A Few More Twists on the FCC’s Long and Winding Road to Its New Ownership Report Form

The FCC announced in April 2009 its intent to implement a new version of its biennial Ownership Report form, and to require that all commercial broadcast stations file a new Ownership Report with the FCC by November 1 of odd-numbered years. Since that time, the FCC has had to delay the original November 2009 filing deadline a number of times, for reasons ranging from its electronic filing system grinding to a halt and being unable to handle the sheer mass of the new reports, to technical glitches with the form itself, delays in Office of Management and Budget approval, and fierce opposition from broadcasters at the FCC, OMB and now in court based upon the paperwork burden and privacy concerns the new form raises. As we discussed in an earlier Client Alert, the FCC’s revised deadline requires parties to report their November 1, 2009 ownership data on the new form by July 8, 2010.

As that deadline draws near, however, it looks like there are still a few obstacles that the FCC must navigate. As we reported in a recent Client Alert, the FCC yesterday responded to a petition filed with the U.S. Court of Appeals for the DC Circuit by a group of broadcasters. Those broadcasters have asked the court to stop the FCC from implementing the revised Form 323, arguing that the requirement that all “attributable” principals provide their Social Security Number (SSN) to obtain a Federal Registration Number (FRN) for the new ownership report violates the Administrative Procedure Act and the Privacy Act. In its court-ordered response to these allegations, the FCC claims it has complied with the law, and that the broadcasters’ claims are moot in any event because filers are no longer actually required to provide their SSNs and can instead apply for a “Special Use FRN” (SUFRN) (love that acronym!) to complete the new ownership report form.

That response is not, however, entirely accurate. The FCC initially refused to create a Special Use FRN for purposes of reporting ownership interests. It feared that broadcast investors would choose to use that option rather than supplying their SSN, thereby undercutting the FCC’s ability to determine precisely which “Ted Jones” was the owner of a particular radio station. The FCC relented only when it became clear that many broadcasters would be unable to file their Ownership Reports at all since they had no ability to force their investors to reveal SSNs, and the FCC’s electronic filing system would not accept an ownership report if all attributable investors listed did not have an SSN-obtained FRN.

Even when the FCC later relented and created the SUFRN, it limited its use to the filing of biennial ownership reports (as opposed to post-sale ownership reports or other FCC applications). The FCC also made clear that the use of a SUFRN, while technically allowing broadcasters to file their ownership reports through the electronic filing system, did not comply with its rules and that it expected broadcasters to have obtained SSN-obtained FRNs before the next biennial ownership report is due in November 2011.

Since that time, and under continuing pressure from communications lawyers and privacy advocates (who are often one and the same), the FCC appears to be growing more flexible about the use of SUFRNs in completing ownership reports. Action by the court in the short time remaining until the July 8, 2010 filing deadline may determine just how flexible the FCC will need to be in that regard, and whether the filing deadline might have to be extended yet one more time.