Broadcast Incubator Program

(a)

Findings

Congress finds the following: (1)Our Nation continues to respond to the ongoing COVID–19 pandemic, and all Americans must have access to accurate, reliable information. (2)Americans are fighting racial injustice, and promoting local and diverse media will play an important role in limiting misinformation. (3)Congress should commit to promoting media diversity and pledging to work with media entities and diverse stakeholders to develop common-ground solutions to eliminate barriers to media diversity. (4)The principle that an informed and engaged electorate is critical to a vibrant democracy is deeply rooted in our laws of free speech and underpins the virtues on which we established our Constitution: in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity. (5)Having independent, diverse, and local media that provide exposure to a broad range of viewpoints and the ability to contribute to the political debate is central to sustaining informed engagement. (6)It is in the public interest to encourage source, content, and audience diversity on our Nation’s shared media platforms. (7)The survival of small, independent, and diverse media outlets that serve diverse audiences and local media markets is essential to preserving local culture and building understanding on important community issues that impact the daily lives of residents. (8)Research by the American Society of News Editors, the Radio Television Digital News Association, the Pew Research Center, and others has documented the continued challenges of increasing diversity among all types of media entities. (9)With increasing media experience and sophistication, it is even more important to have minority participation in local media to ensure a diverse range of information sources are available and different ideas and viewpoints are expressed to strengthen social cohesion among different communities. (10)The constriction in small, independent, and diverse media outlets and limited participation of diverse populations in media ownership and decisionmaking are combining to negatively impact our goal of increasing local civic engagement and civic knowledge through increased voter participation, membership in civic groups, and knowledge of local political and civil information. (11)The Advisory Committee on Diversity and Digital Empowerment of the Commission, and predecessor Federal advisory committees, have recommended for decades that the Commission adopt an incubator program providing structural rule changes to facilitate new and diverse entrants into the marketplace. (12)The Broadcast Incubator Program established under this section is consistent with the national policy described in section 257(b) of the Communications Act of 1934 (47 U.S.C. 257(b)): to promote the policies and purposes of this Act favoring diversity of media voices, vigorous economic competition, technological advancement, and promotion of the public interest, convenience, and necessity. (b)

Establishment

Not later than 270 days after the date of the enactment of this Act, the Commission shall promulgate regulations establishing a program, to be known as the Broadcast Incubator Program, to support the entry of new and diverse voices in the broadcasting industry by providing for an established broadcaster and an emerging broadcaster to enter into a qualifying incubation relationship with respect to one or more incubated stations of the emerging broadcaster. (c)

Qualifying incubation relationship

(1)

Requirements

The Commission shall establish in the regulations promulgated under subsection (b) requirements for a qualifying incubation relationship under the Program that include the following: (A)Eligibility criteria that an established broadcaster and an emerging broadcaster shall meet in order to enter into such relationship, including— (i)a limit, expressed in terms of a number of broadcast stations, on how many broadcast stations of which an emerging broadcaster may have effective control on the day before the date on which the established broadcaster and the emerging broadcaster submit the application for the Program under subsection (d); (ii)a cap, expressed in terms of a dollar amount, on the gross revenue that the emerging broadcaster may earn during the calendar year ending most recently before the date on which the established broadcaster and the emerging broadcaster submit the application for the Program under subsection (d); and (iii)a requirement for the established broadcaster to have effective control of— (I)if any incubated station under such relationship will be a radio broadcast station, any class of AM or FM radio broadcast station (except for a low power radio station or a radio translator station); and (II)if any incubated station under such relationship will be a television broadcast station, any class or assignment of television broadcast station (except for a low power television station or a television translator station). (B)Criteria for the incubation activities that the established broadcaster shall perform as part of such relationship. Such activities shall include the provision by the established broadcaster to the emerging broadcaster of training, financing, or access to resources. (C)A requirement that the established broadcaster and the emerging broadcaster establish mutually agreed-upon goals for such relationship. (D)A requirement that the established broadcaster and the emerging broadcaster establish a mutually agreed-upon limitation on the amount of equity (if any) that the established broadcaster may hold in the emerging broadcaster. (E)A minimum duration of 2 years for such relationship. (F)An option, which may be exercised upon the agreement of the established broadcaster and the emerging broadcaster, for such relationship to continue on an ongoing basis. (G)A requirement that, upon successful completion of such relationship in accordance with the application approved by the Commission under subsection (d) and in compliance with the other requirements for the Program established by the Commission, the emerging broadcaster shall have effective control of each incubated station under such relationship. (2)

Determination of successful relationship

The Commission shall provide in the regulations promulgated under subsection (b) for the determination of whether a qualifying incubation relationship is being carried out successfully or has been completed successfully to be made by the Commission on a case-by-case basis based on information provided in the application process and related forms and materials. (d)

Application process

(1)

Joint application

The Commission shall require an established broadcaster and an emerging broadcaster who propose to enter into a qualifying incubation relationship under the Program to submit to the Commission a joint application for participation in the Program. (2)

Process, forms, and materials

The Commission shall develop an application process and related forms and materials necessary to carry out the Program. (3)

Application review process

(A)

Deadline

(i)

In general

Except as provided in clause (ii) and subparagraph (B), the Commission shall approve or deny an application for participation in the Program not later than 90 days after the date of the submission of the application. (ii)

Additional time needed by Commission

If the Commission determines that, because an excessive number of applications have been filed at one time, the Commission needs additional time for employees of the Commission to process the applications, the Commission may extend the deadline described in clause (i) for not more than 45 days. (B)

Opportunity for applicant to cure deficiency

If the Commission determines that an application is materially deficient, the Commission shall provide the applicants a 15-day period to cure the defect before denying the application. If such period would extend beyond the deadline under subparagraph (A) for approving or denying the application, such deadline shall be extended through the end of such period. (C)

Effect of denial

Denial of an application for participation in the Program shall not preclude the applicants from resubmitting the application or any applicant from submitting a new application for participation in the Program at a later date. (4)

Certifications

The Commission shall require each applicant submitting an application for participation in the Program to certify to the Commission in the application that, as of the date of the submission of the application— (A)the applicant intends to participate, in good faith, in the Program; (B)in the case of an emerging broadcaster, the applicant would be unable, without the qualifying incubation relationship proposed in the application— (i)in the case of any incubated station of which the applicant has effective control as of such date, to continue to successfully operate such station; and (ii)in the case of any incubated station of which the applicant proposes to acquire effective control after such date, to acquire such effective control; (C)the applicants have established the mutually agreed-upon goals required by subsection (c)(1)(C); and (D)the applicants have established the mutually agreed-upon limitation required by subsection (c)(1)(D). (5)

Limitation on reapplication by established broadcaster after failed relationship

If, in 3 or more instances, the Commission has terminated the participation of an established broadcaster in the Program under subsection (f) and determined that such established broadcaster was primarily at fault in causing the circumstances on which the termination was based, such established broadcaster may not submit another application for participation in the Program. (e)

Waiver of local ownership rules

(1)

In general

If the Commission makes the determination described in paragraph (2) with respect to an established broadcaster and an emerging broadcaster, the Commission shall, not earlier than 1 year after making such determination, grant to the established broadcaster a waiver of paragraph (a) or (b) of section 73.3555 of title 47, Code of Federal Regulations (or any successor regulation) to the extent necessary to permit the established broadcaster— (A)to hold a cognizable interest in any incubated station under the qualifying incubation relationship; and (B)to hold a cognizable interest in— (i)if the established broadcaster had effective control of an AM or FM radio broadcast station (except for a low power radio station or a radio translator station) on the day before the date on which the established broadcaster and the emerging broadcaster submitted the application for the Program under subsection (d), 1 radio broadcast station in excess of the number of radio broadcast stations in which the established broadcaster is permitted to hold a cognizable interest under section 73.3555(a) of such title in a radio market that is— (I)specified in paragraph (3)(A); and (II)selected by the established broadcaster; (ii)if the established broadcaster had effective control of a television broadcast station (except for a low power television station or a television translator station) on the day before the date on which the established broadcaster and the emerging broadcaster submitted the application for the Program under subsection (d), 1 television broadcast station in excess of the number of television broadcast stations in which the established broadcaster is permitted to hold a cognizable interest under section 73.3555(b) of such title in a DMA that is— (I)specified in paragraph (3)(A); and (II)selected by the established broadcaster; or (iii)if the established broadcaster had effective control of an AM or FM radio broadcast station (except for a low power radio station or a radio translator station) and a television broadcast station (except for a low power television station or a television translator station) on the day before the date on which the established broadcaster and the emerging broadcaster submitted the application for the Program under subsection (d), either (at the option of the established broadcaster)— (I)1 radio broadcast station in excess of the number of radio broadcast stations in which the established broadcaster is permitted to hold a cognizable interest under section 73.3555(a) of such title in a radio market determined in the same manner as under clause (i); or (II)1 television broadcast station in excess of the number of television broadcast stations in which the established broadcaster is permitted to hold a cognizable interest under section 73.3555(b) of such title in a DMA determined in the same manner as under clause (ii). (2)

Determination of Commission described

The determination described in this paragraph is a determination that an established broadcaster and an emerging broadcaster have entered into and are successfully carrying out a qualifying incubation relationship under the Program in accordance with an application approved by the Commission under subsection (d) and are in compliance (with respect to such relationship) with the other requirements for the Program established by the Commission. (3)

Specification of radio markets and DMAs

(A)

In general

The radio markets or DMAs (as the case may be) specified in this subparagraph are— (i)if the highest-ranked radio market or DMA in which an incubated station under the qualifying incubation relationship is located is ranked not lower than 25, all radio markets or DMAs; (ii)if the highest-ranked radio market or DMA in which an incubated station under the qualifying incubation relationship is located is ranked lower than 25 but not lower than 75, the radio markets or DMAs ranked lower than 25; (iii)if the highest-ranked radio market or DMA in which an incubated station under the qualifying incubation relationship is located is ranked lower than 75 but not lower than 100, the radio markets or DMAs ranked lower than 75; (iv)if the highest-ranked radio market or DMA in which an incubated station under the qualifying incubation relationship is located is ranked lower than 100 but not lower than 150, the radio markets or DMAs ranked lower than 100; and (v)if the highest-ranked radio market or DMA in which an incubated station under the qualifying incubation relationship is located is ranked lower than 150, the radio markets or DMAs ranked lower than 150. (B)

Market rankings

For purposes of subparagraph (A)— (i)a DMA ranking refers to the rankings of DMAs based on the number of television households, as determined by Nielsen Media Research and published most recently before the granting of the waiver in the Nielsen Station Index Directory and Nielsen Station Index United States Television Household Estimates (or any successor publication); and (ii)a radio market ranking refers to the rankings of radio markets based on population, as determined by Nielsen Media Research and published most recently before the granting of the waiver in Radio Market Survey Population, Rankings & Information (or any successor publication). (4)

Termination of waiver

The Commission shall specify in the regulations promulgated under subsection (b) when a waiver granted under paragraph (1) shall terminate. (f)

Termination of participation in Program

(1)

In general

Except as provided in paragraph (2), if the Commission determines that an established broadcaster and an emerging broadcaster are not successfully carrying out a qualifying incubation relationship in accordance with the application approved by the Commission under subsection (d) or are not in compliance (with respect to such relationship) with the other requirements of the Program established by the Commission, the Commission shall terminate the qualifying incubation relationship under the Program and the participation of the established broadcaster and the emerging broadcaster in the Program with respect to such relationship. (2)

Exception for transfer of incubated station

(A)

In general

The transfer by an emerging broadcaster of effective control of an incubated station to another person shall not terminate the qualifying incubation relationship under the Program, and such other person shall be substituted as a party to such relationship, if— (i)such other person meets the requirements for an emerging broadcaster under the Program; (ii)such other person and the established broadcaster continue, with respect to such station, to successfully carry out the qualifying incubation relationship in accordance with the application approved by the Commission under subsection (d) and to comply with the other requirements of the Program established by the Commission; and (iii)in a case in which the original emerging broadcaster retains effective control of any incubated station under the qualifying incubation relationship, such emerging broadcaster and the established broadcaster continue, with respect to any such station, to successfully carry out the qualifying incubation relationship in accordance with the application approved by the Commission under subsection (d) and to comply with the other requirements of the Program established by the Commission. (B)

Treatment as single qualifying incubation relationship

If, after a transfer described in subparagraph (A), the original emerging broadcaster retains effective control of any incubated station under the qualifying incubation relationship, any such station and any station of which effective control has been so transferred shall be treated as being part of a single qualifying incubation relationship. (3)

Revocation of waiver prohibited

(A)

In general

Except as provided in subparagraph (B), the Commission may not, as a penalty for or consequence of the termination under paragraph (1) of a qualifying incubation relationship between an established broadcaster and an emerging broadcaster, revoke any waiver granted to the established broadcaster under subsection (e)(1) as a result of such relationship. (B)

Exception for willful and knowing violations

If the Commission determines that the circumstances on which the termination under paragraph (1) of a qualifying incubation relationship between an established broadcaster and an emerging broadcaster is based involve a willful and knowing violation by the established broadcaster of this section or a regulation promulgated under this section, the Commission may revoke any waiver granted to the established broadcaster under subsection (e)(1) as a result of such relationship. (g)

Exclusion from quadrennial review

The Program, the regulations promulgated by the Commission under this section, and any waiver granted under subsection (e)(1) shall not be subject to review under section 202(h) of the Telecommunications Act of 1996 or section 11 of the Communications Act of 1934 (47 U.S.C. 161). (h)

Implementation and enforcement

The Commission shall implement and enforce this section as if this section is a part of the Communications Act of 1934 (47 U.S.C. 151 et seq.). A violation of this section, or a regulation promulgated under this section, shall be considered to be a violation of the Communications Act of 1934, or a regulation promulgated under such Act, respectively. (i)

Consideration in Communications Marketplace Report

Section 13(d) of the Communications Act of 1934 (47 U.S.C. 163(d)) is amended by adding at the end the following:

(4)

Considering effectiveness of Broadcast Incubator Program

In assessing the state of competition under subsection (b)(1) and regulatory barriers under subsection (b)(3), the Commission, with the input of the Office of Communications Business Opportunities of the Commission, shall consider the efficacy of the Broadcast Incubator Program established under section 2 of the Broadcast Diversity in Leadership Act in promoting competition.

(j)

Rule of construction

Nothing in this section shall be construed to limit the development by the Commission of additional programs or policies to promote the entry of new and diverse voices in the broadcasting industry. (k)

Definitions

In this section: (1)

Broadcast station

The term broadcast station has the meaning given such term in section 3 of the Communications Act of 1934 (47 U.S.C. 153). (2)

Cognizable interest

The term cognizable interest has the meaning given such term in note 1 to section 73.3555 of title 47, Code of Federal Regulations (as in effect on the date of the enactment of this Act). (3)

Commission

The term Commission means the Federal Communications Commission. (4)

DMA

The term DMA means a Designated Market Area, as determined by Nielsen Media Research and published in the Nielsen Station Index Directory and Nielsen Station Index United States Television Household Estimates (or any successor publication). (5)

Emerging broadcaster

The term emerging broadcaster means a person who— (A)has effective control of a broadcast station (including any class or assignment of television broadcast station and any class of AM or FM radio broadcast station) that such person would be unable to continue to operate successfully without a qualifying incubation relationship under the Program; or (B)plans to acquire effective control of a broadcast station (including any class or assignment of television broadcast station and any class of AM or FM radio broadcast station) that such person would be unable to acquire without a qualifying incubation relationship under the Program. (6)

Established broadcaster

The term established broadcaster means a person who— (A)has effective control of a broadcast station, including any class or assignment of television broadcast station (except for a low power television station or a television translator station) and any class of AM or FM radio broadcast station (except for a low power radio station or a radio translator station); and (B)is established in the broadcasting industry, as determined by the Commission. (7)

Incubated station

The term incubated station means a broadcast station— (A)of which an emerging broadcaster has (or plans to acquire) effective control; and (B)with respect to which an established broadcaster performs (or will perform) incubation activities as part of a qualifying incubation relationship under the Program. (8)

Low power television station

The term low power television station does not include a low power television station that has been accorded primary status as a Class A television licensee under section 73.6001(a) of title 47, Code of Federal Regulations. (9)

Program

The term Program means the Broadcast Incubator Program established by the regulations promulgated under subsection (b). (10)

Radio market

The term radio market means a radio market, as determined by Nielsen Media Research and published in Radio Market Survey Population, Rankings & Information (or any successor publication).