Broadcast Law Blog

Congressman Walden Urges Adoption of Broadcast Diversity in Leadership Act – An Incubator ...

Fri, 23 Oct 2020 15:34:54 GMT

There were several reports in the broadcast trade press today about an article in the Hill newsletter from retiring Congressman Greg Walden about his proposals to increase diversity in broadcast ownership. Congressman Walden, a former broadcaster, seeks in his Broadcast Diversity in Leadership Act to foster minority ownership and ownership by new entrants by establishing in legislation an incubator program similar to the one adopted by the FCC in 2018, but put on hold by the Third Circuit Court of Appeals in their decision on broadcast ownership (which is now before the Supreme Court – see our post here). While, given the short time before the end of the Congressional session, the Congressman’s bill stands little chance of passing both houses of Congress and being adopted before the end of the year, the bill is worth reviewing as it has the support of both the NAB and minority-advocacy organizations, so it could well resurface in a new Congress.

The bill adopts much of the framework of the FCC’s incubator program (which we outlined in our article here). Under the proposed legislation, an existing broadcaster could work with an aspiring broadcaster to help that new entrant purchase and operate a broadcast station. The bill asks the FCC to adopt rules outlining the support that could be provided to the new entrant, including training, financing and access to resources of the established broadcaster. The established broadcaster could even hold a non-controlling equity interest in the emerging broadcaster, as long as the new entrant retains control. In exchange for providing the services or financing, if the incubation is determined to be successful after a two-year period, the existing broadcaster would be allowed to acquire one station in a similarly sized market that exceeded the current cap on broadcast ownership allowed by Section 73.3555 of the Commission’s rules. So, if the existing broadcaster operates in a market where one party can only own 6 stations, it could acquire a seventh.

What is different in this proposal from the incubator program that the FCC already adopted? First, it would apply to TV as well as radio. Second, the size of the markets in which the existing broadcaster could exercise its reward for a successful incubation is based not on the number of stations that a broadcaster can currently own, but instead on the size of the market. In the FCC’s program, if the incubated station was in a market where one party could own up to 6 stations, the established broadcaster could acquire its reward for a successful incubation in any market where the cap was 6 stations, no matter the population of that market. In the Walden proposal, the reward would come in a similarly sized or smaller market (market size being based on Nielsen market ranks for radio and TV). So, if the incubation was in a market between 25 and 50, the reward for the successful program would come in a similarly rated market – or one that was smaller. In the legislation, the incubation could be ended and judged successful in two years, as opposed to the three years in the FCC-adopted program.

The legislation would also give a Congressional stamp of approval to the program, insulating it from attacks on the FCC’s authority to adopt it. It would also remove it from review under the Quadrennial Review process, taking it out of the current log-jam on FCC ownership rule changes that has been ongoing, unless the Supreme Court overturns last year’s decision by the Third Circuit that has frozen any consideration of changes in the broadcast ownership rules.

Given the diverse support for this program, watch for its reintroduction in the new post-election Congress, perhaps in connection with other proposals to advance new entrants into broadcast ownership. For instance, as we wrote here, there also proposals in Congress to revive the minority tax certificate as a way to foster new broadcast owners. We will be watching to see what develops next year.

Looking at FCC Non-Vacancy Specific EEO Outreach Efforts – the "Menu Options” – in a ...

Thu, 22 Oct 2020 15:31:51 GMT

In the last few weeks, we have received several inquiries from broadcasters about the FCC’s enforcement of its requirements that broadcasters conduct non-vacancy specific outreach efforts to educate their communities about broadcast employment opportunities and to train their staff to assume greater responsibility at stations and otherwise assist them in their career development (not to train them for their current positions, but to prepare them to assume a position with more responsibilities as their careers advance). Stations are required to undertake a variety of activities to educate the public about broadcast employment opportunities (and the experience and skills that will be helpful to obtain these broadcast positions) and to train their employees to advance in their careers beyond their current positions. These outreach efforts must be undertaken even when stations don’t have job openings. The FCC has a whole list of “menu options” to meet these obligations (see them listed in the EEO training presentation that I did last year for a state broadcast association, available here). While these menu options were designed for a “normal” work environment, many can be adapted to today’s world where so much business and education is being done virtually.

When asked if these rules are still in effect, I have been telling broadcasters that the FCC has not said that these obligations are suspended during the pandemic. In fact, the FCC has been conducting EEO audits throughout the course of the pandemic (see our article here, for instance), so it appears that enforcement of the EEO rules continues unabated. While I expect that the FCC will be somewhat flexible in assessing compliance in these present circumstances, stations can accomplish many of the activities listed in the menu options even in the pandemic. In a webinar that I conducted recently for many of the states with upcoming radio license renewal deadlines, and in another webinar for a public broadcasters group in a midwestern state, I discussed some of those opportunities.

Attendance at job fairs is one of the menu options – a station having to send employees involved in the employment process to four job fairs in a two year period to obtain one EEO credit (stations in employment units with five to ten full-time employees and those operating in metropolitan areas with fewer than 250,000 people have to complete two credits in a two-year period, while larger groups in larger markets have to gather 4 credits – an employment unit being one or more commonly controlled stations serving the same area and having at least one common employee). While in-person job fairs have been scarce during the time of COVID, many organizations, including many state broadcast associations, are conducting online job fairs about which I have heard some positive reviews. Another of the menu options is talking to student groups about careers in broadcasting – four presentations to students in a two-year period gets a credit. Certainly, these presentations can be done virtually especially as so many students are already learning in a virtual environment. Educating community groups about broadcast employment opportunities can also be done virtually by speaking to local business and civic associations at their online meetings.

Activities inside the station also can count for credit and can be done even while socially distancing. Training programs to help employees train for a higher position in the station is another option that can be done virtually, as well as mentorship programs to advance the skills of younger employees. In fact, mentorship programs for newer employees probably have never been more important than now, when so many businesses are limiting in-person contact between employees, limiting the natural acclamation process that takes place when employees are all together in the same building.

Internships is another of the menu options. I have heard that stations are doing virtual internships for high school and college students. Scholarship programs, where the station does more than just give money (e.g. its employees help set up the program, judge the entries, etc.) are also an option that can be done in the pandemic. There are other menu options that the station can do, even in the pandemic, to get credit for these outreach efforts. It may take some creativity, but there are ways to comply.

The important point to remember is that the FCC expects a meaningful commitment of staff time to activities designed to encourage and educate new entrants into the broadcast industry and to train existing broadcasters to assume more responsible positions within the industry. Just paying money or providing airtime to someone else’s programs is not enough – your staff needs to get involved too. Also, remember that these EEO outreach efforts are judged in two-year periods – those periods running from date of the filing of a license renewal application. So for stations in the second year of an evaluation period, hopefully your pre-pandemic efforts were strong. And for those in the first year of an evaluation period, you can make up for any slowdown in activities that may be occurring now by next year doing more when things are hopefully more normal. In any event, these outreach efforts can be done – but just like everything else in this brave new world – you need to be creative. Obviously, talk to your own attorneys and advisors about how to meet these rules in today’s most unusual circumstances.

Abolition of the Radio Program Nonduplication Rules Effective October 22, 2020

Thu, 22 Oct 2020 15:17:39 GMT

The FCC’s abolition of the rule that prohibited same-service radio stations serving the same area from substantially duplicating their programming becomes effective today, as the FCC order repealing the rule was published in the Federal Register. The rule had prohibited radio stations in the same service (AM or FM) that have over 50% overlap of their principal community contours (the 70 dBu for FM stations and the 5 mV/m contour for AM stations) from duplicating more than 25 per cent of the total hours in their average programming week. In August, the FCC voted to abolish that rule (see our article here), and that decision is now effective so stations, especially those suffering from the economic pinch of the pandemic, have more options for programming their stations.

Next Step to a Filing Window for New Noncommercial FM Stations – FCC Asks for Comments on ...

Tue, 20 Oct 2020 15:08:24 GMT

The FCC yesterday issued a Public Notice announcing that it will in fact be opening a window for the filing of applications for new reserved-band noncommercial FM stations (those stations operating in the portion of the FM band below 92.1 FM, which is reserved for noncommercial educational broadcasters). We anticipated that this window was coming in our articles here and here. In yesterday’s Public Notice, the FCC asked for comments on its proposal to limit any applicant to ten applications nationwide in the upcoming window. The window will open probably next year, after the FCC resolves this question on the maximum number of applications in which one party can have an interest.

The ten-application limit has been used by the FCC in the past to limit the number of applications filed in the window to hopefully speed processing times and avoid some situations where applications end up being mutually exclusive with each other (i.e., where some of the applications filed cannot be granted without creating destructive technical interference to each other, causing the FCC to have to use their point system analysis to determine which application to grant – see our articles here and here on the point system). Of course, limiting the number of applications could have the unintended impact of preventing some parties from filing applications in smaller markets and rural areas, saving their applications for areas in which they are likely to reach the most people. In the Public Notice, the FCC asks for comments as to the impact of a ten-application limit and whether some other number (or no maximum at all) would be more appropriate. Comments on this proposal will be due 15 days after this Notice is published in the Federal Register and Reply Comments will be due 25 days after that publication.

This Week in Regulation for Broadcasters: October 10, 2020 to October 16, 2020

Sun, 18 Oct 2020 13:08:35 GMT

Here are some of the regulatory developments of 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.

The FCC set the comment dates for its proposal for changing the cost to file various broadcast applications. The new schedule of fees the FCC has proposed are meant to better reflect the actual legal and engineering labor resources spent processing the applications. Because of this, some applications that take up more resources to process see a proposed fee increase, while other applications that are easier to process see a proposed fee decrease. Interested parties should review the fee schedules and submit their comments and reply comments by November 16 and November 30, respectively. (Notice of Proposed Rulemaking)
Chairman Pai announced his intention to open a rulemaking to clarify the meaning of Section 230 of the Communications Decency Act of 1996. This provision grants broad immunity to online platforms for civil liability (including defamation claims) that arises from content that users post on those platforms. In the last few months, Section 230 has become a hot-button issue following President Trump’s Executive Order calling for the examination of Section 230’s liability shield. Nathan Simington, the President’s nominee for FCC commissioner, is said to have played a role in the advancing that order. We wrote here and here about Section 230. (News Release)
The FCC this week proposed that three VHF stations be allowed to move to channels in the UHF band. Each waiver contains a waiver of the current filing freeze on changes to the television Table of Allotments. More than nine years ago, the Commission put in place a channel change freeze while it worked through the mechanics of the incentive auction and repack. These waivers indicate at least some thawing of the freeze as the auction and repack are substantially complete. The waivers note that VHF transmissions can sometimes be difficult for viewers to receive due to VHF’s signal propagation characteristics and thus allowed these channel change proposals to move forward. (Channel change proposals for Portland, Oregon; Mesa, Arizona; and Minneapolis, Minnesota)
With only a couple of days left until the November Election, we wrote on the Broadcast Law Blog about the importance of compliance with the online political file rules and the steady stream of consent decrees that have been issued by the FCC’s Media Bureau over the last few months. (Broadcast Law Blog)
It’s official: The FCC, though its workforce is still largely working remotely, has moved to its new headquarters. The new headquarters, at 45 L Street NE, is close to Union Station and steps from NPR headquarters. (Public Notice)
It was announced this week that Nathan Simington, the President’s nominee to fill Commissioner Michael O’Rielly’s seat at the FCC, will have a confirmation hearing before the Senate Commerce Committee on November 10 in the next step in the Senate’s consideration of his nomination. (Nominations Hearing)
On the Broadcast Law Blog, we also wrote about the apparent heightened interest of the recording industry in music used in podcasts, where demand letters from an industry association have recently resulted in the shutdown of two podcasts. Anyone making available music on-demand (including in a podcast or in any video production) needs to clear the rights directly from copyright holders – ASCAP, BMI, SESAC, GMR and SoundExchange licenses are not enough. (More details available in this article on the Broadcast Law Blog).

More FCC Consent Decrees for Political File Violations – Issues to Watch in the Last Weeks of ...

Fri, 16 Oct 2020 16:14:41 GMT

As the campaign enters its final weeks, the FCC has begun to send out the next round of proposed consent decrees to radio broadcasters unable to certify in their license renewal applications, because of perceived deficiencies in their political file, that that every document was placed into their FCC-hosted online public inspection file on a timely basis (see, for instance, this decree released yesterday). The certification of public file compliance is required of every applicant for license renewal. As with any other certification, a licensee must review its records and truthfully answer the application’s question, either certifying that it has complied with all of the public file obligations or disclosing any deficiencies. As we wrote last year, in cases of substantial noncompliance, the FCC has fined stations that essentially ignored the public file rules. But, until recently, in cases where a station had made a good faith effort to comply but had some minor deficiencies in the public file (as is natural over an eight-year renewal period), the FCC has generally been granting renewals, acknowledging that minor violations do not signal that a broadcaster is not operating in the public interest. However, in August, the Commission initiated a new policy for stations that reported deficiencies in the political portion of the public inspection file, sending draft consent decrees to virtually all stations unable to certify full public file compliance because of any political file issue.

These consent decrees were modeled on the ones that were sent in July to six large radio broadcast groups as a result of an earlier FCC review of their political files (see our article here on those consent decrees, which also provides a review of a broadcaster’s political file obligations). The difference is, of course, that the July decrees went to large radio groups for what the FCC described as hundreds of violations at many radio stations. The new renewal-driven consent decrees were sent to all stations that did not certify political file compliance, even to stations that had only a handful of political advertising sales if those stations determined that they could not certify that all required documents went into the file in a timely fashion. While the decrees carry no monetary fine, they do require that the signing station enter into a compliance program – appointing a compliance officer, having a written compliance plan, reporting any violations to the FCC as they occur, and providing a report to the FCC at the end of each calendar year for two years cataloging all political sales and when the required documents went into the political file.

After the first round of these decrees were sent in August to over 100 broadcasters from the first year’s radio license renewal groups who could not certify compliance because of political file issues, discussions were held with the FCC about the scope of the decrees. The FCC recognized that there were some cases where violations were so minor that they did not warrant imposing the compliance burden demanded by the decrees. The Commission has informally said that where, in the two years prior to the filing of the license renewal application, a station had 5 or fewer instances where political orders were not timely uploaded to the public file, upon request after the receipt of the draft consent decree, a licensee could be excused from having to sign the decree as a condition of their license renewal. A significant number of smaller stations and larger stations with isolated instances where the uploads were not made on a timely basis, have since been excused from having to enter into these consent decrees.

Even this exception for minor violations does not excuse a station from initially reporting in its renewal that its file was incomplete. Nor does the Commission’s current policy signal that it will continue to provide in the future this exception for what they term “de minimis” violations. Instead, these decrees, together with the decrees entered into with the larger radio operators earlier in the year, and the admonitions issued to TV stations for political file violations on disclosures on issue ads (see our articles here, here, here and here), signal the importance that the FCC places on the political file. Broadcasters should consult their own counsel about any compliance issues that they have in these areas, as this area is particularly complicated with detailed reporting obligations. Our article on the large radio group consent decrees provides some guidelines for political file compliance, as does this video that I hosted for the Indiana Broadcasters Association on the political file obligations. Do all you can to educate yourself as to the obligations under the FCC’s rules and policies. The FCC is watching – so take these obligations very seriously.

Music in Podcasts – As Podcasts Shut Down Following Infringement Notices, Looking at the ...

Thu, 15 Oct 2020 16:25:31 GMT

The use of music has long been an issue for those looking to provide music-oriented podcasts to the public. As we have written before (see, for example, our articles here and here), clearing rights to use music in podcasts is not as simple as signing up with ASCAP, BMI and SESAC (or even adding GMR or SoundExchange to the mix). These organizations simply cover public performance rights for music when, as our prior articles make clear, podcasts require additional rights to use music in ways not fully covered by the licenses that are offered by these organizations. The rights to the use both the underlying musical composition and the actual recording of that composition by a band or singer must be obtained on an individual basis from the copyright holders. That can often mean a search for both the publisher and record company who usually own those copyright in the musical composition and the sound recording, respectively. This can often be a difficult search, especially if there are multiple songwriters of a composition (and hence multiple publishing companies which likely own the copyrights) or where the rights to the songs have been assigned over time from their original owners. Plus, as we have written before, there is no easily accessible universal database yet in existence that provides up-to-date and complete records of who owns those copyrights. All this combines to make the clearance of music for use in podcasts an arduous process – and almost prohibitive for any small podcaster who wants to use more than one or two pieces of music in connection with their show.

In an article in the radio industry newsletter Inside Radio this week, it appears that at least two music-oriented podcasts have attracted the attention of the music industry, receiving demands from the RIAA which has led to their ceasing of operations. It appears that these cases demonstrate both the difficulty of clearing music for podcasts, and perhaps that, as podcasting is growing in attention, the legal issues associated with the use of music in those podcasts is coming to the forefront of the attention of the music industry.

The two podcasts mentioned in the Inside Radio article have each posted explanations of their shutdowns on their websites (here and here), and both indicate that they were surprised by the take down notices as they had secured permission from the artists whose music they were playing in their podcasts. The podcasters both indicate that the notices came from the RIAA, so it is likely that the issues dealt not with the clearance of the underlying musical works (the words and music in the songs being used), but instead were based on concerns over the use of the actual recordings themselves. While we have not seen the takedown notices and have no direct knowledge of the permissions that these podcasters received, it may be that while they received some permission from the artists involved, they did not receive permission from the actual copyright holders in the recordings. A band or singer may tell a podcaster that the podcaster has permission to use an old recording in their program. But if the artist has assigned the copyright in that recording to the record label, the artist may not have the right to grant the podcaster the necessary authority to use their own music. In the music industry, you see several instances where artists re-record classic albums or songs so that they “own the master” in the recording so that they can exploit that recording, when the original may well be owned by the record label or some other party who controls its use.

In other cases, take-down notices can be generated by mistake, as various “bots” may be scouring the Internet for music uses without permission, and services like podcasters may be identified as infringing on the copyright holders rights even where they have permission, simply because that permission was granted outside the normal channels that may have been inputted into some Internet search program. Finding the right person to clear up such a mix-up may not be easy, but hopefully it is something that can be done with some persistence by even individual podcasters.

These issues are only growing in today’s virtual world. I recently participated on a panel hosted by the Copyright Society talking about pandemic-related copyright issues. We discussed how, as more and more of our normal activities have gone virtual, and as music that accompanies those activities follows along, rights issues can be implicated. Instead of a public performance license from the performing rights organizations that may be needed for a live event, online videos available on demand, in the same way as podcasts, need to clear their music use from the copyright holders. The same issues described above come up with music in videos, so be careful about clearing the necessary rights.

As time goes on, hopefully there will be more online exchanges where rights to such uses can be cleared by a few clicks of a mouse, and there will be databases where the identity of the appropriate parties from whom to obtain those rights is universally available. Until then, be careful using music in these productions, and expect to encounter some bumps along the way.

This Week in Regulation for Broadcasters: October 3, 2020 to October 9, 2020

Sun, 11 Oct 2020 03:46:31 GMT

Here are some of the regulatory and legal actions and developments of 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.

The FCC released the agenda and items to be considered at its October 27 Open Meeting.
- After issuing a Notice of Proposed Rulemaking in the spring, the FCC will vote on finalizing changes to its rules for video description (the insertion in TV programming of spoken narration of what is happening on the screen to aid blind or visually impaired persons). If the item is adopted, it will, among other things, rename video description as “audio description” and extend the audio description requirements to television markets 61-100 at a rate of ten markets per year. Stations affiliated with ABC, CBS, Fox, or NBC in markets 61-70 will have to start complying on January 1, 2021 or on the effective date of the Order, whichever comes later. We covered this proceeding on the Broadcast Law Blog, here. (Report and Order)
- As part of the Commission’s AM revitalization efforts, it will consider allowing AM stations to convert to all-digital broadcasting on a voluntary basis. Currently, AM stations are authorized for either analog or hybrid (combined analog and digital) transmission. This rule change would allow AM stations to transition fully to digital, which would help those stations overcome some of the problems that affect analog AM signals, like interference and lower-quality audio. We took a deeper look at the Report and Order, here. (Report and Order)
- In the latest step in the multi-year effort to increase unlicensed wireless operations in TV “white space,” the Commission will consider an item that allows fixed unlicensed devices operating on channels 2-35 to operate at higher power in “less congested” rural and unserved areas and allow greater antenna heights for these devices. Unlicensed device operators must still cease operations if their operations interfere with an authorized service like, for example, television stations. See our blog post, here, from March where we looked at the Notice of Proposed Rulemaking. (Report and Order)
The window is closing for TV stations repacked after the incentive auction to submit their invoices for reimbursements. Stations in Phases 1 to 5 have until October 8, 2021 to submit invoices for reimbursement. Stations in Phases 6 to 10 have until March 22, 2022. All other entities eligible for reimbursement, including FM and LPTV/translator stations, have until September 5, 2022 to submit their documentation. (Public Notice)
If you want to start filling in your 2021 calendar, the FCC has released the dates for its 2021 Open Meetings. While the Open Meetings since March have been held remotely, the 2021 meetings are scheduled to be held at the Commission’s new Washington headquarters. (Open Meetings Calendar)
A low power FM station was hit with a consent decree and $15,000 fine for airing announcements for for-profit entities that violate the non-commercial underwriting rules, violating the cross-ownership rules that prohibit a party from holding an interest in a radio station while also holding an attributable interest in an LPFM, violating the rule that requires LPFMs to file with the FCC when more than 50% of the station’s governing board changes suddenly, and violating the rule against transferring or assigning an LPFM license within three years of issuance. (Order)
The FCC has named a new point person to oversee its field offices. Axel Rodriguez, the Commission’s new Field Director, will supervise the 13 field offices and its agents and lead efforts to combat pirate radio and other unauthorized spectrum uses and support efforts to restore communications services after disasters. Rodriguez has a background in electrical engineering and served as a cyber warfare officer in the military. (News Release)

FCC Announces Plans to Authorize All-Digital AM Radio at October 27 Open Meeting

Thu, 08 Oct 2020 15:34:26 GMT

The FCC this week released its agenda for its October 27 open meeting. At that meeting the FCC will consider a number of issues of relevance to broadcasters, including enhanced white space use in the TV band and an expansion of the requirement for audio description of video programming. It also plans to adopt an order authorizing licensees of AM stations to voluntarily transition to all-digital AM operations. A draft order setting out the FCC’s decision and the rules that it intends to adopt for all digital AM operations was released yesterday. We wrote previously about this proceeding on all-digital AM as it has progressed through the FCC (see our articles here and here).

The draft order on all-digital AM contains a discussion as to whether the Commission should put limits on the ability of AM licensees to transition so as to not take away service from existing listeners who do not have digital AM radios. The conclusion set out in the draft order is that there should not be restrictions on the ability of licensees to convert to all-digital operations. The FCC noted that as long as there are a substantial number of listeners without digital AM receivers, some AM licensees will have an economic incentive to continue to broadcast an analog signal. Thus, these analog listeners will not be left without service. The FCC also noted that its recent order abolishing the prohibition on radio stations duplicating the programming of commonly-owned stations serving the same area (see our articles here and here) would allow one owner to put the same programming on two AMs in the same area – one providing a digital program stream while the other continued analog operations. Thus, the FCC’s tentative decision is that there is no need to restrain stations from making the conversion.

There was some fear of interference to other AM stations addressed in the draft order. The FCC’s tentative conclusion is that there appears to be little concern that all-digital AM will have substantially greater interference characteristics than does analog AM radio. In fact, as the primary energy from the all-digital broadcast is concentrated on the center of the AM carrier (as opposed to being on side-bands that encroach on adjacent channels in the currently-authorized hybrid mode), interference to adjacent channel stations may well be reduced by all-digital operations. If interference does occur, the FCC will look to stations to resolve such interference between themselves, with FCC filings only required where there is a reduction in the power of the primary sidebands where the audio programming is transmitted. Only where the parties cannot voluntarily work out interference issues will the FCC get involved in mediating these disputes.

Before converting to all-digital operations, or making changes in such operations, the FCC will require that a licensee notify the FCC on Form 335, providing the following information:

the type of notification (all-digital notification, increase in nominal power, reduction in nominal power, transition from core-only to enhanced, transition from enhanced to core-only, reversion from all-digital to hybrid or analog operation);
the date that new or modified all-digital operation will commence or has ceased;
a certification that the all-digital operations will conform to the relevant nominal power and spectral emissions limits;
the nominal power of the all-digital station;
a certification that the all-digital station complies with all EAS requirements; and
if a notification of commencement of new all-digital service or a nominal power change, whether the station is operating in core-only or enhanced mode.

The FCC will provide a public notice of proposed all-digital operations. No changes can be made for 30 days following that public notice to allow other AM stations to take measurements of the current interference that they receive from the station planning to convert to all-digital operations so that these other stations can judge if the all-digital operations create more interference. The licensee of the station planning to convert to all-digital operations must give the public over-the-air notice of its plans to convert during this 30-day notice period.

The draft order also sets out technical rules for all-digital operations. It allows AM digital operations both day and night, dismissing concerns that nighttime skywave interference could be more severe with digital operations. It also requires that all-digital stations participate in EAS alerts and work with stations that monitor the all-digital facilities to ensure that the receiving stations can receive the all-digital alerts or that they change the stations that they monitor.

The draft order may be subject to revisions between now and the October 27 meeting. Assuming that no substantial changes are made, this meeting may well launch the most substantial attempt by the FCC to revitalize the AM band by actually encouraging AM broadcasting. Watch for further developments in the coming weeks.

Supreme Court to Hear Appeal of Third Circuit Rejection of FCC Changes to Broadcast Ownership Rules

Mon, 05 Oct 2020 15:54:58 GMT

The 2017 deregulatory changes to the FCC’s ownership rules have been on hold since December 2019, when the decision of the US Court of Appeals for the Third Circuit, overturning those rule changes, became effective (see our post here). The court’s decision has put any broadcast ownership changes on hold (including potential changes in the radio ownership rules which were not part of the 2017 FCC decision) while the FCC contemplated how to deal with the fallout from the Third Circuit’s decision. The potential for another way forward arose last week when the Supreme Court decided to hear the appeal of the Third Circuit decision – granting a petition for “cert” (a petition asking the Court to hear the appeal) – the announcement of that grant coming out on Friday.

As we wrote here, the Third Circuit rejected the FCC’s 2017 ownership rule changes, finding that the FCC had done an inadequate job of assessing how prior ownership relaxations had affected the ability of minorities and other potential new entrants to break into the ranks of broadcast ownership. Despite arguments from the FCC that it had already analyzed the impact of changes on new entrants and taken steps to mitigate any adverse impact, the Court seemed to be directing the FCC to do a more searching analysis of the historical impact of the relaxation of ownership restrictions on new entrants. Because this analysis would affect any ownership rule change, including those proposed for radio (see our article here), the decision effectively froze further FCC consideration of all broadcast ownership rule changes.

The 2017 changes that were undone in December included the abolition of the newspaper-broadcast and the radio-television cross-ownership rules, as well as the rule that prohibited the acquisition of a second television station in a market unless there would remain after the acquisition at least 8 independently owned and programmed stations in the market. We detailed other changes made in the 2017 FCC ruling in our article here.

The acceptance of the case does not in and of itself have any substantive meaning, other than that the Court is at least interested in the arguments that the Third Circuit rejection of the FCC’s changes was wrongly decided. The appealing parties (the FCC and industry groups) will file briefs in support of their arguments later this year, with the opposing parties filing a response. Oral arguments will follow early next year. A decision would likely come before the Court adjourns this year’s term in June or early July.

There are still a number of twists and turns that may come up. Most notably, the November election could have an impact on the Commissioners at the FCC. That could affect the willingness of the FCC to aggressively advocate for the 2017 decision (although the industry groups could still pursue the appeal before the Supreme Court). But even a Court decision overturning the Third Circuit opinion could have its impact mitigated by a new FCC as there is a new Quadrennial Review of the ownership rules that is already open. One would doubt that even a new FCC would reinstate the newspaper-broadcast cross-ownership rule, as there seems little argument that it retains any real basis in today’s world, but one never knows (as we have speculated before – for instance, here, here, and here – that policy seems to have a life of its own and may well outlive the daily newspaper itself).

So, FCC ownership reform is still on hold, but there appears to be some prospect that over the next nine months, things could change. Watch this case as it proceeds before the Supreme Court.

This Week in Regulation for Broadcasters: September 26, 2020 to October 2, 2020

Sun, 04 Oct 2020 13:52:53 GMT

Here are some of the regulatory developments and legal actions of 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.

The U.S. Supreme Court decided to consider the appeals by the FCC and industry groups of the Third Circuit’s decision overturning the FCC’s 2017 ownership order. The FCC’s 2017 decision, among other things, abolished the newspaper-broadcast and radio-TV cross-ownership bans and allowed common ownership of two TV stations in the same market even when there were not 8 independent operators and, in some cases, even allowed combinations of two of the top 4 rated TV stations in a market. For years, the Third Circuit has blocked the FCC’s attempts to reform its ownership rules. In the cases which the Supreme Court will now review, the Prometheus Radio Project cases, the Third Circuit said that the Commission’s analysis of the media marketplace lacked evidence of the impact that changes in the rules have had and will have on the diversity of new entrants into media ownership. Briefs are likely to be submitted to the Supreme Court this fall with oral arguments to follow early in the new year. A decision is expected before the end of this term of the Supreme Court at the end of June or beginning of July of 2021. Get caught up with the issue in these cases, here. (Supreme Court Order List)
The FCC relaxed its rules regarding the notifications cable companies must provide to their subscribers about retransmission consent blackouts. The change from 30-day advance notice of a blackout to “as soon as possible” notification is an acknowledgement that retransmission negotiations sometimes continue until the hours before the deadline and that 30-day notice is, in many cases, not a reliable indicator that a blackout will occur. (Report and Order)
The FCC released an order that will bring more structure to the Team Telecom process which reviews proposals for foreign ownership in the telecommunications industry. Any broadcast deal that would lead to more than 25% foreign ownership is subject to Team Telecom review. Team Telecom brings together telecommunications and national security officials from throughout the government to examine these transactions. The changes are designed to give applicants more transparency into the process and make reviews more predictable. The FCC also hopes to reduce the amount of time it takes for an application to make it through the review process. (News Release) (Report and Order)
FCC Commissioner Michael O’Rielly published a blog post detailing what he thinks should be included in the next slate of media modernization items the Commission considers. O’Rielly suggests lifting the freeze on technical upgrades and modifications that was put in place to conserve staff resources devoted to the incentive auction and repack, updating the criteria by which stations are considered to be failing for ownership waiver purposes, allowing waivers for LPFM stations to make in-market moves, updating the rules for VHF channels to move to the UHF band, and updating the rules to make easier certain changes to communities of license of TV stations. As Commissioner O’Rielly is expected to leave the Commission at year’s end (or sooner if his replacement is confirmed), his time to work on these issues from within the Commission is limited, so his blog post can be seen as a roadmap of media modernization items for the next group of Commissioners to consider. (Blog Post)
We published in our Blog our monthly look at the regulatory dates and deadlines for October. Next up is October 10, which is important for all licensees of full-power stations as it is the deadline for stations to post to their online public files their Quarterly Issues/Programs Lists detailing the issues facing their communities and the programming that they broadcast to address those issues during July, August, and September. (Broadcast Law Blog)

A Video Summary of the Rules on Lowest Unit Rates and Other Political Broadcasting Resources

Thu, 01 Oct 2020 16:07:29 GMT

Back in August, we highlighted some of the many issues in computing lowest unit charges (or “lowest unit rates”) for political candidates which are in effect during the window for the November elections that went into effect on September 4. In this last month before the election, as political advertising ramps up and each party fights over those few undecided viewers, we wanted to bring to your attention a video that I did for the Indiana Broadcasters Association discussing the various issues that arise in determining lowest unit rates. That video summarizes many of the issues that we wrote about back in August and is available here:

At the end of this article, we provide links to other videos produced by the Indiana Broadcasters discussing other political broadcasting issues, and to other articles that we have written on other political broadcasting issues.

As we wrote back in August, lowest unit charges (or “Lowest Unit Rates”) guarantee that, in the 45 days before a primary and the 60 days before a general election, legally qualified candidates get the lowest rate for a spot that is then running on the station within any class of advertising time running in any particular daypart. Candidates also get the benefit of all volume discounts without having to buy in volume – i.e., the candidate gets the same rate for buying one spot as your most favored advertiser gets for buying hundreds of spots of the same class. But there are many other aspects to the lowest unit rates, and stations need to be sure that they get these rules right.

It is a common misperception that a station has one lowest unit rate, when in fact almost every station will have several – if not dozens – of lowest unit rates,with one lowest unit rate for each class of time in each daypart. Even at the smallest radio station, there are probably several different classes of advertising spots. For instance, there will be different rates for spots running in morning drive than for those spots that run in the middle of the night. Each time period for which the station charges a differing rate is a class of time that has its own lowest unit rate. On television stations, there are often classes based not only on daypart, but on the individual program. Similarly, if a station sells different rotations, each rotation that offers substantially different benefits to an advertiser will be its own class of time with its own lowest unit rates (e.g., a 6 AM to Noon rotation is a different class than a 6 AM to 6 PM rotation, and both are a different class from a 24-hour rotator – and each can have its own lowest unit rate). So, in the same time period (e.g., morning drive on a radio station), there may be spots running in that period that have multiple lowest unit rates (such as spots sold specifically for morning drive, as well as cheaper spots that were sold as part of a 6 AM to 6 PM rotation that just happened to fall within the morning drive period). Federal candidates can buy into any of those classes of time, and they take the same chances as does a commercial advertiser as to where their spots will land (e.g., if a candidate buys a 6 AM to 6 PM rotator, and that rotator ends up in morning drive, another candidate may buy that same rotator the next week and end up at 4 PM. That second candidate can only guarantee that they will end up in morning drive by buying a spot guaranteed in that time period).

Even in the same time period, there can be preemptible and non-preemptible time, each with different costs, thus making them different classes of time, each with its own lowest unit rate. Any class of spots that run in a unique time period, with a unique rotation or unique rights attached to it (e.g., different levels of preemptibility, different make-good rights, etc.) will have a different lowest unit rate. Stations need to review each class of time sold on their station, find the lowest rate charged to a commercial advertiser for a spot of the same class that is running at the same time that the candidate wants to buy a spot, and make sure that lowest rate will be what the candidate is charged.

One question that still comes up with surprising regularity is whether these rates apply to state and local candidates, as well as federal candidates. Indeed they do – so if your station is running advertising for candidates for mayor or city council, or for governor or the state senate, or even for the board of education, municipal court judge, or state attorney general – they and any other candidate in any public election for which your station chooses to accept advertising gets lowest unit rates. See our past articles on this topic here and here. Stations are not required to sell advertising time to state and local candidates, but if they do, lowest unit rates apply.

In modern political elections, where PACs, Super PACs and other non-candidate interest groups are buying a significant amount of political advertising time, broadcasters need to remember that these spots don’t require lowest unit rates. Even if the picture or recognizable voice of the candidate that the PAC is supporting appears in the ad, spots that are sponsored by an independent organization not authorized by the candidate do not get lowest unit rates (note, however, that spots purchased by independent groups featuring the voice or picture of the candidate may trigger public file and equal opportunities obligations for the station if the station decides to run those spots). Under federal law, stations can charge these advertisers anything that the station wants for non-candidate ads – no need to stick to lowest unit rates.

From time to time stations may face the one exception to the above paragraph, where political buyers are requesting lowest unit charges and are authorized by a candidate. In these cases, these parties may in fact be entitled to these rates – but only where the spot includes the recognizable voice or picture of the candidate and the message is specifically authorized by the candidate. Under federal law for federal candidates, these purchases will be by political parties and subject to political campaign donation limitations (known as “hard money”). To get lowest unit rates, the advertising purchases must be authorized and “coordinated” with a candidate and, in federal races, the spots should make that coordination clear with the “I approved this message” tag. While the FCC has not formally ruled on it, it appears that some states have similar state laws that allow third parties to buy spots that are authorized by a candidate and may be entitled to lowest unit rates. Talk to your own attorney if you are faced with that issue. Not all third-party spots are entitled to this treatment – only this special class of coordinated expenditures – and stations are entitled to get written confirmation from the candidate that the expenditures are coordinated under applicable election laws. If not coordinated, the parties get charged the same as any other third-party organization.

Various advertising sales packages, and how they are factored into lowest unit rate calculations, also seem to lead to many questions by broadcasters. Candidates cannot be forced to buy single-station packages to get lowest unit rates. Instead, the package must be broken down by the station into a price per spot for each class of spot that is contained in the package. That is done by allocating the package price to the various spots of each class that are contained in the package. Then the allocated rates, on a unit basis, are compared to other spots of the same class that have been sold on the station either on their own or in other packages to determine if the spots from this package have any impact on the station’s lowest unit rates. This allocation is done in an internal station record, which does not need to go into the public file and does not need to be revealed to the candidate. Other than the station, only the FCC will see this allocation if they decide to conduct some sort of audit. We wrote more about this process of allocating spots in a package here.

These are just some of the myriad issues that arise in computing lowest unit rates. Stations need to be familiar with these rules and apply them accurately through the lowest unit rate windows. Check with your own legal advisor to discuss the specifics of these issues as they arise as they are often very difficult to apply in the real world. Some of the other situations that arise with lowest unit rates, and with other political issues that come up in any election season, are covered in our Political Broadcasting Guide, available here.

There are obviously many other issues that come up in the political broadcasting process. The Indiana Broadcasters have produced several other videos in which I explain some of the basics of the political broadcasting rules. These include:

Political file issues: https://www.indianabroadcasters.org/iba-news/ibas-washington-attorney-details-new-political-inspection-file-requirements/
Sponsorship Identification, Candidate Certifications, and Political Disclosure Statements: https://www.indianabroadcasters.org/iba-news/political-advertising-requirements-with-iba-washington-counsel-david-oxenford/
Equal Opportunities: https://vimeo.com/460600312

Other articles that deal with other political broadcasting subjects can be found on our blog by clicking on these links: equal opportunities, reasonable access, the no-censorship provision that governs candidate ads, and the potential for station liability for untruthful statements made in third party ads. Also, see our article here about the obligations for the political file required as part of the online public file, and the importance that the FCC puts on that file. And our articles here, here, here and here on the new requirements for the identification in the public file of all the issues mentioned in any advertising on federal political issues or candidates. All of these materials are just a summary of the basics in each of these areas. The laws regarding political broadcasting are extremely complicated and legal conclusions are very fact-dependent so you need to talk to your own attorney for specific advice on situations that arise at your station.

October Regulatory Dates for Broadcasters: License Renewals, EEO Reports, Carriage Elections, ...

Tue, 29 Sep 2020 14:18:39 GMT

In many parts of the country, the air is turning crisp, the leaves are changing color, and kids are back in school (in some form), making it the perfect time to get caught up with regulatory dates and deadlines coming in October. This is an unusual month where there are several routine regulatory deadlines – renewals, EEO filings, Quarterly Issues Programs Lists, and the must-carry/retransmission consent deadline, but no significant broadcast rulemaking comment deadlines, perhaps as we are nearing the end of the current administration which might not be around to finish any proceeding started now.

The routine deadlines include those for radio stations in Iowa and Missouri and TV stations in Florida, Puerto Rico, and the U.S. Virgin Islands who should be putting the finishing touches on their license renewal applications, to be filed on or before October 1, along with the accompanying EEO program report. Stations should also have their post-filing announcements ready and scheduled to begin airing on October 1. Those announcements continue through December 16. Stations are no longer required to air pre-filing announcements. The schedule for post-filing announcements and sample announcement language is here for radio stations and here for TV stations.

Also due by October 1 are EEO public inspection file reports for stations in Alaska, Florida, Hawaii, Iowa, Missouri, Oregon, Washington, American Samoa, Guam, the Mariana Islands, Puerto Rico, and the U.S. Virgin Islands that are part of a station employment unit with 5 of more full-time employees. An employment unit is one or more commonly controlled stations in the same geographic area that share at least one employee. By October 1, these reports are to be uploaded to the station’s FCC-hosted online public file and a link to that report needs to be placed on the homepage of the station’s website (if the station has a website). If your station employment unit has fewer than five full-time employees, no report needs to be placed in your public file or on your website.

By October 1, television stations must elect must-carry or retransmission consent for multichannel video programming distributors (MVPD) that carry their signals. Full-power and Class A TV stations must place in their online public inspection file by October 1 notice of whether they elect retransmission consent or must-carry carriage from their area’s MVPDs for the three-year cycle beginning on January 1, 2021 and ending December 31, 2023. If the station has decided to change its election, it must notify the MVPD by email, to an address set out in the MVPD’s public file. We summarized this new rule, here.

On or before October 10, all TV and radio stations must upload to their public file their Quarterly Issues/Programs Lists for the 3^rd quarter (July, August, and September). The Quarterly Issues/Programs Lists are a station’s evidence of how it operated in the public interest, demonstrating its treatment of its community’s most significant issues. As we have written previously, the FCC takes this requirement seriously and will fine stations, hold up granting license renewals, or both if it finds problems with a station’s compliance. For a short video on complying with the Quarterly Issues/Programs List requirement, see here.

In advance of the FCC’s October 27 Open Meeting, we will be tracking any broadcast items that make it on the agenda. Stay tuned to the blog throughout October for updates.

Looking ahead to early November, we note the closing of the general election lowest unit charge (LUC) window on November 3. There has been a lot of media reporting suggesting that certain races—the presidential race being the highest profile—may not be decided by the 3^rd or even the early hours of the 4^th. This situation could lead to campaigns continuing to advertise past November 3 to, for example, try to persuade state election officials to certify results, but there is no mechanism in federal law or the FCC’s rules to extend the LUC window past election day. The only exception would be in those races that may have runoff elections occurring after November 3, which are considered new elections so that they would have their own 60-day LUC window.

These are just a few of the regulatory dates we are tracking for October and early November. As always, read the blog and keep in close touch with your station’s counsel to be sure you are staying on top of the dates and deadlines that apply to your operation.

This Week in Regulation: September 19, 2020 to September 25, 2020

Sun, 27 Sep 2020 16:04:38 GMT

The day before 2020 annual regulatory fees were due, the FCC extended the deadline from 11:59 p.m. on Friday, September 25 to 11:59 p.m. on Monday, September, 28. (Public Notice)
Broadcast trade publication TVNewsCheck published “A Broadcaster’s Guide to Washington Issues,” our periodic survey of the legal and regulatory issues facing television It is a good resource for both new and veteran broadcasters looking to understand the status of pending legal and regulatory issues for the television industry.
For stations looking to stay on top of their KidVid reporting, the updated form to be used for the 2020 Children’s Television Programming Report is now available and can be accessed through the FCC’s Licensing and Management System (LMS). Stations can begin to prepare the form, update it during the remainder of the year, saving the information to be ready to file in January. The FCC reminds television broadcasters that the form cannot be finalized and submitted until January 1, 2021. As a reminder, KidVid reports are now filed annually, not quarterly as they were until the rules were changed in 2019. (Public Notice)
The FCC’s Media Bureau has waived the requirement for noncommercial educational (NCE) translator stations to send their carriage election notifications by email to multichannel video programming distributors (MVPD), as required under the FCC’s new carriage election requirements. The waiver came out of a petition from PBS and the trade association America’s Public Television Stations who said that, in many cases, NCE translators do not even know which MVPDs are carrying them and have no easy way to determine this information, making notification time-consuming and costly with no practical benefit as NCE translators can only “elect” must-carry. (Memorandum Opinion and Order)

Noncommercial Broadcasters and the Political File

Fri, 25 Sep 2020 11:43:42 GMT

What are a noncommercial broadcaster’s obligations with respect to the political file and the rest of the FCC’s political broadcasting rules? That is a question that I have heard asked several times in the last few weeks as we approach this most important, and contentious, election. In short, I think that the answer to this question is that, in most cases, a noncommercial broadcaster will have few if any political file obligations. Why?

Broadcast stations that are licensed as noncommercial do not have any reasonable access requirements. What that means is that noncommercial stations do not have any obligation to sell time to political candidates or to make any free time available to the candidates for their messages. Years ago, reasonable access did apply to noncommercial stations, but when a DC-area congressional candidate used the statutory reasonable access requirements to force a local NPR affiliate (to which many on Capitol Hill listened) to air political commercials, Congress acted to abolish the reasonable access requirement as it applied to noncommercial stations. So, as noncommercial stations do not need to sell political time to candidates, they are not faced with the political file obligations which have triggered scrutiny from the FCC in recent months. But that is not to say that there could never be a political file obligation for a noncommercial station.

Where an obligation could arise is when a candidate appears on a noncommercial station in a program that is not an “exempt program.” Exempt programs are programs that are not subject to the equal opportunities (or “equal time” as some call it) rule. Broadcast stations must provide equal time to a candidate when an opposing candidate appears outside of an exempt program. But that should rarely, if ever, occur on a noncommercial station. Bona fide news and news interview programs are exempt programs and thus are exempt from equal time requirements – and the FCC has broadly construed those exemptions. On-the-spot coverage of a news event is also exempt(see our articles here, here and here for more on these exemptions). Candidate appearances on these exempt programs do not trigger equal opportunities, and they also do not require any political file entries.

Theoretically, the appearance of a candidate on a non-exempt program could trigger equal opportunities and require public file disclosures. For a noncommercial station, it would seem like that is most likely to occur when an on-air station employee or volunteer decides to run for political office. Just as with commercial stations, when an employee becomes a legally qualified candidate for office, every time they appear on the air (even if they are performing their regular on-air duties and not mentioning their campaign), their appearance is a “use” by a candidate subject to equal opportunities and political file obligations. See our article here about employee-candidates and what can be done if a station’s employees decide to run for office.

Similarly, if a candidate appears in other programming on the station that is not “exempt,” then political file obligations could occur. Watch for PSAs that feature local government officials who are running for re-election or for other offices, as these can give rise to public file and equal opportunities requirements (see our article here that expands on this warning). A candidate appearance on some enhanced underwriting spot – even if the spot has nothing to do with their campaign – could also trigger the political rules (see our article here about how commercial stations should treat appearances by candidates in advertising for their businesses). Or candidate appearances on some purely entertainment programs could trigger equal opportunities (e.g. when Ronald Reagan and Arnold Schwarzenegger ran for political office, their movies could not be shown on television without triggering equal time and public file obligations).

These situations are likely to be few – but be alert and make sure that your noncommercial station does not inadvertently trigger one of these situations where it needs to make entries in its political file about candidate appearances on the stations.

A TV Broadcaster’s Guide to Washington Legal Issues – An Update on Where Things Stand

Tue, 22 Sep 2020 15:12:58 GMT

Where do all the Washington DC legal issues facing TV broadcasters stand? While we try on this Blog to write about many of those issues, we can’t always address everything that is happening. Every few months, my partner David O’Connor and I update a list of the legal and regulatory issues facing TV broadcasters. That list of issues is published by TVNewsCheck and the latest version, published today, is available on their website, here. It provides a summary of the status of legal and regulatory issues ranging from the adoption of the ATSC 3.0 standard at one end of the alphabet to White Spaces and Wireless Microphones on the other – with summaries of other issues including the many actions that the FCC took in response to the pandemic to the more traditional issues including Ownership Rule Changes, Children’s Television, Media Regulation Modernization, EEO Compliance, Political Advertising, Sponsorship Identification and dozens of other topics, many with links to more detailed discussions here on the Blog. The article is an easy place to go to see where, as of last week when we finished writing the article, legal matters related to TV broadcasting stand. Of course, the status of these issues changes almost daily, so watch this Blog and other trade publications, and consult your own legal counsel, for the latest Washington news of interest to broadcasters.

FCC Proposes $512,228 in Fines to TV Stations for Violating Rules Requiring Good Faith ...

Mon, 21 Sep 2020 16:06:43 GMT

With the October 1 deadline coming up for retransmission consent/must carry elections, and the likely commencement of many retransmission consent negotiations throughout the country, the FCC last week issued a decision that emphasizes the importance of “good faith” retransmission consent negotiations. In this action, the full Commission denied an Application for Review that sought to reverse the Media Bureau’s ruling that eighteen stations had failed to negotiate in good faith with an MVPD for retransmission consent. The Commission’s decision also included a Notice of Apparent Liability announcing that each station faces a $512,228 penalty for these violations of the requirements for good faith negotiation.

In May, we wrote about the earlier stages of this case where another licensee agreed to a consent decree based on essentially the same allegations addressed in last week’s decision. The consent decree was based on violations described in a decision of the FCC’s Media Bureau released last November (here) finding that 18 television station licensees, operating stations in separate markets, had failed to negotiate retransmission consent in good faith. Given the size of the proposed fines on the stations named in last week’s Notices of Apparent Liability, it is worth reviewing the basis of this decision. Even though many of the details are redacted to protect proprietary information, the basis for the decision can still be gleaned from this series of decisions.

The Commission upheld the decision of the Media Bureau which found that all of the named companies had used a single negotiating agent who the Bureau found failed to comply with three of the Commission’s nine “per se” good faith negotiating standards set out in Section 76.65(b)(1) of the Commission’s rules. Specifically, the Bureau found that the stations had not operated in good faith based on these perceived violations: (1) refusal to negotiate retransmission consent agreements; (2) refusal to meet and negotiate retransmission consent at reasonable times and locations, or acting in a manner that unreasonably delays retransmission consent negotiations; and (3) failure to respond to a retransmission consent proposal of the other party, including the reasons for the rejection of any such proposal.

In reaching this conclusion, the Bureau pointed to instances where the negotiating agent did not respond to offers for the carriage of single stations in the negotiating group, did not put forward proposals for the carriage of such stations and was slow in responding to proposals put forth by the MVPD and did not respond in detail to those proposals or make meaningful counterproposals. The Bureau, at the time, ordered the stations to negotiate in good faith and reserved questions of liability, indicating that those could be taken up in the future. That reservation of a decision on the question of liability is the basis for the Notices of Apparent Liability released last week.

Takeaways for TV stations? While the FCC will not get into the substance of retransmission consent negotiations (for example, it will not question the economics proposed by either side – see this article from over a dozen years ago where the FCC made that clear), it does require that the parties seriously negotiate over the terms of such carriage. Parties cannot simply say no and not advance proposals as to what they would accept to resolve the negotiations. Parties cannot unilaterally cut off negotiations. And the obligation is one that is unique to each station – so unrelated stations cannot join together and refuse to even consider deals offered for any particular station. This decision shows that there are real teeth in these regulations – and substantial penalties may follow for violation of the Commission’s standards.

This Week in Regulation for Broadcasters: September 12, 2020 to September 18, 2020

Sat, 19 Sep 2020 18:41:46 GMT

Political advertising will continue to blanket the airwaves for the next month and a half and broadcasters need to remain vigilant in complying with all political advertising rules and obligations. We wrote on the blog this week about some of the sponsorship identification issues broadcasters should look out for, especially as busy station staffers are dealing with more orders and more ad copy. (Broadcast Law Blog)
President Trump nominated Nathan Simington to fill FCC Commissioner Michael O’Rielly’s soon-to-be vacated seat. Simington currently serves as senior advisor at the National Telecommunications and Information Administration (NTIA) and is said to have worked on NTIA’s petition asking the FCC to review Section 230 of the Communications Decency Act of 1996, which gives online platforms broad immunity from what users post on those platforms. O’Rielly’s re-nomination is believed to have been withdrawn over his public comments expressing legal concerns over the President Trump’s desire that the FCC take steps to limit this immunity. O’Rielly can serve through the end of this year or until Simington is confirmed by the Senate, whichever comes first. We wrote about O’Rielly’s nomination troubles and Section 230, here. O’Rielly testified before the House Communications Subcommittee and used his opening remarks to reflect on his time at the Commission. (O’Rielly Remarks).
Chairman Ajit Pai circulated among his fellow Commissioners a Notice of Proposed Rulemaking that would, if adopted, require more specific disclosure when a broadcast station is airing programming that is directly or indirectly provided or sponsored by a foreign governmental entity. The new rules would include standardized disclosure language that specifically identifies the sponsoring foreign entity. (News Release)
A recent consent decree serves as a reminder that changes to ownership and control of broadcast licenses require prior FCC approval. The licensee of two Nevada stations failed to request approval of a buy/sell and stock purchase agreement that gave another party control of the stations. Under the terms of the consent decree, the transaction will be approved, but the licensee must pay an $8,000 penalty and follow a compliance plan for three years. (Order)
The FCC denied an Application for Review that sought to reverse the Media Bureau’s ruling that eighteen stations had failed to negotiate in good faith with DirecTV for retransmission consent. Each station faces a $512,228 penalty. We wrote about the earlier stages of this case and generally about the good faith negotiation requirement, here. (Memorandum Opinion and Order and Notice of Apparent Liability for Forfeiture)

This summary of the week’s regulatory news for broadcasters comes from the attorneys at Wilkinson Barker Knauer, LLP in Washington, DC. (https://www.wbklaw.com/).

Sponsorship of Political Advertising On-Air and On-Line – A Video Presentation and a ...

Fri, 18 Sep 2020 03:28:30 GMT

Now that we are immersed in the heart of the political broadcasting season, issues of sponsorship identification regularly arise. For on-air broadcasts, any paid advertisement that conveys a message dealing with any controversial issue of public importance (state or federal) requires at a minimum an on-air sponsorship identification stating that the ad was “paid for” or “sponsored by” the person or organization that paid for the time. Federal candidates have a more extensive obligation for identifying themselves in their ads, particularly if they mention an opposing candidate. These identification rules come both from the FCC (which stations need to enforce) and from the Federal Election Commission, which are the responsibility of the candidate and their campaign committee. To help sort out some of these obligations, and the requirements for political disclosure statements and federal candidate certifications that entitle them to lowest unit rates, check out this video that I prepared for the Indiana Broadcasters Association as part of a series on political broadcasting topics: https://www.indianabroadcasters.org/iba-news/political-advertising-requirements-with-iba-washington-counsel-david-oxenford/

The video covers the requirements of broadcasters to ensure that the proper sponsorship identification is contained in political advertising. Online political advertising, however, is much more complicated as there is no single body of law that governs those responsibilities. As we wrote here, the FEC has general requirements providing that online political advertising must have sponsorship identification. The FEC also has an open proceeding to mandate more stringent sponsorship identification obligations akin to those required on broadcast and local cable political advertising. Last week, the Congressional Research Service issued a study on the state of the law regarding online political advertising, highlighting the many issues involved in providing more robust political disclosures. These issues are at least partially triggered by the many players involved in online advertising sales. There is a very readable outline on pages 16-19 of the report on all the players in the digital advertising ecosystem – with intermediaries, including demand- and supply-side platforms, that complicate the usual direct interaction between the media outlet and the advertising buyer, which in turn complicates the political compliance process for sponsorship identification. The study, on page 18, even cites to the article that I wrote discussing the concerns about sponsorship identification in any programmatic political advertising.

The CRS report covers many of the pending federal legislative proposals to address concerns about political advertising disclosures. While it is a very readable and comprehensive review of the current federal sponsorship identification obligations (and of some of the ambiguities in federal rules for online political advertising), the CRS report does not provide a review of some of the industry codes of practice and state regulations that have attempted to address the lack of uniform federal obligations for online political sponsorship identification. We wrote here about the early days of the New York and Washington State political advertising regulations that govern online political advertising, and these state regulations have become even more detailed in recent years as implementing regulations have been adopted. California, Virginia, Nevada and several other states have also adopted rules requiring that political sellers know their customers and provide some public disclosure about the sponsors of online political messages. So, too, have various trade organizations adopted voluntary principles governing online political advertising sponsorship disclosures, including the Digital Advertising Alliance’s Application of Self-Regulatory Principles of Transparency and Accountability to Political Advertising and the Network Advertising Initiative’s Code of Conduct.

In advising clients during this busy election year, we have discovered that these voluntary codes of conduct and state regulations have made for a very confusing legal landscape for digital political advertising. None of these rule and laws are the same – they do not even work off the same models. All of them place burdens on political advertisers, and some impose burdens on the media platforms (although see the decision we wrote about here where a Maryland statute putting disclosure burdens on the platforms was declared unconstitutional). Other laws are ambiguous as to where the legal obligations lay. This may be why we have seen calls by some of the biggest online platforms, including Facebook, for federal legislation to make the rules of the road uniform and transparent. Given the current legislative climate and the short timeline before the election and the end of the current Congressional session, the prospects of such federal legislation being enacted soon are probably dim. Until then, digital platforms selling online political advertising need to study these differing regulatory schemes to avoid becoming part of some controversy over hidden political persuasion taking place on their services.

This Week in Regulation for Broadcasters: September 5, 2020 to September 11, 2020

Sun, 13 Sep 2020 15:38:30 GMT

Information on the FY 2020 regulatory fee process continues to roll out, in advance of the 11:59 p.m. EDT September 25 deadline to pay fees or to request a waiver. The Media Bureau released a fact sheet to answer questions and to help stations figure out how much they owe. When you log-in to the fee filer, the amount owed is already pre-entered, so you only need to enter payment information. Should you wish to double-check the amount shown in the filer, the Bureau provides a chart for radio stations that shows payment amounts based on station class type and population served. Television licensees can consult Appendix G of the FY 2020 Fees Report and Order. See our blog post for more information. (What You Owe – Media Services Licensees Fact Sheet)
The FCC released the agenda for its September 30 Open Meeting and drafts of the items to be considered at that meeting. There are no items on the agenda that would change broadcasters’ obligations, though as part of its multi-year Media Modernization efforts, the FCC will consider changes to how cable systems must handle certain notifications to its customers of changes to rates, service, or channel position of stations that they carry. Acknowledging that retransmission consent and program carriage negotiations can continue up until the moment a channel or program has to be pulled from the system, the FCC wants to change its rules to eliminate the 30-day notice required under current rules. The new rule, if adopted, will allow cable systems to notify viewers “as soon as possible” about changes to channel lineups that occur due to retransmission consent or program carriage negotiations that fail within 30 days of the retransmission or program carriage contract ending. (Report and Order)
Holders of FM translator construction permits awarded to AM stations in Auctions 99 and 100 that expire on or before June 30, 2021 have an opportunity to extend the permit’s expiration date by up to six months. The Media Bureau announced it will accept COVID-19-related requests for waiver of the expiration date. The request must specify how the pandemic has prevented the permit holder’s ability to complete construction and should be submitted no later than 15 days before the permit expires. More details and waiver request instructions are available in the Public Notice. (Public Notice)

Looking ahead to next week, Monday, September 14 is the deadline for parties with eligible earth stations involved in the C-Band transition to elect to receive a lump sum reimbursement payment, instead of reimbursement for their actual relocation costs. For more on the lump sum reimbursement process and some of the issues to consider, see our blog post here.