§ 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]

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