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NPRM, NCE Stations and Third Party Fundraising

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Released: April 26, 2012

Federal Communications Commission

FCC 12-43

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
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)

Noncommercial Educational Station Fundraising
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for Third-Party Non-Profit Organizations
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MB Docket No. 12-106
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)

NOTICE OF PROPOSED RULEMAKING

Adopted: April 25, 2012

Released: April 26, 2012

Comment Date: [30 days after date of Publication in the Federal Register]
Reply Comment Date: [60 days after date of Publication in the Federal Register]

By the Commission: Chairman Genachowski issuing a statement.

I.

INTRODUCTION

1.
In this Notice of Proposed Rulemaking (“NPRM” or “Notice”), we solicit comment on
whether and under what circumstances to allow noncommercial educational (“NCE”) broadcast stations
to conduct on-air fundraising activities that interrupt regular programming for the benefit of third-party
non-profit organizations. Under the Commission’s rules, in the absence of a waiver, an NCE station may
not conduct fundraising activities to benefit any entity besides the station itself if the activities would
substantially alter or suspend regular programming.1 The recent report on “The Information Needs of
Communities” (“INC Report”) recommended that we consider affording noncommercial broadcasters
more flexibility by allowing certain NCE stations to engage in fundraising for charities and other third-
party non-profit organizations.2 This NPRM promotes the goals of Executive Order 13579 by analyzing
whether the Commission’s longstanding policy against fundraising for third-party non-profits may be
tailored to grant NCE stations limited flexibility without undermining the policy’s important goals.3

II.

BACKGROUND

2.
Under longstanding Commission policy, an NCE station may not conduct fundraising


1 See 47 C.F.R. §§ 73.503(d) and Note, 73.621(e) and Note; Commission Policy Concerning the Noncommercial
Nature of Educational Broadcast Stations
, Second Report and Order, 86 FCC 2d 141, 157-58, ¶¶ 42-43 (1981)
(“Second Report”), Memorandum Opinion and Order, 90 FCC 2d 895, 907, ¶ 20 (1982) (“Policy Statement”), recon.
granted
, Memorandum Opinion and Order, 97 FCC 2d 255, 264-65, ¶ 19 (1984) (“Reconsideration Order”). See
also Ohio State Univ.
, 62 FCC 2d 449, 450 (1976).
2 See “The Information Needs of Communities: The Changing Media Landscape in a Broadband Age,” by Steven
Waldman and the Working Group on Information Needs of Communities at 356 (June 2011), available at
www.fcc.gov/infoneedsreport.
3 See Exec. Order No. 13,579, § 2, 76 Fed. Reg. 41,587 (July 11, 2011); Preliminary Plan for Retrospective Analysis
of Existing Rules
, 2011 WL 5387696 (Nov. 7, 2011). Pursuant to Executive Order 13579, the Commission analyzes
rules that may be outmoded, ineffective, insufficient, or excessively burdensome and determines whether any such
regulations should be modified, streamlined, expanded, or repealed.

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activities that substantially alter or suspend regular programming and are designed to benefit any entity
other than the station itself.4 “Regular programming” includes programming that “the public broadcaster
ordinarily carries, but does not encompass those fundraising activities that suspend or alter their normal
programming fare.”5 The Commission implemented this policy to reflect the concern that “educational
stations are licensed to provide a noncommercial broadcast service, not to serve as a fund-raising
operation for other entities by broadcasting material that is ‘akin to regular advertising.’”6
3.
The Commission has relaxed some of its other policies governing the broadcast of
promotional announcements by NCE stations. Throughout this process, however, a concern that these
changes not adversely affect the educational programming mission or noncommercial character of these
stations has persisted. For example, in 1981, the Commission determined that stations could
acknowledge contributions made by donors, but it continued to prohibit the broadcast of promotional
announcements by NCE licensees in exchange for consideration, regardless of whether the sponsor of a
given announcement was a for-profit or non-profit organization.7 The Commission adopted these policies
to ‘“strike a reasonable balance between the financial needs of [public broadcast] stations and their
obligation to provide an essentially noncommercial broadcast service’ and eliminate those proscriptive
regulations deemed unnecessary to preserve the media’s noncommercial nature.”8 Notably, the revised
policy regarding contributions by donors was specifically intended to benefit the station itself and its need
for funding to continue to serve its local audience through noncommercial and educational programming.9
4.
Later in 1981, Congress adopted Section 399B of the Communications Act of 1934,
which prohibits NCE stations from broadcasting “advertisements,” defined as


4 See Policy Statement, 90 FCC 2d at 907, ¶ 20; Reconsideration Order, 97 FCC 2d at 264-65, ¶ 19. In the
Reconsideration Order, the Commission addressed licensees’ concern “that the substitution of the term ‘licensee’
for that of ‘station’ [in the Policy Statement] extends the permissible area of suspended programming beyond those
activities designed to raise support for the station’s operations to include activities designed to benefit the licensee’s
other non-station institutional business or state operations.” The Commission acknowledged that the substitution of
the term “licensee” for “station” had the unintended effect of expanding potential beneficiaries beyond that of the
station itself and clarified that the fundraising must benefit the operations of the NCE station itself. See
Reconsideration Order
, 97 FCC 2d at 265, ¶¶ 19-20 (“In the absence of a waiver, noncommercial stations are
prohibited from conducting any fundraising activity which substantially alters or suspends regular programming and
[is] designed to raise support for any entity other than the station itself.”).
5 Reconsideration Order, 97 FCC 2d at 264, ¶ 18, See also Letter from Roy J. Stewart, Chief, Mass Media Bureau,
FCC, to Chicago Educational Television Association, 10 FCC Rcd 12018, 12019 (October 23, 1995) (finding that a
scheduled broadcast of a fundraising holiday gift exchange did not constitute regular programming because it would
not ordinarily be carried by the station, and thus concluding that the station violated the Commission’s
noncommercial fundraising policy).
6 Ohio State Univ., 62 FCC 2d at 450 (quoting Noncommercial Educational Stations, 26 FCC 2d 339, 343, ¶¶ 18-19
(1970)). See also Commission Policy Concerning the Noncommercial Nature of Educational Broadcast Stations,
First Report and Order, 69 FCC 2d 200, 226 ¶ 52 (1978) (“we adhere to our view that broadcast of such matter is
inconsistent with the noncommercial nature of educational broadcasting. Furthermore, we believe that the devotion
of programming time to raising money by on-the-air auctions for charitable or other organizations does not serve the
purposes for which noncommercial educational broadcasting was established. The only plausible justification for
permitting auctions for the benefit of others is that the station would retain a substantial portion of the revenue.
However, even this justification is unpersuasive in view of the large amount of broadcast time licensees already
devote to fund-raising. Simply put, noncommercial educational broadcasting is the wrong vehicle for general fund-
raising by auctions and the only reason an exception is made on behalf of licensees is to aid in their efforts to
provide the programming which they were licensed to broadcast.”).
7 See Second Report, 86 FCC 2d at 142-143 ¶¶ 4, 7-8.
8 Policy Statement, 90 FCC 2d at 897, ¶ 3 (quoting Second Report, 86 FCC 2d at 141, ¶ 4).
9 See id. at 900, ¶ 8.
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any message or other programming material which is broadcast or otherwise transmitted
in exchange for any remuneration, and which is intended—
(1) to promote any service, facility, or product offered by any person who is engaged in
such offering for profit;
(2) to express the views of any person with respect to any matter of public importance or
interest; or
(3) to support or oppose any candidate for political office.10
In light of this statute’s enactment, the Commission reviewed its NCE policies in 1982. In the resulting
Policy Statement, the Commission determined that non-profit organizations are excluded from the
meaning of the phrase “any person who is engaged in such offering for profit” in Section 399B.11 Thus,
the Commission revised the Second Report’s determination regarding consideration received to allow the
broadcast of promotional announcements sponsored by non-profit organizations in order to conform the
rule to Section 399B of the Act.12 Despite these changes and other liberalizations of the fundraising and
donor acknowledgment rules, the Commission continued the ban on conducting fundraising activities
which substantially alter or suspend regular programming and are designed to benefit any entity other
than the station itself, codifying these requirements in Sections 73.503(d) and 73.621(e) of the
Commission’s rules.13 Those rules provide, in pertinent part, that “[t]he scheduling of any
announcements . . . may not interrupt regular programming.”14
5.
Commission staff has occasionally granted waivers of these rules in extraordinary
circumstances. For example, the Commission granted a waiver to the licensee of an NCE television
station to broadcast a three-hour fundraiser for Wolf Trap Foundation, with the money to be used to
rebuild the Filene Center at Wolf Trap Farm Park which had burned down.15 The Commission granted
the waiver in part based on the fact that the fundraising programming would be consistent with regular
programming, in that more than half of the program would consist of excerpts of past programs broadcast
by the NCE station that had originated from Wolf Trap Farm, and the remainder of the program would
consist of interviews with and performances from stars who had appeared at Wolf Trap.16
6.
Similarly, the former Mass Media Bureau granted a waiver of Sections 73.621(e) and
73.503(d) of the Commission’s rules to the licensee of an NCE radio station and an NCE television
station in West Palm Beach, Florida, where the President had declared Dade County a disaster area
following Hurricane Andrew.17 The stations proposed to broadcast a two-hour simulcast along with four
area commercial television stations to raise funds and donations and provide information for the hurricane


10 47 U.S.C. §§ 399b(a), 399b(b)(1).
11 See Policy Statement, 90 FCC 2d at 899, ¶ 8.
12 See id. at 901, ¶ 10.
13 47 C.F.R. §§ 73.503(d), 73.621(e). See Policy Statement, 90 FCC 2d at 907, ¶ 20.
14 47 C.F.R. §§ 73.503(d), 73.621(e).
15 See Cohn and Marks, 51 RR 2d 659, 660 (1982) (“Cohn and Marks”).
16 See id. at 660. See also Letter from Roy J. Stewart, Chief, Mass Media Bureau, FCC, to Richard J. Bodorff and
Todd M. Stansbury, Esqs., 8 FCC Rcd 7909 (October 26, 1993) (“Bodorff Letter”) (granting a request for a waiver
of § 73.503(d) of the Commission’s rules, where the one-time on-air fundraising would benefit the St. Paul Chamber
Orchestra, which had a long history of providing programming to many stations and was facing “severe financial
distress,” and where the fundraising would maintain the existing programming format).
17 See Letter from William H. Johnson, Acting Chief, Mass Media Bureau, FCC, to Malcolm G. Stevenson, Esq., 7
FCC Rcd 5634 (August 27, 1992) (“Stevenson Letter”).
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relief effort.18 The staff granted the waiver in recognition of the catastrophic events that had occurred, the
stations’ unique ability to serve the area affected by the disaster, and the limited length of the program.19
The Commission has also granted rule waivers for fundraising for other singular catastrophic events, such
as Hurricane Katrina, the September 11, 2001 terrorist attacks, the January 2005 tsunami in Southeast
Asia, and the January 2010 earthquake in Haiti.20 More recently, the Commission established informal
procedures through which NCE licensees could request Commission approval to conduct fundraising to
aid the Japan earthquake and tsunami relief efforts, noting that it has granted waivers of Section 73.503(d)
for “fundraising appeals to support relief efforts following disasters of particular uniqueness or
magnitude” and that such waivers “have been issued for a specific fundraising program or programs, or
for sustained station appeals for periods which generally do not exceed several days.”21 In contrast, in
1995, the staff denied a request for a waiver of Section 73.503(d) where the proposed fundraising for the
Muscular Dystrophy Association occurred annually to address ongoing needs and was not limited to a
specific one-time problem.22
7.
In June 2011, a working group including Commission staff, scholars and consultants
released the INC Report, a comprehensive report on the current state of the media landscape.23 The INC
Report
discussed both the need to empower citizens to ensure that broadcasters serve their communities in
exchange for the use of public spectrum and the need to remove unnecessary burdens on broadcasters
who aim to serve their communities. Noting comments from the National Religious Broadcasters
(“NRB”),24 the INC Report recommended that we consider affording noncommercial broadcasters more
flexibility by allowing NCE stations that are not grantees of the Corporation for Public Broadcasting
(“CPB”) to spend up to one percent of their annual airtime doing fundraising for charities and other third-
party non-profit organizations.25 In order to be eligible for CPB funding, an NCE station must devote the
substantial majority of its daily total programming hours broadcast on all of its channels to CPB-qualified
programming, which is defined as “general audience programming that serves demonstrated community
needs of an educational, informational and cultural nature.”26 Programs that “further the principles of


18 See Stevenson Letter, 7 FCC Rcd at 5634.
19 See id. Andrew was a Category 5 hurricane that caused historic amounts of damage in Dade County. See “After
10 Years, Hurricane Andrew Gains Strength,” National Oceanic and Atmospheric Administration Press Release,
NOAA 02-107 (rel. Aug. 21, 2002), available at http://www.nhc.noaa.gov/NOAA_pr_8-21-02.html.
20 See Media Bureau Announces Procedures for Obtaining Commission Approval for NCE Station Fundraising to
Aid Japan Relief Efforts (March 16, 2011).
21 Id.
22 See Letter from Roy J. Stewart, Chief, Mass Media Bureau, FCC, to Karsten Amlie, 10 FCC Rcd 9763 (August
18, 1995).
23 See INC Report. As noted in the INC Report, the report was drafted by an informal working group, and the views
of the report “do not necessarily represent the views of the Federal Communications Commission, its
Commissioners or any individual Bureaus or Offices.” Id. at 362.
24 In 2008, prior to proposing the relaxation of the prohibition on third-party fundraising by NCE stations in its
comments in the Future of Media proceeding, NRB informally requested that the Commission modify its policy
regarding fundraising by NCE stations to permit NCE stations to engage in limited fundraising for 501(c)(3) non-
profit organizations without having to obtain a waiver from the Commission. See Memorandum from Craig
Parshall, Senior Vice President and General Counsel for National Religious Broadcasters to the Federal
Communications Commission at 2 (filed October 15, 2008) (“NRB Memorandum”). NRB argued that allowing
NCEs to raise funds for non-profit organizations, unlike fundraising on behalf of for-profit organizations, would
serve the public interest. Id. at 2. The NRB Memorandum will be made a part of the record of this proceeding.
25 See INC Report at 356. See also id. at 317.
26 See Corporation for Public Broadcasting, FY2012 Radio Community Service Grant General Provisions &
Eligibility Criteria at 7 (2012) (“Radio CSG General Provisions & Eligibility Criteria”), available at
(continued....)
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particular political or religious philosophies, or that are designed primarily for in-school or professional
in-service audiences” are not considered CPB-qualified programming.27 Campus stations managed and
operated by and for students, stations licensed to political organizations, and stations that provide in-
service training programming to licensee employees, clients, or representatives are also ineligible for CPB
funding.28 The INC Report noted that having local charities on the air can be a useful way of informing
residents about problems in their communities and can help NCE stations achieve their public service or
religious missions.29 The INC Report also recommended that broadcasters that take advantage of this
flexibility be required to disclose how the fundraising time is used, including how it is helping charities in
the local community, so that the Commission can assess the effectiveness of providing this flexibility.30

III.

DISCUSSION

8.
We invite comment on whether it is in the public interest to revise our rules restricting the
ability of NCE stations to conduct fundraising on behalf of third-party non-profit organizations. We
believe that the original concerns animating the longstanding restriction remain valid.31 Nevertheless, as
shown by the past grant of waivers, the Commission has concluded that an NCE station can conduct
certain fundraising activities on behalf of other non-profit organizations in some circumstances without
sacrificing its noncommercial nature. It has generally sought to limit such waivers to short-term
fundraising intended to assist communities that have suffered singular misfortunes of historic dimensions
or, more rarely, to benefit non-profit organizations directly tied to the programming activities of the
stations.32 We seek comment on whether a blanket prohibition on the substantial interruption of
programming for third-party fundraising remains necessary to preserve NCE stations’ noncommercial
nature and to retain those stations’ focus on their designated function of serving their communities of
license through educational programming, or whether it would serve the public interest to grant NCE
stations some flexibility to substantially interrupt programming to conduct fundraising on behalf of other
non-profits. If we determine that more flexibility is necessary and appropriate, we seek comment on how
we should modify our existing rules, and on what grounds.
9.
We propose to relax the prohibition on third-party fundraising for NCE stations and seek
comment on that proposal. We further invite comment on whether we should limit the scope of our
action and, if so, what the limitations should be and why. As noted above, the INC Report recommended
that we revise our rules to allow only NCE stations that are not CPB grantees, such as most religious


(...continued from previous page)
http://www.cpb.org/stations/grants/radio/generalprovisions/cpb_12RadioCSG_GeneralProvisions.pdf; Corporation
for Public Broadcasting, FY2012 Television Community Service Grant General Provisions & Eligibility Criteria at 5
(2012) (“Television CSG General Provisions & Eligibility Criteria”), available at
http://www.cpb.org/stations/grants/tv/generalprovisions/cpb_12TV_CSG_GeneralProvisions.pdf.
27 See Radio CSG General Provisions & Eligibility Criteria at 7; Television CSG General Provisions & Eligibility
Criteria
at 6.
28 See Radio CSG General Provisions & Eligibility Criteria at 7; Television CSG General Provisions & Eligibility
Criteria
at 6. Other eligibility criteria for CPB grants include requirements relating to minimum broadcast operating
schedule; station employment; minimum non-federal financial support; station facilities (radio only); locally-
originated program service (radio only); audience service (radio only); diversity of staff and board (television only);
and transparency (television only). See Radio CSG General Provisions & Eligibility Criteria at 7-9; Television CSG
General Provisions & Eligibility Criteria
at 6-7.
29 See INC Report at 356.
30 See id.
31 See supra, note 5 and accompanying text.
32 See supra, ¶¶ 5-6.
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broadcasters, to conduct fundraising for the benefit of third-party non-profit organizations.33 The INC
Report
stated that some public broadcasting officials do not want the flexibility to engage in fundraising
activities for third-party non-profit organizations because “it would put them in the awkward position of
deciding which worthy causes to support and which to reject.”34 We invite comment on whether and how
we should limit the NCE stations that may engage in limited third-party fundraising to address this
concern. How would the Commission justify any such limitation? Is third-party fundraising less likely to
trigger the concerns underlying the prohibition if conducted by certain NCE stations?35 Alternatively,
should we require NCE stations to opt in to the proposed relaxation, as discussed below in paragraph 16,
so that NCE stations that do not want flexibility to engage in third-party fundraising can simply decline to
opt in? We also invite comment on the First Amendment implications of any limitation on the classes of
NCE stations that may conduct third-party fundraising.
10.
As noted, Section 399B prohibits NCE stations from broadcasting, in exchange for
remuneration, programming material intended to promote any service, facility or product offered by any
person who is engaged in such offering for profit. Thus, if we decide to allow NCE stations additional
flexibility to conduct fundraising for other entities, the statute requires that they be limited to non-profit
entities. We seek comment on whether the Commission should further limit the kinds of non-profit
organizations that may be the beneficiaries of fundraising conducted by NCE stations. In the Policy
Statement
, the Commission noted that “‘non-profit’ entities encompass a multitude of organizations with
varied purposes and functions.”36 The Act defines the term “non-profit” (as applied to any foundation,
corporation, or association) to mean “a foundation, corporation, or association, no part of the net earnings
of which inures, or may lawfully inure, to the benefit of any private shareholder or individual.”37 NRB
suggests that we limit the class of entities for which fundraising may be conducted to organizations which
are non-profit under Section 501(c)(3) of the Internal Revenue Code38 and that we allow fundraising when
“the fundraising activities exempted shall be directed to an identified, bona fide charitable, educational, or
religious need which the non-profit 501(c)(3) organization is equipped and committed to aid.”39 We seek
comment on these suggestions. In order to eliminate uncertainty for NCE stations, would it be
appropriate to allow fundraising for any entity that qualifies as a non-profit organization under Section
501(c)(3) of the Internal Revenue Code?40 Should we establish any additional criteria to ensure that
fundraising on behalf of non-profit entities is consistent with NCE stations’ mission to serve their local
communities through educational and noncommercial programming? As discussed above, the INC
Report
suggested that having local charities on the air can be a useful way of informing residents about


33 See INC Report at 356. This limitation also would include other non-religious NCE stations that are ineligible for
CPB grants, including campus stations managed and operated by and for students, stations licensed to political
organizations, and stations that provide in-service training programming to licensee employees, clients, or
representatives. See Radio CSG General Provisions & Eligibility Criteria at 7; Television CSG General Provisions
& Eligibility Criteria
at 6.
34 See INC Report at 317.
35 See supra, note 5.
36 Policy Statement, 90 FCC 2d at 900 n.16 (citing The Exempt Organization Handbook, Internal Revenue Service at
12-13 (1982)) (providing examples of athletic, labor and agricultural associations and organizations, mutual
insurance companies or associations, benevolent life insurance associations, mutual or cooperative telephone
companies, and state chartered credit unions).
37 47 U.S.C. § 397(8) (defining the term “non-profit” for purposes of Title III, Part IV, Subpart E of the Act).
38 26 U.S.C. § 501(c)(3).
39 See NRB Memorandum at 2.
40 Section 501(c)(3) provides that certain corporations, foundations, or other organizations that operate exclusively
for religious, charitable, scientific, educational, or certain other non-profit purposes, are exempt from federal income
taxation. See 26 U.S.C. § 501(c)(3).
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problems in their communities and can help NCE stations achieve their public service or religious
missions.41 Would it further our interest in localism to limit NCE stations to soliciting donations for local
non-profit organizations? Furthermore, given that third-party fundraising on behalf of affiliated entities
may restrict an NCE station’s ability to conduct fundraising for local non-profit organizations, should we
limit fundraising on behalf of third parties to unaffiliated third parties? If so, how should we define
“affiliated”? If we limit any new flexibility for NCE stations to fundraising for local non-profit entities,
should we also retain our existing waiver process for fundraising activities for singular catastrophic events
regardless of whether they are local in nature? We also seek comment on the First Amendment
implications of any limitation on the types of entities that may benefit from fundraising activities aired on
NCE stations.
11.
In the event that we decide to modify the proscription on NCE broadcast stations
interrupting regular programming to conduct fundraising activities on behalf of other non-profit
organizations, we invite comment on how much flexibility to grant NCE stations to devote to this activity.
NRB notes that because NCE licensees rely on fundraising to support their own operations, these stations
will not want to broadcast “[e]xcessive appeals for other non-profit groups” because they “could
negatively impact the licensee’s own self-interests by diverting public support away from the broadcaster
. . . .”42 Approximately how much time do NCE stations spend each year broadcasting fundraisers on
their own behalf? We are concerned that permitting NCE broadcasters to use too much of their airtime
for unrelated non-profit fundraising could undermine the noncommercial character of the participating
facilities and divert these stations from their primary function of providing service to their communities of
license through programming. Thus, we believe a strict, if not a complete, limit on such activities would
be advisable. The INC Report recommended that we consider allowing third-party fundraising so long as
it does not exceed one percent of the broadcaster’s total annual airtime.43 We invite comment on this
approach. With respect to NCE television stations, we seek comment on how the recommended one
percent limit on third-party fundraising should be calculated and applied for stations that multicast
programming on several different channels. We also seek comment on how we should enforce a relaxed
limit on the amount of time that NCE stations may devote to third-party fundraising. Would an annual
limit of one percent be sufficient to allow stations to use third-party fundraising flexibility both for the
kinds of planned fundraising contemplated in the INC Report and for fundraising activities for disasters
and other singular catastrophic events that in the past have required waivers? The Commission has
traditionally granted waivers only for fundraising activities of “limited duration.”44 In addition to an
annual limit, should fundraising activities continue to be circumscribed in this way, such as by adopting a
durational limit on a specific program and/or on a discrete fundraising effort?
12.
In the event we modify the current prohibition, we invite comment on whether we should
require that an NCE station itself conduct all third-party fundraising activities, including collecting funds
and distributing the funds to the non-profit entity, rather than airing fundraising programs produced by the
non-profit organization or some other entity on behalf of the non-profit organization. Would requiring an
NCE station to locally produce its third-party fundraising activities promote localism? What are the
potential benefits and costs of requiring NCE stations to locally produce third-party fundraising activities?
Are there any other limitations we should consider imposing in order to preserve the noncommercial and
educational character of the NCE programming service?


41 See INC Report at 356.
42 See NRB Memorandum at 2.
43 See Inc Report at 356; NRB Memorandum at 2.
44 See Bodorff Letter, 8 FCC Rcd at 7909 (granting a waiver request for a 35-hour phone-in pledge drive); Stevenson
Letter
, 7 FCC Rcd at 5634 (granting a waiver request for a two-hour fundraising event, due in part to its “limited
length”); Cohn and Marks, 51 RR 2d at 660 (granting a waiver request for a three-hour fundraiser, noting that the
request was “for a limited duration.”).
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13.
Section 399B prohibits the airing, in exchange for remuneration, of programming
material intended to express views on matters of public importance or interest, or to support or oppose
political candidates.45 We note that on April 12, 2012, the Ninth Circuit Court of Appeals struck down as
unconstitutional Section 399B’s ban on public interest and political advertisements by NCE stations.46
Accordingly, we will not enforce Section 399B’s ban on public interest and political advertisements in the
Ninth Circuit once the court’s mandate goes into effect. Nevertheless, to the extent any third-party
fundraising that stations would like to conduct under a relaxed policy would fall into these categories, we
invite comment on whether the statutory term “remuneration” includes repayment of a station’s expenses
associated with such fundraising activities. Additionally, we seek comment on whether Section 399B
places any other limitations on the revision of our existing rules to permit substantial interruption of
regular programming for fundraising activities on behalf of non-profit organizations.
14.
We recognize that in certain situations third-party fundraising by an NCE station could
potentially confuse the station’s audience. For example, where an NCE station conducts fundraising
activities on behalf of a non-profit organization or charity that is closely affiliated with the station, it may
be unclear to the audience whether the station is fundraising for the station itself or for another entity. In
the event that we decide to modify the third-party fundraising policy, in order to avoid audience
confusion, should we require NCE stations to air a specified disclosure that clearly identifies the entity for
which the station is conducting the fundraising? If so, what form should this disclosure take? Would it
be sufficient for the station to clearly state that the fundraiser is not to benefit the station itself and to
identify the entity for which it is fundraising and the specific cause, if any, supported by the fundraiser?
How frequently during each fundraising effort or program should the NCE station air the disclosure? We
invite comment on whether we should require the NCE station to air the disclosure at the beginning and
the end of the fundraising program and at least once during each hour in which the program is on the air.
15.
We also seek comment on whether, in the event that we decide to modify the third-party
fundraising policy, we should require NCE stations that interrupt regular programming to conduct
fundraising for third-party non-profit organizations to submit reports to the Commission on their
fundraising activities. The INC Report recommended that the Commission consider requiring NCE
broadcasters to disclose how they are utilizing fundraising time for third-party non-profit organizations so
that the FCC can assess the effectiveness of the additional flexibility recommended therein.47 If we
require NCE stations to submit reports on third-party fundraising, what information should the stations be
required to include in the reports? For example, the reports could include, for each fundraiser, the date
and time of the fundraiser, the name of the non-profit entity benefitted by the fundraiser and whether this
entity is a local organization, the specific cause, if any, supported by the fundraiser, the type of
fundraising activity, the duration of the fundraiser, and the total funds raised. We seek comment on
whether each of these reporting elements would be useful. What, if any, additional information should be
included? Should NCE stations be required to file the reports on an annual basis? While we do not
believe that filing such reports would be unduly burdensome, we invite suggestions for minimizing the
reporting burden on NCE broadcasters. Furthermore, we invite comment on whether we should require
NCE stations to include their reports on third-party fundraising in their public files. Such a requirement
would help to ensure that the public has access to information about how NCE broadcasters are serving
the public interest and their local communities.48 Beyond the above-described reporting requirements, we


45 47 U.S.C. § 399b(a).
46 See Minority Television Project, Inc. v. FCC, No. 09-17311, 2012 WL 1216284, at *17 (9th Cir. Apr. 12, 2012).
47 See INC Report at 356.
48 In the Enhanced Disclosure proceeding, we propose to make television broadcasters’ public inspection files
accessible online, in a new database to be hosted by the Commission on our website. See In the Matter of
Standardized and Enhanced Disclosure Requirements for Television Broadcast Licensee Public Interest
Obligations,
Order on Reconsideration and Further Notice of Proposed Rulemaking, MB Docket No. 00-168, 26
(continued....)
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also invite comment on whether some form of assurance regarding compliance with the third-party
fundraising limits should be required—such as certification of such compliance on licensees’ renewal
applications. This is a common method used to verify compliance in other areas,49 and could assist in
raising awareness of the limitations on this activity and ensuring compliance with the new rules.
16.
Finally, we invite comment on whether we should require NCE stations that want to
participate in fundraising for third-party non-profit organizations to affirmatively “opt in” by filing a letter
or notification with the Commission. An opt in notification would serve to inform both the Commission
and interested non-profit groups which NCE stations intend to engage in third-party fundraising activities.

IV.

PROCEDURAL MATTERS

A.

Initial Regulatory Flexibility Analysis

17.
As required by the Regulatory Flexibility Act,50 the Commission has prepared an Initial
Regulatory Flexibility Analysis (“IRFA”) of the possible significant economic impact on small entities of
the proposals addressed in this Notice. The IRFA is set forth in Appendix B. Written public comments
are requested on the IRFA. These comments must be filed in accordance with the same filing deadlines
for comments on the Notice, and they should have a separate and distinct heading designating them as
responses to the IRFA.

B.

Initial Paperwork Reduction Act of 1995 Analysis

18.
This Notice proposes new information collection requirements. The Commission, as part
of its continuing effort to reduce paperwork burdens, invites the general public and the Office of
Management and Budget (OMB) to comment on the information collection requirements contained in this
document, as required by the Paperwork Reduction Act of 1995.51 In addition, pursuant to the Small
Business Paperwork Relief Act of 2002,52 we seek specific comment on how we might “further reduce the
information collection burden for small business concerns with fewer than 25 employees.”53

C.

Ex Parte Rules

19.
Permit-But-Disclose. The proceeding this Notice initiates shall be treated as a “permit-
but-disclose” proceeding in accordance with the Commission’s ex parte rules.54 Persons making ex parte


(...continued from previous page)
FCC Rcd 15788, 15796–7, ¶ 16 (2011). We further propose to import and update any information that must be filed
with the Commission electronically in the Consolidated Database System to each television station’s Commission-
hosted online public file. See id. at 15797, ¶ 16. To the extent that we adopt these proposals, we would likewise
include each NCE station’s reports on third-party fundraising in the station’s Commission-hosted online public file
under the proposal here.
49 For example, the broadcast station license renewal application form requires renewal applicants to certify their
compliance with the local public inspection file rules. See FCC Form 303-S, Application for Renewal of Broadcast
Station License, Section III, Question 3 and Section IV, Question 3, available at
http://transition.fcc.gov/Forms/Form303-S/303s.pdf.
50 See 5 U.S.C. § 603.
51 See Pub. L. No. 104-13.
52 See Pub. L. No. 107-198.
53 See 44 U.S.C. § 3506(c)(4).
54 See 47 C.F.R. §§ 1.1200 et seq.
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presentations must file a copy of any written presentation or a memorandum summarizing any oral
presentation within two business days after the presentation (unless a different deadline applicable to the
Sunshine period applies). Persons making oral ex parte presentations are reminded that memoranda
summarizing the presentation must (1) list all persons attending or otherwise participating in the meeting
at which the ex parte presentation was made, and (2) summarize all data presented and arguments made
during the presentation. If the presentation consisted in whole or in part of the presentation of data or
arguments already reflected in the presenter’s written comments, memoranda or other filings in the
proceeding, the presenter may provide citations to such data or arguments in his or her prior comments,
memoranda, or other filings (specifying the relevant page and/or paragraph numbers where such data or
arguments can be found) in lieu of summarizing them in the memorandum. Documents shown or given
to Commission staff during ex parte meetings are deemed to be written ex parte presentations and must
be filed consistent with rule 1.1206(b). In proceedings governed by rule 1.49(f) or for which the
Commission has made available a method of electronic filing, written ex parte presentations and
memoranda summarizing oral ex parte presentations, and all attachments thereto, must be filed through
the electronic comment filing system available for that proceeding, and must be filed in their native
format (e.g., .doc, .xml, .ppt, searchable .pdf). Participants in this proceeding should familiarize
themselves with the Commission’s ex parte rules.

D.

Filing Requirements

20.
Pursuant to Sections 1.415 and 1.419 of the Commission’s rules, 47 C.F.R. §§ 1.415,
1.419, interested parties may file comments and reply comments on or before the dates indicated on the
first page of this document. Comments may be filed using the Commission’s Electronic Comment Filing
System (ECFS). See Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (1998).
§
Electronic Filers: Comments may be filed electronically using the Internet by accessing the
ECFS: http://www.fcc.gov/cgb/ecfs/.
§
Paper Filers: Parties who choose to file by paper must file an original and one copy of each
filing. If more than one docket or rulemaking number appears in the caption of this proceeding,
filers must submit two additional copies for each additional docket or rulemaking number.
Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-
class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission’s
Secretary, Office of the Secretary, Federal Communications Commission.
o All hand-delivered or messenger-delivered paper filings for the Commission's Secretary
must be delivered to FCC Headquarters at 445 12th St., SW, Room TW-A325,
Washington, DC 20554. The filing hours are 8:00 a.m. to 7:00 p.m. All hand deliveries
must be held together with rubber bands or fasteners. Any envelopes and boxes must be
disposed of before entering the building.
o 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.
o U.S. Postal Service first-class, Express, and Priority mail should be addressed to 445 12th
Street, SW, Washington DC 20554.
21.
People with Disabilities: To request materials in accessible formats for people with
disabilities (braille, large print, electronic files, audio format), send an e-mail to fcc504@fcc.gov or call
the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty).
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FCC 12-43

22.
For additional information on this proceeding, contact Kathy Berthot,
Kathy.Berthot@fcc.gov, of the Media Bureau, Policy Division, (202) 418-2120.

V.

ORDERING CLAUSES

23.
Accordingly, IT IS ORDERED that, pursuant to Sections 1, 4(i), 303(r), and 399B of the
Communications Act of 1934, as amended, 47 U.S.C. §§ 151, 154(i) , 303(r), 399b, this Notice of
Proposed Rulemaking IS HEREBY ADOPTED.
24.
IT IS FURTHER ORDERED that the Commission’s Consumer and Governmental
Affairs Bureau, Reference Information Center, SHALL SEND a copy of this Notice of Proposed
Rulemaking, including the Initial Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of
the Small Business Administration.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
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APPENDIX A

Proposed Rules

The Federal Communications Commission proposes to amend Part 73 of Title 47 of the Code of Federal
Regulations (CFR) as follows:
PART 73 — RADIO BROADCAST SERVICES
1.
The authority citation for Part 73 continues to read as follows:
Authority: 47 U.S.C. 154, 303, 334, 336, and 339.
2.
Amend § 73.503 by revising the last sentence of paragraph (d), adding new paragraph (e),
redesignating current paragraph (e) as paragraph (f), and revising the Note to § 73.503 as follows:
§ 73.503 Licensing requirements and service.
* * * * *
(d) * * * The scheduling of any announcements and acknowledgements may not interrupt regular
programming
, except as permitted under paragraph (e) of this section.
(e) A noncommercial educational FM broadcast station may interrupt regular programming to conduct
fundraising activities on behalf of third-party non-profit organizations, provided that such fundraising
activities do not exceed one percent of the station’s total annual airtime. For purposes of this paragraph, a
non-profit organization is an entity that qualifies as a non-profit organization under Section 501(c)(3) of
the Internal Revenue Code.
(1) Opt-In Notification. A noncommercial educational FM broadcast station that intends to interrupt
regular programming to conduct fundraising activities on behalf of third-party non-profit organizations
must file an opt-in notification with the FCC prior to engaging in such fundraising activities.
(2) Audience Disclosure. A noncommercial educational FM broadcast station that interrupts regular
programming to conduct fundraising activities on behalf of third-party non-profit organizations must air a
disclosure during such activities clearly stating that the fundraiser is not for the benefit of the station itself
and identifying the entity for which it is fundraising and the specific cause, if any, supported by the
fundraiser. The station must air the audience disclosure at the beginning and the end of each fundraising
program and at least once during each hour in which the program is on the air.
(3) Reports. A noncommercial educational FM broadcast station that interrupts regular programming to
conduct fundraising activities on behalf of third-party non-profit organizations must file a report with the
FCC on an annual basis describing such activities. These reports must include, for each fundraiser, the
date and time of the fundraiser, the name of the non-profit entity benefitted by the fundraiser and whether
this entity is a local organization, the specific cause, if any, supported by the fundraiser, the type of
fundraising activity, the duration of the fundraiser, and the total funds raised.
* * * * *
Note to § 73.503: Commission interpretation on this rule, including the acceptable form of
acknowledgements, may be found in the Second Report and Order in Docket No. 21136 (Commission
Policy Concerning the Noncommercial Nature of Educational Broadcast Stations), 86 FCC 2d 141
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(1981); the Memorandum Opinion and Order in Docket No. 21136, 90 FCC 2d 895 (1982); the
Memorandum Opinion and Order in Docket 21136, 97 FCC 2d 255 (1984); and the Report and Order in
Docket No. 12-106 (Noncommercial Educational Station Fundraising for Third-Party Non-Profit
Organizations), ____ FR ____, _____. See also, “Commission Policy Concerning the Noncommercial
Nature of Educational Broadcast Stations,” Public Notice, 7 FCC Rcd 827 (1992), which can be retrieved
through the Internet at http://www.fcc.gov/mmb/asd/nature.html.
3.
Amend § 73.621 by revising the last sentence of paragraph (e) and the Note to paragraph (e),
adding new paragraph (f), and redesignating current paragraphs (f) through (i) as paragraphs (g) through (j)
as follows:
§ 73.621 Noncommercial educational TV stations.
* * * * *
(e) * * * The scheduling of any announcements and acknowledgements may not interrupt regular
programming
, except as permitted under paragraph (f) of this section.
Note: Commission interpretation of this rule, including the acceptable form of acknowledgements, may
be found in the Second Report and Order in Docket No. 21136 (Commission Policy Concerning the
Noncommercial Nature of Educational Broadcast Stations), 86 F.C.C. 2d 141 (1981); the Memorandum
Opinion and Order in Docket No. 21136, 90 FCC 2d 895 (1982); the Memorandum Opinion and Order in
Docket 21136, 49 FR 13534, April 5, 1984; and the Report and Order in Docket No. 12-106
(Noncommercial Educational Station Fundraising for Third-Party Non-Profit Organizations), ____ FR
____, _____.
(f) A noncommercial educational television station may interrupt regular programming to conduct
fundraising activities on behalf of a third-party non-profit organization, provided that such fundraising
activities do not exceed one percent of the station’s total annual airtime. For purposes of this paragraph, a
non-profit organization is an entity that qualifies as a non-profit organization under Section 501(c)(3) of
the Internal Revenue Code.
(1) Opt-In Notification. A noncommercial educational television station that intends to interrupt regular
programming to conduct fundraising activities on behalf of third-party non-profit organizations must file
an opt-in notification with the FCC prior to engaging in such fundraising activities.
(2) Audience Disclosure. A noncommercial educational television station that interrupts regular
programming to conduct fundraising activities on behalf of third-party non-profit organizations must air a
disclosure during such activities clearly stating that the fundraiser is not for the benefit of the station itself
and identifying the entity for which it is fundraising and the specific cause, if any, supported by the
fundraiser. The station must air the audience disclosure at the beginning and the end of each fundraising
program and at least once during each hour in which the program is on the air.
(3) Reports. A noncommercial educational television station that interrupts regular programming to
conduct fundraising activities on behalf of third-party non-profit organizations must file a report with the
FCC on an annual basis describing such activities. These reports must include, for each fundraiser, the
date and time of the fundraiser, the name of the non-profit entity benefitted by the fundraiser and whether
this entity is a local organization, the specific cause, if any, supported by the fundraiser, the type of
fundraising activity, the duration of the fundraiser, and the total funds raised.
* * * * *
4.
Amend § 73.3527 by adding new paragraph (e)(14) to read as follows:
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§ 73.3527 Local public inspection file of noncommercial educational stations.
* * * * *
(e) * * *
(14) Reports on Fundraising for Third-Party Non-Profit Organizations. For noncommercial educational
FM broadcast stations a copy of each report required to be filed with the FCC by § 73.503(e)(3). For
noncommercial educational TV broadcast stations a copy of each report required to be filed with the FCC
by § 73.621(f)(3). These reports shall be retained in the public inspection file until final action has been
taken on the station’s next license renewal application.
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APPENDIX B

Initial Regulatory Flexibility Analysis

1.
As required by the Regulatory Flexibility Act, as amended (“RFA”),1 the Commission
has prepared this Initial Regulatory Flexibility Analysis (“IRFA”) of the possible significant economic
impact on a substantial number of small entities by the policies and rules considered in the attached
Notice of Proposed Rulemaking (“Notice”). 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 Notice as indicated on the first page of the Notice. The Commission will send a copy of the Notice,
including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (“SBA”).2
In addition, the Notice and the IRFA (or summaries thereof) will be published in the Federal Register.3

A.

Need for, and Objectives of, the Proposed Rules

2.
Longstanding Commission policy provides that noncommercial educational (“NCE”)
stations may not conduct fundraising activities which substantially alter or suspend regular programming
and are designed to benefit any entity other than the station itself.4 “Regular programming” includes
programming that the public broadcaster ordinarily carries, and not fundraising activities that suspend or
alter the normal programming schedule.5
3.
In June 2011, a working group including Commission staff, scholars and consultants
released “The Information Needs of Communities” (“INC Report”), a comprehensive report on the
current state of the media landscape.6 Noting comments from the National Religious Broadcasters,7 the


1 See 5 U.S.C. § 603. The RFA, see 5 U.S.C. §§ 601-612, has been amended by the Small Business Regulatory
Enforcement Fairness Act of 1996 (SBREFA), Pub. L. No. 104-121, 110 Stat. 857 (1996).
2 See 5 U.S.C. § 603(a).
3 See id.
4 See, e.g., Commission Policy Concerning the Noncommercial Nature of Educational Broadcast Stations,
Memorandum Opinion and Order, 90 FCC 2d 895, 907, ¶ 20 (1982) (“Policy Statement”), recon. granted,
Memorandum Opinion and Order, 97 FCC 2d 255, 264-65, ¶ 19 (1984) (“Reconsideration Order”); Ohio State
Univ.
, 62 FCC 2d 449, 450 (1976). In the Reconsideration Order, the Commission addressed licensees’ concern
“that the substitution of the term ‘licensee’ for that of ‘station’ [in the Policy Statement] extends the permissible area
of suspended programming beyond those activities designed to raise support for the station’s operations to include
activities designed to benefit the licensee’s other non-station institutional business or state operations.” The
Commission acknowledged that the substitution of the term “licensee” for “station” had the unintended effect of
expanding potential beneficiaries beyond that of the station itself and clarified that the fundraising must benefit the
operations of the NCE station itself. See Reconsideration Order, 97 FCC 2d at 265, ¶ 19–20 (“In the absence of a
waiver, noncommercial stations are prohibited from conducting any fundraising activity which substantially alters or
suspends regular programming and are designed to raise support for any entity other than the station itself.”).
5 See Reconsideration Order, 97 FCC 2d at 264, ¶ 18.
6 “The Information Needs of Communities: The Changing Media Landscape in a Broadband Age,” by Steven
Waldman and the Working Group on Information Needs of Communities (June 2011), available at
www.fcc.gov/infoneedsreport. As noted in the INC Report, the report was drafted by an informal working group,
and the views of the report “do not necessarily represent the views of the Federal Communications Commission, its
Commissioners or any individual Bureaus or Offices.” Id. at 362.
7 NRB has requested that the Commission modify its policy regarding fundraising by NCE stations to permit NCE
stations to engage in limited fundraising for 501(c)(3) non-profit organizations without having to obtain a waiver
from the Commission. See Memorandum from Craig Parshall, Senior Vice President and General Counsel for
National Religious Broadcasters, to the Federal Communications Commission at 2 (filed October 15, 2008). NRB
(continued....)
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INC Report recommended that we afford noncommercial broadcasters more flexibility by allowing NCE
stations that are not grantees of the Corporation for Public Broadcasting (“CPB”), such as most religious
broadcasters, to spend up to one percent of their airtime doing fundraising for charities and other third-
party non-profit organizations.8 The INC Report also recommended that we require that broadcasters
disclose how this time is used so that the FCC can assess the efficacy of allowing third-party fundraising.9
4.
The Notice proposes to relax the rules to afford NCE stations more flexibility to conduct
on-air fundraising activities on behalf of third-party non-profit organizations and seeks comment on a
series of proposals to facilitate this additional flexibility. The Notice seeks comment on the following
proposals:
·
Revise the rules to allow NCE stations to substantially interrupt regular programming to conduct
on-air fundraising activities for the benefit of third-party non-profit organizations;
·
Define the class of non-profit organizations that may be the beneficiaries of third-party
fundraising by NCE stations to include entities that qualify as non-profit organizations under
Section 501(c)(3) of the Internal Revenue Code;
·
Limit the amount of time that an NCE station may devote to third-party fundraising to one
percent of the station’s total annual airtime;
·
Require NCE stations that substantially interrupt regular programming to conduct third-party
fundraising to air a disclosure that clearly identifies the entity for which the station is conducting
the fundraising;
·
Require NCE stations that substantially interrupt regular programming to conduct third-party
fundraising to submit annual reports to the Commission on their fundraising activities;
·
Require NCE stations that substantially interrupt regular programming to conduct third-party
fundraising to include their reports on third-party fundraising in their public files;
·
Require NCE stations that substantially interrupt regular programming to conduct third-party
fundraising to certify on their renewal applications that they have complied with the limits on
fundraising; and
·
Require NCE stations that want to substantially interrupt regular programming to participate in
third-party fundraising to affirmatively “opt in” by filing a letter or notification with the
Commission.
The Notice also has under consideration possible rule changes that would:
·
Limit the classes of NCE stations that may engage in third-party fundraising;
·
Limit the non-profit organizations that may benefit from fundraising by NCE stations, such as by
limiting the eligible class of non-profit organizations to local entities and/or entities that are not
affiliated with the NCE stations;
·
Prescribe durational limits for each particular fundraising effort; and
·
Require NCE stations to locally produce third-party fundraising activities.


(...continued from previous page)
argues that allowing NCEs to raise funds for non-profit organizations, unlike fundraising on behalf of for-profit
organizations, would serve the public interest. Id. at 2.
8 See INC Report at 356.
9 See id.
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The Notice invites commenters to suggest alternatives to these proposals and other rule changes that
would help to ensure that fundraising on behalf of non-profit entities is consistent with NCE stations’
mission to serve their local communities through educational and noncommercial programming.

B.

Legal Basis

5.
This Notice is adopted pursuant to Sections 1, 4(i), 303(r), and 399B of the
Communications Act of 1934, as amended, 47 U.S.C. §§ 151, 154(i), 303(r), 399b.

C.

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

6.
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 generally
defines the term “small entity” as having the same meaning as the terms “small business,” “small
organization,” and “small governmental jurisdiction.” 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.
7.

Television Broadcasting.

The SBA defines a television broadcasting station as a
small business if such station has $14.0 million or less in annual receipts.10 Business concerns included in
this industry are those “primarily engaged in broadcasting images together with sound.”11 The
Commission has estimated the number of licensed commercial television stations to be 1,387.12 In
addition, according to Commission staff review of the BIA Kelsey Inc. Master Access Television
Analyzer Database (BIA) as of February 7, 2012, about 950 (73 percent) of an estimated 1,301
commercial television stations13 had revenues of $14.0 million or less and thus qualify as small entities
under the SBA definition. We note, however, that in assessing whether a business concern qualifies as
small under the above definition, business (control) affiliations must be included.14 Our estimate,
therefore, likely overstates the number of small entities that might be affected by our action, because the
revenue figure on which it is based does not include or aggregate revenues from affiliated companies.
The Commission has estimated the number of licensed NCE television stations to be 396.15 The


10 See 13 C.F.R. § 121.201, NAICS code 515120.
11 U.S. Census Bureau, 2007 NAICS Definitions, “515120 Television Broadcasting,” available at
http://www.census.gov/econ/industry/def/d515120.htm. This category description continues, “These establishments
operate television broadcasting studios and facilities for the programming and transmission of programs to the
public. These establishments also produce or transmit visual programming to affiliated broadcast television stations,
which in turn broadcast the programs to the public on a predetermined schedule. Programming may originate in
their own studios, from an affiliated network, or from external sources.” Id. Separate census categories pertain to
businesses primarily engaged in producing programming (e.g., Motion Picture and Video Production, NAICS code
512110; Motion Picture and Video Distribution, NAICS Code 512120; Teleproduction and Other Post-Production
Services, NAICS Code 512191; and Other Motion Picture and Video Industries, NAICS Code 512199). See 13
C.F.R. § 121.201.
12 See Broadcast Station Totals as of December 31, 2011, Press Release (MB, rel. January 6, 2012) (“January 6,
2012 Broadcast Station Totals Press Release
”), available at
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-311837A1.doc.
13 We recognize that this total differs slightly from that contained in the January 6, 2012 Broadcast Station Totals
Press Release
; however, we are using BIA’s estimate for purposes of this revenue comparison.
14 “[Business concerns] are affiliates of each other when one concern controls or has power to control the other, or a
third party or parties controls or has power to control both.” 13 C.F.R. § 121.103(a)(1).
15 See January 6, 2012 Broadcast Station Totals Press Release.
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Commission does not compile and otherwise does not have access to information on the revenue of NCE
stations that would permit it to determine how many such stations would qualify as small entities.
8.
In addition, an element of the definition of “small business” is that the entity not be
dominant in its field of operation. We are unable at this time to define or quantify the criteria that would
establish whether a specific television station is dominant in its field of operation. Accordingly, the
estimate of small businesses to which rules may apply does not exclude any television station from the
definition of a small business on this basis and is therefore possibly over-inclusive to that extent. Also, an
additional element of the definition of “small business” is that the entity must be independently owned
and operated. We note 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.
9.

Radio Stations.

The SBA defines a radio broadcasting station that has $7.0 million or
less in annual receipts as a small business.16 A radio broadcasting station is an establishment primarily
engaged in broadcasting aural programs by radio to the public.17 Radio broadcasting stations which
primarily are engaged in radio broadcasting and which produce radio program materials are similarly
included.18 The Commission has estimated the number of licensed commercial radio stations to be
14,952.19 In addition, according to Commission staff review of BIA Kelsey Inc. Master Access Radio
Analyzer Database as of February 7, 2012, about 10,755 (approximately 97 percent) of an estimated
11,106 commercial radio stations20 have revenue of $7.0 million or less and thus qualify as small entities
under the SBA definition. We note, however, that, in assessing whether a business concern qualifies as
small under the above definition, business (control) affiliations21 must be included. Our estimate,
therefore, likely overstates the number of small entities that might be affected by our action, because the
revenue figure on which it is based does not include or aggregate revenues from affiliated companies.
The Commission has estimated the number of licensed NCE radio stations to be 3,644.22 The
Commission does not compile and otherwise does not have access to information on the revenue of NCE
stations that would permit it to determine how many such stations would qualify as small entities.
10.
In addition, an element of the definition of “small business” is that the entity not be
dominant in its field of operation. We are unable at this time to define or quantify the criteria that would
establish whether a specific radio station is dominant in its field of operation. Accordingly, the estimate
of small businesses to which rules may apply does not exclude any radio station from the definition of a
small business on this basis and therefore may be over-inclusive to that extent. Also, an additional
element of the definition of “small business” is that the entity must be independently owned and operated.
We note 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.


16 See 13 C.F.R. § 121.201, NAICS Code 515112.
17 U.S. Census Bureau, 2007 NAICS Definitions, “515112 Radio Stations,” available at
http://www.census.gov/econ/industry/def/d515112.htm.
18 See id. Radio stations that are separate establishments and are primarily engaged in producing radio program
material are classified under another NAICS number. See id.
19 See January 6, 2012 Broadcast Station Totals Press Release.
20 We recognize that this total differs slightly from that contained in the January 6, 2012 Broadcast Station Totals
Press Release
; however, we are using BIA’s estimate for purposes of this revenue comparison.
21 “[Business concerns] are affiliates of each other when one concern controls or has the power to control the other,
or a third party or parties controls or has to power to control both.” 13 C.F.R. § 121.103(a)(1).
22 See January 6, 2012 Broadcast Station Totals Press Release.
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D.

Description of Projected Reporting, Recordkeeping, and Other Compliance
Requirements

11.
The Notice proposes a number of rule changes that would affect reporting, recordkeeping,
and other compliance requirements. Each of these proposals is described below.
12.
The Notice proposes to allow NCE stations to substantially interrupt regular
programming to spend up to one percent of their total annual airtime conducting fundraising activities on
behalf of third-party non-profit organizations. If this proposal is adopted, NCE stations may be required
to keep records sufficient to demonstrate that their fundraising broadcasts are within the one percent limit.
The Notice also proposes to require NCE stations to submit annual reports to the Commission on their
fundraising for third-party non-profit organizations. Further, the Notice proposes to require NCE stations
to include their reports on third-party fundraising in their public files and to certify on their renewal
applications that they have complied with the limits on fundraising.

E.

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

13.
The RFA requires an agency to describe any significant alternatives that might minimize
any significant economic impact on small entities. Such alternatives 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.23
14.
The Notice proposes to relax restrictions on third-party fundraising by NCE stations by
allowing NCE stations to devote up to one percent of their total annual airtime to fundraising for the
benefit of third-party non-profit organizations. This proposal would benefit small entities by reducing or
eliminating the need for NCE stations to seek a waiver of the Commission’s rules to conduct third-party
fundraising activities and affording NCE stations more flexibility to decide which non-profit entities to
support through on-air fundraising. The Notice also proposes to require NCE stations that conduct third-
party fundraising to submit annual reports to the Commission on their fundraising activities, include such
reports in their public files, and certify on their renewal applications that they have complied with the
limits on fundraising. We believe that these reporting and recordkeeping requirements would impose
only minimal burdens on any affected entities, and the costs of these reporting and recordkeeping
requirements would be offset in our opinion by the additional flexibility afforded to NCE stations to
conduct fundraising for third-party non-profit organizations of their choosing without the need to seek a
waiver or prior FCC approval. For this reason, an analysis of alternatives to the proposed rules is
unnecessary. We invite comment on whether there are any alternatives we should consider that would
minimize any adverse impact on small entities, but which maintain the benefits of our proposals.

F.

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

None.


23 5 U.S.C. § 603(c).
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STATEMENT OF

CHAIRMAN JULIUS GENACHOWSKI

Re:
Noncommercial Educational Station Fundraising for Third-Party Non-Profit
Organizations
(MB Docket No. 12-106)
Today we take another step in our efforts to modernize the FCC by revisiting a policy that has
been in effect for more than 40 years. We propose relaxing our longstanding ban on third-party
fundraising by noncommercial broadcast stations and giving these stations more flexibility to raise money
on-air for charities in their local communities and around the world.
Noncommercial broadcasters have long served the American public by providing high quality and
innovative educational, cultural, and news programming to their local communities. As recommended in
The Information Needs of Communities Report, we are now proposing to allow noncommercial stations
to spend a modest amount of their total annual broadcast time—up to one percent—conducting
fundraising activities on behalf of non-profit organizations.
Allowing noncommercial stations to partner with charities, churches and other religious
organizations, schools, and other non-profits to raise money for worthy causes will enable these stations
to help meet the needs of their local communities. On-air fundraising by noncommercial stations can also
help raise awareness about important local and international topics, such as poverty, health care, and
humanitarian issues.
We have historically granted waivers of the prohibition on third-party fundraising, particularly in
response to disasters. For example, we have granted waivers to allow noncommercial broadcasters to
raise funds in support of relief efforts for Hurricanes Andrew and Katrina, the September 11, 2001
terrorist attacks, the January 2010 earthquake in Haiti, and, most recently, the March 2011 earthquake and
tsunami in Japan.
Given our experience in these and other cases, where the ability to raise funds for third-party non-
profits has been invaluable, we question whether it remains appropriate to require noncommercial stations
to seek a waiver just as emergencies are occurring. This proposal would eliminate the need for such
requests.
This action reflects an effort to balance our continued interest in preserving the core educational
mission of noncommercial stations with our goal of providing these stations additional flexibility to
support non-profits of their choosing. We look forward to hearing from all interested parties on the issues
raised in this proceeding.
I thank our Media Bureau and staff across the Commission for their hard work on this item, and
the work yet to come in this proceeding.
20

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