, 2012, the Media Bureau released the first 
electronic analysis of commercial broadcast ownership data submitted 
pursuant to the revised biennial reporting requirements for 2009 and 
2011 (2012 323 Report). On June 27, 2014, the Bureau released a 
similar, second report for 2013 ownership data (2014 323 Report). The 
data contained in these reports are ``snapshots'' of the status of 
minority and female ownership of commercial television, radio, Class A 
television, and LPTV stations and represent the first three of a 
planned series of biennial ``snapshots'' that can be used for trend 
analysis. Preparation of the reports revealed continued difficulties 
with, and errors within, the Commission's broadcast ownership data. 
Many commercial broadcast stations submitted reports with apparently 
inaccurate or insufficient data to permit electronic calculation of 
voting interests. Commission staff required numerous broadcasters to 
correct errors contained in their biennial Form 323 filings via 
amendments, which allowed stations covered by those reports to be 
properly categorized for the report. In addition, Commission staff 
manually analyzed a large number of ownership reports, together with 
other available information, in order to assign certain stations to the 
appropriate categories manually for purposes of the report. As the 2012 
323 Report stated, many data problems stemmed, in part, from the 
``complexity of the information required to accurately file'' Form 323.
    9. The Media Bureau's Consolidated Database System (CDBS) reflects 
that for each filing round, more than one quarter of the unique FRNs 
provided for individuals were SUFRN. Further, a combined analysis of 
the 2009, 2011, and 2013 filing rounds shows that more than 30 percent 
of the total unique FRNs reported were SUFRNs and the rate at which 
filers obtained and reported new SUFRNs for individuals was higher than 
the rate at which they obtained and reported new CORES FRNS. In 
addition, it appears that single SUFRNs have been used for multiple 
individuals and that single individuals have used multiple SUFRNs 
despite Bureau guidance to the contrary. Because it is possible for 
filers to improperly report SUFRNs for individuals--either by reporting 
multiple SUFRNs for a single individual on multiple reports or using 
the same SUFRN for multiple individuals on multiple reports--the number 
of unique SUFRNs reported during a given filing period cannot be relied 
on to determine accurately the number of individuals using a Special 
Use FRN. The Media Bureau therefore cannot confidently determine the 
number of individuals reporting a SUFRN.
    10. On December 3, 2012, the Commission issued a Public Notice in 
the 2010 Quadrennial Regulatory Review proceeding offering parties the 
opportunity to comment on the 2012 323 Report (2012 323 Report PN). The 
notice broadly sought ``additional comment on data contained in [the 
2012 323 Report],'' specifically referencing the Commission's efforts 
``to improve its collection and analysis of broadcast ownership 
information'' and make ``improvements to the reliability and utility of 
the data reported in FCC Form 323.'' Some commenters expressed concern 
that the Commission's incomplete and inaccurate ownership data render 
it difficult to track broadcast ownership trends from 2009 and 2011 
accurately. One commenter suggested that the manner in which the 
Commission currently provides broadcast ownership data from Form 323 to 
the public does not meet the objective that such data be capable of 
being electronically searched, aggregated, or cross-referenced.
    11. On June 27, 2014, the Commission solicited comment concerning 
the 2014 323 Report as part of its 2014 Quadrennial Review Proceeding. 
In response, commenters acknowledged that the Commission has taken 
steps to improve the quality of its broadcast ownership data. 
Nonetheless, some parties suggested that the Commission should do more 
to make its broadcast ownership data easier to use, search, aggregate, 
and cross-reference electronically, for the benefit of studies and 
analysis. Some commenters supported elimination of the use of SUFRNs to 
ensure accuracy, reliability, and usefulness of the data.
    12. Proposals Related to Noncommercial Broadcast Stations. The 
Commission has put forth several proposals that remain pending to 
improve the broadcast ownership reports focused on making the data more 
comprehensive, reliable, and less burdensome to collect. For instance, 
the Fourth Diversity Further Notice, which accompanied the 323 Order, 
generally sought comment on whether to adopt the same or similar 
modifications for Form 323-E for noncommercial stations (NCEs) as the 
323 Order imposed for commercial stations. The Notice specifically 
sought comment on the proper definition of ``ownership'' in the NCE 
context, asking whether looking at the composition of the board of 
directors or other governing body of an NCE station would be 
appropriate for determining ``ownership'' for Form 323-E purposes. 
Several commenters support this approach, noting, for example, that 
board members have legally cognizable duties to the licensees they 
serve and often are involved in station operations and hiring 
decisions, have final authority over NCE licensees, and are responsible 
to the local communities they serve. This approach is consistent with 
the Commission's attribution standards, which attribute ownership 
interests to officers and directors of NCE stations. Other commenters 
argue that dissimilarities between the governance of commercial and NCE 
stations preclude any definition of ``ownership'' in the NCE context. 
These parties note that board

[[Page 10445]]

members do not have equity stakes in the stations they serve; are often 
governmental officials, governmental appointees, individuals elected by 
station members, or volunteers; and often are not involved in day-to-
day station operations. The Fourth Diversity Further Notice also asked 
for input concerning the burden of providing race and gender 
information on Form 323-E. Several commenters argue that requiring the 
collection and reporting of such information would be unduly burdensome 
and might discourage board participation. Other commenters argue that 
the collection of such information is minimally burdensome and agree 
that such information is necessary to construct a complete picture of 
minority and female participation in broadcasting.
    13. On January 3, 2013, the Commission released its Sixth Diversity 
Further Notice. It specifically proposed extending the CORES FRN 
requirement to all listed interest holders on Form 323-E if the filing 
modifications proposed in the Fourth Diversity Further Notice are 
implemented. The Sixth Diversity Further Notice tentatively concluded 
that obtaining and reporting a CORES FRN for individuals identified on 
Form 323-E is not burdensome and sought comment. Some commenters 
believe that the public interest benefits associated with compiling 
comprehensive data on this segment of the broadcast industry outweigh 
any burdens associated with such a plan. Several commenters argue that 
the requirement would be unduly burdensome for NCEs and that it would 
discourage people from serving on the boards of NCE stations. Parties 
also state that licensees may have difficulty obtaining SSNs from board 
members, some of whom are appointed governmental officials. In 
addition, certain commenters suggest that a CORES FRN is insufficient 
as a unique identifier because, for example, (1) multiple FRNs can be 
obtained for a single TIN/SSN, (2) an individual can in certain 
circumstances obtain a CORES FRN without providing an SSN, (3) an 
individual may provide an incorrect SSN, either intentionally or 
inadvertently, and (4) researchers outside the Commission do not have 
access to the TIN information in CORES to permit them to use it as an 
underlying unique identifier. Citing the Privacy Act, multiple 
commenters object to a requirement that noncommercial attributable 
interest holders obtain a CORES FRN for Form 323-E filings because it 
requires submission of an SSN.
    14. Use of CORES FRNs Versus Use of SUFRNs. The Sixth Diversity 
Further Notice also sought comment on the Commission's requirement that 
commercial entities filing Form 323 provide a CORES FRN for 
attributable interest holders. The Commission tentatively affirmed its 
prior determination that the use of CORES FRNs was crucial to unique 
identification on Form 323 and 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. It 
tentatively concluded that the reporting of CORES FRNs on Form 323 was 
superior to the reporting of SUFRNs and proposed eliminating the 
availability of SUFRNs. The Commission reasoned that SUFRNs do not 
provide a reliable means of linking a reported interest holder to a 
unique individual and the continued use of the SUFRN undermines the 
Commission's efforts to ``accurately ascertain the nature and extent of 
minority and female ownership of broadcast properties.'' Acknowledging 
that the Third Circuit in Prometheus II highlighted the importance of 
reliable data to support rulemaking initiatives, the Sixth Diversity 
Further Notice asked for comments on the importance of the CORES FRN as 
a unique identifier for quality, cross-referencing, and searchability 
purposes. The Commission also asked whether it should continue to 
permit filers to use the SUFRN in the event that reportable individuals 
are unwilling to provide their SSN to a third party or unwilling to 
obtain and provide a CORES FRN. The Commission encouraged commenters to 
offer alternative proposals to the SUFRN. The Commission also invited 
comment on its tentative conclusion that the Privacy Act does not 
prohibit adoption of the CORES FRN proposal and asked commenters to 
discuss the degree of the risk to privacy the proposal poses.\5\
---------------------------------------------------------------------------

    \5\ Sixth Diversity Further Notice, 28 FCC Rcd at 472, para. 18. 
The Commission also noted that it has already adopted a Privacy Act 
System of Records for CORES and with respect to the Form 323 
requirement, which applies to any personally identifiable 
information required by Form 323 and CORES in connection with the 
CORES FRN registration process. Id.; see also Reply Letter at 7-8; 
Privacy Act System of Records, 74 FR 59978, Nov. 19, 2009 (system of 
records FCC/MB-1 for Form 323); Privacy Act System of Records, 71 FR 
17234, Apr. 5, 2006 (system of records FCC/OMD-9 for CORES). These 
System of Records Notices (``SORNS'') can be viewed at http://www.fcc.gov/encyclopedia/privacy-act-information#systems (visited 
Dec. 15, 2014).
---------------------------------------------------------------------------

    15. In response to the Sixth Diversity Further Notice, some 
commenters support the Commission's proposal to eliminate the SUFRN, 
arguing that requiring CORES FRNs ``is a necessary step'' to compiling 
complete and searchable data. These commenters also suggest that the 
availability of the SUFRN contributed to the instances of incomplete 
data that prevented the Media Bureau from identifying ownership 
interests in some stations that submitted biennial ownership reports 
during the 2009 and 2011 reporting periods. No commenters offered any 
alternative to the CORES FRN other than the SUFRN, and no commenters 
seriously contend that the SUFRN provides similar data quality as CORES 
FRNs. Instead, some commenters argue that even a CORES FRN cannot serve 
as a unique identifier because, for instance, the CORES system allows 
filers to obtain multiple FRNs and because outside researchers do not 
have access to the underlying TIN as a unique identifier. Also, while 
some commenters support the Commission's conclusion that a unique 
identifier is essential to allow analysis of the data, other commenters 
dispute that position.
    16. The Sixth Diversity Further Notice also sought input concerning 
proposed modifications to Form 323 designed to reduce filing burdens in 
the Commission's Review of Media Bureau Data Practices proceeding. For 
instance, the Commission sought comment on an NAB suggestion to 
eliminate a requirement that a filer disclose the other attributable 
newspaper and broadcast interests of attributable parties listed in the 
filing, arguing that portion of the submission is particularly 
burdensome. In comments, NAB reiterates its support and no commenters 
oppose it.
    17. In December 2010, the Commission initiated a rulemaking 
proceeding in which it proposed to update CORES in an effort to enhance 
the Commission's data collection efforts and to improve customer 
interface with CORES.\6\ 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 CORES Notice 
also stated that the Commission has had difficulty using CORES to 
identify all FRNs held by the

[[Page 10446]]

same entity when entities have provided inconsistent TINs. To address 
these issues, the CORES Notice sought comment on two proposals for 
requiring entities and individuals to rely primarily upon a single 
CORES FRN. Under Option 1, an entity would be required to use a single 
ten-digit FRN for all of its dealings with the FCC, but would have the 
ability to create an unlimited number of sub-accounts that could be 
assigned to organizational units, such as a geographic district served 
by the entity or a distinct line of business conducted by the entity, 
or even to particular employees. Option 2 would enable entities that 
currently hold multiple FRNs to retain all of their various FRNs, which 
would be electronically linked to each other within the Commission's 
database through the assignment of an identical prefix that would 
precede each of the entity's ten-digit FRNs. Commenters generally 
support Option 2 as a mechanism for limiting parties' use of multiple 
CORES FRNs.
---------------------------------------------------------------------------

    \6\ See generally CORES Notice, 25 FCC Rcd at 17401, para. 1. 
The CORES Notice was published in the Federal Register on February 
11, 2011. See Amendment of Part 1 of the Commission's Rules, 
Concerning Practice and Procedure, Amendment of CORES Registration 
System; Notice of Proposed Rulemaking, MD Docket No. 10-234, FCC 10-
192, 76 FR 5652, February 1, 2011. Comments and Reply Comments were 
due on March 3, 2011 and March 18, 2011, respectively. See id.
---------------------------------------------------------------------------

III. Discussion

    18. We propose implementing an RUFRN for use on Form 323 filings. 
We tentatively conclude that this proposal will provide reasonable 
assurance of unique identification of individuals within our broadcast 
ownership report database, which is critical to the improvement of the 
Commission's data gathering practices. We also tentatively conclude 
that RUFRNs provide superior data quality to SUFRNs and could enable 
the Commission to implement a burden-reducing form modification. We 
next consider ways in which the RUFRN proposal is consistent with other 
Commission data gathering and policy initiatives. Thereafter we propose 
to apply RUFRNs to NCE filings if additional Commission action is 
undertaken with respect to broadcast ownership reporting in the NCE 
industry segment. We believe that the quality of the Commission's 
security systems and the Privacy Act are not a barrier to the system 
proposed. In addition, we tentatively conclude that the RUFRN proposal 
is not burdensome. We ask for comment on whether SUFRNs should remain 
available in the case of recalcitrant individuals. We seek comment on 
the costs and benefits of all the proposals contained herein and any 
alternatives commenters propose.
    19. RUFRNs Support the Commission's Data Gathering and Policy 
Making Initiatives. We continue to believe, as described below, that 
the Commission must be able to identify parties reported on broadcast 
ownership reports uniquely for purposes of creating reliable and usable 
data in support of policy initiatives promoting diverse ownership. Our 
RUFRN proposal is important to the Commission's ongoing mission to 
improve, streamline, and modernize the way it collects and uses data. 
We wish, however, to balance these Commission objectives against the 
privacy, data security, and identity theft concerns of individuals with 
attributable interests in broadcast stations. The Commission is 
particularly sensitive to concerns that have been expressed in the 
existing record in the Diversity proceeding concerning the proposal 
that individual attributable interest holders of broadcast stations 
provide an SSN to the Commission for purposes of broadcast ownership 
reporting.
    20. Accordingly, we propose to establish an alternative mechanism 
within CORES to identify individuals uniquely that does not require 
submission of a full SSN to the Commission. This method would allow an 
individual to obtain an RUFRN from CORES by submitting an alternate set 
of identifying information--including full name, residential address, 
date of birth, and last four digits of the individual's SSN. The CORES 
system will be programmed to verify that the submitted information is 
complete and does not duplicate any information that is already 
associated with an RUFRN in CORES. We also propose that when an 
applicant obtains an RUFRN the individual will be asked to list all 
CORES FRNs registered to the individual and all SUFRNs that individual 
previously used in any broadcast ownership report filings since the 
2009 biennial reporting cycle. We tentatively conclude that such 
disclosures will allow the Commission to identify CORES FRNs, RUFRNs, 
and SUFRNs that identify the same individual, promoting the usefulness 
of the broadcast ownership data for purposes of electronic searching, 
aggregating, and cross-referencing and for trend analysis. Once an 
RUFRN is issued, we propose that any ownership report filing that lists 
that specific individual would be required to include that RUFRN. We 
propose that attributable interest holders would not be required to 
obtain or use an RUFRN for Form 323 (or Form 323-E if the filing 
obligations proposed in the Fourth Diversity Further Notice are 
extended to NCEs) and could instead opt to use a CORES FRN. Like 
SUFRNs, we propose that RUFRNs would be usable only on broadcast 
ownership reporting forms and only for individuals (not entities) 
reported as attributable interest holders. We seek comment on these 
proposals and tentative conclusions and on the costs and benefits of 
using an RUFRN as described herein for broadcast ownership reporting 
purposes.
    21. The Commission has previously recognized that Sections 257 of 
the 1996 Act and 309(j) of the Act support its efforts to gather the 
ownership data contained in Form 323. In the 1998 Biennial Review 
Order, the Commission concluded that, in order to fulfill its statutory 
mandates, it must collect race, gender, and ethnicity information from 
all interest holders reported on Form 323. Collecting these data 
enables the Commission not only to assess the current state of minority 
and female ownership of broadcast stations but also to determine the 
success of programs that are designed to facilitate opportunities for 
women- and minority-owned businesses and to promote a diversity of 
media voices. Just as it is essential for the Commission to collect 
these ownership data to fulfill its mandates, it is important that 
these data be reliable, aggregable, and useful for studies and trend 
analysis. The Commission has recognized that CORES FRNs offer a unique 
identifier and therefore play an important role in promoting the 
integrity of the data collected.
    22. We tentatively find that flaws in the current practices related 
to the reporting of SUFRNs for individuals listed on Form 323 
compromise the integrity of the data and thereby frustrate the 
Commission's attempts to fulfill its statutory mandates under section 
257 and section 309(j). Because our policy initiatives are dependent on 
the quality of the data collected, we tentatively conclude that 
requiring an FRN generated by CORES, either through existing mechanisms 
or via the proposed method to obtain an RUFRN, for all reportable 
interest holders on Forms 323 (and 323-E if proposals in the Fourth 
Diversity Further Notice are adopted) is essential to improve the 
quality and usability of the data collected. We seek comment on these 
tentative conclusions.
    23. We tentatively conclude that having reasonable assurance that 
attributable interest holders are uniquely identified on ownership 
reports in a manner that ensures the data can be meaningfully searched, 
aggregated, and cross-referenced electronically is crucial to data 
quality and usability. In the Sixth Diversity Further Notice we 
tentatively concluded that TINs/SSNs within CORES were necessary as 
underlying unique identifiers of individuals. Would the RUFRN system 
described provide

[[Page 10447]]

sufficient assurances that individuals are uniquely identified? For 
instance, are the specific pieces of identifying information described 
in our proposal (full name, residential address, date of birth, and 
last four digits of the individual's SSN) sufficient to provide a 
reasonable basis for determining that an individual identified is 
unique within the CORES system? Are there a sufficient number of 
criteria included in the proposal or are there additional pieces of 
information that would improve the reliability of the data? Are there 
additional or different pieces of information that better enable the 
Commission to ensure that individuals are uniquely identified? If so, 
what additional or different pieces of information should the 
Commission require? What risk would remain that the system could not 
uniquely identify individuals using these pieces of information?
    24. A commenter to the Sixth Diversity Further Notice asserts that 
unique identification of individuals in ownership data is not necessary 
to study broadcast ownership trends over time. This argument is not 
convincing because it presumes incorrectly that the only utility of the 
data is to track how many stations have minority and/or female owners. 
Other questions relevant to evaluating trends in minority and female 
ownership include how many individual minority and/or female owners 
exist at a given point and how those numbers change over time. The 
Commission cannot count unique individual owners without a mechanism to 
identify individuals uniquely. The same commenter also states that the 
fact that ownership reports are submitted under penalty of perjury is 
sufficient to ensure that parties report race or gender information on 
ownership report filings accurately. But, as noted above, examination 
of ownership reports from 2009, 2011, and 2013 revealed numerous data 
reporting errors due in part to the complexity of the information 
required to accurately file the form. We have no reason to believe that 
these errors were the result of filers attempting to deliberately 
mislead the Commission. We tentatively conclude that the presence of a 
unique identifier will improve the quality of our ownership data by 
permitting errors to be identified and remedied. For example, since an 
individual's race cannot change over time, the presence of the same 
individual's FRN on multiple reports, along with inconsistent race 
information could indicate one or more reporting errors that can then 
be cured. We seek comment on these positions.
    25. RUFRNs Provide Superior Data Quality to SUFRNs. We tentatively 
conclude that the RUFRN would provide superior data quality to the 
SUFRN and we seek comment on that tentative conclusion. The SUFRN was 
devised as merely a computer generated number created by clicking a 
button within Form 323 itself and not backed by any identifying 
information. The Commission collects no information when the system 
generates a new SUFRN, and there is no database analogous to CORES that 
contains uniquely identifying information associated with SUFRNs. The 
SUFRN therefore offers the Commission no way to cross reference or 
trace back reported information to a single individual. Because the 
Commission cannot determine whether particular individuals hold one or 
more SUFRNs or whether a particular SUFRN is being used to identify one 
or more individuals, it cannot reliably examine the complete 
attributable holdings of an individual reported with a SUFRN (either at 
a specific time or over time), or search, aggregate, and cross-
reference our ownership data using Commission systems. Any attempt at 
such analysis would require manual consideration of every single entry 
where a SUFRN appears together with a subjective analysis of other 
textual information contained on the form or available from other 
public sources. Manual, subjective analysis of thousands of Form 323 
entries using various sources of information compromises data integrity 
and data utility. On the other hand, we tentatively conclude that since 
RUFRNs will be backed by identifying information, and since CORES will 
not issue multiple RUFRNs for the same identifying information, RUFRNs 
can be relied upon to identify individuals uniquely. We seek comment on 
our view that the qualities of the proposed RUFRN provide superior data 
quality to the SUFRN.
    26. As noted above, some commenters in the Diversity proceeding 
argued that CORES FRNs cannot serve as unique identifiers because, for 
example, multiple FRNs can be obtained for a single TIN/SSN, an FRN 
might be associated with no TIN or an incorrect TIN, and outside 
researchers do not have access to underlying TIN information within 
CORES. We observe that the CORES proceeding has proposed several 
options to resolve some of these issues. Even as the Commission 
continues to examine those issues through its CORES reform process, we 
tentatively conclude, for several reasons, that, notwithstanding these 
possibilities, CORES FRNs and RUFRNs are still superior to SUFRNs for 
the purpose of broadcast ownership reports. To begin with, exceptions 
permitting an individual or entity to obtain a CORES FRN without a TIN 
are legitimately available in a limited number of cases that would not 
be expected to compromise the overall ownership data submitted. And 
even though CORES currently permits an individual or entity to obtain 
multiple FRNs with a single TIN, the Commission can identify all FRNs 
that relate to a single TIN. Also, we expect that individuals and 
entities will comply with our rules and provide accurate information 
during the CORES registration process to the greatest extent possible. 
While the Commission's obligation to hold the TIN confidential does 
limit the direct utility of the TIN to outside researchers as a unique 
identifier, that limitation does not decrease the benefits for data 
integrity and utility to the Commission. With respect to the RUFRN 
proposal, we anticipate that the specificity of the identifying 
information required and the fact that a number of pieces of 
information are required will be sufficient to provide the Commission 
with reasonable certainty that the information identifies a unique 
filer within the CORES system. Based on our experience in the 2009, 
2011, and 2013 reporting cycles, we tentatively conclude that the RUFRN 
proposal will improve the reliability and usability of the broadcast 
ownership report database, in furtherance of our statutory mandates. We 
seek comment on these conclusions.
    27. RUFRNs May Enable Burden-Reducing Form Modification. As noted 
above, the Commission and commenters have identified errors in filings 
submitted to the Commission over the last three filing periods. We 
tentatively conclude that some such errors could be reduced by 
simplifying the form and making it less burdensome to complete and 
submit. Specifically, the record reflects proposals that would 
eliminate a filer's obligation to disclose other attributable broadcast 
interests of attributable parties listed in the filing. We tentatively 
conclude that in order to implement this burden-reducing form 
modification without compromising the scope and content of the 
information collected, the Commission requires a unique identifier to 
allow the filings to be electronically searched and cross-referenced 
within a single filing period and over time. We tentatively conclude 
that the existence of unique identifiers

[[Page 10448]]

will permit the Commission to make this modification while maintaining 
the integrity of its ownership data, thereby reducing burdens on filing 
parties and improving the quality of the information submitted to the 
Commission. We seek comment on these conclusions.
    28. RUFRN Application in NCE Context. We specifically seek 
additional comment concerning the proposal to use RUFRNs for Form 323-E 
if the pending proposal in the Fourth Diversity Further Notice to 
modify NCE ownership reporting practices to correspond to commercial 
requirements and the proposal in the Sixth Diversity Further Notice to 
extend FRN requirements to noncommercial stations are adopted. We 
tentatively conclude that if the Commission does modify the Form 323-E 
requirements as described in the Fourth Diversity Further Notice then a 
CORES-generated FRN, either a traditional SSN-based CORES FRN or the 
RUFRN proposed herein, is a sufficient and appropriate tool for the 
unique identification of individuals with attributable interests in 
NCEs for the same reasons and in the same manner as commercial 
stations. Accordingly, we propose to permit an individual listed on 
Form 323-E to obtain and provide an RUFRN, in lieu of a CORES FRN, for 
use on broadcast ownership filings. We invite comment on these 
tentative conclusions and on the foregoing proposal. As described 
above, we note that several commenters to the Sixth Diversity Further 
Notice argue that the CORES FRN requirement would be unduly burdensome 
for NCEs because an SSN disclosure requirement would discourage people 
from serving on the boards of NCE stations and licensees would have 
difficulty obtaining SSNs from board members who may be government 
officials. We seek comment on how and whether these concerns would 
arise if RUFRNs were made available for use in broadcast ownership 
reports. We note that officers and directors of NCE stations already 
are reported on Form 323-E and questions related to the propriety of 
requiring disclosure of race, gender, and ethnicity information on Form 
323-E are pending pursuant to the Fourth Diversity Further Notice. Here 
we seek comment on specifically whether there are unique considerations 
with respect to NCE stations that would lead to a different conclusion 
for NCEs than for commercial stations with regard to the information 
proposed to be included to obtain an RUFRN. If so what are those unique 
considerations? Are there other alternatives for unique identification 
of individuals in the NCE context that would improve the quality, 
usability, and reliability of our broadcast ownership data and/or help 
ensure that our broadcast ownership data can be searched, aggregated, 
and cross-referenced electronically? We invite comment on the 
application of RUFRNs to NCEs in the event that the pending proposals 
in the Fourth Diversity Further Notice are adopted.
    29. Security of Commission Systems. In the Sixth Diversity Further 
Notice, the Commission sought comment on any security concerns related 
to the requirement that interest holders submit an SSN, noting that 
only the FRN is made public and the SSN is not disclosed on any 
Commission application or form, including Forms 323 and 323-E. 
Commenters raised concerns that a CORES FRN requirement for individuals 
will open individuals to threats of identity theft. Some commenters 
pointed to a system breach described in a GAO report on information 
security and suggested that the Commission's systems are vulnerable to 
a security breach.
    30. We agree with commenters that privacy and security with respect 
to personally identifiable information are paramount, and we believe 
that the steps taken and the procedures in place assure the security of 
the Commission's systems. The Commission is not aware of any breaches 
to CORES. In addressing similar security concerns from commenters, the 
Commission wrote in 2009 that the CORES architecture exceeds Federal 
guidelines and that its databases are behind several firewalls. The 
Commission also explained that administrative access to the CORES 
application is limited and that all transmission of non-public data is 
encrypted. Furthermore, the safeguards in place in 2009 have been 
improved. Certain improvements were underway prior to completion of the 
Information Security GAO Report, and that report also provided the 
Commission with additional, valuable recommendations for continuing to 
strengthen our security environment. We have implemented enhanced 
perimeter controls, malware protection, and monitoring devices and 
upgraded workstations to operating systems with improved security. The 
Commission's security architecture has strict operational controls in 
place that comply with National Institute of Standards and Technology 
guidance. As the Commission explained to OMB in 2009, system servers 
are located behind several firewalls and other security controls to 
protect CORES data from intrusion by outsiders as well as the general 
Commission population. Administrative access to CORES remains limited 
to only certain known internal workstations and all servers are 
monitored by automated tools and operational procedures. Moreover, the 
Commission made several upgrades to all of its systems, including 
CORES, to ensure that its systems remain secure. Security will continue 
to be one of our highest priorities. In light of the foregoing, we seek 
comment on whether the elimination of the need for individual 
attributable interest holders to submit an SSN eliminates the privacy 
and identity theft concerns existing in the current record. If not, 
what privacy or identity theft concerns remain and how can they be 
addressed? Are such concerns outweighed by the importance of the data 
collection?
    31. Privacy Act. We tentatively conclude that the Privacy Act does 
not bar the adoption of the RUFRN requirements described herein. The 
Sixth Diversity Further Notice sought comments on whether the Privacy 
Act was a barrier to adoption of the CORES FRN requirement. No 
commenters asserted that the Privacy Act was a barrier to the 
requirement for individuals with attributable interests in commercial 
entities. With respect to application of the CORES FRN requirement to 
Form 323-E if the proposals in the Fourth Diversity Further Notice are 
adopted, several commenters to the Sixth Diversity Further Notice argue 
that the Privacy Act bars application of the SSN requirement in the NCE 
context. We find that elimination of the SSN requirement from the list 
of identifying information that is required in conjunction with 
broadcast ownership reporting would further ensure that the Privacy Act 
is not an impediment to the proposed RUFRN requirement. Also as 
described above, we tentatively conclude that unique identification of 
individuals is essential for ownership data quality, utility, and 
reliability, which are critical components of any future policy 
initiatives to promote ownership diversity consistent with our 
statutory mandate under the Communications Act. Further, the Commission 
has already adopted a Privacy Act SORN for CORES and with respect to 
the Form 323 requirement, which applies to any personally identifiable 
information required by Form 323 and CORES in connection with the CORES 
FRN registration process, and to the extent necessary any modifications 
required by the implementation of the RUFRN system for Form 323 or Form 
323-E can be addressed with modifications to the

[[Page 10449]]

SORN. We request comment on these tentative conclusions.
    32. RUFRNs Are Not Burdensome, and the Benefits Outweigh the Costs. 
We continue to believe that obtaining a CORES FRN imposes minimal costs 
and burdens, if any, on individuals or filers. As noted in the Sixth 
Diversity Further Notice, registering for a CORES FRN is a one-time 
process that takes a few moments to complete. An individual that 
already has obtained a CORES FRN may continue to use his or her CORES 
FRN for Form 323 filings, and need not obtain a RUFRN. Moreover, an 
individual that wishes to obtain a RUFRN can easily locate previously-
registered CORES FRNs through CORES. We tentatively conclude that 
permitting individuals holding attributable interests in one or more 
broadcast licensees to obtain a RUFRN in lieu of obtaining a CORES FRN 
would impose minimal costs or other burdens. We seek comment on these 
tentative conclusions and on any potential burdens inherent in the 
RUFRN proposal. We seek input on alternatives that might reduce or 
eliminate such burdens as well as the costs and benefits of such 
alternatives. To the extent possible, commenters should quantify any 
identified costs and benefits. We note that the vast majority of 
individuals reported on Form 323 have obtained and reported CORES FRNs, 
and we believe it is likely that will continue to be the case for 
future broadcast ownership filing obligations. Individuals who already 
have a CORES FRN need not obtain an RUFRN and may continue to use the 
existing number. Moreover, any individual that wishes to obtain a CORES 
FRN instead of an RUFRN will be able to do so. Additionally, as 
explained above, the existence of a unique identifier that can be 
cross-referenced may make modifications of the reports possible that 
could reduce the burdens on all filers and, thereby, further improve 
the quality of the ownership data submitted to the Commission. As such, 
we tentatively find that the benefits of improved data collection 
outweigh any de minimis costs or burdens associated with obtaining an 
FRN described herein and we seek comment on that conclusion. To the 
extent possible, commenters should quantify relative costs and 
benefits.
    33. Limited Availability of SUFRNs. We seek further comment 
concerning the elimination of the availability of SUFRNs for broadcast 
ownership reports. The Sixth Diversity Further Notice solicited input 
on whether to retain the SUFRN in the event that reportable individuals 
are unwilling to provide their SSNs to third parties or unwilling to 
obtain and provide CORES FRNs. In the event that a SUFRN is reported 
for an individual, the Sixth Diversity Further Notice explained that 
the Commission could use its enforcement authority against individuals 
who failed to obtain a CORES FRN. Commenters generally support the 
proposal to retain the SUFRN for this limited purpose and oppose the 
Commission's use of its enforcement authority. We seek comment on 
whether the SUFRN should continue to be available to Form 323 filers 
(and Form 323-E filers if the proposals in the Fourth Diversity Further 
Notice are adopted), in the event that after a filer has used 
reasonable and good faith efforts, reportable individuals are unwilling 
to provide their identifying information or unwilling to obtain and 
provide a CORES FRN or RUFRN themselves. Would this limited 
availability of SUFRNs appropriately protect the position of filers in 
the case of recalcitrant interest holders? Should the Commission 
require filers to take specific steps to substantiate that they have 
made a reasonable good faith efforts? If so, what steps should be 
required? For instance, should the Commission expect that a filer will 
instruct an individual about the obligation to supply a filer with a 
CORES FRN or RUFRN or to provide the filer with the identifying 
information sufficient to obtain one of these numbers on the 
individual's behalf? Should the filer be expected to instruct such an 
individual about potential enforcement action? Should the filer itself 
be exempt from enforcement action only if such steps are substantiated? 
Should an instruction be included on Form 323 (and Form 323-E if the 
proposals in the Fourth Diversity Further Notice are adopted) informing 
reportable interest holders of their obligations and alerting them to 
the risk of enforcement action for the failure to provide a CORES FRN 
or RUFRN or to permit a CORES FRN or RUFRN to be obtained? We seek 
comment on these issues.

IV. Procedural Matters

A. Filing Requirements

    34. Ex Parte Rules. The proceeding this Notice initiates shall be 
treated as a ``permit-but-disclose'' proceeding in accordance with the 
Commission's ex parte rules. 47 CFR 1.1200 et seq. 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). 
47 CFR 1.1206(b). In proceedings governed by rule 1.49(f), 47 CFR 
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.
    35. 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).
    <bullet> Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the ECFS: http://fjallfoss.fcc.gov/ecfs2/.
    <bullet> 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

[[Page 10450]]

overnight U.S. Postal Service mail. All filings must be addressed to 
the Commission's Secretary, Office of the Secretary, Federal 
Communications Commission.
    <bullet> 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.
    <bullet> 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.
    <bullet> U.S. Postal Service first-class, Express, and Priority 
mail must be addressed to 445 12th Street SW., Washington, DC 20554.
    36. People With Disabilities: To request materials in accessible 
formats for people with disabilities (braille, large print, electronic 
files, audio format), send an email to <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="472124247277730721242469202831">[email protected]</a> or call the 
Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (tty).
    37. 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. Persons with disabilities who need assistance in the FCC 
Reference Center may contact Bill Cline at (202) 418-0267 (voice), 
(202) 418-0432 (TTY), or <a href="/cdn-cgi/l/email-protection#52303b3e3e7c313e3b3c37123431317c353d24"><span class="__cf_email__" data-cfemail="4e2c272222602d2227202b0e282d2d60292138">[email protected]</span></a>. These documents also will 
be available from the Commission's Electronic Comment Filing System. 
Documents are available electronically in ASCII, Word 97, and Adobe 
Acrobat. To request materials in accessible formats for people with 
disabilities (Braille, large print, electronic files, audio format), 
send an email to <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="a4c2c7c7919490e4c2c7c78ac3cbd2">[email protected]</a> or call the Consumer and Governmental 
Affairs Bureau at (202) 418-1400 (voice), (202) 418-0432 (TTY).
    38. Information. For additional information on this proceeding, 
contact Jake Riehm at (202) 418-2166 or Warren Firschein at (202) 418-
0844. Press inquiries should be directed to Janice Wise at (202) 418-
8165.

B. Paperwork Reduction Act Analysis

    39. Initial Paperwork Reduction Act Analysis. This Second FNPRM and 
Seventh FNPRM seeks comment on potential new or revised information 
collection requirements with regard to CORES, FCC Form 323, and FCC 
Form 323-E. The Commission invites the general public, the Office of 
Management and Budget (``OMB'') and other Federal agencies to comment 
on the information collection requirements. This Notice may result in 
new or revised information collection requirements. If the Commission 
adopts any new or revised information collection requirements, the 
Commission will publish a notice in the Federal Register inviting 
additional public comment on the requirements, 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 specific comment on how it might ``further reduce the information 
collection burden for small business concerns with fewer than 25 
employees.'' On October 19, 2009, OMB approved the FCC's proposal to 
implement a CORES FRN requirement for all individuals holding 
attributable interests in the licensee reported on Form 323. That 
requirement went into effect as of October 30, 2009.
    40. In addition to filing comments with the Secretary, a copy of 
any PRA comments on the proposed collection requirements contained 
herein should be submitted to the Federal Communications Commission via 
email to <a href="/cdn-cgi/l/email-protection#b3e3e1f2f3d5d0d09dd4dcc5"><span class="__cf_email__" data-cfemail="1b4b495a5b7d7878357c746d">[email protected]</span></a> and to Nicholas A. Fraser, Office of Management 
and Budget, via email to <a href="/cdn-cgi/l/email-protection#ec828a9e8d9f899eac83818ec289839cc28b839a"><span class="__cf_email__" data-cfemail="137d756172607661537c7e713d767c633d747c65">[email protected]</span></a> or via fax at 202-395-
5167.

V. Initial Regulatory Flexibility Analysis

    41. 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) Second FNPRM and 
Seventh FNPRM (Notice). 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 Notice. The Commission will 
send a copy of the Notice, including this IRFA, to the Chief Counsel 
for Advocacy of the Small Business Administration (SBA). In addition, 
the Notice and IRFA (or summaries thereof) will be published in the 
Federal Register.

A. Need for, and Objectives of, the Proposed Rules

    42. Currently, filers of Form 323 (Ownership Report for Commercial 
Broadcasters) must provide an FCC Registration Number (FRN) generated 
via the Commission's Registration System (CORES) for each reported 
attributable party. To obtain a CORES FRN, an individual must submit 
his or her social security number (SSN) to the Commission through 
CORES. CORES FRNs therefore can be used to uniquely identify 
individuals reported on Form 323, which is crucial to the quality and 
utility of the Commission's broadcast ownership data. However, if a 
filer uses diligent and good-faith efforts to obtain an SSN from an 
individual that must be reported on Form 323 in order to generate a 
CORES FRN, but is unable to do so, the filer may provide a Special Use 
FRN (SUFRN) for that individual. Because the SUFRN generation process 
does not requires submission of an SSN, or any other identifying 
information, SUFRNs do not provide a reliable means of linking a 
reported interest holder to a unique individual. The existence of 
SUFRNs therefore undermines the usefulness and integrity of the 
Commission's broadcast ownership data.
    43. To address this issue, the Notice invites comment on a proposal 
to create a new type of FRN within CORES--a Restricted Use FRN 
(``RUFRN'')--for use on Form 323. Under the proposal set forth in the 
Notice, an individual requesting an RUFRN would be required to submit 
his or her name, date of birth, and residential address, along with the 
last four digits of his or her SSN, to CORES. Once obtained, an 
individual would be required to use the RUFRN on all current and future 
Form 323 filings. The Notice seeks comment on this RUFRN proposal, 
including input concerning the costs, benefits, and possible 
alternative approaches.
    44. The Notice explains that the Commission's Fourth Diversity 
Further Notice requested input on adopting modifications to Form 323-E 
(Ownership Report for Noncommercial Broadcast Stations) similar to 
those previously adopted for Form 323. The Sixth Diversity Further 
Notice specifically proposed requiring Form 323-E filers to provide a 
CORES FRN for all attributable parties. In light of the foregoing, the 
Notice seeks comment concerning the future application of the RUFRN 
proposal to Form 323-E (if Form 323-E is modified along the lines 
proposed in the Fourth Diversity Public Notice).

[[Page 10451]]

    45. Finally, the Notice indicates that the Sixth Diversity Further 
Notice solicited input on whether to retain the availability of SUFRNs 
for ownership report filings in the event that reportable individuals 
are unwilling to provide their SSN to a third party or unwilling to 
obtain and provide a CORES FRN. Similarly, the Notice asks whether, if 
the RUFRN proposal is adopted, SUFRNs should continue to be available 
to Form 323 filers (and Form 323-E filers if the proposals in the 
Fourth Diversity Further Notice are adopted), in the event that after a 
filer has used reasonable and good faith efforts, reportable 
individuals are unwilling to provide their identifying information or 
unwilling to obtain and provide a CORES FRN or RUFRN themselves.

B. Legal Basis

    46. This Notice 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).

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

    47. 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.
    48. Television Broadcasting. The SBA defines a television 
broadcasting station that has no more than $38.5 million in annual 
receipts as a small business. The definition of business concerns 
included in this industry states that establishments are primarily 
engaged in broadcasting images together with sound. These firms operate 
television broadcasting studios and facilities for the programming and 
transmission of programs to the public. These firms also produce or 
transmit visual programming to affiliated broadcast television 
stations, which in turn broadcast the programs to the public on a 
predetermined schedule. Programming may originate in their own studio, 
from an affiliated network, or from external sources. Census data for 
2007 indicate that 808 such firms were in operation for the duration of 
that entire year. Of these, 709 had annual receipts of less than $25.0 
million per year and 99 had annual receipts of $25.0 million or more 
per year. Based on this data and the associated size standard, the 
Commission concludes that the majority of such firms are small.
    49. Additionally, the Commission has estimated the number of 
licensed commercial television stations to be 1,387. According to 
Commission staff review of the BIA/Kelsey, LLC's Media Access Pro 
Television Database on November 25, 2014, about 1,276 of an estimated 
1,387 commercial television stations (or approximately 92 percent) had 
revenues of $38.5 million or less. The Commission has estimated the 
number of licensed noncommercial educational television stations to be 
395. 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.
    50. 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.
    51. Radio Broadcasting. The SBA defines a radio broadcasting entity 
that has $38.5 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.'' Census 
data for 2007 indicate that 2,926 such firms were in operation for the 
duration of that entire year. Of these, 2,877 had annual receipts of 
less than $25.0 million per year and 49 had annual receipts of $25.0 
million or more per year. Based on this data and the associated size 
standard, the Commission concludes that the majority of such firms are 
small.
    52. Further, according to Commission staff review of the BIA/
Kelsey, LLC's Media Access Pro Television Database on November 25, 
2014, about 11,337 (or about 99.9 percent) of 11,348 commercial radio 
stations in the United States have revenues of $38.5 million or less. 
The Commission has estimated the number of licensed noncommercial radio 
stations to be 4,085. 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.
    53. 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 they apply may 
be over-inclusive to this extent.
    54. 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

[[Page 10452]]

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 $38.5 million in annual 
receipts. As of September 30, 2014, there are approximately 430 
licensed Class A stations and 2,115 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.

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

    55. There may be changes to reporting or recordkeeping requirements 
if the Commission adopts the RUFRN proposal for Form 323 and/or Form 
323-E. In the event that the RUFRN proposal is adopted for the Form 323 
and/or Form 323-E, filers will have the option to obtain and report a 
unique identifier for individual attributable interest holders that 
does not require submission of a full SSN to the Commission. Adoption 
of this proposal will allow an individual to obtain an RUFRN from CORES 
by submitting an alternate set of identifying information. Individuals 
would not be required to obtain or report an RUFRN on the Form 323 and/
or Form 323-E--instead, individuals could obtain and report a CORES 
FRN. An individual who has provided a CORES FRN on one or more previous 
ownership filings may continue to use that CORES FRN going forward. 
There also may be changes to reporting or recordkeeping requirements if 
the Commission limits or eliminates that availability of SUFRNs for 
broadcast ownership reports. Filers may be obligated to instruct 
individuals about their obligation to supply the filer with a CORES FRN 
or RUFRN or to provide the filer with the information sufficient to 
obtain one of these identifiers on the individual's behalf. A filer may 
also be required to inform individuals about potential enforcement 
action for failure to obtain or report a CORES FRN or RUFRN. Moreover, 
if a filer reports an SUFRN for an individual interest holder, the 
filer may be required to show that the filer made reasonable good faith 
efforts to obtain a CORES FRN or RUFRN, or the information necessary to 
obtain a CORES FRN or RUFRN, on the individual's behalf.

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

    56. 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.
    57. As noted, we are directed under law to describe any such 
alternatives we consider, including alternatives not explicitly listed 
above. The Notice proposes to allow individuals reported on Form 323 to 
obtain and provide an RUFRN in lieu of a traditional CORES FRN. 
Similarly, the Notice proposes making RUFRNs available to Form 323-E 
filers in the event that Form 323-E is modified as proposed in the 
Fourth Diversity Further Notice. The Notice also proposes eliminating 
the availability of SUFRNs for Form 323 and Form 323-E filings. In the 
alternative, the Commission could decide not to enact the RUFRN 
proposal contained in the Notice and not to modify the availability of 
SUFRNs. The Commission also could defer these actions until a later 
time. Additionally, the Commission could decide to treat noncommercial 
broadcasters differently from commercial broadcast stations for 
purposes of uniquely identifying and tracking individual attributable 
interest holders reported on the 323-E. While decisions to adopt the 
RUFRN proposal and eliminate the Special Use FRN might result in 
increased burdens on reporting parties, the Notice tentatively 
concludes that any such burdens would be minimal and that 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 would outweigh those burdens. 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 or RUFRN 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 or RUFRN from an individual 
attributable interest holder, while ensuring that the filer will be 
able to timely submit the Form 323. This will allow the Commission to 
identify the individual with a reportable interest that has failed to 
provide a CORES FRN or RUFRN.

F. Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rules

    58. None.

VI. Ordering Clauses

    59. 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), the Second FNPRM and Seventh FNPRM is adopted.
    60. 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 Second FNPRM 
and Seventh FNPRM.
    61. It is further ordered that the Commission's Consumer & 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of the Second FNPRM and Seventh FNPRM, including the Initial 
Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of 
the Small Business Administration.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 2015-03988 Filed 2-25-15; 8:45 am]
BILLING CODE 6712-01-P


</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>