[Federal Register Volume 61, Number 246 (Friday, December 20, 1996)]
[Proposed Rules]
[Pages 67275-67291]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-32323]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 21, 73 and 76
[MM Docket No. 94-150, 92-51, 87-154; FCC 96-436]
Multipoint Distribution Services
AGENCY: Federal Communications Commission.
ACTION: Proposed Rule.
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SUMMARY: This Further Notice of Proposed Rule Making (``FNPRM'') seeks
additional comment in our ongoing proceeding to review our broadcast
attribution rules, the rules by which we define what constitutes a
``cognizable interest'' in applying the multiple ownership rules. We
seek comment as to how the relaxation of our ownership rules resulting
from the passage of the Telecommunications Act of 1996 (``1996 Act'')
should affect our review of the attribution rules. We also seek comment
on new proposals, including a provision to attribute the otherwise
nonattributable interests of holders of equity and/or debt in a
licensee or media entity subject to the broadcast cross-ownership rules
where the interest holder is a program supplier to a licensee or a
same-market media entity subject to the broadcast cross-ownership rules
and where the equity and/or debt holding exceeds a specified threshold.
Additionally, we seek renewed comment on a proposal to attribute Local
Marketing Agreements (``LMAs''). We also invite comment on whether we
should revise our approach to joint sales agreements (``JSAs'') in
specified circumstances. We also seek comment on a study conducted by
Commission staff, appended to this FNPRM, on attributable interests in
television broadcast licensees and on the implications of this study
for our attribution rules, particularly on the voting stock benchmarks.
Finally, we invite comment as to whether we should amend the cable/
Multipoint Distribution Service (``MDS'') cross-ownership attribution
rule. The proposed rules are necessary to promote our goals of
maximizing the precision of the attribution rules, avoiding disruption
in the flow of capital to broadcasting, affording clarity and certainty
to regulatees, and facilitating application processing, and the
proposed rules are intended to effect those results. This NPRM contains
proposed or modified information collections subject to the Paperwork
Reduction Act of 1995 (PRA), Public Law 104-13. It has been submitted
to the Office of Management and Budget (OMB) for review under Section
3507(d) of the PRA. OMB, the general public, and other Federal agencies
are invited to comment on the proposed or modified information
collections contained in this proceeding.
DATES: Written comments by the public on the proposed and/or modified
information collections are due February 7, 1997, and reply comments
are due March 7, 1997. Written comments must be submitted by the Office
of Management and Budget (OMB) on the proposed and/or modified
information collections on or before February 11, 1997.
ADDRESSES: In addition to filing comments with the Secretary, a copy of
any comments on the information collections contained herein should be
submitted to Dorothy Conway, Federal Communications Commission, Room
234, 1919 M Street, N.W., Washington, DC 20554, or via the Internet to
[email protected], and to Timothy Fain, OMB Desk Officer, 10236 NEOB,
725--17th Street, N.W., Washington, DC 20503 or via the Internet to
fainX[email protected].
FOR FURTHER INFORMATION CONTACT: For additional information concerning
the information collections contained in this NPRM contact Dorothy
Conway at 202-418-0217, or via the Internet at [email protected].
SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's FNPRM
in MM Docket No. 94-150, 92-51, 87-
[[Page 67276]]
154; FCC 96-436, adopted November 5, 1996 and released November 7,
1996. The full text of this FNPRM is available for inspection and
copying during normal business hours in the FCC Reference Center (Room
239), 1919 M Street, N.W., Washington, D.C., and also may be purchased
from the Commission's copy contractor, International Transcription
Service, Inc., 2100 M Street, N.W., Suite 140, Washington, D.C., 20037,
(202)857-3800.
Synopsis of Further Notice of Proposed Rule Making
1. The attribution rules seek to identify those interests in or
relationships to licensees that confer on their holders a degree of
influence or control such that the holders have a realistic potential
to affect the programming decisions of licensees or other core
operating functions. Our current broadcast attribution rules are set
out in the Notes to Section 73.3555 of the Commission's rules, and,
insofar as the broadcast-cable cross-ownership rule is involved, in the
Notes to 47 CFR 76.501.1 We issued the NPRM in this proceeding, 60
FR 6483, (February 2, 1995) broadly to review the attribution rules. In
this FNPRM, we do not specifically discuss a number of issues raised in
the NPRM, including treatment of Limited Liability Companies (``LLCs'')
and treatment of limited partnerships. Nonetheless, these issues remain
outstanding, and we intend to resolve the entire set of issues raised
in the NPRM and in this FNPRM, together, after the comments received in
response to this FNPRM are received and reviewed.
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\1\ We recognize that the attribution standards used in a number
of other cable rules are implicitly or explicitly based on Section
76.501. For example, the attribution standards in the cable
television horizontal ownership, channel occupancy and program
access rules are derived from these attribution Notes. We are
considering initiating a separate proceeding to address whether to
modify the attribution criteria for these rules. In the instant
proceeding, we are addressing only the attribution criteria that
would apply to Section 76.501(a), the cable-broadcast cross-
ownership rule. Additionally, we will consider changes to the cable/
MDS cross-ownership attribution rule.
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Paperwork Reduction Act
2. This NPRM contains either a proposed or modified information
collection. The Commission, as part of its continuing effort to reduce
paperwork burdens, invites the general public and the Office of
Management and Budget (OMB) to comment on the information collections
contained in this NPRM, as required by the Paperwork Reduction Act of
1995, Public Law 104-13. Public and agency comments are due at the same
time as other comments on this NPRM; OMB comments are due 60 days from
date of publication of this NPRM in the Federal Register. Comments
should address: (a) Whether the proposed collection of information is
necessary for the proper performance of the functions of the
Commission, including whether the information shall have practical
utility; (b) the accuracy of the Commission's burden estimates; (c)
ways to enhance the quality, utility, and clarity of the information
collected; and (d) ways to minimize the burden of the collection of
information on the respondents, including the use of automated
collection techniques or other forms of information technology.
OMB Approval Number: None
Title: FNPRM--Attribution
Form No.: FCC 301, FCC 314, FCC 315, FCC 323
Type of Review: Revision of existing collections
Respondents: Businesses or other for-profit
Number of Respondents: 12,216
Estimated Time Per Response: These proposals could cause an
increase in burden of an additional 3.5 hours per respondent
Total Annual Burden: 42,756 hours
Needs and Uses: This Further NPRM seeks comments as to how the
relaxation of the Commission's ownership rules resulting from the
passage of the Telecommunications Act of 1996 should affect our review
of the attribution rules. The attribution rules define what interests
are cognizable for purposes of applying the multiple ownership rules to
specific situations. The multiple ownership rules limit the number of
broadcast stations that a single person or entity, directly or
indirectly, is permitted to own, operate, or control. In its Further
Notice, the Commission invited comment on a proposal to add a new
``equity or debt plus'' attribution standard to its Rules. Under this
proposed standard, where the interest holder is a program supplier or
same-market broadcaster or media entity subject to the broadcast cross-
ownership rules (i.e., cable systems and newspapers), the Commission
would attribute its otherwise nonattributable equity and/or debt
interest in a licensee or other media entity subject to the cross-
ownership rules, if the equity and/or debt holding is greater than 33%.
The Commission also sought comment on: (1) Whether it should attribute
television Local Marketing Agreements (LMAs) and radio or television
joint sales agreements (JSAs) among licensees in the same market,
tentatively concluding that television LMAs should be attributed where
they involve more than fifteen percent of the brokered station's weekly
broadcast hours; (2) a staff study of the attributable interests in
commercial broadcast television licensees, as reported in ownership
reports, particularly with respect to the voting and nonvoting stock
attribution benchmarks; and (3) grandfathering/ transition issues
(except for LMAs, which will be resolved in the television local
ownership proceeding). With respect to grandfathering, the Commission
tentatively concluded that (1) any grandfathering should apply only to
the current holder and should not be transferable; and (2) any
interests acquired on or after December 15, 1994, the date of adoption
of the Notice of Proposed Rulemaking in this proceeding, should be
subject to the final rules adopted in the Report and Order in this
proceeding. Finally, the Commission invited comment on whether to
modify the cable/MDS cross-ownership attribution rules to apply
broadcast attribution criteria, as modified in the attribution
proceeding, in determining cognizable interests in MDS licensees and
cable systems for purposes of applying the ownership restrictions of
Section 21.912 of its Rules.
3. The FCC 301 (OMB Control #3060-0027), FCC 314 (OMB Control
#3060-0031), FCC 315 (OMB Control #3060-0032) and the FCC 323 (OMB
Control #3060-0010) are the data collection devices used to identify
those interests that are counted for purposes of applying the multiple
ownership rules. Depending on the outcome of this proceeding, these
forms may need to be modified to reflect new reportable interest
standards and could cause an increase in burden. In addition,
relaxation of the present attributable interests standards could result
in a reduction in the number of interest-holders required to disclose
their ownership interests in broadcast licensees and permittees. The
overall impact, however, cannot be determined until resolution of the
outstanding rulemaking. The attribution rules seek to identify those
interests in or relationships to licensees or media entities that
confer on their holders a degree of influence or control such that the
holders have a realistic potential to affect programming decisions of
licensees or other core operating functions. The attribution rules are
used to implement the Commission's broadcast multiple ownership rules.
Initial Regulatory Flexibility Analysis
As required by Section 603 of the Regulatory Flexibility Act, 5
U.S.C. 603
[[Page 67277]]
(``RFA''), the Commission is incorporating an Initial Regulatory
Flexibility Analysis (``IRFA'') of the expected impact on small
entities of the policies and proposals in this FNPRM of Proposed Rule
Making in MM Docket Nos. 94-150, 92-51, & 87-154 (``FNPRM'').2
Written public comments concerning the effect of the proposals in the
FNPRM, including the IRFA, on small businesses are requested. Comments
must be identified as responses to the IRFA and must be filed by the
deadlines for the submission of comments in this proceeding. The
Secretary shall send a copy of this FNPRM, including the IRFA, to the
Chief Counsel for Advocacy of the Small Business Administration in
accordance with paragraph 603(a) of the Regulatory Flexibility
Act.3
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\2\ An IRFA pursuant to Public Law Notice 96-354, section 603,
94 Stat. 1165 (1980) was incorporated into the Notice of Proposed
Rule Making in MM Docket Nos. 94-150, 92-51 & 87-154, 10 FCC Rcd
3606 (1995), 60 FR 3606, February 2, 1996 (``NPRM'').
\3\ 5 U.S.C. 603(a).
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Reasons Why Agency Action is Being Considered
After the issuance of the NPRM in this Docket, the
Telecommunications Act of 1996 (``1996 Act'') was signed into
law.4 The FNPRM seeks comment as to how the multiple ownership
rule revisions resulting from passage of the 1996 Act should affect our
review of the attribution rules. The FNPRM also seeks comment on our
new proposal to attribute the otherwise nonattributable interests of
holders of equity and or debt in a licensee or other media entity
subject to the cross-ownership rules where the interest holder is a
program supplier to a licensee or a same-market broadcaster and where
the equity and/or debt holding meets or exceeds specified thresholds.
This proposal is intended to address the concerns expressed in the NPRM
that the current attribution rules may not precisely or fully identify
all the interests in or relationships to broadcast stations that should
be counted in applying the multiple ownership rules. Additionally, the
FNPRM seeks comment on proposals concerning attribution of Local
Marketing Agreements (``LMAs'') and joint sales agreements (``JSAs'')
in specified circumstances. Also, the FNPRM seeks comment on a study
conducted by Commission staff, appended to this FNPRM, on attributable
interests in television broadcast licensees and on the implications of
this study for our attribution rules, particularly on the voting stock
benchmarks. Finally, we invite comment as to whether we should amend
the cable/MDS cross-ownership attribution rule.
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\4\ Public Law Notice 104-104, 110 Stat. 56 (1996).
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Need for and Objectives of the Proposed Rules
The attribution rules seek to identify those interests in or
relationships to licensees or media entities that confer on their
holders a degree of influence or control such that the holders have a
realistic potential to affect the programming decisions of licensees or
other core operating functions. The attribution rules are used to
implement the Commission's broadcast multiple ownership rules. Our
goals in commencing this proceeding and in formulating the proposals in
the FNPRM are to be to maximize the precision of the attribution rules,
avoid disruption in the flow of capital to broadcasting, afford clarity
and certainty to regulatees, and ease application processing.
Legal Basis
Authority for the actions proposed in this FNPRM is contained in
Sections 4(i), 303, 307 and 310 of the Communications Act of 1934, as
amended, 47 U.S.C. 154(i), 303, 307, & 310.
Recording, Recordkeeping, and Other Compliance Requirements
If our attribution rules are made more restrictive so as to
attribute interests not now currently attributable, our ownership
reporting form, FCC Form 323, will need to be modified accordingly so
that such attributable interests will then be reportable on the form.
We invite comment as to whether any additional professional skills
would be needed to complete this form.
Federal Rules that Overlap, Duplicate or Conflict With the Proposed
Rules
The rules proposed in the FNPRM will modify the current attribution
rules, and, similarly to the Commission's current attribution rules,
will be used to implement the multiple ownership rules. Thus, the
proposed rules are intended to promote the same diversity and
competition goals also fostered by the multiple ownership rules.
However, the proposed rules do not overlap, duplicate or conflict with
the multiple ownership rules.
Description and Estimate of the Number of Small Entities to Which the
Proposed Rules Will Apply
Under the RFA, small entities may include small organizations,
small businesses, and small governmental jurisdictions. 5 U.S.C.
601(6). The RFA, 5 U.S.C. 601(3), generally defines the term ``small
business'' as having the same meaning as the term ``small business
concern'' under the Small Business Act, 15 U.S.C. 632. 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 Small Business Administration
(``SBA''). Pursuant to 5 U.S.C. 601(3), the statutory definition of a
small business applies ``unless an agency after consultation with the
Office of Advocacy of the SBA and after opportunity for public comment,
establishes one or more definitions of such term which are appropriate
to the activities of the agency and publishes such definition(s) in the
Federal Register.'' 5
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\5\ While we tentatively believe that the SBA's definition of
``small business'' greatly overstates the number of radio and
television broadcast stations that are small businesses and is not
suitable for purposes of determining the impact of the proposals on
small television and radio stations, for purposes of this FNPRM, we
utilize the SBA's definition in determining the number of small
businesses to which the proposed rules would apply, but we reserve
the right to adopt a more suitable definition of ``small business''
as applied to radio and television broadcast stations or other
entities subject to the proposed rules in this FNPRM and to consider
further the issue of the number of small entities that are radio and
television broadcasters or other small media entities in the future.
See Report and Order in MM Docket No. 93-48 (Children's Television
Programming), 11 FCC Rcd 10660, 10737-38 (1996), citing 5 U.S.C.
601(3). We have pending proceedings seeking comment on the
definition of and data relating to small businesses. In our Notice
of Inquiry in GN Docket No. 96-113 (In the Matter of Section 257
Proceeding to Identify and Eliminate Market Entry Barriers for Small
Businesses), FCC 96-216, released May 21, 1996, 61 FR 33066, June
26, 1996, we requested commenters to provide profile data about
small telecommunications businesses in particular services,
including television, and the market entry barriers they encounter,
and we also sought comment as to how to define small businesses for
purposes of implementing Section 257 of the Telecommunications Act
of 1996, which requires us to identify market entry barriers and to
prescribe regulations to eliminate those barriers. Additionally, in
our Order and Notice of Proposed Rule Making in MM Docket No. 96-16
(In the Matter of Streamlining Broadcast EEO Rule and Policies,
Vacating the EEO Forfeiture Policy Statement and Amending Section
1.80 of the Commission's Rules to Include EEO Forfeiture
Guidelines), 11 FCC Rcd 5154 (1996), 61 FR 9964, March 12, 1996, we
invited comment as to whether relief should be afforded to stations:
(1) Based on small staff and what size staff would be considered
sufficient for relief, e.g., 10 or fewer full-time employees; (2)
based on operation in a small market; or (3) based on operation in a
market with a small minority work force.
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The proposed rules and policies will apply to television
broadcasting licensees, radio broadcasting licensees and potential
licensees of either service. The Small Business Administration defines
a television broadcasting station that has no more than $10.5 million
in
[[Page 67278]]
annual receipts as a small business.6 Television broadcasting
stations consist of establishments primarily engaged in broadcasting
visual programs by television to the public, except cable and other pay
television services.7 Included in this industry are commercial,
religious, educational, and other television stations.8 Also
included are establishments primarily engaged in television
broadcasting and which produce taped television program
materials.9 Separate establishments primarily engaged in producing
taped television program materials are classified under another SIC
number.10 There were 1,509 television stations operating in the
nation in 1992.11 That number has remained fairly constant as
indicated by the approximately 1,550 operating television broadcasting
stations in the nation as of August, 1996.12 For 1992 13 the
number of television stations that produced less than $10.0 million in
revenue was 1,155 establishments.14
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\6\ 13 CFR 121.201, Standard Industrial Code (SIC) 4833 (1996).
\7\ Economics and Statistics Administration, Bureau of Census,
U.S. Department of Commerce, 1992 Census of Transportation,
Communications and Utilities, Establishment and Firm Size, Series
UC92-S-1, Appendix A-9 (1995).
\8\ Id. See Executive Office of the President, Office of
Management and Budget, Standard Industrial Classification Manual
(1987), at 283, which describes ``Television Broadcasting Stations
(SIC Code 4833) as:
Establishments primarily engaged in broadcasting visual programs
by television to the public, except cable and other pay television
services. Included in this industry are commercial, religious,
educational and other television stations. Also included here are
establishments primarily engaged in television broadcasting and
which produce taped television program materials.
\9\ Economics and Statistics Administration, Bureau of Census,
U.S. Department of Commerce, 1992 Census of Transportation,
Communications and Utilities, Establishment and Firm Size, Series
UC92-S-1, Appendix A-9 (1995).
\10\ Id. SIC 7812 (Motion Picture and Video Tape Production);
SIC 7922 Theatrical Producers and Miscellaneous Theatrical Services
(producers of live radio and television programs).
\11\ FCC News Release No. 31327, January 13, 1993; Economics and
Statistics Administration, Bureau of Census, U.S. Department of
Commerce, supra note 42, Appendix A-9.
\12\ FCC News Release No. 64958, September 6, 1996.
\13\ Census for Communications' establishments are performed
every five years ending with a ``2'' or ``7''. See Economics and
Statistics Administration, Bureau of Census, U.S. Department of
Commerce, supra note 42.
\14\ The amount of $10 million was used to estimate the number
of small business establishments because the relevant Census
categories stopped at $9,999,999 and began at $10,000,000. No
category for $10.5 million existed. Thus, the number is as accurate
as it is possible to calculate with the available information.
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Additionally, the Small Business Administration defines a radio
broadcasting station that has no more than $5 million in annual
receipts as a small business.15 A radio broadcasting station is an
establishment primarily engaged in broadcasting aural programs by radio
to the public.16 Included in this industry are commercial,
religious, educational, and other radio stations.17 Radio
broadcasting stations which primarily are engaged in radio broadcasting
and which produce radio program materials are similarly
included.18 However, radio stations which are separate
establishments and are primarily engaged in producing radio program
material are classified under another SIC number.19 The 1992
Census indicates that 96 percent (5,861 of 6,127) radio station
establishments produced less than $5 million in revenue in 1992.20
Official Commission records indicate that 11,334 individual radio
stations were operating in 1992.21 As of August, 1996, official
Commission records indicate that 12,088 radio stations were
operating.22
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\15\ 13 CFR 121.201, SIC 4832.
\16\ Economics and Statistics Administration, Bureau of Census,
U.S. Department of Commerce, supra note 42, Appendix A-9.
\17\ Id.
\18\ Id.
\19\ Id.
\20\ The Census Bureau counts radio stations located at the same
facility as one establishment. Therefore, each co-located AM/FM
combination counts as one establishment.
\21\ FCC News Release No. 31327, January 13, 1993.
\22\ FCC News Release No. 64958, September 6, 1996.
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Thus, the proposed rules will affect approximately 1,550 television
stations; approximately 1,194 of those stations are considered small
businesses.23 Additionally, the proposed rules will affect 12,088
radio stations, approximately 11,605 of which are small
businesses.24 These estimates may overstate the number of small
entities since the revenue figures on which they are based do not
include or aggregate revenues from non-television or non-radio
affiliated companies. We recognize that the proposed rules may also
impact minority and women owned stations, some of which may be small
entities. In 1995, minorities owned and controlled 37 (3.0%) of 1,221
commercial television stations and 293 (2.9%) of the commercial radio
stations in the United States.25 According to the U.S. Bureau of
the Census, in 1987 women owned and controlled 27 (1.9%) of 1,342
commercial and non-commercial television stations and 394 (3.8%) of
10,244 commercial and non-commercial radio stations in the United
States.26 We recognize that the numbers of minority and women
broadcast owners may have changed due to an increase in license
transfers and assignments since the passage of the 1996 Act. We seek
comment on the current numbers of minority and women owned broadcast
properties and the numbers of these that qualify as small entities. To
assist us with our responsibilities under the amended Regulatory
Flexibility Act, we specifically request comments concerning our
assessment of the number of small businesses that will be impacted by
this rule making proceeding, the type or form of impact, and the
advantages and disadvantages of the impact.
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\23\ We use the 77 percent figure of TV stations operating at
less than $10 million for 1992 and apply it to the 1996 total of
1,550 TV stations to arrive at 1,194 stations categorized as small
businesses.
\24\ We use the 96% figure of radio station establishments with
less than $5 million revenue from the Census data and apply it to
the 12,088 individual station count to arrive at 11,605 individual
stations as small businesses.
\25\ Minority Commercial Broadcast Ownership in the United
States, U.S. Dep't of Commerce, National Telecommunications and
Information Administration, The Minority Telecommunications
Development Program (``MTDP'') (April 1996). MTDP considers minority
ownership as ownership of more than 50% of a broadcast corporation's
stock, voting control in a broadcast partnership, or ownership of a
broadcasting property as an individual proprietor. Id. The minority
groups included in this report are Black, Hispanic, Asian, and
Native American.
\26\ See Comments of American Women in Radio and Television,
Inc. in MM Docket No. 94-149 and MM Docket No. 91-140, at 4 n.4
(filed May 17, 1995), citing 1987 Economic Censuses, Women-Owned
Business, WB87-1, U.S. Dep't of Commerce, Bureau of the Census,
August 1990 (based on 1987 Census). After the 1987 Census report,
the Census Bureau did not provide data by particular communications
services (four-digit Standard Industrial Classification (SIC) Code),
but rather by the general two-digit SIC Code for communications
(#48). Consequently, since 1987, the U.S. Census Bureau has not
updated data on ownership of broadcast facilities by women, nor does
the FCC collect such data. However, we sought comment on whether the
Annual Ownership Report Form 323 should be amended to include
information on the gender and race of broadcast license owners.
Policies and Rules Regarding Minority and Female Ownership of Mass
Media Facilities, Notice of Proposed Rule Making, 10 FCC Rcd 2788,
2797, 60 FR 06068 (January 12, 1995).
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In addition to owners of operating radio and television stations,
any entity who seeks or desires to obtain a television or radio
broadcast license may be affected by the proposals contained in this
item. The number of entities that may seek to obtain a television or
radio broadcast license is unknown. We invite comment as to such
number.
Additionally, the proposed changes to the cable/MDS cross-ownership
attribution rule will apply to cable and MDS entities. SBA has
developed a definition of small entities for cable and other pay
television services under Standard Industrial Classification 4841
[[Page 67279]]
(SIC 4841), which covers subscription television services, which
includes all such companies with annual gross revenues of $11 million
or less.27 This definition includes cable systems operators,
closed circuit television services, direct broadcast satellite
services, multipoint distribution systems, satellite master antenna
systems and subscription television services. According to the Census
Bureau, there were 1,323 such cable and other pay television services
generating less than $11 million in revenue that were in operation for
at least one year at the end of 1992.28 This figure is
overinclusive since it includes other pay television services, not only
cable and MDS.
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\27\ 13 CFR 121.201.
\28\ 1992 Census, supra, at Firm Size 1-123. See Memorandum
Opinion and Order and Notice of Proposed Rule Making in MM Docket
No. 92-266 and CS Docket No. 96-157, 11 FCC Rcd 9517, 9531, 61 FR
45356 (August 8, 1996).
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The Communications Act contains a definition of a small cable
system operator, which is ``a cable operator that, directly or through
an affiliate, serves in the aggregate fewer than 1 percent of all
subscribers in the United States and is not affiliated with any entity
or entities whose gross annual revenues in the aggregate exceed
$250,000,000.'' 29 The Commission has determined that there are
61,700,000 subscribers in the United States. Therefore, we found that
an operator serving fewer than 617,000 subscribers is deemed a small
operator, if its annual revenues, when combined with the total annual
revenues of all of its affiliates, do not exceed $250 million in the
aggregate.30 Based on available data, we find that the number of
cable operators serving 617,000 subscribers or less totals
1,450.31 Although it seems certain that some of these cable system
operators are affiliated with entities whose gross annual revenues
exceed $250,000,000, we are unable at this time to estimate with
greater precision the number of cable system operators that would
qualify as small cable operators under the definition in the
Communications Act. We are likewise unable to estimate the number of
these small cable operators that serve 50,000 or fewer subscribers in a
franchise area.
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\29\ 47 U.S.C. Sec. 543(m)(2).
\30\ 47 CFR Sec. 76.1403(b).
\31\ Paul Kagan Associates, Inc., Cable TV Investor, February
29, 1996 (based on figures for December 30, 1995).
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The Commission has developed its own definition of a small cable
system operator for the purposes of rate regulation. Under the
Commission's rules, a ``small cable company,'' is one serving fewer
than 400,000 subscribers nationwide.32 Based on our most recent
information, we estimate that there were 1,439 cable operators that
qualified as small cable system operators at the end of 1995.33
Since then, some of those companies may have grown to serve over
400,000 subscribers, and others may have been involved in transactions
that caused them to be combined with other cable operators.
Consequently, we estimate that there are fewer than 1,439 small entity
cable system operators that may be affected by the proposal adopted in
this NPRM. Under the Commission's rules, a small cable system is a
cable system with 15,000 or fewer subscribers owned by a cable company
serving 400,000 or fewer subscribers over all of its cable systems. We
are unable to estimate the number of small cable systems nationwide,
and we seek comment on the number of small cable systems.
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\32\ 47 CFR Sec. 76.901(e). The Commission developed this
definition based on its determinations that a small cable system
operator is one with annual revenues of $100 million or less.
Implementation of Sections of the 1992 Cable Act: Rate Regulation,
Sixth Report and Order and Eleventh Order on Reconsideration, 10 FCC
Rcd 7393, 60 FR 35854 (June 5, 1995).
\33\ Paul Kagan Associates, Inc., Cable TV Investor, February
29, 1996 (based on figures for December 30, 1995).
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The Commission refined the definition of ``small entity'' for the
auction of MDS as an entity that together with its affiliates has
average gross annual revenues that are not more than $40 million for
the preceding three calendar years.34 This definition of a small
entity in the context of MDS auctions has been approved by the
SBA.35
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\34\ 47 CFR 21.961(b)(1).
\35\ See Amendment of Parts 21 and 74 of the Commission's Rules
With Regard to Filing Procedures in the Multipoint Distribution
Service and in the Instructional Television Fixed Service and
Implementation of Section 309(j) of the Communications Act--
Competitive Bidding, MM Docket No. 94-31 and PP Docket No. 93-253,
Report and Order, 10 FCC Rcd 9589, 60 FR 36524 (June 30, 1995).
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The Commission completed its MDS auction in March 1996 for
authorizations in 493 basic trading areas (BTAs). Of 67 winning
bidders, 61 qualified as small entities. Five bidders indicated that
they were minority-owned and four winners indicated that they were
women-owned businesses. MDS is a service heavily encumbered with
approximately 1,573 previously authorized and proposed MDS facilities
and information available to us indicates that no MDS facility
generates revenue in excess of $11 million annually. We tentatively
conclude that for purposes of this IRFA, there are approximately 1,634
small MDS providers as defined by the SBA and the Commission's auction
rules. We seek comment on this tentative conclusion.
Some of the proposals delineated above may also apply to daily
newspapers that hold or seek to acquire an interest in a broadcast
station that would be treated as attributable under the proposals. A
newspaper is an establishment that is primarily engaged in publishing
newspapers, or in publishing and printing newspapers.36 The SBA
defines a newspaper that has 500 or fewer employees as a small
business.37 Based on data from the U.S. Census Bureau, there are a
total of approximately 6,715 newspapers, and 6,578 of those meet the
SBA's size definition.38 However, we recognize that some of these
newspapers may not be independently owned and operated and, therefore,
would not be considered a ``small business concern'' under the Small
Business Act.39 We are unable to estimate at this time how many
newspapers are affiliated with larger entities. Moreover, the proposal
would apply only to daily newspapers, and we are unable to estimate how
many newspapers that meet the SBA's size definition are daily
newspapers. Consequently, we estimate that there are fewer than 6,578
newspapers that may be affected by the proposed rules in this FNPRM. We
invite comment on this estimate.
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\36\ 13 CFR 121.201 (SIC 2711).
\37\ Id.
\38\ U.S. Small Business Administration 1992 Economic Census
Industry and Enterprise Report, Table 3, SIC Code 2711 (Bureau of
the Census data adapted by the Office of Advocacy of the U.S. Small
Business Administration).
\39\ 15 U.S.C. 632.
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Issues Raised by the Public Comments in Response to the Initial
Regulatory Flexibility Analysis of the 1995 NPRM of Proposed Rule
Making
There were no comments submitted specifically in response to the
IRFA. We have, however, taken into account all issues raised by the
public in response to the proposals raised in this proceeding. In
particular, Association of Independent Television Stations, Inc. (now
known as the Association of Local Television Stations, Inc.), among
others, generally notes that, given the plethora of other media
investment opportunities, relaxation of the attribution rules will
attract capital to broadcasting while tightening of the attribution
rules may restrict capital flow to broadcasting. We note that access to
capital is an issue of profound concern to small entities, and,
accordingly, as discussed in the
[[Page 67280]]
FNPRM, supra, para.1, one of our goals in this proceeding has been to
avoid disruption in the flow of capital to broadcasting. National
Association of Black Owned Broadcasters argues that additional
relaxation of the attribution rules will allow increased concentration
of control of the media industry, which works against minority
ownership. Our goal is neither specifically to relax or to tighten the
attribution rules, but rather to maximize their precision. FNPRM,
supra, para.1. Additionally, Big Horn Communications, Inc., which notes
that it is a small market television station in Montana, argues that
LMAs and time brokerage agreements allow cost efficiencies in small
markets that increase service to small markets and promote the economic
viability of small and financially weak stations. Local Station
Ownership Coalition also urges the Commission not to make television
station LMAs attributable unless it permits ownership of two television
stations in a market because LMAs help financially troubled stations
achieve economic viability. We recognize that LMAs can promote economic
efficiencies, and our proposal is designed to permit those benefits
while providing for attribution of those television station LMAs that
should be counted under our multiple ownership rules.
Any Significant Alternatives Minimizing the Impact on Small Entities
and Consistent With the Stated Objectives
This FNPRM solicits comment on a variety of alternatives discussed
herein. Any significant alternatives presented in the comments will be
considered. In the NPRM, we invited comment on whether to restrict or
eliminate current attribution exemptions for nonvoting shares and for
minority voting shareholders in a corporation with a single majority
shareholder. In addition, we requested comment on whether we should
adopt new attribution rules or policies when multiple financial or
business relationships were held in combination in a licensee. The
``equity or debt plus'' approach discussed in the FNPRM is a
specifically tailored approach, narrower than that discussed in the
NPRM. We seek comment on whether there is a significant economic impact
on any class of small licensee or permittee as a result of our proposed
``equity or debt plus'' approach.
We seek comment on whether there would be a significant economic
impact on small stations resulting from the proposed attribution rules
for LMAs or from the possible application of the attribution rules to
JSAs.
We seek comment on whether there would be a significant economic
impact on small entities from the changes we have proposed to the
cable/MDS cross-ownership attribution rules.
Staff Study of the 1994/95 FCC Annual TV Ownership Reports
Policy and Rules Division
Mass Media Bureau
FCC
Executive Summary
This study collected and analyzed ownership information from the
Commission's 1994/1995 annual ownership reports on the majority (1,009
out of 1,043) of for-profit TV stations. The study draws the following
conclusions.
64.6 percent of broadcast TV stations are closely-held,
where majority control is held by 5 or fewer owners.
As well, 74.9 percent of TV stations are held by group-
owners.
Increasing the attribution benchmark for active
stockholders from 5 percent to 10 percent of voting control would
decrease the number of currently-attributable owners by approximately
one-third. As well, the number of licensees with no attributable owners
(excluding directors and officers) would increase from 81 to 134, or by
65.4 percent.
Broadcast investment by mutual funds, life insurance
companies and other passive investors is relatively small. The proposed
change from a 10 percent to 20 percent passive investor benchmark would
affect 5 of 15 currently-attributable passive investors, and impact 5
stations currently with attributable passive investors. Most reported
passive investment is now in the range of 5 percent to 10 percent
voting control.
Non-passive institutional investment is also small, with
only 57 such interests reported in total. The proposed increase from a
5 percent to 10 percent benchmark would decrease by 16, or 33.3
percent, the number of institutional interests that are currently
attributable.
Only 10 instances of reported limited liability
corporations (LLCs) were found among the stations sampled.
I. Purpose of the Study
The present study was undertaken in conjunction with the
attribution notice to analyze the potential impact of proposed rule
changes on the cognizable and non-cognizable interests in broadcast TV
stations.
II. Study Population of Interest
The scope of the data collection and analysis effort was limited to
for-profit broadcast television stations. Data for non-profit TV
stations, radio stations and low power stations were not collected for
several reasons. With non-profit stations only directors and officers
(D&O) are cognizable, and they remain cognizable under proposed
changes. The choice to focus on broadcast TV station attribution was
made to maximize the use of limited resources.
III. Study Design
Broadcast TV station licensees are required to report cognizable
ownership interests in the form of an annual ownership report. These
ownership interests include
(i) ``active'' stockholders of 5 percent voting interest or greater
in the licensee,
(ii) ``passive'' shareholders, including mutual funds, bank trust
departments and life insurance companies holding 10 percent or greater
voting interest in the licensee,
(iii) single-majority stockholders holding greater than 50 percent
interest (in which cases all other voting interests are not
attributable),
(iv) all general partnership interests,
(v) limited partnership interests that are not ``sufficiently
insulated'' and
(vi) all directors and officers (D&O) involved in the licensee.
Data collection focused on collecting data on all attributable
interests, with the exception of directors and officers with less than
1 percent voting interest in the licensee. Because of their direct
operational involvement with the licensee, this latter group is held
attributable, regardless of the extent of their ownership stake in the
station.
The annual ownership reports also frequently and voluntarily report
ownership percentages for owners not attributable under current rules,
in particular voting shareholders with interests in the 1 percent to 5
percent ownership range. To expand the scope of our analysis, data
collection was extended to include all ``reported'' voting ownership
claims of 1 percent or greater.
IV. Overall TV-Station Results
Ownership information was obtained from the annual ownership
reports required by the Commission. Information from the most recent
report on file was used. Essentially, data was collected manually and
then computer-coded from virtually all of the for-profit broadcast TV
ownership filings, except with group-owned stations where a single
ownership report was filed for the entire group.
Of the total 1542 licensed TV stations, for-profit stations
numbered 1043 and
[[Page 67281]]
non-profit stations numbered 499. Of the for-profit stations, 781
stations or 74.8% were held by group owners, defined as 2 or more
stations owned by the same corporate holding company. The remaining 262
stations were singly-owned stations. The breakdown between for-profit
and non-profit stations, and group-owned versus singly-owned stations
is shown in Table I, presented at the end of this report.
Table II categorizes TV stations by owner type. Of the for-profit
TV stations censused, 64.6 percent are closely-held stations, either
(1) by a sole proprietor, (2) by a single-majority shareholder, (3)
majority family-owned or (4) majority-owned by a small (less than six)
number of individual shareholders. Family-owned stations are those
where five or fewer family members hold more than 50 percent ownership
interest in a particular station. Closely-held stations are similarly
defined but without the family-membership requirement. In contrast,
only 20.1 percent of for-profit stations are categorized as widely-
held, where typically any one shareholder would hold only a small
percent of ownership in the station. These percentages exclude stations
which may be closely or widely held in the context of a general
partnership (GP), limited partnership (LP) or limited liability
corporation (LLC) ownership structure. As well, 4.2 percent of TV
stations are organized as GPs, 8.8 percent as LPs and 1.0 percent as
LLCs. Finally of the remaining stations, 5 are international TV
stations and 8 are currently in receivership.
Separate results for group-owned and singly-owned stations are
given in Table III. As shown in the table, group-owned stations tend to
have less concentrated ownership, with 20.4 percent of these stations
widely held, while only 6.8% of singly-owned stations are widely-held.
V. Voting Shareholders as Cognizable Interests
The Commission currently attributes ownership to stockholders with
5 percent or more of voting rights in a broadcast station. Under
consideration in the NPRM is a proposed increase in the attribution
benchmark for voting stockholders from its current level at 5 percent
to a 10 percent benchmark. Of interest is the impact of a change in the
attribution benchmark on the number of attributable owners.
The distribution of ownership interests that are attributable under
the 5 percent rule is given next. The number of equity holders in the 1
percent to 5 percent range is also given, although with the caveat that
non-attributable interests are voluntarily reported and may undercount
the true number. The table excludes ``passive'' shareholders, single-
majority shareholders, and partnership interests, which are governed by
separate attribution rules. These groups will be separately analyzed
below.
I. Issue Analysis
A. Impact of the 1996 Act
4. The 1996 Act relaxed our broadcast station multiple ownership
rules. Section 202 of the 1996 Act directed the Commission to eliminate
national radio multiple ownership limits, to relax significantly local
radio ownership rules, to eliminate the limit on the number of
television stations that a person or entity may directly own
nationwide, and to raise the national television audience reach cap to
35 percent. The 1996 Act also directed the Commission to extend its
one-to-a-market waiver policy, 47 CFR 73.3555(c), to the top 50
markets, consistent with the public interest, convenience, and
necessity, and to review its television duopoly rule, 47 CFR
73.3555(b).
5. In two Orders released on March 8, 1996 (61 FR 10689, March 15,
1996 and 61 FR 10691, March 15, 1996), the Commission amended its
ownership rules to reflect: (1) The elimination of the numerical
national television ownership caps and the increase in the national
television ownership audience reach cap to 35 percent; and (2) the
elimination of national radio ownership limits and the relaxation of
the local radio ownership limits.40 In a companion Second Further
Notice of Proposed Rule Making in MM Docket Nos. 91-221 & 87-8, adopted
today, the Commission invites further comment on a number of issues
concerning the local television ownership rules, including extension of
the one-to-a-market waiver policy and possible grandfathering of
existing television LMAs, should we ultimately determine that these
arrangements are attributable.41
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\40\ Implementation of Sections 202(a) and 202(b)(1) of the
Telecommunications Act of 1996 (Broadcast Radio Ownership), FCC 96-
90, 61 FR 10689 (March 15, 1996); Implementation of Sections
202(c)(1) and 202(e) of the Telecommunications Act of 1996 (National
Broadcast Television Ownership and Dual Network Operations), FCC 96-
91, 61 FR 10691 (March 15, 1996).
\41\ FCC 96-438, released November 7, 1996 (``TV Ownership
Second FNPRM'').
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6. We invite comment in this proceeding as to whether the changes
resulting from passage of the 1996 Act should affect our discussion of
the attribution and cross-interest issues raised by the NPRM, and, if
so, how. The relaxation of our multiple ownership rules does not itself
require either a relaxation or tightening of the attribution rules. It
does, however, reinforce our belief that the attribution rules must
function effectively and accurately to identify all interests that are
relevant to the underlying purposes of the multiple ownership rules and
that should therefore be counted in applying those rules. As
importantly, we seek to identify clearly those interests that do not
and should not implicate concerns raised by the multiple ownership
rules and that should not, therefore, be counted. We invite comment on
these issues, and we specifically invite commenters to update the
record on the impact of the 1996 Act on the issues raised in the NPRM,
including those not discussed again in this FNPRM, such as LLCs and the
cross-interest policy.
B. New Attribution Issues and Proposals
7. In this FNPRM, we explore additional issues and proposals to
increase the precision of our attribution rules. First, we invite
comment on whether we should add a new ``equity or debt plus''
attribution rule to the current rules. If adopted, such a new rule
would limit, but not eliminate, the single majority shareholder and
nonvoting stock attribution exemptions and would address our concerns,
expressed in the NPRM, about whether certain multiple business
interests should be attributable when held in combination. Under such a
rule, where the interest holder is a program supplier or same-market
broadcaster or media entity subject to the broadcast cross-ownership
rules, 47 CFR 73.3555(c), 73.3555(d), & 76.501(a), we would attribute
its otherwise nonattributable equity and/or debt interest in a licensee
or other media entity subject to the cross-ownership rules if the
equity and/or debt holding is greater than a specified
benchmark.42 Second, we incorporate into this proceeding our
proposal to attribute television time brokerage agreements (or LMAs)
based on the same principles that currently apply to radio LMAs.43
Thus, we
[[Page 67282]]
tentatively conclude that we should treat time brokerage of another
television station in the same market for more than fifteen percent of
the brokered station's weekly broadcast hours as being attributable,
and therefore as counting toward the brokering licensee's national and
local ownership limits. Third, we invite comment as to whether we
should attribute joint sales agreements among broadcasters in the same
markets, at least under certain circumstances, and as to what factors
should make such contractual relationships attributable. With respect
to television stations, the definition of what is the same ``market''
for purposes of applying the ``equity or debt plus'' attribution
standard, if adopted, as well as for applying the proposals to
attribute LMAs and JSAs, will be resolved in the television local
ownership proceeding. For radio stations and other entities covered by
our broadcast attribution rules, we would define the same ``market'' by
reference to the definition of the market used in the underlying
multiple ownership rule that is implicated.
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\42\ We will refer herein to such media entities or outlets
proposed to be subject to the ``equity or debt plus'' approach as
``same-market broadcasters'' simply as a shorthand. Thus, when we
refer to a ``same-market broadcaster'' in this FNPRM in the context
of discussing the ``equity or debt plus'' approach, we include daily
newspapers and cable operators.
\43\ We earlier raised this proposal in the television ownership
proceeding, Further Notice of Proposed Rule Making in MM Docket Nos.
91-221 & 87-8, 10 FCC Rcd 3524, Paras. 138-40 , 60 FR 6483,
(February 2,1995) (``TV Ownership FNPRM''), but now intend to
resolve the issue of treatment of LMAs in this attribution
proceeding. We will resolve the issue of possible grandfathering of
LMAs in the television ownership proceeding.
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1. ``Equity or Debt Plus''
8. Background. In the NPRM, para. 51, we expressed concern that our
earlier conclusion that a minority shareholder could not exert
significant influence on a licensee where there is a single majority
shareholder may not be a valid conclusion in all circumstances.
Therein, para. 53, we also noted our concern that nonvoting
shareholders could, in certain circumstances, carry appreciable
influence that is not now attributed. Accordingly, we invited comment
on whether to restrict or eliminate current attribution exemptions for
nonvoting shares and for minority voting shareholders in a corporation
with a single majority shareholder. In addition, we requested comment
on whether we should adopt new attribution rules or policies when
multiple financial or business relationships were held in combination
in a licensee. We noted that such multiple relationships could in
combination with equity or debt interests create sufficient influence
to warrant attribution. While we expressed these concerns, we did not
delineate specific proposals to address them.
9. We received several comments concerning these issues. Most
commenters urged us to retain the single majority shareholder and
nonvoting stock exemptions from attribution. However, network
affiliates have expressed concerns that the exemptions have allowed
networks to extend their nationwide reach by structuring
nonattributable deals in which the networks effectively exert
significant influence if not control over licensees.44 In
addition, while most parties were generally opposed to a case-by-case
attribution approach, several parties agreed that there is a need to
adopt new policies with respect to multiple business interests, or at
least to clarify our existing policies in this regard.45 One
commenter was generally opposed to relaxing the attribution rules,
commenting that ``[a]ny relaxation of the attribution rules will allow
an increase in the concentration of control of the industry,'' and
adding that an increased concentration of control ``works against
diversity of viewpoints and works against minority ownership.'' 46
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\44\ See Consolidated Comments of AFLAC Broadcast Group
(``AFLAC'') at 15-19; Consolidated Reply Comments of AFLAC at 3-4;
Reply Comments of Network Affiliated Stations Alliance at 2-3, 6-7.
\45\ See, e.g., Consolidated Comments of AFLAC at 15, 21-23.
\46\ Comments of National Association of Black Owned
Broadcasters at 10, 13.
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10. In light of the broad divergence of opinion in the comments, we
believe it would be desirable to explore a balanced, specifically-
tailored approach that would focus the rules more precisely on those
relationships that potentially permit significant influence such that
they should be attributed. Accordingly, based in part on our review of
the comments, which underscore the concerns expressed in the NPRM, and
in response to recent cases, we invite comment on a new ``equity or
debt plus'' attribution rule. Many of the concerns sought to be
addressed by the proposed ``equity or debt plus'' attribution approach
have traditionally been dealt with under the cross-interest policy. A
chief benefit of the new proposed approach, as discussed further below,
is that it would permit greater certainty and predictability in
deciding future cases than the cross-interest policy, which has
traditionally been applied on an ad hoc, case-by-case basis.
11. Overview of Approach. The new rule would operate in addition to
other attribution standards and would attempt to increase the precision
of the attribution rules, address the foregoing concerns about multiple
nonattributable relationships, and respond to concerns about abuses of
the single majority shareholder and nonvoting stock attribution
exemptions. This approach would not eliminate the nonvoting and single
majority shareholder exemptions from attribution, but would limit their
availability in certain circumstances. Under this approach, we would
attribute the otherwise nonattributable debt or equity interests in a
licensee where: (1) The interest holder also holds certain other
significant interests in or relationships to a licensee or other media
outlet subject to the cross-ownership rules that could result in the
ability to exercise significant influence; and (2) the equity and/or
debt holding exceeds specified thresholds. We seek to apply bright line
attribution tests wherever possible. Accordingly, we invite comment on
what the appropriate threshold(s) for these purposes should be and
specifically whether we should set the threshold at 33 percent where
the interest holder is: (1) A program supplier to the licensee, as will
be discussed below, or (2) a same-market broadcaster or other media
outlet subject to the broadcast cross-ownership rules, including
newspapers and cable operators. We emphasize that, under the ``equity
or debt plus'' approach delineated herein, a finding that an interest
is attributable would result in that interest being counted for all
applicable multiple ownership rules, local and national.
12. The ``equity or debt plus'' approach is narrower than that
discussed in the NPRM with respect to resolving our concerns that
multiple nonattributable business interests could be combined to exert
influence over licensees. It also does not go so far as to repeal the
current nonvoting stock and single majority shareholder attribution
exemptions; except in cases involving a same-market broadcaster or a
program supplier or any other relationship category that we delineate,
the single majority shareholder and nonvoting stock exemptions would
continue to apply as they do now. This approach reflects our current
judgment as to the appropriate balance between our goal of maximizing
the precision of the attribution rules by attributing all interests
that are of concern, and only those interests, and our equally
significant goals of not unduly disrupting capital flow and of
affording ease of administrative processing and reasonable certainty to
regulatees in planning their transactions. To the extent that it misses
some situations that might be of concern, we, of course, would reserve
the right to address extraordinary cases on an ad hoc basis and in a
manner consistent with the public interest. We invite comment as to
whether the ``equity or debt plus'' option should be adopted, and, if
so,
[[Page 67283]]
whether the 33 percent benchmark is appropriate and whether other
relationships to or interests in a licensee should also trigger
attribution under an ``equity or debt plus'' approach.
13. Triggering Relationships. The ``equity or debt plus'' approach
would focus directly on those relationships that may trigger situations
in which there is significant incentive and ability for the otherwise
nonattributable interest holder to exert influence such that the
interest may implicate diversity and competition concerns and should be
attributed. As noted above, we seek comment as to whether the
application of the equity and/or debt benchmarks discussed below should
be triggered where the interest holder is either: (1) A broadcaster or
other media entity in any service implicated by any of the current
cross-ownership rules, which operates in the same market; or (2) a
program supplier.
14. The approach of focusing on specified triggering relationships
would extend the Commission's current recognition that the category or
nature of the interest holder is important to whether an interest
should be attributed. For example, under the current broadcast
attribution rules, passive investors are subject to a higher voting
stock attribution benchmark, 47 CFR 73.3555 Note 2(c), since these
parties are subject to fiduciary and other restraints on their exercise
of influence over licensees and are, by their nature, principally
concerned with investment returns rather than direct influence over the
licensee.
15. Same-market broadcasters and certain other same-market media
entities may raise particular concerns because of our goal of
protecting local diversity and competition. Firms with existing local
media interests could use financing or contractual arrangements, such
as LMAs, to obtain a degree of horizontal integration within a
particular local market that should be subject to local multiple
ownership limitations. Indeed, the Commission's cross-interest policy
reflects its concern for competition and diversity where an entity has
an attributable interest in one media outlet and a ``meaningful
relationship'' with another media outlet serving substantially the same
area, i.e., in the same market.47 In such cases, if the ``equity
or debt plus'' approach is adopted, an attributable investment in one
broadcast or other media outlet subject to the broadcast cross-
ownership rules (i.e., cable systems and newspapers), combined with a
substantial non-attributable investment in a second station or media
outlet subject to the cross-ownership rules in the same market, would
trigger attribution of both stations or media interests to the interest
holder, where common ownership of the two entities involved would be
barred by the broadcast cross-ownership rules. We seek comment on this
option. Certainly, television broadcasters should be included as
``same-market broadcasters,'' as should radio stations. We also believe
that other media entities captured by the cross-ownership rules (i.e.,
daily newspapers and cable operators) should be subject to the ``equity
or debt plus'' approach, just as they are subject to our broadcast
cross-ownership rules, but we seek comment on the implications of
including daily newspapers and cable operators within the scope of this
proposal. In particular, how should we define what is the ``same
market'' for purposes of applying the ``equity or debt plus'' proposal
to these latter entities?
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\47\ For a recent application of the policy and statement of
this justification, see Roy M. Speer, FCC 96-258, Paras. 124-25,
released June 14, 1996.
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16. We also invite comment on whether we should include program
suppliers under the ``equity or debt plus'' attribution test to address
our concern and that of some commenters that program suppliers such as
networks could use nonattributable interests to exert influence over
critical station decisions, including programming and affiliation
choices. In recent transactions involving program suppliers, it has
appeared that nonattributable investors can be granted rights over
licensee decisions that might afford them significant influence over
the licensee. We note that radio and television time brokerage
agreements or LMAs are program supply contracts and would be
encompassed under the ``equity or debt plus'' attribution approach, if
we specify program suppliers as a triggering category. Thus, under the
``equity or debt plus'' approach, such agreements might result in
attribution in specific cases if the brokering station holds a
financial interest in or acts as a creditor of the brokered station.
Television time brokerage agreements might also be attributable under
the per se LMA attribution approach discussed below.
17. One recent transaction, for example, required us to decide
whether to attribute complex and substantial financial interests that a
national television network held in the proposed assignee of a
television station and associated translator station.48 The
proposed assignee was a multiple station owner whose stations were
affiliated with the network investor. We found that the collective
interests and relationships in that case ``do not squarely fall within
any of the cases * * * in which the Commission has previously found
multiple relationships between a network and its affiliate
nonattributable.'' 49 We therefore granted the application
conditioned upon the outcome of this rulemaking proceeding.50
Other recent cases have raised similar concerns and are also
conditioned on the outcome of this proceeding.51
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\48\ BBC License Subsidiary L.P (WLUK-TV), 10 FCC Rcd 7926
(1995).
\49\ Id. at para. 43.
\50\ Id. at para. 44.
\51\ These include Roy M. Speer, FCC 96-258, released June 14,
1996; BBC License Subsidiary L.P. (KHON-TV et. al), 10 FCC Rcd 10968
(1995); BBC License Subsidiary L.P (WLUK-TV), 10 FCC Rcd 7926
(1995); Quincy D. Jones, 11 FCC Rcd 2481 (1995); Letter to Heritage
Media, Inc. et al. from Roy J. Stewart, Chief, Mass Media Bureau,
dated January 18, 1996 (FCC File Nos. BTCCT-950911KF-KG and BALCT-
950628KJ-KL); Letter of Roy J. Stewart, Chief, Mass Media Bureau,
dated May 8, 1995, Re File Nos. BALH-940323GE and BAL-940330EA
(Cincinnati, Ohio); Letter of Larry D. Eads, Chief, Audio Services
Division, Mass Media Bureau, Ref. 1800B2, 8910-BD, dated June 8,
1995, Re File Nos. BAL-940525EA, BALH-940525EB (Wellington and Fort
Collins, Colorado). Additionally, on March 27, 1996, the staff,
acting pursuant to delegated authority, conditioned the grant of
applications seeking authorization for the transfer of control of
Noble Broadcast Licenses, Inc., licensee of radio stations serving
communities in Ohio, Missouri, Illinois, and Colorado, to Jacor
Communications, Inc., on the outcome of this proceeding. We do not
seek nor will we consider in this proceeding comments on the merits
of the decisions in these particular cases. If necessary, we will
issue separate orders to apply any new rules resulting from the
instant proceeding to the cases that have been conditioned on its
outcome. We mention these cases here only to illustrate the kinds of
relationships and interests that have aroused concerns about the
need to revise our attribution rules and invite comment, as
discussed below, on these relationships and interests in general.
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18. We tentatively conclude that there is the potential for certain
substantial investors or creditors to have the ability to exert
significant influence over key licensee decisions through their
contract rights, even though they are not granted a direct voting
interest or may only have a minority voting interest in a corporation
with a single majority shareholder, which may undermine the diversity
of voices we seek to promote. They may, through their contractual
rights and their ongoing right to communicate freely with the licensee,
exert as much or more influence or control over some corporate
decisions as voting equity holders whose interests are attributable. We
seek specific comment on this issue.
19. If we were to apply this new attribution approach to program
suppliers, we would need to decide how to define the category of
``program supplier.'' We seek comment on how
[[Page 67284]]
the definition should be set. One potential definition would include
all entities from which a broadcast licensee obtains programming,
including program producers, syndicators and networks. As noted above,
these entities in particular may have inherent interests in influencing
programming decisions. Alternatively, should we limit the definition to
networks or only to program suppliers that supply significant or
substantial quantities of programming to the licensee? If we limit the
definition to networks, how should we define a network for these
purposes? Alternatively, if we were to adopt a criterion based on the
amount of programming supplied, what amount of programming would be
sufficient for us to classify an entity as a program supplier for
purposes of applying the ``equity or debt plus'' approach? In addition,
where the program supplier is an entity in which other persons or
entities hold interests, how great an interest in a program supplier
can a person or entity hold without being deemed to be a program
supplier for purposes of applying the debt or equity plus rule? Should
we treat as program suppliers only those persons or entities that hold
a controlling interest (de facto or de jure) in a program supplier?
Alternatively, should we apply our broadcast attribution rules in
answering this question? Under such an approach, for example, applying
the current attribution rules, the holder of five percent of the voting
stock in a program supplier would be considered to be a program
supplier for purposes of applying the ``equity or debt plus'' approach.
As another alternative, should we establish a separate benchmark to be
applied in making this determination? If the last, what should that
benchmark be?
20. Finally, if we include programming suppliers among the
cognizable relationships that would trigger the equity or debt
thresholds discussed above, we nonetheless wish to avoid disrupting the
flow of capital to television stations to fund, among other things, the
conversion to digital television, which we anticipate will be costly.
We invite comment as to whether the ``equity or debt plus'' approach
would significantly hinder networks or other telecommunications
entities from helping stations to fund the conversion to digital
television, and, if so, if this is a significant problem.
21. Investment Thresholds. Under the foregoing approach, where the
creditor or equity interest holder is a same-market broadcaster or a
program supplier to the station in question, in addition to applying
the existing attribution criteria, we would attribute any financial
interest or investment in the station or other media outlet that
exceeds specified equity or debt thresholds. We would aggregate the
equity interests of such an investor (including both non-voting stock
in whatever form it is held and voting stock) in a licensee or other
media outlet for purposes of applying the equity threshold and would
apply the same approach with respect to aggregating all debt holdings
in applying the debt threshold. We seek comment as to whether preferred
stock should be treated as equity or as debt for purposes of applying
the threshold. Additionally, when the investor's total investment in
the licensee or other media outlet, aggregating all debt and equity
interests, exceeds a specified threshold percentage of all investment
in the licensee (the sum of all equity plus debt), attribution would
also be triggered. In aggregating the different classes of investment,
equity and debt, we propose to use total capitalization as a base. We
invite comment on these views. Is the approach proposed workable? Would
aggregating different classes of investment pose difficulties, and, if
so, how can these difficulties be avoided?
22. We invite comment on what specific percentage threshold(s) we
should set for purposes of applying the foregoing approach, and we
specifically request commenters to provide factual and empirical data
to support the threshold or benchmark they advocate. We are inclined to
set the equity and debt thresholds at the same level because the
rationale for including such investments, i.e., those affording the
ability to influence important station decisions, is the same for all
such forms of investment. A 33 percent benchmark might be reasonable
for these purposes. We invite comment on whether a higher or lower
benchmark would be more effective in achieving our diversity and
competition goals, while not unduly disrupting capital flow. We believe
that the threshold should be at least as high as the passive investor
benchmark, whether that benchmark be 10 percent, as under the current
rules, or 20 percent, as proposed in the NPRM in this proceeding.
Additionally, we do not want to set the limit so low as to unduly
disrupt capital flow to broadcasting. Finally, we note that, in the
context of its cross interest policy, the Commission has permitted a
nonattributable equity interest as large as 33 percent. See Cleveland
Television Corp., 91 FCC 2d 1129, 1132-35 (Rev. Bd. 1982), review
denied, FCC 83-235 (May 18, 1983), aff'd, Cleveland Television Corp. v.
FCC, 732 F.2d 962 (D.C. Cir. 1984) (``Cleveland Television''). Accord,
Roy M. Speer, FCC 96-258, Paras. 124-26, released June 14, 1996. In
Cleveland Television, 91 FCC 2d at 1132-35, the Commission held that a
one-third non-voting preferred stock interest by a broadcaster in
another station in the same market conferred ``insufficient incidents
of contingent control'' to violate the multiple ownership rules or the
cross-interest policy, and that the holders, by virtue of ownership of
the non-voting preferred stock interest would not retain the means to
directly or indirectly control the station. We invite comment on the
validity of this conclusion in the context of the ``equity or debt
plus'' approach. Additionally, we seek comment on the impact of a 33
percent threshold on small business entities, particularly on whether
there would be a disproportionate effect on small or minority entities.
23. With respect to the specific benchmark proposed, the comments
reveal that the networks have substantial nonattributable investments
in affiliated stations and that group owners have nonattributable
investments in other stations.52 We invite commenters to give us
current data as to the typical nonattributable interests held by
networks and group owners in other stations and how those relationships
might be affected by the proposed changes. We ask commenters to
designate whether the station is a small business as defined by the
Small Business Administration (``SBA''),53 and/or is minority or
woman-owned. Such information would be useful in weighing the probable
impact of setting the threshold at the 33 percent level or another
level. Finally, we note that nonvoting shares, debt, and voting
minority shares in a corporation with a single majority shareholder are
not reported under current ownership
[[Page 67285]]
report forms, and, if we adopt the ``equity or debt plus'' proposal, we
would need to modify our ownership forms accordingly. We invite comment
as to how we should modify our ownership report form, FCC Form 323, for
this purpose.
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\52\ For example, according to the Network Affiliated Stations
Alliance Comments, Exhibit 1, filed in May 1995: ABC had a 14.7
percent nonattributable interest in 10 stations in addition to the
stations in which it owned a 100 percent interest; CBS had a 49
percent nonattributable interest in one station in addition to
transactions pending to acquire other nonattributable interests in
connection with a station swap with NBC; Fox had a 20 percent
nonattributable interest in the stations attributed to New World, a
25 percent nonattributable interest in the stations attributed to
SF/Savoy, and a proposed 20 percent nonattributable interest in the
Blackstar stations; and NBC had a 49 percent nonattributable
interest in one station. Of course, this information is over one
year old. Indeed, in the interim, both CBS and ABC have been sold to
other entities that are group owners.
\53\ The SBA defines a small television station as one that has
no more than $10.5 million in annual receipts. 13 CFR Sec. 121.201.
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24. We also invite comment as to whether the targeted approach
outlined above would be preferable to a case-by-case approach that
determines whether an interest should be attributed based directly on
the kinds of powers granted to an interest holder in contract language.
For example, in some recent transactions, currently nonattributable
investments have been accompanied by contractual provisions that
essentially give the investor veto power over decisions normally made
by the board of directors under the authority of the voting
shareholders.54 Such combined provisions could give the investor
undue power to influence operational decisions. One approach to
handling these cases might be to base attribution on the type of
contract language that yields control over decisions of concern to us.
Although such an ad hoc approach is more tailored than a generic rule,
it also might lead to complicated interpretation and processing
difficulties and might add uncertainty to resolution of attribution
cases. Thus, a bright line approach, such as the ``equity or debt
plus'' approach, which clearly defines those business relationships
that cause the greatest concern, could provide certainty and minimize
regulatory costs. We invite comment as to whether a bright line test,
where attribution would be linked to the size of an investor's
interest, can serve as a proxy for these concerns, based on the
assumption that the degree of contractual rights an investor may hold
is typically related to the level of his investment. Also, would the
``equity or debt plus'' approach capture those cases where currently
nonattributable investments are accompanied by contractual provisions
that have aroused the foregoing concerns?
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\54\ For example, in BBC License Subsidiary L.P (WLUK-TV), 10
FCC Rcd 7926 (1995), in addition to holding 45 percent of the cash
equity in the licensee and other contractual rights, the investor
had approval rights over certain major decisions of the licensee,
such as expansion of operations into new business areas, mergers,
consolidations and acquisition of other businesses, the sale of
assets, the sale of securities and issuance of stock, the amendment
of the corporate by-laws and dividend payment decisions.
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2. Attribution of Time Brokerage Agreements or LMAs
25. An LMA or time brokerage agreement is a type of contract that
generally involves the sale by a licensee of discrete blocks of time to
a broker that then supplies the programming to fill that time and sells
the commercial spot announcements to support the programming.55 In
the radio context, time brokerage of another radio station in the same
market for more than fifteen percent of the brokered station's weekly
broadcast hours results in attribution of the brokered station to the
brokering licensee for purposes of applying our multiple ownership
rules. See 47 CFR Sec. 73.3555(a)(4)(i).
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\55\ TV Ownership FNPRM, para. 133. In this FNPRM, we refer to
LMAs or time brokerage agreements. For purposes of applying the
radio LMA rules, the Commission's rules define time brokerage as
``the sale by a licensee of discrete blocks of time to a `broker'
that supplies the programming to fill that time and sells the
commercial spot announcements in it.'' 47 CFR
Sec. 73.3555(a)(4)(iii). While we have generally used the terms
interchangeably, we will refer herein to LMAs as those time
brokerage agreements involving a broker that is a licensee of one or
more stations in the same market as the brokered station.
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26. In our TV Ownership FNPRM, we tentatively proposed to attribute
television LMAs based on the same principles that apply to radio time
brokerage agreements. Thus, time brokerage of another television
station in the same market for more than fifteen percent of the
brokered television station's weekly broadcast hours would be held to
be attributable, and therefore would count toward the brokering
television licensee's national and local ownership limits.56 We
specifically propose here that LMAs, if attributable, would also count
in applying our other ownership rules, including, for example, the
broadcast-newspaper cross-ownership rule (47 CFR 73.3555(d)), the
broadcast-cable cross-ownership rule (47 CFR 76.501(a)) and the one-to-
a-market rule (or radio-television cross-ownership rule) (47 CFR
73.3555(c)). We request comment on these tentative proposals. We also
note that if we adopt this proposal for television LMAs, the radio LMA
rules (47 CFR 73.3555(a)(3)) would have to be modified accordingly,
since radio LMAs are currently considered only for purposes of applying
the radio contour overlap rule (47 CFR 73.3555(a)(1)), and invite
comment on how the radio LMA attribution rules should be modified in
this regard. We also incorporate the tentative proposal that
attributable television LMAs be filed with the Commission in addition
to being kept at the stations involved in an LMA.57 We note that
we asked in the TV Ownership FNPRM, para. 139, whether the program
duplication or simulcasting limits that apply to commonly owned or time
brokered radio stations should apply to TV LMAs. We will also resolve
that issue in this proceeding.
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\56\ TV Ownership FNPRM, para. 138. When the TV Ownership FNPRM
was released, we applied national multiple ownership limits to radio
stations, and the brokered station was attributed to the brokering
station for purposes of applying both those national limits and the
local limits. See Revision of Radio Rules and Policies, 7 FCC Rcd
2755, 57 FR 18089 (April 29, 1992), on reconsideration, 7 FCC Rcd
6387, 6400-01 (``First Radio Ownership Reconsideration Order'') 57
FR 42701 (September 16, 1992), on further reconsideration, 9 FCC Rcd
7183, 7191, 59 FR 62609 (December 6, 1994). Subsequently, the
national ownership limits were eliminated for radio. See
Implementation of Sections 202(a) and 202(b)(1) of the
Telecommunications Act of 1996 (Broadcast Radio Ownership), FCC 96-
90, 61 FR 10689 (March 15, 1996). Accordingly, the interest is
counted only in applying local radio ownership limits. National
multiple ownership limits apply to television stations, however,
and, under our proposal, the brokered television station would be
counted toward the brokering television station's national and local
ownership limits, including the one-to-market rule. We note,
however, that the narrow issue of whether the audience reach of a
brokering and a brokered station serving the same market would both
be counted toward the audience reach cap, with the effect of double
counting the stations, will be decided in our proceeding concerning
the television national multiple ownership rules. Notice of Proposed
Rule Making in MM Docket Nos. 96-222, 91-221 & 87-8, FCC 96-437,
released November 7, 1996.
\57\ See TV Ownership FNPRM, para. 138. See 47 CFR
Sec. 73.3613(d).
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27. The proposed per se LMA attribution standard would apply
whether or not the LMA holder has other multiple business relationships
with the brokered station or otherwise has a financial investment in
the brokered station. While time brokerage agreements not involving a
television station in the same market would not fall under this per se
LMA attribution standard, as discussed above, such time brokerage
agreements could be attributable under the ``equity or debt plus''
approach, if adopted, where the brokering station has an equity and/or
debt interest in the brokered station that exceeds the specified
investment threshold.58 We invite updated comments on all aspects
of the foregoing tentative conclusions and proposals.
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\58\ Thus, under the proposals enumerated in this FNPRM, LMAs
are potentially attributable under a per se LMA attribution rule
and/or under the ``equity or debt plus'' approach discussed above.
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28. In making this proposal to attribute television LMAs in the TV
Ownership FNPRM, we also recognized the need to deal with pre-existing
television LMAs and asked whether we should grandfather television LMAs
entered into prior to December 15, 1994, the date of adoption of the TV
Ownership FNPRM, and whether we should subject such existing LMAs to
renewability and transferability guidelines similar to those governing
radio LMAs.59 However, if we do decide to attribute LMAs as we
propose here,
[[Page 67286]]
we intend to resolve the grandfathering, renewability and
transferability issues in the separate TV local ownership docket, TV
Ownership Second FNPRM, so that we can evaluate the extent to which
grandfathering may be needed based on the nature of the local ownership
rules we adopt.
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\59\ TV Ownership FNPRM, Paras. 138-40.
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29. With respect to our tentative proposal in the TV Ownership
FNPRM, now incorporated within this attribution proceeding, to
attribute certain television LMAs to the brokering station for purposes
of applying the multiple ownership rules, commenters voiced a range of
positions. Some opposed attributing television LMAs for ownership
purposes, particularly if the Commission does not relax its duopoly
rule.60 Others supported using the radio rules as a blueprint for
regulating television LMAs.61 Still other parties argued for more
restrictive rules.62 However, commenters generally failed to
provide the Commission with the kind of factual information we seek.
Consequently we once again request quantitative information on the
number and characteristics of existing television LMAs.
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\60\ See, e.g., Comments of Association of Independent
Television Stations, Inc., now known as Association of Local
Television Stations, Inc. (``ALTV''), filed in MM Docket Nos. 91-221
& 87-8 at 29, n.52; Comments of Kentuckiana Broadcasting, Inc. filed
in MM Docket Nos. 91-221 & 87-8 at 5-6.
\61\ See, e.g., Comments of ABC, filed in MM Docket Nos. 91-221
& 87-8, at 26-27.
\62\ See Comments of Post-Newsweek Stations, Inc., filed in MM
Docket Nos. 91-221 & 87-8, at 8-9.
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30. We are especially interested in information on the typical
geographic proximity of the brokering and brokered stations, the
typical term of television LMAs, the typical renewal provisions, the
typical arrangements between the brokered station and the broker on the
sale of advertising time during brokered time periods, the percent of
brokered station time sold to the program supplier in an LMA, and the
typical arrangements between the brokered station and the broker to
allow the brokered station to reject broker-supplied programming that
the brokered station deems not in the public interest to broadcast. We
ask commenters to provide us with information as to whether such
agreements typically require the broker to make fixed payments to the
brokered station or whether other payment terms are applicable. Do LMAs
typically require that the broker sell all the brokered time? Do they
call for the broker to provide the brokered station with studio
services at the broker's facility? Is there a typical LMA? Are there
typical provisions or do these agreements vary widely? Can we draw
general conclusions about LMAs? Are there classes or categories of LMAs
that should be subject to different attribution treatment? Finally, we
want to emphasize, as we did in our radio ownership proceeding, ``that
the licensee is ultimately responsible for all programming aired on its
station, regardless of its source.'' 63 In this regard, we invite
comment on what, if any, specific safeguards we should adopt with
respect to television LMAs to ensure a brokered station's ability to
exercise its programming responsibility.64
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\63\ First Radio Ownership Reconsideration Order, 7 FCC Rcd
6387, para. 63 (1992).
\64\ For instance, radio time brokerage agreements of the type
described in Section 73.3555(a)(3)(i) of our Rules must be reduced
to writing and contain a certification by the licensee or permittee
of the brokered station verifying that it maintains ultimate control
over the station's facilities, including control over station
finances, personnel, and programming. See 47 CFR 73.3555(a)(3)(ii).
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3. Joint Sales Agreements (JSAs)
31. In the Attribution NPRM, Paras. 94-95, we requested comment on
whether, through multiple cooperative arrangements or contractual
agreements, broadcasters could so merge their operations as to
implicate our diversity and competition concerns. We noted, however,
that we did not intend to re-open our earlier decisions permiting joint
sales practices in radio and television. These decisions, of course,
allowed joint sales practices subject to compliance with the antitrust
laws.
32. Subsequent to issuing the Attribution NPRM, the staff has been
presented with cases involving joint sales agreements (i.e., agreements
for the joint sales of broadcast commercial time) that have raised anew
diversity and competition concerns with respect to such
agreements.65 This leads us to ask whether non-ownership based
mechanisms such as JSAs that might convey influence or control over
advertising shares should be considered, and possibly attributed. For
example, where one station owner controls a large percentage of the
advertising time in a particular market, it could potentially exercise
market power. Accordingly, we invite additional comments on the
potential effects of JSAs among same-market broadcasters on diversity
and competition. We also seek comment as to whether we should attribute
JSAs among licensees in the same market, including both radio and
television licensees, irrespective of whether they are accompanied by
the holding of debt or equity.
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\65\ See, e.g., Letter of Roy J. Stewart, Chief, Mass Media
Bureau, dated May 8, 1995, Re File Nos. BALH-940323GE and BAL-
940330EA (Cincinnati, Ohio); Letter of Larry D. Eads, Chief, Audio
Services Division, Mass Media Bureau, Ref. 1800B2, 8910-BD, dated
June 8, 1995, Re File Nos. BAL-940525EA, BALH-940525EB (Wellington
and Fort Collins, Colorado).
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33. We recognize that a JSA not involving stations in the same
market may permit influence over station operations. Nonetheless, we
distinguish between JSAs in the same market and JSAs among stations not
located in the same market. Our concern for media concentration has
been focused on local markets. For example, in the radio context, only
LMAs among stations in the same market are subject to attribution, and
we apply only local multiple ownership limits. And, in the television
context, we have similarly been more concerned with local markets
because the video program delivery market is a local market.66
Following this traditional concern for local markets, we focus on JSAs
in local markets. We invite comment on this approach.
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\66\ See TV Ownership FNPRM, Paras. 31, 36-45, 87-88.
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34. We seek general information concerning the typical contractual
terms of JSAs. What is the typical length of such agreements, and are
they automatically renewable? How are the station owner and broker
compensated? Are there package deals among several stations? Does the
broker get involved in the operation of the station, including
programming and finances, either directly or indirectly? As a practical
matter, do typical JSAs differ from LMAs or do time brokerage
agreements usually accompany JSAs? What other arrangements typically
occur between parties in terms of station operations, joint sales force
utilization, or joint use of production facilities? In addition, what
kind of efficiencies arise with JSAs, how are these shared among
parties to the JSA, and how do these benefits differ from those of
LMAs? Finally, what impact do JSAs have on competition, and under what
circumstances, if any, should the interest of the broker/JSA holder be
held attributable? If we were to consider JSAs, should such interests
be attributable in all circumstances involving stations in the same
market, or only where the broker also has some influence over the
programming or other operations of the brokered station? Alternatively,
should we apply another criterion in deciding whether to attribute
JSAs, such as attributing JSAs among same-market stations where the
brokering station exceeds a specific market share benchmark? We seek
[[Page 67287]]
comment on these issues and any other relevant questions concerning
whether or not JSAs should be attributable, at least under certain
circumstances.
C. Voting Stock Benchmarks
35. In the NPRM, as discussed above, we requested comment as to
whether we should increase the voting stock benchmarks from five to ten
percent for active investors and from ten to twenty percent for passive
investors. In response, the majority of commenters that responded to
these issues favor increasing the benchmarks. However, commenters did
not submit, in response to the NPRM, the kind of specific, empirical
evidence that we believe may be necessary before we can reasonably
conclude that the benchmarks should be raised, and we invite additional
comments to provide such additional evidence and economic studies.
Accordingly, we ask for specific and empirical information in a number
of areas to justify raising the benchmarks.
36. In this regard, Commission staff has conducted a study of the
attributable interests in commercial broadcast television licensees, as
reported in the ownership reports licensees are required to file. The
results of the staff study are set forth below. One conclusion from
that study is that increasing the attribution benchmark for active
investors from five percent to ten percent would decrease the number of
currently-attributable owners by approximately one-third. The number of
stations for which no stockholder would be attributable would increase
from 81 to 134 stations (out of 389 commercial for-profit television
stations that are incorporated and are not single majority shareholder
stations), under current stock distribution patterns.
37. We invite comment on all aspects of this study, including its
implications for our attribution rules. Does the study suggest that
existing attribution criteria appropriately balance the goals of
identifying those interests that should be counted in applying the
multiple ownership rules, while not unduly disrupting capital flow?
Would stockholding or investment patterns change in response to a
change in the attribution rules? If so, how would they change, and why
would they change? Would there be a significant impact on capital flow,
given the relaxation of the multiple ownership rules resulting from
passage of the 1996 Act? Is there a need to encourage additional
capital investment?
D. Transition Issues
38. In the NPRM, para. 15, we stated our concern that any action
taken in this proceeding not disrupt existing financial arrangements,
and, accordingly, invited comment as to whether we should grandfather
existing situations or allow a transition period for licensees to come
into compliance with the multiple ownership rules if we adopt more
restrictive attribution rules. All commenters that have addressed this
issue in response to the NPRM urge the Commission to grandfather
existing interests indefinitely if it adopts more restrictive
attribution rules because of the disruptive effect and the unfairness
to the parties of mandatory divestiture. According to CBS, Comments at
13-14, the alternative of a transition period would not provide real
relief from restrictive attribution rule changes, such as restricting
the availability of the single majority shareholder exemption.
39. We now seek additional comment on the option of a transition
period, particularly since the national television multiple ownership
rules have recently been relaxed, as have the local radio multiple
ownership rules, and the national radio ownership limits have been
eliminated. Accordingly, we invite commenters again to address the
transition/grandfathering issue in light of these different
circumstances, including the appropriate length for any transition
period that may be adopted. We reiterate that the issue of
grandfathering of television LMAs, should we decide to attribute them,
will be resolved in the television local ownership proceeding; in this
FNPRM, we refer only to transition and grandfathering issues related to
the other (non-LMA) attribution issues raised in this attribution
proceeding.
40. If we grandfather existing interests, what grandfathering
principle should we apply? Such grandfathering would mean that the
relationship would be held attributable, but the holder would not be
required to divest holdings in the event that the attribution resulted
in the holder exceeding our ownership limits. If the joint holdings
were later sold, that ownership grandfathering would not transfer to
the assignee or transferee. We also invite comment as to the extent of
grandfathering that would be required if we restrict attribution rules.
41. Finally, regardless of what policy we ultimately adopt with
respect to either a transition or grandfathering of existing interests,
we tentatively conclude that any interests acquired on or after
December 15, 1994, the date of adoption of the NPRM in this proceeding,
should be subject to the final rules adopted in the Report and Order in
this proceeding. We seek comment on this approach, and whether a
subsequent grandfathering date would be more appropriate. In the event
that we adopt a transition period, what is the appropriate length for
such a transition period? We tentatively propose that any such
transition period adopted to permit divestiture of such interests
should be relatively short and no longer than six months.67
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\67\ See, e.g,, Implementation of Sections 202(c)(1) and 202(e)
of the Telecommunications Act of 1996 (National Broadcast Television
Ownership and Dual Network Operations), FCC 96-91, 61 FR 10691
(March 15, 1996).
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E. Cable/MDS Cross-Ownership Attribution
42. We also take this opportunity to consider changes to the cable/
Multipoint Distribution Service (``MDS'') cross-ownership attribution
rule.68 Section 613(a) of the Act states that ``[i]t shall be
unlawful for a cable operator to hold a license for multichannel
multipoint distribution service * * * in any portion of the franchise
area served by that cable operator's cable system.'' 47 U.S.C.
Sec. 533(a) (emphasis added). The Commission may waive the requirements
of this provision ``to the extent the Commission determines is
necessary to ensure that all significant portions of a franchise area
are able to obtain video programming.'' 47 U.S.C.
Sec. 533(a)(2).69 Section 613(a) was added by Section 11(a) of the
1992 Cable Act. In implementing Section 613(a), the Commission modified
its existing cable/MDS cross-ownership rule in Section 21.912 of the
rules.70 Section 21.912(a) prevents a cable operator from
obtaining an MDS authorization if any portion of the MDS protected
service area overlaps with the cable system's franchise area actually
being served by cable. Section 21.912(b) also prohibits a cable
operator from leasing MDS capacity if its franchise area being served
overlaps with the MDS protected service area. For purposes of this
rule, ``an attributable ownership interest shall be defined by
reference to the definitions
[[Page 67288]]
contained in the Notes to Sec. 76.501, provided however, that:
\68\ For purposes of this item, MDS also includes single channel
Multipoint Distribution Service (``MDS'') and Multichannel
Multipoint Distribution Service (``MMDS'').
\69\ Compare 47 U.S.C. 537(d) (before the 1996 Act, providing
broad authority for ``public interest'' waivers of the cable anti-
trafficking restriction). The cable/MMDS cross-ownership prohibition
does not apply if the cable operator is subject to ``effective
competition'' in its franchise area. Id. section 533(a)(3) (added by
1996 Act).
\70\ Implementation of Section 11 and 13 of the Cable Television
Consumer Protection and Competition Act of 1992, 8 FCC Rcd 6828,
6843, 58 FR 42013 (August 6, 1993) (``Implementation Order''),
reconsidered on other grounds, 10 FCC Rcd 4654, 60 FR 37830 (July
24, 1995).
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(i) The single majority shareholder provisions of Note 2(b) to
Sec. 76.501 and the * * * limited partner insulation provisions of
Note 2(g) to Sec. 76.501 shall not apply; and
(ii) The provisions of Note 2(a) to Sec. 76.501 regarding five
(5) percent interests shall include all voting or nonvoting stock or
limited partnership equity interests of five (5) percent or more.''
71
\71\ 47 CFR 21.912 (note 1(A)).
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43. This strict attribution standard severely restricts investment
opportunities that are compatible with our goal of strengthening
wireless cable and providing meaningful competition to cable operators.
Additionally, we see no reason to have different attribution criteria
for broadcasting and MDS. We have previously observed that ``the
Commission could employ the broadcast attribution criteria contained in
Section 73.3555 (Notes) of its Rules, or such other attribution rules
as the Commission deemed appropriate for this purpose.'' 72 Thus,
the instant proceeding provides us with an opportunity to revisit our
current attribution standard consistent with our responsibility to
achieve the objective of diversity while ``balancing genuine and
significant efficiencies.'' 73 Therefore, we invite comment on
whether we should apply broadcast attribution criteria, as modified by
this proceeding, in determining cognizable interests in MDS licensees
and cable systems for purposes of applying the ownership restrictions
of Section 21.912 of our Rules. In addition, we seek comment as to
whether we should add an ``equity or debt plus'' attribution rule where
the competing entity's holding exceeds 33 percent or some other
benchmark. We believe that these proposed modifications of our
attribution rule will increase the potential for investment consistent
with our responsibility ``[t]o further diversity and prevent cable from
warehousing its potential competition.'' 74
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\72\ Implementation Order at 6843.
\73\ S. Rep. No. 92, 102d Cong., 1st Sess. 46-47 (1991)
\74\ Id.
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IV. Conclusion
44. By this FNPRM, we request comments to update the record in this
proceeding, which is intended to determine whether the attribution
rules continue to be effective in identifying those interests that
should be counted for purposes of applying the multiple ownership
rules. It is important to ensure that these rules operate accurately so
that we apply the multiple ownership limits, which have recently been
relaxed as a result of passage of the 1996 Act, in an appropriate
manner, and that the attribution rules are not used as a means to evade
or circumvent these limits. We believe that the concerns and issues
raised in the comments and in this FNPRM are of utmost importance, and
we look forward to well-reasoned and empirically-based comments with
respect to these issues.
V. Administrative Matters
45. Filing of Comments. Pursuant to applicable procedures set forth
in Sections 1.415 and 1.419 of the Commission's Rules, 47 CFR 1.415 and
1.419, interested parties may file comments on or before February 7,
1997 and reply comments on or before March 7, 1997. To file formally in
this proceeding, you must file an original plus four copies of all
comments, reply comments, and supporting comments. Parties are also
asked to submit, if possible, draft rules that reflect their positions.
If you want each Commissioner to receive a copy of your comments, you
must file an original plus nine copies. You should send comments and
reply comments to Office of the Secretary, Federal Communications
Commission, Washington, D.C. 20554. Parties should also file one copy
of any documents filed in this docket with the Commission's copy
contractor, International Transcription Services, Inc., 2100 M Street,
N.W., Suite 140, Washington D.C. 20037. Comments and reply comments
will be available for public inspection during regular business hours
in the FCC Reference Center (Room 219), 1919 M Street, N.W.,
Washington, D.C. 20554.
46. Initial Paperwork Reduction Act of 1995 Analysis. This FNPRM
contains either a proposed or modified information collection (i.e.,
revision of Annual Ownership Report, FCC Form 323). As part of its
continuing effort to reduce paperwork burdens, we invite the general
public and the Office of Management and Budget (OMB) to take this
opportunity to comment on the information collections contained in this
FNPRM, as required by the Paperwork Reduction Act of 1995, Public Law
Notice 104-13. Public and agency comments are due at the same time as
other comments on this FNPRM; OMB comments are due 60 days from the
date of publication of this FNPRM in the Federal Register. Comments
should address: (a) Whether the proposed collection of information is
necessary for the proper performance of the functions of the
Commission, including whether the information shall have practical
utility; (b) the accuracy of the Commission's burden estimates; (c)
ways to enhance the quality, utility, and clarity of the information
collected; and (d) ways to minimize the burden of the collection of
information on the respondents, including the use of automated
collection techniques or other forms of information technology.
47. Written comments by the public on the proposed and/or modified
information collections are due February 7, 1997. Written comments must
be submitted by the Office of Management and Budget (OMB) on the
proposed and/or modified information collections on or before 60 days
after the date of publication in the Federal Register. In addition to
filing comments with the Secretary, a copy of any comments on the
information collections contained herein should be submitted to Dorothy
Conway, Federal Communications Commission, Room 234, 1919 M Street,
N.W., Washington DC 20554, or via the Internet to [email protected] and
to Timothy Fain, OMB Desk Officer, 10236 NEOB, 725--17th Street, N.W.,
Washington, DC 20503 or via the Internet to
[email protected].
48. Ex Parte Rules. This is a non-restricted notice and comment
rulemaking proceeding. Ex parte presentations are permitted, except
during the Sunshine Agenda period, provided they are disclosed as
provided in the Commission's Rules. See generally 47 CFR Sections
1.1202, 1.1203, and 1.206(a).
49. This FNPRM is issued pursuant to authority contained in
Sections 4(i) and 303 of the Communications Act of 1934, as amended, 47
U.S.C. 154(i), 303.
50. Additional Information. For additional information on this
proceeding, contact Mania K. Baghdadi (202) 418-2130 or Berry Wilson
(202) 418-2024, Policy and Rules Division, Mass Media Bureau.
51. Initial Regulatory Flexibility Analysis. With respect to this
FNPRM, an Initial Regulatory Flexibility Analysis (``IRFA'') as set
forth below. As required by Section 603 of the Regulatory Flexibility
Act, the Commission has prepared an IRFA of the expected impact on
small entities of the proposals contained in this FNPRM. Written public
comments are requested on the IRFA. In order to fulfill the mandate of
the Contract with America Advancement Act of 1996 regarding the Final
Regulatory Flexibility Analysis, we ask a number of questions in our
IRFA regarding the prevalence of small businesses in the radio and
television broadcasting industries. Comments on the IRFA must be filed
in accordance with the same filing deadlines as
[[Page 67289]]
comments on the FNPRM, but they must have a distinct heading
designating them as responses to the IRFA.
The Secretary shall send a copy of this FNPRM, including the IRFA,
to the Chief Counsel for Advocacy of the Small Business Administration
in accordance with Section 603(a) of the Regulatory Flexibility Act,
Public Law Notice 96-354, 94 Stat. 1164, 5 U.S.C. 601 et seq. (1981),
as amended.
List of Subject
47 CFR Part 21
Televison broadcasting.
47 CFR Part 73
Television broadcasting, and radio broadcasting.
List of Subject in 47 CFR Part 76
Cable televison.
Federal Communications Commission.
Shirley S. Suggs,
Chief, Publications Branch.
Table A.--Distribution of Non-Passive Ownership Claims
------------------------------------------------------------------------
Ownership range (percent) Number Percent
------------------------------------------------------------------------
1-<5................................................ 274
5-<10............................................... 438 37.5
10-<15.............................................. 183 15.7
15-<20.............................................. 129 11.1
20-50.................................... 417 35.7
50-100.............................................. * 0 0.0
-------------------
Total attributable............................ 1167 100
------------------------------------------------------------------------
Not currently attributable. Also, D&Os holding less than 1 percent
equity are not reported.
*Single-majority shareholders are analyzed below.
The table indicates that among attributable shareholders falling
under the current 5% rule, 37.5 percent have ownership interests
between 5 percent and 10 percent, 15.7 percent with interests between
10 percent and 15 percent, 11.1 percent with interests between 10
percent and fifteen percent and 35.7 percent with interests between 20
percent and 50 percent. Interestingly, the largest concentrations of
ownership are in the 5 percent to 10 percent and 20 percent to 50
percent categories. Under the proposed change in the attribution
benchmark from 5 percent to 10 percent, approximately 37.5 percent of
currently attributable owners would become non-attributable.
Of additional interest is the impact of proposed rule changes on
the number of attributable owners per broadcast station. The following
table gives the distribution of the number of attributable owners per
broadcast TV station under the current 5 percent benchmark and under
the proposed 10 percent benchmark.
Table B.--Distribution of Number of Attributable Owners Per Station
Under 5 Percent and 10 Percent Benchmarks for Non-passive Investors
------------------------------------------------------------------------
Proposed
Current 5 10
Per station number of attributable owners percent percent
benchmark benchmark
------------------------------------------------------------------------
0 *............................................... 81 134
1................................................. 41 27
2................................................. 67 92
3................................................. 56 66
4................................................. 38 43
5................................................. 43 19
6................................................. 24 3
7................................................. 16 5
8................................................. 18 0
9................................................. 0 0
10................................................ 1 0
11................................................ 1 0
12................................................ 3 0
---------------------
Total stations.............................. 389 389
------------------------------------------------------------------------
* D&Os holding less than 1 percent equity are excluded.
The table indicates that the number of stations with no
attributable owners (except directors and officers) would increase from
81 to 134, or by 65.4 percent.
VI. Voting Stock: Passive Investors
A less-restrictive 10 percent attribution benchmark is currently
set for certain institutional investors thought to be restricted by law
or fiduciary responsibility from active involvement in station
operations. These so-called ``passive'' investors include bank trust
departments, mutual funds and insurance companies. Because of their
passive status, the Commission prohibits these investors from serving
as directors or officers of the broadcast station, or from attempting
to otherwise influence station operations.
The distribution of ownership claims for passive investors,
excluding partnerships and single-majority stockholder stations, is
given next.
Table C.--Distribution of Passive Ownership Claims
------------------------------------------------------------------------
Ownership range Number Percent
------------------------------------------------------------------------
1%-<5%.............................................. 0
5%-<10%............................................. 28
10%-<15%............................................ 1 6.7
15%-<20%............................................ 4 26.7
20%-50%.................................. 10 66.7
50%-100%............................................ 0* 0.0
-------------------
Total attributable.............................. 15 100
------------------------------------------------------------------------
Not currently attributable.
* Single-majority shareholders are analyzed below.
As given in the table, the reported number of passive investors is
relatively small, with only 43 such institutional investors reported in
total for these stations. Of these 43, only 15 hold attributable equity
interests. With the proposed relaxation of the attribution benchmark to
20 percent, 5 of the currently attributable interests would become non-
attributable. As well, the largest number of passive investors fall in
the 5 percent to 10 percent range.
Despite the small number of passive institutional investors, some
of these do in fact have large equity stakes in broadcast stations. For
example, one passive investor owns 50% of the parent company of a
licensee.
The following table gives the distribution of the number of
attributable owners under the current 10 percent and under the proposed
20 percent benchmark for passive investors.
Table D.--Distribution of Number of Attributable Owners Per Station
Under 10 Percent and 20 Percent Benchmarks for Passive Investors
------------------------------------------------------------------------
Current Proposed
10 20
Per station number of attributable owners percent percent
benchmark benchmark
------------------------------------------------------------------------
0................................................. 376 381
1................................................. 11 6
2................................................. 2 2
------------------------------------------------------------------------
VII. Voting Stock: Other Institutional Investors
Institutional investors not considered to be passive investors
include commercial banks (excluding trust departments), investment
banks, brokerage firms and pension funds. These investors are not
judged to be restricted by law or fiduciary responsibility from
involvement in broadcast operations, and are subject to the 5 percent
attribution benchmark of other non-passive voting shareholders. No
change is currently proposed for these passive investors in the NPRM.
The distribution of ownership interests
[[Page 67290]]
for non-passive institutional investors is given next.
Table E.--Distribution of Ownership Interests of Non-Passive
Institutional Investors
------------------------------------------------------------------------
Ownership range Number Percent
------------------------------------------------------------------------
1%-<5%.............................................. 9 ........
5%-<10%............................................. 16 33.3
10%-<15%............................................ 8 16.7
15%-<20%............................................ 7 14.6
20%-50%.................................. 13 27.1
50%-100%............................................ 4 8.3
-------------------
Total TV stations............................... 57 100.0
------------------------------------------------------------------------
As with passive investors, the number of reported non-passive
institutional investors in broadcast stations is relatively small. With
the proposed relaxation to 10 percent benchmark, 16 or 33.3 percent of
these would become non-attributable.
Despite their small number, some non-passive institutional owners
have large interests in broadcast stations. For example, one bank owns
100 percent of the parent company of three TV broadcast licenses. As
well, a venture capital subsidiary owns 72.05% of the parent company of
two TV licensees.
VIII. Single-Majority Shareholder
Single-majority shareholder investments are those where a single
stockholder controls more than 50 percent of the voting interest in the
licensee. All other shareholders in this case are non-attributable,
regardless of their percent ownership, since the single-majority
shareholder is thought to hold operational control.
As given in Table II, a total of 308, or 30.5% of for-profit TV
stations, are single majority shareholder owned. The following table
lists the distribution of voting shares for these licensees falling
under the single-majority shareholder rule. Sole proprietorships and
sole owners are listed as 100 percent.
Table F.--Distribution of Ownership Interests in Single-Majority Shareholder Licensees
----------------------------------------------------------------------------------------------------------------
Non-passive investors Passive investors
Ownership range ---------------------------------------------------
Number Percent Number Percent
----------------------------------------------------------------------------------------------------------------
1%-<5%...................................................... 74 9.9 0 0.0
5%-<10%..................................................... 121 16.2 0 0.0
10%-<15%.................................................... 101 13.5 2 16.7
15%-<20%.................................................... 52 7.0 1 8.3
20%-50%.......................................... 93 12.5 7 58.3
50%-<100%................................................... 305 40.9 2 16.7
100%........................................................ 162 40.9 0 0.0
---------------------------------------------------
Total................................................. 746 12
----------------------------------------------------------------------------------------------------------------
The distribution of non-attributable interests (excluding D&Os with
less than 1 percent stake) in single-majority shareholder licensees is
reasonably uniform. In particular, the results do not indicate a large
block of ``49%'' shareholders, who might have chosen to use the single-
majority shareholder rule to circumvent attribution, while holding a
large stake in the licensee.
Some instances of single-majority shareholders involve
institutional owners with large stakes. For example, three licensees
are 90.0% owned by trust agreement. As cited above, 5 licensees are
closely held by non-passive institutional investors.
IX. Non-Voting Stock
The attribution rules for equity interests in a broadcast station
apply only to those stockholders holding voting control. Common or
preferred stockholders without voting rights are exempted from
attribution under the premise that their lack of voting control
precludes their ability to affect management or operation of a
broadcast station. Non-voting stock is a common mechanism for companies
to raise equity capital without sacrificing voting control.
Differential voting rights includes companies with dual or multiple
classes of stock where one class of stock carries greater voting rights
than other classes of stock. For purposes of attribution, the
attributable equity interests is determined by the percent of total
voting rights held by any individual. In total, the study found 79
instances of non-voting interests in TV broadcast stations.
X. Partnership Interests
Under the attribution rules governing partnership interests,
general partners are always attributable, regardless of the extent of
their ownership stake. Limited partners are likewise attributable as
owners, regardless of their ownership percentage, unless the licensee
files a certification statement that the limited partner is
``insulated'', i.e., non-active in the management or operation of the
licensee. This special treatment of general and limited partners
derives in part from the special role that general partners play as
both owners and managers. In contrast, limited partners are restricted
from involvement in operational control, and can be forced to give up
limited liability rights if they participate in operation or management
decisions. Therefore, in contrast to corporations, the separation of
ownership and control is weaker for general partners, who perform both
functions and stronger for limited partners, who may lose limited
liability rights if separation is not maintained.
As presented in Table II, 42 in number, or 4.2% of for-profit TV
stations are organized as general partnerships, and 89 in number or
8.8% are limited partners. In addition, another 42 of for-profit TV
stations have a limited partnership involved as an equity holder.
The following table presents the distribution of interests in
stations organized as general or limited partnerships. Excluded are all
non-partnership for-profit stations, including those broadcast stations
where one of the equity owners may be a limited partnership.
[[Page 67291]]
Table G.--Distribution of Ownership Interests in General and Limited Partnerships
----------------------------------------------------------------------------------------------------------------
General Limited
Ownership range partners Percent partners Percent
----------------------------------------------------------------------------------------------------------------
1%-<5%...................................................... 51 21.3 29 19.7
5%-<10%..................................................... 13 5.4 46 31.3
10%-<15%.................................................... 9 3.8 44 30.0
15%-<20%.................................................... 11 4.6 0 0.0
20%-50%.......................................... 72 30.0 28 19.0
50%-100%.................................................... 84 35.0 0 0.0
---------------------------------------------------
Total................................................. 240 147
----------------------------------------------------------------------------------------------------------------
The results indicate that the majority of general partners have
either small (less than 5 percent) or very large (greater than 20
percent) ownership stakes in the licensee.
The ownership files investigated also indicate that virtually all
limited partners claim insulation of their partnership claim.
XI. Limited Liability Companies and Other New Business Forms
A limited liability company (LLC) is a new hybrid form of ownership
that combines advantages of both a limited partnership and
corporations. Like limited partnerships, profits in an LLC are passed
directly through to investors and therefore taxed only as personal
income, which avoids the double taxation of corporations. However,
unlike limited partnerships, LLC members may exercise management
control without threat of loss of limited liability.
The available ownership records show a total of 10 stations
organized as LLCs and 1 station partially owned by an LLC.
A. Total Profit and Non-Profit Stations
Table I.--Distribution of For-Profit TV Stations Across Type 1994/95
Ownership-Report Data
------------------------------------------------------------------------
Numbers Percent
------------------------------------------------------------------------
For-profit TV stations:
Group-owned stations................................ 781 74.8
Single-owned stations............................... 262 25.2
-------------------
Total for-profit stations....................... *1043 100.0
Number of TV group-owners........................... 180
Not-for-profit TV stations:
Total stations.................................. *499
----------
Total number of stations........................ 1542
------------------------------------------------------------------------
* This break-out between for-profit and not-for-profit stations reflects
the designation self-reported by licensees on their annual ownership
report filed with the Commission. The number of not-for-profit
stations exceeds the number of non-commercial stations (363 as of 11/
20/95, Broadcasting & Cable) by some 130 stations, representing
commercial-band stations that are not-for-profit.
B. Aggregate For-Profit Station Results
Table II.--For-Profit TV Stations by Station Type 1994/95 Ownership-
Report Data
------------------------------------------------------------------------
Number
Type of ownership of Percent
stations
------------------------------------------------------------------------
Single-owner stations............................... 158 15.7
Single-majority-shareholder stations................ 308 30.5
Family-owned stations............................... 72 7.1
Closely-held stations............................... 114 11.3
Widely-held stations................................ 203 20.1
General partnerships (GP)........................... 42 4.2
Limited partnerships (LP)........................... 89 8.8
Limited liability corporations (LLC)................ 10 1.0
International Stations.............................. 5 0.5
In Receivership..................................... 8 0.8
-------------------
1009 100
------------------------------------------------------------------------
Table III.--Group-Owned and Singly-Owned TV Station Results 1994/95
Ownership-Report Data
------------------------------------------------------------------------
Group- Singly-
owned owned
Type of ownership stations stations
percent percent
------------------------------------------------------------------------
Single-owner stations............................... 15.3 22.9
Single-majority-shareholder stations................ 32.2 30.5
Family-owned stations............................... 7.9 4.4
Closely-held stations............................... 10.2 18.9
Widely-held stations................................ 20.4 6.8
General partnerships (GP)........................... 4.0 3.2
Limited partnerships (LP)........................... 8.5 9.6
Limited liability corporations (LLC)................ 1.1 0.4
International Stations.............................. 0.0 2.0
In Receivership..................................... 0.6 1.6
------------------------------------------------------------------------
[FR Doc. 96-32323 Filed 12-19-96; 8:45 am]
BILLING CODE 6712-01-U