[Federal Register Volume 69, Number 165 (Thursday, August 26, 2004)]
[Proposed Rules]
[Pages 52464-52470]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-19468]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 73

[MB Docket No. 04-256; FCC 04-173]


Attribution of Joint Sales Agreements in Local Television Markets

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: The Commission solicits comment on whether to attribute TV 
Joint Sales Agreements (JSAs) for purposes of applying the broadcast 
ownership rules. In a previous decision in this proceeding, the 
Commission attributed the ``brokered station'' to the ``broker'' in 
certain radio JSAs, but, because prior notice had not been given 
regarding whether to attribute TV JSAs, the Commission said that it 
would seek comment in the future on whether to attribute TV JSAs. This 
decision invites comment on whether to attribute certain TV JSAs.

DATES: Comment are due September 27, 2004; Reply comments are due 
October 12, 2004. Written comments on the Paperwork Reduction Act 
proposed information collection requirements must be submitted by the 
public and other interested parties on or before October 25, 2004.

ADDRESSES: Federal Communications Commission, Portals II, 445 12th 
Street, SW., Washington, DC 20554. In addition to filing comments with 
the Secretary, a copy of any comments on the Paperwork Reduction Act 
information collection requirements contained herein should be 
submitted to Les Smith, Federal Communications Commission, 445 12th 
Street, SW., Washington, DC 20554; or via the internet to 
[email protected], and to Kristy L. LaLonde, OMB Desk Officer, Room 
10234 NEOB, 725 17th Street, NW., Washington, DC 20503, or via the 
Internet to Kristy [email protected], or via fax at (202) 395-5167.

FOR FURTHER INFORMATION CONTACT: Debra Sabourin, Industry Analysis 
Division, Media Bureau, (202) 418-0976 or [email protected]. For 
additional information concerning the Paperwork Reduction Act 
information collection requirements contained in this document, contact 
Les Smith at (202) 418-0217, or via the Internet at 
[email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Media Bureau's 
Notice of Proposed Rulemaking (NPRM) in MB Docket No. 04-256, FCC 04-
173,

[[Page 52465]]

adopted July 13, 2004, and released on August 2, 2004. The full text of 
this NPRM is available for inspection and copying during regular 
business hours in the FCC Reference Center, 445 Twelfth Street, SW., 
Room CY-A257, Portals II, Washington, DC 20554, and may also be 
purchased from the Commission's copy contractor, Best Company and 
Printing, Inc., Room CY-B402, telephone (800) 378-3160, e-mail 
www.BCPIWEB.COM. To request materials in accessible formats for people 
with disabilities (electronic files, large print, audio format and 
Braille), send an email to [email protected] or call the Consumer & 
Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 
(TTY).

Synopsis of Notice of Proposed Rulemaking

    1. In its Report and Order and Notice of Proposed Rulemaking (68 FR 
46286, August 5, 2003, and 68 FR 46359, August 5, 2003) (R&O), arising 
from the third biennial review of its broadcast ownership rules, the 
Commission attributed the ``brokered station'' to the ``broker'' in 
certain radio JSAs.\1\ A JSA is an agreement with a licensee of a 
brokered station that authorizes a broker to sell some or all of the 
advertising time for the brokered station in return for a fee or 
percentage of revenues paid to the licensee. (47 CFR 73.3555, Note 
2(k)) Because the broker normally assumes much of the market risk with 
respect to the station it brokers, radio JSAs generally give the broker 
authority to hire a sales force for the brokered station, set 
advertising prices, and make other decisions regarding the sale of 
advertising time, subject to the licensee's preemptive right to reject 
the advertising. As a result of the Commission's decision, its 
attribution rules, which define what interests are counted for purposes 
of applying the Commission's broadcast ownership rules, now state that 
a party with a cognizable interest in a radio station that brokers more 
than 15 percent of the weekly advertising time of another radio station 
in the same local market is considered to have an attributable interest 
in the brokered station R&O. (47 CFR 73.3555) In this NPRM, the 
Commission invites comment on whether comparable, same-market TV JSAs 
should also be attributable.
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    \1\ The R&O was affirmed in part, remanded in part in Prometheus 
Radio Project v. F.C.C., 373 F.3d 372 (3rd Cir. 2004) (Prometheus v. 
FCC). While the court affirmed the Commission's decision to 
attribute JSAs, as well as other Commission decisions, it remanded a 
number of decisions in the biennial proceeding to the Commission for 
additional justification or modification. The court had earlier 
stayed the effectiveness of the Commission's decision pending 
review, and, in a separate Partial Judgment, the court continued the 
stay pending its review of the Commission's action on remand, over 
which the court retained jurisdiction.
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    2. Although the Commission attributed radio JSAs in the R&O it did 
not address TV JSAs or its other attribution rules. The biennial, now 
quadrennial, review requirement of section 202(h) of the 
Telecommunication Act of 1996 does not encompass attribution. The 
attribution rules merely determine what interests are cognizable under 
the Commission's broadcast ownership rules; they are not ownership 
limits in themselves. Moreover, the basis of the attribution rules 
differs from the statutory factors the Commission applies in the 
biennial reviews. The Commission addressed the attribution of radio 
JSAs in the R&O only because the issue was raised in the local radio 
ownership proceeding, which was incorporated into the 2002 biennial 
review. Since prior notice had not been given regarding the issue of 
whether the Commission should attribute TV JSAs, the Commission said 
that it would seek comment on whether to attribute TV JSAs in a future 
NPRM. The Commission has no reason to believe that the terms and 
conditions of TV JSAs differ substantively from those of radio JSAs, 
and, in this NPRM, the Commission tentatively concludes that JSAs have 
the same effect in local TV markets that they have in local radio 
markets and should be treated similarly.
    3. The Commission's attribution rules seek to identify those 
interests in 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.'' \2\ Influence and control are important criteria 
with respect to the attribution rules because these rules define which 
interests are significant enough to be counted for purposes of the 
Commission's multiple ownership rules.
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    \2\ Review of the Commission's Regulations Governing Attribution 
of Broadcast and Cable/MDS Interests; Review of the Commission's 
Regulations and Policies Affecting Investment in the Broadcast 
Industry, 64 FR 59655, November 3, 1999 (1999 Attribution Order), on 
recon., 66 FR 9962, February 13, 2001. For purposes of the multiple 
ownership rules, the concept of ``control'' is not limited to 
majority stock ownership, but includes actual working control in 
whatever manner exercised. Review of the Commission's Regulations 
Governing Attribution of Broadcast and Cable/MDS Interests; Review 
of the Commission's Regulations and Policies Affecting Investment in 
the Broadcast Industry, 60 FR 6483, February 2, 1995.
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    4. In its 1999 attribution proceeding, the Commission considered 
whether to attribute several types of business arrangements, including 
JSAs and TV local marketing agreements (LMAs).\3\ The Commission 
acknowledged that same-market JSAs could raise competitive concerns but 
said it did not believe that such agreements conveyed a sufficient 
degree of influence or control over station programming or core 
operations to warrant attribution, adding that JSAs could promote 
diversity by ``enabling smaller stations to stay on the air.'' (1999 
Attribution Order) The Commission required that JSAs be placed in the 
station's public inspection file, and specifically noted that it 
retained the discretion to conduct a public interest review of specific 
JSAs, if warranted, on a case-by-case basis. (1999 Attribution Order)
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    \3\ LMAs are sometimes called time brokerage agreements, or 
TBAs. ``Time brokerage'' (also known as ``local marketing'') is 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. A joint sales agreement, on the other 
hand, is an agreement with a licensee of a ``brokered station'' that 
authorizes a ``broker'' to sell advertising time for the ``brokered 
station.'' 47 CFR 73.3555, Notes 2(j), (k); see also 1999 
Attribution Order.
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    5. In 1999, the Commission distinguished JSAs from LMAs, holding 
that JSAs are contracts that affect primarily the sale of advertising 
time, as distinguished from LMAs, which may affect programming, 
personnel, advertising, physical facilities, and other core operations 
of radio stations. (1999 Attribution Order) Although the Commission did 
not adopt a rule attributing TV or radio JSAs, it did attribute same-
market TV LMAs, stating that its rationale in the 1992 Radio Ownership 
Order for attributing same-market radio LMAs--i.e., to prevent their 
use to circumvent its ownership limits--applies equally to same-market 
TV LMAs. The Commission also repeated its concern that LMAs among 
stations serving the same market could undermine broadcast competition 
and diversity. (1999 Attribution Order, citing 1992 Radio Ownership 
Order, 57 FR 18089, April 29, 1992) After the 1999 Attribution Order 
took effect, the Commission's rules specified that a party with a 
cognizable interest in either a radio or a TV station that brokers more 
than 15 percent of the weekly broadcast time of another radio or TV 
station in the same local market is considered to have an attributable 
interest in the brokered station. (47 CFR 73.3555, Notes 2(j)(1), 
2(k)(1))
    6. In 2001, the Commission reopened the issue of whether to 
attribute radio JSAs in the Local Radio Ownership NPRM. (Rules and 
Policies Concerning Multiple Ownership of Radio Broadcast

[[Page 52466]]

Stations in Local Markets, 66 FR 63986, December 11, 2001. This 
proceeding was incorporated into the 2002 biennial review.) As part of 
its larger inquiry into possible changes to local radio ownership rules 
and policies, the Commission asked whether it should reconsider its 
blanket exemption of JSAs from attribution, and whether radio JSAs and 
LMAs or TBAs should be treated similarly. (66 FR 63986, December 11, 
2001) In its 2002 Ackerley decision, the Commission interpreted the 
language in the 1999 Attribution Order, in which it reserved the 
ability to conduct a review of specific JSAs on a case-by-case basis. 
It concluded that the parties' TV JSA, which was intertwined with the 
parties' non-attributable TBA, should be attributable due to the level 
of influence it permitted the broker to exercise over the brokered 
station's programming decisions. (Shareholders of the Ackerley Group, 
Inc. (Transferor) and Clear Channel Communications, Inc. (Transferee) 
For Transfer of Control of the Ackerley Group, Inc., and Certain 
Subsidiaries, 17 FCC Rcd. 10828, 2002.) (Ackerley)) In Ackerley, 
Ackerley Group, Inc. had both a TBA and a JSA with KCBA (TV). The TBA 
expressly limited the amount of programming to be provided under the 
TBA to 15 percent of the licensee's weekly programming hours, which was 
the permissible limit without triggering the Commission's attribution 
rules. However, the brokered station, under the terms of the combined 
agreements, did not have the right to collect advertising revenue from 
non-network programming not included within the 15 percent provided 
under the TBA, and so did not have an economic incentive to refuse 
programming suggestions by the broker.
    7. The Commission explained in Ackerley that it had, in the 1999 
Attribution Order, declined to impose new rules attributing JSAs ``as 
long as they deal primarily with the sale of advertising time and do 
not contain terms that materially affect programming or other core 
operations of the stations such that they are substantively equivalent 
to LMAs.'' (Ackerley, 17 FCC Rcd 10842, citing 1999 Attribution Order, 
14 FCC Rcd at 12612-13) The Commission concluded in Ackerley that the 
TBA and related agreements did not provide the licensee with an 
economic incentive to control the 85 percent of programming not 
provided by the broker under the LMA. It concluded that, as a result, 
the agreements together were ``substantively equivalent'' to an LMA for 
more than 15 percent of KCBA(TV)'s weekly broadcast hours and were 
therefore attributable.
    8. In 2003, the Commission decided to attribute radio JSAs. In the 
R&O, the Commission reiterated that the attribution rules seek to 
identify and include those positional and ownership interests that 
convey a degree of influence or control to their holder sufficient to 
warrant limitation under the ownership rules. Where the Commission has 
referred to an interest that confers ``influence'' it has viewed it as 
an interest that is less than controlling, but through which the holder 
is likely to induce a licensee to take actions to protect the interests 
of the holder, and where a realistic potential exists to affect a 
station's programming and other core operational decisions. The 
Commission found that the use of in-market radio JSAs may undermine its 
interest in broadcast competition sufficiently to warrant limitation 
under the multiple ownership rules.
    9. Prior to 2003 the Commission distinguished JSAs from LMAs, 
finding that only LMAs have the ability to affect programming, 
personnel, advertising, physical facilities, and other core operations 
of stations. In the R&O, however, the Commission found that because the 
broker controls the advertising revenue of the brokered radio station, 
JSAs have the same potential as LMAs to convey sufficient influence 
over core operations of a radio station to raise significant 
competition concerns warranting attribution. The Commission found that 
the threat to competition and the potential impact on the influence 
over the brokered station outweighed any potential benefits that non-
attribution of radio JSAs may have on the radio industry.
    10. When the Commission attributed JSAs involving radio stations, 
it said that, where an entity owns or has an attributable interest in 
one or more stations in a local radio market, joint advertising sales 
of another station in that market for more than 15 percent of the 
brokered station's advertising time per week will result in counting 
the brokered station toward the brokering licensee's ownership limits. 
(47 CFR 73.3555, Note 2(k)) Additionally, attributable radio JSAs must 
be filed with the Commission, and placed in the public file. The 
Commission gave parties two years from the effective date of the new 
rule to terminate agreements, or otherwise come into compliance with 
the applicable media ownership rules. (However, if a party sells an 
existing combination of stations within the two year grace period, it 
may not sell or assign the JSA to the new owner if the JSA causes the 
new owner to exceed any of the Commission's ownership limits; the JSA 
must be terminated at the time of the sale of the stations.)
    11. In Prometheus v. FCC, the Third Circuit Court upheld the 
Commission's decision to attribute radio JSAs. The court held that the 
Commission had adequately explained its change in policy with respect 
to attribution of radio JSAs. The court accepted ``that the 
Commission's determination upon `reexamination of the issue' that the 
JSAs convey (and always have conveyed) a potential for influence--
sufficiently rationalizes [the Commission's] decision to jettison its 
prior nonattribution policy and replace it with one that more 
accurately reflects the conditions of local markets.'' The court also 
held that attribution of JSAs is not a regulatory taking in violation 
of the Fifth Amendment. According to the court, in deciding to 
attribute JSAs, the Commission has not invalidated or interfered with 
any contracts, but has merely determined that stations subject to JSAs 
should, in certain circumstances, count toward the regulatory limit in 
determining how many stations the broker may own in a market. The court 
also held that stations have no vested right in the continuation of any 
regulatory scheme.
    12. In this NPRM, the Commission seeks comment on whether or not to 
attribute TV JSAs. The Commission tentatively concludes that it should. 
The Commission asks for comments on the similarities and differences 
between TV and radio JSAs. Are there differences between TV and radio 
JSAs such that the Commission should not attribute TV JSAs?
    13. A licensee assumes all of the market risk associated with a 
broadcast TV station's programming when the licensee receives all of 
the advertising revenue generated by a program. The assumption of all 
market risk provides a licensee with strong incentives to select the 
station's programming and oversee other core operations of the station. 
The Commission's experience with the Ackerley case suggests that TV 
JSAs may reduce a licensee's incentive to select programming and 
oversee other core operations of the station whose ad time is brokered. 
For example, a JSA providing a licensee with a fixed monthly fee, 
regardless of the advertising sales or audience share of the TV 
station, transfers all market risk from the licensee to the broker. 
With the JSA, it is the broker's profits that are directly affected by 
the advertising revenues generated by a program. As such, the broker 
has strong incentives to induce a licensee to select programming

[[Page 52467]]

to protect the broker's interests, and the brokered station has little 
incentive to resist such influence.
    14. In the context of radio JSAs, the Commission found that 
licensees of radio stations subject to JSAs typically receive a monthly 
fee regardless of the advertising sales or audience share of the 
station and, therefore, may have less incentive to maintain or attain 
significant competitive standing in the market. It concluded that, 
because the broker controls the advertising revenue of the brokered 
radio station, JSAs have the potential to convey sufficient influence 
over core operations of a radio station to raise significant 
competition concerns warranting attribution. Is the same fee structure 
typical for TV JSAs? If not, are the incentives different and does this 
have implications for the Commission's decision? In this NPRM, the 
Commission seeks comment on whether broadcast TV JSAs have a similar 
potential to influence program selection and other core operations of a 
TV station.
    15. Beyond the issue of potential influence by a JSA broker over a 
brokered station's operations, which alone may warrant attribution, the 
unattributable nature of JSAs could lead to the exercise of market 
power by brokering stations and raise related competition concerns. In 
the R&O, in addressing local TV ownership, the Commission stated, 
``[o]ur competition goal seeks to ensure that for each TV market, 
numerous strong rivals are actively engaged in competition for viewing 
audiences.'' In the context of radio, JSAs raise concerns regarding the 
ability of broadcasters who are not in a JSA or LMA combination to 
compete, and may negatively affect the health of the local radio 
industry generally. In any given radio market, a broker may own or have 
an ownership interest in stations, operate stations pursuant to an LMA, 
or sell advertising time for stations pursuant to a JSA. Instead of 
stations competing with one another, the Commission, in the R&O, said 
that radio JSAs put pricing and output decisions in the hands of one 
firm that sells packages of time for all stations that are party to the 
agreement. As such, radio JSAs have the potential to lessen competition 
in the market. Do TV JSAs raise the same competitive concerns as radio 
JSAs? In situations where a party would exceed our ownership limits if 
a TV JSA is attributed, does the TV JSA provide the broker with the 
ability to exercise market power, or raise concerns regarding the 
ability of smaller broadcasters to compete? Is there a difference in 
the radio and TV markets that would justify treating TV JSAs 
differently from radio JSAs? What benefits and harms from JSAs have 
occurred in the radio context that could occur in the TV context?
    16. The Commission seeks concrete information on the terms and 
conditions of TV JSAs. The Commission asks commenters that are parties 
to TV JSAs to answer the following questions, which can help us to 
assess the typical terms and significance of TV JSAs. What is the 
duration of the agreement? What terms and conditions are associated 
with TV JSA agreements besides advertising terms? The Commission wishes 
to know the nature of the other terms as well. 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 TV JSAs differ from TV LMAs? Are TV JSAs 
also usually accompanied by program agreements, or are they mostly 
solely advertising agreements? What other arrangements typically occur 
between parties in terms of station operations or joint use of 
production facilities? For example, are TV JSAs often accompanied by 
shared services or joint services agreements? If so, what terms are 
involved and what services or facilities are shared? What is the impact 
of these attributes of JSAs and terms of these contracts on the 
Commission's concerns about influence or control? Are TV JSAs typically 
accompanied by non-attributable financial investments? If such 
combinations occur, what are their terms?
    17. Why do parties enter into TV JSAs? What are the benefits they 
enjoy? Do these benefits differ from those of LMAs? What kind of 
efficiencies arise with TV JSAs? How are these shared among parties to 
the TV JSAs? What benefits accrue to the public from TV JSAs? The 
Commission has seen TV JSA agreements that are accompanied by non-
attributable TV LMAs, sometimes involving a situation where a stronger 
station provides local news programming to a weaker station in the 
market as part of the agreements. This may enable such stations to 
provide news that they were not able to provide previously. Is this a 
frequent occurrence and, if so, what impact should it have on our 
decision? What effect, if any, might attribution of TV JSAs have on the 
digital transition?
    18. What impact do TV JSAs have on competition? What are the 
disadvantages of having a TV JSA? Under what circumstances, if any, 
should the interest of the broker/JSA holder be held attributable? The 
Commission particularly asks station owners who compete with stations 
that are parties to TV JSAs, as well as other commenters, to speak to 
the effects of any TV JSAs in their market.
    19. If the Commission does decide to attribute TV JSAs, are there 
any compelling reasons why the Commission should not apply the existing 
radio JSA attribution guidelines, including the filing requirements, to 
TV JSAs? If a rule similar to the radio JSA attribution rule is applied 
to TV JSAs, should the Commission use the fifteen percent benchmark 
that it used in the radio context, or is some other percentage more 
appropriate? Alternatively, should TV JSAs be examined only on a case-
by-case basis, and be attributed only if their likely degree of 
influence is similar to that of an LMA, as in Ackerley?
    20. The commission did not grandfather existing radio JSAs. Parties 
having existing, attributable JSAs that would cause them to exceed 
relevant ownership limits were required to file a copy with the 
Commission, and were given two years from the effective date of the R&O 
to terminate those JSAs or otherwise come into compliance with the 
local radio ownership rules. Should these same transition provisions 
apply to TV JSAs? What effects, if any, should JSAs have on the renewal 
expectancy of TV stations? Information contained in the parties' 
comments is essential to the Commission's assessment of whether to 
grandfather existing TV JSAs in the event they are deemed attributable, 
and the form this grandfathering should take. Parties to existing JSAs 
are the best source of this information. It is critical that the 
Commission be provided the information it needs to make a reasoned 
decision, and to fashion appropriate grandfathering rights, if any, in 
the event it deems JSAs attributable. For parties to TV JSAs, the 
Commission asks that the licensee of the brokering station and/or the 
licensee of the brokered station include the information described 
above in their comments, along with any other information that they 
think is relevant.
    21. Finally, while this NPRM concerns TV JSAs, the Commission notes 
that TV LMAs entered into before November 5, 1996, were grandfathered 
until the conclusion of the 2004 biennial review of the broadcast 
ownership rules. As part of that review, the Commission was to 
reevaluate these grandfathered TV LMAs, on a case-by-case basis, using 
specified factors, to determine whether they should continue to be 
grandfathered. (Review of the Commission's Regulations

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Governing TV Broadcasting, TV Satellite Stations Review of Policy & 
Rules, 64 FR 54225, October 6, 1999, clarified in Memorandum Opinion & 
Second Order on Reconsideration, 66 FR 9039, February 6, 2001) On 
January 22, 2004, President Bush signed into law the Appropriations 
Act. (Consolidated Appropriations Act, 2004, Public Law 108-199, 
section 629, 118 Stat. 3, 2004) Section 629 of the Appropriations Act 
amends section 202(h) of the Telecommunications Act of 1996, modifying 
the biennial review requirement of the 1996 Act to a quadrennial review 
requirement. According to the amended statute, the next ownership 
review will commence in 2006. Since the Commission will not undertake 
an ownership review in 2004, it invites comment as to whether it should 
nonetheless commence the reevaluation of the grandfathered LMAs in 2004 
or postpone it till the next quadrennial ownership review in 2006.

Administrative Matters

    22. Ex Parte Rules. This is a permit-but-disclose notice and 
comment rulemaking proceeding. Ex parte presentations are permitted, 
except during the Sunshine Agenda period, provided that they are 
disclosed as provided in the Commission's Rules. See generally 47 CFR 
1.1202, 1.1203, and 1.1206(a).
    23. Comments and Reply 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 the notice of 
proposed rulemaking on or before September 27, 2004, and reply comments 
on or before October 12, 2004. Comments may be filed using the 
Commission's Electronic Comment Filing System (ECFS) or by filing paper 
copies. See Electronic Filing of Documents in Rulemaking Proceedings, 
63 FR 24121 (1998). All comments should reference MB Docket No. 04-256.
    24. Comments filed through the ECFS can be sent as an electronic 
file via the Internet to http://www.fcc.gov/e-file/ecfs.html. 
Generally, only one copy of an electronic submission must be filed. In 
completing the transmittal screen, commenters should include their full 
name, U.S. Postal Service mailing address, and the applicable docket or 
rulemaking number. Parties may also submit an electronic comment by 
Internet e-mail. To get filing instructions for e-mail comments, 
commenters should send an e-mail to [email protected], and should include 
the following words in the body of the message, ``get form.'' A sample 
form and directions will be sent in reply. Parties who choose to file 
by paper must file an original and four copies of each filing. Filings 
can be sent by hand or messenger delivery, by commercial overnight 
courier, or by first-class or overnight U.S. Postal Service mail 
(although the Commission continues to experience delays in receiving 
U.S. Postal Service mail). The Commission's contractor, Natek, Inc., 
will receive hand-delivered or messenger-delivered paper filings for 
the Commission's Secretary at 236 Massachusetts Avenue, NE., Suite 110, 
Washington, DC 2002. The filing hours at this location are 8 a.m. to 7 
p.m. All hand deliveries must be held together with rubber bands or 
fasteners. Any envelopes must be disposed of before entering the 
building. Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9300 East Hampton 
Drive, Capitol Heights, MD 20743. U.S. Postal Service first-class mail, 
Express Mail, and Priority Mail should be addressed to 445 12th Street, 
SW., Washington, DC 20554. All filings must be addressed to the 
Commission's Secretary, Office of the Secretary, Federal Communications 
Commission.
    25. Parties must also serve either one copy of each filing via e-
mail or two paper copies to Best Copy and Printing, Portals II, 445 
12th Street, SW., Room CY-B402, Washington, DC 20554, telephone (800) 
378-3160 or (202) 488-5300, or via email to [email protected]. In 
addition, parties should serve one copy of each filing via email or 
three paper copies to Brenda Lewis, 445 12th Street, SW., 2-C266, 
Washington, DC 20554. Parties should also serve one copy of each filing 
via email or one paper copy to Debra Sabourin, Media Bureau, 445 12th 
Street, SW., 2-C165, Washington, DC 20554.
    26. Availability of Documents. Comments, reply comments, and ex 
parte submissions will be available for public inspection during 
regular business hours in the FCC Reference Center, Federal 
Communications Commission, 445 12th Street, SW., CY-A257, Washington, 
DC 20554. These documents also will be available electronically from 
the Commission's Electronic comment Filing System. Documents are 
available electronically in ASCII text, Word 97, and Adobe Acrobat. 
Copies of filings in this proceeding may be obtained from Best Copy and 
Printing, Inc., Portals II, 445 12th Street, SW., Room CY-B402, 
Washington, DC 20554, telephone (800) 378-3160 or (202) 488-5300, 
facsimile (202) 488-5563, or via e-mail at [email protected]. To request 
materials in accessible formats for people with disabilities (Braille, 
large print, electronic files, audio format), send an e-mail to 
[email protected] or call the Consumer and Governmental Affairs Bureau at 
(202) 418-0530 (voice), (202) 418-0432 (TTY).
    27. Regulatory Flexibility Act. As required by the Regulatory 
Flexibility Act, (See 5 U.S.C. 603) the Commission has prepared an 
Initial Regulatory Flexibility Analysis (IRFA) of the possible 
significant economic impact on a substantial number of small entities 
of the proposals addressed in this Notice of Proposed Rulemaking. The 
IRFA is set forth full in the full text of this NPRM. Written public 
comments are requested on the IRFA. These comments must be filed in 
accordance with the same filing deadlines for comments on the NPRM, and 
they should have a separate and distinct heading designating them as 
responses to the IRFA.
    28. Paperwork Reduction Act. This document contains proposed 
information collection requirements. The Commission, as part of its 
continuing effort to reduce paperwork burdens, invites the general 
public to comment on the information collection requirements contained 
in this document, as required by the Paperwork Reduction Act of 1995, 
Public Law 104-13. Public and agency comments are due October 25, 2004. 
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. In 
addition, pursuant to the Small Business Paperwork Relief Act of 2002, 
Public Law 107-198, see 44 U.S.C. 3506(c)(4), we seek specific comment 
on how we might ``further reduce the information collection burden for 
small business concerns with fewer than 25 employees.
    OMB Control Number: 3060-XXXX.
    Title: Rules and Policies Concerning Attribution of Joint Sales 
Agreements In Local Television Markets, NPRM, MB Dock. No. 04-256, FCC 
04-173.
    Form Number: N.A.
    Type of Review: New collection.
    Respondents: Business or other for profit entities.
    Estimated Number of Respondents: 1,360.
    Estimated Time Per Response: 1 hour.

[[Page 52469]]

    Frequency of Response: 1 time.
    Estimated Total Annual Burden: 1,360 hours.
    Estimated Total Annual Costs: 0.
    Privacy Act Impact Assessment: No impacts.
    Needs and Uses: The data would be used by the Commission to 
determine whether the applicants meet basic statutory requirements to 
become a Commission licensee/permittee and to assure that the public 
interest would be best served by grant of the application. The proposed 
filing requirements would also help to determine whether the applicant 
and/or filer is in compliance with the Commission's multiple ownership 
rules.

Ordering Clauses

    29. Pursuant to the authority contained in sections 1, 2(a), 4(i), 
303, 307, 309, and 310 of the Communications Act of 1934, as amended, 
47 U.S.C. 151, 152(A), 154(I), 303, 307, 309, AND 310, and section 
202(h) of the Telecommunications Act of 1996, the Notice of Proposed 
Rulemaking is adopted.
    30. The Commission's Consumer and Governmental Affairs Bureau, 
Reference Information Center, will send a copy of the NPRM, including 
the IRFA, to the Chief Counsel for Advocacy of the Small Business 
Administration, in accordance with the Regulatory Flexibility Act. (See 
5 U.S.C. 603(a).)

Initial Regulatory Flexibility Analysis

    31. As required by the Regulatory Flexibility Act (RFA),\4\ the 
Commission has prepared this Initial Regulatory Flexibility Analysis 
(IRFA) of the possible significant economic impact on small entities of 
the policies and rules proposed in this Notice of Proposed Rulemaking 
(NPRM). Written public comments are requested on this IRFA. Comments 
must be identified as responses to the IRFA and must be filed by the 
deadlines for comments on the NPRM. The Commission will send a copy of 
the NPRM, including this IRFA, to the Chief Counsel for Advocacy of the 
Small Business Administration (SBA).
---------------------------------------------------------------------------

    \4\ See 5 U.S.C. 603. The RFA, see 5 U.S.C. 601 et seq., has 
been amended by the Contract With America Advancement Act of 1996, 
Public Law 104-121, 110 Stat. 847 (1996) (CWAAA). Title II of the 
CWAAA is the Small Business Regulatory Enforcement Fairness Act of 
1996 (SBREFA).
---------------------------------------------------------------------------

Need for, and Objectives of, the Proposed Rules

    32. The Commission, in a Report and Order and Notice of Proposed 
Rulemaking (R&O), arising form the third biennial review of its 
broadcast ownership rules, adopted a rule attributing the ``brokered 
station'' to the ``broker'' in certain radio joint sales agreements 
(JSAa). A JSA is an agreement with a licensee of a ``brokered station'' 
in return for a fee paid to the licensee. The Commission's attribution 
rules seek to identify those interests in 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.'' Influence and control 
are important criteria with respect to the attribution rules because 
the rules define which interests are significant enough to be counted 
for purposes of the Commission's multiple ownership rules.
    33. In the R&O, the Commission decided to attribute radio JSAs but 
found the issue as it relates to TV stations was beyond the scope of 
the proceeding. In extending the attribution rule to include radio 
JSAs, the Commission found that the use of in-market radio JSAs may 
undermine out interest in broadcast competition sufficiently to warrant 
limitation under the multiple ownership rules. Accordingly, in the R&O, 
the Commission revised the attribution rules, which define what 
interests are counted for purposes of applying the Commission's media 
ownership rules, to state that a party with a cognizable interest in a 
radio station that brokers more than 15 percent of the weekly 
advertising time of another radio station in the same local market is 
considered to have an attributable interest in the brokered station. 
These new rules have been stayed. The NPRM invites comment on whether 
same-market TV JSAs should also be attributable under the same terms. 
The NPRM also invites comment on whether the factors that led the 
Commission to attribute radio JSAs apply as well in the context of TV 
JSAs. For example, the Commission asks whether TV JSAs have a similar 
potential to influence core operations of the brokered TV station and 
whether TV JSAs raise similar competitive concerns as radio JSAs.

Legal Basis

    34. This NPRM is adotped pursuant to sections 1, 2(a), 4(i), 303, 
307, 309, 310, of the Communications Act of 1934, as amended, 47 U.S.C. 
151, 152(a), 154(i), 303, 307, 309, 310, and section 202(h) of the 
Telecommunications Act of 1996.

Description and Estimate of the Number of Small Entities to Which the 
Proposed Rules Will Apply

    35. The RFA directs agencies to provide a description of, and, 
where feasible, an estimate of the number of small entities that may be 
affected by the proposed rules, if adopted. The RFA defines the term 
``small entity'' as having the same meaning as the terms ``small 
business,'' ``small organization,'' and ``small governmental entity'' 
under Section 3 of the Small Business Act. In addition, the term 
``small business'' has the same meaning as the term ``small business 
concern'' under the Small Business Act. A small business concern is one 
which: (1) Is independently owned and operated; (2) is not dominant in 
its field of operation; and (3) satisfies any additional criteria 
established by the SBA.
    36. In this context, the application of the statutory definition to 
television stations is of concern. An element of the definition of 
``small business'' is that the entity not be dominant in its field of 
operation. The Commission is unable at this time and in this context to 
define or quantify the criteria that would establish whether a specific 
television station is dominant in its field of operation. Accordingly, 
the estimates that follow of small businesses to which the rules may 
apply do not exclude any television station from the definition of a 
small business on this basis and are therefore over-inclusive to that 
extent. An additional element of the definition of ``small business'' 
is that the entity must be independently owned and operated. The 
Commission notes that it is difficult at times to assess these criteria 
in the context of media entities, and our estimates of small businesses 
to which they apply may be over-inclusive to this extent.
    37. Television Broadcasting. The Small Business Administration 
defines a television broadcasting station that has no more than $12 
million in annual receipts as a small business. Business concerns 
included in this industry are those ``primarily engaged in broadcasting 
images together with sound.'' According to Commission staff review of 
the BIA Financial Network, Inc. Media Access Pro Television Database as 
of June 26, 2004, about 860 (68%) of the 1,270 commercial television 
stations in the United States have revenues of $12 million or less. The 
Commission notes, however, that in assessing whether a business entity 
qualifies as small under the above definition, business control 
affiliations must be included. The Commission's estimates, therefore, 
likely overstate the number of small entities that might be affected by 
any changes to the ownership rules, because the revenue figures on 
which these estimates are based do not include or aggregate revenues 
from affiliated companies.

[[Page 52470]]

Description of Projected Reporting, Recordkeeping, and Other Compliance 
Requirements

    38. The NPRM invites comment as to whether, if the Commission 
adopts a rule attributing same-market TV JSAs, it should adopt a 
requirement that attributable TV JSAs must be filed with the 
Commission.

Steps Taken To Minimize Significant Impact on Small Entities, and 
Significant Alternatives Considered

    39. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its proposed approach, 
which may include the following four alternatives (among others): (1) 
The establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance or reporting requirements under the rule for small entities; 
(3) the use of performance, rather than design, standards; and (4) an 
exemption from coverage of the rule, or any part thereof, for small 
entities.
    40. The Commission invites comment on the options of leaving TV 
JSAs unattributable, attributing same-market TV JSAs under certain 
circumstances or examining TV JSAs on a case-by-case basis. The 
Commission tentatively concludes that it should attribute TV JSAs. The 
NPRM, however, invites comment on the various harms and benefits of TV 
JSAs, including whether TV JSAs may hinder the ability of smaller 
broadcasters and broadcasters who are not in a JSA to compete. The 
Commission has previously recognized the JSAs can have benefits. For 
example, the Commission, in the Report and Order in MM Docket Nos. 94-
150, 92-51, and 87-154 (64 FR 50622, September 17, 1999), while 
acknowledging concern with the possible competitive consequences of 
business agreements such as JSAs, noted that ``some JSAs may actually 
help promote diversity by enabling smaller stations to stay on the 
air.'' Also, the NPRM refers to JSAs accompanied by non-attributable 
LMAs, sometimes involving a situation where a stronger station provides 
local news programming to a weaker station in the market as part of the 
agreements and allowing such stations to provide news that they were 
not able to provide previously. The NPRM invites comment on whether 
this is a frequent occurrence and if so, what impact it should have on 
the Commission's decision. The Commission also invites comment on the 
impact of attribution of TV JSAs on the digital transition.
    41. Finally, the NPRM considers whether, if TV JSAs are made 
attributable, the Commission should grandfather existing TV JSAs. As 
discussed in the NPRM, the R&O did not grandfather radio JSAs, but gave 
licensees two years from the effective date of the R&O to terminate 
those JSAs or otherwise come into compliance with the Commission's 
ownership rules. The NPRM invites comment on whether the same 
provisions should apply in the context of TV JSAs. The Commission 
invites comment on the effects of the alternatives and proposals in the 
NPRM on small businesses.

Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rules

    42. None.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 04-19468 Filed 8-25-04; 8:45 am]
BILLING CODE 6712-01-M