§  76.501   Cross-ownership.

   (a)–(c) [Reserved]

   (d) No cable operator shall offer satellite master antenna television
   service (“SMATV”), as that service is defined in § 76.5(a)(2), separate
   and apart from any franchised cable service in any portion of the
   franchise area served by that cable operator's cable system, either
   directly or indirectly through an affiliate owned, operated,
   controlled, or under common control with the cable operator.

   (e)(1) A cable operator may directly or indirectly, through an
   affiliate owned, operated, controlled by, or under common control with
   the cable operator, offer SMATV service within its franchise area if
   the cable operator's SMATV system was owned, operated, controlled by or
   under common control with the cable operator as of October 5, 1992.

   (2) A cable operator may directly or indirectly, through an affiliate
   owned, operated, controlled by, or under common control with the cable
   operator, offer service within its franchise area through SMATV
   facilities, provided such service is offered in accordance with the
   terms and conditions of a cable franchise agreement.

   (f) The restrictions in paragraphs (d) and (e) of this section shall
   not apply to any cable operator in any franchise area in which a cable
   operator is subject to effective competition as determined under
   section 623(l) of the Communications Act.

   Note 1 to § 76.501: Actual working control, in whatever manner
   exercised, shall be deemed a cognizable interest.

   Note 2 to § 76.501: In applying the provisions of this section,
   ownership and other interests in an entity or entities covered by this
   rule will be attributed to their holders and deemed cognizable pursuant
   to the following criteria:

   (a) Except as otherwise provided herein, partnership and direct
   ownership interests and any voting stock interest amounting to 5% or
   more of the outstanding voting stock of a corporation will be
   cognizable;

   (b) Investment companies, as defined in 15 U.S.C. 80a–3, insurance
   companies and banks holding stock through their trust departments in
   trust accounts will be considered to have a cognizable interest only if
   they hold 20% or more of the outstanding voting stock of a corporation,
   or if any of the officers or directors of the corporation are
   representatives of the investment company, insurance company or bank
   concerned. Holdings by a bank or insurance company will be aggregated
   if the bank or insurance company has any right to determine how the
   stock will be voted. Holdings by investment companies will be
   aggregated if under common management.

   (c) Attribution of ownership interests in an entity covered by this
   rule that are held indirectly by any party through one or more
   intervening corporations will be determined by successive
   multiplication of the ownership percentages for each link in the
   vertical ownership chain and application of the relevant attribution
   benchmark to the resulting product, except that wherever the ownership
   percentage for any link in the chain exceeds 50%, it shall not be
   included for purposes of this multiplication. [For example, if A owns
   10% of company X, which owns 60% of company Y, which owns 25% of
   “Licensee,” then X's interest in “Licensee” would be 25% (the same as
   Y's interest since X's interest in Y exceeds 50%), and A's interest in
   “Licensee” would be 2.5% (0.1 × 0.25). Under the 5% attribution
   benchmark, X's interest in “Licensee” would be cognizable, while A's
   interest would not be cognizable.]

   (d) Voting stock interests held in trust shall be attributed to any
   person who holds or shares the power to vote such stock, to any person
   who has the sole power to sell such stock, and to any person who has
   the right to revoke the trust at will or to replace the trustee at
   will. If the trustee has a familial, personal or extra-trust business
   relationship to the grantor or the beneficiary, the grantor or
   beneficiary, as appropriate, will be attributed with the stock
   interests held in trust. An otherwise qualified trust will be
   ineffective to insulate the grantor or beneficiary from attribution
   with the trust's assets unless all voting stock interests held by the
   grantor or beneficiary in the relevant entity covered by this rule are
   subject to said trust.

   (e) Subject to paragraph (i) of this Note, holders of non-voting stock
   shall not be attributed an interest in the issuing entity. Subject to
   paragraph (i) of this Note, holders of debt and instruments such as
   warrants, convertible debentures, options or other non-voting interests
   with rights of conversion to voting interests shall not be attributed
   unless and until conversion is effected.

   (f)(1) Subject to paragraph (i) of this Note, a limited partnership
   interest shall be attributed to a limited partner unless that partner
   is not materially involved, directly or indirectly, in the management
   or operation of the media-related activities of the partnership and the
   relevant entity so certifies. An interest in a Limited Liability
   Company (“LLC”) or Registered Limited Liability Partnership (“RLLP”)
   shall be attributed to the interest holder unless that interest holder
   is not materially involved, directly or indirectly, in the management
   or operation of the media-related activities of the partnership and the
   relevant entity so certifies.

   (2) In the case of a limited partnership, in order for an entity to
   make the certification set forth in paragraph (g)(1) of this section,
   it must verify that the partnership agreement or certificate of limited
   partnership, with respect to the particular limited partner exempt from
   attribution, establishes that the exempt limited partner has no
   material involvement, directly or indirectly, in the management or
   operation of the media activities of the partnership. In the case of an
   LLC or RLLP, in order for an entity to make the certification set forth
   in paragraph (g)(1) of this section, it must verify that the
   organizational document, with respect to the particular interest holder
   exempt from attribution, establishes that the exempt interest holder
   has no material involvement, directly or indirectly, in the management
   or operation of the media activities of the LLC or RLLP. The criteria
   which would assume adequate insulation for purposes of these
   certifications are described in the Memorandum Opinion and Order in MM
   Docket No. 83–46, FCC 85–252 (released June 24, 1985), as modified on
   reconsideration in the Memorandum Opinion and Order in MM Docket No.
   83–46, FCC 86–410 (released November 28, 1986). Irrespective of the
   terms of the certificate of limited partnership or partnership
   agreement, or other organizational document in the case of an LLC or
   RLLP, however, no such certification shall be made if the individual or
   entity making the certification has actual knowledge of any material
   involvement of the limited partners, or other interest holders in the
   case of an LLC or RLLP, in the management or operation of the media
   businesses of the partnership or LLC or RLLP.

   (3) In the case of an LLC or RLLP, the entity seeking insulation shall
   certify, in addition, that the relevant state statute authorizing LLCs
   permits an LLC member to insulate itself as required by our criteria.

   (g) Officers and directors of an entity covered by this rule are
   considered to have a cognizable interest in the entity with which they
   are so associated. If any such entity engages in businesses in addition
   to its primary media business, it may request the Commission to waive
   attribution for any officer or director whose duties and
   responsibilities are wholly unrelated to its primary business. The
   officers and directors of a parent company of a media entity, with an
   attributable interest in any such subsidiary entity, shall be deemed to
   have a cognizable interest in the subsidiary unless the duties and
   responsibilities of the officer or director involved are wholly
   unrelated to the media subsidiary, and a certification properly
   documenting this fact is submitted to the Commission. The officers and
   directors of a sister corporation of a media entity shall not be
   attributed with ownership of that entity by virtue of such status.

   (h) Discrete ownership interests held by the same individual or entity
   will be aggregated in determining whether or not an interest is
   cognizable under this section. An individual or entity will be deemed
   to have a cognizable investment if:

   (1) The sum of the interests held by or through “passive investors” is
   equal to or exceeds 20 percent; or

   (2) The sum of the interests other than those held by or through
   “passive investors” is equal to or exceeds 5 percent; or

   (3) The sum of the interests computed under paragraph (i)(1) of this
   section plus the sum of the interests computed under paragraph (i)(2)
   of this section is equal to or exceeds 20 percent.

   (i) Notwithstanding paragraphs (e) and (f) of this Note, the holder of
   an equity or debt interest or interests in an entity covered by this
   rule shall have that interest attributed if the equity (including all
   stockholdings, whether voting or nonvoting, common or preferred, and
   partnership interests) and debt interest or interests, in the
   aggregate, exceed 33 percent of the total asset value (all equity plus
   all debt) of that entity, provided however that:

   (1) in applying the provisions of paragraph (i) of this note to
   § § 76.501, 76.505 and 76.905(b)(2), the holder of an equity or debt
   interest or interests in a broadcast station, cable system, SMATV or
   multiple video distribution provider subject to § § 76.501, 76.505, or
   76.905(b)(2) (“interest holder”) shall have that interest attributed if
   the equity (including all stockholdings, whether voting or nonvoting,
   common or preferred, and partnership interests) and debt interest or
   interests, in the aggregate, exceed 33 percent of the total asset value
   (defined as the aggregate of all equity plus all debt) of that entity;
   and

   (i) the interest holder also holds an interest in a broadcast station,
   cable system, SMATV, or multiple video distribution provider that
   operates in the same market, is subject to § § 76.501, 76.505, or
   76.905(b)(2) and is attributable without reference to this paragraph
   (i); or

   (ii) the interest holder supplies over fifteen percent of the total
   weekly broadcast programming hours of the station in which the interest
   is held.

   (2) For purposes of applying subparagraph (i)(1), the term “market”
   will be defined as it is defined under the rule that is being applied.

   Note 3 to § 76.501: In cases where record and beneficial ownership of
   voting stock is not identical (e.g., bank nominees holding stock as
   record owners for the benefit of mutual funds, brokerage houses holding
   stock in street names for benefit of customers, investment advisors
   holding stock in their own names for the benefit of clients, and
   insurance companies holding stock), the party having the right to
   determine how the stock will be voted will be considered to own it for
   purposes of this subpart.

   Note 4 to § 76.501: Paragraph (a) of this section will not be applied so
   as to require the divestiture of ownership interests proscribed herein
   solely because of the transfer of such interests to heirs or legatees
   by will or intestacy, provided that the degree or extent of the
   proscribed cross-ownership is not increased by such transfer.

   Note 5 to § 76.501: Certifications pursuant to this section and these
   notes shall be sent to the attention of the Media Bureau, Federal
   Communications Commission, 445 12th Street, SW., Washington, DC 20554.

   Note 6 to § 76.501: In applying paragraph (a) of § 76.501, for purposes
   of paragraph note 2(i) of this section, attribution of ownership
   interests in an entity covered by this rule that are held indirectly by
   any party through one or more intervening organizations will be
   determined by successive multiplication of the ownership percentages
   for each link in the vertical ownership chain and application of the
   relevant attribution benchmark to the resulting product. The ownership
   percentage for any link in the chain that exceeds 50% shall be
   included. [For example, if A owns 10% of company X, which owns 60% of
   company Y, which owns 25% of “Licensee,” then X's interest in
   “Licensee” would 15% (0.6×0.25), and A's interest in “Licensee” would
   be 1.5% (0.1×0.6×0.25).]

   [ 58 FR 27677 , May 11, 1993, as amended at  60 FR 37834 , July 24, 1995;
    61 FR 15388 , Apr. 8, 1996;  64 FR 50646 , Sept. 17, 1999;  64 FR 67194 ,
   Dec. 1, 1999;  66 FR 9973 , Feb. 13, 2001;  67 FR 13234 , Mar. 21, 2002;  68 FR 13237 , Mar. 19, 2003]