Update: Forms 314, 315 Revised To Reflect "Tribal Priority" Policies

New certifications for radio assignment/transfer applicants

Over the last couple of years, the Commission has, in its “Rural Radio” proceeding, taken steps to facilitate the acquisition, by Native American Tribes, of radio broadcast stations designed to serve primarily Tribal Lands. (You can read about some of those steps here, here and here.) The most recent of those steps were taken late last year but, as we reported last January, they did not all become effective then because of the Paperwork Reduction Act. Now, at long last, the Commission has announced that the Office of Management and Budget has approved some relatively modest changes to FCC Forms 314 and 315. Those changes should assist in the implementation of the service-to-Tribal-Lands initiative by requiring certifications concerning whether the station to be assigned (through FCC Form 314) or transferred (through FCC Form 315) is subject to “Tribal Priority” restrictions. The revised forms are in effect as of December 4, 2012.

Update: Rural Radio Form Changes Approved

Revisions to Forms 301, 314, 315, 316 and 340 have been approved by OMB; Look for them soon on CDBS

Remember last February, when the FCC released its long-awaited decision in the “rural radio” proceeding, a proceeding which was expected to re-vamp the AM and FM allotment processes? To some, the actions taken by the Commission fell considerably short of the expectations. Still, the revised rules did provide new opportunities for Native Americans to acquire radio authorizations, and they separately clarified certain filing requirements associated with AM modification proposals. You can refresh your recollection by reading our post from last February.

We mention all this now because the Commission has just announced in the Federal Register that (a) it has revised various application forms – Form 301, 314, 315, 316 and 340 – to conform to the changes adopted last Winter AND (b) the revised forms have been approved by OMB. Time does not appear to have been of the essence in this process, since OMB approval was issued back in May and June. The FedReg notice does not explain the delay in getting the new forms up and running in the intervening five months. (Oh, wait, as of 9:00 a.m. on November 30, the revised forms still don’t appear to have been made available on the forms page of the FCC’s website or on CDBS. Presumably they’ll get there eventually, since the Federal Register notice specifies that the “compliance date” relative to the revised forms and the related rule changes is November 30.)

In any event, it looks like the final “i” is at last being dotted and the final “t” crossed in the implementation of the rural radio changes from ten months ago.

Locked Out of CDBS? Here's a Possible Work-Around!

The key is in the call sign.

Responding to our post about the apparent glitch in CDBS which is complicating the preparation of Form 314 assignment applications for new audio (and possibly TV) construction permits, our colleague Peter Tannenwald has provided a possible work-around. According to Peter, CDBS will let you open up a new 314 for a CP sale IF the CP has a call sign. That is, the glitch appears only to occur when all you have to identify the CP is a file number and a Facility ID number.

So PT suggests that, rather than bother Konrad Herling, you can just sign up for a regular old call sign, and once that has made it through the FCC's call sign assignment system, bingo, you should be able to open up a new 314 without a problem. Is this a great country or what!  The folks who are buying the CP can then change the call sign to one of their own choosing once the transaction has been completed, if they're so inclined.

Locked Out of CDBS?

Manual “unlocking” of CDBS necessary to access Form 314 for some CP sales

So you’ve got this AM or FM construction permit, and you really don’t need it and you’ve found a willing buyer and you’ve cut your deal and now all you need to do is get the FCC to bless it. So what do you do? Head to CDBS, access your account, and fire up the old Form 314, right? Up comes the 314 pre-form asking for the file number of the authorization you’re trying to peddle. You type that in and suddenly (cue ominous music) – aughhhh! – an error message from CDBS Hell:

Invalid combination of Call Sign (NEW) and Facility Identifier (0)

Here’s the bad news: because of a glitch which we don’t fully comprehend, Form 314 is “locked” – and therefore inaccessible through the normal CDBS interface – when it comes to proposed assignments of AM or FM CP’s.  (It’s not clear whether the same is true of TV CP’s – if you have any information on that, let us know.)

But there’s good news.

The FCC is aware of the problem and is all over it like a cheap suit. If you need to file a 314 to assign a radio CP, here’s what you do:

Send an email to konrad.herling@fcc.gov, explain what you want, and be sure to include the following information:

  1. Facility ID of the construction permit to be assigned
  2. The name of the permittee/assignor
  3. The relevant CDBS account number and password

The FCC’s staff will then manually “unlock” the form, making it available to you in your CDBS account. (Think of it as kind of like visiting your safety deposit box, only different.) You’ll be notified by email when the account has been “unlocked”. The process takes one-two business days. Bear that slight delay in mind if time is of the essence in connection with your sale (like, say, your CP is expiring and you’re fast approaching that narrow window available for selling it to an Eligible Entity in order to keep the permit alive for another 18 months).

It appears that this problem will be with us for another year or so, while the Commission’s crack contractors overhaul CDBS, paving the way for the “consolidated form” that may or may not make our lives better.

Of course, you might wonder why the FCC hasn’t issued a public notice alerting the universe of unsuspecting CP buyers and sellers about this departure from standard CDBS protocol. We’re not sure ourselves, but it certainly doesn’t seem right, especially since the job of notifying the public appears to have fallen to staffers who happen to be on the wrong end of the phone when one of those unsuspecting buyers or sellers calls in to ask about the error message. Keep your eyes out for a public notice – there’s bound to be one sooner or later.

One last tip: As you may have gleaned from the email address indicated above, the FCC staffer who bears the unfortunate brunt of this problem is none other than Konrad Herling, a true prince of a guy (and certainly one of the most pleasant, helpful and effective folks we’ve run into at the agency). But here’s the deal:   It’s best NOT to call Konrad about unlocking your CP Form 314’s; E-MAIL him, but do NOT call him. While he would doubtless be unfailingly pleasant with you on the phone, the fact is that, in the end, the conversation will not get you any closer to having the form unlocked for you; you’re still going to have to e-mail him the necessary information. So you can save both him and yourself some time by eschewing the phone and heading straight for your e-mail.

Applications Tweaked In Wake of Diversity Order

New 301, 314, 315, 345 forms now available

The FCC has announced that it is implementing another part of its sweeping Diversity Order (adopted in late 2007 but not released until March, 2008) by modifying a number of basic broadcast application forms. The changes took effect May 21.    

The forms that have gone under the knife are the 301 (for construction permits), 314 (for consent to voluntary assignment of authorization), 315 (for consent to voluntary transfer of control of licensee/permittee) and 345 (for voluntary assignment/transfer of control of FM/TV translator and LPTV authorizations). 

Generally, the Commission has changed these forms in three ways.

First, the method for determining attributable interests to demonstrate compliance with the FCC’s multiple ownership rules has been revised to conform to the Diversity Order’s modified treatment of “eligible entities” for equity-debt-plus (EDP) purposes.  (“Eligible entities” are, of course, entities that qualify as small businesses under the standards adopted by the Small Business Administration (SBA).)  Under EDP, an entity may be tagged with an attributable interest in a broadcast licensee even if it is not technically an owner. That historically occurred when the non-owner was (a) either a significant program supplier or an attributable owner of another same-market station holder and (b) held a 33% or greater equity and/or debt position in the licensee – when those factors coincided, the non-owner’s interest was deemed “attributable”. But in the Diversity Order, the FCC relaxed that rule to allow up to 50% equity and/or debt interest in an “eligible entity” licensee or a debt interest alone (no equity) of up to 80% of the asset value of a station. The new forms include instructions about these new limits and a question regarding whether the applicant is claiming status as an “eligible entity”.

In addition, the assignment and change of control applications (Forms 314, 315 and 345) now require a certification concerning compliance with the FCC’s anti-discrimination rules in connection with the transaction for which approval is being sought. In the Diversity Order, the Commission adopted a new rule (47 CFR Section 73.2090) banning discrimination on the basis of race, color, religion, national origin or sex in the sale of commercial broadcast stations. 

In the revised Forms 314 and 345, the assigning/transferring party is required to certify that it (or any other party to the application) did not violate this rule in connection with the transaction for which it is applying for the FCC’s consent. In the revised 315, that certification obligation falls to the licensee/permittee (as opposed to either the transferor or transferee).  Since the certification requirement applies only to commercial stations, applications involving noncommercial stations include an “N/A” box. If a commercial station applicant cannot certify that it did not violate that rule, it must attach exhibits to the application disclosing the persons and matters involved, and an explanation why such non-compliance should not impede grant by the FCC of the application. 

Finally, the assignment and change of control forms for full service stations (Forms 314 and 315) now ask whether the proposed transaction involves a radio station that is a part of a non-compliant grandfathered cluster of stations. If the answer is yes, the buyer must then certify that, within 12 months of the consummation of the transaction, it will bring itself into compliance by divesting station(s) as necessary either to an “eligible entity” or to an irrevocable trust that will in turn assign the station(s) to an “eligible entity”. The Diversity Order expanded the ability to deal off grandfathered station clusters to any buyer (such sales had previously been limited to eligible entities), subject to certain limitations. 

Applicants who check the “yes” box for this question must submit a form of an irrevocable trust agreement providing for the assignment of the license(s) to an eligible entity. (Note that the application requires submission of such a form of agreement even if the proposed buyer indicates that it intends to divest the excess station(s) to an eligible entity, rather than to an irrevocable trust for later assignment to an eligible entity. This may be an oversight on the Commission’s part that will be corrected eventually. For the time being, though, the application requires submission of the irrevocable trust form in either case.)

The new forms have been loaded into CDBS and are currently available for use. In fact, you’ve got to use them.  It’s not clear what happens if you started to complete one of the revised forms on CDBS prior to May 21 – it’s possible that, in that situation, you will have to copy over all the information onto a new version of the form. But if you start the filling-in process as of May 21, you should not have any problems.

If you run into any problems with the new forms, please feel free to contact us for guidance.