New 301, 314, 315, 345 forms now available

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

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

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

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

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

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

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

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

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

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