Ajit Pai 2017

In what would be the most aggressive attack on requirements that broadcasters submit paper copies of certain documents to the Federal Communications Commission, agency chief Ajit Pai is proposing it do away the dictate. He says the demand is “unnecessary” now that the FCC has imposed online public file requirements. Pai has scheduled a vote for this month’s Commission meeting that, if approved, would launch a formal rulemaking to scale back the station filing demands.

“Since the late 1930s, the FCC has required broadcast stations that hold FCC licenses or permits to submit paper copies of certain contracts and other documents relating to ownership and control of those stations to the Commission,” Pai said in a blog post. “I’m proposing to eliminate this requirement.”

At Pai’s direction the FCC is proposing that both commercial and noncommercial radio and television stations no longer be required to file an array of documents including those that relate to ownership or control of a station, such as time brokerage and joint sales agreements—and in the case of TV stations any network affiliation agreements. “While paper filings may have previously been the most efficient mechanism for ensuring that the Commission and the public had ready access to these materials, we believe that is no longer the case,” the FCC tentatively concludes in the 16-page proposal. No such rule currently exists for noncommercial stations, a discrepancy which the FCC also proposes to keep in place.

The elimination of paper has its roots in the digital transformation of how radio stations connect with the FCC. Broadcasters have been transitioning from local public inspection files to an online file since 2014. Top 50 market stations are already required to post their files online—and the rest of the industry will follow suit on March 1. The Notice of Proposed Rulemaking also points out the “vast majority” of forms are now filed electronically, and the FCC has already taken a number of steps to eliminate or streamline whatever paper filing and document retention obligations that do remain.

In order to help the public keep up to date, the FCC proposes that stations would subsequently be required to either retain copies of the documents listed in their ownership reports in the public file—or maintain an up-to-date list of such documents in the public file and provide copies to anyone who requests copies of the paperwork within seven days. The proposal also seeks comment on whether broadcasters should be required to more quickly disclose their most recent ownership report or update the list of documents posted in the online file.

Pai’s proposal was borne out of the ideas presented to the FCC as part of his Modernization of Media Regulation Initiative. The NPRM says commenters generally said that the public’s information needs can be “sufficiently met” through the existing public file requirements, pointing out there was no opposition to such a shift. Since the late 1930s, the FCC has required stations to submit paper copies of certain contracts and other documents and beginning in 1965 it’s also been a requirement that the paperwork is placed in the local public inspection file. But beginning in the late 1970s the FCC has begun to reassess what’s actually useful and has decided some information was no longer needed on a routine basis. That included the elimination of the requirement that radio stations file network affiliation agreements with the government.

Also as part of Pai’s ongoing Modernization of Media Regulation Initiative, the FCC will vote later this month to revise its rulebooks to remove a pair of pending regulations that have been made obsolete by the digital television transition, which concluded on June 12, 2009.

New Division Would Handle FCC Auctions

The Commission will also vote later this month on whether to move forward with a plan that would adjust the FCC’s organizational chart by moving nearly all of the agency’s economists into an Office of Economics and Analytics (OEA). Under a proposal released Tuesday, the new OEA would be divided up into several divisions focusing on industry analysis, economic analysis and data. Each would work with the various agency bureaus and offices on rulemakings, transaction reviews and other projects that need some input from an economist.

“Over the years, the agency has failed to fully take advantage of this asset. Our economists are sprinkled across the Commission, and their input during policy deliberations has too often been ad hoc or an afterthought,” Pai said in a blog post. “The new OEA will at long last put economic analysis at the heart of Commission decision-marking.”

In the biggest change impacting broadcasters, the new OEA would be responsible for concluding any FCC auction. The outline says the new Auctions Division would be responsible for structuring auctions on everything from AM and FM stations to wireless spectrum.

The proposal is the next step in a process that began last April when Pai created the Office of Economics and Analytics in a move to better integrate economic analysis into the FCC’s decision-making. While economists have played a role in decision-making at the FCC for several decades, in recent years, Pai has said it’s been applied in an ad hoc fashion, often too late in the process to be of value. The data backs that up. Since 1980, FCC experts have drafted 90 economic papers on a variety of issues. But since 2012 not a single analysis has been done.

To address that, Pai formed a working group of Commission staff to develop a plan for creating the just-proposed Office of Economics and Analytics. “If done properly, economic analysis and the staff who help provide it—economists, data management experts, and related personnel—will be more effectively used. And this change will enrich the FCC’s collaborative culture, providing benefits that will endure for years to come,” the work group’s just-released recommendation says.

While many economists will find themselves shifting on the FCC’s flow chart, the plan also recommends that most of the Commission’s staff that works with data, most of whom aren’t economists, would remain in the bureaus and offices where they currently work.