FCC to Change Noncommercial Ownership Form

Commission to eliminate need for social security numbers from board members of noncommercial licensees for Biennial Ownership Report.

David Oxenford - Color
David Oxenford

By: David Oxenford, Wilkinson Barker Knauer, LLP
www.broadcastlawblog.com

Last week, we wrote about two of the three broadcast items to be considered at the FCC meeting on April 20. We wrote here about the draft order to restore the UHF discount and here about the relaxation of the restrictions on fund-raising for third parties by noncommercial stations. The third item, also related to noncommercial licensees, is the resolution of the long-simmering dispute about whether or not to require that those individuals with attributable interests in noncommercial broadcast stations – officers and board members – to provide their Social Security Numbers or other personal information to the FCC to obtain an FCC Registration Number – an FRN. The draft order released last week indicates that the FCC will eliminate that requirement at its April 20 meeting.

The obligation to obtain an FRN was adopted so that the FCC could comprehensively track the ownership of broadcast stations and determine the interests of individual parties across the broadcast media nationwide. This was principally done for purposes of assessing the diversity of ownership of the media – including by minorities and women. By making each attributable owner get their own FRN, interests across the broadcast media landscape could be tracked with greater precision. However, objections were raised when the FCC proposed to apply this obligation to noncommercial broadcasters, requiring that officers and board members provide their Social Security Number or other personal information to obtain an FRN. Despite these objections, the previous Commission ordered noncommercial broadcasters to provide this information, going so far as to suggest that attributable interest holders who did not provide the information necessary to obtain an FRN could be sanctioned. See our articles here and here. The current FCC under Chairman Pai rescinded the decision of the Media Bureau upholding the obligation (see our post here) – leading to the draft order to be considered at the April 20 meeting.

Noncommercial broadcasters have argued that this information is not as necessary as for commercial broadcasters in assessing diversity, as noncommercial stations don’t have owners in the traditional sense of the word. Their officers and board members don’t have an economic interest in the business success of the station. In fact, those with attributable interests in noncommercial stations often don’t become officers or directors because they are interested in radio or television at all, but instead because they are interested in a noncommercial entity’s broader purpose. For instance, a member of the board of a state university may become a board member because of his or her interest in some academic department, or because of the athletic teams at the university and not even know when appointed to the board that among the university’s holdings is a broadcast station. Some board members may become members by being an elected official – e.g. state governors are often ex-officio members of state university boards. The fear is that, by requiring that these individuals provide personally sensitive information, they may be discouraged from participating in these nonprofit endeavors. A majority of the current Commission appears to have accepted that reasoning and has now teed up the concept of allowing noncommercial stations to obtain Special Use FRNs (“SUFRN”) for these individuals – which will not require personally identifiable information or Social Security Numbers.

The FCC did note, however, that these individuals need to use the same SUFRN for any broadcast interests that they may have. So if an individual sits on the board of multiple broadcast licensees (e.g. the governor of a state who may be on the board of several state universities that are the licensee of broadcast stations), that individual must provide the same SUFRN to each licensee. Also, if an attributable party has an interest in a commercial broadcast station and obtains an FRN in connection with the ownership report of that station, they need to use that FRN on the ownership report of the noncommercial licensee. Noncommercial licensees thus will still need to survey their officers and board members to make sure that they don’t have other broadcast interests and to coordinate with other licensees in state systems to make sure that the same SUFRN is used.

Biennial ownership reports for all stations, commercial and noncommercial, are due on December 1 of this year, reporting on the ownership of the licensee as of October 1. While this order, if adopted on April 20, will make information collection easier for noncommercial licensees, they should still start planning their information collection process for getting information about the broadcast interests of board members in time for the December 1 deadline.

David Oxenford is MAB’s Washington Legal Counsel and provides members with answers to their legal questions with the MAB Legal Hotline.  Access information here. (Members only access).

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