The FCC announced on Friday afternoon that it would push back the December 1, 2017 deadline for commercial and noncommercial broadcast stations to file their biennial ownership reports. Rather than opening the filing window on September 1 and closing it on December 1, the FCC will open the window on December 1 and close it on March 2, 2018. The Commission stressed that it is only changing the filing due date, not the period of time covered by the report. That is, all reports, regardless of when in the window they are filed, must be accurate as of October 1, 2017. If a station is sold after October 1, 2017, the former ownership of the station must still be reported when the form is finally filed.
This biennial ownership filing cycle is the first one in which both commercial and noncommercial stations file on the new consolidated filing date, which was to be December 1 of odd numbered years. In addition, it will be the first one to use new ownership report forms accessed and filed through the FCC’s new Licensing Management System (“LMS”), rather than the CDBS filing system that is being phased out.
In its comments in the FCC’s proceeding to reduce or eliminate regulatory burdens on broadcasters, the NAB had requested that the Commission suspend the December 1, 2017 filing date while it considers comments the NAB and others filed seeking a reduction in the frequency and burden of ownership reporting. NAB followed that request up with a letter asking that the Commission allow additional time specifically for broadcasters to test the new filing system and revised ownership reporting forms to avoid the debacle that occurred in 2009-2010 when the FCC last updated the form for commercial stations, causing multiple delays and suspensions of the filing deadlines.
In delaying this year’s ownership report filing, the FCC said that it was acting of its own accord to permit adequate time for the integration of the new ownership report forms with the FCC’s LMS filing database. Whatever the technical issues the FCC faces in that process, there is plenty for broadcasters to do during this delay. For radio broadcasters, the LMS is an entirely new filing system with which they will need to become familiar. As broadcasters’ recent experience with the unexpected and dramatic redesign of the Emergency Test Reporting System (ETRS) showed, the learning curve surrounding a new filing system can be very steep and frustrating.
In addition, the FCC requires that all reportable interest holders be identified in the ownership report by one of three types of unique identifiers. As we have explained before, reportable interest holders must secure a Federal Registration Number (the CORES FRN, not to be confused with the CORES Username and Password needed to access the ETRS), and to do so must provide the FCC with their full Social Security Number. To address the backlash from those concerned about providing their SSNs, the Commission created a Restricted Use FRN, or RUFRN, that can be used only in ownership reports and requires reporting the interest holder’s name, date of birth, residential address and last four digits of their SSN. Finally, if an interest holder refuses to release the information needed to secure a CORES FRN or a RUFRN, the licensee may secure a Special Use FRN without revealing any SSN information upon a showing that it made a good faith effort to secure a CORES FRN or RUFRN.
Most recently, the Commission exempted interest holders in noncommercial licensees, many of whom are volunteers, from the CORES FRN/RUFRN requirement going forward, and those licensees may use SUFRNs for their reportable interest holders without having to make a showing of good faith efforts to collect interest holders’ SSNs.
Still, all licensees have some administrative work to do in advance of the ownership report filing, determining which of their interest holders already have a CORES FRN, creating RUFRNs for any interest holders needing them, and determining whether use of the SUFRN is permitted or appropriate for any interest holders.
While the delay will provide broadcasters with more time to address the difficulties of using the new form and filing system, the recent experience with ETRS gives broadcasters plenty to think about as they prepare for their next ownership filing.