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trade liabilities) in excess of 5 percent of total outstanding plicity of applications requiring FCC approval
and as part debt, including name and address and amount of debt of various reports regularly required by the Commission. held by holders of more than 5 percent of the issue or The information received by each Bureau is discussed $500,000, whichever is less.
below. The reports filed by officers and directors require
Broadcast Bureau information on stock or other interests held by them. The definition of interest includes bonds, notes, debentures The Broadcast Bureau receives most of its information and evidence of indebtedness. This information on short pertaining to ownership and control of broadcast stations term and long-term debt of air carriers may be found in in connection with applications to (1) construct or modify these reports.
broadcast stations; (2) transfer ownership or control of
broadcast stations; and (3) renew existing broadcast 5. Enforcement and Effectiveness of Laws, Rules and station licenses or permits. Regulations
Section 319(a) of the Communications Act of 1934, as See Comptroller General's letter on p. 197.
amended, (47 U.S.C. 319(a)) authorizes FCC to issue
permits for the construction of any broadcast station, 6. Availability and Cost of Information to the Public
AM and FM radio and VHF and ÚHF television. Pur
suant to this authority FCC regulations (47 CFR 1.533) All forms and reports discussed above are available to require that FCC Form 301, an application for authority the public. CAB regulations (14 CFR 310) describe the to construct a new commercial broadcast station or modify manner in which CAB opinions, orders and records are an existing station, be filed with the Commission. Applicaavailable for public inspection and copying.
tions to construct or modify a noncommercial educational Copying machines are available in CAB's Public television or radio station are made on FCC Form 340. Reference Room for use by the public at a cost of 15€ per Section 310(b) of the act (47 U.S.C. 310(b)) states that copy. Requests for information may be made directly to CÁB. We were informed that CAB personnel are available ferred, assigned or disposed of in any manner without the
no construction permit or station license shall be transto copy information for the public and the cost is 35 cents approval of FCC. To obtain approval of a transfer, FCC per copy. CAB performs the service pursuant to CAB regulations (47 CFR 1.540) require the filing of FCC Form regulation 14 CFR 389.
314, an application for assignment of a television broad
cast station construction permit license or FCC Form 7. Proposals for New Legislation and Authority
315, an application to transfer the control of a radio CAB officials informed us that, with respect to informa
broadcast station construction permit or license. tion on proprietary ownership, subsidiaries, parents and Section 4(i) of the act (47 U.S.C. 154 (i)), and section other control, officers and directors, and long-term and 303(r) of the act (47 U.S.C. 303(r)) provide that FCC may short-term debt, no laws, rules, regulations or procedures perform any and all acts, make such rules and regulations have been recommended during the past 10 years which and issue such orders as may be necessary in the execution have not been implemented and therefore not contained in of its functions. Pursuant to this authority, FCC regulathe preceding sections. Our review of CAB's Proposed tions (47 CFR 1.615) require that FCC Form 323, OwnerLegislative Program for each of the past 10 years disclosed ship Report, be filed every 3 years by all AM and FM no proposed legislation which dealt with the subject matter radio and VHF and UHF television stations in order to be of ownership or control.
relicensed or have a perm renewed. In addition, a suppleWe learned that on March 5, 1973, CAB's Bureau of mental Ownership Report (FCC Form 323) is required to Operating Rights made certain recommendations to the be filed by each licensee or permittee within 30 days after Board concerning additional reporting requirements for any change occurs in the ownership information previously diversified air carriers. The recommendations were pre- reported. sented in the Air Carrier Reorganization Investigation The information received on the aforementioned apwhich is now in process.
plications and reports is discussed below in the same These recommendations would require diversified air sequence as the information requested in Senator Metcarriers to file (1) quarterly reports containing detailed call's letter of February 9, 1973, except for the evaluation information on certain intercorporate transactions and of the enforcement and effectiveness of the rules and (2) additional reports focusing on the carrier's diversifica- regulations which will be covered in the Comptroller tion policies and procedures.
General's formal response to Senator Metcalf."
1. Information on Proprietary (Voting) Ownership FEDERAL COMMUNICATIONS COMMISSION
The application to construct or modify a broadcast The Federal Communications Commission (FCC) reg- station, FCC Form 301, requires the applicant to provide ulates interstate and foreign communications by wire and the name and residence of stockholders, number of shares radio. FCC is responsible for regulating the rates and of each class of stock held, and percent of ownership services of communications common carriers and for at- or percent of voting stock held. If the applicant has more taining and maintaining maximum benefits for the United than 20 stockholders, information is to be provided only States from the use of the radio spectrum. Three Bureaus for stockholders owning 3 percent or more of the stock. within FCC-Broadcast Bureau, Common Carrier Bu- If the beneficial owner of the stock is a person other than reau and Cable Television Bureau-receive information the owner of record, data must be included on the name from regulated companies regarding (1) proprietary owner- of the owner of record, the name of the beneficial owner, ship; (2) subsidiaries, parents, or other companies or firms the conditions under which the owner of record holds any having control over the regulated companies; (3) officers and directors of the regulated companies ; and (4) the voting power, and a copy of any contract or other inlong-term and short-term debt of the regulated companies.
strument relating to such conditions. The information is received in connection with a multi- See p. 197.
The ownership information to be provided in FCC Form holders need report this information only with respect to 340 includes all holders of 1 percent or more ownership officers, directors, or stockholders having 1 percent or interest, their names and residence, citizenship, and more of the voting stock in the broadcast station. Suppleprincipal profession or occupation.
mental ownership reports, containing the same informaApplications to transfer a broadcast station, FCC Forms tion, must be filed within 30 days after any change occurs 314 and 315, require the same ownership information as in the ownership information previously reported. FCC Form 301. We were informed by officials that, while Forms 301, 314, and 315 only require information on
ADDITIONAL INFORMATION stockholders owning 3 percent or more of the capital stock, in most cases, the Bureau requests supplemental
In addition to the subsidiary, parent and control inforinformation on all persons owning 1 percent or more of mation received by the Bureau on application forms and the capital stock. We were told that this was done so that reports as discussed above, FCC also requires other such the Bureau can determine whether FCC's restrictions on
information pursuant to authority granted in section the number of stations a person may own have been 319(a), of the act (4? U.S.C. 319(a)). FCC regulations violated.
(47 CFR 1.539) requires the filing of FCC Form 342, an The Ownership Report (FCC Form 323) requires that application for renewal of a noncommercial educational information on owners of record, beneficial owners and
broadcast station license. This form requires information those having power to vote be filed (1) prior to any
as to the existence of any documents, instruments, conapplication for relicensing or (2) within 30 days after any
tracts or understandings relating to the ownership, use or change occurs in the ownership information previously control of the station facilities or any rights or interests
. reported on any application from or other Ownership Report.
In addition to the rules and regulations requiring the Although no specific FCC forms inust be filed, section submission of ownership information, FCC also has regu4(i) of the act provides authority for FCC to require, lations which affect ownership but
do not require the subunder 47 CFR 1.613, the filing of any agreement, docu- mission of ownership information. The FCC's rules relating ment, or instrument affecting, directly or indirectly, the to multiple ownership of AM radio broadcast stations ownership or voting rights of the licensee's or permittee's (47 CFR 73.35), state that no license shall be granted for stock including agreements for transfer of stock and a broadcast station if (a) such party directly or indirectly instruments for the issuance of new stock.
owns, operates, or controls, one or more AM broadcast
stations and the grant of such license will result in any 2. Information on Subsidiaries, Parents, or Any Other overlap of the existing and proposed stations; or (b) such
Company or Firm Having Control Over Regulated party, or any stockholders, officers or directors of such Corporation
party, directly or indirectly owns, operates, or controls,
or has any interest in, or is an officer or director of any FCC Form 301 requires the applicant to provide in- standard broadcast station, if the grant of such license formation concerning the occupation and business and would result in a concentration of control of standard financial interests of each party named as a stockholder broadcasting in a manner inconsistent with the public and any other party having ownership interests. If the interest, convenience, or necessity. Similarly, sections applicant is a corporation, information must be provided 73.240 and 73.636 (47 CFR 73.240 and 73.636) of FCC's as to whether the corporation is directly or indirectly regulations govern multiple ownership of FM and televicontrolled by another corporation or legal entity; whether sion broadcast stations respectively. 10 percent or more of the stock of the applicant is owned by another corporation or legal entity; and, if the corpora- 8. Information on Officers and Directors tion named as controlling the applicant is in turn a subsidiary, the applicant must state the name of such other FCC Form 301 requires a schedule of the number of parent corporation or legal entity. Information is also shares of each class of stock, and percentage of voting requested as to whether the applicant has now, or ever stock, held by all officers, directors and members of the had, interest in, or connection with, any other broad- governing board as well as their business and financial cast station. On FCC Form 340, FCC receives sub- interests at the present time and during the past 5 years sidiary, parent and control information from noncom- in any other broadcast station. FCC Form 340 requires a mercial educational TV, AM and FM broadcast stations. schedule of the applicant's officers and members of the This form requires information as to the applicant's governing board; including their names and residence, interest in, or connection with, any other broadcast office held, citizenship, principal profession or occupation station and any documents, instruments, contracts or and by whom they were appointed or elected. Both FCC understandings relating to ownership, use, or control of the Form 314 and FCC Form 315 require information on applicants station or facility. In addition, both FCC Form officers and directors similar to that as required by FCC 314 and FCC Form 315 require subsidiary, parent and
Form 301, discussed above. control information similar to that as required by FCC The Ownership Report (FCC Form 323) includes a Form 301, discussed above.
schedule of all officers and directors and the stock held by The Ownership Report (FCC Form 323) requires each, including the number and class of stock and the broadcasters to provide the name of any corporation or percentage of voting stock held by each. Also included is a other entity having a direct or indirect ownership interest schedule which requires the interests held in any other in them. In addition, the broadcasters must show the broadcast station by any of the officers and directors. interests they have in any other broadcast station includ- Supplemental ownership reports must be filed within 30 ing those of any of its officers, directors, stockholders or days after any change occurs in the ownership information partners. Broadcast stations having more than 50 stock- previously reported.
4. Information on Long-Term and Short-Term Debt
and reductions in service, construction of facilities and FCC Form 301 requires a statement setting forth the
applications to use radio in communication service.
Section 219(a) of the Communications Act of 1934, as full name and address of each person who has assisted or will assist in any manner in financing the station and a
amended (47 U.S.C. 219(a)), authorizes FCC to (1) require copy of the agreement by which each person is so obligated,
annual reports from all carriers subject to its jurisdiction showing the amount, rate of interest and terms of repay. trolled by, or under direct or indirect common control
and from persons directly or indirectly controlling or conment and security, if any. For financial institutions or
with any such carrier, (2) prescribe the manner in which equipment manufacturers who have agreed to make a loan
such reports shall be made, and (3) require from such peror extend credit, a copy of the document by which the
sons specific answers to all questions upon which FCC institution or manufacturer has indicated its willingness to provide such loan or credit must be submitted. Both FCC may need information. Pursuant to this authority, FCC Form 314 and FCC Form 315 require financial informa- regulations (47 CFR 43.21 and 1.785) require that the
following annual reports be filed by communications comtion similar to that as required by FCC Form 301.
mon carriers: Financial information is also requested on FCC Form 340 on a schedule of the financial qualifications of the (1) FCC Form M-an annual report form prescribed applicant which includes full information as to the sources for use by telephone companies. of funds for the first year's operation of the proposed (2) FCC Form R-an annual report form prescribed station.
for use by radiotelegraph carriers. In addition to the forms shown above, FCC regulations (3) FCC Form Ö-an annual report form prescribed (47 CFR 1.611) require FCC Form 324 entitled Annual for use by wire telegraph_and ocean-cable carriers. (This Financial Report of Networks and Licensees of Broadcast form is identical to FCC Form R.) Stations to be filed by each licensee or permittee of a
(4) FCC Form H-an annual report form prescribed commercially operated broadcast station. This report in- for holding companies. (Securities and Exchange Comcludes schedules of broadcast revenues, broadcast expenses mission Form 10-K may be substituted for this form purand broadcast income.
suant to FCC regulation (47 CFR 43.21(c)) since it con
tains similar information.) 5. Enforcement and Effectiveness of Laws, Rules, and Regu- (5) FCC Form P-an annual report prescribed for lations
miscellaneous microwave common carriers. See Comptroller General's letter on p. 197.
In performing its statutory responsibilities, the Bureau
receives other information as follows: 6. Availability and Cost of Duplicating Information
(1) Section 309 of the act (47 U.S.C. 309) authorizes We were informed by FCC officials that all applications radio station license filed with the Commission, whether
FCC to determine, in the case of each application for a and reports as described above and submitted to FCC are
the public interest, convenience and necessity will be available to the public upon request to FCC's Office of served by the granting of such license. Pursuant to this Information. FCC provides for public use a machine for authority, FCC regulations (47 CFR 21.14) require that duplicating such information at a cost of 10 cents per page. FCC Form 401, an application for new or modified com, If an individual is not able to personally review these records he may write to FCC requesting that such in- with the Commission.
mon carrier radio station construction permit, be filed formation be provided. If the request does not involve considerable time or cost, the information will be supplied that no construction permit or station license shall be
(2) Section 310(b) of the act (47 U.S.C. 310(b)) states by FCC at no cost to the public. If the individual cannot obtain the information himself and FCC will not copy it transferred, assigned or disposed of in any manner
except for him because of the time and expense involved he may FCC regulations (47 CFR 21.14(h)) require that an appli
upon application to FCC. Pursuant to this authority, obtain the information from the Keuffel and Esser Company, 1521 North Danville Street, Arlington, Virginia cation to transfer a common carrier's permit or license be 2220i, at a cost of 12 cents per copy or a minimum charge submitted on FCC Form 702 or FCC Form 704, respecof $2.00. The Keuffel and Esser Company provides this
tively. service under a contract with the FCC.
The information received on the aforementioned appli
cations and reports is discussed below in the same sequence 7. Proposals for New Legislation or Authority
as the information requested in Senator Metcalf's letter
of February 9, 1973, except for the evaluation of the We were informed by FCC officials that there has not enforcement and effectiveness of the rules and regulations been any proposed legislation or rulemakings during the which will be covered in the Comptroller General's formal past 10 years which have not been enacted concerning the response to Senator Metcalf.' subject matter. However, we were advised that a task force study on conglomerates and their interests in broad- 1. Information on Proprietary (Voting) Ownership cast stations was started several years ago. A copy of the task force report was submitted to FCC about February
FCC Form M requires common carriers to complete a 1973 but no proposed legislation or rulemakings have schedule that includes information on the voting power of resulted at this time.
all stockholders and the number of shares of stock voted
by proxies at the latest general stockholder meeting. Common Carrier Bureau
FCC Form M also requires a schedule of the 30 largest stockholders of each class of stock listed in descending
M FCC regulates the rates and practices of communica- order of their holdings. If any of the 30 largest stocktions common carriers by telephone, telegraph, radio, holders was a trustee or nominee for other persons who cable, and satellite. FCC also approves proposed common
held the beneficial interest in the securities, the name and carrier mergers and acquisitions of properties, extensions 1 See p. 197.
address of the beneficial interest, if known, must be shown person who has control, the means by which the control in a footnote.
is held, and the extent of the control. FCC also requires We were informed by FCC officials that COMSAT, that, if the controlling organization or person was in turn which is also under FCC jurisdiction in accordance with controlled by another organization or person, the common the provisions of the Communications Satellite Act carrier must show the chain of control leading to the of 1962 (47 U.S.C. 701-744), files a modified FCC Form organization or person having ultimate control. The M pursuant to authority granted in Section 219(a) of common carrier must also show the extent of control the Communications Act of 1934, as amended (47 U.S.C. exercised over each organization or person in the chain. 219(a)), and FCC regulations (47 CFR 43.21).
In addition, FCC requires that, if any controlling orgaFCC Forms R and O require schedules of the 30 largest nization or person held control as trustee, the name and stockholders of each class of stock listed in descending address of the beneficiary for whom the trust is maintained order of their holdings. If any of the 30 largest stock- and the purpose of the trust must be given, if known. holders was a trustee or nominee for other persons who Another schedule in FCC Form M requires information held the beneficial interest in the securities, the name as to the names and addresses of all companies which, and address of the person who was the principal owner during the year, came under the direct or indirect control or who had the beneficial interest, if known, must be of the common carrier and includes (1) how control was shown in a footnote. In addition, if any person was established, (2) names of other parties to a joint agreement the principal owner or had the beneficial interest in the for control, (3) the extent of control exercised by each securities held by trustees or nominees under different party, and (4) any other pertinent data. trusts or other groupings, and the aggregate holdings of FOC Forms R and O includes two schedules requiring such person would place him among the 30 largest listed information on subsidiaries, parents and control of the stockholders, the details of his holdings are required carrier. One schedule requires information on the form of to be shown in a footnote, if known.
control including name and address of the controlling
CORPORATE CONTROL OF CARRIER
FCC Form H requires a schedule showing corporate In addition to the ownership information received in control over the carrier. The schedule includes information the annual reports discussed above, proprietary ownership on the form of control, the name and address of the information is also obtained by the Bureau from common controlling party, the manner in which control was carriers in various applications as follows:
established, the extent of control, and whether such (1) FCC Form 401, an application for new or modified
control was direct or indirect. FCC Form H also requires radio station construction permit, requires a schedule of
a schedule showing the companies controlled directly the names and addresses and percentages held of all by the carrier other than through securities. The schedule stockholders owning and/or voting 10 percent or more of
contains the name and address of the company controlled; the applicant's stock.
and the character of such control. Another schedule (2) FCC Form 702, an application to assign a radio
with FCC Form H shows companies controlled by the station construction permit or license, requires a schedule
carrier through nonreporting intermediaries. The schedule of names and addresses of all stockholders owning and/or whether such control is sole or joint; the names of other
shows the name and address of the company controlled; voting 10 percent or more of the transferee's stock and
parties, if any, to a joint agreement for control; how percentage of stock held by each.
control was established; the extent of such control and (3) FCC Form 704, an application to transfer control of
the name and address of the intermediary through which a corporation holding a common carrier radio station
indirect control exists. construction permit or license, requires a schedule of the
FCC Form P requests information on any equipment or names, addresses, and percentages of stock held by all facility in the carrier's microwave service that is owned, principals of the corporation seeking to obtain control and operated or maintained by person(s) other than the licensee. by all stockholders owning and/or voting 10 percent or
In addition to the information received from commore of the transferee's stock.
munication common carriers by the Bureau in the annual 2. Information on Subsidiaries, Parents, or Any Other report forms discussed above, subsidiary, parent, and
Company or Firm Having Control Over Regulated control information is also requested by FCC from com-
mon carrier radio stations on various application forms
as shown below: FCC Form M requires a schedule showing who has (1) Form 401, an application for new or modified radio control over the common carrier, including the form of the station construction permit, requires information as to control, the name and address of the organization or whether the applicant is directly or indirectly controlled
by any other corporation and a schedule of the names to whether any director or officer of the applicant is an and addresses of all such controlling corporations including alien and whether or not the applicant is directly or the organization having final control.
indirectly controlled by any other corporation of which (2) FCC Form 702, an application for assignment of a any officer or more than one-fourth of the directors are radio station construction permit or license, requires a aliens. schedule of other businesses the assignee is directly, or (2) FCC Form 702, which is an application for assignindirectly involved in, and, if the assignee is a corporation, ment of a radio station construction permit or license, information as to whether the assignee is directly or requires information by the applicant as to whether the indirectly controlled by any other corporation. In addi- assignee has any officers or directors who are aliens. tion, if such controlling corporation is in turn a subsidiary,
(3) FCC Form 704, which is an application to transfer a schedule of the chain of control to the organization
control of a corporation holding a construction permit or having final control is required.
license, requires information by the applicant as to whether (3) FCC Form 704, an application for transferring
the transferee has any officers or directors who are aliens. control of a corporation holding a common carrier radio station construction permit or license, requires a schedule
(4) Although FCC prescribes no specific form, applicaof the business, employment or activities in which each
tions must be filed pursuant to Section 212 of the Com
munications Act of 1934, as amended (47 U.S.C. 212) to individual transferee is engaged. In addition, if a transferee
obtain authorization from the Commission for officers or is directly or indirectly controlled by any other corporation, a schedule of the names and addresses of all control
directors of one carrier to hold the position of officer or ling corporations including the organization having final
director of another carrier. Pursuant to this authority, control must be furnished.
FCC regulations (47 CFR 62.11) state that each applica(4) Although FCC prescribes no specific form, applica- address, and place of residence of the applicant; (b) a
tion shall include: (a) the full name, occupation, business tions must be filed for two or more domestic telephone specification of every carrier of which the applicant holds companies to effect a consolidation or merger. Pursuant to Section 221 of the Communications Act of 1934, as
stock, bonds, or notes, individually, as trustee or otheramended (47 U.S.C. 221). FCC regulations (47 CFR
wise; (c) and each and every position with any carrier 66.11) states that applications under section 221 of the
which is held by the applicant at the time of the applica
tion, and which he seeks authority to hold, together with act shall contain information which includes the manner in which the properties, or control, will be acquired and
the date and manner of his election. In addition, informathe consideration to be paid by each applicant, the name
tion is requested as to whether the applicant is an officer, of the resulting company and any facts as to any inter
director, trustee, receiver, attorney or agent of any corporate relations through holding companies, ownership position and the nature of the business must be provided.
business corporation and, if so, complete disclosure of such of securities or otherwise, between the parties to the transaction.
4. Information on Long-Term and Short-Term Debt 3. Information on Officers and Directors
FCC Form M contains a schedule which requires longFCC Form M requires the completion of a schedule
term debt information including a description of the oblishowing the name of each person who was a member of the
gation, date of issue, date of maturity and face amount carrier's board of directors at any time during the year,
authorized. Also required by this form is a schedule of his address, length of service, and number of meetings
notes payable, providing information as to the name of attended during the year. The carrier is also required to
the creditor, description of the transaction, date of issue file a schedule of its principal general officers, providing providing the name of the creditor and the balance due at
and date of maturity and a schedule of accounts payable information as to the officer's name and address, title, and
the end of the year. department over which jurisdiction is exercised. Forms R and O contain a schedule that requires
FCC Forms R and O include a schedule of long-term information on the carrier's board of directors including
debt and related accounts which provides information on the names of the chairman and each person who was a
the nature of the debt, including any preferences, special member of the board at any time during the year; the
privileges or restrictions, and information on the debt members of the executive committee; the title of each
authorization, issuance, and other particulars. FCC Forms member of the board, their duties, tenure, and compensa
R and O also require a schedule of notes payable to affilition as a director. Forms R and O contain another schedule ates, indicating the name of the affiliate, date of the note, for listing the carrier's general officers and all other date of maturity and unpaid balance. In addition, FCC persons having an annual salary rate of $20,000 or more.
Forms R and O also include a schedule of notes payable FCC Form H includes a schedule which requires a listing
other than to affiliates requesting the name of the payee, of the title, name and address, tenure and duties of officers
amount due, date of the note and date of maturity. and directors of the carrier. 'If there are any receivers,
FCC Form H contains a schedule of long-term debt trustees or committees, who are in the controlling manage
advanced to the carrier from affiliated companies and a ment of the company or any department, the carrier must
schedule of other long-term debts including the name and provide their names, titles, and the location of their offices.
address of the creditor company, the balance at the begin
ning of the year, the balance at the end of the year and ADDITIONAL INFORMATION
interest accrued during the year. In addition, F°C Form
H requires the carrier to submit schedules of notes payIn addition to the information received in annual reports able and accounts payable which show the name of the from communication common carriers by the Bureau, creditor, the nature of the liability or transaction and the information on officers and directors is also requested by balance due at the end of the year. The information conFCC from common carrier radio stations on application tained on FCC Forms M, R, and 0, and H are reported forms as shown below:
on an annual basis. Other than the information on long(1) FCC Form 401, an application for new or modified term and short-term debt provided from FCC Forms M, radio station construction permit, requires information as R, and 0, and H discussed above, most data on outstand