Good And Bad In FCC’s New Disclosure Plan

At its open meeting tomorrow, the FCC, led by Chairman Julius Genachowski, is expected to throw out its dormant 2007 “enhanced disclosure” rules that raised the ire of broadcasters, but it’s also expected to propose a new set of disclosure obligations that broadcasters may find equally upsetting.

Like the 2007 rules, the proposed ones call for more detailed reports from stations on the programming they air so that the FCC can better assess whether they are meeting their obligation to serve the public interest. But the proposed disclosures are not as demanding as the 2007 ones.

At the same time, the FCC is proposing to modify and expand the requirement in the 2007 rules that stations place their FCC-mandated public files online for easier access.

Most important, stations would have to include in the online files political advertising records showing the purchases of time by candidates, PACs and other political advocacy groups. The agency is also proposing that the online files be kept on an FCC-hosted website.

The proposals would advance through two parallel proceedings — the programming disclosures in a Notice of Inquiry and the online requirements in a Further Notice of Proposed Rulemaking.

Requiring just one more round of comments and reply comments, the Further Notice could be brought to a vote on final rules early next year.

Backers of the 2007 rules and other advocates for greater transparency for broadcast licensees are backing the FCC’s new approach, having been assured by Genachowski’s office that both proceedings will be on a fast track.

“We were told this is a high priority and the FCC will move it quickly without any undue delay,” says Corie Wright, attorney for Free Press. “It will be a matter of months, not years.”

Free Press and other advocacy groups formed the  Public Interest, Public Airwaves Coalition (PIPAC) which is considered the driving force behind the new proposals.

In 2007, the FCC, led by former Chairman Kevin Martin, adopted the “enhanced disclosure’’ rules, which included a mandate that stations prepare elaborate quarterly reports on all the programming they aired in a variety of “public interest” and local programming categories.

The reports on Form 355 would have superseded the relatively spare quarterly issues/program lists that stations now must maintain.

The 2007 rules also require stations to post their public files on their own websites or on the website of their state broadcast association.

It was all too much for broadcasters, who complained about the paperwork burden and petitioned the FCC for reconsideration and challenged the rules in the U.S. Court of Appeals in Washington. The rules also got hung up in the Office of Management and Budget, which routinely assesses the burden new federal regulations will have on businesses.

Without OMB approval, the FCC never enforced the rules. “The FCC  recognized that its form was far too complicated and that it would have forced stations to go out and hire someone just to fill out the form,” says David Oxenford, an attorney with Davis Wright Tremaine.

Tomorrow’s actions are the FCC response to the petitions for reconsideration.

The FCC’s actions are motivated in part by the  agency’s “Report on the Information Needs of Communities” released in June. That report concluded that the agency should eliminate the “enhanced disclosure’’ rules, but also urged it to move ahead with getting public files online.

It said that a new streamlined, Web-based form that would require broadcasters to provide programming information based on a composite or sample week might be a good substitute.

Picking up on the recommendation, PIPAC has been pushing for a new program reporting system requiring information for two composite weeks per quarter selected by the FCC. The reports would be tailored so that they could be easily posted, compiled and accessed online.

According to PIPAC FCC filings, the reports would disclose what stations are airing in “core” categories, including “local news, local civic/governmental affairs [and] local electoral affairs.”

Under current FCC rules, stations must maintain a mass of information in their public file and make it accessible to anybody who walks in the door.

The required information includes FCC applications, FCC authorization and signal contour maps, ownership reports and related material, EEO reports, letters and email from the public, FCC children’s programming reports, commercial limits certification, FCC consumer education quarterly report, the quarterly issues/programs lists, DTV transition reports, a political file, joint sales agreements, time brokerage agreements and a station’s must-carry or retransmission consent election.

“For a long time public interest groups have been pushing to get better access to these files,” says Free Press’s Wright. “Given the convenience of the Internet and its relative ubiquity, we think it is high time it was put in an online form so that people can see it without having to take off work.”

While delighted that the FCC is scrapping the old rules, broadcasters are not particularly happy with how the new ones are shaping up.

Putting files online would be opening “pandora’s box,” said one communications lawyer. “It will only give a station’s enemy ammunition to challenge a station renewal or embarrass a broadcaster.”

In a letter to the FCC, NAB raises concerns that the proposed rules will require that the online public file “contain new information that is not currently in the file, such as sponsorship identification information or additional contracts.’’

Indeed, PIPAC asked the FCC this summer to make sure that online public files include time brokerage, joint sales and joint operating agreements and sponsorship identification information.

Currently, stations only have to include time brokerage and joint sales agreements in their public file.

Of particular concern to the broadcasters is the proposal to require political files online.

“We noted that the commission wisely chose to exclude stations’ political file when it previously adopted an online public file requirement,” NAB says in a letter recapping a recent visit its representatives made to the FCC.

“Developing a system of uploading, organizing and ensuring timely online access to the political file presents a significant challenge,” the letter says.

“I am not sure the FCC realizes how much political stuff  there is that would need to be constantly uploaded,” says one communications attorney. It would be a “big headache,” says another.

But advocacy groups say putting the political file online is long overdue.

“It contains a lot of important information for people working on campaigns that want to see how broadcasters are selling their time and who’s buying it. All this information is very useful. It just happens to be buried in dusty files that you may have to drive dozens of miles to get to,” says Wright.

Broadcasters may score at least one small victory in the transition from the old to new online duties. The old rules stipulated that stations include emails from the public in the online file. That requirement is reportedly not part of the new proposal.

Broadcast reps are also grumbling about the programming disclosure information the FCC is after.

“While, at first blush, the proposal seems to require less information as it only requires information for two ‘composite weeks’  per quarter, the way the proposal is set up, it really does not eliminate the biggest concern of broadcasters — that you would essentially need a full-time, new employee just to complete the report,’’ says Oxenford.

The NAB is expected to continue to argue that broadcasters’ current issues/programs lists are the best way to quantify how stations are serving their  community.

But it will get push back from Free Press.

The issues/programs list are “really, really, worthless,” says Wright. “There is no uniformity. Broadcasters can report on whatever and whenever they want to. Some don’t even report on programming. They report on charity drives they did. One broadcasters even reported that it hosted an audition for America’s Next Top Model as an example of community responsive programming.’’