Federal Register / Vol. 74, No. 100 / Wednesday, May 27, 2009 / Rules and Regulations 25163 

Executive Order, we specifically 

solicited comments from State and local 

government officials on this interim 

final rule. We will seriously consider 

these comments in developing the final 

rule. 

List of Subjects in 45 CFR Part 286 

Carry over, Reserve, Prior fiscal years, 

Federal TANF funds. 

(Catalog of Federal Domestic Assistance 

Program Number 93.558, Temporary 

Assistance for Needy Families Program) 

Dated: March 30, 2009. 

Curtis L. Coy, 

Acting Assistant Secretary for Children and 

Families. 

Approved: April 28, 2009. 

Charles E. Johnson, 

Acting Secretary, Department of Health and 

Human Services. 

■ For the reasons stated in the preamble, 

we are amending 45 CFR chapter II by 

amending part 286 as set forth below: 

PART 286—TRIBAL TANF 

PROVISIONS 

■ 1. The authority citation for part 286 

is revised to read as follows: 

Authority: 42 U.S.C. 601, 604, and 612; 

Public Law 111–5. 

■ 2. Revise § 286.60 to read as follows: 

§ 286.60 Must Tribes obligate all Tribal 

Family Assistance Grant funds by the end 

of the fiscal year in which they are 

awarded? 

No. A Tribe may reserve amounts 

awarded to it, without fiscal year 

limitation, to provide assistance, 

benefits, and services in accordance 

with the requirements under § 286.35 or 

§ 286.40, if applicable. 

[FR Doc. E9–12187 Filed 5–26–09; 8:45 am] 

BILLING CODE P 

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Parts 73 and 74 

[MB Docket Nos. 07–294, 06–121, 02–277, 

04–228; MM Docket Nos. 01–235, 01–317, 

00–244; FCC 09–33] 

Promoting Diversification of 

Ownership in the Broadcasting 

Services 

AGENCY: Federal Communications 

Commission. 

ACTION: Final rule. 

SUMMARY: The Report and Order adopts 

changes to the reporting requirements 

on FCC Form 323, ‘‘Ownership Report 

for Commercial Broadcast Stations’’ to 

improve Form 323 data collection in 

order to obtain an accurate, reliable, and 

comprehensive assessment of minority 

and female broadcast ownership in the 

United States. The FCC also is 

broadening Form 323 reporting 

requirements to require low power 

television station licensees, including 

Class A stations, to file biennially. 

DATES: The amendments to §§ 73.3615, 

73.6026, and 74.797 contain information 

collection requirements that have not 

been approved by OMB. The FCC will 

publish a document in the Federal 

Register announcing the effective date. 

FOR FURTHER INFORMATION CONTACT: 

Mania Baghdadi, (202) 418–2330, Amy 

Brett (202) 418–2703. 

SUPPLEMENTARY INFORMATION: This is a 

summary of the Commission’s Report 

and Order (R&O) adopted April 8, 2009, 

and released May 5, 2009. The full text 

of this document is available for public 

inspection and copying during regular 

business hours in the FCC Reference 

Center, Federal Communications 

Commission, 445 12th Street, SW., CY– 

A257, Washington, DC 20554. These 

documents will also be available via 

ECFS (http://www.fcc.gov/cgb/ecfs). The 

complete text may be purchased from 

the Commission’s copy contractor, 445 

12th Street, SW., Room CY–B402, 

Washington, DC 20554. 

Summary of the Report and Order 

1. In the (R&O) (1) the FCC enlarges 

the class of licensees required to file 

ownership reports biennially to include 

LPTV stations, including Class A 

stations, as well as commercial 

broadcast stations licensed to sole 

proprietors and partnerships composed 

of natural persons; (2) for purposes of 

defining the class of interests that are 

reportable, the FCC will not apply two 

attribution exemptions—the single 

majority shareholder exemption and the 

exemption for interests held in eligible 

entities that would be attributable but 

for the higher Equity/Debt Plus (‘‘EDP’’) 

thresholds adopted in the Diversity 

Order; (3) the FCC set a uniform 

biennial filing date in place of the filing 

date tied to stations’ renewal 

anniversaries; and (4) the FCC set an 

initial filing date of no later than 

November 1, 2009. To effectuate these 

changes, as discussed more fully below, 

the FCC delegates authority to staff to 

(1) revise the FCC Form 323 according 

to the parameters adopted in the (R&O); 

(2) revise the electronic interface so that 

the ownership data is incorporated into 

the database, is searchable, and can be 

aggregated and cross-referenced; (3) 

build additional checks into Form 323 

to perform verification and review 

functions and to preclude the filing of 

incomplete or inaccurate data; and (4) 

conduct audits on a random basis to 

ensure accuracy of Form 323 Reports. 

2. Currently, full power broadcast 

stations are required to periodically file 

Form 323 Ownership Reports to identify 

their organizational and ownership 

structures. Form 323 also requires 

stations to provide information on 

owners’ race, ethnicity, and gender. 

Currently, full power commercial 

broadcast licensees are required to file 

Form 323: (1) When filing the station’s 

license renewal application; (2) 

following the consummation of an 

assignment or transfer of control of the 

station license; (3) within 30 days after 

the grant of a construction permit for a 

new commercial radio or television 

station; and (4) at two-year intervals on 

the anniversary date of the station’s 

renewal application filing date. The 

biennial reporting requirement does not 

apply, however, where the licensee is a 

sole proprietor or a partnership that is 

composed entirely of natural persons. In 

lieu of filing a new report, a licensee 

with a current and unamended report 

may certify that it has reviewed its 

current report and that it is accurate. 

The Commission does not require LPTV 

stations, including Class A stations, to 

file Form 323. If a full power 

commercial licensee or permittee is 

directly or indirectly controlled by 

another entity or if another entity holds 

an attributable interest in such licensee 

or permittee, a separate Form 323 is 

required to be submitted for such entity. 

To determine which interests are 

reportable on Form 323, the 

Commission uses its broadcast 

attribution rules, including the 

multiplier, which applies when an 

interest in a licensee is held indirectly 

by any party through one or more 

intervening entities in a vertical 

ownership chain. Form 323 defines the 

term ‘‘respondent’’ as either the licensee 

or permittee or an entity controlling or 

holding an attributable interest in the 

licensee or permittee. Each respondent, 

other than a natural person, is required 

to list its officers, directors, 

stockholders, and other entities with 

attributable interests, its non-insulated 

partners, and/or its members. 

3. In 1998, the Commission began 

collecting data on minority and female 

broadcast ownership to fulfill the 

Commission’s statutory mandate under 

Section 257 of 1996 Telecom Act of 

1996 and Section 309(j) of the 

Communications Act of 1934 to promote 

opportunities for small businesses and 

businesses owned by women and 

minorities in the broadcasting industry. 

The Commission revised Form 323 to 


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25164 Federal Register / Vol. 74, No. 100 / Wednesday, May 27, 2009 / Rules and Regulations 

require filers to identify the gender and 

race or ethnicity of individuals with 

attributable interests in the licensee. 

The Commission concluded that the 

information was needed to ‘‘determine 

accurately the current state of minority 

and female ownership of broadcast 

facilities, to determine the need for 

measures designed to promote 

ownership by minorities and women, 

and to chart the success of any such 

measures that the Commission may 

adopt.’’ 

4. It became apparent that the current 

collection methodology is inadequate 

and incomplete and cannot accurately 

be used to determine the state of 

minority and female broadcast 

ownership. Study authors who 

attempted to use the data contend that 

the data are incomplete, inaccurate, 

duplicative, and subject to significant 

measurement error. Specific problems 

cited include ownership percentages 

exceeding 100%, inconsistent racial 

classifications from year to year, missing 

and inaccurate information, and missing 

filings. The authors also note that 

because the biennial filing deadlines are 

tied to the station’s renewal application 

filing date, it is impossible to obtain a 

snapshot of broadcast ownership at any 

one particular moment in time to use as 

a benchmark or for analytical purposes. 

The authors recommend that the 

Commission collect race and gender 

data on a regular basis not only from 

commercial broadcasters that are 

currently exempt from the biennial 

reporting requirement, but also from 

non-commercial licensees. Researchers 

object to the use of attachments for 

submitting ownership data because the 

attachments cannot be electronically 

searched in the database or crossreferenced with other forms. 

Researchers also state that the filing of 

multiple forms by separate entities for a 

single station creates additional 

difficulties for performing analysis. 

5. GAO Study. In March 2008, the 

United States Government 

Accountability Office (‘‘GAO’’) released 

a report recommending that the FCC 

identify processes and procedures to 

improve the reliability of its data on 

gender, race, and ethnicity so that it can 

more effectively monitor and report on 

the status of female and minority 

broadcast ownership. The GAO 

identifies three weaknesses of the data: 

(1) Exemptions from the biennial filing 

requirement for certain types of 

broadcast stations, (2) inadequate data 

quality procedures, and (3) problems 

with data storage and retrieval. First, the 

GAO concludes that because 

individuals, partnerships of natural 

persons, low power stations, and noncommercial broadcast stations are 

exempt from filing Form 323 biennially, 

it is not possible to identify the full 

universe of broadcast stations owned by 

minorities and women. 

The GAO criticizes the Commission 

for not verifying or periodically 

reviewing the gender, race, and 

ethnicity data submitted on Form 323. 

The GAO finds that reporting of 

ownership data on attachments is 

problematic because the data are not 

entered into the database, which renders 

the database unreliable and unusable for 

electronic queries. The GAO also 

criticizes the Commission for retaining 

outdated ownership forms in its 

database, even when a form has been 

updated. The GAO commends the 

Commission for taking several measures 

to address these concerns, noting, for 

instance, that the Commission now 

allows owners to modify information on 

a previously submitted Form 323, 

instead of requiring modifications to be 

submitted on a new form, and it 

precludes electronic submissions of 

incomplete forms. However, the GAO 

faults the Commission for continuing to 

allow respondents to file ownership 

information on attachments to Form 

323, for not having any regular review 

process, and for not imposing 

consequences for misfiling that would 

encourage accurate, complete, and 

timely submission of Form 323. 

6. On March 5, 2008, the Commission 

released the Diversity Order to increase 

participation in the broadcasting 

industry by new entrants and small 

businesses, including minority- and 

women-owned businesses, which 

historically have not been well 

represented in the broadcasting 

industry. The Commission adopted a 

number of new rules and policies 

intended to encourage ownership 

diversity and new entry in broadcasting. 

The Commission discussed the benefits 

of conducting ‘‘longitudinal studies’’ of 

minority and female ownership in order 

to track ownership trends over time and 

agreed to begin research once the 

Commission improved the data 

collection process and gathered the 

necessary data. The Commission 

concluded that such studies could help 

parties to assess the impact of changes 

in the media ownership rules on 

minority and female ownership and 

provide real-time feedback on the 

impact of the Commission’s rules and 

policies on licensing, access to capital, 

availability of spectrum, and 

opportunities for minority and female 

ownership. The Commission stated that 

it would modify Form 323 Ownership 

Report to improve the quality and 

usefulness of the data and sought 

comment on specific proposals. 

7. Form 323. In the Third Further 

Notice, the Commission sought 

comment on whether to create a new 

form to collect data on minority and 

female ownership or to modify the 

existing Form 323. The Commission 

tentatively concluded that it should 

modify the existing Form 323 and not 

create a new form for this purpose and 

commenters agreed. The FCC continues 

to believe that use of Form 323 is the 

most efficient and least burdensome 

method of collecting minority and 

female broadcast ownership data. 

Broadcasters are familiar with the form 

and how to complete it. In the R&O, the 

FCC decides to continue to use Form 

323 to collect data on minority and 

female ownership and will retain the 

existing biennial reporting interval for 

the form. Commission staff is directed to 

modify the existing FCC Form 323 

consistent with the discussion in the 

R&O. The FCC delegates to staff the 

authority to modify the format, 

structure, content, and placement of 

questions designed to elicit empirical 

information as to minority and female 

ownership within the boundaries of the 

policies adopted in the R&O. In 

designing the appropriate questions to 

elicit the information, the R&O states 

that staff should balance the goals of 

increasing data quality and 

comprehensiveness with that of 

minimizing burdens on respondents 

wherever possible. 

8. Enlarging the Class of Stations 

Required to File Biennially. In order to 

obtain comprehensive, up-to-date 

ownership data, the FCC is requiring all 

full power commercial broadcast 

stations and all low power television 

stations, including Class A stations, to 

file FCC Form 323 every two years. 

Therefore, the FCC is eliminating the 

exemption from the biennial reporting 

requirement that currently applies to 

sole proprietorships and partnerships of 

natural persons that are licensees of 

commercial broadcast stations. The R&O 

finds that any additional filing burdens 

imposed by this action are 

counterbalanced by the need to ensure 

the completeness and accuracy of the 

data collection efforts. Because the FCC 

is modifying the form to include 

additional requests for information and 

establishing a uniform filing date, the 

FCC will require all licensees and 

respondents to file a complete Form 323 

by the initial filing date established in 

the Order. This will allow the first 

snapshot to be complete and provide a 

baseline of comparison for later filings 

every two years. The Commission staff 


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Federal Register / Vol. 74, No. 100 / Wednesday, May 27, 2009 / Rules and Regulations 25165 

is directed to revise Form 323 as 

indicated in the R&O. 

9. Reportable Interests. Currently, 

Form 323 requires respondents to 

provide information, including gender, 

race, and ethnicity, for all entities with 

attributable interests in any station that 

is subject to the reporting requirement. 

The R&O finds that there are certain 

areas in which the comprehensiveness 

of the FCC’s minority and female 

ownership data collection efforts will be 

materially advanced by deviating from 

the attribution rules, and the FCC 

believes that it can do so without 

unreasonably burdening respondents. 

While the Commission considers only 

attributable interest holders in 

determining whether licensees are in 

compliance with the media ownership 

rules, the balance struck in defining 

what interests should be counted for 

purposes of implementing the 

ownership rules may not be appropriate 

for collecting data on interests held by 

minorities and women. Specifically, the 

FCC believes it is important to collect 

information from holders of equity 

interests in a licensee that would be 

attributable but for the single majority 

shareholder exemption and from 

holders of interests that would be 

attributable but for the higher Equity/ 

Debt Plus (‘‘EDP’’) thresholds adopted 

in the Diversity Order for purposes of 

determining attribution of certain 

interests in eligible entities. The single 

majority shareholder exemption 

provides that a minority shareholder’s 

voting interests will not be attributed 

where a single shareholder owns more 

than 50 percent of the outstanding 

voting stock. Accordingly, shareholders 

holding voting stock interests of 5 

percent or more in corporations with a 

single majority shareholder are required 

to be reported. Under the Commission’s 

equity/debt plus (‘‘EDP’’) standard, an 

interest is held attributable under the 

Commission’s rules if, aggregating both 

equity and debt, the interest exceeds 33 

percent of the total asset value (all 

equity plus all debt) of a broadcast 

station licensee, cable television system, 

daily newspaper or other media outlet 

subject to the Commission’s broadcast 

multiple ownership or cross-ownership 

rules—and the interest holder also (1) 

holds an attributable interest in another 

media outlet in the same market that is 

subject to the multiple or crossownership rules, or (2) supplies over 15 

percent of the total weekly broadcast 

programming hours of the station in 

which the interest is held. The Diversity 

Order adopted a mechanism to allow an 

interest holder to exceed the 33 percent 

threshold without triggering attribution 

if the investment would enable an 

‘‘eligible entity’’ (as that term is defined 

in the Diversity Order) to acquire a 

broadcast station provided that (1) the 

combined equity and debt of the interest 

holder in the eligible entity is less than 

50 percent, or (2) the total debt of the 

interest holder in the eligible entity does 

not exceed 80 percent of the asset value 

of the station being acquired by the 

eligible entity and the interest holder 

does not hold any equity interest, 

option, or promise to acquire an equity 

interest in the eligible entity or any 

related entity. In order to obtain a 

broader scope of ownership data, the 

FCC will require entities holding 

interests in licensees that would 

otherwise be deemed non-attributable 

by virtue of the ‘‘eligible entity’’ 

exemption to be reported. Accordingly, 

Commission staff is directed to modify 

Form 323 so that these two attribution 

exemptions will not apply for purposes 

of defining the class of interests that are 

reportable and the entities that are 

required to file Form 323. 

10. Database Functionality. To 

address criticism of the Commission’s 

current data storage and retrieval 

system, Commission staff is directed to 

modify Form 323 so that ownership data 

is incorporated into the database, is 

searchable, and can be aggregated and 

cross-referenced electronically. To 

further improve the ability of 

researchers and other users of the data 

to cross-reference information and 

construct complete ownership 

structures, the FCC will require each 

attributable entity above the licensee in 

the ownership chain to list on Form 

323, the FCC Registration Number (FRN) 

of the entity in which it holds an 

attributable interest. In other words, 

each filing entity must identify by FRN 

the entity below it in the chain. For 

example, Licensee A is wholly owned 

by Corp. B, and Corp. B is wholly 

owned by Corp. C. Corp. C is required 

to include on its Form 323, Corp. B’s 

FRN. Corp. B is required to include on 

its Form 323 the Licensee’s FRN. The 

R&O directs staff to revise Form 323 

accordingly. While the FCC believes 

that these measures will resolve 

concerns regarding the usefulness of the 

data, the FCC delegates authority to the 

staff to revisit this issue if additional 

modifications of the form are 

determined to be necessary. 

11. Uniform Reporting Date. The 

Commission sought comment on 

whether to establish a uniform filing 

date for all respondents. Currently, 

filing and reporting requirements are 

tied to stations’ renewal cycles, and new 

data are continually incorporated into 

the database as it is filed, mixing new 

data and old data. The FCC’s experience 

with the data has made it apparent that 

the current use of rolling filing dates has 

impeded the ability to perform timerelated comparisons using its database. 

None of the commenters opposes a 

uniform filing date. To make the data 

easier to work with, to address the 

problems created by the staggered 

ownership report filing deadlines 

currently in effect, and to facilitate 

studies of ownership, the FCC 

establishes a uniform filing date and a 

uniform date on which respondents 

must biennially identify ownership 

information as it exists on that date. 

Therefore, on or before November 1, 

2009, and every two years thereafter, all 

commercial, full power broadcast 

licensees, LPTV, and Class A licensees, 

and entities with attributable interests 

in those licensees are required to file the 

revised Form 323. The reported 

ownership information must be current 

as of October 1 of the year in which the 

filing is being made. Therefore, for the 

first filing, all ownership information 

must be current as of October 1, 2009. 

The provision of ownership information 

on a uniform filing date every two years, 

instead of on a rolling or ad hoc basis, 

will facilitate comparisons among 

stations and rigorous analysis. 

12. To address additional quality 

control issues, Commission staff is 

directed to build additional checks into 

Form 323 to perform verification and 

review functions and to preclude the 

filing of incomplete or inaccurate data. 

In addition, as discussed above, staff is 

directed to modify the form to ensure 

that all ownership data will be filed in 

a format that can be electronically 

searched, aggregated, and crossreferenced. As another measure to 

improve the quality of the ownership 

data, the Commission directs the Media 

Bureau to conduct audits on a random 

basis to ensure the accuracy of the 

Ownership Reports. The FCC authorizes 

the Bureau to make revisions to Form 

323, its instructions, and the electronic 

database, as necessary in order to 

conduct random audits. 

13. The Commission sought comment 

on the penalties to be imposed for 

licensees that file inaccurate 

information. The GAO Report 

recommends that the Commission adopt 

additional penalties for entities that fail 

to file the form or that file inaccurate 

information. NAB opposes the adoption 

of such penalties. The FCC concludes 

that current policies and rules are 

adequate to assure the accuracy of the 

information reported and that additional 

penalties are unnecessary. The 

truthfulness, accuracy, and 

completeness of information submitted 


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25166 Federal Register / Vol. 74, No. 100 / Wednesday, May 27, 2009 / Rules and Regulations 

on a Form 323 must be certified by the 

individual permittee or licensee, a 

general partner in the licensee or 

permittee partnership, or an appropriate 

officer in the licensee or permittee 

corporation or association. Licensees are 

required to exercise reasonable due 

diligence before certifying to the 

accuracy of any information that is 

submitted to the Commission. The FCC 

determined that the current enforcement 

procedures are sufficient to ensure that 

licensees comply with its rules and 

procedures. 

Final Paperwork Reduction Analysis 

14. The R&O contains both new and 

modified information collection 

requirements subject to the Paperwork 

Reduction Act of 1995 (‘‘PRA’’), Public 

Law 104–13. OMB, the general public, 

and other Federal agencies are invited to 

comment on the new and modified 

information collection requirements 

contained in this R&O. The Commission 

will submit the information collection 

requirements to the Office of 

Management and Budget (OMB) for 

review and approval under Section 

3507(d) of the PRA and OMB, the 

general public, and other Federal 

agencies will again be invited to 

comment on the new and modified 

information collection requirements 

contained in this R&O. Comments 

should address: (a) Whether the 

proposed collection of information is 

necessary for the proper performance of 

the functions of the Commission, 

including whether the information shall 

have practical utility; (b) the accuracy of 

the Commission’s burden estimates; (c) 

ways to enhance the quality, utility, and 

clarity of the information collected; and 

(d) ways to minimize the burden of the 

collection of information on the 

respondents, including the use of 

automated collection techniques or 

other forms of information technology. 

Submit PRA comments on or before 

July 27, 2009 to Nicholas A. Fraser, 

Office of Management and Budget, via 

Internet at 

Nicholas_A._Fraser@omb.eop.gov or via 

fax at (202) 395–5167 and to Cathy 

Williams, Federal Communications 

Commission, Room 1–C823, 445 12th 

Street, SW., Washington, DC or via 

Internet at Cathy.Williams@fcc.gov or 

PRA@fcc.gov. 

Pursuant to the Small Business 

Paperwork Relief Act of 2002, Ex. Public 

Law 107–98, see 44 U.S.C. 3506(c)(4), 

the FCC has considered how the 

Commission might ‘‘further reduce the 

information collection burden for small 

business concerns with fewer than 25 

employees.’’ The FCC finds that the 

modified requirements must apply fully 

to small entities (as well as to others) to 

protect consumers and further other 

goals, as described in the R&O. 

Final Regulatory Flexibility Analysis 

15. As required by the Regulatory 

Flexibility Act of 1980, as amended 

(RFA), an Initial Regulatory Flexibility 

Analysis (IRFA) was incorporated in the 

Third Further Notice of Proposed 

Rulemaking (FNPRM) in MB Docket No. 

07–294. The Commission sought written 

public comment on the proposals in the 

FNPRM including comment on the 

IRFA. The Commission also prepared a 

Supplemental Initial Regulatory 

Flexibility Analysis (Supplemental 

IRFA) and a Second Supplemental 

Initial Regulatory Flexibility Analysis 

(Second Supplemental IRFA) of the 

possible significant economic impact on 

small entities of the proposals in the 

Further Notice of Proposed Rulemaking 

(Further Notice) and the Second Further 

Notice of Proposed Rulemaking (Second 

Further Notice), respectively. The 

Commission sought written public 

comment on the Further Notice, 

including comment on the 

Supplemental IRFA, and written public 

comment on the Second Further Notice, 

including comment on the Second 

Supplemental IRFA. This Final 

Regulatory Flexibility Analysis (FRFA) 

conforms to the RFA. 

A. Need for, and Objectives of, the 

Report and Order 

16. The R&O adopts changes to FCC 

Form 323, Ownership Report for 

Commercial Broadcast Stations, and the 

filing requirements for Form 323, to 

improve the Commission’s collection of 

data on minority and female broadcast 

ownership so that the Commission can 

more accurately assess and effectively 

promote diversity of ownership in the 

broadcast industry. The R&O broadens 

the reporting requirements to require 

low power television stations (‘‘LPTV’’) 

licensees, Class A television station 

licensees, and full power commercial 

broadcast licensees that are sole 

proprietors and partnerships comprised 

of natural persons, to file the form 

biennially. The R&O also requires 

entities with financial interests that 

would be attributable (1) but for the 

single majority shareholder attribution 

exemption or (2) the higher Equity/Debt 

Plus threshold adopted in the Diversity 

Order for purposes of attributing certain 

interests in eligible entities, to file Form 

323 every two years. To ensure that the 

entire collection of minority and female 

ownership data is current as of a single 

date for each filing cycle, the R&O states 

that filers must file Form 323 no later 

than November 1, with reported 

ownership information to be current as 

of October 1 of filing year. The first 

filings using the new Form 323 will be 

due on or before November 1, 2009. To 

address quality control issues, the R&O 

delegates authority to the Media Bureau 

staff to perform random audits, and to 

improve the electronic interface process 

in order to perform verification and 

review functions and preclude the filing 

of incomplete or inaccurate data. The 

R&O revises 47 CFR 73.3615 and adds 

47 CFR 74.797 to implement these 

changes. 

B. Legal Basis 

17. The R&O is adopted pursuant to 

sections 1, 2(a), 4(i), 303, 307, 309, and 

310 of the Communications Act of 1934, 

as amended, 47 U.S.C. 151, 152(a), 

154(i), 303, 307, 309, and 310. 

C. Summary of Significant Issues Raised 

by Public Comments in Response to the 

IRFA and the Supplemental IRFAs 

18. The Commission received no 

comments in direct response to the 

IRFA, the Supplemental IRFA, or the 

Second Supplemental IRFA. However, 

the Commission received comments that 

discuss the additional burdens on 

broadcast licensees, including small 

entities. The National Association of 

Broadcasters and American Women in 

Radio and Television opposed requiring 

full power commercial broadcast 

licensees that are sole proprietors to file 

FCC Form 323 on a biennial basis. 

Instead, the commenters asked the 

Commission to retrieve the ownership 

data for minorities and women from 

either applications to request an 

assignment or transfer control of a 

broadcast station, or to require currently 

exempt entities to file Form 323 once, 

and not on a biennial basis. The 

Commission considered other ways to 

collect the ownership data, instead of a 

biennial filing, but determined that the 

biennial filings from the broader class of 

entities is needed to collect complete 

and accurate data, and ultimately to 

promote broadcast ownership among 

new entrants and small businesses, 

including minority- and women-owned 

businesses. 

D. Description and Estimate of the 

Number of Small Entities to Which the 

Rules Will Apply 

19. 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 entity’’ under 


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Federal Register / Vol. 74, No. 100 / Wednesday, May 27, 2009 / Rules and Regulations 25167 

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. 

20. Television Broadcasting. In this 

context, the application of the statutory 

definition to television stations is of 

concern. The Small Business 

Administration defines a television 

broadcasting station that has no more 

than $14 million in annual receipts as 

a small business. Business concerns 

included in this industry are those 

‘‘primarily engaged in broadcasting 

images together with sound.’’ According 

to Commission staff review of the BIA 

Financial Network, Inc. Media Access 

Pro Television Database as of February 

19, 2009, about 918 (71 percent) of the 

1,292 commercial television stations in 

the United States have revenues of $14 

million or less. About 180 (14 percent) 

of the 1,292 commercial television 

stations are owned by sole 

proprietorships or partnerships and 

would be subject to new reporting 

requirements. However, these figures 

take into account all partnerships, and 

only partnerships comprised of natural 

persons are subject to new reporting 

requirements. Therefore, the FCC’s 

estimate likely overstates the number of 

small entities that might be affected. In 

addition, the FCC notes that in assessing 

whether a business entity qualifies as 

small under the above definition, 

business control affiliations must be 

included. Its estimate, therefore, likely 

overstates the number of small entities 

that might be affected by any changes to 

the filing requirements for FCC Form 

323, because the revenue figures on 

which this estimate is based do not 

include or aggregate revenues from 

affiliated companies. 

21. 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 overinclusive to that extent. An additional 

element of the definition of ‘‘small 

business’’ is that the entity must be 

independently owned and operated. It is 

difficult at times to assess these criteria 

in the context of media entities, and the 

FCC’s estimate of small businesses to 

which the rules may apply may be overinclusive to this extent. 

22. Radio Broadcasting. The Small 

Business Administration defines a radio 

broadcasting entity that has $7 million 

or less in annual receipts as a small 

business. Business concerns included in 

this industry are those ‘‘primarily 

engaged in broadcasting aural programs 

by radio to the public.’’ According to 

Commission staff review of the BIA 

Financial Network, Inc. Media Access 

Radio Analyzer Database as of February 

19, 2009, about 10,600 (96 percent) of 

11,050 commercial radio stations in the 

United States have revenues of $7 

million or less. About 1,440 (13 percent) 

of the 11,050 commercial radio stations 

are owned by sole proprietors or 

partnerships, and would be subject to 

the new reporting requirements. 

However, these figures take into account 

all partnerships, and only partnerships 

comprised of natural persons are subject 

to new filing requirements. Therefore, 

the FCC’s estimate likely overstates the 

number of small entities that would be 

affected. In addition, the FCC notes that 

in assessing whether a business entity 

qualifies as small under the above 

definition, business control affiliations 

must be included. The FCC’s estimate, 

therefore, likely overstates the number 

of small entities that might be affected 

by any changes to the ownership rules, 

because the revenue figures on which 

this estimate is based do not include or 

aggregate revenues from affiliated 

companies. 

23. 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. The FCC is 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. The FCC notes that it is 

difficult at times to assess these criteria 

in the context of media entities, and its 

estimate of small businesses to which 

the rules may apply may be overinclusive to this extent. 

24. Class A TV and LPTV stations. 

The rules and policies adopted herein 

apply to licensees of Class A TV stations 

and low power television (‘‘LPTV’’) 

stations, as well as to potential licensees 

in these television services. The same 

SBA definition that applies to television 

broadcast licensees would apply to 

these stations. The SBA defines a 

television broadcast station as a small 

business if such station has no more 

than $14.0 million in annual receipts. 

Currently, there are approximately 554 

licensed Class A stations and 2,300 

licensed LPTV stations. Given the 

nature of these services, the FCC will 

presume that all of these licensees 

qualify as small entities under the SBA 

definition. The FCC notes, 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. The FCC’s 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. 

E. Description of Projected Reporting, 

Recordkeeping and Other Compliance 

Requirements 

25. Currently, the Commission 

requires certain full power commercial 

radio and television broadcast stations 

to periodically file Form 323 Ownership 

Report to identify their organizational 

and ownership structures, including 

information on owners’ race, ethnicity, 

and gender. Licensees of full power 

commercial stations that are sole 

proprietors and partnerships comprised 

of natural persons, and licensees of low 

power broadcast stations are not 

required to file Form 323 biennially. 

The R&O expands the class of entities 

that are required to file the Form 323 

biennially to include all commercial 

licensees. Thus, sole proprietorships, 

partnerships of natural persons, and 

LPTV licensees, including, Class A 

licensees, must file the Form 323 

biennially. In addition, the R&O 

broadens the filing requirements to 

include holders of two classes of 

nonattributable ownership interests: (1) 

Equity interests in a licensee that would 

be attributable but for the single 

majority shareholder exemption and (2) 

interests that would be attributable but 

for the higher Equity/Debt Plus 

thresholds adopted in the Diversity 

Order for purposes of determining 

attribution of certain interests in eligible 

entities. The R&O sets a deadline of no 

later than November 1, 2009, and every 

two years thereafter, as the biennial 

filing deadline for Form 323. The R&O 

also states that ownership data must be 

current as of October 1 of the filing year. 


PWALKER on PROD1PC71 with RULES
25168 Federal Register / Vol. 74, No. 100 / Wednesday, May 27, 2009 / Rules and Regulations 

F. Steps Taken To Minimize Significant 

Impact on Small Entities and 

Significant Alternatives Considered 

26. The RFA requires an agency to 

describe any significant alternatives that 

it has considered in reaching its 

proposed approach, which may include 

the following four alternatives (among 

others): (1) The establishment of 

differing compliance or reporting 

requirements or timetables that take into 

account the resources available to small 

entities; (2) the clarification, 

consolidation, or simplification of 

compliance and reporting requirements 

under the rule for 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. 

27. In order to minimize the 

administrative burdens on licensees, 

including small businesses, the 

Commission considered and declined to 

create a new form to collect the data on 

minority and female ownership. Instead, 

the Commission concluded that 

collecting the information on the 

current FCC Form 323 is the most 

efficient and least burdensome method 

of collecting minority and female 

broadcast ownership data. The R&O 

considered as an alternative whether to 

enlarge the class of stations that are 

required to file Form 323 biennially and 

concluded that the most effective way to 

obtain comprehensive ownership data is 

to require all full power commercial 

broadcast stations, LPTV, and Class A 

stations to file the revised Form 323 

biennially. Currently, if a licensee is 

directly or indirectly controlled by 

another entity, or if another entity has 

an attributable interest in such licensee 

or permittee, a separate Form 323 must 

be submitted for each such entity. As 

suggested by NAB, the Commission 

considered the alternative of revising 

the reporting requirement so that a 

single form could be filed for all of the 

entities ultimately controlled by the 

same parent company or a single form 

for each licensee. The Commission did 

not revise the current reporting 

requirement because it was not 

convinced that requiring broadcasters to 

obtain all ownership data for parent 

corporations and attributable entities on 

a single form would be less 

burdensome. For instance, the 

Commission stated that licensees may 

find it burdensome to collect ownership 

information as to certain entities that 

hold interests in the licensee indirectly 

through a vertical ownership chain. 

However, to further improve the ability 

of researchers and other users of the 

data to cross-reference information and 

construct complete ownership 

structures, the Commission is requiring 

each attributable entity above the 

licensee in the ownership chain to list, 

on Form 323, the FCC Registration 

Number of the entity in which it holds 

an attributable interest. The 

Commission considered the alternative 

of modifying the existing rolling filing 

schedule which is tied to a station’s 

renewal cycle. In order to permit 

rigorous analysis based on data that is 

current as of the same date for all filers, 

the Commission concluded that it is 

necessary to establish a uniform 

submission date for the biennial filings. 

Therefore, the R&O states that files must 

file Form 323 no later than November 1, 

2009, and every two years thereafter. 

The R&O also states that ownership data 

must be current as of October 1 of the 

filing year. 

G. Report to Congress 

28. The Commission will send a copy 

of this R&O, including this FRFA, in a 

report to Congress and the Government 

Accountability Office, pursuant to the 

Congressional Review Act. In addition, 

the Commission will send a copy of this 

R&O, including this FRFA, to the Chief 

Counsel for Advocacy of the Small 

Business Administration. 

List of Subjects in 47 CFR Parts 73 and 

74 

Radio, Television. 

Federal Communications Commission. 

Marlene H. Dortch, 

Secretary. 

Final Rules 

■ For the reasons stated in the preamble, 

the Federal Communications 

Commission amends 47 CFR parts 73 

and 74 as follows: 

PART 73—RADIO BROADCAST 

SERVICES 

■ 1. The authority citation for part 73 

continues to read as follows: 

Authority: 47 U.S.C. 154, 303, 334, 336 

and 339. 

■ 2. Section 73.3615 is amended by 

revising paragraph (a) introductory text 

to read as follows: 

§ 73.3615 Ownership reports. 

(a) The Ownership Report FCC Form 

323 must be electronically filed no later 

than November 1, 2009, and every two 

years thereafter by each licensee of a 

commercial AM, FM, or TV broadcast 

station (‘‘Licensee’’) and each entity that 

holds an interest in the licensee that is 

attributable for purposes of determining 

compliance with the Commission’s 

multiple ownership rules (see Notes 1– 

3 to 47 CFR 73.3555) or would be 

attributable but for the single majority 

shareholder exemption (see former Note 

2(b) of 47 CFR 73.3555 and Order 16 

FCC Rcd 22310 (2001)) or the higher 

threshold for attribution of certain 

interests in eligible entities under the 

Equity Debt Plus attribution standard 

(see Note 2(i) to 47 CFR 73.3555) 

(‘‘Respondent’’). A Licensee or 

Respondent with a current and 

unamended Report on file at the 

Commission, which was filed on or by 

the November 1, 2009 initial filing date 

or thereafter, may electronically certify 

that it has reviewed its current Report 

and that it is accurate, in lieu of filing 

a new Report. Ownership Reports shall 

provide the following information as of 

October 1 of the year in which the 

report is filed: 

* * * * * 

■ 3. Section 73.6026 is amended by 

adding the following entry to the end of 

the list as follows: 

§ 73.6026 Broadcast regulations 

applicable to Class A television stations. 

* * * * * 

§ 73.3615(a) and (g) Ownership 

reports. 

PART 74—EXPERIMENTAL RADIO, 

AUXILIARY, SPECIAL BROADCAST 

AND OTHER PROGRAM 

DISTRIBUTIONAL SERVICES 

■ 4. The authority citation for part 74 

continues to read as follows: 

Authority: 47 U.S.C. 154, 303, 334, 336 

and 339. 

■ 5. Add § 74.797 to subpart G to read 

as follows: 

§ 74.797 Biennial Ownership Reports. 

The Ownership Report FCC Form 323 

must be electronically filed no later than 

November 1, 2009, and every two years 

thereafter by each licensee of a low 

power television station or Respondent 

(as defined in § 73.3615(a) of this 

chapter). Beginning with the 2011 filing, 

a licensee or Respondent with a current 

and unamended Report on file at the 

Commission may certify electronically 

that it has reviewed its current Report 

and that it is accurate, in lieu of filing 

a new Report. Ownership Reports shall 

provide information as of October 1 of 

the year in which the report is filed. For 

information on filing requirements, 

filers should refer to § 73.3615(a) of this 

chapter. 

[FR Doc. E9–12312 Filed 5–26–09; 8:45 am] 

BILLING CODE 6712–01–P 


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