We are nearing the end of September and, in many jurisdictions we are in the heart of political season – though mostly for state and local elections. While most broadcast stations don’t think much about the FCC’s political broadcasting rules in odd-numbered years, they are required to do so, as races for state and local political offices trigger most of the same FCC obligations as do races for federal office.  There are particularly hard-fought elections for Governor in November in Virginia and New Jersey, and all sorts of state and local elections around the country.  These include some mayoral races in major US cities.  Thus, it is worth repeating the reminders that we have published before: most of the political rules apply to these state and local electoral races so broadcasters need to be paying attention.

Whether the race is for Governor or much more locally focused, like elections for state legislatures, school boards or town councils, stations need to be prepared. Candidates for state and local elections are entitled to virtually all of the political broadcasting rights of Federal candidates – with one exception, the right of reasonable access which is reserved solely for Federal candidates. That means that only Federal candidates have the right to demand access to all classes and dayparts of advertising time that a broadcast station sells. As we wrote in our summary of reasonable access, here, that does not mean that Federal candidates can demand as much time as they want, only that stations must sell them a reasonable amount of advertising during the various classes of advertising time sold on the station. For state and local candidates, on the other hand, stations don’t need to sell the candidates any advertising time at all. But, if they do, the other political rules apply.

That means that if a broadcast station decides to sell advertising time to one candidate in a state or local political race, they must sell it to all candidates for the same race – and be prepared to make available equal amounts of time in equivalent time periods. Stations can decide to make available advertising only in certain dayparts (or on certain stations in a cluster) for state and local races. They can even make different dayparts (or stations) available for different political races, as long as all candidates for the same race are treated the same. So, for instance, a station could decide to offer only spots during weekend and overnight time periods to candidates for the city council, while offering candidates for Governor time during all dayparts. A station just needs to treat all legally qualified candidates (including legally qualified independent, fringe party, and write-in candidates) for the same state or local race in the same way.

Lowest unit rates apply to state and local candidates, if you choose to sell to those candidates.  That means if the time is sold to state and local candidates during the 60 days before the general election (no matter when that election will be held), the time must be sold to the candidates at lowest unit rates. See our summaries of the rules relating to equal time here, and to lowest unit charges here. Similarly, if a station on-air personality decides to run for state or local office (anything from the school board or local planning commission to Governor or state legislature), the station needs to consider whether to take that personality off the air, or risk having to provide equal time to all competing candidates – for free – in amounts equivalent to the amount of time that the employee-candidate appeared on the air, even if the employee never mentions his or her candidacy at all. See our articles about this topic here and here.

Political file rules also apply to all advertising by candidates and their authorized campaign committees.  So the FCC’s clarifications in 2020 (see our articles here and here) on information about orders for candidate ads – including all price and schedule information – being uploaded to the public file within one business day, applies to these elections just as it does to federal elections.  See my video here, prepared for the Indiana Broadcasters Association, that discusses many of the FCC’s new interpretations of the public file rules.

Ads from non-candidate groups dealing with state and local elections generally do not require price and schedule information to be uploaded (unless those ads also mention a federal issue), but they do require that the station’s online public file contain an identification of the sponsor of the ad (address, phone number and contact person should be provided), plus a list of the ad sponsor’s executive officers, members of the Board of Directors or similar governing board.  Under the FCC’s guidance from 2019 (see our article here), the FCC thinks that most of these organizations will have more than one governing board member, so if you are provided with a single name, you are required to reach out to the sponsor or their representative and ask if there are others who should be listed.

For more about the political rules, see our Broadcaster’s Guide to Political Broadcasting here (though note that the political file information has not been updated, so refer to the video and articles linked in the prior paragraph for more information).  Don’t forget about these political advertising rules – even though this is an odd-numbered year!

Here are some of the regulatory developments from the last week of significance to broadcasters , with links to where you can go to find more information as to how these actions may affect your operations.

• At the last minute, the deadline for broadcasters to pay their annual regulatory fees was extended to Monday, September 27, 2021 at 11:59 PM Eastern Time. The deadline had been Friday, September 24.  Procrastinators need to file by the new date to avoid the 25% penalty for late-filed fees.  (Public Notice) (Fee Filer Website)
• The FCC opened a rulemaking to consider whether unlicensed spectrum users, like large technology companies, should be required to pay annual regulatory fees. It has been argued that these companies receive benefits from FCC regulation and thus should pay fees that offset the FCC’s costs of operation, reducing the fees paid by regulated entities, including broadcasters. Commenters are invited to comment on whether the FCC has the authority to impose such fees and, if so, how such fees should be assessed.  Comments are due by October 21 and reply comments are due by November 5.  (Federal Register)
• Both the Audio and Video Divisions of the FCC continued to penalize broadcasters for late uploads to their online public inspection files discovered during the license renewal process. One Class A TV station was issued an admonition for failing to timely upload 11 Quarterly Issues Programs Lists to its public file (all uploads were less than a month late).  Several other TV stations also received admonitions (admonitions can be considered in assessing penalties for future violations) for violations discovered by the FCC’s staff in their review of stations’ public files.  Among the actions taken against radio stations was a consent decree with a Kentucky AM station requiring a $4500 monetary penalty plus the requirement for a compliance plan imposing significant paperwork requirements.  The station had not submitted an EEO Program Report with its renewal application and had not uploaded to its public file quarterly issues programs lists during the renewal term.
• The FCC issued rules for Auction 111, which is open to a limited group of applicants for low power TV and TV translator stations. The applicants who can participate in the auction submitted mutually exclusive applications either during a 2009 filing window for new LPTV stations or in a 2018 window for stations displaced by the Incentive Auction.  Short-form applications are due between November 1 and November 9, 2021 and bidding begins February 23, 2022.  (Public Notice) (Eligible Applicant List)
• We wrote on our Broadcast Law Blog about the effort to bring back the old FCC Form 395-B which required broadcasters to report on the racial and gender make-up of their workforce in various job categories. Comments on the FCC’s Further Notice of Proposed Rulemaking proposing to revive this form are due by September 30 and reply comments are due by November 1.  (Broadcast Law Blog)
• Fans of copyright law will enjoy reading our look at the federal court decisions that led to the termination of operations by streaming company Locast which, before the court orders, had been transmitting broadcast TV stations’ programming on the internet without the permission of the stations. (Broadcast Law Blog)

For next week, keep an eye on the Broadcast Law Blog for our monthly update on important broadcast regulatory dates and deadlines coming in October. Also, don’t forget that Monday, September 27, is the deadline for broadcasters to file ETRS Form Three.  This form details each station’s participation in the August 11 national EAS test, including whether the station received the test and relayed it successfully.  We wrote about the form, here.

Comments are due on September 30 on the FCC’s Further Notice of Proposed Rulemaking looking to bring back some form of the old FCC Form 395B, the Annual Employment Report.  That form required broadcasters to report on the racial and gender make-up of their workforce in various employment categories.  The use of the form has been on hold for almost two decades after two rulings from the US Court of Appeals that found it was unconstitutional for the FCC to use the information collected from the Form 395B to determine if a broadcaster’s license renewal application deserved extra scrutiny.  In effect, the court found using the reports in this way compelled broadcasters to make hiring decisions based on the race and gender of employment candidates, which was discriminatory and thus could not be compelled by the FCC.

This created a tension between a law requiring that the FCC gather information on the racial and gender make-up of the broadcast workforce to determine if affirmative action efforts should be made on an industry-wide basis, versus  the prohibition on gathering this information on a station-specific basis where the temptation would always be to look at a specific station’s data and make assumptions about whether it had been  in making employment decisions in color blind manner.  While the FCC has over the last two decades repeatedly considered bringing back the form to collect information on an industry-wide basis, questions have always arisen as to how the accuracy and completeness of that information could be assured if the information gathered did not identify the station providing it.  And, once that information was in hand, would it be subject to Freedom of Information Act (FOIA) obligations that could force its disclosure which could lead to it potentially being used in an enforcement context?

The current proceeding tackles these issues, asking questions about whether the collection can be done in a way that complies with both the court rulings and the statutory requirement to gather industry-wide data on the make-up of the broadcast workforce.  The FCC notes that there is now a statute that allows agencies to set up data-collection arms to get industry data to assess broad trends, without subjecting that data to FOIA requests. Could portions of the FCC be designated to receive such information and keep it protected?  Is that necessary, or can the information otherwise be divorced from individualized decisions about stations?  If that information can be collected, how can the FCC assure that stations are accurately and completely reporting their data?  Would the FCC have to conduct audits of the information – and what kinds of penalties would have to be assessed on stations that do not report at all or in an accurate fashion?

These are obviously thorny questions on which there are bound to be conflicting views.  The proceeding also asks more mundane questions about the form itself, and whether the various categories used to identify employees at stations should be updated both as to their positions at the station and as to the racial and gender make-up of employees in each of those categories.  The old form used broad categories such as “officials and managers”, “professionals”, “sales workers”, technicians”, “office and clerical”, “craft workers (skilled)” and other categories that may not reflect how workers are classified in today’s broadcast workplace.

Comments are due September 30, with replies to be submitted by November 1.  This proceeding and any new obligations that the FCC may impose on broadcasters should be carefully tracked in the coming months.

In recent weeks, decisions of a US District Court judge in the Southern District of New York led to the suspension of service by the Internet streaming company Locast, which built its business on streaming local television stations generally without obtaining the consent of TV stations or the copyright holders in the programs they broadcast.  Facially, the service looked much like that offered by Aereo, which the Supreme Court determined seven years ago violated federal copyright law by retransmitting TV stations without first obtaining the consent of the copyright holders (see our article here on the Aereo Supreme Court decision).  Locast offered a novel defense to the claims that it was nothing but an Aereo imitator, contending that the Copyright Act permitts nonprofit entities to retransmit copyrighted materials without the consent of copyright owners.  The federal judge in the Southern District rejected that argument in his opinion on a motion for summary judgement, and then issued an injunction ordering the service to cease operating (though Locast had already suspended those operations after the initial decision on the motion for summary judgement).  What did the judge find?

Locast had argued that Section 111(a)(5) of the Copyright Act permits “secondary transmissions” of a “primary transmission” (i.e., an internet transmission of an over-the-air television signal) without permission of copyright holders if the retransmissions are made by a government body or nonprofit organization “without charge to the recipients of the secondary transmission other than assessments necessary to defray the actual and reasonable costs of maintaining and operating the secondary transmission service.”  This provision of the rules was intended to allow governments and local nonprofit associations in rural communities to provide TV translators or community antenna systems to bring television service to their communities.  Locast argued that the provision should also be interpreted to authorize its service, which interrupted service every 15 minutes to ask for donations unless a user paid a $5 monthly “contribution” to the service.  The judge determined that the payment of this $5 monthly fee took Locast outside the narrow “nonprofit organization” exception provided by the law.

The judge’s decision was based on findings that the money brought in from these $5 monthly contributions exceeded the costs of running the local service.  Locast contended that it did not make a profit, as any fees in excess of the costs of running the local service were plowed back into the company, allowing it to expand into other markets.  The judge’s decision was based on a narrow finding that “expansion” of the service is different from “reasonable costs of maintaining and operating” the service.  As the law’s exception is a narrow one that abridges a copyright holders rights to control the distribution of its copyrighted material, the judge concluded that it should be construed narrowly.  The statutory exception says nothing about charges to recipients being used to “expand” the service (and thus expand the intrusion on the rights of the copyright holder), so the judge’s decision concluded that the collection of these excess charges took the company outside the exception.

While not so stated, once the exception was gone, this case was essentially the same as that of Aereo.  As Locast was streaming the signals of the television stations without permission, the rights of the copyright holders to control the public performance of their works through their retransmission on the internet was infringed.  This led to the injunction against the continued operation of the service.

What is next?  While the company could conceivably limit its operations so that its contributions did not exceed operational costs, that would make further expansion difficult.  Moreover, it would not end the litigation, as the broadcast companies challenging Locast raised several other arguments about the company’s operations which the court never had to reach because of its determination on this narrow issue.  More likely, we will see an appeal of the judge’s decision with Locast arguing that his statutory interpretation was too narrow.  There is also the issue of statutory damages to the copyright holders, which may need to be decided at some point, though there is some indication in recent pleadings that the parties may be discussing some sort of settlement.

No matter what happens with Locast, we have already seen the expansion of services that stream local TV stations – with the permission of those stations and the copyright holders in their programs.  This is likely to expand, as there clearly is a demand for such products as witnessed by Locast, Aereo and Aereo contemporary FilmOn X (see our articles about court cases finding their service as violating the Copyright laws here and here).  Just as legitimate music services largely tamped down the furor over music file sharing services a decade ago, these legitimate TV streaming services will likely decrease the demand for services that look for loopholes in the Copyright Act as the basis of their business plans.

Here are some of the regulatory developments of significance to broadcasters from the last week, with links to where you can go to find more information as to how these actions may affect your operations.

• In anticipation of this week’s deadline for payment of annual regulatory fees – 11:59 pm, Eastern Daylight Time on Friday, September 24, 2021 – the FCC’s Media Bureau released a guide to computing the fees due for broadcast stations (Media Bureau Fee Filing Guide) and made available a fee lookup webpage. A separate Fact Sheet on who is regularly exempt from paying these fees (including noncommercial stations and those payors with total obligations of $1000 or less) was also released this week.  Read our summary of all of the FCC notices on the procedures and requirements for paying these fees on our Broadcast Law Blog, here.
• The FCC released a draft rulemaking that asks, among other things, whether broadcast stations should be required to report their operational status to the Disaster Information Reporting System (DIRS) when it is activated during an emergency. That reporting is currently voluntary.  If the rulemaking is adopted by the FCC, it would ask about the burden that mandatory reporting would place on stations in the middle of an emergency and whether the burden would impede coverage by the station of the emergency, whether the FCC has the legal authority to require reporting, and the penalties that could be tied to a failure to report.  The draft will be considered at the FCC’s September 30 regular monthly open meeting.  (Draft Notice of Proposed Rulemaking)
• NAB and two other media trade groups are trying to delay the effective date of the FCC’s new rules which require the on-air identification of programs supported by foreign governments (and require research by broadcasters as to whether any buyer of program time is a representative of a foreign government), while the groups pursue a review of the rules in federal court. The groups argue that they are likely to win in court, so implementation of the rules before the court acts would be premature and unnecessarily costly for stations.  We mention the foreign government sponsorship identification rules in one of our weekly updates, here and the court case, here. (Petition for Stay)
• A New York federal district court judge issued a permanent injunction blocking Locast from any further operation of its service which had retransmitted on the internet the programming from over-the-air television stations without consent of the stations. The same federal judge two weeks ago ruled that Locast’s operation violated federal copyright law.  We noted that decision, here.
• About a hundred organizations wrote Acting FCC Chairwoman Jessica Rosenworcel urging the FCC to formally examine what is claimed to be the agency’s history of systemic racism in its policies and licensing. The letter calls on the FCC to “investigate its own history of anti-Black racism in the policies it has adopted” and to “identify reparative actions it will take to redress the structural racism that exists in our media system due to those FCC policies.” (Letter)  This letter comes as some of these issues may be considered in in comments due September 30 on the FCC’s rulemaking on whether to bring back the FCC Form 395, reporting on the racial and gender breakdown of each broadcast station’s workforce, and in the October 1 reply comments on the FCC’s inquiry into potential changes to its multiple ownership rules, including changes to the radio ownership rules, changes opposed by several organizations because of the alleged impact that changes would have on minority ownership (see our blog article here about the FCC inquiry on the ownership rules).

With a week to go before the deadline for submission of annual regulatory fees, we urge broadcasters to get into the FCC’s fee filing system now and pay their fees.  We have been told that there are sometimes glitches in the electronic payment system that can take time to resolve.  With a 25% penalty on payments received after the September 24 deadline, broadcasters should not wait until the last minute to submit these fees and risk having to pay the steep penalty for a late payment should a glitch arise.

The FCC has issued numerous public notices about the payment of these annual regulatory fees that anyone paying fees should review to make sure that they know all that they need to know to make a complete and timely payment.  The FCC initially issued a Public Notice announcing that the payment window is open and will be open for timely payments through 11:59 pm Eastern Daylight Time on September 24, 2021. The Media Bureau subsequently released a Media Bureau Fee Filing Guide setting out payment specifics for computing the fees due from broadcast stations.  The Bureau’s online fee lookup portal for the fees that the FCC believes are due from any specific station was activated early this week (see the FCC Public Notice here).  Remember, fees are based on a station’s status as of October 1, 2020, so stations that have since changed facilities pay on the facilities as they were last year – and that is what should be reflected in the FCC’s database.  This week, the FCC also issued a Fact Sheet explaining who does not owe fees – including noncommercial stations and companies whose total obligations are $1000 or less.

The FCC also released a separate Payment Procedures Public Notice.  Review that notice to make sure that you are following the correct procedures to make the required payments.  In this time when many stations are still suffering from the economic downturn last year because of the pandemic, the FCC recognized that fee payments could imperil the broadcast services offered by some particularly hard-hit stations.  Licensees that want to seek a waiver, deferral or reduction of their regulatory fees based on financial hardship from the pandemic should review yet another Public Notice setting out the procedures for such requests.  These requests, which must be submitted by September 24, should include financial documentation demonstrating the hardship of a timely payment. The FCC won’t just take your word when evaluating your economic issues and hardship request – you must document that the timely payment would imperil specific services that your station provides.

With a week to go, you should be working on these filings right now.  Don’t delay, as the penalty for an untimely payment is steep.

Here are some of the regulatory developments of significance to broadcasters from the last week, with links to where you can go to find more information as to how these actions may affect your operations.

• The FCC opened the window for Fiscal Year 2021 regulatory fees which must be paid no later than 11:59 pm, Eastern Daylight Time on September 24, 2021 – a 25% penalty will be attached to late payments (Public Notice). The Media Bureau released a guide to computing the fees due for broadcast stations (Media Bureau Fee Filing Guide).  A separate notice on payment procedures was also released by the FCC (Payment Procedures Public Notice).  Licensees that want to seek a waiver, deferral, or reduction of their regulatory fees based on financial hardship from the pandemic should review yet another public notice setting out the procedures for such requests.  These requests, which are to be submitted by September 24, must include financial documentation demonstrating the hardship of a timely payment.  (Public Notice on Fee Waivers)
• The FCC reminded broadcasters of their obligations to file biennial ownership reports this year. The window to file these reports opens on October 1 and closes on December 1 (Public Notice).  To help broadcasters prepare for filing their biennial ownership reports, the FCC will present an online information session on October 5, 2021 at 2:00 PM EDT, which will include the opportunity for questions from online attendees.  The session is designed to help both novice and experienced filers.  It will be streamed live from the FCC’s web page at fcc.gov/live and the FCC’s YouTube page at https://www.youtube.com/user/fccdotgovvideo (where it will also be available for later viewing).  )
• The FCC is seeking comment on the accessibility to children with disabilities of children’s educational and informational television programming.  Specifically, the agency wants to gather information on the extent to which short-form programming and regularly scheduled weekly programming aired on multicast streams is closed captioned and/or audio described, including on multicast channels like PBS KIDS. Comments are due October 7, and reply comments are due November 8.  (Public Notice)
• The Incentive Auction Task Force reminded phase 0-5 repacked full power and Class A TV stations that they must submit all remaining invoices for reimbursement from the TV Broadcaster Relocation Fund by October 8, 2021. The deadlines to submit all remaining invoices and initiate interim close-out procedures for phase 6-10 repacked stations is March 22, 2022, and the deadline is September 5, 2022 for all eligible MVPDs, FM stations, and LPTV/translator stations that intend to seek reimbursement.  (Public Notice)
• The FCC released the tentative agenda for its September public open meeting to be held on September 30 (Agenda). The agenda includes the proposed adoption of a Notice of Proposed Rulemaking seeking comments on standardized questions to be asked of foreign entities seeking to acquire interests in US communications facilities, including interests in broadcast stations, which require approval of the FCC or other government agencies (Factsheet and Draft Notice of Proposed Rulemaking)
• A Low Power FM station entered into a consent decree for violating the FCC’s underwriting rules. LPFM stations are all licensed as noncommercial educational broadcasters and cannot run commercials.  The consent decree includes a $17,500 fine and requires that the licensee adopt a compliance plan to prevent future violations. The station was also granted a short-term, four-year license renewal instead of the normal eight-year renewal.  This action began with a complaint from a commercial station which argued that the LPFM station routinely aired commercial advertisements and had failed to air educational content.  The Media Bureau rejected the educational content argument, noting that the FCC has long recognized that licensees are entitled to broad discretion in the scheduling, selection, and presentation of programming; but found that many of the underwriting announcements were too promotional leading to the fine and other penalties. (Consent Decree)

Here are some of the regulatory developments of significance to broadcasters from the last week, with links to where you can go to find more information as to how these actions may affect your operations.

• In a significant win for television broadcasters, a federal district court in New York determined that the nonprofit company Locast, which was retransmitting to viewers via the Internet local television stations without permission of the stations and without compensating them, was not entitled to rely on an exception in copyright law that allows nonprofit entities to retransmit copyrighted material without permission. One of the requirements to qualify for the exception is that the nonprofit that is retransmitting the signal do so without charge to the consumer other than a reasonable amount to cover its costs of maintaining and operating the service.  The Judge found that Locast was receiving revenues from viewers which exceeded its costs of operation, and thus he concluded that Locast could not rely on this exception.  After the release of the decision, the company shut down its operations, though an appeal of the decision may be filed.  (Decision)
• For radio broadcasters, the full decision of the Copyright Royalty Board setting webcasting streaming royalty rates to be paid to SoundExchange for the period 2021-2025 was released, redacting confidential business information submitted as evidence by the parties (CRB Decision). We wrote about the decision here when the rates were initially announced, explaining how the royalty rates will increase from those that were in effect through 2020. The decision can be appealed to the US Court of Appeals but will become effective while any appeal is pending.
• Comments and reply comments will be due September 30, 2021 and November 1, 2021, respectively, in connection with the FCC’s Further Notice of Proposed Rulemaking that seeks comment on reviving the FCC’s collection of data from broadcasters via Form 395-B which would require periodic reporting on the racial and gender characteristics of a station’s workforce. (Public Notice)
• Eighteen television stations that were fined $512,228 each for violations of the good faith negotiation requirements of the FCC’s retransmission consent rules have petitioned the agency to reconsider its decision upholding the fines. The TV stations make, among others, a constitutional argument saying, in effect, that the stations could not have had notice that such large fines were possible, because the FCC had never fined a station for violation of the good faith negotiation requirement of the retransmission consent rules.  For more background on the earlier stages of this proceeding, see our blog posts here and here.  (Petition)
• With about a month to go until broadcasters can start filling out their biennial ownership reports, the FCC released its report on broadcast station ownership as of October 1, 2019 as compiled from the last set of biennial reports. The Report provides a breakdown of the race and gender of broadcast station owners – information compiled from the 2019 biennial reports.  (Report)

The saga of Flo & Eddie seeking performance royalties for the pre-1972 sound recordings of their old band, the Turtles, seems to be finally reaching its end. For years, they have sued both broadcasters and digital media companies trying to exploit an ambiguity in copyright law over the status of pre-1972 sound recordings – songs as recorded by a particular band or artist before February 1972 when sound recordings first became subject to federal copyright law. While federal law still only conveys a performance right in sound recordings when those recordings are performed as a digital audio performance (e.g., through a streaming service or digital cable transmission), Flo & Eddie had argued that pre-1972 sound recordings remained covered by state laws, that some of those state laws provided a performance right, and that this  performance right extended to all performances, not just digital ones. Courts in other states had rejected that argument (see our articles on decisions in New York, Florida and Georgia), but the question of the status of the law remained unresolved in California. A court decision last week helps to resolve that issue, though intervening events have lessened its impact, so the decision has gone relatively unnoticed despite the extensive prior coverage previously devoted to this subject.

The decision was one of the 9th Circuit Court of Appeals, specifically related to XM Sirius royalties. In the decision, the Court conducted a searching review of the history of copyright law’s treatment of sound recordings, and found nothing in that history that would suggest that the California legislature, when adopting its law giving a creator the “exclusive rights” in these recordings meant to convey a public performance right in a sound recording – noting that the first use of that exclusive right language was in the 1870s, before there were sound recordings. The Court analyzed all the decisions in the interim and found none that suggested that there was a common law or California statutory right that created a public performance right in these recordings.  There was no suggestion that the California legislature had intended to depart from the practices that have otherwise generally applied throughout the US where no performance right has been paid for sound recordings except for the digital performance right that was adopted by Congress in the 1990s. The Court did note that, since the case first began, the Music Modernization Act extended the federal performance right in digital performances to pre-1972 sound recordings. So, the Court’s decision was limited in its application to disputes about whether a digital performance royalty was due for performances before that extension.  But there was one other issue not mentioned by the Court that makes this decision relevant to everyone who performs sound recordings even in a non-digital context, including broadcasters.

If the Court had found a performance right existed under state law, the next argument would be that, since these rights are creations of state law, the limitations under federal law that limit such rights might not apply. Under federal law, the sound recording performance right applies only to digital audio recordings.  But if the Court had found a state law performance right in sound recordings, that right could be deemed unrestricted.  Thus, one could argue that radio stations or bars and restaurants or sports stadiums that play pre-1972 sound recordings in California would have to pay a performance royalty to the artists and record companies that own these copyrights.  In fact, we wrote about Flo & Eddie making exactly that argument against radio broadcasters in California.

Thus, by determining that California law is no different than the law of any other state, and that there is no performance royalty owed under California state law to copyright owners of pre-1972 sound recordings, the Court has made the world safe  for oldies radio, retro-sock hops,  big band dance parties, and 50s and 60s music at various burger joints throughout the state (at least from having to pay artists or record labels – though the composers still need to be paid through ASCAP, BMI, SESAC and other performing rights organizations).  Of course, the Court’s decision could still be appealed, but it would seem that this decision, being in line with those of courts across the country, might well spell the end to the debates over pre-1972 sound recordings.

As Fall approaches and kids head back to school, be sure not to lose track of the regulatory dates and deadlines in September.  We outline some of those dates below.  One date is applicable to all commercial broadcasters, the obligation to pay regulatory fees.  While the exact due date has not yet been announced, look for that announcement any day as the Commission adopted the decision setting those fees last week.  See the Report and Order, here, for more details and to see what your station owes.  As part of that proceeding, the FCC also decided to seek comment on assessing fees in the future on users of unlicensed spectrum, especially large tech companies.  Many such users manufacture devices or provide other applications that use spectrum or otherwise benefit from FCC regulation, but right now do not pay fees.  Watch for comment dates on this proposal in the near future.  The Notice of Proposed Rulemaking begins on page 38, here.

Comment dates have been set for parties that want to weigh in on the FCC’s media ownership rules.  They have until September 2 to file their comments in the 2018 Quadrennial Review proceeding, which focuses most heavily on local radio ownership regulation.  These comments are to refresh the record with updated information about the state of the media marketplace since initial comments in the proceeding were filed over two years ago.  Reply comments are due by October 1.  We wrote more about this review of media ownership, here.

The FCC’s Media Bureau is seeking comment on a petition filed by the four major TV networks affiliates’ associations regarding recently adopted rules that require broadcasters to make specific sponsorship identification disclosures about programming blocks purchased by a foreign government or its representatives, and to take steps to assess if any party purchasing such time is in fact a representative of a foreign government.  The affiliates are concerned that the new rules might be read to apply to common forms of broadcast advertising and asked the FCC to clarify that these rules do not apply when a station sells time to advertisers in the normal course of business, no matter the duration of the advertisement.  In the Public Notice setting the comment dates, the Media Bureau encouraged commenters that agree with the affiliates’ position to provide objective criteria to distinguish between program blocks that should or should not be covered by the rules.  Comments on the petition are due by September 2, with reply comments due by September 17.  Note that the NAB and two other broadcast organizations have also filed a Petition for Review in the D.C. Circuit Court of Appeals challenging the new sponsorship identification rules.

Radio operators should note September 7 as the date comments are due on several technical changes the FCC has proposed making to its rules for radio.  Read the Notice of Proposed Rulemaking, here.  Reply comments are due by September 20.

Winning bidders in Auction 109 that recently concluded should be working on their FCC Form 2100, Schedule 301-FM long-form applications and be prepared to submit those applications by September 13.  Instructions for completing the application are available, here.  Final payments are also due by September 13.  See the Public Notice with more details, here.

The approximately 200 stations that received an EEO random audit letter from the FCC must upload their responses to their online public file by September 20.  We wrote more about this audit round, here.  A copy of the audit letter and the list of stations chosen to be audited are available, here.

More details about the results of the August 11 National EAS Test are due by September 27 via FCC ETRS Form Three.  Stations should be prepared to share the operational details of their test experience, including whether the station suffered any equipment or software failures that caused the station to not retransmit the test to its audience.  See the Form Three filing guide, here.

Looking ahead to October, radio stations in Alaska, American Samoa, Guam, Hawaii, Marianas Islands, Oregon, and Washington and TV stations in Iowa and Missouri should be preparing their license renewal applications for submission on or before October 1.  Pay close attention to the contents of your online public file and be sure that all required documents are complete and were uploaded on time.  These stations are also required to file a Broadcast EEO Program Report (FCC Form 2100, Schedule 396) and, if they have five or more full-time employees in their station employment unit, upload an annual EEO report to their public file and website.

Radio stations with five or more full-time employees in their station employment in Florida, Puerto Rico, and the Virgin Islands, Iowa, and Missouri and TV stations with five or more full-time employees in their station employment unit in Florida, Puerto Rico, the Virgin Islands, Alaska, American Samoa, Guam, Hawaii, Marianas Islands, Oregon, and Washington must also post their annual EEO reports to their public file and website.

Another obligation at which all broadcasters should be looking arises between October 1 and December 1, when licensees of commercial and non-commercial full power television, Class A television, low power television, AM radio, and FM radio stations must submit their biennial ownership reports (FCC Form 323 and 323-E).  These reports ensure the public can learn who owns, operates, and controls broadcast stations.  Timely filing of your ownership report takes on added significance during a license renewal cycle, as the reports are one of the items that FCC staff will be looking at during their compliance review.  See the June Public Notice, here.

Quarterly Issues Programs lists are also due in early October – by October 10.  All full-power broadcast stations, including Class A TV stations, must file these reports.

Finally, TV stations in Phases 0 to 5 of the incentive auction repack have until October 8 to submit all remaining invoices and supporting documentation using the FCC Form 399 reimbursement form, and to initiate interim close-out procedures with respect to any compensation that they are due from the repacking of the TV spectrum.  Any station that has failed to file any invoices or initiate interim close-out procedures by the invoice filing deadline assigned to its phase will be closed out of the reimbursement program on its filing deadline date, and its available reimbursement funds will be returned to the fund for use by other entities.  See the Public Notice, here.

These are just some of the dates and deadlines in September and early October that you should mark on your calendar.  As always, be sure to keep in touch with your station’s legal counsel, engineer, and other consultants who advise your operations to identify specific regulatory dates that apply to your operations.

Here are some of the regulatory developments of significance to broadcasters from the last week, with links to where you can go to find more information as to how these actions may affect your operations.

• On Friday, the FCC released its decision setting 2021 annual regulatory fees. In a win for broadcasters, the NAB and other broadcast groups convinced the FCC to lower the broadcast fees that the FCC had initially proposed, avoiding a proposed significant increase in the fees on radio.  As was the case last year, stations that can show that COVID significantly affected their finances may qualify to pay their fees over time, rather than in the lump sum that will be due before October 1.  The FCC will release a Public Notice in the next few days announcing the window during which broadcasters are to pay their fees.  (Report and Order)
• The FCC’s Media Bureau continues to scrutinize television license renewals. This week, the Bureau announced that a South Carolina TV station faces a $3,000 fine for uploading four quarterly issues/programs lists more than one year late and three lists between one month and one year late. The violations were discovered during the FCC staff’s review of the stations’ public files for license renewal.  (Notice of Apparently Liability for Forfeiture)  It also admonished a Mississippi TV station for uploading two lists between one month and one year late, and eight lists between one day and one month late.  (Letter)
• In our weekly update last week, we noted a proposed $3500 fine on a broadcaster who had completed construction of a new FM translator and commenced its operations, but forgot to timely file a license application informing the FCC of the completion of construction in accordance with the translator’s construction permit. Showing that this fine is now a standard in similar cases, the FCC issued four more decisions this week imposing similar penalties (here, here, here and here).  These decisions remind broadcasters who are building new technical facilities authorized by an FCC construction permit to file a license application before the construction deadline showing that they have timely constructed the station as authorized by their permit.
• Flo & Eddie, leaders of the 1960s band the Turtles, were again rejected—this time by a federal appeals court in California—in their latest attempt to get a court to recognize a right to receive royalties for the public performance of pre-1972 sound recordings. The case had implications for broadcasters, as a contrary decision could have recognized a state-based performance royalty that could have applied to over-the-air radio and to anyone else who played these oldies in public in California.  (Opinion).  Watch for an article with more details on this decision later this week on our Broadcast Law Blog.
• Visit the Broadcast Law Blog on Monday afternoon for our monthly feature on important September regulatory dates and deadlines for broadcasters.

Here are some of the regulatory developments of significance to broadcasters from the last week, with links to where you can go to find more information as to how these actions may affect your operations.

• Two Federal Register notices set dates for changes to the FCC’s EAS rules. We wrote about these issues here and here.
  • One notice set an effective date of September 20, 2021for rule changes expanding FEMA’s ability to send emergency alerts during national emergencies and requesting that States that don’t have effective State Emergency Communications Committees (SECC) activate one. Other rules changes adopted at the same time will take effect after further Paperwork Reduction Act review and approval. These include rule changes allowing government entities to report false EAS alerts to the FCC, requiring submission of State EAS plans to the FCC for its review, requesting annual updates to State EAS plans, and mandating annual SECC meetings. (Federal Register)
  • A second Federal Register notice announced that the FCC will accept comments through October 19 and reply comments through November 18 on several other EAS changes, including whether to delete, redefine, or replace certain EAS codes that are no longer relevant or may cause confusion, and whether to update EAS to support “persistent” alerts that continue to be transmitted through EAS for the duration of an emergency involving possible loss of life.
• The FCC proposed a $3,500 fine against the licensee of a new Oklahoma FM translator for its failure to file a license application and for its subsequent unlicensed operation after the completion of its construction. As a reminder, when you have a construction permit for a new station and complete construction, you need to file with the FCC a license application certifying that construction was compete in the manner set out in the permit – for translators, before commencing operations.  (Notice of Apparent Liability)
• Two radio stations entered into consent decrees with the FCC over their failure to comply with the FCC’s online public file rules and, in one case, failure to file biennial ownership reports. In the first case, a commercial station appears to have failed to upload any quarterly issues/programs lists. (Georgia Consent Decree)  In the second case, a noncommercial station appears to have not uploaded any quarterly issues/programs lists or filed any biennial ownership reports for the entirety of its license period. (Montana Consent Decree).  In each case, the consent decrees impose reporting conditions and other paperwork requirements so that the FCC can more closely supervise the operations of the stations in the future.  These decisions are another reminder that you need to be sure your station’s online public file is complete and accurate, as the FCC will scrutinize it when it processes your license renewal application.
• The FCC issued a Public Notice setting out a dispute resolution process for the reimbursement due to C-band satellite dish operators by the satellite companies for costs the dish operators incur as a result of the partial repurposing of the C-band so that it can be used by wireless carriers. This notice should serve as a reminder that the transition deadline for C-Band operators in Phase I markets is December 5, 2021 (Phase 1 stations are located in Partial Economic Areas 1-50, except stations in the Washington, DC area and certain counties in Georgia, Colorado, and Hawaii – see a PEA list here).  By that date, C-band earth stations in Phase I markets need to install filters or make other changes to avoid interference from the new wireless users.  The transition deadline for the remaining markets is December 5, 2023.
  • In the last two weeks, the FCC’s reimbursement coordinator, RPC, has begun emailing entities holding C-band earth station authorizations, alerting them that RPC has begun to accept claims for C-band transition reimbursements, including for lump sum payments. To be reimbursed, C-band operators need to set up an account in RPC’s Coupa payment system.  See RPC’s site here for a flow chart of the reimbursement process plus information on setting up an account and on dispute resolution.  When RPC will begin paying out the reimbursements is, at this point, still not known.
• On our Broadcast Law Blog, we this week summarized recently introduced legislation to bring back the minority tax certificate which, if adopted, would allow the seller of a broadcast station to defer any gains from the sale if the buyer is controlled by women or members of socially disadvantaged groups. (Broadcast Law Blog article)

The minority tax certificate is back in the news with revised bills being introduced in both the House of Representatives and the Senate.  We wrote about a version of this bill introduced in the last session of Congress here.  The tax certificate offers perhaps the most meaningful route to increasing diversity in broadcast ownership.  While the certificate was abolished by Congress over 25 years ago, these new bills signaling the potential for its revival merits another examination of what this policy did and why it was effective, and what is now being proposed.

The minority tax certificate was a program designed to provide broadcasters with an economic incentive to sell their stations to minority owners.  Rather than directly subsidizing the potential owners, the certificate instead gave a tax break to sellers of broadcast stations that incentivized them to sell to a minority-owned business even if there were multiple bidders for their properties.  If the seller sold its station to a minority-owned business, the seller could take the proceeds from the sale and roll those proceeds over into a new media property without recognizing the taxable gain from the sale.  Unlike the typical like-kind exchange where the roll-over into a new property has to proceed within a few months of the sale, the tax certificate treated the sale as an involuntary sale (like the sale of a property because of a government’s exercise of eminent domain) under Section 1033 of the tax code, giving the seller several years to roll the proceeds over into a new purchase.  At that point, the new property would have the same tax basis as the old – meaning that no gain would be recognized until the sale of the new property.  In the closing decades of the last century, this policy spurred many sales to minority-controlled companies by broadcasters looking not to get out of the business, but instead looking to realign their holdings or to move up into larger markets.  Several hundred radio and TV stations were purchased under this program in the last 20 years of the program’s existence.  Why was this seemingly successful program abandoned?

The program always had some critics who objected to the constitutionality of race-based set-asides, or expressed fears of the “gaming” of the program by non-minority companies using minority “fronts” to exploit the tax benefits.  But the straw that appeared to break the camel’s back was the proposed mid-1990s sale of a major cable company to a minority-controlled buyer, where taxes of hundreds of millions of dollars would have been deferred upon the sale.  The prevalent attitude in Congress at the time seemed to be that companies that can make such a large acquisition were not the economically-disadvantaged companies that the program was meant to promote – and that the government would be giving up too much money by allowing the continued use of the certificate program.

Even though it was repealed, the idea of the tax certificate never went away – probably because it was likely the single most successful program that the FCC ever had at its disposal to promote meaningful diversity in the ownership of broadcast stations.  Suggestions for the revival of the program have been floated almost ever since.

Introduced in recent weeks are revised proposals in Congress by Congressman G.K. Butterfield and Senator Gary Peters to revive the program.  These new bills establish limits on the program to overcome some of the objections that existed to the program in the last century.  To overcome some of the constitutional objections, the new bills apply to sales to companies controlled by “socially-disadvantaged individuals” – not just to businesses that are minority-owned.  Socially disadvantaged individuals are defined as women and individuals “who ha[ve] been subjected to racial or ethnic prejudice or cultural bias because of the identity of the individual as a member of a group without regard to the individual qualities of the individual.”  To overcome the concerns about this program being exploited by big businesses that don’t need government assistance, the program proposes to cap the size of the sale that could take advantage of the certificate – with that cap being no more than $50 million.  The bill also requires that socially-disadvantaged individuals be involved in the management of the stations acquired, and that the properties be held for between two and three years to avoid the purchased stations quickly being turned over to non-qualifying businesses.  A limit on the number of sales that one seller can receive is also proposed.  These limitations and definitions would be further refined by an FCC proceeding to be completed within a year of the passage of the bills.

Also, investors in companies owned or controlled by socially disadvantaged individuals would qualify for a certificate.  This could enhance the incentives for participation in the FCC’s incubator programs that were adopted in 2018 (see our articles here and here).

The House and Senate Bills are worded slightly differently and bear different names.  The House Bill is called the Expanding Broadcast Ownership Opportunities Act of 2021, the Senate Bill the Broadcast Varied Ownership Incentives for Community Expanded Service Act (or the Broadcast VOICES Act).  But the substantive provisions described above are contained in both.  Each bill also proposes that the FCC track minority ownership and report on it to Congress on a regular basis.

There does not seem to be any significant opposition to this bill.  Both minority organizations and the NAB have voiced their support.  Where this bill will go in Congress remains to be seen, but there is a real push behind this bill by supporting organizations.  Watch in coming months to see if these bills move forward to reinstate this valuable tool to increase broadcast ownership diversity.

Here are some of the regulatory developments of significance to broadcasters from the last week, with links to where you can go to find more information as to how these actions may affect your operations.

• The FCC and FEMA conducted their annual Nationwide Test of the EAS system on Wednesday, August 11. All broadcasters should have submitted “day of” test results in the FCC’s ETRS system by Thursday, August 12, and are required to provide more detailed information about the test results in ETRS Form Three due by September 27, 2021. (FEMA/FCC Announcement)
• The FCC this week announced the close of Auction 109, which offered for sale construction permits for 139 new radio stations – 4 AM stations in the St. Louis area whose licenses were surrendered by the prior licensee, and 135 new FM channels.  97 of the channels were sold but 42, including the AM stations, went unsold.  The FCC’s announcement also sets post-auction deadlines for winning bidders to submit their payments and long-form applications for the channels that they won.  The full auction results can be seen on the FCC’s auction site here.  The FCC will raise $12,344,110 from the auction – though over $9,000,000 of that is to be paid for two channels – over $6 million for a Sacramento FM and over $3 million for an FM to be licensed to a community just north of the Dallas metro. (Public Notice of Closing of Auction and post-auction deadlines).  See our Broadcast Law Blog article here about the implications of the large number of unsold channels.
• The FCC issued a Public Notice reminding all full-power and Class A TV stations that were repacked in Phases 1 through 5 of the post-incentive auction repacking of the TV band (and repacked stations that were granted permission to transition prior to Phase 1) that they must submit all remaining invoices for reimbursement from the TV Broadcaster Relocation Fund no later than October 8, 2021. The remaining full-power stations must submit their reimbursement requests by March 22, 2022, with others eligible to receive repacking funds (LPTV and TV translator stations as well as radio and MVPD claimants) needing to submit their reimbursement requests by September 5, 2022. (Public Notice)
• Bills were introduced in both the House of Representatives and the Senate seeking to bring back the minority tax certificate, providing a deferral of taxable gain to the seller of a broadcast station who sells their station to a buyer controlled by “socially disadvantaged individuals.” These individuals are defined as women and members of groups that have been subject to racial or ethnic prejudice or cultural bias – such groups to be defined by FCC rulemaking.  (Press Release).  See our article here for more information about the background of the tax certificate.
• The National Association of Broadcasters (NAB), the Multicultural Media, Telecom and Internet Council (MMTC), and the National Association of Black Owned Broadcasters (NABOB) filed a petition with the US Court of Appeals seeking review of recently adopted FCC rules which these groups argue impose unnecessary burdens on broadcasters to conduct inquiries about any entity that leases program time on broadcast stations to see if the entity must be identified on the air as a representative of a foreign government. (Press Release and Petition)
• The FCC issued notices of violations to the operator of two FM translators that were operating with unmodulated signals at times when their primary station was silent. (sample Notice of Violation).  These notices remind FM translator operators that their stations must shut down if they do not receive a signal on their input channel.
• We alerted website owners to a recent court decision suggesting that embedding pictures or video hosted by a social media site on their website without permission of the copyright owner may not excuse the website from liability for copyright infringement. Old court decisions that suggest that no liability would arise unless the copyrighted content is hosted on the server controlled by the website owner may no longer be good law.  In the recent court decision, the judge found that, if a website viewer would assume that a picture or video has been provided by the website owner, that owner should get permission of the copyright owner before displaying the content on their site.  (Broadcast Law Blog article)

The FCC this week announced the end of Auction 109, which offered for sale construction permits for 139 new stations – 4 AM stations in the St. Louis area whose licenses were surrendered by the prior licensee, and 135 new FM channels.  97 of the channels were sold but 42, including all of the AM stations, went unsold in the auction.  The full auction results can be seen on the FCC’s auction site here.  The FCC will raise $12,344,110 from the auction – though over $9,000,000 of that is to be paid for two channels – over $6 million for a Sacramento FM and over $3 million for an FM to be licensed to a community just north of the Dallas metro.

The 42 channels that were unsold range from channels allotted to small communities in states like Wyoming or Alaska that were predicted to serve very few people, thus having opening bids as low as $750 that no one was willing to meet, to channels in somewhat bigger communities including channels in New York state and Colorado that had opening bids of $75,000, indicating that they would serve a substantial number of people, but the prices were apparently deemed too high to justify for companies looking for a business return. The 4 St. Louis area AM stations, which each had opening bids of $50,000, appear to be in that same category.  This lack of interest may also say something about the FCC’s local radio ownership rules.

Many of the unsold channels are in communities where there are already local broadcasters.  In some cases, I have been told that parties would have been interested in bidding on channels that went unsold but, because of the FCC’s ownership limitations, they were precluded from owning those stations.  So instead of providing new service to the public, these channels will lie fallow providing service to no one.  Comments on whether changes should be made to the FCC’s radio ownership rules are due to be filed at the FCC on September 2, 2021, and the results of this auction may well be instructive on the issues that the FCC will be considering.  In comments filed in 2019, parties talked about stations in their smaller radio markets that are essentially nothing but a transmitter and a computer – providing no real local service – when local owners who do cover the issues of importance to local communities are precluded from using these channels to provide new services, as the ownership rules do not permit such ownership.  See this article about FCC Commissioner Carr’s visit to one such station.

The radio industry has significantly changed since the 1996 Telecommunications Act which set the current radio ownership limits.  We have written before about competition from digital media giants that are real competitors for local radio both for audience and advertising revenue (see, for instance, our articles here and here).  No longer is owning a local radio station the dream of every amateur DJ or kid with an interest in electronics – many of those dreams are now fulfilled by digital channels.  But there are still broadcasters who want to serve local communities, and as recent Congressional activity has suggested (see our articles here and here), a recognized need for such local services.  Perhaps the result of this auction and the other comments filed on September 2 will inform the Commission on the realities of the current audio marketplace – realities that can impact their assessment of whether the current radio ownership limitations remain in the public interest.

We’ve written before over the controversy as to whether embedding pictures or video served by a social media site on your website negates the need to get explicit permission from the copyright owner for that use.  For years, many had relied on old court decisions that employed a “server test” – a site was only liable for the use of copyrighted material if that material resided on the same server as the rest of the website content being made available by the site’s owner.  But that test seems to be falling by the wayside based on a number of recent cases (see our articles here and here).  Another decision was released the week before last by a US District Court Judge that seems to further advance that trend.

In a case brought against Sinclair Broadcast Group, video of a starving polar bear was posted by Sinclair on websites that it controlled without permission of the individual who recorded it. The video was posted as part of an article on the popularity of the video.  The videographer sued – and Sinclair responded that it could not have copyright liability as it did not host the video, but instead merely embedded a link to Instagram where the videographer had posted the video.  In his decision denying a motion to dismiss, the Judge determined that intentionally embedding the code that brought up that video whenever a website visitor visited a Sinclair site was a “display” of the video by Sinclair and the functional equivalent of hosting the video on Sinclair’s own servers, so the infringement claim could not be dismissed. The Judge did, however, allow Sinclair to continue to argue that, in the context the video was displayed, the use may have been a “fair use.”

The Judge’s decision turned on the language of Section 106(5) of the Copyright Act, which gives copyright owners the exclusive right to “display the copyrighted work publicly.”  That includes the right to authorize anyone to display the work – meaning that it cannot be displayed without permission of the owner unless it meets one of the limited exceptions to copyright infringement, such as “fair use.”  In a detailed analysis of the right to display a work, District Court Judge Rakoff cited the definition of “display” in the Copyright Act:

“[t]o ‘display’ a work means to show a copy of it, either directly or by means of a film, slide, television image, or any other device or process or, in the case of a motion picture or other audiovisual work, to show individual images nonsequentially.”

The definition of “show” in the Copyright Act is “to cause or permit to be seen.”  Using these definitions, the Judge concluded that the intentional embedding of the video on the Sinclair websites was a display within the meaning of the Act, and therefore needed the permission of the copyright owner.  He distinguished the old cases relying on the “server” test as being cases dealing with search engines where the images did not display until a link in the search results were displayed – contrasting that to the concept of embedded photos or videos, where the display occurs as soon as a viewer looks at the website and is indistinguishable to the consumer from other content on the website.  The intent of the website owner is to “show” the work to website visitors.

This case is one more chink in the armor that had been provided to websites when they merely embedded copyrighted content on their sites.  The recent trend seems to be away from the “server rule” toward a more viewer-oriented position.  If the viewer thinks that the content is part of the site, permission needs to be obtained.  The Judge also pushed back on claims that this decision would undercut the purpose of the Internet by limiting the interlocking links that can be provided to relevant content wherever it may reside.  The Judge noted that, if Sinclair had merely posted a link to the video on Instagram rather than embedding that link so that the video came up when a viewer visited the Sinclair site, the issue likely would not have arisen.  It was the conscious choice to make that video immediately available to anyone who came to their site that raised the potential infringement.

The Judge did concede that the use of the video in a report on how popular the video was could be considered a fair use – though the final decision on fair use would be determined by the jury.  The judge weighed the various factors in a fair use analysis (see our list of the factors in the article here) and found that some weighed in favor of Sinclair (that the video was used for purposes of commentary or criticism) though others weighed against it (that the whole video was used rather than just a clip).  But that issue would be left for the trial.

Once again, this case is a warning to website owners to get permission for anything that they are posting to their sites that will be seen by viewers as being part of that site.  Embedded photos or videos no longer appear to be exempt from this general rule – be safe rather than facing potential liability.

As we wrote several months ago, the Nationwide EAS test is scheduled for tomorrow, August 11, 2021 at 2:20 pm ET, with “day of test” information to be filed with the FCC on ETRS Form Two by August 12.  The FCC issued a reminder last week, and FEMA sent an announcement of the test out yesterday, so do a last check of your equipment to be sure that you are ready to receive the test when it comes your way (or to report on any failure if for any reason it does not arrive as expected).  And don’t forget the final test date due on ETRS Form Three by September 27.

The FCC yesterday issued a Public Notice reminding all full-power and Class A TV stations that were repacked in Phases 1 through 5 of the post-incentive auction repacking of the TV band (and repacked stations that were granted permission to transition prior to Phase 1) that they must submit all remaining invoices for reimbursement from the TV Broadcaster Relocation Fund no later than October 8, 2021.  The FCC is looking to finalize the last details of the incentive auction by concluding all payments to repacked stations.  The remaining full-power stations must submit their reimbursement requests by March 22, 2022, with others eligible to receive repacking funds (LPTV and TV translator stations as well as radio and MVPD claimants) needing to submit their reimbursement requests by September 5, 2022.

On Friday, the FCC  released another of its regular EEO audit notices (notice and list of affected stations available here), asking approximately 200 radio and TV stations, and the station employment units with which they are associated (i.e., commonly owned stations serving the same area), to respond to the audit notices by September 20, 2021.  Audited stations must upload their response to their online public inspection file. The response should include copies of the employment unit’s EEO Annual Public File reports for the last two years, as well as backup data showing that the station in fact did everything that was required under the FCC rules.  This is the second audit of 2021 (see our article here on the first audit commenced earlier this year).  It appears that this audit targets stations in states who have recently had license renewals reviewed, as stations in states with recent license renewals would already have their EEO record under review as part of the renewal process.

Audited stations must provide representative copies of notices sent to employment outreach sources about each full-time vacancy as well as documentation of the supplemental efforts that all station employment units with 5 or more full-time employees are required to perform (whether or not they had job openings in any year). These non-vacancy specific outreach efforts, which are outlined as “menu options” in the FCC’s rules, are designed to educate the community about broadcast employment positions and to train employees for more senior roles in broadcasting. Stations must also provide information about how they self-assessed the performance of their EEO program. Answers to certain other questions are also required.

The FCC has promised to randomly audit 5% of all broadcast stations each year. Since each station’s response (and the audit letter itself) must be uploaded to the public file, it can be reviewed not only by the FCC but by anyone else with an Internet connection anywhere, at any time.  The license renewal cycle which began last year adds to the importance of this audit, as a broadcaster does not want a recent compliance issue to headline the record the FCC will be reviewing with its license renewal (see our article here about the license renewal cycle). So, whether you are on the list or not, this is a good time for broadcasters to review what is required by the FCC’s EEO rules.

The summer before last, at the Wisconsin Association of Broadcasters annual convention, I did a presentation on the FCC requirements for EEO compliance. The slides from that presentation are available here. The FCC rules were designed to bring new people into broadcast employment positions and encourage broadcasters to recruit from outside the traditional broadcast networks when hiring new employees. Not only should broadcasters be reaching out to their consultants and employees for referrals, and using their own airwaves to promote openings, but they need to be using outreach sources that are designed to reach all groups within a community to notify potential candidates about the availability of open employment positions. While the FCC in the past required that outreach be made to a plethora of community groups, it has now recognized that online recruitment sources alone can reach the entire community (see our summary of that decision here) – but these sources need to be evaluated regularly to assure that they are in fact bringing in applicants for job openings from a representative sample of the population from a station’s employment area.

Stations need to keep the required documentation to demonstrate their hiring efforts, as the failure to have those documents can still lead to fines (see our article here). The documents should show not only the stations’ hiring efforts in connection with job openings, but also the supplemental efforts that they have taken (even where they have not had job vacancies) to educate their community about broadcast employment and to train their employees to assume more responsibilities.  The FCC has provided a menu of options to achieve these required supplemental efforts.  See our article here for some ideas from the menu for ways that stations can receive credit for these supplemental efforts even during this time of social distancing.  Stations should review their policies to make sure that they have the documentation to meet an FCC audit and ensure that their EEO programs are regularly bringing in recruits from diverse sources and that they have done the required non-vacancy specific educational efforts on broadcast employment.

When the FCC abolished the FCC Form 397 EEO Mid-Term Report, it promised to review the effectiveness of its EEO rules. A Notice of Proposed Rulemaking examining  how to make the program more effective was released last year, leading to  some interesting proposals (see our article here). Those proposals are likely going to require further public comment before they can be adopted.  Thus, for now, the current rules remain in effect.

Broadcast EEO enforcement was transferred three years ago to the FCC’s Enforcement Bureau (see our article here).  From what we have seen recently, review of EEO programs has become more detailed, so stations should pay attention to their paperwork.

Consult with your attorneys to obtain a thorough understanding of the EEO rules and talk with the employees involved in employment matters at your station to make sure that they understand what they should be doing and are maintaining the paperwork necessary to demonstrate your compliance with the rules. The FCC continues to enforce its rules and impose fines on stations that cannot demonstrate compliance, so make sure that you comply with the FCC’s obligations on EEO matters.

Here are some of the regulatory developments of significance to broadcasters from the last week, with links to where you can go to find more information as to how these actions may affect your operations.

• In the run-up to the August 11 National EAS Test, the FCC released a Public Notice reminding broadcasters to ensure their EAS equipment is all updated, their EAS equipment can receive and process the National Periodic Test code (the “six zeroes” national location code), and their equipment is configured for the monitoring assignments designated in their State EAS Plans. This year’s test will not be distributed over the internet using IPAWS but will instead use traditional broadcast distribution, which will cause the aural and visual messages received by TV viewers to not be identical.  Stations must file EAS Form Two “day of test” information by August 12 and EAS Form Three with post-test data by September 27.  (Public Notice)
  • In other EAS news, the FCC Enforcement Bureau proposed a $20,000 fine against ESPN for alleged violation of the FCC rules that prohibit the transmission of false or deceptive EAS tones. In an episode of 30 for 30, the tones were heard briefly during the dramatic depiction of a severe weather event, though ESPN said the tones could not have triggered any automated relay equipment.  This is another reminder that the FCC prohibits use of EAS tones – real or simulated – not tied to an actual emergency or test.  (ESPN NALF)
• Nearly 200 radio and TV stations have been randomly selected by the FCC for an audit of their compliance with the FCC’s EEO rules. Station employment units (i.e., commonly owned stations serving the same area) with five or more full-time employees are required to provide to the FCC (by posting the information in their online public inspection file) their EEO Annual Public File reports for the last two years, as well as backup data showing that the station did everything that was required under the EEO rules.  Station employment units exempt from EEO reporting (i.e., they employ fewer than five full-time employees) still need to respond to the audit, though with much less paperwork.  The deadline for posting audit information in the public file is September 20.  We wrote, here, about EEO audits and rules after the first round was announced in February.  (Audit Letter and Station list)
• The FCC’s Media Bureau is seeking comment on a petition filed by the four major networks affiliates’ association regarding recently adopted rules that require broadcasters make specific sponsorship identification disclosures about programming blocks purchased by a foreign government or their representatives, and to take steps to assess if parties leasing airtime on a station requires such disclosures. The affiliates are concerned that the new rules might be read to apply to common forms of broadcast advertising and asked the FCC to clarify that these rules do not apply when a station sells time to advertisers in the normal course of business, no matter the length of the advertisement.  The Media Bureau encouraged commenters that agree with the affiliates’ position “to provide objective criteria that could distinguish between advertising and arrangements for the lease of airtime” and “to articulate specific characteristics that might distinguish what they consider to be advertising from a lease of airtime on a station, such as duration, content, editorial control, or differences in the nature of the contractual relationship between the third-party and the station.”  Comments on the petition are due by September 2, 2021, with reply comments due by September 17, 2021.  (Public Notice)  (Petition).
• Two Class A TV stations face fines of $15,000 and $20,000 for failing to timely upload a significant number of quarterly issues/programs lists to their public file. These notices are reminders that the FCC scrutinizes public files as part of its evaluation of a station’s license renewal application and that stations need to stay on top of their upload deadlines if they want to avoid these penalties.  Issues/programs lists are the only FCC-required documents that demonstrate a station’s public service to its community.  See the letters here and here.
• The FCC voted to begin a rulemaking that proposes two updates to the political broadcasting rules. The first proposal would add use of social media and creation of a campaign website as factors to consider when determining if a write-in candidate has made a “substantial showing” of a bona fide campaign for office so that they can be considered a “legally qualified candidate.”  The second proposal would update the political file recordkeeping rules to require that stations upload to their political files any request for advertising time that “communicates a message relating to any political matter of national importance” (i.e., federal issue ads).  Comments and reply comments will be due 30 days and 45 days, respectively, after publication of the item in the Federal Register.  We wrote more about the proposals, here.  (Notice of Proposed Rulemaking)
• The comment period has been set for interested parties who want to weigh in on several technical changes the FCC has proposed making to its rules for radio. Read the Notice of Proposed Rulemaking, here, and have your comments and reply comments in by September 7 and September 20, respectively.  (Federal Register)
• Auction 109 for new broadcast stations has ended, with construction permits for nearly 100 new FM stations being sold. The four St. Louis-area AM licenses received no bids.  See the list of winning bidders, here.
• Keep an eye on Capitol Hill, where the Local Journalism Sustainability Act was recently introduced in the House and Senate, designed to support local media in the face of more advertising dollars migrating to digital media. If this proposal was to become law, a tax credit of up to $5,000 would be available to small business advertisers who place advertising in either a local newspaper or on a local broadcast station.  Local media outlets could also receive tax credits of up to $12,500 for hiring a local journalist.  We wrote about the bills, here.  (House Bill)  (Senate Bill)