“Local” No More: Radio, Cable, Satellite All Moving their (Previously) Local Public Inspection Files to the Internet
Concluding a proceeding begun a mere 18 months ago, the Commission has extended its online public file requirement well beyond the broadcast TV industry.
To no one's real surprise, the FCC has decided to expand its online public inspection file requirement - first imposed on television broadcasters in 2012 - to include radio broadcasters, cable operators and satellite radio and TV operators, too. While the expansion will be phased in (supposedly to ease the burden on smaller operations and noncommercial radio licensees), everyone should expect to have their previously "local" public inspection files online and available to just about anybody anywhere as of March 1, 2018 at the latest.
While the specifics of the new online rules vary somewhat from service to service, the essential elements here are the same across all platforms. To the extent that you have been required by the FCC to maintain a "local public inspection file" available to the public, you will be expected to upload most, but not all, of the contents of that file to an FCC-maintained online system. Some materials that are filed with the FCC (e.g., broadcast applications and/or reports filed through CDBS) will be automatically dumped into the online file by the FCC. But, as of a date the FCC will eventually announce (see below), pretty much anything else that's in the file will have to be uploaded in electronic format to the FCC's system.
The primary exception will be (as it was on the TV side) each entity's political file. Documents already in the existing political file will not need to be uploaded to the online file; they will, however, have to be maintained locally for as long as the rules require them to be retained (for broadcasters, that would be two years). But going forward from the effective date of the online system, all new political materials will have to be uploaded "as soon as possible" which, under the rules, means "immediately absent unusual circumstances".
A second exception for commercial broadcasters will involve "letters from the public". Commercial (but not NCE) broadcasters are, of course, required to place in their local public inspection files copies of letters and/or emails received from members of the public concerning station operations. Because of privacy concerns, such correspondence will not be required to be uploaded. Instead, stations will be required to continue to maintain, at their main studios, a public file containing such letters, in the unlikely event that anyone might ever ask to see them. (How unlikely? Even the Commission has acknowledged that "it's hard to imagine anyone ever visiting a station solely for the thrill of reading its mail". And following up on that tris obvious (to us, at least) observation, the Commission has committed to opening up a separate proceeding looking to eliminating the "letters from the public" retention requirement. When that will occur, however, remains to be seen.)
The expanded online public file requirement is set to be rolled out as follows.
Before anybody has to do anything, the new rules will have to be given the once-over by the Office of Management and Budget pursuant to the hilariously-named Paperwork Reduction Act. That process is likely to take at least three-four months, possibly longer if unanticipated snags crop up. Once OMB has signed off on the new rules, the FCC will announce that sign-off in the Federal Register. Thirty days after that announcement, the new rules will be deemed effective.
That does not, however, mean that anybody will have to be in full compliance with the new rules as of that effective date. Rather, the effective date will be the first date on which the online system will be available so that those in the first batch of folks newly subject to the rule can start their uploading. That first batch of folks will consist of (a) all cable systems with 1,000 or more subscribers (although some such systems do get a break of sorts, as discussed below); (b) DBS (i.e., satellite TV) providers; (c) SDARS (i.e., satellite radio) licensees; and (d) large market commercial radio stations with five or more full-time employees. In this context "large market stations" refers to stations located in any of the Nielsen Audio-defined Top 50 Markets .
Importantly, the "five or more full-time employees" is to be determined on the basis of employment units, not stations. So where a station in a Top 50 Market is commonly-owned with one or more other broadcast stations in the same market that share at least one employee, and the station employment unit has five or more full-time employees, each radio station in the group will be deemed to be in the "five or more" category and, therefore, subject to the new requirements at the earliest time.
In the FCC's view, regulatees in this first batch can be expected to have the resources necessary to handle the upload burden. These folks will have a total of six months from the effective date to complete the uploading of the necessary materials to the online file. Note, however, that the six-month get-up-to-speed period does not include newly-created political materials. Once the effective date arrives, all newly-created political materials will have to be uploaded as soon as possible (i.e., immediately).
The second batch of folks consists of all NCE radio broadcasters and all remaining commercial radio stations, i.e., (a) all commercial stations which are located outside any of the Top 50 Markets and (b) all commercial stations which are located in any of the Top 50 Markets and have fewer than five full-time employees. This second batch isn't off the hook entirely - they just get a bit more time: these entities are not required to start uploading "new" political materials and have the rest of their legacy public file materials uploaded to the FCC's system until March 1, 2018. And one subset of cable operators also enjoys some leniency along these lines. Cable systems with at least 1,000 subscribers but fewer than 5,000 need not start uploading "new" political materials until March 1, 2018. With that one exception, though, cable systems with 1,000 or more subscribers will be required to have their public files uploaded within six months of the effective date of the new rules.
So large entities (i.e., those in the first batch) won't have to start uploading "new" political materials until the effective date, which will be 30 days after the FCC announces that OMB has approved the rules, which isn't likely to happen for another three months, at least. So they can probably figure that that chore will kick in sometime this summer or early fall, barring any unforeseen problems. And the first batch will then have a total of six months after the effective date - which probably puts us sometime in early 2017 - to get all of their legacy files uploaded.
By contrast, smaller entities won't have to start uploading "new" political materials until March 1, 2018, but by that date they will have to have the rest of their files already uploaded to the FCC's system.
There are various niceties that apply in various circumstances outlined in the Commission's Report and Order. Example: Everyone will have to identify one individual to be listed in the online public file as the contact person for that file. Another example: broadcast stations will still have to provide on their websites (if they have a website) a separate link to their EEO materials. Going forward, it will be permissible for that link to direct to the specific page in the online file containing the relevant EEO materials. And yet another example: the Commission imposes some back-up obligations on regulatees so that the information in the public files will still be available should the Commission's system tank at any point.
On a more general note, the Commission indicates that waivers of the online public file requirement may be granted - but if we were you, we wouldn't be getting our hopes up on that front.
We recommend that you review the decision carefully to see which of those niceties may apply to you. We also suspect that, as the effective date approaches, the Commission will provide additional guidance and reminders. Check back here for updates.
Anyone interested in getting ahead of the curve may want to take a look at our posts, vintage 2012, describing the upload process for TV stations. (You can find two of them here and here.) Since the upload process is not necessarily intuitively obvious, you may find it useful to be able to see screen grabs of the system in operation. While it's possible that the Commission may have tweaked the process some by the time the next wave of uploading has to get started, we're reasonably confident that our descriptions will nevertheless help the uninitiated get used to the drill.
The expanded universe of online public filers will increase more than seven-fold the amount of material the Commission's system will have to accommodate; there are, after all, more than 15,000 radio stations that will now have to be given their own online file space, as opposed to the 2,000 or so TV stations " and that's not counting cable systems and satellite operators. In anticipation of that, the Commission has already transitioned to "cloud-based computing solutions" to manage the online public file database. Presumably its several years' experience with the TV online public file has provided the Commission insight into the process, insight that gives the FCC confidence that this massive expansion can be handled without much risk of epic failure. Let's keep our fingers crossed.
Two closing observations.
First, in its decision the Commission effectively acknowledges that the "local public inspection file" really is no longer "local" by any stretch of the imagination. Originally, the file was intended to promote interaction between a broadcast station and its audience by giving interested audience members the opportunity and incentive to visit the station, review its public file materials, and possibly even speak with station officials. The conventional wisdom throughout the broadcast industry - conventional wisdom borne of decades of experience - is that the public file never came close to achieving that fanciful goal. To the contrary, local public inspection files have for the most part gone totally (or nearly so) uninspected year after year.
By moving the public file to the Internet, the Commission is removing any pretense of "localism" and is, instead, assuring the files' availability to anybody anywhere. The Commission continues to intone the traditional notion that "the public file is first and foremost a tool for community members", notwithstanding half a century of experience to the contrary. But now, possibly recognizing the implausibility of that traditional notion, the FCC is shifting gears: it advises that the public file is also a tool for the "larger media policy community", a community consisting of "public advocacy groups, journalists, and researchers [who] act in part as surrogates for a portion of the viewing public in evaluating and reporting on broadcast stations' performance."
In other words, the audience members who were the intended beneficiaries of the public file need "surrogates". Why that may be is not indicated. Broadcast audience members, after all, seem highly capable of evaluating a station's performance by choosing to tune into the station or not. The need for surrogates therefore seems, at best, dubious, and certainly inconsistent with the original goal of the public file requirement. But that original goal now seems to have quietly faded away.
Second, the Commission's decision here is the culmination of a proceeding that was commenced by a petition for rulemaking filed on July 31, 2014 - exactly 18 months ago. It's difficult to recall any other rulemaking that went from initial petition to final decision that fast. On the one hand, this reflects an admirable ability on the FCC's part to get things done speedily. On the other, it raises a question: why did the FCC happen to accord, in effect, same-day service to the petition for rulemaking in this case, while the agency allows so many other matters of seemingly equal, if not greater, practical importance to languish, ignored, for years?
We'll keep an eye out for developments that may be of interest on this front, and we'll report on them as they arise.