While it has taken nearly two years to get there, the FCC today announced the release of its new broadcast ownership data in a format that can be searched and manipulated for media and public policy research. For broadcasters, however, the more interesting part of this Public Notice is what it says about broadcasters that failed to timely file their ownership reports.
In April of 2009, the FCC announced it was revamping the biennial ownership report filing requirement for commercial broadcast stations. Prior to that time, broadcast stations had filed their ownership reports every other year on the anniversary date of their license renewal filing deadline. However, because that deadline varied depending upon the state in which a station was located, and because a licensee with stations in multiple states could elect to file a consolidated set of reports on the license renewal deadline for any of those states, locating all of a particular broadcast station’s ownership reports at the FCC could be challenging. Even determining whether a broadcaster had timely filed its reports was not easy.
Because of that, and because the FCC had long received complaints from advocacy groups that the ownership data collected was hard to access and not particularly useful in assessing broader media ownership issues, the FCC established a uniform filing date for all commercial stations on November 1 of odd-numbered years. The FCC also revamped the report form itself, required LPTV owners to begin filing ownership reports, and eliminated prior filing exemptions for sole proprietors and general partnerships composed of natural persons. The FCC’s stated goal in making these changes was to gather ownership information from the full universe of broadcast license holders, allowing the FCC to populate a database which could be used to electronically aggregate or dissect ownership information from all commercial broadcast station owners.
The FCC (and broadcast station owners) quickly found out that this was a task easier said than done. The sheer amount of information that had to be submitted to the FCC, particularly for broadcast groups with complex ownership structures, was daunting. As we detailed in an earlier post, the FCC had to postpone the filing deadline a number of times to address issues both technical and substantive. Ultimately, the November 1, 2009 deadline slid to July 8, 2010 as these various issues were addressed. The filings were further complicated by the FCC’s instruction that, despite the reports being filed in July 2010, the ownership information in them had to be as it existed on November 1, 2009, even if that information was no longer accurate. Stations that changed hands or were newly-built during that period were unsure of what, or if, they were to report to the FCC.
One by one, these issues were resolved, and while the FCC’s filing system struggled from time to time with the immense number of filings made during those last few weeks before the deadline, the process ultimately went fairly smoothly in comparison to the process leading up to it. With today’s announcement that the ownership database is available, and that media researchers can now gather and process ownership information in a far more efficient manner, it is inevitable that we will be seeing a lot more rulemaking comments and requests for rulemaking based upon the information in this database.
However, as the Public Notice itself points out, there are limitations to the utility of the data collected. Specifically, despite a broad outreach by the FCC, lots of law firm advisories (I count at least a half dozen over that time from Pillsbury alone), and the successive filing deadline extensions, a surprising number of licensees still failed to file ownership reports. The FCC attributes this to the failure of many who were previously exempt from filing to understand that they now need to be filing ownership reports with the FCC.
Based upon the FCC’s figures, there is an obvious correlation between the type of station involved and the likelihood that it filed the required reports. Among full power commercial TV stations, only 1.7% failed to file. Among full power commercial radio stations, 4.5% failed to file. However, among LPTV stations (including Class A stations), over 39% failed to file.
Earlier this month, the FCC began sending out letters to licensees demanding that they file the required ownership reports immediately, noting that “your failure to file could result in potential fines or forfeitures.” It appears that these letters are going both to stations that didn’t file at all, and to stations that did file, but had a defect in their reports (for example, providing ownership data accurate as of July 2010 rather than November 2009). The FCC’s Public Notice does not make clear whether stations that filed a defective report were counted as not filing, but the language in these recent letters suggest that may be the case, which would help to explain the surprisingly high “failure to file” statistics.
Regardless, the new database system makes it extraordinarily easy for the FCC to generate a list of stations that failed to timely file their biennial ownership reports. It also makes it easy for the FCC to automate the process of pursuing enforcement actions against such stations. Fortunately, the initial batch of letters from the FCC appears to indicate a desire to obtain missing filings to make the ownership database complete. However, the next batch of letters could begin the process of issuing fines against stations for failure to file, particularly those that failed to do so after being warned by the FCC. If your station is one of those that did not file by the July 2010 deadline, now would be an excellent time to address that oversight before you receive an unwelcome piece of correspondence from the FCC in your mailbox.