The FCC has revised its broadcast and cable/MDS ownership attribution rules. The
attribution rules define what constitutes a "cognizable interest" for purposes of applying the
ownership rules. A Report and Order (FCC 99-207) adopted today improves the precision of
the attribution rules and makes them more clear to financial markets. Regulatory certainty for the
attribution rules is necessary to prevent disruptions in the flow of capital into broadcasting.
Through these changes, the FCC and the industry will be better able to identify the real interests
that companies hold in broadcast properties.|
Key elements of this order include:
Except for LMAs, any interests acquired on or after November 7, 1996, the date of FCC
adoption of theAttribution Further Notice of Proposed Rulemaking, are subject to the rules
adopted in this Report and Order. If the interest was acquired before that date, it is grandfathered
and not subject to these revised rules.
- adoption of a new "equity/debt plus" attribution rule which would function in addition to
the current attribution rules. Under this new rule, a holder of a financial interest, whether
equity or debt or both, in excess of 33% of a licensee's total assets will have an attributable
interest in that licensee if it is either a major program supplier to that licensee (supplying
more than 15 percent of a station's total weekly broadcast programming hours) or if it is a
same market media entity (including broadcasters, cable operators and newspapers). All
stock, both common and preferred, both voting and nonvoting, will be counted toward the
- retention of the 5% voting stock benchmark while raising the voting stock benchmark for
passive investors (bank trust department, mutual funds, and insurance companies) to 20%
(from the existing 10% benchmark);
- adoption of a new attribution rule for television Local Marketing Agreements (LMAs).
Under this rule, time brokerage of another television station in the same market, for more
than 15% of the brokered station's broadcast hours per week will result in attribution of
- elimination of current aspects of the cross-interest policy (i.e., key employee relationships,
nonattributable equity interests, joint venture arrangements);
- no change in the treatment of joint sales agreements (JSAs);
- no change in the treatment of limited partnership interests as distinct from corporate
voting equity interests.
- application of limited partnership insulation criteria to determine attribution of limited
liability companies (LLCs).
- application of revised broadcast attribution criteria to cable/MDS and broadcast/cable
Action by the Commission August 5, 1999, by Report and Order (FCC 99-207). Chairman
Kennard, Commissioners Ness and Powell with Commissioners Tristani and Furchtgott-
Roth dissenting in part, concurring in part and all five Commissioners issuing separate
Mass Media Bureau contacts: Mania K. Baghdadi, Roger Holberg at (202) 418-2120.
TTY: (202) 418-1398 (Office of Public Affairs).