The Federal Communications Commission (FCC) Media Bureau recently released a public notice giving guidance to broadcasters in light of the Third Circuit's July 7 holding in Prometheus Radio Project v. FCC. In that case, the court vacated several aspects of the FCC's broadcast ownership rules, including the definition of "eligible entity." Under the FCC's rules, eligible entities included all small businesses, as defined by the Small Business Administration's industry groupings based on revenue. Eligible entities qualified for exceptions to certain broadcast ownership, attribution, and other rules. Among other things, FCC rules allowed eligible entities that acquired expiring construction permits additional time to complete station construction. The extended construction period was either: (i) the time remaining on the construction permit or (ii) 18 months from the date the transaction was closed (whichever is longer).

In light of the court's decision, the Media Bureau announced that all of its eligible entity rule provisions and policies are suspended pending further FCC action. The impact on those seeking to qualify for an eligible entity construction permit extension varies depending on the status of their related FCC application as of the date that the court issues its "mandate" to the FCC. The court is expected to issue its mandate in late August.

Final Application Grants: If grant of an application to assign/transfer a construction permit to an eligible entity has become "final" as of the date the court issues its mandate to the FCC, the permittee will enjoy the benefit of the extended construction period. A grant is deemed "final" 40 days after public notice of the grant of the application, unless a petition for reconsideration or application for review is timely filed.

Non-Final Application Grants: If grant of an application to assign/transfer a construction permit to an eligible entity has not become "final" as of the date the court issues its mandate to the FCC, the permittee will not enjoy the benefit of the extended construction period. Instead, the construction permit will revert back to its original expiration date. In all cases in which construction was not completed prior to the original construction permit expiration date, the construction permit is automatically forfeited upon expiration.

Pending Applications: If grant of the application to assign/transfer a construction permit to an eligible entity is pending before the FCC as of the date the court issues its mandate to the FCC, there are two potential outcomes: (i) if the construction permit has already expired, the Bureau will dismiss the application; (ii) if the construction permit has not expired, the application will be processed, but the grant will not include a condition extending the construction permit.

Affected stations are encouraged to contact their counsel for further guidance.