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Death, taxes, and ownership reports: all three are unavoidable, but broadcasters had a brief respite from the last one. That respite has now come to an end.

One of the joys of being a broadcast licensee is filing biennial ownership reports detailing the extended ownership structure of each station. These reports used to be called Annual Ownership Reports and were filed, appropriately enough, annually. In an effort to reduce the amount of paperwork flowing between licensees and the FCC, the requirement changed in 1999 from an annual to a biennial one. That created endless confusion, as any particular station’s filing deadline was generally dictated by where it was located. Radio stations in one state would file by April 1 of odd-numbered years, while radio stations in a different state would be required to file by June 1 of even-numbered years. In fact, even TV and radio stations in the same state were required to file in different years.

Because of exceptions to the general rule on filing deadlines (too boring to discuss here), even the FCC had difficulty determining whether a station had been properly filing its ownership reports on time. As a result, the FCC adopted new filing rules in May 2009 establishing November 1 of odd-numbered years as the national ownership report filing date for all commercial broadcast stations. It also introduced a new form requiring more detailed information than in the past, required formerly exempt entities to file reports, and required that the information be entered electronically and repeatedly into the FCC’s filing system for each attributable owner in the ownership chain.

Previously, licensees with complex ownership structures would create a single exhibit describing the complete ownership structure and other media ownership interests, which was then attached to the ownership report for every entity in the chain of ownership. Because the new electronic ownership report form would not allow such attachments, stations (well, let’s be honest; station’s lawyers) were required to reenter the data for each and every ownership report. The reports for even midsize station groups could take months to complete. Initially, the FCC postponed the filing deadline (twice!) to give licensees time to fill out the voluminous reports, but as the FCC’s electronic filing system started to whimper from the volume of data being entered, the FCC postponed the deadline until the form could be reworked to solve the worst of the problems. For those interested, you can read our advisories and alerts from the time here, here, here, here, here, and here (you begin to appreciate the scope of the problem!).

A few hours ago, the FCC announced that a revamped ownership report form is now available which resolves the repetitive data entry issue by incorporating a spreadsheet that, once filled out, can be copied into multiple ownership reports. With the availability of the new form, the FCC also announced that all commercial broadcast stations, including Class A and LPTV stations, must file their reports on the new form by July 8, 2010. For those interested in the details of the new Form 323 and spreadsheet, you can read our Client Alert on the new form, and ponder whether a similar eight month postponement of death or taxes might also be possible.

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4/8/2010
The FCC’s Media Bureau has announced that a new version of the Biennial Ownership Report Form for commercial broadcast stations, FCC Form 323, will be available on its website as of April 9, 2010. All commercial broadcast station owners must file their biennial ownership reports using the new form by July 8, 2010. However, the data used to complete the form must be accurate as of November 1, 2009.

The FCC originally announced its intent to implement a new version of the Form 323 in an Order released in May 2009 as part of its Promoting Diversification in the Broadcasting Services proceeding. The revision required, among other things, that each holder of a direct or indirect attributable interest in a licensee secure an FCC-issued Federal Registration Number (“FRN”). The revision also mandated that information regarding attributable interest holders and their other broadcast interests be reported repeatedly and in a precisely structured manner. As a result, the number of reports and the time to complete each report increased dramatically for many broadcasters with the ultimate result that the FCC’s electronic filing system ground to a near halt and did not reliably save information entered into it. Based on these technical difficulties, the FCC stayed the filing obligation until it could improve the functioning of the form to account for these difficulties.

The FCC sent its revisions to the form to the Office of Management and Budget (“OMB”) for approval on March 25, and OMB approved the modified form on March 26. The revised form uses a new XML Spreadsheet template that will allow information to be entered into the spreadsheet and then uploaded to the form, thereby reducing the time and effort needed to enter the data. The spreadsheet must be downloaded from the FCC form and comes with detailed instructions regarding the proper use of the XML Spreadsheet. Of particular note are the following:

  • The XML Spreadsheet comes with 25 empty rows for data entry that contain embedded validation codes necessary for the proper functioning of the form. Any licensee needing more than 25 lines must copy and paste the original 25 lines as many times as necessary and not create new lines.
  • The XML Spreadsheet must be saved with an .xml extension, not the .xls or .xlsx extensions that the Excel program will assign by default.
  • Licensees must not change or delete any data in Cell B1.
  • Information must be entered in all capital letters.

The new version of the form also retains the requirement that each attributable interest holder secure an FRN. The instructions state that where, after a good faith effort, a licensee is unable to secure an interest holder’s social security number, which is needed to complete the FRN registration process, a button on the form will allow the licensee to secure a Special Use FRN. The instructions to the form state that the Special Use FRN can only be used for the Biennial Ownership Report filing, and not for any other filing, such as a post-consummation Ownership Report filing.

The Commission’s May 2009 Order also adopted November 1 as a new uniform reporting date for all commercial stations nationwide, regardless of the station’s license renewal filing anniversary (the deadline previously used by the FCC). Because the original November 1, 2009 filing requirement was stayed while the form was revised, the reports filed by the new July 8, 2010 deadline must still reflect the ownership data as it existed November 1, 2009.

The substantial difference in time between the new filing deadline and the time for which ownership information is being reported leads to some interesting questions. For example, where a station has been sold since November 2009, should the report be filed under the name of the new licensee or the prior licensee. If it is to be filed by the new licensee, how will the FCC deal with the fact that the new licensee may not have any personal knowledge of the prior licensee’s November 2009 ownership structure? These questions may be answered by a follow up public notice from the FCC, but if not, we will be pursuing them with the FCC’s staff.

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The fact that you are reading this tells us that you have found your way to CommLawCenter.com, our effort to simplify the gathering of information and resources relating to the communications industry, particularly regarding its legal aspects. CommLawCenter is an effort to step outside the normal confines of law firm websites and memoranda to address breaking news more directly and quickly by bringing everything under one roof. In structuring the site, we have tried to make it as flexible as possible so that it can improve where possible and adapt where needed. As it grows, we hope that you become a part of it, contributing your thoughts and advice on its continuous refinement.

But first, a bit of background: the core of Pillsbury’s communications law practice is a group of attorneys who have practiced together for many years. Most of us began our practices at a communications law boutique named Fisher Wayland Cooper & Leader. Fisher Wayland, as it was popularly known, was founded in 1934 as one of the nation’s first communications law firms by Ben S. Fisher of the Federal Radio Commission – the predecessor agency of the FCC.

The creation of the Federal Communications Commission that same year marked a new approach by the federal government to regulating the rapidly expanding segments of the communications industry. Since that time, communications technologies have improved and multiplied at an amazing pace, with Fisher Wayland, and now Pillsbury, lawyers involved at every turn: the launch of FM radio, broadcast television, cable television, satellite distribution, cellular telephone service, space-based consumer entertainment technologies, and an explosion of Internet-based communications services in recent years. In recognition of this, USA Today once described Fisher Wayland as “among the most venerable” of communications law firms.

Times change, however, and nowhere is that more true than in the communications industry. As the industry moved toward integration and consolidation, communications law boutiques needed to provide an ever-broader array of services to these expanding clients, leading many of them to merge with large and diverse firms capable of tackling any legal issue imaginable.

Why are we telling you this? Well, it was ten years ago today that Fisher Wayland merged into Shaw Pittman Potts and Trowbridge, and five years ago today that Shaw Pittman merged into Pillsbury. The result is a truly national (actually, international) firm whose lawyers remember well that it is the personal relationships (and cool technology) that make communications such a personally rewarding field in which to practice. It is therefore fitting that we are launching CommLawCenter on this anniversary. From snail mail, to fax, to email, to web distribution, to this site, our efforts to keep clients and friends informed over the past 75 years have been an ever-evolving process. CommLawCenter will allow that audience to access our content more quickly and easily than ever before. We hope you will visit us regularly, and whether you look at it as Pillsbury v.2.0 or Fisher Wayland v.4.0, that you join us at CommLawCenter as we continue to explore what the next iteration of the communications industry will look like.

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