2010-11161. Promoting Diversification of Ownership in the Broadcasting Services

AGENCY:

Federal Communications Commission.

ACTION:

Final rule; correction and correcting amendments.

SUMMARY:

The Federal Communications Commission published in the Federal Register of May 16, 2008 (73 FR 28361), a Report and Order concerning steps the Commission took to increase participation in the broadcasting industry by new entrants and small businesses, including minority- and women-owned business. This document corrects the Report and Order by substituting the word “ethnicity” for “gender” in explaining the requirements for broadcasters to certify that their advertising contracts do not discriminate on the basis of race or ethnicity and that such contracts contain nondiscrimination clauses. In this document, the FCC also corrects the rules in 47 CFR 73.3555 and 73.5008 published at 73 FR 28361, May 16, 2008, related to steps the Commission took to increase participation in the broadcasting industry by eligible entities, including minority- and women-owned businesses.

DATES:

The amendments to 47 CFR 73.3555 and 73.5008 in this rule are effective May 14, 2010, and Form 303-S will become effective 30 days after the Commission publishes a document in the Federal Register announcing approval by the Office of Management and Budget.

FOR FURTHER INFORMATION CONTACT:

Amy Brett, [phone].

SUPPLEMENTARY INFORMATION:

This is a summary of the Commission's Third Erratum, FCC 10-49, adopted March 29, 2010 and released March 29, 2010. In FR Doc. E8-11039 the Federal Communications Commission published a Report and Order in the Federal Register of May 16, 2008 (73 FR 28361) in FCC 07-217.

On page 28364, in the first column, paragraph 11, the Commission inadvertently used the word “gender” instead of “ethnicity.” This document corrects that error and revises the language to read as follows:

The Commission finds that discriminatory practices have no place in broadcasting and concludes that it is appropriate for the Commission to require broadcasters renewing their licenses to certify that their advertising contracts do not discriminate on the basis of race or ethnicity and that such contracts contain nondiscrimination clauses.

Also, in this document the Commission amends Note 2(i) of 47 CFR 73.3555 and 47 CFR 73.5008(c), published at 73 FR 28361, May 16, 2008, so the rules accurately reflect the Commission's intent.

Need for Correction

As published, the final regulations contain inadvertent errors which need to be corrected.

List of Subjects in 47 CFR Part 73

• Radio
• Television

Federal Communications Commission.

Bulah Wheeler,

Acting Associate Secretary.

Accordingly, 47 CFR part 73 is corrected by making the following correcting amendments:

PART 73—RADIO BROADCAST SERVICES

1. The authority citation for part 73 continues to read as follows:

Authority: 47 U.S.C. 154, 303, 334, 336, and 339.

2. Revise paragraph i. of Note 2 to § 73.3555, to read as follows:

§ 73.3555

Multiple ownership.

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i.1. Notwithstanding paragraphs e. and f. of this Note, the holder of an equity or debt interest or interests in a broadcast licensee, cable television system, daily newspaper, or other media outlet subject to the broadcast multiple ownership or cross-ownership rules (“interest holder”) shall have that interest attributed if:

A. The equity (including all stockholdings, whether voting or nonvoting, common or preferred) and debt interest or interests, in the aggregate, exceed 33 percent of the total asset value, defined as the aggregate of all equity plus all debt, of that media outlet; and

B.(i) The interest holder also holds an interest in a broadcast licensee, cable television system, newspaper, or other media outlet operating in the same market that is subject to the broadcast multiple ownership or cross-ownership rules and is attributable under paragraphs of this note other than this paragraph i.; or

(ii) The interest holder supplies over fifteen percent of the total weekly broadcast programming hours of the station in which the interest is held. For purposes of applying this paragraph, the term, “market,” will be defined as it is defined under the specific multiple ownership rule or cross-ownership rule that is being applied, except that for television stations, the term “market,” will be defined by reference to the definition contained in the local television multiple ownership rule contained in paragraph (b) of this section.

2. Notwithstanding paragraph i.1. of this Note, the interest holder may exceed the 33 percent threshold therein without triggering attribution where holding such interest would enable an eligible entity to acquire a broadcast station, provided that:

i. The combined equity and debt of the interest holder in the eligible entity is less than 50 percent, or

ii. The total debt of the interest holder in the eligible entity does not exceed 80 percent of the asset value of the station being acquired by the eligible entity and the interest holder does not hold any equity interest, option, or promise to acquire an equity interest in the eligible entity or any related entity. For purposes of this paragraph i.2, an “eligible entity” shall include any entity that qualifies as a small business under the Small Business Administration's size standards for its industry grouping, as set forth in 13 CFR 121.201, at the time the transaction is approved by the FCC, and holds:

A. 30 percent or more of the stock or partnership interests and more than 50 percent of the voting power of the corporation or partnership that will own the media outlet; or

B. 15 percent or more of the stock or partnership interests and more than 50 percent of the voting power of the corporation or partnership that will own the media outlet, provided that no other person or entity owns or controls more than 25 percent of the outstanding stock or partnership interests; or

C. More than 50 percent of the voting power of the corporation that will own the media outlet if such corporation is a publicly traded company.

* * * * *

3. Section 73.5008 is amended by revising paragraph (c) to read as follows:

§ 73.5008

Definitions applicable for designated entity provisions.

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(c)(1) An attributable interest in a winning bidder or in a medium of mass communications shall be determined in accordance with § 73.3555 and Note 2 to § 73.3555. In addition, any interest held by an individual or entity with an equity and/or debt interest(s) in a winning bidder shall be attributed to that winning bidder for purposes of determining its eligibility for the new entrant bidding credit, if the equity (including all stockholdings, whether voting or nonvoting, common or preferred) and debt interest or interests, in the aggregate, exceed thirty-three (33) percent of the total asset value (defined as the aggregate of all equity plus all debt) of the winning bidder.

(2) Notwithstanding paragraph (c)(1) of this section, where the winning bidder is an eligible entity, the combined equity and debt of the interest holder in the winning bidder may exceed the 33 percent threshold therein without triggering attribution, provided that:

(i) The combined equity and debt of the interest holder in the winning bidder is less than 50 percent, or

(ii) The total debt of the interest holder in the winning bidder does not exceed 80 percent of the asset value of the winning bidder and the interest holder does not hold any equity interest, option, or promise to acquire an equity interest in the winning bidder or any related entity. For purposes of paragraph (c)(2) of this section, an “eligible entity” shall include any entity that qualifies as a small business under the Small Business Administration's size standards for its industry grouping, as set forth in 13 CFR 121.201, at the time the transaction is approved by the FCC, and holds:

(A) 30 percent or more of the stock or partnership interests and more than 50 percent of the voting power of the corporation or partnership that will own the media outlet; or

(B) 15 percent or more of the stock or partnership interests and more than 50 percent of the voting power of the corporation or partnership that will own the media outlet, provided that no other person or entity owns or controls more than 25 percent of the outstanding stock or partnership interests; or

(C) More than 50 percent of the voting power of the corporation that will own the media outlet if such corporation is a publicly traded company.