2013-00578. Promoting Diversification of Ownership in the Broadcasting Services

AGENCY:

Federal Communications Commission.

ACTION:

Notice of proposed rulemaking.

SUMMARY:

In this document, the Commission seeks further comment on its requirement that licensees and other entities filing the FCC Form 323, Ownership Report for Commercial Broadcast Station, provide an FCC Registration Number (FRN) generated by the Commission's Registration System (CORES) (CORES FRN) for attributable individuals reported on the Form 323. The Sixth Further Notice of Proposed Rulemaking (Sixth FNPRM) also seeks comment on the Commission's proposal to eliminate the “Special Use” FRN for individuals reported on the Form 323 and on a proposal to amend the Form 323-E, Ownership Report for Noncommercial Educational Broadcast Station to require filers to report the CORES FRN for individuals with attributable interests in licensees reported on the Form 323-E. The Commission also invites comment on whether it should extend the CORES FRN requirements, as they apply to entities and individuals, to any non-attributable interest holders that the Commission might ultimately conclude should be reported on the Form 323, as proposed by the Fifth Further Notice of Proposed Rulemaking (Fifth FNPRM). Finally, comment is sought on a proposal to extend the biennial ownership report filing period and on proposed revisions to the Form 323 as submitted in comments in the Review of Media Bureau Data Practices proceeding.

DATES:

The Commission must receive written comments on or before February 14, 2013 and reply comments on or before March 1, 2013. Written comments on the Paperwork Reduction Act (PRA) proposed information collection requirements must be submitted by the public, Office of Management (OMB) and other interested parties on or before March 18, 2013.

ADDRESSES:

You may submit comments, identified by MB Docket. No. 07-294, by any of the following methods:

• Federal Communications Commission's Web Site: http://fjallfoss.fcc.gov/​ecfs2/​. Follow the instructions for submitting comments.
• People with Disabilities: Contact the FCC to request reasonable accommodations (accessible format documents, sign language interpreters, CART, etc.) by email: [e-mail] or phone [phone] or TTY: 202-418-0432.

For detailed instructions for submitting comments and additional information on the rulemaking process, see the SUPPLEMENTARY INFORMATION section of this document.

FOR FURTHER INFORMATION CONTACT:

For additional information on this proceeding, contact Judith Herman of the Media Bureau, Industry Analysis Division, at [phone]. For additional information concerning the Paperwork Reduction Act information collection requirements contained in the Notice of Proposed Rulemaking contact Cathy Williams at [phone] or send an email to [e-mail].

SUPPLEMENTARY INFORMATION:

This is a summary of the Commission's Sixth Further Notice of Proposed Rulemaking in MB Docket No. 07-294, FCC 12-166, adopted December 21, 2012, and released January 3, 2013. The full text of this document is available for public inspection and copying during regular business hours in the FCC Reference Center, Federal Communications Commission, 445 12th Street SW., Washington, DC 20554. These documents will also be available via ECFS (http://fjallfoss.fcc.gov/​ecfs/​) and may be purchased from the Commissions copy contractor, BCPI, Inc. at their Web site http://www.bcpi.com or call 1-800 378-3160.

Initial Paperwork Reduction Act of 1995 Analysis

This Notice of Proposed Rulemaking may result in a new or revised information collection requirement. If the Commission adopts any new or revised information collection requirements, the Commission will publish a notice in the Federal Register inviting the public to comment on the requirement, as required by the Paperwork Reduction Act of 1995, Public Law 104-13 (44 U.S.C. 3501-3520). In addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the commission seeks further comment on how it might “further reduce the information collection burden for small business concerns with fewer than 25 employees.”

Summary of the Sixth Further Notice of Proposed Rulemaking

I. Introduction

1. In this Sixth FNPRM, we seek further comment on the Commission's requirement that licensees and other entities filing the FCC Form 323, Ownership Report for Commercial Broadcast Station, provide an FCC Registration Number (FRN) generated by the Commission's Registration System (CORES) (CORES FRN) for attributable individuals reported on Form 323. Obtaining a CORES FRN requires users to identify themselves uniquely. This unique identification is achieved by requiring users to submit their taxpayer identification number (TIN), which for entities is generally their employer identification number (EIN) and for individuals is generally their social security number (SSN). As discussed below, unique identification of entities and individuals filing and being reported on Form 323 is crucial to ensuring the accuracy and reliability of Form 323 data and the usefulness of those data to the Commission and other researchers.

2. We seek comment herein also on eliminating the interim, “Special Use” FRN alternative to obtaining a CORES FRN for individuals reported on Form 323. The Commission has long required licensees and other entities filing Form 323 to obtain and provide a CORES FRN. The revised Form 323, adopted in 2009 pursuant to the 323 Order, 74 FR 25163 (2009), and the 323 MO&O, 74 FR 56131 (2009) in this proceeding, requires filers to obtain and include a CORES FRN not only for themselves but also for entities and individuals whose attributable interests are reported on the form. Two parties sought reconsideration of the requirement to obtain CORES FRNs for individuals holding attributable interests, arguing that the CORES FRN requirement for individuals is overly burdensome and raises privacy and data security issues and that the Commission provided inadequate notice of this requirement. To address the concerns of the petitioners and others who raised this issue in comments, the Media Bureau implemented a “Special Use” FRN as an alternative, temporary measure to obtaining a CORES FRN for individuals holding attributable interests reported on the form. The Special Use FRN allows Form 323 filers to obtain an FRN for use with Form 323 for such individuals without submitting a TIN through CORES. As a rule, all filers must provide an FRN for all persons and entities reported on Form 323. If, after using diligent and good-faith efforts, a filer is unable to obtain or does not have permission to use an SSN in order to generate an FRN for an individual holding an attributable interest in the licensee, the filer may use the Special Use FRN. Filers who use a non-SSN based Special Use FRN will be deemed fully compliant with the Form 323 filing obligation for purposes of the 323 filing, and the lack of SSN-based FRNs in response to Section II, Question 3(a) and will not subject Respondents to enforcement action. We now seek comment on eliminating this temporary measure. We also seek comment on our proposal to permit filers to use a Special Use FRN solely in instances where the filer is unable to obtain a CORES FRN from an individual with reportable interests.

3. In addition, we seek comment on our proposal to amend the Form 323-E, Ownership Report for Noncommercial Educational Broadcast Station, to require filers to report a CORES FRN for individuals with attributable interests in licensees reported on this form. Further, we seek comment on whether we should extend the CORES FRN requirements, as they apply to entities and individuals, to any non-attributable interest holders that we might ultimately conclude should be reported on Form 323, as proposed in the Fifth FNPRM. Finally, we seek comment on our proposal to extend the biennial ownership report filing period and on the proposed revisions to Form 323 submitted in comments in the Review of Media Bureau Data Practices proceeding.

II. Background

4. It has been a longstanding goal of the Commission to promote diverse ownership of broadcast stations, including ownership by women and minorities. In order to gather accurate and usable data about these and other ownership categories, the Commission substantially revised its biennial ownership reporting form in 2009. As the Commission previously has stated, the changes to the filing requirements and the modifications to the form are intended to facilitate long-term comparative studies of broadcast station ownership. In addition, the changes address flaws in the data collection process identified by the United States Government Accountability Office (GAO) and by researchers who have attempted to use the data submitted on previous versions of Form 323. In 2008, GAO cited several shortcomings with the Commission's data collection process: (1) Exemptions from the biennial filing requirement for certain types of broadcast stations; (2) inadequate data quality procedures; and (3) problems with data storage and retrieval. To address GAO's concerns and to improve the quality and suitability of the data for the Commission's use, the Commission adopted several significant changes. First, it set a uniform “as of” date of October 1 for the ownership data being reported in the biennial filing and established a uniform filing deadline for the data of November 1. Thus, all filers must report their ownership interests as they exist on the “as of” date of the filing year and submit their reports no later than one month thereafter. These uniform dates make it possible to discern statistically valid trends in minority and female ownership over time, which was not possible using the previous rolling filing procedures, and ensure timely collection of the data. Second, the Commission also expanded the class of licensees that must file the report biennially to include sole proprietors and partnerships of natural persons as well as low-power television and Class A licensees.

5. Third, the Commission delegated to the Media Bureau authority to (1) Revise Form 323's electronic interface so that the ownership data incorporated into the database are searchable, and can be aggregated and cross-referenced; (2) build additional checks into Form 323 to perform verification and review functions; and (3) conduct audits to ensure the accuracy of the Form 323 reports. The Commission also stated that “to further improve the ability of researchers and other users of the data to cross-reference information and construct complete ownership structures, we will require each attributable entity above the licensee in the ownership chain to list on Form 323, the [CORES] FRN of the entity in which it holds an attributable interest.” This requirement to reference the next layer down in an ownership chain by using a unique identifier, the FRN, fulfills a need for unmistakable identity in the face of often complex ownership structures involving numerous parties and multiple layers or links in the ownership chain, a need which cannot be fulfilled by identification based entirely on names and addresses. In other words, the Commission concluded that without a single, unique identifier, researchers could not confirm the accuracy of aggregated records. While the Commission believed that these measures would resolve concerns regarding the usefulness of the data, it nevertheless delegated authority to the Media Bureau staff to revisit the CORES FRN issue if it determined that additional changes were necessary. In response, the Media Bureau revised and improved the instructions and questions in all sections of the form in order to (1) Clarify the information sought in the form, (2) ensure that the data are collected in machine-readable formats that can be incorporated in database programs used to prepare economic and policy studies, and (3) simplify completion of the form by giving respondents menu-style or checkbox-style options to enter data. The Bureau also included built-in edit checks and pre-fill capabilities to assure greater accuracy and ease of completion.

6. On August 11, 2009, the Commission submitted the revised Form 323 to the Office of Management and Budget (OMB) for approval pursuant to the Paperwork Reduction Act (PRA) requirements and published the Federal Register notice initiating a 60-day comment period. Among other things, the revised form required each filer to include a CORES FRN of entities one step above and one step below it in the ownership chain and to identify the CORES FRNs of its attributable officers, directors, and shareholders reported on the form. Many of the commenters in their comments to OMB objected to having to report CORES FRNs for individuals holding attributable interests, arguing that in order to obtain a CORES FRN from these individuals, they would need to provide SSNs to the Commission, a requirement that they claimed triggers privacy, data security, and identity theft concerns. Commenters also suggested that obtaining and reporting CORES FRNs for these individuals would be onerous and would present a hardship to filers, and that in some cases, filers might be unable to obtain a CORES FRN for all individual attributable interest holders because the individuals are unwilling to either obtain the FRN themselves or provide their SSN to the filer for the purpose of obtaining an FRN. Additionally, commenters criticized the Commission for failing to seek comment on requiring these individuals to obtain CORES FRNs prior to including this requirement on the revised form submitted for OMB approval. They also claimed that the decision was inconsistent with the CORES FRN requirement applicable to wireless licensees, who, they alleged, are not required to provide CORES FRNs or other similar information for officers, directors, and board members. Two Petitions for Writs of Mandamus were filed with the Court of Appeals for the D.C. Circuit to stay the FCC from implementing revisions to the form. Both were denied.

7. On October 6, 2009, the Commission submitted a letter to OMB in response to the comments. The FCC's response explained that requiring CORES FRNs on Form 323 is an integral part of the Commission's effort to “improve the quality, reliability, and usability of the collected data by eliminating inconsistencies and inadequacies in the data submitted.” The Reply Letter identified the CORES FRN as a key tool for ensuring that the ownership data is matched with specific owners. Also, without the CORES FRNs, the Commission explained that it would be unable to accurately determine the identity of a person when variations of a single name or other spelling irregularities appear from form to form. The Reply Letter also noted that the FRN has been used as a unique identifier for reports that collect data on individuals and entities that hold attributable interests in wireless services and concluded that requiring filers to provide a CORES FRN for individual attributable interest holders on the Form 323 “will allow the Commission to harmonize its processes between different licensing divisions and directly improve the quality and usefulness of the collected data * * *.” The Reply Letter rejected allegations that the Commission failed to comply with the notice requirements of the PRA. After the Commission submitted the revised form to OMB, the Commission issued a further order, the 323 MO&O, and explained that each filer was required to identify the CORES FRNs of its attributable officers, directors, and shareholders, explaining “[i]n the process of modifying Form 323 on delegated authority, the Bureau determined that it was necessary to expand the class of [CORES] FRNs to be included to ensure the usefulness of the data.”

8. On October 19, 2009, OMB approved the revised Form 323, including the requirement that filers identify the CORES FRN for individuals holding an attributable interest in the licensee. After several delayed filing deadlines, the Commission set July 8, 2010, as the first biennial filing deadline using the revised form. Generally, the Bureau's experience during the filing process was that most filers complied with the CORES FRN requirement. Nevertheless, in response to industry concerns about filers' ability to obtain FRNs from all individuals holding attributable interests due to individuals' concerns about privacy, security, and identify theft, the Bureau allowed filers, as an interim measure, to obtain a Special Use FRN for individuals reported on the form in lieu of obtaining a CORES FRN. Individuals do not need to provide an SSN in order to generate the Special Use FRN.

9. In December 2010, the Commission initiated a rulemaking proceeding in which it proposes to update CORES in an effort to enhance the Commission's data collection efforts and to improve customer interface with CORES. In the Notice of Proposed Rulemaking, the Commission noted that, “[s]ince the creation of CORES, entities have been able to obtain multiple FRNs in order to permit different members of their corporate family to obtain their own individual FRNs, regardless of whether those entities have different taxpayer identification numbers * * *” The Commission stated that it has had difficulty using CORES to identify all FRNs held by the same entity when entities have not provided TINs or have provided inconsistent TINs. It also observed that some filers erroneously invoked exceptions to the general requirement to provide a TIN and that these entities or individuals also would be difficult to track. The Commission has proposed several options to resolve these issues. In addition, the Commission has asked whether it should expand the availability of “special use” FRNs for purposes other than the filing of Form 323.

10. In July 2011, the Court of Appeals for the Third Circuit, as part of its review of the Commission's media ownership rules, vacated and remanded certain aspects of the Diversity Order. The court concluded that the Commission's decision to adopt a revenue-based eligible entity definition to facilitate ownership diversity was arbitrary and capricious because the Commission did not show how such a definition specifically would assist minorities and women, who were among the intended beneficiaries of this action. The court also remanded each of the measures adopted in the Diversity Order that relied on the revenue-based definition. The court found that the eligible entity definition was not supported by “data attempting to show a connection between the definition chosen and the goal of the measures adopted—increasing ownership of minorities and women,” stressing that regulations seeking to increase female and minority ownership must be based upon reliable data. The court stated, “At a minimum, in adopting or modifying its rules the FCC must `examine the relevant data and articulate a satisfactory explanation for its action[,] including a rational connection between the facts found and the choice made.' ” The court also made plain that “[i]f the Commission requires more and better data * * * it must get the data.” The court stated that the actions taken in the Order and Fourth FNPRM to reliably analyze minority and female ownership “will, however, lay necessary groundwork for the Commission's actions on remand.”

III. Discussion

11. By this FNPRM, we seek to supplement the record regarding the use of CORES FRNs. First, we tentatively affirm the Commission's prior determination that the use of CORES FRNs as unique identifiers is necessary in order to improve the quality of the data collected on Form 323, and we propose to discontinue the Special Use FRN for Form 323. We propose to require all individual attributable interest holders to obtain a CORES FRN and to require all Form 323 filers to provide the CORES FRN for these individuals. Second, we seek comment on whether we should require the individual and entities holding non-attributable interests that would be reportable on the Form 323 under the proposal set forth in the Fifth FNPRM to obtain a CORES FRN and require all Form 323 filers to report these CORES FRNs. Third, we seek comment on revising Form 323-E to include the same CORES FRN and attributable interest reporting obligations as those applicable to Form 323. Finally, we seek comment on proposed revisions to the Form 323 submitted in comments in the Review of Media Bureau Data Practices proceeding.

12. Elimination of Special Use FRN for Form 323. Special Use FRNs do not afford the Commission a reliable means of tracing a reported interest holder to a unique individual and their use therefore undermines the purpose of our data collection effort, which seeks to accurately ascertain the nature and extent of minority and female ownership of broadcast properties. Without the ability to track an FRN to a unique individual, it may be difficult, if not impossible, to accurately cross-reference broadcast ownership interests. The Third Circuit has highlighted the importance of collecting reliable data to support the Commission's rulemaking initiatives.

We seek comment on the use of the CORES FRN as a means of associating non-unique information (names, addresses, race, gender, and ethnicity) with a unique identifier for data quality, searchability, cross-referencing, and aggregation purposes solely for use with FCC Form 323 as a means of identifying attributable interests. How effective, relatively speaking, is the CORES FRN as a unique identifier for the Commission's purposes? If no unique numeric or other identifier is associated with an ownership record, how can researchers and other members of the public adequately verify and/or make use of the collected data? How can complete ownership structures be compiled reliably? What alternatives are there to the use of the CORES FRN as a unique identifier? We invite comment on other measures the Commission could use as a unique identifier in lieu of the CORES FRN and its underlying TIN basis.

13. We tentatively affirm the Commission's prior determination that the use of CORES FRNs as unique identifiers is necessary in order to improve the quality of the data collected on Form 323, and we propose to eliminate the availability of Special Use FRNs and require the universal use of CORES FRNs for all biennial and non-biennial Form 323s. We tentatively conclude that such unique identification is essential to providing the kind of searchable and manipulable database needed to support accurate and reliable studies of ownership trends. We also tentatively conclude that the reporting of CORES FRNs on Form 323 that are obtained after supplying the Commission with a TIN is superior to reporting the Special Use FRNs now permitted for individuals. We seek comment on these tentative conclusions, and particularly encourage those who may have used the dataset created from the first set of Form 323 biennial filings that were required to include FRNs for attributable entities and individuals to address these issues. Furthermore, the use of CORES FRNs is consistent with Commission precedent in the wireless services context, as applicable to attributable interest holders. We seek comment on any justifications to treat broadcasters differently with respect to CORES FRN requirements.

14. We note that other government agencies also use SSNs when necessary to ensure program integrity and for statistical and research purposes. For example, the Census Bureau uses SSNs reported on income tax returns in order to prepare annual population estimates for states and counties to determine immigration rates between localities. The Department of Agriculture has statutory authority to collect the SSNs of both food stamp recipients and officers and owners of retail and wholesale food concerns that accept and redeem food stamps. The Small Business Administration (SBA) requires that applicants for SBA-backed loans provide their past business and personal income tax returns, which contain their SSNs. The Department of Housing and Urban Development (HUD) requires SSNs as a condition of eligibility for participation in HUD programs involving loans, grants and other assistance. The Veterans Administration requires individuals to provide their SSNs to be eligible for compensation or pension benefits programs. The Treasury collects the SSNs of all savings bond purchasers. The Department of Labor requires all workers compensation claimants to provide an SSN. The Department of Homeland Security uses SSNs in its E-Verify database as the basis for its employment verification system. Health and Human Services collects SSNs to verify citizenship status. Agencies also collect and share SSNs for purposes of collecting debts owed to the government, as well as using employees' SSNs for activities such as payroll, wage reporting, and providing employee benefits. We seek comment on the use of SSNs as unique identifiers by other governmental agencies as it relates to the Commission's proposed CORES FRN requirement for individuals.

15. Although we are seeking comment in our separate CORES proceeding on measures to improve the CORES FRN system and the possible expansion of special use FRNs, we tentatively conclude that it is not necessary to await the outcome of that proceeding to improve further the Form 323 data collection process by discontinuing the Special Use FRN for Form 323. Unlike many of our filing obligations, the fundamental objective of the biennial Form 323 filing requirement is to track trends in media ownership by individuals with particular racial, ethnic, and gender characteristics. In this context, it is especially critical to ensure that we can identify uniquely each individual reported on the form. As noted above, the Commission cannot ensure that each individual is assigned only one Special Use FRN and that it is used consistently throughout the Form 323 reporting process because no unique identifier is available to track the Special Use FRN back to a single individual. For instance, CDBS does not have any mechanism to prevent a filer from obtaining multiple Special Use FRNs for the same individual. In contrast, even though multiple CORES FRNs can be obtained by the same individual or entity, the SSN or TIN underlying these FRNs generally permits the Commission to identify the specific person or entity using any such FRNs in a Commission report or form. Because CORES FRNs are backed by a TIN whereas Special Use FRNs are not backed by any unique identifier, the CORES FRN offers a superior means of sorting and aggregating Form 323 data. We seek comment on these views.

16. We also seek comment on the costs and benefits of eliminating the Special Use FRN for Form 323. Commenters objecting to the CORES FRN requirement for individuals with attributable interests that are reported on the form argue that the requirement would be burdensome. In the Reply Letter, the Commission disagreed that the process is as onerous as commenters describe. Filers must only register one time to obtain a CORES FRN, which can be used for current and all future Form 323 filings and other Commission filings. The CORES database registration process takes only a few moments to complete and users easily can obtain previously-registered CORES FRNs using the search tool in CORES. Moreover, in addition to not being a burdensome requirement, the CORES FRN is an essential part of the Commission's effort to improve the reliability, quality, and usability of the data collected, as the Commission as noted in identifying the CORES FRN as a key tool for ensuring that ownership data are matched with specific owners. Is the requirement to obtain a CORES FRN for individual attributable interest holders onerous on small businesses? On large corporations? On individuals? A small number of commercial broadcast licenses are held by governmental entities, tribal organizations, and not-for-profit groups. Is compliance with the CORES FRN requirement more burdensome for these entities? What factors contribute to any difficulties businesses may have in complying with the CORES FRN requirement? On balance, we believe the benefits of the proposed revisions will outweigh any costs. We seek comment on this analysis. Commenters should describe the benefits and any costs associated with eliminating the Special Use FRN or with any alternative proposal, explain any underlying assumptions, submit all relevant data and, if possible, quantify the potential effects.

17. We also seek comment on whether we should continue to allow filers to obtain a Special Use FRN solely in instances where, after reasonable and good faith efforts, they are unable to obtain a CORES FRN from an individual with reportable interests. We expect that filers will either obtain a CORES FRN for such individuals after obtaining the individuals' SSNs in order to do so, or, if the individuals are reluctant to disclose their SSNs to the filer, to instruct such individuals how to obtain a CORES FRN on their own. As we have noted before, this latter approach would avoid the need for individuals to disclose their SSNs to any party other than the Commission. In the event that an individual is unwilling to provide the filer with sufficient information for it to obtain a CORES FRN and is unwilling to obtain and provide a CORES FRN separately, we wish to ensure that a filer will still be able to timely file a Form 323 and to report the recalcitrant attributable interest holder. To permit this and to identify individuals who have failed to provide the required FRN, we seek comment on whether we should reserve the use of special use FRNs solely for those cases in which an individual with a reportable interest has failed to provide a responsible filer with a valid CORES FRN or to provide the filer with the means of obtaining one. We note that in such instances, the Commission can use its enforcement authority to impose a forfeiture against such individuals. In this connection, we also seek comment on whether we should require filers to notify individuals with reportable interests of the Commission's enforcement authority in such instances.

18. We also invite comment on any privacy concerns the CORES FRN requirement may raise as it relates to Form 323 and the identification of attributable interests. CORES FRNs are intended to provide a unique identification system for entities and individuals that does not require the disclosure of a TIN or SSN on Commission applications and forms. TIN data are needed only to obtain a CORES FRN in the first instance and those data are secured by the Commission and not used publicly. Does this requirement raise any potential adverse consequences? We invite comment in particular on the applicability of the Privacy Act to the CORES FRN requirement. The Commission does not consider sole proprietors and officers and directors to be persons who are subject to the Privacy Act of 1974, as amended, since they are acting in an entrepreneurial capacity. In addition, the Commission already has adopted Privacy Act Systems of Records for the CORES system and for the Form 323 requirement, which apply to any personally identifiable information required by the Form 323 and by CORES in connection with the FRN registration process. We tentatively conclude that the Privacy Act does not bar our adoption of the CORES FRN proposals discussed in this Further Notice. To the extent commenters believe the requirement presents a risk of any adverse consequences affecting individuals' privacy, what is the degree of risk involved and is it outweighed by the benefits of obtaining more accurate and verifiable ownership data?

19. We also invite comment as to whether it is necessary to clarify that any individual with reportable interests must obtain an FRN. Currently, our rules do not explicitly require these individuals to obtain an FRN. Rather, the Form 323 requires licensees and other respondents to report the FRN of individuals holding attributable interests. A requirement for individuals with reportable interests to obtain FRNs would address concerns that filers may be unable to obtain FRNs from unwilling individual attributable interest holders. In this regard, we seek comment on Petitioner Koerner & Olender's request to “redefine or reinterpret” § 1.8002 of our rules, which establishes the Commission's generic FRN requirement, to include within the scope of the rule the holders of interests reportable on Form 323. Section 1.8002 states that persons “doing business” with the Commission must obtain an FRN and lists examples of the types of activities or interests that trigger the requirement. It does not state that the listed categories are the only circumstances under which an entity or individual must obtain an FRN. In the wireless context, the Commission has determined that individuals holding attributable interests in wireless licensees are “doing business with” the Commission and that wireless licensees must provide the FRNs for such individuals on the Form 602, FCC Ownership Disclosure Information for the Wireless Telecommunications Services. Should we amend § 1.8002 to explicitly include any interests of individuals or entities that are reportable on Form 323, either because the holders of these interests are deemed to be “doing business” with the Commission or because the Commission has, for other reasons, determined that these interest-holders should obtain an FRN? We seek comment on these matters, including comments on the costs and benefits of any rule amendment.

20. Requiring CORES FRNs for additional reportable interests. In the Fifth FNPRM, we are concurrently seeking comment on whether to expand the biennial ownership reporting requirement to include interests, entities and individuals that are not attributable because of (a) the single majority shareholder exemption and (b) the exemption for interests held in eligible entities pursuant to the higher EDP threshold. We propose herein that if the Commission requires these interest holders to be reported on the biennial ownership form, they should be required to obtain and provide CORES FRNs. We seek comment on what impact such a requirement would have on these interest holders and whether the benefits of unique identification described above are equally applicable to individuals subject to such a requirement. Would a CORES FRN requirement for these interest holders present different burdens for small businesses, other types of firms, or individuals? Would this requirement present privacy concerns? As requested above, commenters should address in detail the costs and benefits of expanding the existing FRN requirements to the additional interests at issue in the Fifth FNPRM.

21. Reporting FRNs on Form 323-E. We also seek comment on our proposal to require that CORES FRNs be provided for all entities and individuals reported on Form 323-E, Ownership Report for Noncommercial Broadcast Stations. In the 323 Fourth FNPRM, the Commission sought comment on whether to modify the Form 323-E to include gender, race, or ethnicity data questions, similar to the revisions adopted in the 323 Order in order to further the Commission's goal of advancing diversity of ownership in the broadcast industry. NPR objects to extending the CORES FRN requirement to Form 323-E, contending that it raises “unique privacy issues and administrative burdens” for the noncommercial sector. In comments submitted in response to the 323 Fourth FNPRM, NPR states that in many instances the governing board members are elected officials, or political appointees, who are volunteers that are not compensated for their services. Therefore, NPR argues that none of these board members would hold any equity interest in the station and would not provide meaningful “ownership” information to the Commission. We seek comment on this view. Are there unique attributes of noncommercial broadcasters, or of the ownership structure of noncommercial entities, that would make the application of an FRN requirement for their officers and directors particularly burdensome? Generally, we seek comment on the benefits, potential costs or other effects, and possible alternatives to imposing the same CORES FRN requirements on Form 323-E filers and holders of reportable interests as those applicable to Form 323 filers and attributable interest holders. Are there other advantages or drawbacks to applying these requirements to the Form 323-E? If the Commission elects not to include a CORES FRN requirement for individuals with attributable interests reported on Form 323-E, how can it ensure the accuracy of the data submitted? What alternatives to the CORES FRN, if any, are available that could provide sufficient data verification? We invite comment on these issues. Commenters should describe the benefits and costs of applying the existing FRN requirements to the Form 323-E or any alternative proposal, explain any underlying assumptions, submit all relevant data and, if possible, quantify the potential effects.

22. Due date for Biennial Ownership Reports. Currently, 47 CFR 73.3615(a) requires biennial reports to be filed by November 1 of odd-numbered years and states that each report must be accurate as of October 1 of the year in which it is filed. In order to provide parties with additional time to complete and submit their reports, we propose to move the due date from November 1 to December 1, with the October 1 “as of” date unchanged. We believe that providing filers with an additional 30 days to produce the Form 323 report will lead to more accurate reporting, and will not significantly delay the collection of data. We seek comment on this proposal.

23. Proposals submitted in the Review of Media Bureau Data Practices proceeding. We also are seeking comment on proposals regarding the Form 323 that were submitted in the Review of Media Bureau Data Practices proceeding, which was initiated “to improve the way the Commission collects, uses and disseminates data.” In that proceeding, the Bureau encouraged commenters to provide recommendations regarding: (1) The use and rationale of its existing data collections, (2) additional data that should be collected, (3) how it can improve the collection and analysis process for its existing collections, and (4) how it may improve the dissemination of its reports and analyses. Based on its experiences completing the revised Form 323, NAB suggests that the Commission modify the electronic version of Form 323 to allow for cross-referencing to information on other reports. Second, NAB suggests that an entity with several wholly-owned licensee subsidiaries should be able to list all of the licensees (and their respective stations) in Section I, Item 7. We seek comment on this proposal and ask whether it should be limited to wholly-owned subsidiary licensees or whether a parent entity instead should be able to list all the licensees in which it has an attributable interest (and their respective stations) in Section I, Item 7. We believe that such a change will significantly reduce the filing burdens on some entities, without compromising the data collected. NAB also proposes that the Bureau consider eliminating Section II-B, Item 3(c) as duplicative. NAB further suggests that the Commission modify the instructions to Form 323 to eliminate inconsistent information, such as the instructions for Section II-B, Items 1, 3(a), and 3(c). MMTC recommends simplifying the public display of Form 323 filings; requiring only one Form 323 filing per station with all the racial/ethnic/gender ownership of the attributable interest holders; creating a separate filing category for transfers to bankruptcy trustees, debtors-in-possession or trusts; and changing from a biennial filing to an annual filing requirement. Accordingly, we seek comment on these proposals regarding Form 323, including the costs and benefits of these proposals.

IV. Procedural Matters

24. Ex Parte Rules. The proceeding this FNPRM initiates shall be treated as a “permit-but-disclose” proceeding in accordance with the Commission's ex parte rules. Persons making ex parte presentations must file a copy of any written presentation or a memorandum summarizing any oral presentation within two business days after the presentation (unless a different deadline applicable to the Sunshine period applies). Persons making oral ex parte presentations are reminded that memoranda summarizing the presentation must (1) list all persons attending or otherwise participating in the meeting at which the ex parte presentation was made, and (2) summarize all data presented and arguments made during the presentation. If the presentation consisted in whole or in part of the presentation of data or arguments already reflected in the presenter's written comments, memoranda or other filings in the proceeding, the presenter may provide citations to such data or arguments in his or her prior comments, memoranda, or other filings (specifying the relevant page and/or paragraph numbers where such data or arguments can be found) in lieu of summarizing them in the memorandum. Documents shown or given to Commission staff during ex parte meetings are deemed to be written ex parte presentations and must be filed consistent with § 1.1206(b). In proceedings governed by § 1.49(f) or for which the Commission has made available a method of electronic filing, written ex parte presentations and memoranda summarizing oral ex parte presentations, and all attachments thereto, must be filed through the electronic comment filing system available for that proceeding, and must be filed in their native format (e.g., .doc, .xml, .ppt, searchable .pdf). Participants in this proceeding should familiarize themselves with the Commission's ex parte rules.

25. Comments and Reply Comments. Pursuant to §§ 1.415 and 1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested parties may file comments and reply comments on or before the dates indicated on the first page of this document. Comments may be filed using the Commission's Electronic Comment Filing System (ECFS). See Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (1998).

Electronic Filers: Comments may be filed electronically using the Internet by accessing the ECFS: http://fjallfoss.fcc.gov/​ecfs2/​.

Paper Filers: Parties who choose to file by paper must file an original and one copy of each filing. If more than one docket or rulemaking number appears in the caption of this proceeding, filers must submit two additional copies for each additional docket or rulemaking number. Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission's Secretary, Office of the Secretary, Federal Communications Commission.

All hand-delivered or messenger-delivered paper filings for the Commission's Secretary must be delivered to FCC Headquarters at 445 12th Street SW., Room TW-A325, Washington, DC 20554. The filing hours are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes and boxes must be disposed of before entering the building.

Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743.

U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th Street SW., Washington, DC 20554.

26. People with Disabilities: To request materials in accessible formats for people with disabilities (braille, large print, electronic files, audio format), send an email to [e-mail] or call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty).

Initial Regulatory Flexibility Analysis

27. As required by the Regulatory Flexibility Act of 1980, as amended (“RFA”), the Commission has prepared this Initial Regulatory Flexibility Analysis (“IRFA”) of the possible economic impact on small entities by the policies and rules proposed in this Sixth FNPRM. Written public comments are requested on this IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines for comments on the FNPRM. The Commission will send a copy of the FNRPM, including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (“SBA”). In addition, the FNPRM and IRFA (or summaries thereof) will be published in the Federal Register.

28. Need for, and Objectives of, the Proposed Rules. The FNPRM invites comment on the Commission's prior determination that the use of CORES FRNs as unique identifiers is necessary in order to improve the quality of the data collected on the Form 323 and on the proposal to eliminate the “Special Use” FRN feature for the Form 323. The FNPRM also seeks comment on the burdens of eliminating the Special Use FRN, of requiring all individual holders of interests reportable on the Form 323 to obtain an FRN through the Commission's Registration System (CORES), and of requiring all filers of Form 323 to report the FRNs for these individuals. The FNPRM invites comment on the use of social security numbers as unique identifiers by other governmental agencies as it relates to the Commission's proposed CORES FRN requirement for individuals.

29. The objective of the information collection undertaken to establish a CORES FRN is to obtain a special, unique identifier that will allow the Commission and researchers to cross-reference information and create complete ownership structures in order to promote its long standing goal to promote diverse ownership of broadcast stations, including by women and minorities.

30. The FNPRM also notes that the Commission, in the Fifth FNPRM, is concurrently seeking comment on whether to expand the biennial ownership reporting requirement to include interests, entities and individuals that are not attributable because of (a) the single majority shareholder exemption and (b) the exemption for interests held in eligible entities pursuant to the higher EDP threshold. If the Commission requires these interest holders to be reported on the biennial ownership form, the Commission proposes, in this FNPRM, that these interest holders should be required to obtain and provide CORES FRNs. The FNPRM invites comment on the impact of this requirement on these interest holders and whether the benefits of unique identification described in the FNPRM are equally applicable to individuals subject to such a requirement. As described at paragraph 13 of the FNPRM, a unique identifier is essential to providing the searchable database necessary to support accurate and reliable studies of ownership trends.

31. The FNPRM also seeks comment on the Commission's proposal to require that CORES FRNs be provided for all entities and individuals reported on Form 323-E, Ownership Report for Noncommercial Broadcast Stations. Based on potential unique attributes of noncommercial entities, the Commission seeks comment on whether the proposed data collection imposes a significant burden for such entities, which may be smaller entities by nature. The Commission also seeks comment on the usefulness, potential effects, and possible alternatives to imposing the same CORES FRN requirements on Form 323-E filers and holders of reportable interests as those applicable to Form 323 filers and attributable interest holders.

32. The FNPRM also seeks comment on a proposal to amend the Commission's rules to clarify that an individual with reportable interests must obtain a CORES FRN. The Commission also invites comment on whether the Commission should reserve the use of Special Use FRNs solely for cases in which an individual with a reportable interest has failed to provide the filer with sufficient information for it to obtain a CORES FRN and is unwilling to obtain and provide a CORES FRN separately. The Commission also seeks comment on whether it should require filers to notify individuals with reportable interests of the Commission's enforcement authority to impose a forfeiture against such individuals.

33. The Commission invites comment on its proposal to extend the filing period for the Biennial Ownership Reports by moving the due date from November 1, to December 1, with the October 1 “as of” date unchanged. The FNPRM also invites comment on the proposed revisions to Form 323 that were submitted in the Review of Media Bureau Data Practices proceeding. The Commission also seeks comment on NAB's proposal in that proceeding that an entity with several wholly-owned licensee subsidiaries should be able to list all of the licensees and respective stations in Section I, Item 7 of the Form 323 and asks whether the proposal should be limited to wholly-owned subsidiary licensees or whether a parent entity instead should be able to list all the licensees in which it has an attributable interest in Section I, Item 7.

34. Legal Basis. This FNPRM is adopted pursuant to sections 1, 2(a), 4(i)-(j), 257, and 303(r), of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152(a), 154(i, j), 257, 303(r).

35. Description and Estimate of the Number of Small Entities to Which the Proposed Rules Will Apply. The RFA directs agencies to provide a description of, and, where feasible, an estimate of the number of small entities that may be affected by the proposed rules, if adopted. The RFA defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction” under Section 3 of the Small Business Act. In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A small business concern is one which: (1) is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA.

36. Television Broadcasting. In this context, the application of the statutory definition to television stations is of concern. The Small Business Administration defines a television broadcasting station that has no more than $14 million in annual receipts as a small business. Business concerns included in this industry are those “primarily engaged in broadcasting images together with sound.” The Commission has estimated the number of licensed commercial television stations to be 1,387. According to Commission staff review of the BIA Kelsey Inc. Media Access Pro Television Database as of May 2, 2012, 1070 (77 percent) of the 1,399 commercial television stations in the United States have revenues of $14 million or less. The Commission has estimated the number of licensed noncommercial educational television stations to be 396. We do not have revenue data or revenue estimates for noncommercial stations. These stations rely primarily on grants and contributions for their operations, so we will assume that all of these entities qualify as small businesses. We note that in assessing whether a business entity qualifies as small under the above definition, business control affiliations must be included. Our estimate, therefore, likely overstates the number of small entities that might be affected by any changes to the filing requirements for FCC Form 323 or Form 323-E, because the revenue figures on which this estimate is based do not include or aggregate revenues from affiliated companies.

37. An element of the definition of “small business” is that the entity not be dominant in its field of operation. The Commission is unable at this time and in this context to define or quantify the criteria that would establish whether a specific television station is dominant in its market of operation. Accordingly, the foregoing estimate of small businesses to which the rules may apply does not exclude any television stations from the definition of a small business on this basis and is therefore over-inclusive to that extent. An additional element of the definition of “small business” is that the entity must be independently owned and operated. It is difficult at times to assess these criteria in the context of media entities, and our estimates of small businesses to which they apply may be over-inclusive to this extent.

38. Radio Broadcasting. The Small Business Administration defines a radio broadcasting entity that has $7 million or less in annual receipts as a small business. Business concerns included in this industry are those “primarily engaged in broadcasting aural programs by radio to the public.” According to Commission staff review of the BIA Kelsey Inc. Media Access Radio Analyzer Database as of May 2, 2012, about 10,750, (97 percent) of 11,093 commercial radio stations in the United States have revenues of $7 million or less. The Commission has estimated the number of licensed noncommercial radio stations to be 3,712. We do not have revenue data or revenue estimates for these stations. These stations rely primarily on grants and contributions for their operations, so we will assume that all of these entities qualify as small businesses. We note that in assessing whether a business entity qualifies as small under the above definition, business control affiliations must be included. Our estimate, therefore, likely overstates the number of small entities that might be affected by any changes to filing requirements for FCC Form 323 or Form 323-E, because the revenue figures on which this estimate is based do not include or aggregate revenues from affiliated companies.

39. In this context, the application of the statutory definition to radio stations is of concern. An element of the definition of “small business” is that the entity not be dominant in its field of operation. We are unable at this time and in this context to define or quantify the criteria that would establish whether a specific radio station is dominant in its field of operation. Accordingly, the foregoing estimate of small businesses to which the rules may apply does not exclude any radio station from the definition of a small business on this basis and is therefore over-inclusive to that extent. An additional element of the definition of “small business” is that the entity must be independently owned and operated. We note that it is difficult at times to assess these criteria in the context of media entities, and our estimates of small businesses to which they apply may be over-inclusive to this extent.

40. Class A TV and LPTV Stations. The rules and policies adopted herein apply to licensees of low power television (“LPTV”) stations, including Class A TV stations and, as well as to potential licensees in these television services. The same SBA definition that applies to television broadcast licensees would apply to these stations. The SBA defines a television broadcast station as a small business if such station has no more than $14 million in annual receipts. As of March 31, 2012, there are approximately 479 licensed Class A stations and 2,001 licensed LPTV stations. Given the nature of these services, we will presume that all of these licensees qualify as small entities under the SBA definition. We note, however, that under the SBA's definition, revenue of affiliates that are not LPTV stations should be aggregated with the LPTV station revenues in determining whether a concern is small. Our estimate may thus overstate the number of small entities since the revenue figure on which it is based does not include or aggregate revenues from non-LPTV affiliated companies.

41. Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements. There may be changes to reporting or recordkeeping requirements if the Commission eliminates the “Special Use” FRN requirement. We do not anticipate any other changes in recording or recordkeeping requirements for commercial broadcast entities, as we are proposing to maintain the existing requirement. In addition, there may be a change in reporting or recordkeeping compliance for noncommercial entities if a CORES FRN requirement is adopted for the Form 323-E. See, paragraph 21.

42. Steps Taken to Minimize Significant Impact on Small Entities, and Significant Alternatives Considered. The RFA requires an agency to describe any significant alternatives that might minimize any significant economic impact on small entities. Such alternatives may include the following four alternatives (among others): (1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance and reporting requirements under the rule for small entities; (3) the use of performance, rather than design, standards; and (4) an exemption from coverage of the rule, or any part thereof, for small entities.

43. As noted, we are directed under law to describe any such alternatives we consider, including alternatives not explicitly listed above. The Notice proposes to continue to require individuals reported on a Form 323 to obtain a CORES-registered FRN and to eliminate the “Special Use” FRN. In the alternative, the Commission could decide not to eliminate the Special Use FRN for the Form 323, or it could defer these actions until a later time. While the option to retain the CORES FRN requirement and to eliminate the Special Use FRN might result in an increased burden on those required to obtain and provide a CORES FRN, the benefits of having a unique identifier for data quality, searchability, cross-referencing and aggregation purposes in order to further the Commission's goal of advancing diversity of ownership in the broadcast industry outweigh the burdens. The CORES FRN as a unique identifier is necessary to improve the quality of the data collected on the Form 323. The Commission also seeks comment on whether the Special Use FRN should be available solely in instances where, after reasonable and good faith efforts, filers are unable to obtain a CORES FRN from an individual with reportable interests. This alternative could reduce the burden for those filers who are unable to, after reasonable and good faith efforts, to obtain a CORES FRN from an individual attributable interest holder, while ensuring that the filer will be able to timely submit the Form 323 and allowing the Commission to identify the individual with a reportable interest that has failed to provide a CORES FRN.

44. In the FNPRM, the Commission proposes that CORES FRNs be reported for the two classes of non-attributable interests that would be reportable if the Commission adopts the pending proposal in the Fifth FNPRM to make these interests reportable. In the alternative, the Commission could decide not to extend the CORES FRN requirement to these interests if they are deemed reportable, or the Commission could defer these actions until a later time. While the option to extend the CORES FRN to these classes of non-attributable interests might impose an increased burden on those required to obtain and provide a CORES FRN, the benefits of having a unique identifier for data quality, searchability, cross-referencing and aggregation purposes in order to further the Commission's goal of advancing diversity of ownership in the broadcast industry outweigh the burden of obtaining a CORES FRN.

45. In the FNPRM, the Commission proposes to impose a CORES FRN requirement for all entities and individuals reported on the Form 323-E, Ownership Report for Noncommercial Broadcast Stations in order to further the Commission's goal of advancing diversity of ownership in the broadcast industry. In the alternative, the Commission could decide not to expand the CORES FRN requirement to the holders of attributable interests in non-profit licensees that file Form 323-E, or the Commission could defer this action until a later date. While the option to extend the CORES FRN requirement to entities and individuals reported on the 323-E could impose an increased burden on those required to obtain and provide a CORES FRNs the benefits of having a unique identifier for aggregating data related to non-commercial licensees outweighs the burdens associated with obtaining a CORES FRN.

46. The FNPRM proposes to amend the Commission's rules to clarify that an individual with reportable interests must obtain a CORES FRN. The Commission seeks comment on how to reduce or eliminate the costs imposed by this proposal to amend the Commission's rules on small businesses. The Commission invites comment on its proposal to extend the filing deadline for the Biennial Ownership Reports. By providing filers with additional time to file the Biennial Ownership Report, this proposal will reduce the burden on filers. The Commission also seeks comment on the recommendations regarding the Form 323 from NAB and other commenters in the Media Bureau Data Practices proceeding and the costs and benefits associated with these proposals for small businesses.

47. Federal Rules that May Duplicate, Overlap, or Conflict With the Proposed Rules. None.

V. Ordering Clauses

48. Accordingly, it is ordered that, pursuant to the authority contained in sections 1, 2(a), 4(i)-(j), 257, and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152(a), 154(i)-(j), 257, and 303(r), this Sixth Further Notice of Proposed Rulemaking is adopted.

49. It is further ordered that, pursuant to the authority contained in sections 1, 2(a), 4(i,j), 257, and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152(a), 154(i,j), 257, 303(r), notice is hereby given of the proposals described in this Sixth Further Notice of Proposed Rulemaking.

50. It is further ordered that the Commission's Consumer & Governmental Affairs Bureau, Reference Information Center, shall send a copy of the Sixth Further Notice of Proposed Rulemaking, including the Initial Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

51. It is further ordered, that the Emergency Petition for Immediate Revision of Instructional/Informational Materials Relative to Form 323, filed on September 14, 2011 by Fletcher, Heald & Hildreth, P.L.C., is dismissed.

Federal Communications Commission.

Cecilia Sigmund,

Acting Associate Secretary.