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Translation of the Latest FCC Ownership Rule

On October 30, 2009, in response to a request by the National Association of Broadcasters (NAB), the FCC published a final version of a rule titled "Promoting Diversification of Ownership in the Broadcasting Services" which changed the biennial reporting requirements for broadcast licensees.

Under the rule, station owners would have to report "non-attributable interests" in other broadcast stations every two years. An attributable interest in a company owning a broadcast station, is one that counts in determining whether the party can, under the FCC's multiple ownership rules, own an interest in another station in the same market. The FCC has extensive case law describing when an interest is non-attributable and does not count in a multiple ownership review. In most cases, a non-attributable interest is one that does not hold voting rights on most company decisions.

After the request by the NAB, the FCC removed the requirement that financial interests that could be attributable to those who own less than 50% of a broadcast station be reported.

However, they retained the requirement that sole-proprietors of broadcast stations report their non-attributable financial interests in other broadcast stations.

The effect of this rule is to require any person owning a majority of a broadcast station or ownership company to disclose their non-voting ownership interests in other broadcast stations in the same market area.

Additionally, the FCC released two final rules on the same day that are part of the compliance process under the Paperwork Reduction Act, obtaining the proper permissions from the Office of Management and Budget to alter the interest reporting form.

The motivation behind this rule seems to be the easing of the internal process for multiple ownership reviews.

 

 

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