FCC 73.3597 Revised as of October 1, 2007
Goto Year:2006 |
2008
Sec. 73.3597 Procedures on transfer and assignment applications.
(a) If, upon the examination of an application for FCC consent to an
assignment of a broadcast construction permit or license or for a transfer
of control of a corporate permittee or licensee, it appears that the station
involved has been operated on-air by the current licensee or permittee for
less than one year, the application will be designated for hearing on
appropriate issues unless the FCC is able to find that:
(1) The permit or license was not authorized either through the Minority
Ownership Policy or after a comparative hearing or, in the case of low power
TV and TV translator stations, the permit or license was not authorized
after a lottery in which the permittee or licensee benefited from minority
or diversity preferences;
(2) The application involves an FM translator station or FM booster station
only;
(3) The application involves a pro forma assignment or transfer of control;
or
(4) The assignor or transferor has made an affirmative factual showing,
supported by affidavits of a person or persons with personal knowledge
thereof, which establishes that, due to unavailability of capital, to death
or disability of station principals, or to other changed circumstances
affecting the licensee or permittee occurring subsequent to the acquisition
of the license or permit, FCC consent to the proposed assignment or transfer
of control will serve the public interest, convenience and necessity.
(5) the assignee or transferee has made an affirmative factual showing,
supported by affidavits of a person or persons with personal knowledge
thereof, which established that the proposed transaction would involve an
assignment or transfer to a minority-owned or minority controlled entity in
furtherance of our Minority Ownership Policy.
(b)(1) The commencement date of the one-year period set forth in paragraph
(a) of this section shall be the date on which the station initiated program
tests in accordance with Sec. 73.1620 or Sec. 74.14.
(2) In determining whether the station has been operating on-air for one
year, the FCC will calculate the period between the date of initiation of
program tests (as specified in paragraph (b)(1) of this section) and the
date the application for transfer or assignment is tendered for filing with
the FCC.
(c)(1) As used in paragraphs (c) and (d) of this section:
(i) Unbuilt station refers to an AM, FM, or TV broadcast station or a low
power TV or TV translator station for which a construction permit is
outstanding, and, regardless of the stage of physical completion, as to
which program tests have not commenced or, if required, been authorized.
(ii) Seller includes the assignor(s) of a construction permit for an unbuilt
station, the transferor(s) of control of the holder of such construction
permit, and any principal or such assignor(s) or transferor(s) who retains
an interest in the permittee or acquires or reacquires such interest within
1 year after commencing program tests.
(iii) The provisions of paragraphs (c) and (d) of this section apply only to
mutually exclusive noncommercial educational applications filed on or after
the release of the Report and Order in MM Docket 98–43, where the
construction permit is issued pursuant to settlement agreement.
(2) The FCC will not consent to the assignment or transfer of control of the
construction permit of an unbuilt station if the agreements or
understandings between the parties provide for, or permit, payment to the
seller of a sum in excess of the aggregate amount clearly shown to have been
legitimately and prudently expended and to be expended by the seller, solely
for preparing, filing, and advocating the grant of the construction permit
for the station, and for other steps reasonably necessary toward placing the
station in operation.
(3)(i) Applications for consent to the assignment of a construction permit
or transfer of control shall, in the case of unbuilt stations, be
accompanied by declarations both by the assignor (or transferor) and by the
assignee (or transferee) that, except as clearly disclosed in detail in the
applications, there are no agreements or understandings for reimbursement of
the seller's expenses or other payments to the seller, for the seller's
retention of any interest in the station, for options or any other means by
which the seller may acquire such an interest, or for any other actual or
potential benefit to the seller in the form of loans, the subsequent
repurchase of the seller's retained interest, or otherwise.
(ii) When the seller is to receive reimbursement of his expenses, the
applications of the parties shall include an itemized accounting of such
expenses, together with such factual information as the parties rely upon
for the requisite showing that those expenses represent legitimate and
prudent outlays made solely for the purposes allowable under paragraph
(c)(2) of this section.
(d)(1) Whenever an agreement for the assignment of the construction permit
of an unbuilt station or for the transfer of control of the permittee of an
unbuilt station, or any arrangement or understanding incidental thereto,
provides for the retention by the seller of any interest in the station, or
for any other actual or potential benefit to the seller in the form of loans
or otherwise, the question is raised as to whether the transaction involves
actual or potential gain to the seller over and above the legitimate and
prudent out-of-pocket expenses allowable under paragraph (c)(2) of this
section. In such cases the FCC will designate the assignment or transfer
applications for evidentiary hearing. However, a hearing is not mandatory in
cases coming within paragraph (d)(2) of this section.
(2) It is not intended to forbid the seller to retain an equity interest in
an unbuilt station which he is transferring or assigning if the seller
obligates himself, for the period ending 1 year after commencing program
tests, to provide that part of the total capital made available to the
station, up to the end of that period, which is proportionate to the
seller's equity share in the permittee, taking into account equity capital,
loan capital, and guarantees of interest and amortization payments for loan
capital provided by the seller before the transfer or assignment. This
condition will be satisfied:
(i) In the case of equity capital: By paid-in cash capital contributions
proportionate to the seller's equity share;
(ii) In cases where any person who has an equity interest in the permittee
provides loan capital: By the seller's provision of that part of the total
loan capital provided by equity holders which is proportionate to the
seller's equity share; and
(iii) In cases where any person cosigns or otherwise guarantees payments
under notes given for loan capital provided by nonequity holders: By similar
guarantees by the seller covering that part of such payments as is
proportionate to the seller's equity share. However, this condition shall
not be deemed to be met if the guarantees given by persons other than the
seller cover, individually or collectively, a larger portion of such
payments than the ratio of the combined equities of persons other than the
seller to the total equity.
(3) In cases which are subject to the requirements of paragraphs (d)(2) (i),
(ii) and (iii) of this section:
(i) The assignee's (or transferee's) application shall include a showing of
the anticipated capital needs of the station through the first year of its
operation and the seller's financial capacity to comply with the above
requirements, in the light of such anticipated capital needs.
(ii) The FCC will determine from its review of the applications whether a
hearing is necessary to ensure compliance with the above requirements.
(iii) Compliance with the above requirements will be subject to review by
the FCC at any time, either when considering subsequently filed applications
or whenever the FCC may otherwise find it desirable.
(iv) Within 30 days after any time when a seller is required to provide
equity or loan capital or execute guarantees, the permittee shall furnish
the FCC a written report containing sufficient details as to the sources and
amounts of equity capital paid in, loan capital made available, or
guarantees obtained as to enable the FCC to ascertain compliance with the
above requirements.
(v) No steps shall be taken by the permittee to effectuate arrangements for
the provision of equity or loan capital from sources not previously
identified and disclosed to the FCC, until 30 days after the permittee has
filed with the FCC a report of such arrangements and of provisions made for
the seller's compliance with the above requirement.
(vi) The provisions of paragraphs (d)(3) (iv) and (v) of this section shall
cease to apply 1 year after commencing program tests.
(4) Applications subject to this paragraph (d) of this section will, in any
event, be designated for evidentiary hearing in any case where the
agreements, arrangements or understandings with the seller provide for the
seller's option to acquire equity in the station or to increase equity
interests he retains at the time of the assignment or transfer of control.
An evidentiary hearing will similarly be held in any case in which the
assignee(s), transferee(s) or any of their principals, or any person in
privity therewith, has an option to purchase all or part of the seller's
retained or subsequently acquired equity interests in the station.
[ 44 FR 38509 , July 2, 1979, as amended at 47 FR 24580 , June 7, 1982; 47 FR 55930 , Dec. 14, 1982; 48 FR 9012 , Mar. 3, 1983; 48 FR 27207 , June 13, 1983;
50 FR 6946 , Feb. 19, 1985; 53 FR 36787 , Sept. 22, 1988; 63 FR 70050 , Dec.
18, 1998]
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