Public Inspection File Rule: The FCC Asks (Again) If It's Really Necessary

Thanks to the Paperwork Reduction Act, the public file rule is out for comment … again

The Paperwork Reduction Act strikes again! As we all know, the PRA requires the FCC to get clearance from the Office of Management and Budget for “information collections” the FCC wants to impose on its regulatees. OMB clearances have a shelf-life of three years, meaning that the Commission has to truck on back to OMB every three years to re-up previously issued clearances.

Those of you with reasonably long memories may see where this is heading.

Three years ago was when OMB last approved the Commission’s local public inspection file (and related political file) rules for broadcast and cable operators. (Those rules may be found at §§73.3526, 73.3527, 73.1943 and 76.1701.) And sure enough, the FCC has now solicited comments on those rules yet again as part of the process necessary to secure another three-year OK from OMB.

We reported on the 2011 proceedings back when they first got started. You may want to take a look at that report, because not much has changed this time around. The Commission is again inviting comment on several boilerplate questions, including:

(a)    whether the public file rules are “necessary for the proper performance of the functions of the Commission, including whether the [collected] information shall have practical utility”; and

(b) whether the Commission’s burden estimate is accurate.

As to that “burden estimate”, the numbers continue to amuse and amaze. Recall that in 2011 the Commission estimated that 52,285 respondents (providing a total of 52, 285 responses) would require anywhere from 2.5-109 hours to comply with the public file rules, resulting in a “Total Annual Burden” of “1,831,706” (the 2011 notice didn’t put any units on that total burden estimate, but we figure it probably referred to hours) and a “Total Annual Cost” of (are you sitting down?) “none”.

This time around, the corresponding estimates are: 24,558 respondents (providing a total of 63,234 responses); one hour to 104 hours per response; “Total Annual Burden” – 2,375,336 hours; “Total Annual Cost” – $882,236.

If these numbers look a bit odd to you, join the club.

The number of respondents this year is down more than 50% from 2011, but the number of responses is up by more than 20%. While the time per response has gone down, the Total Annual Burden has skyrocketed by almost 30%. And how about that estimated “Total Annual Cost”? It has shot from “none” (which is where it had been pegged by the FCC in 2008, too) to $882,236. And let’s not forget that in 2008, the Commission included an estimate of the “Total Annual ‘In-house’ Cost” – $37,469,148. How that might have been squared with the “Total Annual Cost” figure of “none” was never explained. The 2011 and 2015 notices have not provided “Total Annual ‘In-house’ Cost” figures.

The OMB website reflects that, in 2011, a number of broadcast groups submitted comments. While those did not succeed in getting the kibosh put on the rules, they may have had some impact: we heard off-the-record reports that the folks at OMB had a bunch of questions for the Commission before approving the rules then. As it turns out, that approval contained the proviso that “[d]uring the period before the next three-year renewal, the FCC will continue its work to modernize and streamline the inspection file requirement.” And in 2012 (when OMB had to consider some proposed tweaks to the public file rules – a proposal which also attracted considerable broadcaster comments), OMB specified in its approval that, going forward, the Commission would have to “review and take into consideration submitted comments regarding the burden placed on affected entities and where necessary, propose possible revisions to the associated information collection to reduce unnecessary burden while continuing to maximize the practical utility of the information requested from respondents.”

So it’s at least possible that the comment opportunities provided by the PRA may not be entirely useless after all.

The public file rule might serve some valid purpose – but, since the Commission has never done anything to investigate the validity of that proposition, nobody can say for sure. It’s probably safe to assume that the FCC is not enthusiastic about launching such an investigation on its own. (As we have previously observed, the Commission has ignored for nearly a decade a petition for rulemaking filed by our friend, communications attorney David Tillotson, challenging the validity of the public file requirement.)

But the Paperwork Reduction Act requires the Commission to justify rules like this every three years, so we all have another chance to make the case: do the public file rules serve a useful purpose, are the FCC’s burden estimates valid and, if so, does the supposedly useful purpose justify the supposedly valid burdens? And let’s not forget: the Commission must satisfy the OMB that the FCC’s assessment is correct.

In other words, anyone who has any thoughts about the public file should take advantage of this opportunity to articulate them to the FCC. The Commission will be accepting comments through July 6, 2015. After that, the Commission will bundle up any and all comments submitted and send them over to OMB, along with a statement in support of the rules (assuming that the Commission is not persuaded by the comments to drop the rules entirely). OMB will then provide an additional 30-day comment period.  If OMB declines to approve the rules, the FCC will be unable to enforce them.

Filing Deadline for 2013 Biennial Form 323 Extended Already!

Yikes, time is just screaming past us. Has it really been two years since the last biennial Ownership Report (FCC Form 323) was filed? Apparently so – and we know this because the FCC, apparently looking to get a jump on things, has already extended the deadline for the next biennial Form 323. In an order issued on its own motion (i.e., nobody even had to ask), the Media Bureau has announced that the 2013 biennial Ownership Reports will be due no later than December 2, 2013. (That’s a month later than the original deadline.)

The Commission provided a similar one-month extension the last time around, back in 2011.

These biennial reports must be filed by all commercial full-power AM, FM, TV, and LPTV stations (including Class A stations), as well as any entities that happen to have attributable interests in any such stations. While the deadline for filing has moved, the “as of” date – that is, the date as of which the information in the report must be accurate – has not moved. So this year’s Ownership Reports must reflect the reporting entity’s information as of October 1, 2013.

The Commission still has taken no action in the rulemaking proceeding it kicked off last New Year’s Eve. You may recall that, in that Sixth Notice of Proposed Rulemaking, the Commission proposed ditching the “special use FRN” (SUFRN) that has been a feature of the biennial Form 323 since late 2009. (The SUFRN has an interesting history, which you can read about here (and in the earlier links you’ll find there). It’s a device that permits some reporting individuals to avoid having to cough up their Social Security Numbers in order to get an official FCC Registration Number (FRN) to include in the Ownership Report.) The Bureau’s order doesn’t mention SUFRNs, which is par for the course. But since the Commission has not adopted that proposal, it seems at this point that it’s a reasonable bet that the SUFRN will still be available for 2013 Form 323 filers. You can never be too sure, though, so it would probably be prudent to check back here periodically between now and then.

GAO Report: In Wake of Successful Hack of FCC Computer Systems, $10 Million Fix Ineffective

Gee, do we really want to entrust our social security numbers to the FCC?

Did you know that, in September, 2011, the FCC was the victim of “a security breach on its agency network”? 

Neither did we. 

The precise nature and extent of the breach hasn’t been made public (as far as we can tell), but it must have been impressive. Did you also know that, in reaction to that breach, within a couple of months the FCC had wangled out of the Office of Management and Budget a cool $10 million to undertake an immediate “Enhanced Secured Network” (ESN) Project to improve its computer security against such cyber attacks? 

Neither did we.

And did you also know that the General Accountability Office (GAO), called in to assess the manner in which the FCC implemented its ESN Project, concluded that the FCC messed up? In particular, according to the GAO, the Commission “did not effectively implement or securely configure key security tools and devices to protect these users and its information against cyber attacks.” And did you know that, as a result, again according to the GAO, the Commission continues to face “an unnecessary risk that individuals could gain unauthorized access to its sensitive systems and information”? 

Neither did we.

This is all spelled out – circumspectly, to be sure, presumably so as not to reveal too much about the FCC’s vulnerabilities – in a GAO report sent to Congress on January 25, 2013. The report was not publicly announced until last week.

The fact that the FCC’s computer systems have been compromised is bad enough. The fact that the FCC, apparently acting in haste, cut a few too many corners in its effort to lock up the barn door after the horse had taken a hike is even more troublesome.

But what is especially galling – to this blogger, at least – is the fact that, while all that has been going on, the Commission has proposed to force a large universe of individuals to trust the FCC with their social security numbers. And in so doing, the Commission hasn’t bothered to mention that the computer systems on which those numbers would presumably be maintained have already been shown to be vulnerable to hackers.

As we reported last month, the Commission is considering the elimination of the Special Use FRN in connection with broadcast Ownership Reports (FCC Forms 323 and 323-E). If adopted, that elimination would mean that all attributable interest holders of all full-service broadcast stations (as well as LPTV and Class A TV stations) would have to cough up their social security numbers to the Commission in order to obtain an FCC Registration Number (FRN), which would have to be included in all Ownership Reports. Comments on that proposal are currently due to be filed on February 14.

The FCC’s seeming reticence relative to the fact that it suffered an apparently successful cyber attack 18 months ago, and that its efforts to fix the problem in the meantime have apparently been less than successful, is understandable, if regrettable (and also curiously contrary to this Commission’s professions of “transparency”).

But it seems extraordinarily inappropriate for the Commission, knowing of those vulnerabilities, to then propose that a huge number of folks must provide to the FCC the crown jewels of their identity, their social security numbers. In so doing, shouldn’t the Commission, at a bare minimum, have alerted us all to the fact that not only are their computers possibly vulnerable (we all know that that’s an unfortunate fact of modern-day life), but that their computers had already been successfully attacked? Oh yeah, and mightn’t it have been a good idea to spread the word that GAO had been called in to see whether the problem had been fixed? And once GAO concluded that, um, the problem hadn’t been fixed, don’t you think the FCC might have at least had some second thoughts about persisting in its proposed insistence on the submission of social security number-based FRNs?

Before you answer those questions, consider this. In 2009, when the FCC first proposed to require the submission of SSN-based FRNs for all attributable interest holders, a number of parties objected, pointing out (among other things) that such submission would increase the risk of identity theft. The Commission’s response? We quote it verbatim:

While identity theft is a serious matter, none of the comments identify a single instance of a security breach with respect to the Commission’s CORES system. Indeed, their claims are purely speculative. The FCC has a robust security architecture in place for CORES that exceeds Federal guidelines and recommendations and has deployed strict operational controls in compliance with NIST guidance. The servers are located in secured locations with strict access control. Logically, the databases are located behind several firewalls that protect the data from the Internet and the general FCC user population. All servers and communications are monitored both by automated tools and systems as well as operational procedures. The CORES application uses separate roles for various user classes, and administrative access is only permitted from limited set of known internal workstations. All transmission of non-public data is encrypted.

(You can find the entire FCC response on the OMB website. It’s the “Supplementary Document”, uploaded on 10/16/09 and titled “Response Letter to OMB on Comments Received”.)

So, according to the FCC, the notion that its oh-so-secure computer systems might be compromised was, at most, far-fetched speculation. 


We now know that that speculation was not at all far-fetched. That being the case, the Commission may want to re-think its proposed abandonment of the Special Use FRN. And anyone who, in response to the proposal to deep-six the SUFRN, expresses concern about data security should be sure to cite to the GAO report. That way, the Commission can’t claim that such concerns are merely speculative.

Form 323 - Kissing the SUFRN Good-bye?

FCC proposal would abandon “special use FRNs” in Ownership Reports, require social security number-based FRNs instead . . . for noncommercial licensees, too!

If you’ve got an “attributable interest” in a broadcast licensee, you might want to make sure that you’ve got your social security number (SSN) handy. The FCC is trying – again – to insist that all attributable interest holders provide SSN-based FCC registration numbers (FRNs) when the time comes to file biennial Ownership Reports on FCC Forms 323 (for commercial licensees) and 323-E (for noncommercial licensees). 

In a Sixth Further Notice of Proposed Rulemaking (6th FNPRM) the Commission has proposed deep-sixing the “special use FRN” (SUFRN, as in “SUFRN succotash”) alternative that has been available since the July, 2010 filing of the biennial Form 323. The Commission has also proposed expanding the SSN-based FRN requirement to Form 323-E for noncoms, which would meant that folks on the controlling boards of NCE stations would have to get SSN-based FRNs. And the Commission has also renewed a proposal first bandied about in the Fifth Further Notice of Proposed Rulemaking (5th FNPRM) back in 2009. (In the nearly four years since the 5th FNPRM, that proposal – which would expand the FRN reporting requirement even more – apparently never made it to the Federal Register . . . until now!)

So long, SUFRN?

The history of the FCC’s efforts to require the reporting of SSN-based FRNs by all attributable interest holders in commercial licensees makes for fascinating reading. Unfortunately, the summary of those efforts as set out in the 6th FNPRM is not entirely accurate; it misses a lot of important details concerning the provenance of SUFRNs, a device made available for those not interested in providing their SSNs to the FCC. If you need to brush up on things, let us refer you to our fine collection of posts on the topic. (Note: when you click on the link, the posts – about a couple dozen – will appear in reverse chronological order, so be sure to scroll down to the May, 2009 entries before you start reading.) For a quick synopsis, check out this post, and for a good chuckle, check out this one.

In a nutshell, back in 2009 the FCC tried to insist that all attributable interest holders in commercial broadcast licensees would have to provide SSN-based FRNs. The universe of “attributable interest holders” is vast; it includes all general and many limited partnership interests, all members of LLC licensees, holders of five percent or more of a corporate licensee’s stock, and all officers and directors of a licensee. But wait, there’s more. That universe also includes individuals and entities who hold indirect interests in broadcast licensees, i.e., through intermediate holding companies. (Possibly helpful illustration: if Corporation A happens to own a 20 percent ownership interest in a corporate licensee, then all of Corporation A’s officers, directors and 25 percent or greater shareholders would be deemed to hold attributable interests in the licensee.)

Prior to 2009, a licensee had generally been responsible for, at most, its own FRN. But with the revised Form 323 introduced in 2009, that changed dramatically. Suddenly – and we do mean suddenly, since the Commission sprang the revised form on the broadcast industry in mid-August, 2009, without having made it available for public review beforehand – commercial broadcasters would have to obtain and report SSN-based FRNs not only for the licensees themselves, but also for all their attributable interest-holders. That would impose a substantial burden on many, possibly most, licensees. It also gave rise to legitimate privacy concerns. In this day and age of identity theft, we are all taught not to hand out our SSNs unnecessarily.

Not surprisingly, considerable opposition to the mandatory reporting of SSN-based FRNs arose, despite the fact that the Commission seemed bent on minimizing the opportunity for any public comment. Faced with serious resistance, the Commission initially (in December, 2009) announced that SUFRNs could be used by licensees to report interest holders for whom the licensee could not obtain SSN-based FRNs as of the deadline for filing the Ownership Report. But the licensee would still be obligated to obtain and report SSN-based FRNs for all its attributable interest holders.

Fletcher Heald, joined by a number of state broadcast associations, took that requirement to court. The day our petition was filed, the FCC announced that it was postponing the then-imminent Ownership Report deadline indefinitely. Coincidence? You make the call.

By May, 2010, the requirement was still with us, and the new filing deadline was fast approaching. Back to court we went. This time the court ordered the Commission to respond to our petition. Two days after that order came down, the FCC revised Form 323. Coincidence? You make the call. In so doing, the Commission didn’t bother to tell anybody other than the Office of Management and Budget, which rubber-stamped the change.  

The Commission then paraded into court, pointing to its revised form without mentioning to the court that the ink was still wet on the revised version. The court eventually denied our petition, but only based on the revised version of the form, which the court interpreted to say that no individual attributable interest holder would be required to submit an SSN-based FRN if he/she preferred not to. So even though our petition was technically “denied”, we had largely achieved the result we wanted.

The biennial Form 323 filings went in in 2010 and 2011 (yes, it really was “biennial”, since the 2010 report related back to 2009) without apparent problems. But now, with the 6th FNPRM, the Commission is proposing to eliminate the SUFRN option.

Why? It’s not entirely clear. The Commission speaks generally about the need to “facilitate long-term comparative studies” of broadcast “ownership”. It sees SSN-based FRNs as “essential to providing the kind of searchable and manipulable database needed to support accurate and reliable studies of ownership trends.” And now we learn that, apparently, the “fundamental objective” of the biennial Ownership Report is to “track trends in media ownership”.

As far as we know, the FCC’s interest in studying “ownership trends” is of extremely recent vintage, as is the notion that that activity is the “fundamental objective” of Ownership Reports. But even if we indulge the Commission on this point for the moment, serious questions remain about the proposal to toss the SUFRN option.

For example, the Commission seems to think that reliance on an SSN-based system will assure greater accuracy than any alternative. But that assumes that everyone obtaining an SSN-based FRN provides accurate input. That’s not necessarily a given: the potential for inadvertent slip-ups always exists, as does the possibility that folks who prefer not to provide their SSN might intentionally mis-enter it in the CORES system. How can the FCC police against that? Also, if you’re familiar with CORES, you know that it’s possible to get an FRN without entering an SSN at all. For example, you can simply indicate that you have applied for an SSN (the assumption being that you haven’t yet received it), and bingo, you can get yourself an official FRN without an underlying SSN. (In a footnote to the 6th FNPRM, the FCC itself acknowledges that the CORES FRN system can be circumvented and requires accurate input from users.)

So the FCC’s insistence on the virtues of an SSN-based approach to FRNs seems a bit over-stated.

So, too, does the Commission’s insistence on getting data from all attributable interest-holders. While rounding up that universe of respondents will for sure provide an incredibly comprehensive snapshot of essentially all participants in the broadcast industry, is that really necessary? What difference does it make if Joe and Loretta Six-Pack happen to own a five percent, or even ten percent, interest in their brother-in-law’s station down the block? Who cares if, strictly for purposes of convenience (e.g., for signing the occasional corporate document for regulatory purposes), a broadcast president/CEO has appointed one of her office staff to serve as “Assistant Secretary” of the licensee corporation? If the FCC’s goal is to chart and monitor the major veins and arteries of the broadcast industry, why bother scanning down to the capillary level, especially when that imposes a substantial burden on the scannees?

And let’s not forget the legitimate privacy concerns of everyone who would have to get an SSN-based FRN. One’s SSN is normally viewed as among the crown jewels of one’s array of personal identifying information. We are frequently encouraged not to provide our SSN unnecessarily.

The FCC initially began collecting SSNs only from those who “do business with” the Commission, as a mechanism to facilitate debt collection. While that might be a valid basis for SSN collection, does it have anything at all to do with Joe and Loretta Six-Pack or the Assistant Secretary who happens to hold a corporate officership simply for convenience purposes? The Commission can’t claim with a straight face that it might try to go after such bit players for regulatory obligations incurred by the licensee.

BTW, if you’re not sure how serious the FCC is about enforcing an SSN-based FRN requirement, check this out. According to the 6th FNPRM, if an attributable interest holder is unwilling to provide an SSN-based FRN for inclusion in an Ownership Report, the Commission will apparently expect the licensee to “report the recalcitrant attributable interest holder” so that the FCC can “use its enforcement authority to impose a forfeiture against such individuals”.   Translation (cue sinister music, lower lights menacingly): “We have our ways to get the information we want. Bwahahahaha.” Exactly how such individual forfeitures could be justified is unclear, since (as the FCC admits), its rules don’t currently require attributable interest holders to have FRNs at all. We’re guessing that that wouldn’t stand in the FCC’s way, though, at least until the matter got to court.

In summary, the FCC appears still to be wedded to the SSN-based FRN reporting requirement that it attempted to foist on the broadcast industry in 2009. That initial attempt was foiled, thanks primarily to the fact that the Commission ignored a number of obvious procedural niceties in its headlong rush to impose the requirement. But now, more than three years later, the Commission is taking a more deliberative approach presumably designed to avoid the problems it ran into the last time around. 

While we may all agree that the Commission’s proposal is flawed in a lot of ways, we must face the fact that, unless somebody comes up with an acceptable alternative, the FCC seems bound and determined to toss out the SUFRN option and to insist on SSN-based FRNs from all attributable interest-holders of each licensee. So now’s the time to put your thinking caps on. It’s hard to imagine that a suitable alternative can’t be devised, even if the FCC seems resistant to that notion. Here’s hoping that comments in response to the 6th FNPRM will provide such alternatives.

Non-coms in the FRN cross-hairs?

Also out for comment in the 6th FNPRM is a proposal that the SSN-based FRN reporting requirement be extended to attributable interest holders in noncommercial licensees. The NCE universe dodged this particular bullet back in 2009, although the issue was then teed up in a Fourth Further Notice of Proposed Rulemaking (4th FNPRM). The Commission is now soliciting more comments on it – even though, in response to the 4th FNPRM members of the public broadcasting community severely criticized it. 

Other proposals

Additionally, in the 6th FNPRM the Commission suggests that the biennial ownership reporting requirement be expanded to include entities and individuals whose interests are not otherwise attributable. If their non-attributability arises from either (a) the single majority shareholder exemption or (b) the exemption for interests held in “eligible entities” subject to a higher EDP threshold, then that non-attributabiltiy would go away under the FCC’s proposal.  (This proposal first saw the light of day back in 2009, but has not been actively pursued, until now.)

The Commission is also suggesting that the filing date for biennial Ownership Reports should be shifted back a month, to December 1 (although the “as of” date would remain October 1). The Commission probably thinks that giving broadcasters an extra 30 days to prepare their reports is doing them a favor, but hold on there. December 1 arrives immediately after the Thanksgiving holiday, and coincides with multiple other filing deadlines. Why not pick a date – July 1, for instance – that would not be similarly encumbered. Further, it’s not uncommon for broadcast transactions to be timed to close as of the December 31 of any given year. That being the case, ownership data accurate as of October 1 would often be inaccurate a mere 90 days later. For that reason a mid-year reporting deadline (again, July 1 springs to mind) might be preferable all around.

In any event, the 6th FNPRM has been published in the Federal Register, as a result of which the deadlines for comments have been established. Comments on the various proposals are due to be filed by February 14, 2013 (Happy Valentine’s Day!), and reply comments are due by March 1.

Update: Interim 700 MHz Report Date Set

Last month we reported on the much delayed publication of approval by the Office of Management and Budget of the reporting requirement that applies to certain 700 MHz licensees.  Now (just like we predicted in last month's post), the FCC has announced the new date by which interim status reports are due: January 13, 2012. By that date, licensees in the EA Block A, CMA Block B, EA Block E and REAG Block C must advise the FCC of the status of construction and operation of their systems.   While no penalty attaches to failure at this point to have made progress, the interim report serves as a reminder and prod to 700 MHz licensees to get cracking. By June 13, 2013, they will be expected to have met some pretty serious build-out and service obligations (35% of their geographic area in the case of the CMA licensees).   With that deadline only a year and a half away, it’s not too early to start worrying if your system is not up or in the planning stages.

Another New (well, almost new) Reporting Requirement Takes Effect

From our Better Late Than Never File: Build-out reports for 700 MHz licensees now in effect

The November 21, 2011 Federal Register includes a notice of the effectiveness of certain record-gathering rules adopted by the FCC in July, 2007.   The 2007 Second Report and Order established substantive service requirements for 700 MHz licensees, but also required those licensees to file a report on the progress of their efforts to build out their market. Oddly, there was an impressive four-year gap between the adoption of the Second Report and Order and publication of the required notice that the Office of Management and Budget had approved the new paperwork burden. (Without that approval, the requirement could not become effective.) The terse Federal Register notice sheds no light on why, exactly, it took more than four years to wrap this seemingly ministerial chore up.  This is disturbingly reminiscent of the situation involving Form 477, which we recently reported on, in which the Commission failed for some two years to notify the public of OMB approval of a reporting requirement.

The initial build-out report required by the rules was to have been submitted on June 13 of this year, but the FCC had to delay that filing due to the ineffectiveness of the rule. 700 MHz licensees can now expect the Wireless Bureau to issue a Public Notice establishing a new date for the filing of the status report. We’ll let you know when that happens.

When is a Requirement Not a Requirement?

“Effective dates” can be hard to pin down,  thanks to contradictions, omissions and an overall lack of clarity by the FCC – take Form 477 as an example

The November 7, 2011 edition of the Federal Register contained what appeared at first blush to be a fairly routine notice that certain rules had received approval from the Office of Management and Budget (“OMB”) and were therefore going into effect as of the publication of that notice.   But when we lift up that seemingly innocent flat rock of a notice, we observe a swarm of ugly questions about just how and when FCC rules become effective. Because FCC regulations have the force of law and are enforceable by fines in thousands and even hundreds of thousands of dollars, it is critical that the public know exactly when compliance is required. Yet that seemingly simple detail – when do we have to obey a new rule? – can be hopelessly obscure, as was certainly the case in the proceeding referenced in the November 7 notice.  

That proceeding involved amendments to Form 477, but the same question – i.e., when does a requirement become “effective” – applies to many other FCC proceedings.

Form 477 is required to be filed twice a year by CMRS and broadband providers. In 2008 OMB had approved it through June 30, 2011. But that approval did not include a number of changes to the form which the Commission had adopted in March, 2008, but had not released until three months later. When it did release the order setting out those changes, the Commission stated that the changes “SHALL BE EFFECTIVE 30 days after publication of notice of the Report and Order and Further Notice in the FEDERAL REGISTER, subject to Office of Management and Budget (OMB) approval for new or modified information collection requirements.” On July 2, 2008, the text of the Report and Order was published in the Federal Register with the following notation:

The amendments to §§1.7001 and 43.11 in this document contain information collection requirements that have not been approved by the Office of Management and Budget. The Federal Communications Commission will publish a document in the Federal Register announcing the effective date.

On Christmas Eve, 2008, the FCC sent the new rules, including the revised Form 477, over to OMB for its review pursuant to the Paperwork Reduction Act. OMB signed off on the new rules and the revised form on January 30, 2009 – but the revised form was approved for only one year (rather than the usual three), i.e., through January, 2010. OMB was apparently concerned about the burdens the revisions would impose on entities required to complete the form, so OMB insisted that the FCC come back in a year, after re-evaluating the reporting requirements and methods.

Usually, once OMB approval has been granted, the FCC publishes a brief notice in the Federal Register alerting everyone that the rules (a) have been approved by OMB and (b) are effective as of the date of that notice.

Not this time.

It wasn’t until November 7, 2011 that the FCC published the notice declaring that the rules were effective as of that date.  That lag time – from 2009 to 2011 – was noteworthy in and of itself. But further examination of the OMB website reveals even more interesting information.

It turns out that, when the one-year approval issued by OMB in January, 2009, expired in January, 2010, the FCC went back for a full three-year approval, which OMB duly granted (through April 30, 2013) – but not until April 26, 2010, i.e., more than a month after the March, 2010 deadline for filing Form 477.  So the revised version of Form 477 would appear not to have been approved at all by OMB for that particular filing opportunity.  The November 7 Federal Register notice doesn't mention that.

And even though the form had technically been approved by OMB since 2009 (assuming we ignore that gap in 2010), the FCC apparently failed to notify the public (including all affected regulatees) of any OMB approval until November, 2011. Since the Commission itself had specified that the revised rules and form would not be effective until the Commission published a Federal Register notice announcing the effective date, it would appear that Form 477, as revised in 2008, did not become effective until November, 2011. 

Of course, everyone in the industry had used the new form twice a year starting in March, 2009, justifiably assuming that the form and its information requirements had become effective. Imagine their surprise when the Federal Register announced that the new reporting requirement had not really become effective until November, 2011!

When it comes to completing Form 477, we’re not talking about a minor chore that can be tossed off in a couple of minutes. According to the FCC’s own estimate (submitted to OMB in the FCC’s February, 2010 re-submission of the form), the burden of filling in Form 477, per semi-annual response, was a whopping 289 hours – and that estimate was reduced from the Commission’s original 2008 estimate of 337 hours.   Let’s do the math: 289 hours twice a year equals 578 hours, divided by 40 hours/week (i.e., a standard work-week) equals more than 14 weeks. In other words, completion of the form could be expected, on average, to require the full-time attention of a single employee for more than 14 weeks, or more than three months each year.

In view of this burden, it’s not unreasonable to expect the FCC to be clear as to when the requirement has taken effect.

But a glance at the Code of Federal Regulations, which would normally be the authoritative reference on an issue like this, only confuses the issue further. Section 43.11 of the 2009 edition sets forth the text of the revised reporting rule, but includes a footnote stating that it “will not become effective until approval has been given by the Office of Management and Budget.”   And over in Section 0.408, a section in which all OMB control numbers and their related expiration dates are maintained, the expiration date for Form 477 is listed as “06/30/11”. But that’s the expiration date for the old version of the form, not the version as revised in 2008.

For an agency information collection requirement to become effective, the Paperwork Reduction Act provides only that the OMB must approve that requirement. As far as we can tell, there is no separate requirement that the FCC or OMB publish a Federal Register notice reflecting OMB’s approval.   So, theoretically, a rule adopted “subject to OMB approval” could become effective immediately upon OMB approval without further action by the FCC. But how would anybody know that the rule had become effective since OMB does not itself publish its approval actions? And why would anyone even think to delve into the deep weeds of the OMB’s records to see if OMB has indeed issued its approval when the Commission has clearly and unequivocally stated that the Commission would announce the effective date in the Federal Register?

Let’s say you are a regulated company and you have to file some information with the FCC, subject to heavy civil penalties and potential damage to your good standing as a licensee if you don’t file, or if you file the wrong information.   Did the pertinent “information collection” requirement that tells you what you have to file become effective when the FCC formally voted to adopt it? Did it become effective when the text was released? Did it become effective 31 days after it was published in the Federal Register? Did it become effective when OMB approved the requirement? Did it become effective when the form bearing the OMB control number was posted? Or did it become effective when the FCC published the OMB approval and announced that it was now “effective” – a date that, in the case of Form 477, occurred more than three years (and six separate filing opportunities) after the information collection was technically adopted by the Commission? 

You make the call. Good luck.

Notwithstanding the uncertainty about when the rule went into effect, few would disagree that it makes no sense for the FCC to adopt a rule in March, 2008 – presumably because the rule was in the public interest – only to have that rule sit in limbo until November, 2011 as a result of the Paperwork Reduction Act.    The FCC has recently pledged to get its orders out more quickly after they are adopted, but how about tying up the rest of the loose ends, too?

Form 323 - The Fun Begins Again

Media Bureau announces opening of 2011 Ownership Report season, but leaves out some information that many might find useful

The Media Bureau has reminded commercial broadcasters that their biennial Ownership Reports (Form 323) are due to be filed by December 1, 2011 – and that the opportunity to start filing them opens up October 1, 2011.

But the Bureau’s public notice doesn’t mention some information we kind of hoped they might, since we reminded them of it just a couple of weeks ago. Seeing as how the Commission seems less than clear about what it told the U.S. Court of Appeals for the D.C. Circuit just last year, let us help out here.

The question: Is it really true that anybody and everybody with any attributable interest in a reporting licensee must be identified, in the report, by a Social Security Number-based FCC Registration Number?

Short answer: No.

Longer answer: No, individuals with attributable interests may submit a non-SSN-based FRN – dubbed a “Special Use FRN” (we refer to it as a SUFRN) – under some circumstances. Just what those circumstances are remains a bit fuzzy, since the latest public notice fails to mention an important exchange between the Commission and the D.C. Circuit which shed considerable light on this very point.

First, a brief intro to the SUFRN.  The SUFRN option is not reflected in the instructions to Form 323 or in the form itself . . . BUT, if you get deep into completing the form, you get to the FRN question, which simply requires you to insert an FRN for each attributable interest holder. Immediately under the blank where you’re supposed to insert that FRN, the form reads: “If Respondent is unable to provide an FRN for an individual attributable interest holder reported in this listing, press above button”.

And sure enough, there’s a button labeled “Special Use FRN”. If you push that button, you get a pop-up message that instructs that you don’t need to use an SSN-based FRN. However, according to the pop-up message, eligibility to use a SUFRN arises only “if, after diligent and good faith efforts, Respondent is unable to obtain, and/or does not have permission to use, a Social Security Number in order to generate an FRN for any specific individual whose FRN must be reported on Form 323.”

The pop-up message thus limits use of an SUFRN to situations in which the respondent has made “diligent and good faith efforts” to obtain SSN-based FRNs but has been “unable to obtain, and/or does not have permission to use” such FRNs.

Omitted from the form, the pop-up message, and the FAQs found on the Bureau’s website dedicated to All Things Form 323 is the fact that respondents “are not required to provide SSN-based FRNs . . . if they object to the submission of their Social Security Numbers.” Nor does the Bureau acknowledge that “no individual attributable interest holder will be required to submit Social Security number to obtain an FRN” in order to respond to Form 323. 

But that’s precisely what the Commission and the D.C. Circuit worked out in June-July, 2010.

There’s a fair amount of backstory here. You can catch up with it by reading this series of posts chronicling L’Affaire Form 323 from 2009-2010. You can also read the Emergency Petition we filed with the Commission on September 14, 2011.   If you don’t feel like reading the entire history of the matter – entertaining though it may be – and would prefer to cut to the chase, here are direct links to the FCC’s pleading to the Court and the Court’s response.

The bottom line is that, with respect to use of SUFRNs, the Commission made a very specific representation to the Court and the Court expressly relied on that representation. According to the FCC, respondents “are not required to provide SSN-based FRNs . . . if they object to the submission of their Social Security Numbers.” And according to the Court, “no individual attributable interest holder will be required to submit Social Security number to obtain an FRN” in order to respond to Form 323.

We think that all Form 323 filers are entitled to know that. For some reason, the Commission seems unenthusiastic about that prospect.

As we read all this, inability to obtain an SSN-based FRN – which is what Form 323 suggests is a prerequisite to hitting the SUFRN button in the first place – appears to be immaterial. Ditto for making “diligent and good faith efforts” to get hold of SSN-based FRNs – a duty imposed by the pop-up message when you hit the “Special Use FRN” button. The Commission appears to have told the Court in no uncertain terms that no individual attributable interest holder has to file an SSN-based FRN is he/she objects to doing so. Period.  If the Commission disagrees with our interpretation, it might want to say so.

Another, less prominent, aspect of the SSN-based FRN question involves changes made to the form back in December, 2009, which have since been quietly tweaked. In December, 2009, the SUFRN pop-up message (as well as a public notice issued on December 4, 2009) insisted that reliance on a SUFRN for purposes of getting an Ownership Report on file by the then-operative deadline was only an interim measure. Respondents remained under an “ultimate duty to obtain a fully compliant FRN” for all folks identified in Form 323. According to the December 4, 2009 public notice, the Commission expected all filers relying on SUFRNs to “update their filed ownership reports with fully compliant FRNs when these are obtained.”

The language about some “ultimate duty” to update after the fact was deleted from the pop-up message by the Commission in March, 2010.  You may not have noticed that, since the deletion was effected without explanation or public notice from the Commission. The FCC did ask OMB for permission for the deletion, but in so doing merely characterized the change as “non-substantive”, without offering any rationale. Since the Commission didn’t bother to tell anybody about this change, much less explain it, there was no reason to believe that the concept of some continuing “ultimate duty” did not remain in place.

We mentioned this in our Emergency Petition, and the Commission appears to have taken our comments on this point to heart . . . sort of. On September 28, 2011 – that would be just a couple of weeks after we filed the Emergency Petition, and a mere three days before the form was to go “live” for the 2011 biennial filings – the Commission quietly asked OMB to authorize yet another tweak to the language in the pop-up message, and OMB obliged. Now, stuck on at the end of the pop-up message is the following sentence: “The guidance provided on Special Use FRNs in the Media Bureau’s December 4, 2009 Public Notice (DA 09-2539) has been superseded as discussed herein.”

“As discussed herein”? The problem is that there is no obvious discussion in the pop-up message (or on the FCC’s website) referring back to the December, 2009 public notice, so anyone reading that newly-added sentence wlll be hard-pressed to know what it’s supposed to mean. Our guess is that the Commission is backing away from the notion of some “ultimate duty” to follow-up with SSN-based FRNs for everybody, but the Commission sure hasn’t said that expressly. By contrast, the Commission was very explicit in imposing that duty back in December, 2009 – so if it wants now to countermand that earlier instruction, you’d think that the Commission could do so with similar clarity.

Unfortunately, the Commission appears still to be trying to shore up the multiple weaknesses in its Form 323 in a piecemeal, less-than-public way. The history of Form 323 since 2009 has not been a particularly happy one, and the most recent developments don’t suggest much improvement. With the filing window opening on October 1, the Commission has apparently not focused on problems with the form that were identified, and should have been fixed, more than a year ago. The last-minute addition of unilluminating language in the pop-up message does not suggest that the Commission has taken the time to think through the form carefully. Indeed, the manner in which that last-minute addition was submitted to OMB suggests less than careful and thoughtful preparation:

(This is a screen grab, taken from the OMB website, of a portion of the request for OMB approval submitted by the FCC on September 28, 2011.)

Maybe we’re missing something here, but a hand-written change to a form which is supposed to go “live” within a couple of days doesn’t suggest that the folks in charge of that form have the best handle on it. That’s too bad, since it’s a form that all commercial broadcasters are required to file. We had hoped that the efforts we made in 2009-2010 would have assisted the Commission to get its Form 323 act together by now. We may just have to keep trying.

OMB: Thumbs Up for Net Neutrality Provisions

After months of quiescence, net neutrality is on the move

The net neutrality rules have cruised past another hurdle: the Office of Management and Budget (OMB) has approved the two “information collection” aspects of the “open Internet” rules that the FCC shipped over there last July (as required by the Paperwork Reduction Act). While OMB approved those aspects almost two weeks ago (on September 9), the official announcement of the approval didn’t make it into the Federal Register until September 21.

OMB approval often marks the end of the rulemaking process in many instances; not so here. New rules generally cannot take effect until their full text has been published in the Federal Register. In many other rulemakings, the Commission takes care of that full-text publication first, and then follows up with getting OMB approval for any incidental “information collections” that may be involved.  As a result, OMB approval of such collections is often the last development in the rulemaking process.

It hasn’t gone down that way with net neutrality.

Instead, the Commission went first to OMB to get preliminary clearance for the “information collection” components of the rules. Meanwhile, the FCC has held tight onto the full text of the rules. While that approach has prevented the net neutrality rules from taking effect, it has also prevented any would-be challengers from seeking judicial review of the rules. Federal Register publication of new rules is the starting gun for the appellate process. Until that publication happens, the courts don’t get involved. (Verizon was reminded of that when its initial appeal was tossed by the D.C. Circuit as premature.) 

According to various trade press reports, the Commission has sent the full text of the rules to the Government Printing Office for publication in the Register in the next couple of weeks. (Note that we heard similar reports months ago and they didn’t pan out – so you might not want to bet the farm on this.) Once the rules are published, we can expect a stampede of appellate litigators heading toward their preferred U.S. Court of Appeals. (Any of the federal circuit courts of appeals are permitted to take this kind of case.) The smart money figures that petitions for review will be filed with a number of circuits. When that happens, the courts draw straws to decide which court gets it. That’s an oversimplification, of course – they don’t draw straws; they pull an entry out of a drum. Actually, the various cases are referred to the Judicial Panel on Multidistrict Litigation, which then does indeed pull a lucky entry out of a drum to determine which court gets the case. (The Commission has released a detailed notice explaining how to assure proper participation in such a lottery.)

In any event, after months of quiescence, it looks like net neutrality is on the move. Check back here for updates.

Form 323 Deadline Extended to December 1, 2011

In apparent memory lapse, Commission fails to mention last-minute effective elimination of all-encompassing SSN-based FRN requirement

Has it really been two years already? 

The Commission has announced that the time has come for the next round of biennial Ownership Reports (Form 323) for commercial broadcasters. And get this, the initial public notice about the upcoming deadline for filing pushes that deadline back a month, to December 1, 2011.

Note that the last round of Form 323s was filed in July, 2010, which (contrary to the whole “biennial” aspect of things) isn’t really a full two years ago. But as long-time readers may recall, that initial round was originally scheduled for the fall of 2009, but got postponed several times. (You can read a collection of our posts about the FCC’s 2009-2010 Form 323 travails here.) 

Form 323 requires all commercial licensees to file reports by a uniform nationwide deadline, once every two years.  The next reports were to be due November 1, 2011, reflecting ownership data as of October 1, 2011.  Apparently responding to concerns that one month is not enough time to compile data and submit a report, the FCC has extended this year’s filing deadline to December 1, 2011.  This is a one-time extension and does not apply to reports due in 2013 and subsequent years (at least for now). 

The ownership information to be reported must still reflect the reporting entity’s relevant information as it stands of October 1, 2011.   Reports may be filed any time between October 1 and December 1; they must be filed electronically on Form 323, using the FCC’s electronic CDBS system.  A filing fee must be paid at the time of filing.

The Commission’s terse notice doesn’t get into the nitty-gritty specifics of Form 323, but merely refers interested readers to the form’s instructions and to the FAQ page about the form on the Commission’s website. Heads up for some clarifications, though, since neither the form itself nor the FAQ page addresses an important change that the Commission committed to back in late June, 2010.

The change involved the question of including separate FCC Registration Numbers (FRNs) for each individual and entity reflected in each report, whether or not that individual or entity was in fact the licensee or even in a position to wield anything akin to control of the licensee. 

We won’t bore you with the details of the back-and-forth we had with the Commission on that touchy point – you can read all about it in our previous blogs on the subject. All you – and apparently, the folks at the Commission – need to recall is that we here at FHH (on behalf of ourselves and a number of clients) asked the U.S. Court of Appeals for the D.C. Circuit to tell the FCC that the Commission could not lawfully impose the FRN requirement as that requirement had been described up to that point. The Commission fussed a bunch, delayed the filing deadline to give it a chance to tweak things, but eventually tried to stick to its FRN guns. We went back to the Court. The Court ordered the FCC to respond to our arguments.

A funny thing happened at that point. After it was ordered to respond but before it did so, the Commission revised the FRN language in Form 323. It then explained to the Court that the form, as revised, made it “clear” that “users are not required to provide SSN-based FRNs for the July 8 filing if they object to the submission of their Social Security Numbers”. (Note that that gloss on the revised form might not have been 100% consistent with the language of the revision, at least in the minds of some folks, but that’s the way the FCC explained it to the Court.) The Court, in turn, interpreted the FCC’s statement to say that “no individual attributable interest holder will be required to submit a Social Security number to obtain an FRN [i.e., FCC Registration Number] for the July 8, 2010, biennial filing deadline or for any imminent non-biennial filing of Form 323.” And, based on that interpretation, the Court denied our petition.

None of that history is reflected in the form’s instructions or on the FAQ page, at least as of today (August 23, 2011). But the fact of the matter is that, in its explanation to the Court, the Commission clearly indicated that nobody would be required to submit a Social Security Number-based FRN if he/she objects to such submissions, regardless of the basis for any such objection. To the extent that the form’s instructions and the FAQ may seem to say otherwise, those indications can and should be disregarded (unless, of course, the Commission is inclined to schlep down to the Court again to explain why what it told the Court in 2010 should no longer apply 2011).

Keep an eye out – particularly here on – for any further wrinkles that might pop up on this front in coming months.

Remember that the filing requirement applies to full power TV, commercial radio, and all Class A and low power TV stations, but not TV or FM translators or low power FM stations.  Noncommercial educational AM, FM, and TV stations must file biennial reports, but they use FCC Form 323-E and must file on staggered dates corresponding to the state where they are licensed rather than the uniform nationwide date that applies to commercial stations.

Update: Public Inspection File Inquiry Arrives at OMB

The FCC digs its regulatory heels in.

We have movement on the local public inspection file front!

The proceeding the FCC kicked off last April – inquiring into (among other things) whether there really is any need for the public inspection file requirements of Sections 73.3526 and 73.3527 – has now been bucked over to the Office of Management and Budget. This opens up one final 30-day period during which comments on the requirements may be submitted (to OMB). The deadline for comments is September 15, 2011.

Why another round of comments? It’s all part of the Paperwork Reduction Act (PRA) process. In PRA parlance, the public file requirements constitute “information collections”. Because of that, the FCC can’t impose those rules without approval from OMB, which approval can extend for no more than three years. Once the three-year clock tolls, the FCC’s got to go back to OMB and request an extension of the previously-issued approval if the FCC wants to keep the requirements in place. As part of that extension process, the FCC must: (a) give everybody a 60-day opportunity to submit comments to the Commission; (b) review those comments and prepare a “supporting statement” addressing the comments; and (c) ship the comments and its supporting statement to OMB. Then OMB must provide a 30-day comment opportunity of its own. That’s where we are right now.

If you want to read the FCC’s supporting statement, you can find it at the OMB’s website, or you can click here. We’ll address some of its highlights below. In addition to the supporting statement, the Commission has posted a downloadable Zip file containing approximately 516 comments that were filed.  (To get to that file, click on the link in the previous sentence and scroll down to the "Public Inspection File Comments" link.)  Don’t be daunted by that number – more than 90% consist of the same 191-word four-paragraph letter urging the FCC to retain the public file requirements. (While we suppose that it’s theoretically possible that 470+ individuals may have independently come up with precisely the same combination of 191 words in precisely the same order, we suspect it more likely that some form of AstroTurf® operation may have been at work here. Not that there’s anything wrong with that . . .) We’ll get to those letters, too.

Mixed in with the robo-comments are 30+ comments mainly from broadcasters and state broadcast associations. They generally oppose the continued imposition of all or most of the public file requirements.

Let’s take a look at the FCC’s supporting statement first.

As appears to be par for the course for such statements, this one bears no signature or other attribution to any particular official or office within the Commission. Such anonymity seems strange in this day and age of Transparency and Accountability. But OMB doesn’t seem to care, so why should we?

In its statement, the Commission is supposed to explain why this particular “information collection” is “necessary”. As far as we can tell, the Commission never gets around to doing that. Oh sure, it rambles on about how the public file “allows the public to monitor [broadcasters’] public interest performance”, and how “public participation is a key component of the broadcast license renewal system”. It claims that the public file “allows the public to meaningfully participate in the [license] renewal process”, and moans that the “citizens’ role in the licensing process would be diminished” without, in particular, the issues/programs list aspect of the rules.

But the PRA doesn’t ask the Commission to describe how a rule might be useful; rather, it requires the Commission to “include an explanation of how the agency has used the information that it has collected” (those are our italics, not the PRA’s). So let’s get past the platitudes and look at the actual historical record. As we pointed out in comments filed on behalf of a number of FHH clients (yup, you can find them in the FCC’s Zip file), the FCC has had decades of experience with the broadcast renewal process and the public file rules. Those rules have been in their current form for about 25 years. Do the math: that’s at least three full license renewal cycles for all 12,000–15,000 broadcast licenses, for a total of about 40,000 separate license renewals. And yet, as far as we know, the availability of materials in public files has not led to any denials of renewal – or otherwise factored meaningfully – in any of those 40,000 or so instances. That should not be surprising, since (according to the broadcasters who commented) no members of the public ever actually inspect the public files.

So why exactly is the public file rule “necessary” to the Commission? The Commission doesn’t  say, probably because, after decades of experience, there is no reason to believe that the rule really is necessary.

Another thing the Commission is supposed to provide is an explanation of its estimates of the “burdens” and “costs” imposed by the rule. In its initial notice back in April, the Commission provided a bunch of numbers supposedly reflecting those estimates, but no explanation of how it arrived at those numbers. Several commenters pointed that out – only to be told, in the Commission’s supporting statement, that those commenters obviously didn’t understand what the Commission was doing. No kidding, Sherlock – but that lack of understanding arose from the fact that the FCC hadn’t bothered to explain its numbers. Unfortunately, nothing in the supporting statement sheds much more light on the genesis of the Commission’s figures. Suffice it to say, though, that the FCC is sticking by its position that stations generally devote between 100-200 hours a year to maintain their public files – although how the Commission gets to that number is still not explained – and that the cost of that burden is $0.

In general, it’s safe to say that the Commission does not appear to have been swayed by any of the comments urging abandonment of public file rule.

As for those commenters who supported retention of the rule – that would be the 470 or so like-minded folks who opted to use the scripted response and another dozen or so who ad-libbed independently – one thing can be said: while all those commenters wax eloquent about the incredible overriding importance of the public file, none of them provides any evidence to support their claims. If the public file really were an essential device to these folks, you’d think that at least some of them would have been able to provide specific illustrations of how they have historically used that device. Of course, since the FCC’s own records contain no such instances, it’s not surprising that the commenters came up empty-handed as well.

So the comments provide no indication at all that the public file requirement in fact has ever come into play in the FCC’s licensing activities. The Commission cites not even one case in which the agency’s exaggerated expectations for the file have ever intersected with reality. And the best that the supporting commenters can do is say that, gee, making broadcasters maintain public files is a swell idea, regardless of whether anybody ever looks at them. That doesn’t seem like a particularly compelling case for allowing the FCC to continue to impose those rules.

One interesting observation. The FCC’s materials were apparently submitted to OMB on August 16. The expiration date for the current OMB approval of the public file rules is September 30, 2011. So what? As it turns out, the PRA (that would be 44 U.S.C. §3507(h)(1)(B)) specifies that, if an agency wants an extension of an outstanding approval, the agency “shall” submit its extension request “no later than 60 days before the expiration” of that outstanding approval. So it looks like the FCC was a couple of weeks late with its submission to OMB. And since the PRA is a statute, the 60-day deadline it imposes is not something that could ordinarily be waived by a mere agency (i.e., the FCC or OMB). How the Commission’s apparent lateness may affect things remains to be seen.

The ball is now in OMB’s court.

Again, comments are due at OMB by September 15, 2011.

FCC's CableCARD Deal: Effective August 8

 After a relatively fast start, it’s been something of a rocky road for the Commission’s rulemaking aimed at encouraging the use of consumer-owned “CableCARD” devices for accessing MVPD services. The Commission got the latest stage of this proceeding cranked up in April, 2010, with a Fourth Further Notice of Proposed Rulemaking teeing up a number of new rules that the Commission adopted a scant six months later.  That kind of quick turn-around seemed to indicate that the agency was intent upon getting its new rules into the books as soon as possible.

Nine months after their adoption, though, they’re still not there. But now, at long last, there’s light at the end of the tunnel.

Part of the intervening delay may be attributable to the fact that the Commission had to tweak the still-not-in-effect rules on its own motion back in January. But after that happened, the cone of silence descended over the proceeding until, finally, the text of the October, 2010, report and order was published in the Federal Register on July 8, about nine months after it was first adopted. That publication announced that the new rules would become effective on August 8, 2011 except for several sections (to be specific, Sections76.1205(b)(1), 76.1205(b)(1)(i), 76.1205(b)(2), 76.1205(b)(5), and 76.1602(b)). Those exceptions involve “information collections” requiring OMB prior approval (thanks to our pal, the Paperwork Reduction Act).  

Good news. According to a notice in the Federal Register, OMB approved those sections on July 12, so they, too, can take effect on August 8. Here’s a link to the record of the OMB proceeding (which apparently didn’t get started until May 31, 2011, when the FCC got around to sending the file over to OMB).

Of course, the July 8 Federal Register publication also opened up the opportunity to file for reconsideration or judicial review of the new rules – but let’s take things one at a time. For the time being, at least, the new rules are set to take effect on August 8.

[Update: In a public notice released July 26, 2011, the Commission has confirmed the August 8 effective date of the CableCARD rules – with two exceptions. Those two exceptions are: (1) Section 76.640(b)(4)(iii), which requires cable operators to include a home networking output on high-definition set-top boxes (except for unidirectional, non-recording settop boxes) – effective date, December 1, 2012; and (2) the requirement in Section 76.1205(b)(1) that cable operators provide the means to allow subscribers to self-install CableCARDs – effective date, November 1, 2011 only with respect to operators that did not previously offer self-install options for leased boxes or cable modems and needed to time to gear up for that.]

Net Neutrality Lands at OMB

Next round of Paperwork Reduction Act review of the “open Internet” information collection requirements starts at OMB.

We have progress to report on the net neutrality front!  Well, sort of.

The Commission has shipped two “information collection” aspects of the “open Internet” rules over to the Office of Management and Budget for its review. Yes, we know that we expected the Commission was going to take care of this chore a couple of months ago – but let’s get past that. The fact is: OMB review of net neutrality has begun, as required by the Paperwork Reduction Act (PRA).

(If you’re confused about the whole OMB review process and how it fits into the plan to effectuate the net neutrality rules, check out our earlier post addressing such things.)

Interested parties may submit their comments on either the net neutrality formal complaint process and/or the mandatory disclosure of network management practices, performance and commercial terms of access. You can find directions on how to do so in the notices (linked in the preceding sentence) published in the Federal Register. This round of comments will go to OMB, rather than the Commission (which fielded the last round of such comments starting back in February). You’ve got until August 8, 2011 to fill the OMB in on your views.

When the PRA review process started back in February, we observed that the information the FCC had made available up to that point provided less than clear guidance about just what the various new net neutrality requirements will entail. The latest notices announcing OMB review don’t add anything – which means that would-be commenters are still flying at least somewhat blind.

Note that the Federal Register notices announcing this next step in the PRA process do NOT mean either that the net neutrality rules are now effective, or that they are now subject to judicial review. Before anybody will be able to appeal the new rules, those rules will have to be published in toto in the Federal Register. 

And before the new rules can be effective, they not only will have to have been published, they will also have to have been approved by OMB. That won’t happen before August 8 for sure – but it could happen very soon after that date, if OMB has no problem with the rules. We’ll keep you posted.

STELA Update V: Section 73.686(e) Now Effective

All you STELA watchers who have been waiting on tenterhooks for more than six months can now breathe easy: the Office of Management and Budget (OMB) has approved Section 73.686(e). As a result, that section has become effective as of June 30, 2011. For those of who may have lost track of all this, last November the Commission adopted amendments to its broadcast satellite rules as provided in the Satellite Television Extension and Localism Act of 2010 (STELA). Most of the rule changes became effective back in January. But Section 73.686(e), which addresses procedures for measuring the field strength of digital television signals, involved some “information collection” requirements which – thanks to the Paperwork Reduction Act – had to be reviewed by OMB before they could kick in. OMB has now blessed the FCC’s handiwork and, by notice in the Federal Register, the FCC has announced that Section 73.686(e) has become effective.

Reminder: Comments On Public Inspection File Rule Due By June 17

 A couple of months ago we reported that the FCC had quietly invited comments on whether its local public inspection file rule is really necessary.  The deadline for those comments is fast approaching: June 17, 2011.  If you have anything you might want to tell the FCC about that rule, now would be a good time to do it.

The Federal Register notice that contains the FCC’s invitation provides all the information you should need to get your comments on file.  All you need to do is write down what you have to say and email it to and Alternatively, we'd be happy to help out if you’d like. The specific questions the FCC has posed include:

  • Whether the public file rule is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility;
  • Whether the Commission’s estimate of the burden that rule imposes on broadscasters is accurate (our earlier post includes a table setting out the FCC’s various estimates);
  • Are there any ways to enhance the quality, utility, and clarity of the information collected;
  • Are there any 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; and
  • Are there any ways to further reduce the information collection burden on small business concerns with fewer than 25 employees.

If you want our help in preparing comments on any of these questions, please let us know.

Note that while this is your last chance to tell the FCC how you feel, it’s not the absolute last chance you’ll get to comment on the public file rule.  Once June 17 comes and goes, the FCC will bundle up everything that gets submitted to it and ship the whole package over to the Office of Management and Budget, along with a separate memo from the FCC explaining how it proposes to proceed with the public file rule and why.  OMB will then provide everybody a chance to comment on that.

Public Inspection File Rule: FCC Asks If It's Really Necessary

Thanks to Paperwork Reduction Act, public file rule now out for comment

Here’s a surprise! The FCC has invited comments on whether or not the local public inspection file requirement is really necessary. Since the Commission has assiduously ignored – for more than five years – a petition for rulemaking seeking the abolition of those requirements, this invitation should puzzle some and thrill others.

As it turns out, the obligations imposed by the public file rules constitute “information collections” (in the parlance of our old friend, the Paperwork Reduction Act), and we all know what that means: periodically (like every three years) the FCC must justify such requirements to the Office of Management and Budget. The current OMB approval is set to expire on September 30, 2011, which means that, if the Commission plans to keep those rules on the books, it’s got to re-justify the rules to OMB’s satisfaction. That process entails two opportunities for public comment stretching over at least 90 days. With less than 180 days to go before expiration, the FCC has now started that process.

Unlike other Commission proceedings that get kicked off with much fanfare – public notices, Commissioners hailing “vibrancy”, “robustness”, “transparency” and the like, maybe even a webcast or blog – this one is more like a stealth item wrapped in an invisibility cloak flying under the radar. So far all we’ve seen is a blander-than-bland Federal Register announcement

But that doesn’t mean that the party hasn’t started, so come on down.

The public file rule for commercial broadcast stations may be found in Section 73.3526; for noncommercial stations, it’s in Section 73.3527. (Two other sections relating to political files – 76.1701 (cable operators’) and 73.1943 (broadcasters’) – are also included in the Commission’s inquiry.) As the FCC sees it, public files provide members of the local audience a quick and direct way of monitoring broadcaster performance. 

According to many broadcasters, though, such files are largely if not totally ineffective and unnecessary, since (in the reported experience of many of those broadcasters) the public seldom if ever inspects the files. From that perspective, the requirement to maintain the files is an empty make-work exercise that serves no purpose . . . other than to provide the FCC with a way to collect tens (if not hundreds) of thousands of dollars in fines from folks who happen not to have dotted all their public file I’s and crossed all their public file T’s. Related gripe: the broadcast renewal application form requires licensees to rat themselves out with respect to such miscues, dramatically reducing any enforcement burden the FCC might otherwise encounter.

Among the questions on which the Commission is now inviting comment are:

(a) whether the public file rules are “necessary for the proper performance of the functions of the Commission, including whether the [collected] information shall have practical utility”; and

(b) the accuracy of the Commission’s burden estimate.

As to the first question, the FCC already has an inkling. In January, 2006, our old friend, communications attorney David Tillotson, filed a petition for reconsideration urging that the public file rules be eliminated. After four months (and, we understand, some pushing by Tillotson), the Commission assigned his petition a file number (RM-11332) and issued a public notice. Don’t remember that notice? That’s not a surprise, as it was another one of those stealth/invisible/under-the-radar items, tersely describing Tillotson’s proposal only as involving some unspecified “amendment” of the rules. (Here’s a link to it.)

But even with that lack of official drum-beating, the petition attracted more than 30 comments. Only three of those indicated any support at all for the existing rules (and one of those supporting commenters referred to the requirement as “a pathetic vestige”. With friends like that . . .). The opposing commenters were broadcasters – many with decades of experience in the industry – attesting to the fact that the public has historically shown virtually no interest in the public file.

As to the question of the FCC’s “burden estimate”, get set for a chuckle.

According to the Federal Register notice, the Commission calculates the “Estimated Time per Response” – which we understand to mean the total time that each broadcaster spends to assure compliance with the public file requirement – to be “2.5-109 hours”. The notice provides no breakdown of those numbers; indeed, it doesn’t even indicate whether the time estimate involves weekly, monthly or annual increments. But back in 2008, the FCC provided OMB with this relatively detailed set of estimated annual burdens:



Hourly Burden

Local Public Inspection Files:

     (1) General Maintenance

           Commercial Radio Stations

       52 hours

           Noncommercial Education Radio Stations

     104 hours

           Commercial TV Stations

       57 hours

           Noncommercial Educational TV Stations

      109 hours


     (2) Community Issue List

           Commercial Radio Stations

        52 hours

           Commercial TV Stations

        52 hours


     (3) Commercial Limits


           Commercial TV Stations

        26 hours


     (4) Must Carry/Retransmission Consent

           Noncommercial Educational TV stations

        50 hours

           Commercial TV Stations

        50 hours


     Political Files:


           Commercial Radio

           6.25 hours

           Noncommercial Educational Radio Stations

           6.25 hours

           Commercial TV Stations

           6.25 hours

           Noncommercial Educational TV Stations

           6.25 hours

            Low Power TV Stations

           6.25 hours

            Low Power FM Stations

           6.25 hours

           Cable Systems

           2.5 hours






























So the “2.5 hour” low-end estimate presumably relates only to cable systems. In the 2008 estimates full power broadcast stations all clocked in at least 110.25 hours per year – exceeding the FCC’s current stated high-end estimate of 109 hours. And that’s just for radio stations. If our math is right, the estimated burden for commercial TV stations in 2008 was 191.25 hours.

The PRA rules provide that an agency’s burden estimate must be “specific” and “objectively supported”. Since the 2011 notice provides no real detail about the provenance of its estimates, we can’t say whether it meets those criteria. But the public file requirements haven’t changed substantially since 2008, and our guess is that FCC’s 2011 time estimates are based on the same calculations as the 2008 estimates above. (That guess is bolstered, at least in our minds, by the fact that the Commission’s 2011 estimate of “total annual burden” is 1,831,706, which just so happens to be the identical seven-digit figure it came up with in 2008. Coincidence? We think not. By the way, while the 2011 notice does not indicate what unit the FCC might be talking about there – 1,831,706 days? pieces of paper? monkeys with typewriters? holes to fill the Albert Hall? – the 2008 report to OMB makes clear that that refers to hours.)

This, of course, is not the first time we have seen such an extravagant – and risible – time estimate from the Commission.  But the real punch line is the Commission’s estimate of the “Total Annual Cost”, which we understand to mean how much it should cost the regulated party to comply with the rule. According to the FCC, that would be (get ready for it): “None”. (Note that the Commission’s notice is not a model of clarity, so it’s possible that the “Total Annual Cost” here does not refer to the cost to the regulated party – but, if not, then who does it refer to?)

As with its time estimates, the current Federal Register announcement gives us no breakdown or explanation for this cost estimate. But again, the FCC’s 2008 submission to OMB is instructive. There, using the “hourly burden” estimates indicated above, the Commission calculated that the “Total Annual ‘In-house’ Cost” comes to $37,469,148Yet even then, the Commission still concluded that the “Annual Cost Burden” would be “none”.

There is obviously considerable room for clarification by the FCC on all this.

The public file rule might serve some valid purpose – but, since the Commission has never done anything to investigate the validity of that proposition, nobody can say for sure. Given the fact that the Tillotson petition has been stuck in (or perhaps behind) some bureaucratic drawer for five years already, we can probably assume that the FCC is not enthusiastic about launching such an investigation on its own.

But the Paperwork Reduction Act requires the Commission to justify these rules, so like it or not, the FCC has got to invite and, theoretically, consider comments about them: do they serve a useful purpose, are the FCC’s burden estimates valid and, if so, does the supposedly useful purpose justify the supposedly valid burdens? More importantly, the Commission must satisfy the OMB that the FCC’s assessment is correct.

In other words, anyone who has any thoughts about the public file should take advantage of this opportunity to articulate them to the FCC. The Commission will be accepting comments through June 17, 2011. After that, the Commission will bundle up any and all comments submitted and send them over to OMB, along with a statement in support of the rules (assuming that the Commission is not persuaded by the comments to drop the rules entirely). OMB will then provide an additional 30-day comment period.  If OMB declines to approve the rules, the FCC will be unable to enforce them.

STELA Update IV: Next Stop, OMB

If you’ve been paying attention to the inexorable march of the STELA amendments, you will recall that the rule changes adopted by the Commission last November (on an expedited basis, at Congress’s behest) took effect in December and January, EXCEPT for the new version of Section 73.686(e). That last piece of the puzzle involves the procedures for measuring the field strength of digital television signals. Because it involves an “information collection”, it’s got to go through the standard Paperwork Reduction Act (PRA) drill before it can become effective.

Step One in the drill: the FCC invites PRA-related comments on the revised rule. Step Two: the FCC bundles up the proposed rule with any comments that get filed and ships the package over to the Office of Management and Budget (OMB). Step Three: OMB invites more comments. Step Four (best case scenario, FCC-wise): OMB approves the new rules. Step Five: the FCC announces the approval, and the rule takes effect.

Where are we on Section 73.686(e)? Step One. In a notice in the Federal Register, the Commission has spread the word that comments on that proposal may be filed with the Commission until April 19, 2011. (If you’re keeping track, that means that that particular rule isn’t likely to take effect until June or thereabouts, at the earliest.)

Net Neutrality Update: Coming soon - OMB Review!

But effectiveness of the new rules is still months away, at least

The Commission’s Open Internet (a/k/a Net Neutrality) initiative has taken a tangible step forward with the announcement that the FCC is getting ready to ship two “information collection” aspects of the rules over to the Office of Management and Budget (OMB) for its review. But don’t hold your breath – it’ll take at least a couple of months to get there.

OMB review is mandated by our old friend, the Paperwork Reduction Act, which requires agencies to quantify and justify “information collection” burdens before imposing them on regulated industries or the public. The idea is that OMB may perceive regulatory excess that the FCC has somehow overlooked and slam the brakes on the process.

The two Net Neutrality information collections in question? First, there are the formal complaint procedures to be used to resolve “open Internet disputes” when other, less formal, means don’t do the trick. And second, we have the requirement that broadband providers disclose their network management practices. Unfortunately, the FCC’s Federal Register notices concerning its proposals afford no particular insight into just what the complaint and disclosure requirements will involve. That may complicate the task of preparing comments on the proposals.

But wait – doesn’t the Net Neutrality order itself fill in some of the gaps in the notices? Some, maybe . . . but not all.

The formal complaint process is addressed at Paragraphs 154-159 of the Net Neutrality order. The bottom line appears to be that a complainant is expected to “plead fully and with specificity the basis of its claims and to provide facts, supported when possible by documentation or affidavit, sufficient to establish a prima facie case of an open Internet violation.” The target of the complaint can then answer each claim in the complaint, “demonstrating the reasonableness of the challenged practice.” The complainant can then try to rebut that.

The network management practices disclosure requirement is covered in Paragraphs 56-61 of the order. There the Commission provides an extensive list of types of information that might be disclosed. But the FCC emphasizes that the list is “not necessarily exhaustive, nor is it a safe harbor.” Talk about wiggle room! And just how is the information to be disclosed? That, too, is a bit up in the air. It’s got to be posted on a “publicly available, easily accessible website”, and must also be provided at the point of sale. According to the Commission, “[c]urrent end users must be able to easily identify which disclosures apply to their service offering.” The Commission declined to specify any particular format for the disclosures.

In the Federal Register notice, the FCC summarizes the disclosure requirement as mandating disclosure of “accurate information regarding the network management practices, performance, and commercial terms of their broadband Internet access services sufficient for consumers to make informed choices regarding use of such services and for content, application, service, and device providers to develop, market, and maintain Internet offerings.” A standard defined by what might be deemed (by whom? the FCC? the consumer?) “sufficient” to allow “consumers” to make “informed choices” doesn’t seem to be much of a “standard” in the traditional sense, but you never know.

So anyone inclined to file comments on either of these proposals may find it tricky to get a firm grip on precisely what burdens are likely to be involved here. (For the record, we asked the FCC if it could let us know what its proposed information collections would entail – above and beyond what is shown in the Federal Register notices. We were directed to the paragraphs of the order mentioned above, along with Appendices A and B to the order.)

What happens next?

Anyone who wants to comment on either (or both) of the proposals has two (count ‘em, two) opportunities to do so. First off, between now and April 11, you can submit comments to the Commission. According to the FCC’s notices, 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 will have practical utility; (b) the accuracy of the Commission’s burden estimate; (c) ways to enhance the quality, utility, and clarity of the information collected; (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; and (e) ways to further reduce the information collection burden on small business concerns with fewer than 25 employees.

Once April 11 comes and goes, the Commission will package up any and all comments and ship them to OMB, along with its proposed information collections and a separate “supporting statement”. At that point, interested parties will have a 30-day opportunity to let OMB know what they think. The Commission will then have a chance to respond to any incoming comments and/or questions that OMB might pose. Its response may include revising either or both proposals. (Note – Neither OMB nor the FCC provides any public notice of any such post-comment period revisions. If you’re diligent, you should be able to find out about them by checking the OMB website on a daily basis . . . but that may prove an empty exercise, since OMB affords no formal opportunity to comment on any such on-the-fly revisions.) 

Once OMB is satisfied that the FCC’s proposals are consistent with the Paperwork Reduction Act, OMB will issue its approval. That approval will be formally announced in the Federal Register and, 60 days after that announcement, all of the Open Internet rules adopted last December are set to become effective.

So even in the fastest scenario – where the FCC would send its proposals to OMB immediately after the close of the April 11 comment period, and OMB would in turn approve the proposals immediately after the close of its own 30-day comment period, and the announcement of that approval would be published instantaneously with the issuance of the approval – we’re still looking at 120 days at the very least before the Net Neutrality rules can be expected to take effect.

One more timing consideration. Within a matter of days, if trade press reports are to be believed, the Commission should be publishing the Open Internet order itself in the Federal Register. That publication will mark the opening of a 60-day period during which petitions for review of the order may be filed pursuant to Section 402(a) of the Communications Act. Two appeals of the order have already been filed pursuant to Section 402(b), although the FCC has moved to dismiss both of them. In any event, it is virtually certain that some parties – and maybe a lot of parties – will be seeking judicial review of the order before the rules become effective. Should a reviewing court conclude that a stay of the rules is warranted, the effective date could be pushed back indefinitely.

. . . and statistics."

FCC 2010 Quadrennial Review “Consumer Survey” gets preliminary go-ahead from OMB

Readers may recall a couple of posts here last November, describing a “Consumer Survey” that the Commission had sent over to OMB for its approval. (Those posts may be found here and here.) The FCC had commissioned a survey which would generate data to be “used to examine the impact of local media market structure on consumer satisfaction with available broadcast radio and television service”. It’s all part of the Commission’s 2010 Quadrennial Review.

You may also recall that, in sending it over for OMB’s thumbs up, the Commission urged that the survey be approved by November 22, 2010 because the results were needed for a study that was due to the Commission by January 31. (Less than two weeks after pleading for expedited treatment, the Commission advised OMB that, oops, it had mis-stated when the various studies were due to be completed – but it still wanted the OMB to approve the survey by November 22.) According to the FCC, “[a]ny delay in administering the survey will make the contractors’ already tight deadlines unworkable.”

Good news!! OMB approved the survey . . . on January 13, not quite two months beyond the Commission’s outside deadline.

It appears that OMB had a number of concerns about the survey as it was initially presented. The materials available for review at the OMB website reflect a major league overhaul of the Commission’s “Supporting Statement” along with a number of tweaks to the survey itself.

The Supporting Statement now consists of 23 pages, split up into two separate sections. That’s in contrast to the original version of the Supporting Statement filed back in November – which weighed in at a meager four pages. (Oddly, the original version appears to have gone missing from the OMB website. No worries – we kept a copy; you can read it here.) The first section (presumably from somebody at the Commission, although it’s unsigned and unattributed) now waxes eloquent about “competition” and “diversity” and “localism”. According to the Commission, the survey will, among other things, “collect information on consumers’ perception of the quality and quantity of the local content provided.” 

But the only survey question focused on “localism” reads

A media environment with low localism provides very little or no information on local news and events. With medium localism, there is some local information, and it reflects some of the interests of your community. With high localism, the information reflects many of the issues and interests of your community.

Consider the sources of information from your media environment. Please indicate their level of localism [on a three-level scale, i.e., “Low”, “Medium” or “High” localism].

Later questions solicit the respondent’s “satisfaction” (on a five-point scale) with the level of “localism” which he/she perceives to be available. The concept of “satisfaction” is not defined in any discernable way. Neither is “localism” or “local content” (other than through a reference to “examples” like reports on “school sporting results”, “city/county elections” or “neighborhood crime”). The words “quality” and “quantity” don’t appear in the survey at all.

With all due respect, it’s difficult to see how that survey question (even with follow-ups about the undefined notion of “satisfaction”) could possibly produce any useful information at all about “consumers’ perception of the quality and quantity of local content” available to them. 

And are consumers’ “perceptions” a meaningful consideration in any event? If “localism” really is a valid regulatory concern, shouldn’t the Commission be concerned about the nature, amount and source of “local” programming actually available? (With respect to the Commission’s self-serving description of the regulatory significance of “localism”, readers might want to take a look at these Comments (continued here and here) and this law review article for a different perspective on the subject of localism.)

The second part of the new-and-improved Supporting Statement appears to have been prepared by the non-FCC folks who drafted the survey. To say that it’s technically challenging is an understatement. Be sure to have a dictionary on hand if you try to read it. (Sample terms: “cross-sectional regression analysis”, “exogenously”, “collinearity”, “dichotomous”, “bivariate probit”, “computationally intractable”)

It’s also got a boatload of stuff like:

A linear approximation to the household conditional utility function is:


+ β5MULTICULTURALISM + e                                                                       

where U* is (unobserved) utility, β1 is the marginal disutility of COST, β2, β3, β4 and β5 are the marginal utilities for the media environment features, ADVERTISING, DIVERSITY, LOCALISM and MULTICULTURALISM, and e is a random disturbance.

We’ve established in previous posts that this particular blogger is not a probs/stats jock, so you won’t find me criticizing this end of things. But even if we assume the fancy math is all exactly right, doesn’t the validity of the results depend ultimately on the validity of the data being fed into all those fancy equations?

In addition to the Supporting Statement (Parts A and B), the OMB website now also includes a “Response to OMB Review” apparently submitted by somebody on the survey design team who seems to have been responding to more or less specific OMB questions. The interesting point here is that it looks like OMB actually did critique the original version of the survey in some detail.

Not that it did much good.

Oh sure, at OMB’s suggestion, the original reference to USA Today (at Question 42, about “diversity”) has been changed to The Wall Street Journal. And where, in the same question, the original version parenthetically assigned political values to “CNN news (more liberal)” and “Fox news (more conservative)”, those parenthetical descriptions have gone away in the new version.   Another change – in Question 48, the following “example of multiculturalism” has been deleted:

[N]ews outlets that, rather than only reporting negative news from African American or Hispanic neighborhoods, such as robberies and shootings, provide a balanced story of “what is going on” in these neighborhoods.

But when OMB questioned the “vagueness of the features of the media environments” or the use of “Low”, “Medium” and “High” as descriptives for levels of, e.g., “localism” and “multiculturalism”, the survey designers simply declined to make any changes.

And with those changes and non-changes, OMB has approved the survey. Kind of. The survey has been cleared only for “the focus group and pre-test portions”, meaning that when those preliminary hurdles have been crossed, any additional changes will have to be sent back to OMB for further review. OMB also imposed several technical conditions.

Notwithstanding the conditions and possible further review, though, it appears that OMB is not going to stand in the way of the deployment of the Consumer Survey. It will be interesting to see whether the FCC and its contractors ever get around to administering the survey. After all, back in November, the Commission took the position that any delay in administering the survey “will make the contractors’ already tight deadlines unworkable.” OMB still hasn’t fully approved the survey, we’re now half-way through January, and it’s hard to imagine that those deadlines that were “already tight” two months ago have become any more “workable”. 

But where there’s a will, there generally turns out to be a way. Ostensible reliance on extended fact-finding is something agencies like to trot out when their rulemaking actions are appealed. Cynical observers might suggest that the survey is just an effort to generate a nice batch of seemingly scientific statistics to cite in support of whatever conclusions the Commission would like to reach. The near total absence of useful definitions of crucial terms, together with other obvious shortcomings (e.g., an apparent failure to clearly delineate “broadcast” from “nonbroadcast” sources of video programming), does nothing to dispel such musings. It’ll be interesting to see how this plays out – but don’t be surprised if you hear a lot more about the survey when the FCC tries to move forward with its Quadrennial Review.

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.

"Our Survey Said . . . " - Update

Proposed “Consumer Survey”, along with more “supporting” info, now available at OMB website

As you will recall from our post last Friday, an official FCC public notice (in the Federal Register, for crying out loud – how much more official can you get?) said that the proposed “Consumer Survey” would be available for review on November 5. That turned out to be not entirely true, since (apparently because of some delay induced by the OMB computer system), the survey and related supporting documents didn’t show up on the OMB site until November 7. But it’s there now, so we can all breathe a little easier. (Note: A tip of the CommLawBlog hat to the truly dedicated FCC staffperson who emailed us at 9:15 on Sunday morning, November 7, to pass the word along that the materials had shown up on the OMB site. That was service far above and beyond the call of duty, and we are sincerely thankful for her help.)

Here’s the scoop. To view the proposed Survey, go to this page at the OMB site. To make life easier for you, here’s what you should see when you get to that page:


Once there, click on the link to “Consumer Survey (2010).pdf”, which appears in the “Instrument File” column of the table on that page. (We’ve helpfully marked that in the illustration above.) The Survey should pop up on your screen as a PDF file. As we suggested in our last post, it makes for interesting reading.

But wait, there’s more. If you go to this other page at the OMB site, you’ll find links to three additional documents. One (identified as “Supporting Statement A”) is the supporting statement we provided a link to in our earlier post about the Survey. No real news there.

But the other two are pretty interesting in their own right.

“Supporting Statement B” sheds some light on how the Survey will be administered. Turns out the perfessors who designed the Survey have subbed out the actual conduct of the operation to a company (Knowledge Networks, or “KN”). KN will send the Survey to “a random sample of the U.S. population, potentially obtaining information from an estimated 5,000 households.” Statement B contains a lot of impressive stuff about statistical this and estimation that – stuff that, frankly, this blogger doesn’t fully grasp (“Dammit, Jim, I’m a communications lawyer, not a probabilities and statistics expert”). 

It’s all apparently intended to provide assurance that we should have confidence in the accuracy of the Survey results. For example, Supporting Statement B advises that, because the Survey will be conducted online, KN will be able to determine how long it takes any particular respondent to answer any particular question. According to KN, “[t]his gives the contractor a natural measure of the certainty the respondent feels in his or her answer. This information is useful in ameliorating the effects of hypothetical bias.” Perhaps that’s valid, but might the response time be affected not only by the respondent’s “certainty” in his/her answer, but also the respondent’s desire to get on with his/her life sooner rather than later, or possibly the respondent’s need to go to the bathroom, answer the phone, get a bite to eat, etc., while plowing through the 25-page Survey?

Another example: KN has developed a number of strategies to assure accurate response from “low-education and cognitively challenged respondents”. One such strategy involves “re-asking questions through a confirmation exercise if it is apparent from inconsistencies in the survey answers that the respondents do not understand the survey questions”. But if the respondent didn’t understand the survey questions the first time through, will “re-asking” those questions really help?

The bottom line here is that Supporting Statement B strives mightily to soothe us all as to the likely accuracy of the Survey’s results. The problem is that there remains a “black box” sense to the whole thing. And, to some of us not intimately familiar with probs and stats, that sense is not helped by the fact that devices supposedly designed to improve accuracy might also be seen as opportunities to put one’s thumb on the scale.

The third document (file name: “Emergency Letter (Consumer Survey). pdf”) linked on the OMB page is the FCC’s explanation about why the Survey needs to be approved by OMB on an “emergency” basis. And the answer is . . . well, you should read it yourself, because maybe we’re missing something.

The Commission notes that the Survey would be conducted in connection with the statutorily-mandated Quadrennial Broadcast Ownership inquiry. That’s undoubtedly true, but why does that require “emergency” treatment? The FCC doesn’t say.

The FCC then advises that it was unable to award the bid for the Survey until September 30 “[d]ue to a significant delay in obtaining funding”. We all know how that goes, but that explains only why it’s taken so long to get to this point – it does not explain why getting the Survey approved by November 22 is important. The Commission does say that the contractor “is required to submit a draft of the study” to the FCC by January 5, 2011, with the final study due by January 31, 2011. Where those deadlines came from, though, and why they are apparently etched deeply in stone is not disclosed.

So the “emergency” here is apparently that the FCC has established a deadline – based on what, the Commission doesn’t say – and in order to meet that deadline, it would like the Survey to get moving pronto. We strongly suspect that if a broadcaster seeking “emergency” FCC action relied on this kind of showing, the Commission would routinely reject it out of hand – but that just goes to show what happens when the shoe’s on the other foot.

One aspect of the Commission’s “emergency” claim is particularly troubling. It seems clear that the (presumably) FCC-established deadline for completion of the final report is driving the bus here, which seems backwards. If the Survey is intended to provide useful insight into the issues on the table, shouldn’t the researchers be given the time they need to complete their survey thoroughly and analyze the resulting data completely first, before the Commission can even start to set deadlines for wrapping things up? This apparent Deadline-Über-Alles approach does not inspire confidence here.

And let’s take a look at the Survey schedule, if the FCC does get OMB approval on November 22. According to Statement B, KN plans to run the Survey past not one, but two focus groups. We’re guessing that that’s likely to take at least a couple of days. If OMB gives the Survey its blessing on November 22 (the Monday of Thanksgiving week), it seems unlikely that the focus groups will have been conducted, the results compiled, and any adjustments to the Survey made before, say, December 1. So let’s say the Survey gets deployed to the random universe of 5,000 folks on 12/1. Supporting Statement B says that respondents will have “a two-to-four week period to reply”. That means that the responses won’t all be in until after Christmas. But the draft report is due to the Commission on January 4. Is that schedule really consistent with an interest in achieving the most accurate and reliable report which might meaningfully contribute to the resolution of important questions?

If you have any thoughts about any of this, you have until November 22, 2010, to pass them along to the FCC and/or OMB. And as we suggested in our earlier post, since the FCC seems to expect OMB approval on November 22, it would probably be a good idea to get comments in sooner rather than later.

"Our Survey Said . . ."

FCC unveils “Consumer Survey” to be used as basis for latest broadcast ownership review

Paging  Richard Dawson! The FCC may be needing you to come out of retirement soon to deliver the classic Family Feud catchphrase. Why? Because the Commission is looking to unleash its own “Consumer Survey”. The subject? “The impact of local media market structure on consumer satisfaction with available broadcast radio and television service.”

The survey is being undertaken in connection with the Commission’s latest quadrennial inquiry into broadcast ownership. As you doubtless recall, that inquiry got kicked off last May. In June, the Media Bureau issued a number of “Requests for Quotations” (RFQs), seeking proposals for “economic studies to evaluate the current marketplace and the state of the media industry”. One proposal was selected on September 30, apparently – not that the FCC made any formal public announcement of that selection back then (the whole selection process appears somehow to have escaped the FCC’s oft-alluded-to commitment to Transparency). 

In any event, now it’s full speed ahead with the survey. In fact, the Commission’s in such a hurry that, according to a notice published in the Federal Register, it’s asking the Office of Management and Budget to give the draft survey the old “emergency processing” treatment so that OMB can give it the thumbs up in a mere 17 days. (Calendar note: the17-day period in question happens, coincidentally or otherwise, to include three weekends, so it’s really a 10-business-day period if you don’t count the last day, i.e., the day the FCC apparently expects OMB approval to issue.)

Looks like the FCC may be hoping to deploy the survey before the end of the month.

The Federal Register notice doesn’t shed any light on why the Commission might think emergency treatment is warranted here. But it does provide the following description of what the survey is supposed to entail:

The consumer survey will be used in a determination to define a performance metric related to the public interest goals the Commission seeks to promote through its media ownership rules. The Consumer Survey will be used to examine the impact of local media market structure on consumer satisfaction with available broadcast radio and television service. The Consumer Survey will collect information regarding how much time people spend with various media and how people get news and information. The Survey will ask respondents to rate, on a numerical scale, their current satisfaction with the overall local media environment and with components such as broadcast television, broadcast radio, and newspapers. The Survey will also include questions asking respondents to rate their current satisfaction with the local news, local public affairs, and other locally oriented media content. This survey will be distributed via the Internet to a nationwide sample of consumers, and the Commission anticipates approximately 5,000 responses to the survey.

The proposed survey was supposed to be available at the OMB website on November 5. As of 4:00 p.m. on November 5 it wasn’t there, although a very helpful FCC staffmember assured us that the survey (and an accompanying “Supporting Statement”) had been sent to OMB for posting around noon. We don’t doubt her on that, since she also very kindly sent us copies of both. We were going to include our own link to the Survey, but we noticed that its front page bears an ominous copyright notice (claiming ownership by the surveyors, not the FCC), so out of an excess of caution, we’ll hold off on including a link until it shows up on the OMB site. But we will include a copy of the FCC's Supporting Statement here – to tide you over until OMB catches up. (Remember, you have only 17 days to comment, so every minute counts!)

A quick look-see at the survey suggests that there may be plenty of reason to comment.

For openers, the survey is titled “Choosing information from your media environment: What are the options?” That doesn’t sound like it’s gearing up to measure “consumer satisfaction”, but what the heck – it’s just the title.

Remember how the Commission said in its Federal Register notice (quoted above) that the survey would, among other things, inquire about “satisfaction” with “broadcast television” and “broadcast radio”? Well, it doesn’t really do that, mainly because it makes no serious effort to distinguish between “broadcast” services and NONbroadcast services (such as satellite radio, satellite TV, or cable). And when the survey does allude to such differences, it does not do so in a helpful manner. To wit: “Broadcast TV channels are free, over the air if you have good reception, e.g., ABC or NBC. They are often re-transmitted by the cable or satellite company, but they are still broadcast channels.” All true, sort of.

And even if we could accept that rough-hewn definition of “broadcasting”, it really doesn’t make any difference. That’s because, in what appear to be the pay-off questions seeking comparisons among the various different types of “media”, the survey lists merely “radio” and “TV” as options, without reference to broadcast vs. nonbroadcast. And the ultimate question about “satisfaction” (that would appear to be Question No. 51) doesn’t even distinguish among the different types of media – rather, it asks about the respondent’s level of satisfaction with his/her “overall media environment”.

So how is this survey going to provide any useful information at all about “broadcast ownership”?

There are other problems. For example, the survey doesn’t attempt to define for the respondent’s benefit the concept of “satisfaction” as it is used in the survey. How, then, can we know that one respondent’s definition of “satisfaction” is even remotely equivalent to another’s – much less what, precisely, any particular respondent might mean by “satisfaction”.

And while the survey poses questions about the availability of “localism” and “multiculturalism” in the respondent’s media environment, the definitions of those two terms are interesting, but not particularly useful from a regulatory perspective.

Eschewing any effort to provide, like, real definitions, the survey opts instead for “examples”. For “localism”, the survey refers to “reports on: school sporting results, local council meetings, city/county elections, neighborhood crime, local heroes who give their time to the community, or job layoffs at a local factory.” For multiculturalism, the examples offered are “reports on: the Cinco de Mayo celebration, female wage inequality, or programs that help people with disabilities find a job.” Oh yeah, and “news outlets that, rather than only reporting negative news from African American or Hispanic neighborhoods, such as robberies and shootings, provide a balanced story of ‘what is going on’ in these neighborhoods.”

Those may, of course, be perfectly valid examples of the surveyors’ understanding of “localism” and “multiculturalism”. But remember, this survey is supposed to be used by the FCC to develop FCC policy concerning broadcast ownership. Unless the basic terminology used in the survey correlates with some precision to corresponding FCC terminology, it is difficult to see how the survey could produce any data that the FCC could legitimately use. Needless to say, however the FCC may have conceived of “localism” heretofore, it has not defined it like the survey does. Ditto for “multiculturalism”.

The survey includes an elaborate series of questions in which the respondent is asked to indicate a preference between two different mixes of five variables (i.e., “cost”, “advertising”, “diversity”, “localism”, and “multiculturalism”). Again, it’s not at all clear how these questions will generate any data properly useable in an assessment of broadcast ownership.

Don’t take our word for it. Click on the survey when it shows up on the OMB site and wander through its 25 pages. (Try to do so in 15 minutes, though – that’s the time the surveyors estimate will be needed to complete it. Presumably that time estimate does not include the time necessary to locate all your recent bills for newspaper, satellite radio, cable/satellite TV and/or Internet service – all of which are required to answer a number of the questions. 15 minutes? Good luck with that.)

Over and above the survey itself, the FCC’s submission to OMB sheds no light on precisely how the survey will be administered. We know that the surveyors plan to distribute it to about 5,000 people over the Internet, but who those lucky few are and how they will be chosen is a mystery. (Despite its Internet-based delivery, the survey will be available to folks who don’t have home access to the Internet. That’s because the surveyors plan to provide such folks with “free netbook computers and Internet access”. Other “non-specific survey incentives” will be provided to respondents to “maintain a high degree of panel loyalty”.  Where can we sign up?)

Oh, and by the way, according to the FCC’s Supporting Statement, the survey cost $88,300 to produce. Those would be our tax dollars at work.

Anyone interested in commenting on the survey has until November 22, 2010 to do so. You should bear in mind, though, that the FCC has asked OMB to approve the survey on the 17th day, so it might be a good idea to file comments sooner rather than later. (Of course, if the FCC is already expecting OMB approval on November 22, what are the chances that the opportunity to file comments with OMB is likely to be much more than a charade?)

Form 323: SSN Disclosure Requirement Largely Written Out Of Form In Last-Minute Revision

Court ruling on Fletcher Heald mandamus petition confirms elimination of need for new SSN-based FRNs to complete revised Ownership Report

Last week we reported that the U.S. Court of Appeals for the D.C. Circuit had denied our mandamus petition, and that the July 8 deadline for biennial Ownership Reports (FCC Form 323) would remain in effect. What with the last-minute nature of the Court’s order and the consequent need to wrap up a bunch of 323’s by the deadline (not to mention various other distracting obligations), we didn’t highlight perhaps the most important aspect of the order: the Court effectively confirmed that nobody needs to provide his/her Social Security Number (SSN) for a new FRN in order to file ANY Ownership Report – biennial or otherwise – until further notice.

According to the Court, the FCC has taken the position that “no individual attributable interest holder will be required to submit a Social Security number to obtain an FRN [i.e., FCC Registration Number] for the July 8, 2010, biennial filing deadline or for any imminent non-biennial filing of Form 323.” And since the Court’s denial of our mandamus petition was based on the FCC’s stated position, it appears extremely doubtful that the FCC will be moving off that position soon.

As a result, any person holding an attributable interest in a commercial broadcast licensee – i.e., any person who would have to be reported on Form 323 – who has not already submitted his/her SSN to the FCC in order to obtain an FRN need not do so. This is a significant development, and a significant retreat on the part of the Commission.

Here’s a step-by-step chronology of the rise and fall of the FRN requirement.

Behind closed doors

Back in May, 2009, the Commission announced that Form 323 would be revised. But at that time the Commission said absolutely nothing about requiring individual attributable interest holders to cough up their SSNs part of that process. Likewise, when the Media Bureau announced, in June, 2009, that it had revised the form, it didn’t mention any SSN requirement; to the contrary, the Bureau specifically said that the revised form did not give rise to any need for confidentiality and did not raise any privacy concerns. (Even though the Bureau solicited public comments on its revised form, it elected not to make the revised form available for review, which made it difficult – no, wait, make that impossible – to comment on the draft form.)

From behind a cloud of denial, the revised form appears

In August, the Bureau shipped its revised Form 323 over to the Office of Management and Budget (OMB) for its approval. In so doing, the Bureau – or maybe it was the Commission itself (it’s impossible to tell exactly who sent the item over to OMB) – again expressly claimed that its handiwork did not present anything to worry about from a confidentiality or privacy perspective. But OMB posted the revised form for all to see, finally. Lo and behold, the revised form required that every attributable interest holder listed in any Form 323 be identified by his/her own SSN-based FCC Registration Number (FRN). In other words, in order to complete the form, licensees would have to force their various attributable interest holder to obtain their own FRNs, and that in turn would require those interest holders to hand over their SSNs to the FCC.

Accompanying the form was a “supporting statement” which again asserted that the revised form did not involve privacy or confidentiality issues.

A number of broadcast-related parties pointed out to OMB that, au contraire, the SSN/FRN requirement did indeed implicate serious privacy/confidentiality considerations . . . and oh, by the way, the FCC had never given anybody the opportunity to comment on that requirement in the first place. A month later, a “revised supporting statement” was submitted – presumably by the Commission, although it was unsigned and otherwise unattributed – in which the obvious privacy/confidentiality concerns were finally acknowledged.

In a separate response to the various comments, an official in the FCC’s Office of Managing Director claimed that the SSN-based FRN requirement was a “vital mechanism for data quality assurance”. In essence, the Commission was moving full speed ahead with its revised form, FRN requirement and all.

The FCC blinks once, or maybe twice

Despite the problematic record underlying the revised form, OMB approved it in October, 2009, and the Bureau promptly announced that the new form would have to be filed by December 15. In November, Fletcher Heald asked the Commission to stay the implementation of the form, noting (among other things) that an impressive number of shortcomings in the development of the revised form precluded its implementation. The Commission ignored our pleading, but a week or two later postponed the filing deadline into January

In early December, the Commission made the revised form available for folks to fill in., at least for a while. But it also revealed a further change relating to the FRN requirement. Now parties could avoid disclosing SSN-based FRNs, but only after the licensee had made good faith, diligent efforts to obtain all necessary FRNs. If they had done so but still were unable to come up with the FRNs, respondents could use randomly-generated “special use FRNs” (SUFRN) as a temporary expedient – emphasis on the word “temporary”. According to the revised instructions, use of a SUFRN did not relieve the respondent of its “ultimate duty” to hunt down “fully compliant” FRNs for all concerned. And the SUFRN was not available for non-biennial Ownership Reports (such as those filed by assignees or transferees after the consummation of their acquisition of licenses).

So the SUFRN option in fact did nothing to eliminate the FRN obligation.

In late December, with the January deadline fast approaching, Fletcher Heald – joined by ten state broadcasting associations – asked the D.C. Circuit to intercede. Several hours after that request was filed, the FCC announced that it was indefinitely postponing the filing of the revised form, giving rise to cautious optimism that the FCC might be re-thinking the FRN requirement. (Apparently as a result of the indefinite postponement, three months later the Court denied Fletcher Heald’s December request.)

It’s baaaack.

In early April, it became clear that any optimism, cautious or otherwise, was unfounded. The Bureau announced that the revised Form 323 was back on the calendar. New due date: July 8. The announcement said nothing about the FRN question. But careful review of the FRN question on the form revealed new language. Gone was the admonition that respondents had some “ultimate duty” to chase down SSN-based FRNs for all their attributable interest holders. Instead, the form now provided that

[r]espondents who use a non-SSN based “Special Use FRN” will be deemed fully compliant with the Form 323 filing obligation for purposes of this initial filing and the lack of SSN-based FRNs in response to Question 3(a) will not subject Respondents to enforcement action.

The Commission did not provide any public notice announcing, much less explaining, this change.

The Court steps in

Fletcher Heald, along with several state associations and a number of broadcast licensees, headed back to court with a second mandamus petition. With the new deadline just weeks away, on June 14 the Court ordered the FCC to respond to our arguments by June 21 (later extended to June 23). 

Here’s where things got interesting.

On June 17, the FCC sent OMB yet another revision to the form, changing the instructions to the FRN question further:

Old language: An SUFRN could be used “[i]If, after using diligent and good-faith efforts, Respondent is unable to obtain a Social Security Number”.

New language: An SUFRN may be used “[i]f, after using diligent and good-faith efforts, Respondent is unable to obtain, and/or does not have permission to use, a Social Security Number in order to generate an FRN”. (emphasis added)

In other words, if a respondent had somebody’s SSN and could theoretically have signed that person up for his/her own FRN, the respondent was not obligated to do so if the individual had not given his/her permission. Obviously, the Commission was moving away from its original notion that all respondents had an unavailable “ultimate duty” to nail down SSN-based FRNs for all attributable interest holders.

Additionally, the new instruction made the SUFRN option available not only for the biennial Ownership Report, but also for all other non-biennial uses of the Form 323.

OMB approved that new language on June 21, and on June 23 the Commission relied on the newly-relaxed instructions in responding to FHH’s arguments. The Commission didn’t bother to issue any public notice announcing its revised instructions. More surprisingly, in its response to the Court the Commission also didn’t bother to alert the Court that the language on which the FCC was relying was brand-spanking new – and that that language had been concocted only after the Court had ordered the Commission to respond.

What the Commission did do in its response to the Court was to provide its own gloss on the revised instruction. According to the Commission’s response, that revision makes it “clear” that

users are not required to provide SSN-based FRNs for the July 8 filing if they object to the submission of their Social Security Numbers.

To some, that gloss might go somewhat beyond the precise language of the latest revised instruction. But that’s what the FCC told the Court.

The Court then interpreted the Commission’s gloss to mean that “no individual attributable interest holder will be required to submit a Social Security number to obtain an FRN [i.e., FCC Registration Number] for the July 8, 2010, biennial filing deadline or for any imminent non-biennial filing of Form 323.” And, based on that interpretation, the Court denied our second mandamus petition.

Call us crazy, but we’re prepared to declare a significant (although not yet total) victory here. Yes, the mandamus petition was “denied”, but only because the Commission backed off the FRN requirement. And since the Court clearly identified that retreat as the basis for the Court’s decision, any attempt by the Commission to re-impose its previous, unrelaxed standard would open the door for another mandamus action. In other words, a major flaw in the revised report has been corrected, at least temporarily, as a result of our efforts.

Unfortunately, the last-minute timing of the FCC’s response and the Court’s action kept these developments out of the public eye just as the July 8 deadline rolled around. As a result, it’s likely that a number of folks who might not otherwise have provided their SSNs did so under the misimpression that they had to. Next time, they might want to check out CommLawBlog first.


Is the relaxation – or effective elimination – of the SSN-based FRN requirement permanent? Who knows? Since the FCC has never bothered to explain precisely why such FRNs are supposedly essential, it’s hard to say whether the FCC could justify such a requirement (although many strongly doubt it). And the longer the Commission relies on SUFRNs, the harder it will be to justify any claim that there is no adequate substitute for SSN-based FRNs. 

But the Commission clung tightly to the requirement in the face of strong arguments, and relented only when forced by the Court to try to explain its position. That suggests that we may not have seen the last of the SSN-based FRN requirement. We’ll keep our eyes out for further developments – check back here for updates.

And before signing off, let’s hear it for the folks who stood up with us at the D.C. Circuit in one or both of the mandamus petitions: The Alabama Broadcasters Association, the Alaska Broadcasters Association, the Arkansas Broadcasters Association, the Kentucky Broadcasters Association, the Louisiana Association of Broadcasters, the Mississippi Association of Broadcasters, the New Mexico Broadcasters Association, the Puerto Rico Radio Broadcasters Association, the South Carolina Broadcasters Association, the Tennessee Association of Broadcasters, Hubbard Broadcasting, Inc., Salem Communications Corp. and Spring Arbor University. We appreciate the support they provided and the confidence they showed in us.

Form 323: The Court Weighs In

We’ve received many calls over the last week or so asking whether the D.C. Circuit had issued any decision with respect to our mandamus petition about the revised Form 323. The answer has been “no” – until, that is, today, when the Court issued a very brief order, which you can read here, denying the petition.  As a result, Thursday's deadline remains in effect. 

Form 323: Point/Counterpoint

FCC opposes mandamus petition, petitioners reply.

Following our June 15 post reporting that the U.S. Court of Appeals had ordered the FCC to respond to our mandamus petition relative to the revised Form 323, we have received a number of requests for updates on that front. Here’s the scoop.

Apparently as a result of a glitch in the court’s electronic filing process, the FCC reportedly didn’t receive a copy of the court’s order on June 14, when it was issued. The Commission told the court that the Commission learned of the order only through the trade press on June 16. (And the trade press presumably found out about the order from our post.) The FCC asked for, and was granted, a two-day extension of its response time.

On the extended deadline (that would be June 23) the Commission filed its Opposition, which you can read here. Anyone who has followed the Form 323 festivities will find that it makes for most interesting reading.

The petitioners, led by Fletcher Heald, have filed a reply to the FCC’s Opposition. You can read our reply here.

The matter is now teed up for the court’s consideration. Given the tight time limits the court imposed on both the FCC and the petitioners with respect to this latest round of pleadings, we suspect that the court is aware that the July 8 deadline for filing biennial ownership reports on the revised Form 323 is fast approaching. Check back here for further developments.

Form 323 Update: FCC Has Some 'Splaining To Do

Court gives Commission seven days to respond to charges about irregularities in the way revised ownership report was developed.

With the July 8 deadline for filing commercial ownership reports fast approaching, we have a new development to report: the U.S. Court of Appeals for the D.C. Circuit has ordered the FCC to respond to claims that the revised Form 323 filing requirements – and particularly the requirement that all “attributable” principals provide their social security numbers (SSNs) – were not imposed lawfully. While it’s impossible to predict what the Court will ultimately do, the fact that it has asked the FCC for its side of the story suggests a level of judicial interest which should be of concern to the Commission.

The Court’s involvement was sought by Fletcher Heald, together with a number of state broadcast associations and broadcasters. In May they filed a petition for writ of mandamus asking the Court to step in to compel the Commission to comply with required procedures before forcing anybody and everybody with any “attributable” interest to cough up their SSNs to the agency.

We have been following the problematic history of the FCC’s efforts to revise its ownership report (Form 323) for commercial broadcasters for more than a year. Any readers new to the situation can catch up by taking a romp through our past Form 323 posts here.

A petition for mandamus is what the Court terms an “extraordinary” request in which the petitioner asks the Court to force the agency to comply with statutory requirements which the agency appears to be ignoring. Unlike the more conventional appellate process – which routinely contemplates that the FCC must make its case in a responsive brief before the Court will act one way or the other – the mandamus process does not guarantee any response from the FCC. To the contrary, the Court can, and often does, simply deny or dismiss a petition for mandamus with a two or three sentence order without bothering the Commission at all.

But the Court’s rules provide that a petition for mandamus will not be granted unless the agency is given an opportunity to respond. That’s one reason the Court’s order directing the FCC to respond to the FHH et al. petition is of more than passing interest. Throw in the fact that the Court’s order gives the FCC a mere seven days in which to respond, and that interest grows: such an abbreviated response deadline at least suggests that the Court may be looking to assemble a complete record and act on the petition in advance of the fast-approaching due date (currently July 8) for filing reports on the revised Form 323.

By our reckoning, the FCC’s response to the Court’s order will mark the first time that the Commission will have had to address, in a formal presentation, the unusual – and, in the view of a number of observers, unlawful – approach by which it has tried to force all “attributable” principals to give the FCC their SSNs. Anyone who has been following this story will want to check back here next week to see what the FCC has to say.

Revised Form 323 Available - April 9, 2010

Bureau announces July 8, 2010 deadline for filing November 1, 2009 information

It’s official!! The Media Bureau has announced that, as of April 9, 2010, the revised Form 323 to be used by commercial broadcasters for their biennial Ownership Reports is available for use.   Disappointingly (but, given its track record in this matter, not surprisingly), the Bureau’s public notice does not bother to address any of the serious problems that have plagued its efforts to revise the form. Instead, the notice imposes a deadline of July 8, 2010, for the completion and submission of biennial Ownership Reports for all commercial broadcast licensees. Oh, and it also reminds us that the information to be submitted on that report must reflect the reporting licensee’s ownership as of November 1, 2009.

The Bureau encourages everybody to file “as early as possible”.

It's Baaaack! More Revisions To Form 323 Emerge On OMB Website

Spreadsheet uploads apparently approved, SSN-based FRNs still required

You’ll never guess what snuck onto the OMB website a week or two ago – some more changes to the draft Ownership Report (FCC Form 323) for commercial broadcasters. Who knew? (The answer to that question appears to be as few people as possible, at least if the Commission had anything to say about it.)

 The FCC’s OMB filing presumably signals a renewed agency interest in implementing modified reporting requirements. Readers may recall that that interest first popped up in late 2008, in connection with the Commission’s efforts to encourage greater diversity of broadcast ownership. That led to a Dilbert-like series of developments as the Commission (in the role of the pointy-headed boss) gave the Media Bureau (in the role of Dilbert) a hopelessly vague set of directions and a totally unreasonable deadline by which to get the job done. 

Of course, things didn’t work out so well, as the Bureau encountered multiple practical problems and considerable resistance from various quarters. The November 1 deadline initially specified by the Commission slipped back into December, then into January, and then just before Christmas the whole project was put on indefinite hold. (Need a refresher on all this? Check out our collection of reports on the Form 323 fiasco here.)

Since December we have heard nary a word from anybody at the Commission about Ownership Reports, even though the Bureau was supposedly working to address numerous problems which had been identified by folks who tested the December version of the form. In view of the difficulties encountered by the Bureau last Fall, you might have thought that this time around the Bureau might ask for some additional public input on the changes to the form. You would, unfortunately, be mistaken. 

The Commission’s most recent changes to the form simplify things in one area but leave other previously-identified problems untreated.

On the upside, the latest iteration of Form 323 includes the ability to upload spreadsheet documents. This should eliminate, or at least dramatically reduce, much of the soul-killing input drudgery that the original version of the form required.

On the downside, it appears that the social security number (SSN) based FCC Registration Number (FRN) requirement is still with us. We know this because the draft form available on the OMB website continues to require SSN-based FRNs for all attributable principals. 

 Over and above that, one of the recently-submitted changes involves revised language in the explanatory “pop-up” box that provides information about “Special Use FRNs” (SUFRNs). The change is not especially helpful.

 As was the case last Fall, the revised form permits reliance on a SUFRNs when, after good faith efforts, a responding licensee is unable to ascertain the SSN-based FRN for one or more of its attributable principals. (Did we mention that the SUFRN option is available only in biennial reports, but no other Ownership Reports?) The “pop-up” box first alerts the reader to the SUFRN option, admonishing anybody who plans to rely on that option to read the FCC’s “Frequently Asked Questions” about Form 323 on the Commission’s website. 

 The changed language consists of a sentence in a “note” which appears in the “pop-up” box. According to what the FCC told OMB, the changed language “is necessary to clarify necessary information to the public. The new FRN pop up language is much clearer and easier to understand by the public.” 

You be the judge. 

Here’s the sentence as it originally appeared in the “pop-up” note:

Moreover, use of the ‘Special Use FRN’ does not relieve Respondent of its ultimate duty to obtain a fully compliant FRN.

Now here’s the sentence as revised in the “pop-up” note uploaded onto the OMB website on March 25, 2010:

Respondents who use a non-SSN based ‘Special Use FRN’ will be deemed fully compliant with the Form 323 filing obligation for purposes of this initial filing and the lack of SSN-based FRNs in response to Question 3(a) will not subject Respondents to enforcement action.

The newer formulation certainly seems less threatening than its predecessor, until you realize that the FAQ on the FCC website – the one that the “pop-up” instructs you to read – still includes precisely the same language as the earlier version of the sentence. That being the case, how does the new sentence change anything at all – other, possibly, than to confuse matters? (Interesting factoid: In its OMB submission, the FCC characterizes this and the other changes to the form as “non-substantive” – so presumably the Commission really didn’t mean for its new language to change anything.)

While the latest revisions to the Form 323 may address some of the mechanical problems with the Form (e.g., bulk uploading of spreadsheet data), they do nothing to address the substantive problems with the form which have been brought to the Bureau’s attention several times already. 

More importantly, the hush-hush manner in which the Commission continues to operate aggravates, rather than allays, the serious procedural flaws that FHH raised last fall. The Commission has consistently failed to provide the notice and comment opportunities mandated by the Administrative Procedure Act with respect to its proposed overhaul of Form 323. This is ironic, given the fact that the Commission routinely trumpets the supposed “transparency” of its operations. The fact of the matter is that the revision of Form 323 has been anything but transparent.

One more odd aspect of the Commission’s Form 323: it appears (from the materials currently on file at OMB) that the FCC is continuing to insist that the first biennial Ownership Report to be filed on the revised form must show ownership information as of November 1, 2009. But that means that the next biennial reports will be guaranteed to be more than eight months out of date from the get-go – even though the Bureau has repeatedly expressed its desire to ensure the accuracy of the data collected. As the Bureau left things last December, the initial biennial Ownership Report won’t be due until 90 days after the revised form is released by the Commission.  So even if the Commission were somehow to have made the new Form available by April 1 (which it didn’t), reports would not be due until July 1. Forcing licensees to report November 1 ownership data on the following July 1 (or later) doesn’t really seem like the best way to ensure accurate and reliable data. 

According to the Bureau’s last Form 323 public notice (from December, 2009), the new deadline for filing will be at least 90 days from the date that the new form is made available for biennial filings. So even though the OMB appears to have approved the most recent changes, the 90-day clock has not yet started to run. However, that could happen any day now – unless the Bureau has still more changes up its sleeve – so check back here for updates.

In any event, it appears that (a) the FCC is once again paying some attention to the Form 323, but (b) it has not learned anything from the failure of its previous attempts to revise the Form without any public input. The next couple of laps in this long-distance race should be interesting.

Court Review Of Revised Form 323 Is Sought As Bureau Suspends January 11 Deadline

FHH, State Associations head to court; Bureau indicates that revised form may impose “unanticipated” practical burdens on filers

Two days before Christmas, and all was neither calm nor bright for Form 323 at the FCC. On December 23 the agency’s troubled efforts to launch its revised Form 323 – the Ownership Report for commercial broadcasters – got more troubled on a couple of fronts. In the morning, FHH, together with ten state broadcaster associations, asked the U.S. Court of Appeals for the D.C. Circuit to stay the implementation of the form pending Court review of the new burdens that form imposes. And hours later, the Media Bureau issued an order postponing indefinitely the deadline for filing biennial (but not other, non-biennial) Ownership Reports on the new form in order to fix mechanical problems that have cropped up with the form. While the two events were not directly related to one another, they both shone a glaring and none too favorable light on the FCC’s six-month (and counting) campaign to impose, without notice or comment, new and intrusive reporting obligations on commercial broadcasters.

We have already chronicled the history of, and major league flaws underlying, that campaign in considerable detail. Need a refresher? Click here and start reading. When last we checked in on things a couple of weeks ago, the FCC had finally taken the wraps off its revised form six months after first announcing in the Federal Register that the new form had been designed. (The FCC has never explained its reluctance to let us all kick the tires on the new form before having to drive it off the lot.) While the Commission had initially mandated in May, 2009, that the revised form would have to be filed by all commercial broadcast licensees by November 1 (reflecting their ownership as of October 1), that date had slipped to December 15, and then to January 11 (with the October 1 “as of” date moving to November 1). 

Meanwhile, in November FHH had filed, with the Commission, a motion to stay the implementation of the new form, and then a separate “Petition for Reconsideration or Such Alternative Relief As May Be Appropriate”. 

With the January 11 deadline closing in fast and no sign at all that the FCC was giving any serious consideration to the issues which FHH’s pleadings raised, FHH headed to court, along with the broadcaster associations from Alabama, Alaska, Arkansas, Kentucky, Louisiana, Mississippi, New Mexico, Puerto Rico, South Carolina and Tennessee.

Normally you go to the Court of Appeals only after the agency has taken some action which the Court can then review. But in certain extraordinary circumstances, the Court is authorized to step in even absent agency action, to make sure that the Commission is doing what it’s required by Congress to do. The revised Form 323 requires the submission of social security number (SSN)-based FRNs for every individual having an attributable interest/position in connection with any commercial broadcast licensee. As we see it, the FCC’s efforts to steamroll that requirement into place have fallen demonstrably short of Congressionally-imposed criteria, even though affected broadcasters have no conventional way to secure judicial review before they are required to comply – a situation perfectly suited for the “extraordinary writ” process.

So away we went to Court, asking it to stay the implementation of the new form. Since, when we filed the petition, the deadline was still January 11, we asked the Court to treat this as an “emergency” situation, the goal being a ruling by January 4, i.e., a week ahead of the January 11 deadline.

Meanwhile, back at the FCC, representatives from a number of law firms had met with Bureau staffers on Friday, December 18, to demonstrate to the staff that the new Form 323 was, as a purely practical matter, a nightmare. The group served up multiple horror stories of cumbersome on-line processes, system timeouts and losses of “saved” data, all of which contributed to massive amounts of time spent completing the form. (How massive? The group told of cases, involving “moderately complex” ownership structures, where the completion of a single form took 500 to 800 hours. 800 hours? Wrap your mind around that. That’s the equivalent of 20 40-hour weeks – about five months – all dedicated 100% to the completion of a single form. Where’s the Paperwork Reduction Act when you really need it?)

Following the meeting, the group – ably led by Wiley Rein’s Kathleen Kirby, who deserves big props for leading the charge – followed up with a letter requesting an extension of the January 11 deadline as well as various mechanical modifications to the form to alleviate the problems that have been encountered. The letter focused exclusively on the mechanics of the form; it made no reference to the more fundamental legal questions that FHH had raised and the FCC had declined to address.

The Bureau, apparently convinced that their form does have glitches and hiccups, agreed in the Order released on the afternoon of December 23 to suspend the January 11 deadline for biennial Ownership Reports. The suspension is indefinite, and is intended to allow the staff to “investigate what changes can be made” to get the form to work more efficiently without compromising the “completeness, quality, usefulness and aggregability of the data.” The Order provides that, once the dents have been knocked out of the revised form, the FCC will announce a new deadline which will be at least 90 days from the date the New(er) and (More) Improved form is made available.

Note, though, that the form, flawed as it is, is still required to be completed and filed in non-biennial reporting circumstances. Those include consummation reports relative to assignments or transfers of control. (Check out Section 73.3615 if you have any doubts.) But if the form as it currently stands is problematic, why use it at all? That’s just one more question the Commission has declined to answer. 

Also, note that, when the biennial form is eventually filed, it will (according to the Bureau’s Order) still have to reflect ownership as of November 1, 2009. That means that, if the new form were to become available on, say, February 1 (that’s just an optimistic guess on our part), reports would be due 90 days later, i.e., by (let’s see, 30 days hath September . . .) May 3, the first business day in May. That’s six months after November 1. While many licensees may not have changed during that time, it’s reasonable to assume that a significant number will have changed – meaning that those changed licensees will be reporting outdated information likely relating to entities or individuals with which the reporting licensees have no connection at all. That is not a recipe for complete and accurate data collection.

Be that as it may, the deadline for filing biennial reports on the revised Form 323 has now been suspended indefinitely. 

But hold on – what does that suspension do to the Petition filed with the Court?  Well you might ask. With the January 11 deadline gone, the immediate threat to all commercial broadcasters was obviously removed. But the deadline suspension does nothing to cure the underlying unlawfulness of the new SSN-based FRN reporting requirement. And notwithstanding the suspension, non-biennial Ownership Reports must still be filed on the new form, with the unlawful SSN-based FRN requirement. And the FCC continues to show no inclination to address, much less resolve, the issues which FHH has raised about that unlawfulness.

In other words, the suspension does absolutely nothing to correct what we believe to be the more fundamental flaws in the new form. (Not surprisingly, in its Order the Bureau claimed that FHH’s motion for stay, filed with the Commission in November, was rendered moot by the Order. We disagree with that example of bureaucratic wishful thinking.)

Obviously, the Bureau’s Order was a late-breaking development that the Court should know about, so within a couple of hours of the release of the Bureau’s suspension Order, we were back in Court, supplementing our Petition. In our Supplement we advised the Court of the Bureau’s Order and acknowledged that, because of the deadline suspension, there is no longer any need for “emergency” relief, i.e., a ruling by January 4. BUT we emphasized that the form is still seriously flawed, that non-biennial filers are currently being harmed by those flaws despite the suspension, and that those flaws are still not susceptible to judicial review through conventional means. In other words, while we withdrew the request for “emergency” relief, we emphasized that prompt extraordinary intervention by the Court is still called for here. Accordingly, we renewed our request that the Court consider our Petition.

With the arrival of Christmas weekend, we can all expect at least a couple of days of peace and quiet on the Form 323 front. But we should not expect that to last long. Stay tuned.

Presenting The New Form 323!!!

Dim the lights! Drum roll, please! Curtains! Cue the musicians . . . and . . . theme song (“Here it comes, Form 323, Here it comes, our ideal . . .”).

On December 8, the new Ownership Report form for commercial broadcasters was at long last made available for review on the FCC’s website.  The unveiling was decidedly downbeat, at least as far as the Commission was concerned: it merely posted a new "headline" on the front page of its website, with a link to the public notice which it had issued four days earlier.

You can check out the new form on CDBS right now. Word is that it would be a good idea to do so, and maybe give it a test drive, because it may have some minor practical quirks that could take some getting used to.

As the Commission announced on December 4, they have provided a temporary work-around, for folks who are unable to get all the FRNs they might need to complete the form by January 11. The emphasis here is definitely on “temporary”: when you click on the “Special Use FRN” button, CDBS flashes up this helpful reminder:

 Respondents must provide an FCC Registration Number (FRN) for all persons and entities reported in Question 3(a) of this Report. If, after using diligent and good-faith efforts, Respondent is unable to obtain a Social Security Number in order to generate an FRN for any specific individual whose FRN must be reported on Form 323, Respondent may click on the button below to generate an interim 'Special Use FRN' solely for the purposes of completing this Report. Respondents selecting this option should first read the Commission's Form 323 Frequently Asked Questions concerning the 'Special Use FRN', available at

NOTE: The 'Special Use FRN' generated by selecting the button may be used only to file a biennial ownership report on FCC Form 323 and may not be used for any other purpose at the FCC. Moreover, use of the 'Special Use FRN' does not relieve Respondent of its ultimate duty to obtain a fully compliant FRN. To proceed with generating the 'Special Use FRN', select the button ('OK') below.

The take-home message here is that the Commission does not intend the Special Use FRN to be used simply because a respondent doesn’t feel like providing his/her social security number in order to get an FRN.

If you’re interested in knowing what you might find by clicking on the link providing in the FCC’s message quoted above, here’s what we found (this is the only place on the Form 323 page that refers to SUFRNs):

4. I am an attorney completing Form 323 for a client. I have made every attempt to get FRNs for all of the officers, directors, and attributable shareholders I need to report, but one of them refuses to get an FRN for himself and won’t give me the information I need to obtain one on his behalf. What do I do?

As a rule, all filers must provide an FCC Registration Number (FRN) for all persons and entities reported on Form 323. If, however, after using diligent and good-faith efforts, you are unable to obtain an FRN for any specific individual required to be reported on Form 323, the electronic form contains a mechanism for generating an interim “Special Use FRN” solely for the purposes of completing the form. The “Special Use FRN” may be used only to file a biennial ownership report on FCC Form 323 and may not be used for any other purpose at the FCC.

We remind individuals who must be reported on the form that they have the option of obtaining their own FRN directly from the CORES system, obviating the need to disclose their SSNs to anyone other than the Commission. We encourage individuals to provide FRNs to filers to alleviate any concerns they may have about disclosing their SSNs to filing entities. We note that Special Use FRNs are an interim measure to ease the transition to use of the revised form. Use of the “Special Use FRN” does not relieve a filer of its ultimate duty to obtain a fully compliant FRN. We expect filers using Special Use FRNs to update their filed ownership reports with fully compliant FRNs when these are obtained. (Added: 12/4/2009)

Curiously, that second paragraph seems to suggest that, in the Commission’s view, respondents may be more reluctant to provide the SSNs to people (say, their lawyers) other than the Commission, the implicit message being that everybody should be way comfortable in giving up their sensitive personal information (like SSNs) to the FCC. That’s an interesting notion, the validity of which we might be better able to gauge had the Commission ever bothered to disclose the FRN requirement to the public and seek comment on it.

Revised Form 323 To Be Revealed Real Soon

January 11, 2010 deadline still effective

Breaking a long silence, the Media Bureau has at last announced that the revised Ownership Report (Form 323) for commercial broadcasters should be available for review on line at the FCC’s website sometime in the next five days. Since the Bureau (and, presumably, the Commission) is sticking with the previously announced January 11, 2010, deadline for all commercial broadcasters (including LPTVs and Class A TVs) to file that form, it might have been nice for them to make the form available by October 1 (when it was first promised), or by November 16 (the next target date), or by sometime the week of November 16 (when the date slid again), or by now. But what the heck – it looks like December 9 (or maybe sooner) is the date that All Will Be Revealed.

The public notice announcing the impending revelation of the revised form also promises that the Commission will convene an “instructional workshop” on the revised form on December 9 at 2:00 p.m. in the Commission meeting room. (Can’t make it to D.C. for the festivities? No problem – the workshop will be broadcast live on the Internet at

Frequenters of our blog may be asking themselves: “Will we still have to include FRNs for each of our individual ‘attributable interest holders’?” After all, as we pointed out to the Commission in both a motion for stay and a petition for reconsideration, imposition of that particular requirement raises a number of very difficult – some might say insurmountable – legal problems.

Apparently the Commission got the memo, but didn’t read it all the way through.

In its public notice, the Bureau advises that the new form still requires the inclusion of FRNs for each individual, BUT it also includes a mechanism for generating a “Special Use FRN” (“SUFRN”, as in “SUFRN’ SUCCOTASH”) for the purpose of getting the Form 323 on file when a real FRN is not available. The “SUFRN” can be used only for filing Form 323 (and not for any other FCC purpose). While the public notice indicates that “instructions on how to obtain a [SUFRN] are on” the FCC’s Form 323 webpage, we couldn’t find any such instructions, although (for what it’s worth) Question 4 of the FAQs there does mention that “the electronic form [Form 323] contains a mechanism for generating an interim “SUFRN” solely for the purposes of completing the form”.

You might think that the Commission’s willingness to accept a SUFRN in lieu of a social-security-number-based FRN indicates that the Commission has recognized (a) the legitimate concern that many have expressed about coughing up their SSNs and (b) the fact that some alternative(s) to SSN-based FRNs should be available to do the trick.

You would, of course, be wrong.

The public notice makes clear in no uncertain terms that every individual who shows up as “attributable” in a Form 323 will still have to have a f’real (i.e.¸SSN-based) FRN, and that the SUFRN is just a temporary stopgap “to ease the transition to use of the revised form”. According to the notice, the Commission still “expect[s] filers using Special Use FRNs to update their filed ownership reports with fully compliant FRNs when these are obtained.”

So the Commission is sticking to its guns and insisting on SSN-based FRNs from one and all, even though an alternative – the SUFRN – appears to be readily available as a non-SSN-based alternative. It seems that the SUFRN is just a device by which the Commission hopes to create the impression that you can get your Form 323 filed without disclosing your social security number, perhaps in an attempt to take the wind out of the sails of those who oppose the revised form as unduly intrusive because of the SSN/FRN requirement. But that impression would be a misimpression, since the notice makes stunningly clear that SSN-based FRNs really are de rigueur.

So the public notice does not appear to cure any of the defects which we have previously noted with the Commission’s process for revising Form 323, and it may put the Commission in a worse position than it was in before. We shall have to wait and see how events continue to unfold.

FHH to FCC: Think Again

Fletcher Heald seeks review of mandatory social security number/FRN aspect of revised Form 323

Following up on the Motion for Stay it filed a couple of weeks ago relative to the revised commercial broadcast Ownership Report Form 323 (which the FCC has still not formally taken the wraps off of), Fletcher Heald & Hildreth has filed a “Petition for Reconsideration or Such Alternative Relief As May Be Appropriate” on the same topic. You can read a copy of FHH’s Petition here.

Problems with the revised Form 323 have been addressed repeatedly on this blog– but apparently not at the FCC – for months. (If you’ve been living in a cave since last June, you can start catching up by reading our posts here, here and here.) 

In its Petition FHH highlights a number of those problems, pointing out in particular that the Commission isn’t supposed to impose significant new regulatory burdens without first providing the opportunity for public comment through a rulemaking proceeding. Here, the FCC’s new form would require each and every individual with an “attributable interest” in a broadcast licensee to cough up his/her social security number to the Commission (in order to get themselves FCC Registration Numbers – or FRNs – which they would then have to include in the new Form 323). Forcing disclosure of such sensitive Identity-Theft-Prone information as SSNs is certainly a new and significant regulatory burden.

And just what “attributable interest” folks would be required to throw their SSNs into the FCC’s hopper? Um, that would be every officer and every director and everybody owning 5% or greater interests in both (a) corporate licensees and (b) corporations that in turn hold attributable interests in corporate licensees, as well as all non-insulated members of LLC’s, limited partnerships and the like which happen to be licensees or which happen to hold attributable interests in licensees. 

That’s a lot of SSNs right there.

But the Commission never bothered to mention anything about that requirement before news of it popped up on the website of the Office of Management and Budget last August.  To the contrary, up to that point the Commission had repeatedly and expressly and very publicly (like, “in the Federal Register” publicly) assured everybody that its new form would not implicate any confidentiality or privacy interests. By October, of course, the cat was out of the bag, and the FCC ‘fessed up to OMB that the new form, what with its social security/FRN requirement and all, really did raise significant privacy concerns. But even today you’ll look long and hard for any public acknowledgement of those concerns, by the Commission, in any public notice, or decision, or even a posting on its own website. Nor has the Commission ever bothered to try to explain how it could have thought that demanding the submission of thousands upon thousands of social security numbers might not have implicated any privacy concerns.

So our sense is that it’s going to be very difficult for the Commission to implement that requirement without taking a couple of giant steps backward and going through the rulemaking process which it seems to have overlooked the first time around. We shall see if the FCC agrees.

It's Official: Form 323 Deadline Extended To January 11!

The December 15 deadline for filing the revised Ownership Report (Form 323) for commercial broadcasters has been extended to January 11. According to a terse public notice issued on November 23 (a scant three weeks before the previously-announced December 15 deadline), the extension was granted by the Media Bureau, acting on its own motion. The notice advises that the “Bureau is in the process of conducting final testing of the form and has delayed the release of the electronic version until the testing is complete.” The notice also assures that the Bureau wants to provide “adequate time to prepare and file the report”.

No mention is made, however, of FRN’s, or the requirement that each individual with an attributable interest of any sort obtain and file his/her own FRN as part of the revised ownership reporting process. That requirement – and the unorthodox manner in which it was imposed on the industry – have been the focus of considerable discussion since the revised form was first made public (by OMB, not the FCC). Whether the Commission intends to use the additional time to address that problem remains to be seen.

A SORN In The FCC's Side?

Privacy Act notice requirement may inhibit FCC plans for 12/15 Ownership Report filing

As of late in the afternoon on November 20, the Commission is still apparently sticking to its December 15 deadline for its revised Ownership Report (FCC Form 323) for commercial broadcasters – at least according to its website. The FCC doesn’t seem to think that it’s a problem that that revised form has still not been made public, or that the dwindling period (less than four weeks as of this writing) between now and the deadline is interrupted by the Thanksgiving holiday. While rumors swirl about possible postponement of the deadline – some suggesting a postponement is possible, others suggesting just the opposite – the Commission so far has kept mum, which means the clock is still ticking toward December 15.

Interestingly, on November 19 the Commission published in the Federal Register a “System of Records Notice” (SORN) regarding the new form. We say that this is interesting because the timing of that publication may, under the Privacy Act, force the Commission to delay the filing deadline, at least briefly, or make some changes to its filing system. 

Under the Privacy Act, any agency that intends to maintain and use any records containing personally identifiable information must publish a SORN in the Federal Register. The SORN provides details on how the records will be handled by the agency. Normally, the publication of a SORN starts a 40-day waiting period (a) during which it is to be reviewed by the OMB and Congress and (b) before the end of which the agency may not implement the system. 

But 40 days from November 19 would be (let’s see, 30 days hath November, add five, carry the seven . . .) December 29 – and that would be two weeks after the December 15 deadline toward which the Commission has been driving us all! Presumably recognizing that inconvenient fact – and still obsessively committed to the December 15 deadline – the FCC requested a waiver of the 40-day filing deadline. The basis for its waiver request? Well, the December 15 filing deadline is approaching so fast.  (Curiously, the Commission offered no explanation as to why it hadn’t bothered to publish the SORN more than 40 days before the filing deadline the Commission had chosen; it also failed to explain why the December 15 date is so overwhelmingly important that that date, rather than the SORN waiting period, cannot be changed.) 

At this point it’s unclear whether that waiver has been, or will be, granted.

But wait, there’s more.

The Privacy Act includes another, separate, 30-day waiting period. Section 552a(e)(11) of the Act appears to prohibit any agency from publishing or disclosing any information in a newly-established or newly-revised system of records until the agency has provided a 30-day public notice period, commencing with Federal Register publication of the SORN. As all you CDBS aficionados know, once an ownership report is submitted and the fee paid, the information in that report is available for all (well, for anybody with Internet access, at least) to see in CDBS the next day. In Privacy Act parlance, that accessibility constitutes a “routine use” of the information filed on the ownership report.

The FCC did not request a waiver of this 30-day period, probably because no waiver is permitted.  According to an OMB circular cited by the Commission in its request for waiver of the usual 40-day deadline:


OMB cannot waive time periods specifically established by the [Privacy] Act such as the 30 days notice and comment period required for the adoption of a routine use proposal pursuant to Section (b)(3) of the Act. [emphasis added]

Now we’re not Privacy Act experts, but it sure seems pretty clear from OMB’s language there that the Commission may be prohibited from making public any information filed on the new ownership reports until after the expiration of this 30-day waiting period. Based on the November 19 publication date of the FCC’s SORN, that period would expire on Monday, December 21.

So, even if the Commission persists in requiring the new ownership reports to be filed by December 15, it might need to figure out a way to prevent those reports from becoming public until at least December 22. Can this be done? We have our doubts, but stay tuned to for updates.

FHH To FCC: "Stay"

Fletcher Heald seeks stay of Form 323 filing deadline

Fletcher, Heald & Hildreth has filed a Motion for Stay with the Commission, asking it to hold off on the implementation of its new Ownership Report (FCC Form 323) for commercial broadcast stations.  You can read the FHH motion here.  As we have reported previously on our blog, the revised Form 323 is currently due to be filed by December 15, even though the Commission has still (at least as of the morning of November 17) not formally unveiled that form.  (Want a sneak peek? Here’s a link to the version of the form that was apparently approved by OMB. Whether the final version that the FCC plans to post on CDBS will differ from the version taken from the OMB site remains to be seen.)  

If the Commission stays on its current schedule, reporting licensees will have, at most, only four weeks (including the intervening Thanksgiving holiday) to access, complete and file the form. Since the universe of reporting licensees has been expanded considerably – to include, for the first time ever, LPTV and Class A TV stations – that’s a pretty tall order in any event.

But the primary problem with the new form is that it requires all individuals and entities with an “attributable” interest in the licensee to identify themselves with their own unique FCC Registration Numbers (FRNs).

To get an FRN, an individual has to provide to the FCC his/her social security number, while entities like corporations have to cough up their equally sensitive taxpayer identification numbers. There is considerable, and understandable, reluctance to do that in this day and age of identity theft and Internet security issues – especially when the new requirement extends to each and every lowly officer (think Assistant Secretary, etc.) and pretty much anybody with as little as a 5% ownership interest.  (You don’t have to take our word about the dangers of the Internet – just ask Chairman Genachowski, who last month joined with the Chairman of the FTC to “encourage the public to take safeguards to protect themselves, their privacy , and their personal information online”.) 

What’s more, the inclusion of individual FRNs as part of the revised Ownership Report process was never disclosed to the public by the FCC in a way which allowed for public input. In fact, the FCC didn’t even acknowledge, much less address, any privacy concerns until they were raised by a number of parties before the OMB. Au contraire, when the FCC initially sent its draft form to OMB in August, it specifically – and incorrectly – said that the form did “not affect individuals or households” or create any “impacts under the Privacy Act”. 

And even when, in October, the Commission finally conceded that, gee, the form would contain personally identifiable information and that, gosh, privacy might be something to think about here, it still didn’t implement the full range of steps ordinarily mandated by privacy laws. Instead, the Commission said that it would get right on those steps for sure, even though it planned to require use of the new form before all the privacy hoops had been jumped through.  (Check it out at page 7 of the FCC’s October 6 letter to OMB.)

In view of all of these considerations, it seems to us at FHH that the appropriate thing for the Commission to do is to stop, take a deep breath, and work on developing an Ownership Report system that addresses all important issues in a procedurally proper manner. And in the meantime, it should hold off on requiring the filing of Form 323.

Check back to for updates on continuing developments in the Form 323 situation.

Deadline For Filing New Form 323: December 15

It’s official. The Media Bureau has announced that the new biennial Ownership Report (FCC Form 323) is due to be filed by December 15, 2009. Information in that form must be current as of November 1.

We have been tracking the long-running saga of the revised Form 323 for months now. If you’re not already up to speed on it, check out our posts here, here, here and here for background history. Most recently, we reported that the Office of Management and Budget had approved the revised form, and that all that was left was an announcement from the Commission, telling us all when the first reports would be due. That’s the announcement that has just been released this afternoon.

Unfortunately, there are apparently still some loose ends dangling around the new form. According to today’s announcement, the revised form will not be up and available on CDBS until sometime “on or about November 16”. That’s not quite as definite as one might like, but at least the apparent target date of November 16, if met, would provide almost 30 days during which 323s could be uploaded. The problem, though, is that every licensee of every commercial AM, FM, TV, LPTV and Class A TV station will be having to file a new Form 323 by December 15. There are more than 15,000 stations in that universe. 

Plus, as we have reported, every person or entity with an attributable interest in each reporting licensee will have to have his/her/its own FCC Registration Number in order to properly complete Form 323. Our guess is that that means that a whole lot of folks will be having to sign up for new FRNs in the very near future.

Because of the very large number of forms that will all need to be completed, validated and submitted by December 15, the demands on CDBS’s resources are likely to be substantial (if not overwhelming). Obviously, the more available lead time, the better – which explains why even an anticipated 29-day opportunity strikes us as pretty close to the edge. But if 29 days is what we’re all getting, we’ll have to make the most of it.

Another loose end – In anticipation of the likelihood of a flood of questions flowing in once everybody gets a chance to start test-driving the new form (not to mention the “numerous inquiries” the Bureau has already received), the Bureau will be establishing a “website containing information regarding Form 323”. That website will include Frequently Asked Questions “with responses that will be updated continually throughout the biennial filing period”. 

Unfortunately, that website apparently hasn’t been set up yet (despite the fact that, as noted, the Bureau says it has already received “numerous inquiries”), and today’s public notice does not provide an anticipated kick-off date for the site. Nevertheless, if you have Form 323-related questions that you would like addressed on the to-be-unveiled-at-some-point website, the Bureau invites you to send them to

We will continue to post updates as information becomes available.

Revised 323 Approved By OMB

No immediate word on revised deadline for initial filing of new Ownership Report

Surprising many oddsmakers, the Office of Management and Budget has approved the FCC’s revised Ownership Report (FCC Form 323) for commercial broadcast licensees – but not before the Commission performed a last-minute two-step to clean up one loose end. The new form still isn’t ready for prime-time: the FCC first has to issue a public notice (a) announcing OMB’s approval and (b) cluing us in as to when we’ll all be due to file our next 323. The public notice could come any day now, but the deadline for filing will be at least 30 days after that notice. Still, if you’re a commercial AM, FM, TV, LPTV or Class A licensee, you might want to get ahead of the curve by taking a look at the form and penciling in your answers now. We expect that CDBS’s resources will be, um, strained as the deadline approaches, so early filers may avoid some headaches.

We have chronicled the FCC’s efforts to overhaul its ownership reporting process here, and here, and here . . . oh yeah, and here, too. Here's the abridged edition.

The FCC would like to take steps to increase minority and female broadcast ownership, but government agencies are very limited (by the Equal Protection Clause of the Constitution, for openers) from engaging in race/gender-based decision-making. A 1995 Supreme Court case (Adarand v. Pena) gives agencies some very limited leeway on that score, but the agency must have a solid evidentiary justification. The Commission has decided that the ownership information which it has historically collected won’t do the trick. The solution? Upgrade the FCC’s ownership database by changing Form 323 (and its noncommercial sibling, Form 323-E) and the underlying reporting process.

But rather than get its own hands all dirty in the form-revision process, the Commission dumped that chore onto the Media Bureau. The Bureau duly closed the doors, pulled the shades and threw together a revised form without bothering to let anybody out in the real world know exactly what changes the Bureau had in mind. The form the Bureau ultimately cooked up was then shipped over to OMB for its review in August, before anyone in the public could take a peek. When OMB quietly posted the form on its website, lo and behold – the form contained a number of surprises. (The NAB, which had also filed a petition for reconsideration with the Commission, thereupon did an admirable job letting OMB know about the problems with the new form, as did a handful of other groups.)

A central element of the revised reporting requirement was the shift to a single filing deadline for all commercial broadcasters. Traditionally, biennial ownership reports have been due on the anniversary of each station’s renewal application. No longer. As announced by the Commission last May, the new drill calls for everybody to file their respective reports on November 1 (reflecting data accurate as of the previous October 1) . . . starting this November 1. As that magical date approached, however, the Commission had a problem. It couldn’t use the new form until OMB approved it, and as we rounded the turn and headed into October, that approval was still MIA.  So earlier this month the Commission announced that the November 1 deadline was no longer operative this year (although November 1 will be the deadline in future years). Instead, the FCC would wait for OMB approval and then let us all know when to file.

But then, on October 16, the Commission released its decision on the NAB petition for reconsideration. While it denied that petition in part, it also purported to grant the petition in part. The NAB had objected to the new requirement that sole proprietorships file biennially. The Commission rejected that argument. But the NAB had also pointed out that another new provision – requiring the reporting of certain non-attributable interests previously not subject to the reporting requirement – had not even been hinted at in any notice of proposed rulemaking or responsive comments. Under the Administrative Procedure Act, agencies aren’t supposed to surprise us all like that, a point which the NAB made convincingly. And sure enough, the FCC had to agree. So the Commission said that it was deleting that aspect of the new form. 

Score one for the NAB, right?

Not exactly. Having “granted” the NAB’s petition in one breath, in the very next breath the Commission decided that it would invite public comment on the proposed reporting requirement for certain non-attributable interests, thereby effectively side-stepping the basis for the NAB’s objection. In other words, any victory the NAB may have enjoyed is likely to be short-lived: we can reasonably expect that, when the dust finally settles on this latest detour, that particular reporting requirement will have been re-inserted into the form.

Still, didn’t this last-minute shift in gears – which would require further revision of the draft form sitting over at OMB – mean that any OMB approval would likely be postponed further? You might have thought that, but then, on October 19, OMB went ahead and approved the form anyway. The Commission has slipped OMB the word that the requirement to report non-attributable interests was being deleted, and OMB proceeded to approve the form with that stipulation.

So here’s where things seem to stand, at least for the moment. The Media Bureau’s draft form has been approved by OMB, minus the provision for reporting non-attributable interests. You can find a copy of the revised and (we think) approved form here - yes, we know that it says "not approved by OMB" in the upper-right hand corner, but the file name as it appears on the OMB website is "FCC Form 323 Post-Reconsideration Version (Final).doc". (But don’t forget that the FCC is considering reinserting the requirement to report non-attributables, and it seems pretty clear that we’ll be seeing that provision back in the form before long.) The requirement that everyone with an attributable interest be identified in Form 323 with his/her/its FCC Registration Number (FRN) is still in there – which means that the FCC will likely be seeing a long line forming on CORES as previous FRN-less folks queue up, SSNs and TINs in hand, to lay claim to their own new FRNs so that they can duly report them in Form 323.

When will the new Form 323 be required to be filed? That’s the big question, and it won’t be answered until the FCC issues a public notice. A number of observers are guessing that December 1 is a likely pick, but who knows? (Anyone who would like to join in a pool to guess the 323 deadline should feel free to submit their guesses in comments to this post.) We’ll let you know when the notice comes out.

Update III: AM On FM Translators - Revised Form 349 Now Available

On September 1, we reported that the FCC had, at long, long last, managed to get its order authorizing the rebroadcast of AM stations on FM translators published in the Federal Register, thus establishing an effective date for the new rule. But, as we also reported, there were still a couple of loose ends – a related rule (Section 74.1284) and several translator-related forms needed to be revised to conform to the new rules, and the revisions hadn’t yet been approved by the Office of Management and Budget. No problem – as we reported a week later, most of those loose ends got tied up pronto, allowing the new rules and revised Forms 303-S and 345 to take effect October 1.

But wait. Form 349 (for new and modified FM translator/booster CP’s) somehow got left behind, lost in OMB limbo. Not to worry, though. The Commission managed to hustle that last form over to OMB (on September 4), OMB gave it the thumbs up (on October 8), on October 16 public notice of OMB’s approval made it into the Federal Register and voilà! Revised Form 349 is now effective.

Biennial Ownership Report (Form 323) Deadline Extended

With no approved form yet available, Media Bureau puts off November 1 deadline

The Media Bureau has blinked. With the original due date – i.e., November 1, 2009 –  for the initial filing of all biennial Form 323s fast approaching, but without OMB approval of the new report forms themselves, the Bureau has announced, on its own motion, that it is extending the deadline for filing those reports. Instead, the Bureau will release a public notice at some future point, specifying a new filing deadline no less than 30 days after that public notice.

As we have previously reported (here and here), the Commission decided last Spring to revise Form 323 (the Ownership Report for commercial broadcast licensees). It also decided to abandon the longstanding practice of having stations file their respective biennial Form 323s on the anniversary date of the filing of their license renewal applications. Instead, the Commission said that all biennial Form 323s would henceforth be filed, biennially, on November 1 (with the reported information current as of the preceding October 1).

The problem that the Commission has since encountered is not surprising, in view of the fact that it set the new process in motion before it had come up with the revised form to be used.  Rather than have the revised form ready to roll last Spring, the Commission left it to the Media Bureau to concoct a new form, get it approved by OMB, and have it ready to roll by November 1. While the Bureau tried hard to get the job done, at least one aspect of the task – OMB approval – was out of the Bureau’s hands: the Bureau could prepare a revised form and ship it over to OMB, but the Bureau could not compel OMB to approve it quickly -- or at all, for that matter.

Not surprisingly, as of October 2 OMB had still not approved the revised Form 323. (Considerable objection has been raised against the revised form before OMB, presumably slowing OMB’s deliberative processes down some and possibly – or likely, depending on whom you talk to – justifying OMB rejection of the new form. Since OMB could theoretically hold off on its decision until mid-October, the Bureau recognized that the uncertainty of the situation warranted putting off the deadline. And that’s just what it did.

So for the time being we can sit back and await OMB action. If OMB approves the revised form, the FCC will issue a public notice to that effect. In that notice the Commission will announce the new due date. (If OMB declines to approve the revised form, it is not clear exactly what will happen – but whatever it is, the FCC will presumably clue us all in with a public notice.)

Note that, for some reason, the Commission appears absolutely wedded to the notion that biennial Form 323s must be filed on November 1. The Bureau’s announcement of the extension specifies that, regardless of when the deadline ultimately falls this year, all biennial report filings in future years will be due November 1 (again with information current as of October 1).

Check back with for further updates as events develop.

Update II: AM on FM Translator Rules Still Effective On October 1

OMB approves Section 74.1284, Forms 303-S, 345; Form 349 still in limbo

On September 1 we reported that the rules permitting AM signals to be rebroadcast on FM translators will become effective on October 1 – all the rules, that is, except Section 74.1284, which supposedly still required OMB approval. (OMB approval had already been given, as it turns out and as we reported, but that word had apparently not reached the FCC by the time it made its initial announcement about the October 1 effective date.) As we predicted would happen, the Commission has now issued a follow-up notice alerting the public to the OMB approval and consequent effectiveness of Section 74.1284 as of October 1.

The lack of effectiveness of Section 74.1284 had also meant that revised Forms 303-S (for license renewal) and 345 (for assignments or transfers of control of translators) were themselves technically not effective, either. But now that OMB is on board with the 74.1284 changes, it has also signed off on the revised 303-S and 345. Those, too, are good to go as of October 1.

But there’s one remaining loose end: Form 349 (for new and modified FM translator/booster CP’s) is still lost in OMB limbo. (It looks like the FCC didn’t get around to asking for OMB approval of that revised form until September 4.) Keep your eyes out for a further notice advising of the effectiveness of revised Form 349.

Revised Form 323 Revealed

Ownership reports would require ALL attributable interest-holders to have (and report) their own FRNs; OMB comment period closes September 10

Remember last May, when the Commission issued its Report and Order about biennial Ownership Reports? Sure you do. Do you remember when it dumped onto the Media Bureau the chore of designing a new Ownership Report form (FCC Form 323)? Of course.

And do you remember how that new form would require anyone and everyone with any attributable interest in a broadcast licensee to be identified by his/her/its own separate and distinct FCC Registration Number? 

Ummm, neither do we – because the Report and Order didn’t say anything about that.

But the Media Bureau’s draft form – new, improved, hot-off-the-presses and just shipped over to OMB for approval – would impose just such a requirement.

As we reported back in May, the Commission’s Report and Order provided, at most, some very general guidelines about what the new Form 323 should look like. It left it to the Bureau to fill in the details. 

Last week we finally got a look at what the Bureau has come up with.

A copy of the Bureau’s proposed form can be found here. Check it out, and if you have any thoughts about it, feel free to let the folks at the Office of Management and Budget (OMB) know – you have until September 10 to get your comments in.

The fact that we’re all just getting a last minute crack at the Bureau’s handiwork is unfortunate – and may be contrary to the rules. Since the ownership report is an “information collection” subject to the Paperwork Reduction Act, the Commission is supposed to solicit comments on it before sending the proposal out for separate review by OMB. While the FCC did technically invite comments back in June, that opportunity was somewhat – how can we say this delicately? – less than useful, being as how the form about which comment was being sought was not available for anybody to review.

The June notice described the proposed changes in the form as follows, without further elaboration or illustration:

The instructions have been revised to state the Commission’s revised Biennial filing requirements adopted in the 323 Order. The instructions and questions in all sections of the form have been significantly revised.  Many questions on the form have been reworked or reordered in order to (1) clarify the information sought in the form; (2) simplify completion of the form by giving respondents menu-style or checkbox-style options to select rather than requiring respondents to submit a separate narrative exhibit; and (3) make the data collected on the form more adaptable for use in database programs used to prepare economic and policy.

But now the form has surfaced – although without much of a noticeable splash – and we can all take a look. 

Perhaps the most striking change – a change not mentioned by the FCC in any of its various notices – is that the proposed form would require that every person or entity holding an “attributable” interest must have his/her/its own separate and distinct FCC Registration Number (FRN) which must in turn be reported in the new Ownership Report form. Those with “attributable interests” include officers, directors, 5% or greater shareholders and individuals or entities whose interests exceed certain levels under the Commission’s “equity-debt-plus” standards.

This means that lots and lots and lots of people, and entities, will now have to sign up for their own FRNs, which in turn means that they will have to provide the FCC with their social security number, employer ID number or taxpayer ID number. To be sure, the revised Ownership Report itself does not call for SSN/EIN/TIN disclosure, but in order to get an FRN in the first place, you have to cough up one of those ID numbers to the FCC (through the CORES system for doling out FRNs).

It is not hard to imagine the very considerable practical problems that the new FRN reporting will create. The overall number of FRNs issued by the Commission is likely to balloon exponentially. After all, a corporate licensee at this point generally requires only its own FRN. Under the new regimen, each of that licensee’s officers and directors and attributable interest- holders will have to have his/her/its own FRN. And if any attributable – and, therefore, reportable – interest holder is, in turn, a corporation (or other business entity), it too will have to provide FRNs not only for itself but also for its officers, directors and attributable interests holders. And so forth down the line. Oh, and don’t forget that the Commission has also expanded the universe of services subject to ownership reporting requirements to include LPTV and Class A folks – thereby further jacking up the number of attributable interest-holders who will be filing reports.

So the FCC will suddenly become a repository of a vast trove of sensitive information – SSNs, EINs, TINs – which it has not previously held. In view of the ever-present, and increasing, threat of identity theft, one would think that Federal agencies would be reluctant to collect such data. Additionally, reporting entities – licensees and their various officers, directors, etc. – will have to keep track of the multiple FRNs they are required to include in their reports. To some degree it is already a headache keeping track of multiple FRNs (and associated passwords) – that problem will only get worse when the number of reportable FRNs skyrockets. 

Plus, the new form requires that all FRN information be “consistent” among all reports. That is, if an individual or entity listed in one report shows a particular FRN, then that same FRN should be used in all other reports in which that individual or entity happens to be listed. The new form advises that respondents should be sure to “coordinate with each other” to ensure consistency. The unstated problem here is that, historically, the FCC has not limited FRNs on a one-to-a-customer basis. As a result, any individual or entity might have a bunch of different FRNs. In order to achieve the “consistency” mandated by the new form, respondents will have to take pains to use the correct FRNs, and will also have to hope that all other respondents do likewise.

Curiously, the Commission appears not to have recognized the likely impact of this change. Check out the FCC’s defense of its new form, as presented to OMB. Nary a word about the new requirement to report FRNs for every attributable interest-holder. In fact, the FCC blithely concludes that “[t]here is no need for confidentiality with [the revised Form 323]” and the revised form “does not address any private matters of a sensitive nature”. While it is true that Form 323 itself does not require confidential or sensitive information, the new FRN-reporting requirement will nevertheless compel the submission of boatloads of SSNs, EINs and TINs (through the CORES registration system), all of which would normally be viewed as confidential or sensitive.

With the exception of the FRN aspect, the proposed form contains few other surprises. Still, since the form is now designed to provide conclusive documentation of the precise level of minority ownership in broadcasting, it does seem a bit odd that respondents can choose “two or more races” as an option, without identifying which races are involved – won’t that affect the data? 

And the Commission’s racial definitions still suffer from problems inherent in such governmental efforts at population compartmentalization. For example, “Asian” is re-defined to include only those “having origins in the original peoples of the “Far East, Southeast Asia or the Indian Subcontinent” – hey, we thought Asia started at the Urals, and what about all that “Siberia” thing? “African” similarly now means “not really all of Africa” – since it appears to exclude those “having origins in any of the original peoples of . . . North Africa”. And what, exactly, does “having origins in any of the original peoples” mean, anyway? How far back, and how deeply, can or must respondents go to answer that?

While the Commission fails to address any of these practical problems in its OMB defense, it does provide some laughably incomprehensible “estimates” of the “burdens” that the revised form will impose on the private and governmental sectors. For example, with no explanation, the Commission speculates that it will take between 1.5 and 2.5 hours to complete the revised Form 323. (Check it out for yourself: go to Supporting Statement OMB 3060-0010 (August 2009).doc  and take a look at Paragraphs 12-14 on pages 8-9.)  In our experience, that’s way over for the simplest situations (e.g., a single-owner licensee with only one station), but probably unreasonably low for more complex situations (e.g., multi-tiered ownership structures). 

But wait, the 1.5/2.5 hour estimates do not appear to involve attorney prep time; rather, it appears that those estimates relate only to the amount of time the reporting entity would itself have to devote to preparation of the report. The Commission next figures that attorneys would likely be involved as well, and it speculates (in Paragraph 13) that each report would require eight hours of attorney time – probably on the high side, at least for relatively straightforward reports – at a billable rate of $200/hour (good luck with that).

The unreliability of the FCC's figures is underscored by the fact that it doesn't even get its own filing fees correct.  At Paragraph 13 it refers to a filing fee of $55 per biennial report.  Call us crazy, but we could have sworn the 2009 Fee Guide sets that fee at $60 a pop, the same level it's been at since at least 2008, and maybe even since 2006.

Finally, the fun continues with the Commission’s estimate of the “cost to the federal government”. According to the FCC, a GS-11 staffer will require two hours to “process” each report. But the reports are being filed electronically by the licensees. No staff involvement likely there. And it has long been our impression that, except in unusual situations, Ownership Reports go largely unreviewed by the Commission once they are submitted. Where, then, does the two hours of “processing” time come from? Ideally, OMB will be able to sort all this out.

The revised form, and the accompanying report to OMB, do make for interesting, if not enlightening, reading. Since all full-service radio, TV, LPTV and Class A broadcasters will be having to complete the form biennially, it would be a good idea for everybody to check it over now, while it’s still in draft form. You have until September 10 to chip in your two cents’ worth about the form at OMB. After that, opportunities to get the form changed will be few and far between.

Moment Method Modeling: Update IV

Way back in September the Commission approved moment method computer modeling for directional AM proofs, but the rules didn’t go into effect until December 1, 2008 – and even then (as we reported here), they didn’t really go into effect because the application forms on which such proofs must be submitted hadn’t jumped through all the requisite bureaucratic hoops. If that minor technicality stopped any of you from proceeding with preparation and submission of streamlined proofs, your wait is over. The Office of Management and Budget approved the FCC’s modified forms on January 26, and notice of that approval popped up in the Federal Register this morning.  According to that notice, the forms (and associated rules) are effective as of February 5, 2009.

Paperwork Reduction Act Alive and Kicking

FCC to OMB: "No mas!"

One of the pleasant vestiges of 1980 is the Paperwork Reduction Act, a law intended to curb the excesses of federal regulatory agencies by mandating independent review of all new regulations which impose paperwork burdens on the public.  The idea was that agencies must quantify and justify such burdens before imposing them on regulated industries or the public.  The Office of Management and Budget (OMB) was appointed to be the final checkpoint on the regulatory assembly line to ensure that agencies were not overstepping.  This, of course, was in the era when "big gov'ment" was Public Enemy #1, and "paperwork" was a dirty word. 

There's obviously been some slippage since 1980 as the FCC has imposed burden after burden on the telecom industries, many of which involve considerable expense and reams of paperwork in the form of periodic reports or record-keeping.  The vast majority of these regs have been rubber-stamped with OMB approval.   (Ironically, the process actually increases the amount of paperwork generated by an agency as part of its justification of the paperwork it is imposing on others.)

That's why it was satisfying last week to see OMB manfully exercise a rare veto over an FCC rule.

Specifically, the FCC had adopted rules which imposed an obligation on the largest cellular carriers to maintain eight hours of emergency battery back-up at cell sites. (This was a knee-jerk reaction to difficulties encountered during Hurricane Katrina when many cell sites lost electrical power and could not operate for hours or days.)  The rule elicited howls of protest from the affected carriers who challenged the procedures used by the FCC in adopting the rules as well as the enormity of the burden which had rather casually been imposed.

The tenuousness of the FCC position was first confirmed when the reviewing court of appeals granted a stay of the rules -- an indication that it considered the appeal to have substantial merit. When it came time for oral argument, the Court suddenly became interested in the Paperwork Reduction Act. Since OMB had not yet signed off on the rules, the court decided that the case was not yet ripe for action.   If OMB ultimately rejected the rules, the Court reasoned, the Court would have wasted its time reviewing the substance of the rules -- and courts never decide cases if they don't have to. The case was therefore remanded to the FCC to await OMB action.  

It turns out that the Court's reticence was well-founded. OMB did reject the rules as being unjustifiably burdensome. While an agency can contest the OMB's determination, the FCC has decided not to do so. The rules are therefore ineffective unless and until the FCC revises them and justifies whatever burden is then created.  The FCC has now announced that it is throwing in the towel and going back to the drawing board on these rules, so the world is temporarily safe from battery back-up requirements.

The larger lesson here, though, is that the Paperwork Reduction Act remains a viable, if little used, salient in the public's thin defenses against the onslaught of federal regulation. This decision may invigorate the industry to aggressively challenge FCC regulations at the OMB level with the hope that somebody over there is now actually listening.

Moment Method Modeling: Update

An informal work-around for a work-around?

In a post last September we called attention to the Commission’s approval of moment method computer modeling for directional AM proofs. Use of such modeling was touted as hugely advantageous to many AM licensees because it would relieve them of an exceedingly time-consuming and expensive burden.

But just because the Commission approved moment method modeling did not mean that we could take advantage of it. The effective date of the new rules was not announced in September; rather, the FCC indicated that they would become effective once the Office of Management and Budget (OMB) had reviewed and approved the revised rules. 

So it was something of a surprise when we happened to be thumbing through the Federal Register on October 30 and came across a notice, from the Commission, advising that the changes would become effective December 1, 2008, “except for the amendments to §§73.61, 73.68, 73.151, and 73.155.” But, as it turns out, those sections are pretty much the only ones that were changed last September – which led to the next obvious question: what exactly goes into effect on December 1?

We asked around and it appears that, as a practical matter, very little goes into effect on December 1 . . . BUT there may be some method to the Commission’s madness here. 

At present, the smart money figures that OMB approval won’t kick in until well into the first quarter of 2009. Meanwhile, though, it’s possible that a significant number of AM licensees might be in a position to take advantage of moment modeling if they could. The staff’s thinking appears to be that, if at least some aspects of the new rules are in effect, then affected licensees may feel it appropriate to prepare and submit applications based on moment modeling, even if the application forms have not technically been approved. While the staff won’t be able to act on such applications until OMB has given its thumbs-up to the form, we understand that the staff is getting comfortable with the notion that it can grant program test authority based on the not-yet-OMB-blessed application forms.

So the drill goes like this. You prepare your 302-AM using moment modeling as outlined in the not-yet-effective rules and you file it now, asking for program test authority in the process. Don’t ask for a waiver – just file the application and PTA request. We understand that the staff is willing to act on the PTA request and (presumably) grant such authority right away, which would enable the station-applicant to commence full operation of its modified facilities. While the license application would then hang around in pending status until OMB approves the forms (thus clearing the way for the Commission to act on the applications), that should not matter much to the station-applicant, since it would be operating merrily along with its PTA in the meantime.

If the staff takes this tack – and we have been led to believe that that’s the plan – then they deserve a round of applause for coming up with a way to deliver benefits to the affected industry despite the strictures of a Rube Goldberg-like bureaucracy.

Form 355 and Website Public File Posting: Soon in the Crosshairs at OMB

Last November, the FCC announced that it had adopted a new "enhanced" programming report for TV licensees, and also that it would require TV licensees to post pretty much all of the local public files on their respective websites.  From March 13 until May 12, we all have an opportunity to send comments on the resulting paperwork to the FCC, which will then pass the comments on to the Office of Management and Budget (OMB) to let them how we feel about these new burdens.

OMB gets involved because the new reporting and website posting requirements are what the Federal government calls "information collection" activities.  Under the Paperwork Reduction Act, before an agency like the FCC can impose new information collection activities, it has to get OMB to bless them.  So the FCC has now had a notice published in the Federal Register to solicit comments related to the Paperwork Reduction Act, which then will be added to its own presentation and forwarded to OMB for its consideration.

We strongly encourage everyone to take advantage of this opportunity.  It is at least possible that a compelling showing of the extreme burdens imposed by the new FCC requirements could force the government to re-think them.

Technically, comments should address the need for the information to be collected, the accuracy of the Commission's estimate of the burden of the collection, ways to improve the information collection requirement, and ways to reduce the burden on respondents.  Any comments are due to be filed by May 12, 2008.

It seems to us that the Commission has grossly underestimated the burdens imposed by the new rules and overestimated the utility of the information to be collected and/or posted.  For example, the FCC's estimate of the time which would be required to complete Form 355 is rather fuzzy and shows significant costs to each station, costs which will be repeated quarterly - a fact which the FCC does not readily admit.  According to the Commission, filling out the form may take anywhere from 2.5 to 52 hours, a rather broad range to say the least.  The Commission has not explained how this new requirement will generate any more interest from the public, or otherwise promote the Commission's localism goals, any better than similar requirements in the past have done.  Taking the Commission's own estimate, the imposition of a new filing that could require more than a work week's time to complete should require some justification - and that's EVERY QUARTER!

If there are multiple comments from affected parties (i.e., television licensees) pointing out these flaws, the FCC might be forced to come up with some justification for its rules and to explain how the new burdens comport with the Paperwork Reduction Act.  The entertainment value alone of watching the FCC make this effort could be substantial, and a serious inquiry could even force some re-thinking.

For those inclined to try to get the FCC to reconsider outside of the OMB process, the March 13 Federal Register publication also establishes the deadline for filing petitions for reconsideration, and that deadline is now April 14, 2008.


DTV Public Outreach Outlined

The Commission released an Order on Monday, March 3rd requiring broadcasters, MVPDs (i.e., cable, satellite), manufacturers and wireless service providers to commence specific public outreach initiatives to educate the public on DTV Transition matters.  The Commission had released proposed rules in July, 2007, and has now taken steps to implement several of the proposed rules.  
On the broadcast side, the Commission will require TV licensees to select one of three outreach programs.  Each of the options includes a mix of Program Service Announcements (PSAs) and video crawls - all of which must be reported back to the FCC on a new form (FCC Form 388) describing the efforts.  For example, under the first option, television stations would be required to air 15-second PSAs and run one 15-second video crawl four times a day, totaling 28 of each during the week.  The second option would require only an average of 16 30-second video crawls and an average of 16 30-second PSAs each week, along with additional announcements in the last 100 days prior to the end of the Transition, and a "bug" on the screen that will provide a countdown to the end of the transition.  The third option will be available only to noncommercial broadcasters, and would require them to air 60 seconds per day of consumer educational programming between now and April 1, and then 120 seconds per ay from May 1, 2008 to October 31, and finally 180 seconds per day from November 1 until the Transition.  The Commission is not placing any requirements on Low Power and Class A television broadcasters, but urges them to commence educating the public with regard to the end of the DTV Transition.

On the MVPD side, the Commission will require that notices be placed in the monthly consumer bills, providing notice of the DTV Transition, and referring the consumer to other sources of information, including  The Commission will require telecommunications carriers that provide Lifeline/Link-Up services to also include similar notices with their monthly bills.  As for equipment manufacturers, each television receiver or other device intended to work with television receivers (i.e., converter boxes) shipped after the effective date of the rules must include information relating to the DTV transition, including how the transition will affect the use of the purchased device.  Finally, the Commission committed to work with NTIA on making sure that their consumer help desks are staffed with persons knowledgeable about the transition. 
The rules adopted in the order will become effective as soon as they are published in the Federal Register.  The forms that are required to be filed will not become effective until after OMB approves them.

TV Rereg Order Released

On January 24, 2008, the Commission finally released the Report & Order (R&O) containing the standardized and enhanced disclosure requirements which it had decided to impose on the television broadcast industry last November.  In our November Memo to Clients we described the FCC's action based on the public notice issued by the Commission then. The release of the R&O provides us with the detailed nitty-gritty of what the FCC is imposing on the industry.  Among the new burdens are a new quarterly programming report and significantly greater public inspection file obligations.

Among the new public inspection file requirements are the following:

  • Stations with websites must post their public inspection files on their websites or on the website of their State Broadcast Association.
  • Stations must give notice twice daily (including at least once between 6 p.m. and midnight) that the station's public inspection file is available for inspection at the station's main studio and on its website.
  • While political files are not required to be posted, emails from the public are, and documents available on the Commission's site but not posted on the station's site must be linked to the station's site.  Stations must also retain hard copies of all letters and emails from the public in their public inspection files.
  • Stations must make the public inspection file portion of their websites accessible to the disabled, requiring compliance with specific Web Content Accessibility guidelines

Among the new reporting requirements are the following:

  • The current issues/programs lists required by TV licensees will be replaced by the all-new FCC Form 355 (available at Pg. 31 of the attached Report & Order), which will have to be filed with the Commission (electronically) each quarter on the 30th day of the succeeding calendar quarter - that is, the reports will have to be filed by April 30, July 30, October 30, and January 30 of each year.
  • In the quarterly reports, which cover not only the main broadcast channel but also all additional programming stream(s), each TV licensee is required to describe its programming in a laundry list of categories including national news, local news, local civic affairs, local electoral affairs, local programming, public service announcements, paid public service announcements, underserved communities programming, religious programming and independent produced programming.
  • Broadcasters must report information on closed captioning (including which programs were not closed captioned due to exemptions and the basis for each exemption), voluntary video description efforts, efforts to make emergency information available and access of the information to the disabled.
  • Broadcasters must certify that they have undertaken ascertainment efforts to assess the needs of their community, and must specify whether they have designed programming to address those needs.  The new rules do not mandate specific ascertainment efforts, although the new Form 355 does require the reporting licensee to describe (a) any ascertainment efforts it did take and (b) any programming designed to address any needs identified through such efforts.

The new rules will not go into effect until 60 days after notice of their approval by the Office of Management and Budget is published in the Federal Register.  Stations with existent websites must have their public inspection files posted online at that time.  Any websites later created must comply with the rules within 30 days after the sites are made available to the public.

We will have more on the new rules and potential challenges to their validity in the next edition of Memorandum to Clients.  In the meantime, if you have any questions please do not hesitate to contact your FHH attorney.

Analog TV Consumer Disclosure -- UPDATE

On May 3, I reported on a new FCC requirement for consumer disclosures on sales of analog-only TV receivers.

That included the FCC-announced effective date of May 25, 2007.

This morning's Federal Register supersedes that report. It says that the rule requires approval by the Office of Management and Budget, and will not take effect until a date to be announced.

Nevertheless, companies affected by the rule are urged to move quickly toward compliance. When OMB does issue its approval, the rule may then take effect with little or no warning.