Draft Proposes End of Exemption of Giving FCC Social Security Number
The FCC would propose all owners of attributable broadcast interests must give a Social Security number when the radio and TV stations report every other year who owns stakes above 5 percent in them, agency officials said of a draft rulemaking notice. They said the Media Bureau further rulemaking notice proposes to end an exemption that let a special-use FCC Registration Number be obtained by any investor listed on the Form 323s. Such special-use FRNs let an entity not give a Social Security number. Broadcasters raised privacy concerns when the commission in 2009 (CD April 9 p6/09) required all radio and TV stations except for low-power FMs to file 323s. Their lawyers said now that they'd oppose ending the exemption.
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The FCC backed down partway from requiring FRNs be obtained for anyone holding an attributable interest in a radio or TV station in 2010, telling the U.S. Court of Appeals for the D.C. Circuit that it would allow exemptions. The D.C. Circuit said that year it wouldn’t issue a writ of mandamus sought by broadcast attorneys in Fletcher Heald v. FCC. That was long as the agency made good on its pledge that “no individual attributable interest holder will be required to submit a Social Security number to obtain an FRN” for a 2010 filing deadline or any other “imminent” non-biennial filing of the form (http://xrl.us/bnvo37). The draft rulemaking notice proposes requiring all holders of attributable stakes in broadcasters get a Commission Registration System (CORES) FRN, which the licensee would then include in its biennial Form 323, commission officials said. A bureau spokeswoman had no comment.
FCC Chairman Julius Genachowski wants colleagues to vote on the further rulemaking notice, which no other commissioner had voted on since the item circulated in May, agency officials said. They said that at the time his office circulated it, Genachowski hadn’t pushed for a vote. Seeking a vote on the item now appears to be a way for Genachowski to seek from broadcasters more disclosure, as he’s sought the release of more information generally from both the agency and those it regulates, agency and industry officials speculated. Genachowski’s spokesman declined to comment.
The draft rulemaking asks about widening the array of broadcast investors that must get FRNs so their information can be included on Form 323s, commission officials said. The item asks about ending an exemption that let owners of stakes that normally would be attributable not get FRNs and be listed on 323s when the station is controlled by a single investor with majority control, an agency official said. The item also asks about requiring board members of noncommercial stations, which file an 323-E, to also have to obtain FRNs, the official said.
In seeking comment on ending the single-majority shareholder exception and in requiring non-commercial educational station board members to get FRNs, the draft rulemaking doesn’t propose expanding the class of broadcast investors who must be included on 323s, an FCC official said. That the agency is asking about requiring such directors to provide Social Security numbers will raise privacy concerns about those board members, said broadcast lawyers Harry Cole of Fletcher Heald and Richard Zaragoza of Pillsbury Winthrop. Neither had seen the draft item and both had opposed the 2009 Form 323 order. Cole unsuccessfully sued the FCC in the D.C. Circuit, which he chronicled on Fletcher Heald’s blog (http://xrl.us/bnvo5v). Such directors would “have some concerns” if what’s asked about in the rulemaking notice came to pass in an FCC order, said Zaragoza. He represented state broadcaster associations that asked the Office of Management and Budget to block information collection requirements from the 2009 order (http://xrl.us/bnvo59).
Proposing to kill the single controlling shareholder exemption would mean the commission could require holders of stakes that in any other situation would be attributable be listed on Form 323s, if commissioners then voted to approve an order requiring that, agency and industry officials said. “Basically forcing non-attributable holders to report their FRNs is basically requiring them to report their identity” to the FCC, Zaragoza said. “It’s a very dangerous, slippery slope” if the commission ends the single controlling shareholder exemption, he said. “This is a very mischievous possible exception to that rule.” The commission backtracked (CD Oct 19 p3) by allowing later in 2009 the exemption, instead of revoking it as the initial ruling did (http://xrl.us/bnvo6u). Clients of Fletcher Heald and of Pillsbury get interim-use FRNs, said Cole and Zaragoza.
The bureau is still preparing to release aggregate data from the 2009 and 2011 filing periods of Form 323, even though a report that is in draft form hadn’t been released last week as some had predicted earlier was a possibility (CD Oct 18 p2), agency and industry officials said now. Including a regular FRN on future Form 323s would make it easier for the commission to track over time who owns stakes in what stations, said Cole. “The trouble is now we've gone through two generations” of biennial filings with the special-use FRN, which wouldn’t let the agency track those investments for 2009 and 2011, he said. “The commission’s ability to generate any kind of reliable database at this point is hopelessly corrupted.”