[Federal Register Volume 85, Number 19 (Wednesday, January 29, 2020)]
[Rules and Regulations]
[Pages 5163-5168]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-00671]


-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 73

[MB Docket Nos. 14-50, 09-182, 07-294, 04-256, 17-289; DA 19-1303; FRS 
16410]


2010/2014 Quadrennial Regulatory Review; Rules and Policies To 
Promote New Entry and Ownership Diversity in the Broadcasting Services

AGENCY: Federal Communications Commission.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This document amends the broadcast ownership rules to reflect 
the mandate of the U.S. Court of Appeals for the Third Circuit, which 
vacated and remanded the Commission's 2018 Incubator Order and 2017 
Order on Reconsideration in their entirety, and the definition of 
eligible entities adopted in the Commission's 2016 Second Report and 
Order. This document implements the Third Circuit's mandate and 
clarifies which rules are currently in effect.

DATES: Effective January 29, 2020.

FOR FURTHER INFORMATION CONTACT: Ty Bream, [email protected], or 202-
418-0644.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order, 
DA 19-1303, in MB Docket Nos. 14-50, 09-182, 07-294, 04-256, 17-289, 
adopted and released on December 20, 2019. The complete text of this 
document is available electronically via the search function on the 
FCC's Electronic Document Management System (EDOCS) web page at https://apps.fcc.gov/edocs_public/ (https://apps.fcc.gov/edocs_public/). The 
complete document is available for inspection and copying in the FCC 
Reference Information Center, 445 12th Street SW, Room CY-A257, 
Washington, DC 20554 (for hours of operation, see https://www.fcc.gov/general/fcc-reference-information-center). To request materials in 
accessible formats for people with disabilities (Braille, large print, 
electronic files, audio format), send an email to [email protected] (mail 
to: [email protected]) or call the FCC's Consumer and Governmental Affairs 
Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).

Synopsis

    1. In Prometheus Radio Project v. FCC, the United States Court of 
Appeals for the Third Circuit vacated and remanded the Commission's 
2018 Incubator Order (83 FR 43773, Aug. 28, 2018) and its 2017 Order on 
Reconsideration (83 FR 755, Jan. 8, 2018) in their entirety, as well as 
the definition of eligible entities adopted in the Commission's 2016 
Second Report and Order (81 FR 76262, Nov. 1, 2016). Pursuant to F. R. 
App. P. 41(b), the court issued its mandate on November 29, 2019, which 
vacated, as of that date, the rule changes adopted in the Incubator 
Order and Order on Reconsideration and the eligible entity definition 
as adopted in the Second Report and Order. With this Order, we amend 
our rules to reflect the court's mandate and clarify which rules are 
currently in effect. Nothing in this Order shall be construed to affect 
the right of the Commission or any other party to the Prometheus 
litigation to seek further review of the Third Circuit's decision in 
the U.S. Supreme Court, or to limit the Commission's discretion in the 
event that the Supreme Court were to take further action in that 
litigation. Consistent with the court's mandate, this Order repeals 
changes adopted in the Incubator Order and Order on Reconsideration and 
the eligible entity definition as adopted in the Second Report and 
Order. As a result of the court's decision and these revisions, the 
newspaper/broadcast cross-ownership rule, radio/television cross-
ownership rule, local television ownership rule, local radio ownership 
rule, and television joint sales agreement attribution rule are 
reinstated as they existed prior to the Order on Reconsideration. For 
clarity, because the Order on Reconsideration is vacated in its 
entirety, the presumption under the local radio ownership rule that 
would apply a two-prong test for waiver requests involving existing 
parent markets with multiple embedded markets is repealed and 
unavailable to applicants. Note 5 to Sec.  73.3555 is reinstated with a 
reference to the streamlined procedures adopted in March 2019 for 
reauthorizing television satellite stations when such stations are 
assigned or transferred. In addition, the eligible entity standard and 
its application to regulatory measures as set forth in the Second 
Report and Order are repealed. Apart from the portions of the order 
related to the now vacated eligible entity definition, the remainder of 
the Second Report and Order is in effect and provides additional 
guidance with respect to the reinstated rules. Finally, the regulatory 
measures adopted in the Incubator Order are similarly repealed and 
unavailable to applicants.
    2. The Bureau finds that notice and comment are unnecessary for 
these rule amendments under 5 U.S.C. 553(b), because this ministerial 
order merely implements the mandate of the United States Court of 
Appeals for the Third Circuit, and the Commission lacks discretion to 
depart from this mandate. Because this Order is being adopted without 
notice and comment, the Regulatory Flexibility Act does not apply.
    3. Accordingly, it is ordered that Sec.  73.3555 of the 
Commission's rules, 47 CFR 73.3555, is amended as set forth in the 
Final Rules, effective upon publication in the Federal Register. While 
the effect of the court's mandate was to vacate certain rule changes 
and

[[Page 5164]]

restore prior rules, as described above, we now undertake by this Order 
the ministerial step of amending our rules to reflect the court's 
mandate. Because of the need during the current broadcast station 
license renewal cycle to alert prospective applicants to the current, 
applicable rules, there is ``good cause'' under 5 U.S.C. 553(d) to make 
the rules effective immediately upon publication in the Federal 
Register.
    4. This action is taken pursuant to the authority contained in 
sections 1, 2(a), 4(i) and (j), 5(c), 257, 303, 307, 308, 309, 310, and 
403 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 
152(a), 154(i), 154(j), 155(c), 257, 303, 307, 308, 309, 310, and 403, 
section 202(h) of the Telecommunications Act of 1996, and Sec. Sec.  
0.61 and 0.283 of the Commission's rules, 47 CFR 0.61, 0.283.
    5. The Bureau has determined, and the Administrator of the Office 
of Information and Regulatory Affairs, Office of Management and Budget, 
concurs that these rules are non-major under the Congressional Review 
Act, 5 U.S.C. 804(2). The Commission will send a copy of this Order to 
Congress and the Government Accountability Office pursuant to 5 U.S.C. 
801(a)(1)(A).

List of Subjects in 47 CFR Part 73

    Radio, Television.

Federal Communications Commission.
Thomas Horan,
Chief of Staff, Media Bureau.

Final Rules

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 part 73 as follows:

PART 73--RADIO BROADCAST SERVICES

0
1. The authority citation for part 73 continues to read as follows:

    Authority: 47 U.S.C. 154, 155, 301, 303, 307, 309, 310, 334, 
336, 339.


0
2. Amend Sec.  73.3555 by:
0
a. Revising paragraph (b);
0
b. Adding paragraphs (c) and (d);
0
c. Revising Notes 2, 4 through 7, and 9 to the section; and
0
d. Adding Note 12 to the section.
    The revisions and addition read as follows:


Sec.  73.3555  Multiple ownership.

* * * * *
    (b) Local television multiple ownership rule. An entity may 
directly or indirectly own, operate, or control two television stations 
licensed in the same Designated Market Area (DMA) (as determined by 
Nielsen Media Research or any successor entity) if:
    (1) The digital noise limited service contours of the stations 
(computed in accordance with Sec.  73.622(e)) do not overlap; or
    (i) At the time the application to acquire or construct the 
station(s) is filed, at least one of the stations is not ranked among 
the top four stations in the DMA, based on the most recent all-day (9 
a.m.-midnight) audience share, as measured by Nielsen Media Research or 
by any comparable professional, accepted audience ratings service; and
    (ii) At least 8 independently owned and operating, full-power 
commercial and noncommercial TV stations would remain post-merger in 
the DMA in which the communities of license of the TV stations in 
question are located. Count only those TV stations the digital noise 
limited service contours of which overlap with the digital noise 
limited service contour of at least one of the stations in the proposed 
combination. In areas where there is no DMA, count the TV stations 
present in an area that would be the functional equivalent of a TV 
market. Count only those TV stations digital noise limited service 
contours of which overlap with the digital noise limited service 
contour of at least one of the stations in the proposed combination.
    (2) [Reserved]
    (c) Radio-television cross-ownership rule. (1) The rule in this 
paragraph (c) is triggered when:
    (i) The predicted or measured 1 mV/m contour of an existing or 
proposed FM station (computed in accordance with Sec.  73.313) 
encompasses the entire community of license of an existing or proposed 
commonly owned TV broadcast station(s), or the principal community 
contour(s) of the TV broadcast station(s) (computed in accordance with 
Sec.  73.625) encompasses the entire community of license of the FM 
station; or
    (ii) The predicted or measured 2 mV/m groundwave contour of an 
existing or proposed AM station (computed in accordance with Sec.  
73.183 or Sec.  73.186), encompasses the entire community of license of 
an existing or proposed commonly owned TV broadcast station(s), or the 
principal community contour(s) of the TV broadcast station(s) (computed 
in accordance with Sec.  73.625) encompass(es) the entire community of 
license of the AM station.
    (2) An entity may directly or indirectly own, operate, or control 
up to two commercial TV stations (if permitted by paragraph (b) of this 
section, the local television multiple ownership rule) and one 
commercial radio station situated as described in paragraph (c)(1) of 
this section. An entity may not exceed these numbers, except as 
follows:
    (i) If at least 20 independently owned media voices would remain in 
the market post-merger, an entity can directly or indirectly own, 
operate, or control up to:
    (A) Two commercial TV and six commercial radio stations (to the 
extent permitted by paragraph (a) of this section, the local radio 
multiple ownership rule); or
    (B) One commercial TV and seven commercial radio stations (to the 
extent that an entity would be permitted to own two commercial TV and 
six commercial radio stations under paragraph (c)(2)(i)(A) of this 
section, and to the extent permitted by paragraph (a) of this section, 
the local radio multiple ownership rule).
    (ii) If at least 10 independently owned media voices would remain 
in the market post-merger, an entity can directly or indirectly own, 
operate, or control up to two commercial TV and four commercial radio 
stations (to the extent permitted by paragraph (a) of this section, the 
local radio multiple ownership rule).
    (3) To determine how many media voices would remain in the market, 
count the following:
    (i) TV stations. Independently owned and operating full-power 
broadcast TV stations within the DMA of the TV station's (or stations') 
community (or communities) of license that have digital noise limited 
service contours (computed in accordance with Sec.  73.622(e)) that 
overlap with the digital noise limited service contour(s) of the TV 
station(s) at issue;
    (ii) Radio stations. (A)(1) Independently owned operating primary 
broadcast radio stations that are in the radio metro market (as defined 
by Arbitron or another nationally recognized audience rating service) 
of:
    (i) The TV station's (or stations') community (or communities) of 
license; or
    (ii) The radio station's (or stations') community (or communities) 
of license; and
    (2) Independently owned out-of-market broadcast radio stations with 
a minimum share as reported by Arbitron or another nationally 
recognized audience rating service.
    (B) When a proposed combination involves stations in different 
radio markets, the voice requirement in paragraphs (c)(2)(i) and (ii) 
of this section must be met in each market; the radio stations of 
different radio metro markets may not be counted together.

[[Page 5165]]

    (C) In areas where there is no radio metro market, count the radio 
stations present in an area that would be the functional equivalent of 
a radio market.
    (iii) Newspapers. Newspapers that are published at least four days 
a week within the TV station's DMA in the dominant language of the 
market and that have a circulation exceeding 5% of the households in 
the DMA; and
    (iv) One cable system. If cable television is generally available 
to households in the DMA. Cable television counts as only one voice in 
the DMA, regardless of how many individual cable systems operate in the 
DMA.
    (d) Newspaper/broadcast cross-ownership rule. (1) No party 
(including all parties under common control) may directly or indirectly 
own, operate, or control a daily newspaper and a full-power commercial 
broadcast station (AM, FM, or TV) if:
    (i) The predicted or measured 2 mV/m groundwave contour of the AM 
station (computed in accordance with Sec.  73.183 or Sec.  73.186) 
encompasses the entire community in which the newspaper is published 
and, in areas designated as Nielsen Audio Metro markets, the AM station 
and the community of publication of the newspaper are located in the 
same Nielsen Audio Metro market;
    (ii) The predicted or measured 1 mV/m contour of the FM station 
(computed in accordance with Sec.  73.313) encompasses the entire 
community in which the newspaper is published and, in areas designated 
as Nielsen Audio Metro markets, the FM station and the community of 
publication of the newspaper are located in the same Nielsen Audio 
Metro market; or
    (iii) The principal community contour of the TV station (computed 
in accordance with Sec.  73.625) encompasses the entire community in 
which the newspaper is published; and the community of license of the 
TV station and the community of publication of the newspaper are 
located in the same DMA.
    (2) The prohibition in paragraph (d)(1) of this section shall not 
apply upon a showing that either the newspaper or television station is 
failed or failing.
* * * * *
    Note 2 to Sec.  73.3555: In applying the provisions of this 
section, ownership and other interests in broadcast licensees, cable 
television systems and daily newspapers will be attributed to their 
holders and deemed cognizable pursuant to the following criteria:
    a. Except as otherwise provided herein, partnership and direct 
ownership interests and any voting stock interest amounting to 5% or 
more of the outstanding voting stock of a corporate broadcast licensee, 
cable television system or daily newspaper will be cognizable;
    b. Investment companies, as defined in 15 U.S.C. 80a-3, insurance 
companies and banks holding stock through their trust departments in 
trust accounts will be considered to have a cognizable interest only if 
they hold 20% or more of the outstanding voting stock of a corporate 
broadcast licensee, cable television system or daily newspaper, or if 
any of the officers or directors of the broadcast licensee, cable 
television system or daily newspaper are representatives of the 
investment company, insurance company or bank concerned. Holdings by a 
bank or insurance company will be aggregated if the bank or insurance 
company has any right to determine how the stock will be voted. 
Holdings by investment companies will be aggregated if under common 
management.
    c. Attribution of ownership interests in a broadcast licensee, 
cable television system or daily newspaper that are held indirectly by 
any party through one or more intervening corporations will be 
determined by successive multiplication of the ownership percentages 
for each link in the vertical ownership chain and application of the 
relevant attribution benchmark to the resulting product, except that 
wherever the ownership percentage for any link in the chain exceeds 
50%, it shall not be included for purposes of this multiplication. For 
purposes of paragraph i. of this note, attribution of ownership 
interests in a broadcast licensee, cable television system or daily 
newspaper that are held indirectly by any party through one or more 
intervening organizations will be determined by successive 
multiplication of the ownership percentages for each link in the 
vertical ownership chain and application of the relevant attribution 
benchmark to the resulting product, and the ownership percentage for 
any link in the chain that exceeds 50% shall be included for purposes 
of this multiplication. [For example, except for purposes of paragraph 
(i) of this note, if A owns 10% of company X, which owns 60% of company 
Y, which owns 25% of ``Licensee,'' then X's interest in ``Licensee'' 
would be 25% (the same as Y's interest because X's interest in Y 
exceeds 50%), and A's interest in ``Licensee'' would be 2.5% (0.1 x 
0.25). Under the 5% attribution benchmark, X's interest in ``Licensee'' 
would be cognizable, while A's interest would not be cognizable. For 
purposes of paragraph i. of this note, X's interest in ``Licensee'' 
would be 15% (0.6 x 0.25) and A's interest in ``Licensee'' would be 
1.5% (0.1 x 0.6 x 0.25). Neither interest would be attributed under 
paragraph i. of this note.]
    d. Voting stock interests held in trust shall be attributed to any 
person who holds or shares the power to vote such stock, to any person 
who has the sole power to sell such stock, and to any person who has 
the right to revoke the trust at will or to replace the trustee at 
will. If the trustee has a familial, personal or extra-trust business 
relationship to the grantor or the beneficiary, the grantor or 
beneficiary, as appropriate, will be attributed with the stock 
interests held in trust. An otherwise qualified trust will be 
ineffective to insulate the grantor or beneficiary from attribution 
with the trust's assets unless all voting stock interests held by the 
grantor or beneficiary in the relevant broadcast licensee, cable 
television system or daily newspaper are subject to said trust.
    e. Subject to paragraph i. of this note, holders of non-voting 
stock shall not be attributed an interest in the issuing entity. 
Subject to paragraph i. of this note, holders of debt and instruments 
such as warrants, convertible debentures, options or other non-voting 
interests with rights of conversion to voting interests shall not be 
attributed unless and until conversion is effected.
    f. 1. A limited partnership interest shall be attributed to a 
limited partner unless that partner is not materially involved, 
directly or indirectly, in the management or operation of the media-
related activities of the partnership and the licensee or system so 
certifies. An interest in a Limited Liability Company (``LLC'') or 
Registered Limited Liability Partnership (``RLLP'') shall be attributed 
to the interest holder unless that interest holder is not materially 
involved, directly or indirectly, in the management or operation of the 
media-related activities of the partnership and the licensee or system 
so certifies.
    2. For a licensee or system that is a limited partnership to make 
the certification set forth in paragraph f. 1. of this note, it must 
verify that the partnership agreement or certificate of limited 
partnership, with respect to the particular limited partner exempt from 
attribution, establishes that the exempt limited partner has no 
material involvement, directly or indirectly, in the management or 
operation of the media activities of the partnership. For a licensee or 
system that is an LLC or RLLP to make the certification set forth in 
paragraph f. 1. of this note, it must verify that the organizational 
document,

[[Page 5166]]

with respect to the particular interest holder exempt from attribution, 
establishes that the exempt interest holder has no material 
involvement, directly or indirectly, in the management or operation of 
the media activities of the LLC or RLLP. The criteria which would 
assume adequate insulation for purposes of this certification are 
described in the Memorandum Opinion and Order in MM Docket No. 83-46, 
FCC 85-252 (released June 24, 1985), as modified on reconsideration in 
the Memorandum Opinion and Order in MM Docket No. 83-46, FCC 86-410 
(released November 28, 1986). Irrespective of the terms of the 
certificate of limited partnership or partnership agreement, or other 
organizational document in the case of an LLC or RLLP, however, no such 
certification shall be made if the individual or entity making the 
certification has actual knowledge of any material involvement of the 
limited partners, or other interest holders in the case of an LLC or 
RLLP, in the management or operation of the media-related businesses of 
the partnership or LLC or RLLP.
    3. In the case of an LLC or RLLP, the licensee or system seeking 
insulation shall certify, in addition, that the relevant state statute 
authorizing LLCs permits an LLC member to insulate itself as required 
by our criteria.
    g. Officers and directors of a broadcast licensee, cable television 
system or daily newspaper are considered to have a cognizable interest 
in the entity with which they are so associated. If any such entity 
engages in businesses in addition to its primary business of 
broadcasting, cable television service or newspaper publication, it may 
request the Commission to waive attribution for any officer or director 
whose duties and responsibilities are wholly unrelated to its primary 
business. The officers and directors of a parent company of a broadcast 
licensee, cable television system or daily newspaper, with an 
attributable interest in any such subsidiary entity, shall be deemed to 
have a cognizable interest in the subsidiary unless the duties and 
responsibilities of the officer or director involved are wholly 
unrelated to the broadcast licensee, cable television system or daily 
newspaper subsidiary, and a statement properly documenting this fact is 
submitted to the Commission. [This statement may be included on the 
appropriate Ownership Report.] The officers and directors of a sister 
corporation of a broadcast licensee, cable television system or daily 
newspaper shall not be attributed with ownership of these entities by 
virtue of such status.
    h. Discrete ownership interests will be aggregated in determining 
whether or not an interest is cognizable under this section. An 
individual or entity will be deemed to have a cognizable investment if:
    1. The sum of the interests held by or through ``passive 
investors'' is equal to or exceeds 20 percent; or
    2. The sum of the interests other than those held by or through 
``passive investors'' is equal to or exceeds 5 percent; or
    3. The sum of the interests computed under paragraph h. 1. of this 
note plus the sum of the interests computed under paragraph h. 2. of 
this note is equal to or exceeds 20 percent.
    i.1. Notwithstanding paragraphs e. and f. of this Note, the holder 
of an equity or debt interest or interests in a broadcast licensee, 
cable television system, daily newspaper, or other media outlet subject 
to the broadcast multiple ownership or cross-ownership rules 
(``interest holder'') shall have that interest attributed if:
    A. The equity (including all stockholdings, whether voting or 
nonvoting, common or preferred) and debt interest or interests, in the 
aggregate, exceed 33 percent of the total asset value, defined as the 
aggregate of all equity plus all debt, of that media outlet; and
    B.(i) The interest holder also holds an interest in a broadcast 
licensee, cable television system, newspaper, or other media outlet 
operating in the same market that is subject to the broadcast multiple 
ownership or cross-ownership rules and is attributable under paragraphs 
of this note other than this paragraph i.; or
    (ii) The interest holder supplies over fifteen percent of the total 
weekly broadcast programming hours of the station in which the interest 
is held. For purposes of applying this paragraph, the term, ``market,'' 
will be defined as it is defined under the specific multiple ownership 
rule or cross-ownership rule that is being applied, except that for 
television stations, the term ``market,'' will be defined by reference 
to the definition contained in the local television multiple ownership 
rule contained in paragraph (b) of this section.
    2. Notwithstanding paragraph i.1. of this Note, the interest holder 
may exceed the 33 percent threshold therein without triggering 
attribution where holding such interest would enable an eligible entity 
to acquire a broadcast station, provided that:
    i. The combined equity and debt of the interest holder in the 
eligible entity is less than 50 percent, or
    ii. The total debt of the interest holder in the eligible entity 
does not exceed 80 percent of the asset value of the station being 
acquired by the eligible entity and the interest holder does not hold 
any equity interest, option, or promise to acquire an equity interest 
in the eligible entity or any related entity. For purposes of this 
paragraph i.2, an ``eligible entity'' shall include any entity that 
qualifies as a small business under the Small Business Administration's 
size standards for its industry grouping, as set forth in 13 CFR 
121.201, at the time the transaction is approved by the FCC, and holds:
    A. 30 percent or more of the stock or partnership interests and 
more than 50 percent of the voting power of the corporation or 
partnership that will own the media outlet; or
    B. 15 percent or more of the stock or partnership interests and 
more than 50 percent of the voting power of the corporation or 
partnership that will own the media outlet, provided that no other 
person or entity owns or controls more than 25 percent of the 
outstanding stock or partnership interests; or
    C. More than 50 percent of the voting power of the corporation that 
will own the media outlet if such corporation is a publicly traded 
company.
    j. ``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.
    1. Where two radio stations are both located in the same market, as 
defined for purposes of the local radio ownership rule contained in 
paragraph (a) of this section, and a party (including all parties under 
common control) with a cognizable interest in one such station brokers 
more than 15 percent of the broadcast time per week of the other such 
station, that party shall be treated as if it has an interest in the 
brokered station subject to the limitations set forth in paragraphs 
(a), (c), and (d) of this section. This limitation shall apply 
regardless of the source of the brokered programming supplied by the 
party to the brokered station.
    2. Where two television stations are both located in the same 
market, as defined in the local television ownership rule contained in 
paragraph (b) of this section, and a party (including all parties under 
common control) with a cognizable interest in one such station brokers 
more than 15 percent of the broadcast time per week of the other such 
station, that party shall

[[Page 5167]]

be treated as if it has an interest in the brokered station subject to 
the limitations set forth in paragraphs (b), (c), (d) and (e) of this 
section. This limitation shall apply regardless of the source of the 
brokered programming supplied by the party to the brokered station.
    3. Every time brokerage agreement of the type described in this 
Note shall be undertaken only pursuant to a signed written agreement 
that shall contain a certification by the licensee or permittee of the 
brokered station verifying that it maintains ultimate control over the 
station's facilities including, specifically, control over station 
finances, personnel and programming, and by the brokering station that 
the agreement complies with the provisions of paragraphs (b), (c), and 
(d) of this section if the brokering station is a television station or 
with paragraphs (a), (c), and (d) of this section if the brokering 
station is a radio station.
    k. ``Joint Sales Agreement'' is an agreement with a licensee of a 
``brokered station'' that authorizes a ``broker'' to sell advertising 
time for the ``brokered station.''
    1. Where two radio stations are both located in the same market, as 
defined for purposes of the local radio ownership rule contained in 
paragraph (a) of this section, and a party (including all parties under 
common control) with a cognizable interest in one such station sells 
more than 15 percent of the advertising time per week of the other such 
station, that party shall be treated as if it has an interest in the 
brokered station subject to the limitations set forth in paragraphs 
(a), (c), and (d) of this section.
    2. Where two television stations are both located in the same 
market, as defined for purposes of the local television ownership rule 
contained in paragraph (b) of this section, and a party (including all 
parties under common control) with a cognizable interest in one such 
station sells more than 15 percent of the advertising time per week of 
the other such station, that party shall be treated as if it has an 
interest in the brokered station subject to the limitations set forth 
in paragraphs (b), (c), (d), and (e) of this section.
    3. Every joint sales agreement of the type described in this Note 
shall be undertaken only pursuant to a signed written agreement that 
shall contain a certification by the licensee or permittee of the 
brokered station verifying that it maintains ultimate control over the 
station's facilities, including, specifically, control over station 
finances, personnel and programming, and by the brokering station that 
the agreement complies with the limitations set forth in paragraphs 
(b), (c), and (d) of this section if the brokering station is a 
television station or with paragraphs (a), (c), and (d) of this section 
if the brokering station is a radio station.
* * * * *
    Note 4 to Sec.  73.3555: Paragraphs (a) through (d) of this section 
will not be applied so as to require divestiture, by any licensee, of 
existing facilities, and will not apply to applications for assignment 
of license or transfer of control filed in accordance with Sec.  
73.3540(f) or Sec.  73.3541(b), or to applications for assignment of 
license or transfer of control to heirs or legatees by will or 
intestacy, or to FM or AM broadcast minor modification applications for 
intra-market community of license changes, if no new or increased 
concentration of ownership would be created among commonly owned, 
operated or controlled media properties. Paragraphs (a) through (d) of 
this section will apply to all applications for new stations, to all 
other applications for assignment or transfer, to all applications for 
major changes to existing stations, and to all other applications for 
minor changes to existing stations that seek a change in an FM or AM 
radio station's community of license or create new or increased 
concentration of ownership among commonly owned, operated or controlled 
media properties. Commonly owned, operated or controlled media 
properties that do not comply with paragraphs (a) through (d) of this 
section may not be assigned or transferred to a single person, group or 
entity, except as provided in this Note, the Report and Order in Docket 
No. 02-277, released July 2, 2003 (FCC 02-127), or the Second Report 
and Order in MB Docket No. 14-50, FCC 16-107 (released August 25, 
2016).
    Note 5 to Sec.  73.3555: Paragraphs (b) through (e) of this section 
will not be applied to cases involving television stations that are 
``satellite'' operations. Such cases will be considered in accordance 
with the analysis set forth in the Report and Order in MM Docket No. 
87-8, FCC 91-182 (released July 8, 1991), as further explained by the 
Report and Order in MB Docket No. 18-63, FCC 19-17, (released March 12, 
2019), in order to determine whether common ownership, operation, or 
control of the stations in question would be in the public interest. An 
authorized and operating ``satellite'' television station, the digital 
noise limited service contour of which overlaps that of a commonly 
owned, operated, or controlled ``non-satellite'' parent television 
broadcast station, or the principal community contour of which 
completely encompasses the community of publication of a commonly 
owned, operated, or controlled daily newspaper, or the community of 
license of a commonly owned, operated, or controlled AM or FM broadcast 
station, or the community of license of which is completely encompassed 
by the 2 mV/m contour of such AM broadcast station or the 1 mV/m 
contour of such FM broadcast station, may subsequently become a ``non-
satellite'' station under the circumstances described in the 
aforementioned Report and Order in MM Docket No. 87-8. However, such 
commonly owned, operated, or controlled ``non-satellite'' television 
stations and AM or FM stations with the aforementioned community 
encompassment, may not be transferred or assigned to a single person, 
group, or entity except as provided in Note 4 of this section. Nor 
shall any application for assignment or transfer concerning such ``non-
satellite'' stations be granted if the assignment or transfer would be 
to the same person, group or entity to which the commonly owned, 
operated, or controlled newspaper is proposed to be transferred, except 
as provided in Note 4 of this section.
    Note 6 to Sec.  73.3555: For purposes of this section a daily 
newspaper is one which is published four or more days per week, which 
is in the dominant language in the market, and which is circulated 
generally in the community of publication. A college newspaper is not 
considered as being circulated generally.
    Note 7 to Sec.  73.3555: The Commission will entertain applications 
to waive the restrictions in paragraph (b) and (c) of this section (the 
local television ownership rule and the radio/television cross-
ownership rule) on a case-by-case basis. In each case, we will require 
a showing that the in-market buyer is the only entity ready, willing, 
and able to operate the station, that sale to an out-of-market 
applicant would result in an artificially depressed price, and that the 
waiver applicant does not already directly or indirectly own, operate, 
or control interest in two television stations within the relevant DMA. 
One way to satisfy these criteria would be to provide an affidavit from 
an independent broker affirming that active and serious efforts have 
been made to sell the permit, and that no reasonable offer from an 
entity outside the market has been received.
    We will entertain waiver requests as follows:
    1. If one of the broadcast stations involved is a ``failed'' 
station that has

[[Page 5168]]

not been in operation due to financial distress for at least four 
consecutive months immediately prior to the application, or is a debtor 
in an involuntary bankruptcy or insolvency proceeding at the time of 
the application.
    2. For paragraph (b) of this section only, if one of the television 
stations involved is a ``failing'' station that has an all-day audience 
share of no more than four per cent; the station has had negative cash 
flow for three consecutive years immediately prior to the application; 
and consolidation of the two stations would result in tangible and 
verifiable public interest benefits that outweigh any harm to 
competition and diversity.
    3. For paragraph (b) of this section only, if the combination will 
result in the construction of an unbuilt station. The permittee of the 
unbuilt station must demonstrate that it has made reasonable efforts to 
construct but has been unable to do so.
* * * * *
    Note 9 to Sec.  73.3555: Paragraph (a)(1) of this section will not 
apply to an application for an AM station license in the 1605-1705 kHz 
band where grant of such application will result in the overlap of the 
5 mV/m groundwave contours of the proposed station and that of another 
AM station in the 535-1605 kHz band that is commonly owned, operated or 
controlled. Paragraphs (d)(1)(i) and (ii) of this section will not 
apply to an application for an AM station license in the 1605-1705 kHz 
band by an entity that owns, operates, controls or has a cognizable 
interest in AM radio stations in the 535-1605 kHz band.
* * * * *
    Note 12 to Sec.  73.3555: Parties seeking waiver of paragraph 
(d)(1) of this section, or an exception pursuant to paragraph (d)(2) of 
this section involving failed or failing properties, should refer to 
the Second Report and Order in MB Docket No. 14-50, FCC 16-107 
(released August 25, 2016).

[FR Doc. 2020-00671 Filed 1-28-20; 8:45 am]
BILLING CODE 6712-01-P