Broadcast Law Blog

Reminder – 2021 Will Include Some Off-Year Elections for State and Local Office – and FCC ...

Tue, 12 Jan 2021 16:51:08 GMT

After this year’s contentious elections, it is with reluctance that we even broach the subject – but broadcasters and cable companies need to be aware that in many jurisdictions there are elections this November. While most broadcast stations don’t think about the FCC’s political broadcasting rules in odd numbered years, they should – particularly in connection with state and local political offices. There are elections for governor in November in Virginia and New Jersey, and all sorts of state and local elections in different parts of the country. These include some mayoral races in major US cities. Some of these local elections don’t even occur in November – and there are even a few that are taking place as early as next month. As we have written 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 has to sell. 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 independent and fringe party 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 candidate 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 applicants – 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 recent insistence (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 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!

Dates Set for Comments on FCC’s Zonecasting Rulemaking Proposal for FM Boosters

Mon, 11 Jan 2021 16:36:55 GMT

The FCC’s Notice of Proposed Rulemaking looking to allow zonecasting by FM booster stations was published in the Federal Register today, setting the comment deadline as February 10, 2021 with reply comments due on or before March 12, 2021. We’ve written about that proposal here and here. The FCC proposes to allow FM boosters to originate limited amounts of programming (up to 5% of any program hour) different from their primary stations. According to the proponents of the proposal, this will allow for insertion of hyper-local content including local news and advertisements in different parts of any station’s coverage area. So, for instance, an FM station could run in the same commercial spot break ads for different car dealers in different parts of the primary station’s market where that station has boosters. As we wrote when the NPRM was released, the FCC asks many questions in the NPRM – including technical questions about the likely interference that will result from implementation of the proposal. It also asks operational, business and policy questions about the impact of the adoption of the proposal. If you have a position on these issues, now is the time for the filing of comments.

This Week in Broadcast Regulation: January 2, 2021 to January 8, 2021

Sun, 10 Jan 2021 14:52:29 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. Also, we include a quick look at some important dates in the future.

The Enforcement Bureau advised broadcasters (and other participants) of their Emergency Alert System obligations, including the requirement to make EAS messages accessible. The advisory provides a good reminder of a broadcaster’s EAS obligations. (Advisory)
The FCC issued a status report on the incentive auction repack and announced that it has sufficient funds available for the reimbursement of costs incurred by LPTV and TV translator stations because of the repacking to increase their payments from 85% of verified estimates to 92.5%. According to the status report, all of the stations repacked as part of the incentive auction have vacated their pre-auction channels and, as of this week, over 95% of the stations are operating with their final technical facilities. (Public Notice)
The FCC released its count of broadcast stations as of year-end 2020, finding more than 33,500 stations, including more than 15,000 full-power radio stations and nearly 1,200 full-power TV stations. (Broadcast Station Totals)
The FCC submitted its annual report to Congress on the implementation of the PIRATE Act and the enforcement actions it has taken over the last year. The report notes that COVID-19 and the lack of congressionally-appropriated funds in FY 2020 for the Act have limited implementation and enforcement activities. (Report)
Four low power FM stations in Iowa and Missouri failed to file license renewal applications by their October 1, 2020 filing deadline and are in danger of seeing their licenses expire. This serves as a reminder to television stations in Arkansas, Louisiana, and Mississippi and radio stations in Kansas, Nebraska, and Oklahoma to file their renewal applications, due by February 1, 2021. (Public Notice)
In the copyright world, the Copyright Office released a Notice of Inquiry to review changes to the copyright license granted to satellite TV providers under 2019’s Satellite Television Community Protection and Promotion Act to provide local-into-local retransmission of television stations. The review seeks comments by March 8 as to how the new law impacts affected parties including consumers and stations. Read more about the inquiry, here.
A handful of large radio groups and webcasters will be audited by SoundExchange over their compliance with their copyright licenses for the public performance of sound recordings required when they transmit their programming on the Internet. Read more about this and other music licensing audits, here.

To help you stay on top of the many scheduled regulatory dates for the rest of the year, we published our Broadcaster’s Regulatory Calendar for 2021, which sets out many of the broadcast regulatory dates and deadlines in 2021. (Broadcast Law Blog)

Looking ahead, on Monday, a notice is scheduled to appear in the Federal Register announcing the comment period for the FCC’s FM booster rulemaking (we covered the “zonecasting” proposal in more detail, here). The proceeding asks if boosters should be allowed to originate hyperlocal program that is different from the programming carried on the station they rebroadcast. Comments will be due by February 10, 2021 and reply comments will be due 30 days later on March 12, 2021. On Wednesday, the FCC will hold the first of its required monthly Open Meetings of 2021. After releasing a tentative agenda with only bureau and staff presentations about the FCC’s accomplishments during his term, Chairman Pai, who will preside over his last Open Meeting, added three items for Commissioners to vote on – none of which directly impact broadcasters. The meeting will be streamed live, here, at 10:30 pm Eastern on January 13.

Copyright Royalty Board Announces SoundExchange Audits of Royalty Payments for Webcasters ...

Fri, 08 Jan 2021 17:25:53 GMT

The Copyright Royalty Board today published a Federal Register notice announcing that SoundExchange was auditing a number of broadcasters and other webcasters to assess their compliance with the statutory music licenses provided by Sections 112 and 114 of the Copyright Act for the public performance of sound recordings and ephemeral copies made in the digital transmission process by commercial webcasters. A separate notice to audit the company Music Choice, which also provides a digital music service usually delivered with cable or satellite television services, was also issued to audit their compliance both on webcasting and on their subscription music service which is subject to separate royalty rules set out in a different part of the same section of the Copyright Act and set through a different Copyright Royalty Board proceeding. A third audit notice has gone out to a company called Rockbot, a Business Establishment Service whose royalties are exclusively paid under Section 112 of the statute (see our article here about the CRB-set royalties for these services that provide music played in various food and retail establishments and other businesses).

SoundExchange may conduct an audit of any licensee operating under the statutory licenses for which it collects royalties. Such audits cover the prior three calendar years in order to verify that the correct royalty payments have been made. The decision to audit a company is not necessarily any indication that SoundExchange considers something amiss with that company’s royalty payments – instead they audit a cross-section of services each year (see our past articles about audits covering the spectrum of digital music companies audited by SoundExchange here, here, here and here). Audits are conducted by outside accounting firms who, after they review the books and records of the company being audited, issue a report to SoundExchange about their findings. The company being audited has the right to review the report before it is issued and suggest corrections or identify errors. The reports are then provided to SoundExchange and, if they show an underpayment, it can collect any unpaid royalties, with interest. While, by statute, the notice of the royalty must be published in the Federal Register, the results of the audit and any subsequent resolution usually are not made public.

SoundExchange is not the only royalty collection group who can audit music companies – though its audits are different because announcements are published in the Federal Register. All of the other performing rights organizations (e.g. ASCAP, BMI and SESAC) can conduct audits from time to time. Audits are not limited to music, as television stations and other video companies can be audited to assess their compliance with program royalty obligations. We wrote more extensively about the royalty audit process here.

If your company is audited, get with your attorneys and accountants right away to make sure that you discuss the audit process and how to minimize the disruption to your business. If you were not on this list, the list serves as a good reminder to assess the records you are keeping to be sure that you are maintaining them in a way that will demonstrate that you paid what you owe. Any company, big or small, could be the subject of a future audit to assess its compliance with its royalty obligations.

Copyright Office Begins Review of Changes in Satellite Television Statutory License for ...

Wed, 06 Jan 2021 17:01:51 GMT

A Notice of Inquiry from the Copyright Office was published today in the Federal Register, announcing the initiation of an inquiry into the effects of the 2019 changes in the statutory license under Section 119 of the Copyright Act for satellite television providers to retransmit local television stations. Pursuant to that license, a satellite carrier can retransmit local television stations into their own markets without having to negotiate with each copyright holder in the programming carried by local stations. Instead, the satellite carrier pays a license fee set by the statute and the proceeds of that license are redistributed through proceedings held by the Copyright Royalty Board to the copyright holders. As part of that license, satellite carriers can import signals of distant network television stations into a market in certain circumstances – circumstances that were greatly limited by the Satellite Television Community Protection and Promotion Act (the “STCPPA”) in 2019. As part of that statute, Congress instructed the Copyright Office to conduct this study to review the impact of the 2019 changes.

The 2019 changes eliminated the ability of satellite carriers to import distant network signals to households in a market where:

The households could not receive a local over-the-air signal via an antenna;
The household received a waiver from a local network affiliate to receive a distant signal;
“Grandfathered” households that received distant signals on or before October 31, 1999; and
Households eligible for a statutory exemption related to receiving “C-Band” satellite signals.

These exceptions were problematic to broadcasters as they introduced a distant network affiliate into a television market, encouraging viewers to watch that distant station at the expense of the local affiliate. Congress was concerned that these situations encouraged viewers to watch distant news rather than the local news and information provided by in-market stations. Many of these provisions were also hard to implement and enforce. For instance, the question of whether a household could receive an over-the-air signal could often be a contentious question. Waivers also were problematic, as a local station could feel pressure to give a waiver to a local resident to avoid bad will within the community. Thus, in 2019, all of these exceptions were abolished.

Distant signals can still be imported under the STCPPA into satellite markets in these limited situations:

RVs and commercial trucks; and
Subscribers located in “short markets.”

These exceptions were of less concern to broadcasters, as RVs and trucks are typically transitory visitors to a market. Short markets are ones without an affiliate of a certain network – so the importation of a distant signal would not compete with a local affiliate. Moreover, the ability of a satellite carrier to rely on these exceptions was further limited, as only a satellite carrier who provided local-into-local service (beaming though their satellite systems local television stations into their own markets) in all 210 television markets can rely on these exceptions.

The study initiated by the Copyright Office is to look at the results of the law. The Copyright Office seeks comments from interested parties and the public (and it is in fact sending a survey to certain satellite subscribers to see how they have been impacted). Questions include whether households that did not receive programming from a local affiliate now receive such programming, whether the price and service from the satellite carriers have changed, whether households who were relying on the old exceptions to get network programming can still receive such programming, and whether the change in the statute has otherwise affected the experience of viewers and broadcasters.

Comments are due on the Notice of Inquiry in this proceeding on or before March 8, 2021.

A Broadcaster’s 2021 Regulatory Calendar – Looking at Some of the Important Dates for the ...

Tue, 05 Jan 2021 17:21:47 GMT

Here we are, in a new and hopefully more “normal” year – wondering what will be ahead. Each year, at about this time, we put together a look at the regulatory dates ahead for broadcasters – or at least the primary ones that we already know. This year is no different – and we offer for your review our Broadcaster’s Regulatory Calendar for 2021. While this calendar should not be viewed as an exhaustive list of every regulatory date that your station will face, it highlights many of the most important dates for broadcasters in the coming year – including dates for license renewals, EEO Public Inspection File Reports, Quarterly Issues Programs lists, children’s television obligations, annual fee obligations and much more. This year, for LPTV and TV translator operators, there are also dates associated with this summer’s deadline for all such stations to be operating digitally (see our article here).

While this likely will not be a big political advertising year like 2020, there will be some state and local races – so we note the start of the Lowest Unit Charge window for this year’s November election – relevant in states like New Jersey and Virginia where there are races for governor and state legislature, and to the many locations across the country that will have mayor’s races and other state and local political contests. Look for local information about the dates for any primary elections for these elections – as those primaries have their own LUC windows for the 45 days preceding the primary. See our article here on how the other political broadcasting rules apply to state and local elections.

Certainly, as the year progresses, there will be plenty more dates to note. Follow our blog where we weekly post a summary of the prior week’s regulatory actions relevant to broadcasters and a look ahead prior to the start of each month at the regulatory dates in the coming month, read other newsletters and trade publications and consult your own attorney to stay on top of the regulatory obligations that apply to your stations. We hope that this 2021 Broadcasters Regulatory Calendar will give you a good start on spotting some of the important dates that may be ahead and affect your operations.

The Last Two Weeks in Broadcast Regulation: December 19, 2020 to January 1, 2021

Mon, 04 Jan 2021 15:39:53 GMT

Here are some of the regulatory developments in the last two weeks 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 an order revising its fees for broadcast applications and other filings. The fees were adjusted to reflect the Commission’s accounting of the amount of legal, engineering, and supervisory resources spent on reviewing the filing. For the first time, the fees will include payments for FM translator minor changes. The new fee schedule will go into effect after the FCC has updated its internal systems and notice is published in the Federal Register. (Report and Order)
The FCC announced that, beginning January 15, it will marginally increase its fines for rule violations to adjust for inflation. (Order)
For broadcasters who use drones (“unmanned aircraft systems” or “UAS”), the Federal Aviation Administration released two lengthy decisions amending its regulations governing their operations. The new rules mandate a “digital license plate” to identify most drones to enhance security in the industry and pave the way for expanded operations that are currently allowed only through special waivers or exemptions. At the same time, the FAA modified its rules for small UAS, i.e., those weighing less than 55 pounds, to permit qualified operators to fly them over people and moving vehicles and at night without waivers, provided certain conditions are met. An FAA press release with links to the decisions is available here.
The Federal Trade Commission announced consent decrees with six companies over their marketing of CBD products, finding the advertising of specific health benefits of CBD to be deceptive (FTC Press Release). For more information on these decrees and other cannabis advertising issues for broadcasters, see our blog article here.
The FCC’s Media Bureau granted a waiver allowing the common ownership of two TV stations in the Lubbock, Texas market even though there would not be eight independent operators in the market after the combination, as required under current FCC ownership rules. The Commission justified the waiver on its “failing station” standard, finding that the acquired station had “been struggling for an extended period of time both in terms of its audience share and in its financial performance.” See the FCC’s letter for the criteria a station must meet to be considered failing and the Video Division’s analysis of this particular transaction.
In two decisions, the FCC approved foreign ownership of broadcast companies in excess of 25%. Specific FCC approval is required when foreign ownership in a company holding broadcast licenses is proposed to exceed 25%, with the FCC and other government agencies reviewing the national security and public interest implications of the foreign ownership (decisions on Estrella Broadcasting, Inc. and Univision Holdings, Inc.)
In a reminder to pay attention to filing deadlines, eleven low power TV stations in Florida and Puerto Rico failed to submit renewal applications by their October 1, 2020 filing date and are now in danger of their licenses expiring. (Public Notice) Television stations in Arkansas, Louisiana, and Mississippi and radio stations in Kansas, Nebraska, and Oklahoma are next due to file their license renewals, with a deadline of February 1, 2021.
The FCC released its biennial Communications Marketplace Report that analyzes, among other things, the state of the radio and TV marketplaces. The report is provided to Congress to advise it on economic and competitive trends in regulated industries to provide information for any legislation that it may consider. (2020 Communications Marketplace Report)

For a look ahead, we posted on our blog a review of some of the regulatory dates and deadlines in January and early February of which broadcasters should be aware. In the coming month, among other things, look for a new FCC administration, quarterly issues/programs lists, KidVid reports, comment deadlines for two proceedings, the Supreme Court’s oral argument on multiple ownership issues and, in a number of states, February 1 license renewal and EEO public file report deadlines. (Blog)

More FTC Consent Decrees Emphasize Prohibitions on Advertising of Unproven Health Benefits of ...

Wed, 30 Dec 2020 16:35:19 GMT

Just before Christmas, the Federal Trade Commission issued consent decrees with six companies resolving proceedings alleging that their marketing of CBD products was deceptive. The consent decrees included monetary penalties as high as $80,000 and compliance plans to ensure that the named companies would not engage in future marketing of unproven health benefits of CBD products. The FTC issued a press release on the consent decrees (links to the decrees and related documents can be found on the same webpage as the press release).

Some of the health claims that the FTC found problematic were very specific, suggesting that CBD could aid in the treatment of specific diseases and medical conditions. Other claims found to be improper included more general claims that CBD was effective for “pain relief” and that the products are safe for all users. As noted in the FTC documents, only proven health claims for CBD can be included in marketing material – and so far, the proven health benefits have been limited to those provided by specific FDA-approved anti-seizure medications. While these decrees were with companies selling CBD products, rather than media companies that ran their ads, as we have noted before, broadcasters and other media companies should be alert to advertising messages that exceed permissible guidelines. While the FDA has promised further guidance on the sale and marketing of CBD products, action has likely been stalled by the agency’s concentration on pandemic-related issues.

This month’s decrees are not the first federal government actions to target the marketing of CBD products. We have written before (see, for instance, our articles here and here) about actions by both the FTC and the FDA that target companies selling CBD products, not only for the types of deceptive health claims involved in these cases, but also in connection with any CBD product that is marketed for ingestion as a food additive or dietary supplement. As we noted, hemp-based CBD is no longer a Schedule I drug that is banned by federal law for all uses in the US (contrast this with marijuana, which we have suggested that media companies not advertise at all given its continued illegality under federal law). Instead, CBD can now be legally produced and distributed in many states that have implemented regulatory controls required by the 2014 and 2018 Farm Acts. But companies looking to advertise these products need to observe the restrictions on health claims that these recent decisions found problematic, as well as the restrictions on ingestible products cited in past regulatory actions, and any other restrictions imposed by law and regulation – including state laws that may limit the distribution and marketing of these products. Given the uncertainties that surround CBD advertising, stations should consult with counsel before accepting such ads.

January Regulatory Dates for Broadcasters – A New FCC Administration, Quarterly Issues ...

Tue, 29 Dec 2020 14:58:24 GMT

The holiday season is nearly behind us and many are looking forward to putting 2020 in the rearview mirror with a hopeful eye on 2021. The new year will bring big changes to the Washington broadcast regulation scene, with the inauguration of a new President and installation of a new FCC chair who will make an imprint on the agency with his or her own priorities. And routine regulatory dates and deadlines will continue to fill up a broadcaster’s calendar. So let’s look at what to expect in the world of Washington regulation in the coming month.

On the routine regulatory front, on or before January 10, all full-power broadcast stations, commercial and noncommercial, must upload to their online public inspection files their Quarterly Issues Programs lists, listing the most important issues facing their communities in the last quarter of 2020 and the programs that they broadcast in October, November and December that addressed those issues. As we have written before, these lists are the only documents required by the FCC to demonstrate how stations served the needs and interests of their broadcast service area, and they are particularly important as the FCC continues its license renewal process for radio and TV stations. Make sure that you upload these lists to your public file by the January 10 deadline. You can find a short video on complying with the Quarterly Issues/Programs List requirements here.

Television stations should also be preparing their annual Children’s Television Programming Report (Form 2100, Schedule H – formerly Form 398) and certification of compliance with commercial limits in their children’s programming. The Form 398 would normally be due to be filed at the FCC on January 30 but, as that date falls on a Saturday, the FCC filing deadline this year is February 1, the next business day. This is the first time that stations will file a KidVid report covering an entire year and not just one quarter. We summarized the 2019 KidVid rule changes, here. FCC rules also require that stations place in their public files by January 30 of each year records documenting compliance with the limits on the number of commercial minutes that stations can allow in children’s programming.

Reply comments are due in two proceedings that will affect broadcasters. Interested parties have until January 25 to submit reply comments in the FCC’s foreign entity sponsorship identification proceeding. This proceeding seeks to enhance and standardize the on-air disclosure that broadcasters must make when programming is supplied or paid for by a foreign entity or its representatives.

Also due that same day are reply comments on the petition by the National Association of Broadcasters to clarify who is legally responsible for the programming on a subchannel of one TV station when that programming is a simulcast of another station’s programming. This would include when the subchannel is acting as the required ATSC 1.0 “lighthouse” signal for the primary video stream of a station that has converted to ATSC 3.0 (Next Gen TV) operations. The NAB suggests that the originating station, rather than the host station, should be liable for the public service, political broadcasting, public file and other legal obligations that arise from that programming. We wrote about the issues posed in this proceeding in more detail, here.

For those interested in potential changes in the FCC’s ownership rules, you will want to listen to the oral argument before the Supreme Court on the appeal of the Third Circuit Court of Appeals’ rejection of the FCC’s 2017 media ownership rule changes that, among other things, eliminated the Newspaper/Broadcast Cross-Ownership Rule. That argument will be held on January 19 and can be heard live on C-SPAN. An audio recording and transcript of the argument should be posted to the Court’s website by January 22. A decision in the case is expected later in the year, and the argument may give some preview of the Court’s thinking. We wrote about this case and media ownership issues more generally, here.

The FCC will hold its first of its required monthly open meetings of 2021 on January 13. The tentative agenda indicates that Chairman Pai will not tee up any items for a vote and will instead use the meeting to allow bureau and office leaders to highlight their accomplishments over the last four years. This meeting will be Chairman Pai’s last Open Meeting at the agency and Commissioner Nathan Simington’s first meeting, having joined the Commission on December 14, 2020. A week later, President-Elect Joe Biden will be sworn in on January 20. With Chairman Pai’s planned January 20 departure from the agency, each party will hold two seats (Rosenworcel (D), Starks (D), Carr (R), and Simington (R)), making action on any partisan items all but impossible until a third Democratic Commissioner is installed. We will be watching to see the naming of an interim chair of the FCC, and for when a nominee for the open seat will be announced by the new President – and how quickly the Senate will act on that nominee.

And, looking ahead to February, television and radio stations in several states must file applications for license renewal and file and upload EEO reports. By February 1, TV stations in Arkansas, Louisiana, and Mississippi and radio stations in Kansas, Nebraska, and Oklahoma must file their license renewal applications through the FCC’s Licensing and Management System (LMS). Those stations must also file with the FCC a Broadcast EEO Program Report (Form 396) and, if they are part of an employment unit with 5 or more full-time employees, upload to their public file and post a link on their station website to their Annual EEO Public Inspection File report covering their hiring and employment outreach activities that occurred in the period from February 1, 2020 to January 31, 2021. TV and radio stations licensed to communities in New Jersey and New York also must meet their Annual EEO Public Inspection file report obligations on February 1.

As always, consult with your own attorneys and advisors to make sure that there are no other regulatory obligations for your stations that fall in the coming month. As 2020 comes to a close, we thank you for your readership and join you in looking forward to a successful 2021 for your stations and the broadcast industry.

Outgoing FCC Chairman Pai Calls for Modernization of Media Ownership Rules – Audio ...

Mon, 21 Dec 2020 17:10:26 GMT

Last week, Chairman Pai gave a speech to the Media Institute in Washington, talking about his deregulatory accomplishments during his tenure as FCC Chairman. Central to his speech was the suggestion that the broadcast ownership rules no longer made sense, as they regulate an incredibly small piece of the media landscape, while digital competitors, who are commanding a greater and greater share of the market for audience and advertising dollars, are essentially unregulated. Not only are they unregulated, but the digital services that compete with broadcasting are owned and financed by companies who are the giants of the US economy. In his speech, he noted that the company with the most broadcast TV ownership is dwarfed in market capitalization by the companies offering competing video services.

While the Chairman’s speech concentrated on television, mentioning radio only in passing, we note that many of these same issues are even more at play in the audio entertainment marketplace. When the Chairman two months ago offered remarks on the hundredth anniversary of the first commercial radio station in the US, he recognized that radio has played a fundamental role in the communications world over the last century. But that role faces more and more challenges, perhaps exaggerated by the pandemic when in many markets listeners are spending less time in cars where so much radio listening takes place. There are many challenges to over-the-air radio as new sources of audio entertainment that sound and function similarly are more and more accessible to the public and more and more popular with listeners. Over-the-air radio is already less a distinct industry than a part of the overall audio entertainment marketplace competing with streaming services, podcasts, satellite radio and other audio media. These changes in listening habits are coupled with a change in the advertising marketplace, as the digital media giants now take over 50% of the local advertising market that was once the province of radio, television and newspapers.

These changes in the media marketplace, particularly for radio, will be facing any new administration at the FCC starting in January. The ownership rules for local television ownership and the cross-ownership rules restricting daily newspaper owners from also holding radio or TV interests may well be resolved by the current Supreme Court review of the Third Circuit decision overturning the 2017 changes adopted by the Commission. But a review of radio ownership rule changes, started as part of the FCC’s required Quadrennial Review of the broadcast ownership rules, has been on hold for the last year and a half at the FCC. Comments on proposals to amend those rules were filed in the Spring of 2019, but they have not been acted on, as the Third Circuit decision effectively froze consideration of changes to any of the FCC’s ownership rules. The underlying basis of that decision — whether the FCC adequately considered the impact of ownership changes on minorities and other potential entrants to broadcast ownership — would impact any further relaxation of any broadcast ownership rules, so the radio rule review is on hold.

There have been no substantial changes in the ownership rules for radio since 1996, during a period where there have been massive changes in the rest of the audio industry. In 1996, streaming was something only a few technologically-forward people even knew existed. Pandora did not launch its streaming service for another decade, and Spotify was even further behind – not launching in the US until 2011. Even those few people who knew that audio streaming existed in 1996 would never have thought that they could listen to a streaming service in their cars. Apple was not offering a streaming music service – in fact it had not even introduced the iPod (introduced in 2001) or the iTunes store (2003) – both themselves technological relics because of subsequent changes in the audio marketplace. Given that there was no iPod, there were obviously no podcasts to bring audio storytelling to the millions who now listen to their favorite programming through the multitude of services that provide podcasts on almost any subject. There was no Alexa to bring Amazon and other music services into the home – in fact, Amazon itself had only begun selling books online in 1995. Even Sirius XM (then Sirius and XM as two competing companies) had not initiated their services at the time of the 1996 Act – as XM did not start providing service to consumers for another 5 years (with Sirius launching a year later). And the pace of change for audio technology is not slowing.

Streaming to cars – radio’s most important listening venue – is already a reality. Between streaming and satellite radio, an unlimited number of audio channels are available to most Americans. Even drivers in rural areas with little or no mobile coverage providing sufficient bandwidth to deliver streaming services can receive Sirius XM service, and podcasts and cached content from certain subscription streaming services provide additional audio options. And, over time, with driverless cars on the horizon, video may too become a competitor to radio in the car.

Radio reception in the home is changing as well. Alexa, Google Home, and its imitators provide direct voice-activated access to audio content that does not include traditionally-delivered over-the-air radio. Here, too, the number of channels of programming available from these services is effectively unlimited. These digital giants providing new audio competition – including Facebook, Amazon, Google and Apple – all have market capitalizations at or well above 500 billion dollars, dwarfing the total capitalization of the entire radio industry which is less than 10 billion dollars.

The competition for radio revenue has also dramatically changed since 1996. In 1996, local advertising competitors were the local newspaper, some TV ads, and direct mail. Local cable TV ad insertion networks were in their infancy. And digital advertising competition really did not exist. Facebook did not launch to the general public until 2006 (being available to college students two years before), and Google wasn’t launched until 1998. Analysts say that digital services now take over half of the local advertising in most radio markets. Even regulators seem to recognize this dominance, as witnessed by the recent antitrust lawsuits filed against digital media giants Facebook and Google.

The fact that over-the-air radio continues to command a significant audience share is no doubt attributable to the quality and relevance of the content that it provides to local listeners, its ease of access, the lack of subscription fees and habit. But with all the competition now in the radio marketplace, rules that were written when the only competitive mobile audio content was from the cassette player would seem ripe for review. So how will the new FCC react to these marketplace changes as it completes the work on the Quadrennial Review begun in 2019?

What changes in the ownership rules will the new FCC be prepared to make to address the seismic shift that has occurred in the audio marketplace? Will the FCC recognize that radio is no longer an island unto itself? Will they recognize that radio no longer is a separate market where radio stations only compete with other radio stations? That is a real question, as sometimes the government is slow to recognize the transformation of the marketplace.

In the past, some radio companies have suggested a lifting of the “subcaps” in the radio ownership rules that limit the number of AM or FM stations that can be owned in a single market (see our article here). Right now, in the largest markets, one party can own up to 8 stations, but no more than 5 can be in one service – AM or FM. Some fear that lifting the subcaps will mean that the big players will all migrate to FM, further damaging the already-ailing AM band. The FCC will need to address whether this artificial support for the AM band is still in the public interest – and consider whether, even if the big radio owners move to FM, that won’t create more opportunities for niche programmers on the AM dial. In the comments filed in 2019, even some broadcasters who opposed relaxation of FM ownership supported deregulation of AM ownership, seeing the lifting of AM limits as a way in which innovation in AM operations might be possible.

A more far-reaching question is whether the lifting of the subcaps goes far enough to allowing radio owners to develop the synergies needed to compete with the plethora of new audio competitors. Some suggest that, to compete effectively against the digital giants who are thus far subject to little or no regulation, radio owners need to be able have a marketplace presence that is even deeper than 8 stations. For instance, in a market like New York City, BIA Kelsey (the broadcast analysis service on which the FCC relies to determine which stations compete in each market) says that there are 154 radio competitors serving all or part of the market. In Los Angeles, BIA says that there are 93 stations that compete in the market. Are 8 stations enough to really compete in the media marketplace in those markets?

Others worry that more concentration will shut out potential new owners and believe that new technologies still don’t provide an equivalent means to reach the radio audience. Fearing that new entrants, diverse owners, and niche programmers will be priced out of radio ownership if more consolidation is allowed, some are likely to continue to oppose any change in the radio ownership rules just as they have opposed changes to the TV and cross-ownership rules in the pending Supreme Court case.

Small market radio provides its own challenges. In markets not rated by Nielsen, the FCC looks at the overlap of radio station’s service contours to determine which stations compete, and how many radio stations are in any market. In the smallest markets, a broadcaster can own up to 5 stations, no more than 3 of which can be in any service, and in no case can the broadcaster own more than half the stations in a market. Some small market broadcasters suggest that these limits often leave one or two weak stations in a market – stations that provide little local service. Just as many markets have a single newspaper (if they even have one); some argue that some smaller markets simply cannot support multiple commercial radio operators. Should the more successful stations in the market be allowed to own some of these orphan stations, or would further consolidation in the small markets foreclose service from some operator who might come up with a unique idea that could revive an otherwise failing station?

These are the issues that will likely face the new FCC as they finish the Quadrennial Review after the Supreme Court decision clarifies the issues that the FCC needs to consider in these reviews. Given the age of the record in this proceeding, the new faces at the FCC, and the guidance that will be coming from the Supreme Court decision, there are quite likely going to be additional comments filed in this proceeding before any final resolution takes place (see, for instance, the decision on Friday extending a temporary waiver for Fox to own two TV stations and a daily newspaper in New York through the end of the Quadrennial Review, apparently anticipating that further consideration will be given to the newspaper-broadcast cross-ownership rule if the Supreme Court does not itself uphold the 2017 FCC decision to abolish it). So it may be some time until the FCC will have the opportunity to evaluate its radio rules to see if they can catch up to the marketplace realities identified by the Chairman in last week’s speech.

This Week in Broadcast Regulation: December 12, 2020 to December 18, 2020

Sun, 20 Dec 2020 13:29:25 GMT

Here are some of the regulatory developments in the last week of significance to broadcasters -and a few dates to watch in the week ahead – with links to where you can go to find more information as to how these actions may affect your operations.

The FCC issued an order that locks in its authority to assess higher penalties against pirate radio operators and allows those penalties to be levied more quickly as the FCC does not need to first issue notice to the suspected pirate of its violation before imposing a fine. Under this authority granted by the PIRATE Act, operators of stations that do not have an FCC license could face fines of $100,000 per day, up to a total of $2 million. Landlords who are found to have “willfully and knowingly” allowed pirates to broadcast from their properties can also be subject to penalties. Two New York landlords this week received notices of illegal pirate radio broadcasting. Read the letters, here. We wrote about the PIRATE Act, here. (Order)
The FCC’s new rules for voluntary all-digital AM radio, except new procedures for notifying the Commission of a station’s intent to transition from analog to all-digital operations which still need Paperwork Reduction Act approval, will go into effect on January 4, 2021. We looked at the new rules, here. (Public Notice)
Nathan Simington was sworn in virtually by Chairman Ajit Pai as the newest FCC Commissioner. His term runs through June 30, 2024. Commissioner Simington joins Ajit Pai and Brendan Carr to form the Republican majority that will hold until Pai leaves the agency on January 20, 2021. Not much is known about the new Commissioner’s views on broadcast matters, but it is thought that he will favor deregulation. The broadcast industry will be watching closely to see who he names to his staff and how familiar those people are with broadcast issues. Simington can be found on Twitter at @SimingtonFCC. (Commission Simington Bio)
Commissioner Pai, in a virtual speech to the Media Institute, reviewed the changes made during his watch in FCC broadcast regulations. He also called for further relaxation of the broadcast ownership rules. He said these rules no longer make sense, as they restrict the growth of broadcasters, making it harder to compete for audience and advertisers with broadcasters’ new adversaries – the essentially unregulated tech giants. These digital competitors are some of the biggest companies in the US economy and dwarf the size of the biggest broadcast company. (Pai Speech). Look for our thoughts on those issues, particularly for the radio industry, on our blog on Monday.
In the latest step in the Supreme Court’s review of the FCC’s 2017 media ownership rules, Prometheus Radio Project and its partners submitted their reply brief arguing for the Court to uphold the Third Circuit Court of Appeals’ rejection of the 2017 rule changes. The Court will hear oral argument on January 19. (Prometheus Brief).
In connection with the Supreme Court’s review, which could reinstate the FCC’s 2017 abolition of the newspaper-broadcast cross-ownership rules (a decision overturned by the Third Circuit’s opinion), the FCC extended Fox’s authority to operate two TV stations in New York City where a commonly controlled company operates a daily newspaper. The continuing authority would stay in effect at least until the Supreme Court releases its decision and, if the Court does not resolve the issue, until the FCC completes its next Quadrennial Review of the ownership rules assessing whether there is a continuing need for the newspaper cross-ownership rule. (Order)
New procedural rules for filing carriage complaints against multichannel video programming distributors (MVPD) go into effect on January 19, 2021. The new rules require a carriage complaint to be filed within one year of the event that triggers the complaint, not within one year of a party notifying the MVPD of its intention to file a complaint. (Federal Register)

Looking ahead to next week, we will learn what items will be on the agenda for the Commission’s January 13, 2021 meeting and should see drafts of those items. The January meeting will be Chairman Pai’s final Open Meeting and Commissioner Simington’s first. There are also comments due by December 24 in two proceedings. By that date, interested parties should submit their comments on the FCC’s plan to enhance and standardize on-air sponsorship identification of programming provided to US stations by foreign governments. Also due on December 24 are comments in the proceeding that seeks to clarify which TV licensee is legally responsible when simulcast programming from one licensee is broadcast on the subchannel of a station owned by another licensee, including programming that airs on a host station’s subchannel as the ATSC 1.0 “lighthouse” signal of another station that has converted to NextGen TV (ATSC 3.0). We covered this issue in more detail, here.

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

Sun, 13 Dec 2020 05:35:32 GMT

The FCC, at the last of its monthly open meetings of 2020, voted to adopt new rules for Broadcast Internet (datacasting) services. The FCC clarified its rules for the annual ancillary and supplementary fees of 5% of a TV broadcaster’s revenue for leasing their spectrum to third parties. The lessee’s revenue will not be included as part of the revenue subject to the fee unless the broadcaster and lessee are affiliated. The Commission also decided to reduce the fees to 2.5% of the revenue from any noncommercial educational Broadcast Internet services that are provided by a noncommercial licensee. Finally, the Commission retained its requirement that TV broadcasters who offer Broadcast Internet services offer at least one, free, over-the-air standard definition video signal. (Report and Order)
At the same meeting, the FCC also voted to require electronic payment of fees for activities administered by the Media Bureau. Noting infrequency of payments by check and the cost savings of eliminating processing those payments, the Commission will phase out its lockbox used to accept manual payments and will instead require payment of Media Bureau fees by credit card or electronic wire transfer. This rule change takes effect 30 days after it is published in the Federal Register, though the lockbox will remain open for 90 days past that effective date. (Order)
The FCC terminated its proceeding that asked if a TV channel in each market should be set aside for use by unlicensed wireless devices and wireless microphones. Microsoft and others argued for a vacant channel in each market, saying that the certainty of available spectrum would spur innovation and development of wireless devices. Television broadcasters argued against the proposal, saying that losing another channel in the UHF band would harm broadcasters’ ability to deliver new services and roll out NextGen TV (ATSC 3.0). The Commission acknowledged that due to the reduction of channels after the incentive auction and because of other actions it has taken over the last few years making spectrum available for unlicensed wireless uses, setting aside a vacant channel in every market was not necessary. See our post, here. (Report and Order)
The Senate voted this week to confirm Nathan Simington as the newest FCC Commissioner. Simington takes Commissioner Michael O’Rielly’s spot. When Chairman Ajit Pai leaves the agency on Inauguration Day, the FCC will stand at two Democrats and two Republicans, depriving President Biden of a majority at the agency until a new Democratic Commissioner is confirmed, potentially delaying action on controversial matters that the a Chairman may want to pursue. See our post on Commissioner Simington, here.
Two actions this week by the FCC give examples of the circumstances under which construction permit extensions will be granted or denied.
- The Audio Division dismissed a petition filed by a California AM permittee that sought to have its construction permit deadline extended. After extensions in the construction deadline due to COVID-19 issues, the permittee asked the FCC to further pause the deadline due to continuing COVID issues and the poor air quality from wildfires that the permittee claimed interfered with construction. The FCC found that the station had not submitted any proof of any construction progress, and it could not tie that lack of progress to any of the causes that it cited. The Commission noted that COVID did not justify additional extensions as the State of California considers broadcast services and construction essential critical infrastructure not subject to COVID restrictions. As the permittee could not show that there were extraordinary circumstances that prevented all construction progress, the FCC found that the construction permit has expired. (Letter)
- The FCC dismissed a petition by a Florida noncommercial permittee that asked for its construction permit to be reinstated after several extensions had been granted and passed without the station being constructed. Since 2015, the permittee received construction extensions based on hurricanes and the elimination of the main studio rule. The permittee asked for a further extension to review new construction plans. The FCC denied that further extension as the permittee, despite requests from the FCC to tie the potential change in construction plans to hurricane-caused delays, never did so. As the permittee could not show that it had been making real efforts to construct the station or that its efforts were delayed by extraordinary circumstances, the FCC refused to reinstate the permit. (Order on Reconsideration)
The House of Representatives passed the Marijuana Opportunity Reinvestment and Expungement Act (MORE Act), which would decriminalize marijuana at the federal level. To become law, the bill would also have to pass the Senate and be signed by the President before the end of the current Congressional session in early January—which appears unlikely. Thus, broadcast stations should continue to think twice about running any marijuana advertising on the air. We wrote about the MORE Act, here.

MORE Act Passes House – But Don’t Rush to Run Marijuana Ads on Your Broadcast Station

Thu, 10 Dec 2020 15:17:25 GMT

Last week, there was much written in the press about the MORE Act passing in the House of Representatives, taking actions to decriminalize marijuana under federal law. This would include removing marijuana from Schedule I, which is the list of drugs whose use for almost all purposes is prohibited in the United States. The passage of this bill through the House, though, should not be taken as a sign to start running marijuana advertising on your broadcast station – though there are some signs that the day on which that advertising can be run may be in sight.

First, it is important to remember that this bill passed only in the House of Representatives. Without also being approved by the Senate and being signed by the President, the House’s action had no legal effect. Because of the way that Congress works, if the bill does not pass the Senate in the current legislative session, which ends in the first few days of January 2021, the whole process must start over again – bills do not carry over from one Congressional session to another. So, to become law in the new year, a new Congress would have to start with a new bill, and a new House of Representatives and a new Senate would both have to vote to adopt the legislation.

Press reports have indicated that the Senate is unlikely to pass this legislation before the session ends, so marijuana will remain forbidden under federal law, no matter what individual states may say. As we have written before many times (see for instance our articles here and here), as a federal licensee, broadcasters run a real risk in running marijuana advertising even if they operate in a state that has legalized its use. The FCC, being a federal agency which enforces federal law, could be forced to take actions against a licensee for running this advertising if a complaint is filed against a station running such ads – including during the ongoing license renewal process. In addition, there are still federal criminal penalties for promoting Schedule 1 drugs, including a specific prohibition against using radio waves to promote its sale and distribution. But does that House action signal movement in the future?

For years, we have seen the entire Congress include language in budget bills restricting the use of federal funds to prosecute entities that sell medical marijuana in states where that sale has been legalized. As we noted here, that permission has been limited to medical marijuana, and it only applies for the year for which the budget bill provides federal spending authorization. In dismissing cases brought by federal authorities during the term of one such spending limitation, a court specifically noted that the budget provisions do not legalize the underlying conduct, they just don’t allow funds to be spent to prosecute the activity that is still a crime under federal law. These budget provisions do not limit an agency like the FCC from spending its funds on regulatory matters relating to marijuana, so a broadcaster cannot take comfort from these limitations on spending.

These limitations on spending, which have consistently been approved by Congress for many years, along with the House action on the MORE Act, could signal a new willingness by some in Congress to revisit the criminalization of marijuana under federal law. In recent years, including in the November election, some state laws have been changed to legalize recreational marijuana, with many states legalizing medical marijuana use, including in states that most would consider as being “conservative.” We are also looking at a Democratic administration taking office in January. In the last Democratic administration, the Department of Justice issued prosecutorial guidelines that limited federal actions against banks who processed funds from cannabis-related businesses that were legal in the states in which they operated, as long as those businesses met some federal guidelines to prevent specific harms (see our article here). Some had viewed this hands-off approach as one that should be applied to the broadcast industry, though the last FCC did not take a similar action.

But, with a new administration and a new Congress in 2021, and a different regulatory status in many states across the country, one can see that there has been a general shift in the regulatory climate surrounding marijuana legalization. That shift could well lead to further rule changes in the near term. Until then, broadcasters should act with caution, but should stay alert to see how future regulatory actions play out.

FCC Terminates Proceeding to Dedicate TV Channel in Each Market to Unlicensed Wireless Use

Wed, 09 Dec 2020 16:13:59 GMT

One of the last questions about the repacking of the television spectrum following the television incentive auction was whether there would be a UHF television channel set aside in each television market for unlicensed wireless uses. Microsoft and other tech companies have been pushing for that set aside for years, arguing that more capacity for wi-fi-like services and wireless microphones was needed. These parties argued that there was room in the television spectrum for the set aside of a single 6 MHz channel in every market for these unlicensed wireless uses that would be protected from encroachment by new or modified TV operations. The broadcast industry naturally opposed this proposal which would further diminish the already curtailed television spectrum. Yesterday, the FCC finally decided the question by closing the proceeding without taking any action to set aside any channel for these wireless users.

In terminating the proceeding, the FCC looked at the TV spectrum following the repack and determined that there were numerous TV markets in which there was no vacant UHF channel to dedicate to these wireless users. There was certainly no vacant channel that could be consistently used across the country so that manufacturers of equipment would have a nationwide dedicated channel for certainty as to where their devices would work. In addition, since the proposal was first advanced, other spectrum has been made available by the FCC for unlicensed wireless users. Even in the spectrum used by TV stations, white spaces devices are allowed to operate where they do not cause interference to existing TV stations (see our articles here, here, and here). Because of these developments, and the burdens that protecting a channel for unlicensed wireless users would put on continuing TV operations and the expansion of such operations (e.g. though the use of DTS, see our article here), the FCC decided to terminate the ongoing proceeding without taking any action on the proposals that had been made. This appears to have been a unanimous decision of the Commission, so it is one unlikely to be revisited by any new FCC after the change of administration.

New FCC Commissioner Nathan Simington on the Way

Wed, 09 Dec 2020 16:03:45 GMT

The Senate this week confirmed Nathan Simington for the seat on the FCC currently held by Michael O’Rielly. It is expected that Mr. Simington will be sworn in as a new Commissioner later this week, allowing Commissioner O’Rielly to serve through tomorrow’s FCC open meeting where he will likely give his farewell comments to the FCC and communications audience. Commissioner O’Rielly has generally been a friend to broadcasters, championing many causes for the industry, including changes to the Children’s Television rules and fighting pirate radio. Broadcasters will certainly miss his voice at the FCC.

Commissioner Simington comes to the FCC with a relatively low-profile background. He has been a lawyer for less than a decade, and his communications background appears to be limited to serving as an in-house lawyer for a wireless service company and working at the NTIA (the administration within the Commerce Department charged with developing communications policy for the administration and oversight over government spectrum). At NTIA, he worked to some degree on the administration’s proposals for the FCC to interpret provisions of Section 230 of the Communications Decency Act (see our posts here and here) – proposals currently under review by the Commission. His outlook as a Republican appointee seems to generally be a deregulatory one, though his specific thoughts about broadcast regulation have not been set out in any detail.

With his confirmation, it appears that the FCC, upon Chairman Pai‘s announced departure from the FCC before the Biden inauguration, will be split with 2 Democrats and 2 Republicans until a Biden nomination to the open seat now held by the Chairman can be made and confirmed by the Senate. So, at least for the near term, it would appear that there will not be significant substantive regulatory changes at the FCC. Of course, whether there will be any change in philosophy that affects more day-to-day FCC activity depends on specific appointments to leadership positions within the agency, including the selection of an interim chairperson until a permanent chair is selected by the new President. We will be watching as the changing of the guard unfolds at the FCC in 2021.

$125,000 FCC Penalty to Broadcaster for Tower Structure and Contest Rule Violations – ...

Mon, 07 Dec 2020 17:27:45 GMT

Last week, the FCC announced a Consent Decree with a Florida broadcaster, with the broadcaster admitting violations of several FCC rules and agreeing to pay a $125,000 fine and enter into a consent decree to ensure future compliance. The violations addressed in the decree include (i) the failure to monitor tower lights and report that they had been out for significant periods of time, (ii) the failure to update the Antenna Structure Registration (ASR) of the tower to reflect that the broadcaster was the owner, (iii) not following the announced rules in conducting certain contests, and (iv) broadcasting seemingly live content that was in fact prerecorded, without labeling the programming as having been prerecorded. While the details of the violations are provided in only summary fashion, these violations all serve as a reminder to broadcasters to watch their compliance – and also highlight the apparent interest of the FCC in enforcing the rule on seemingly live but prerecorded content, a rule rarely if ever enforced until this year.

Looking at the contest violations first, the Consent Decree gives a general description of the contests in question in a footnote. One contest was apparently a scavenger hunt. The station had intended for the contest to run for an extended period, but a listener found the prize soon after the on-air promotion began. To prolong the on-air suspense, the station agreed with that listener to not reveal that she had won. The station continued to promote and seemingly conduct the contest on the air for some time, until finally awarding the prize to the original winner. In another contest, the station gave prizes to people who called in at designated times during the day. According to the allegations in the Consent Decree, fake call-ins were recorded by the station to be broadcast during times when there were no live DJs. As we have written before (see our articles here and here), the FCC requires that stations conduct on-air contests substantially in the manner set out in the announced rules for that contest – and the broadcasts about the contest cannot be materially misleading. The FCC concluded that these contests did not meet that standard, and also found another problem with those prerecorded call-ins to the station.

The FCC found that these pre-recorded segments violated the rule against the broadcast of seemingly-live but prerecorded programming that was not labeled as having been recorded. We wrote about that rule earlier this year when the FCC imposed a substantial fine on a broadcaster who, for months after the host had died, broadcast re-runs of a call-in program without telling the audience that the program had been prerecorded. We noted then that this was a rare fine for the violation of this rule – and now we have our second instance where that rule is cited by the FCC. As stated in last week’s consent decree:

The Commission has a longstanding goal of protecting consumers by ensuring that the public knows when certain program material is “live,” rather than taped, filmed, or recorded. Consistent with this goal, Section 73.1208 of the Rules requires licensees to disclose that material is prerecorded when “time is of special significance, or . . . [when] an affirmative attempt is made to create the impression that it [i.e., the program material] is occurring simultaneously with the broadcast.”

As we noted in our article about the case earlier this year, many broadcasters probably did not realize that this rule existed until that fine. And even though we now have another penalty being assessed for the violation of the rule, we still do not have clear guidance as to exactly when enforcement actions in this area will be taken. The FCC has cited the language of the rule requiring the labeling of pre-recoded programming, Section 73.1208, to say that broadcasters must disclose to their audience that program material is prerecorded when “time is of special significance, or . . . [when] an affirmative attempt is made to create the impression that [the program material] is occurring simultaneously with the broadcast.” In both the current case and the one earlier this year, audience call-ins were involved. In the earlier case, the program was billed as program where listeners could call in to have questions about health issues discussed. That program even used the word “live” in its title. In last week’s case, the call-ins were purported to be call-ins from listeners trying to win a contest. Thus, it seems clear that trying to pass off pre-recorded calls as being live failed the requirements of the rule. How else it may be applied remains to be seen. We wrote more about the rule and its likely application in our prior article on the subject. Review our discussion, the recent cases, and the text of the rule, and talk to your own legal advisors as to how this rule might impact your on-air operations.

Finally, the Consent Decree faults the station for issues concerning its tower. The FCC received a complaint that tower lights were out for an extended period of time without the FAA having been notified. That, of course, is a real concern as it threatens the safety of aircraft. The FAA is to be notified immediately when tower lights are out, and a broadcaster has an obligation to regularly monitor those lights to make sure that they are working. In investigating the tower light outage, the FCC discovered that the registered owner of the tower had not owned it for years – and in the Consent Decree, the FCC faulted the new owner for not updating the ASR within 5 days of a change in ownership as required by the rules.

Last week’s consent decree highlights many regulatory obligations of which broadcasters need to be aware. Think about these obligations and make sure that your operations are in full compliance with all of these rules.

This Week in Regulation for Broadcasters: November 28, 2020 to December 4, 2020

Sun, 06 Dec 2020 15:05:54 GMT

FCC Chairman Ajit Pai announced his intention to leave the FCC by January 20, the day that President-Elect Joe Biden is inaugurated. Pai has been at the Commission since 2012 and has led the Commission as Chairman since President Trump elevated him in 2017. The news release announcing his departure highlights some of the issues he hopes will be part of his legacy. (News Release)
- In other FCC personnel news, Nathan Simington’s nomination to fill the Commission seat now held by Michael O’Rielly moved ahead after the Senate Commerce Committee, along party lines, voted to advance his nomination. The next—and final—step is a vote by the full Senate which would have to be done before the current Senate session adjourns at the beginning of January. If not completed by the end of the session, the nomination and confirmation process would have to begin again. Senate Majority Leader Mitch McConnell (R-KY) plans to take up the nomination soon, but certain Democratic senators have indicated they may try to delay or derail a vote on Simington’s nomination. Should Simington be confirmed, the agency, with the departures of Chairman Pai and Commissioner O’Rielly, would be deadlocked at two Democratic and two Republican Commissioners in the early months of the Biden Administration until a new Democratic Commissioner is nominated and confirmed. We wrote about Simington’s nomination, here.
- Commissioner Michael O’Rielly sent a farewell email and video to FCC staff on Friday afternoon that recognized that his departure from the agency is imminent. O’Rielly can serve only until the adjournment of the current congressional session in early January or until his successor is confirmed and sworn in, whichever comes first.
The Commission released a Notice of Proposed Rulemaking that seeks comment on allowing FM boosters to originate a limited amount of programming that is different from the programming being aired on their primary station. Proponents of this “zonecasting” idea believe that boosters could deliver hyper localized news, weather, emergency alerting, and advertising. Interested parties should review the NPRM, consult with their technical experts, and begin drafting their comments as the FCC wants detailed input on the technical and operational aspects of the proposal. Comments will be due 30 days after the NPRM is published in the Federal Register. See our blog post, here, for a detailed look at the proposal. (Notice of Proposed Rulemaking)
The FCC’s International Bureau issued an updated list of C-band incumbent earth station lump sum reimbursement elections, showing that nearly 98% of lump sum elections were accepted. The Bureau also released an updated list of incumbent earth stations eligible for reimbursement. Operators of earth stations should carefully review these documents to make sure that their operations are properly reported so that any reimbursement to which they are entitled will not be jeopardized.
The FCC announced that television stations in DMAs 61 through 70 that are covered by the expanded audio description rules should be preparing to comply with the new rules beginning January 1, 2020. (Public Notice). We noted the FCC decision to expand the obligations to provide audio descriptions of certain broadcast TV video programming here and here.
A Florida FM licensee will pay a $125,000 fine after admitting to failing: (i) to conduct the required daily inspection of an antenna structure’s lighting system, (ii) to notify the FAA about a lighting failure, (iii) to register an antenna structure with the FCC, (iv) to conduct two contests in a manner substantially as announced by pre-selecting the winners in those contests, and (v) to disclose that programming broadcast over the station during a supposedly live call-in contest was prerecorded. (Order)
A West Virginia TV station was admonished for its failure to comply with the FCC’s rules for commercial limits in children’s programming. The station disclosed in its license renewal application that a website URL was displayed for about a half of a second during the closing credits of a program directed at children 12 years or younger. Stations cannot include in children’s programming the URL of a website whose primary purpose is to sell merchandise related to the program. In this case, the Video Division found that that the website was not primarily noncommercial in nature. The Division also noted stations are ultimately responsible for the programming on their air, even if the program was, as it was here, supplied by a network or other programmer. See the FCC’s letter for more details on these issues.
The FCC rejected a petition by a party asking the Commission to reconsider its policy against awarding “secondary” grants in groups of mutually exclusive noncommercial educational FM applications. (Order on Reconsideration). We wrote here about the FCC’s reasoning for maintaining its processing policies that exclude such secondary grants.
The FCC finalized rulemaking proceedings amending the TV Table of Allotments to change the channels of three TV stations from VHF to UHF channels. The FCC had agreed to start processing these requests several months ago despite a freeze on channel changes and other coverage modifications for TV stations (see our article here). These orders noted that the recent FCC decision to lift the filing freeze on TV technical applications that expand a station’s service area, making any waiver of that freeze unnecessary. (FCC Orders granting requests for channel changes in Mesa AZ, Minneapolis MN and Portland OR). As the lifting of the TV freeze has now become effective, expect more changes in the technical facilities of TV stations soon.

Next week, on December 10, the FCC will hold its last Open Meeting of 2020 at which it will vote on new rules for Broadcast Internet (ATSC 3.0) services. The new rules will clarify how the Commission will calculate the annual ancillary and supplementary fees owed by broadcasters that lease their spectrum to third parties and, if the FCC’s tentative order is adopted, will reduce the fees owed by noncommercial broadcasters that offer noncommercial Broadcast Internet services. Unchanged in the new rules is the requirement that broadcasters providing these ancillary services must continue to offer at least one standard-definition over-the-air signal. We are also watching a late addition to the meeting agenda—an Order that will require electronic payment of fees for activities administered by the Media Bureau. No additional details are currently available, but most broadcasters already pay their fees by credit card and electronic wire transfer.

FCC Starts Rulemaking on Possible Adoption of GeoBroadcast Solutions Zonecasting Proposal to ...

Fri, 04 Dec 2020 17:20:30 GMT

Zonecasting – the proposal by GeoBroadcast Solutions to allow FM boosters to originate limited amounts of programming different than their primary station – has advanced at the FCC though the release this week of a Notice of Proposed Rulemaking formally asking if the FCC should adopt rules permitting this service and, if so, what those rules should be. We wrote about the initial proposal earlier this year when it was first received by the FCC. The proposal would allow an FM broadcaster to use an FM booster to geo-target ads and news to different parts of its service area by putting this different information (up to 5% of a station’s hourly programming) on a booster. So, for instance, a station could be running an ad for a car dealer in one part of its market on its main station and originate an ad for a different local dealer in another part of the market by originating that programming on a booster – with both ads running at the same time. This week’s NPRM asks numerous questions on many aspects of the proposal.

These questions generally center in three very general areas. First, the FCC asks about the technical issues (would the service cause interference as boosters operate within the primary station’s 1 mv/m service area and operate on the same channel as the primary station – and would this system work with HD radio operations). Second, it asks about the operational issues (questions about how much origination should be allowed, what kinds of programming could be originated, how many different boosters should be allowed for each main station, and how the service would be rolled it out). Finally, it asks about business and policy questions (including whether this is really a good thing for the industry and its economics). We will provide a little more color on each of these areas below, but first it is worth mentioning the FCC’s treatment of a comment that was filed when this proposal was first advanced – seeking to expand this proposal to cover translators as well as boosters (see our article here on that proposal).

In the initial comments filed earlier this year when the rulemaking request was first filed, a coalition of smaller broadcasters asked that the proposal be expanded to include FM translators (including those that rebroadcast AM stations) as well as boosters – and that the 5% limit on the amount of origination be significantly expanded to allow as much as 40% origination. The argument was that with this expanded origination potential, these translators would be able to not just originate different commercials or newsbreaks, but also more in-depth regionalized programming, e.g. separate high school sports games in different parts of the primary station’s market. The FCC in the NPRM saw this as a different issue from the one being advanced by GeoBroadcast Solutions and decided to not consider that proposal in this proceeding. Instead, if interested parties wanted to pursue that idea, the FCC suggested that they petition to start a separate proceeding to look at rule changes that specifically apply to translator operations.

Let’s look at some of the specific questions asked by the FCC on the proposal that is being considered in this NPRM. First, there are the technical issues. The FCC’s concerns on technical matters worry about several different issues. These include:

The amount of interference that will arise between boosters and the main station, whether that interference would be acceptable to listeners, and how it should be evaluated or limited by the FCC (or should it be simply left to the discretion of the broadcaster)?
The potential to interference to other stations. While boosters are contained within the 1 mv/m of their primary station and operate on the same channel, do they pose any concerns for other stations as they will be separate transmitters located throughout the service area of the primary station?
Should there be specific power limits on the boosters to minimize interference areas?
Whether the system will work for HD operations – and if so, would the boosters be allowed to originate just the primary audio stream of the HD station, or could it also include the subchannels broadcast by the primary station – and would origination be allowed on those subchannels, too?

Second, the FCC looked at operational issues (some of which may be influenced by the technical questions):

Is a limit on origination of 5% of hourly programming the right limit?
What kinds of origination should be allowed? The proponent of the rulemaking suggested that the originated programming be substantially similar to that being broadcast on the primary station – but what does that mean?
Should there be a limit on how many boosters taking advantage of the origination rules one company can have?
Should noncommercial FM stations as well as commercial stations be allowed to take advantage of any new rules? If so, are there different issues that arise in the noncommercial context?
How many requests are likely to be filed, and should the FCC set up a staggered application system to prioritize applications for new boosters from any particular class of station?

Finally, on the business and policy issues (that also overlap with some of the issues listed above), the FCC is generally to be asking whether this proposal was really a good idea. The FCC asked questions including:

Would the idea promote localism?
What impact it would have on advertisers?
Would smaller stations be able to afford to make this conversion?
Would some listeners end up being ignored by this targeted programming?
How would it impact different FCC rules, e.g. public file rules for issues like political broadcasting where, for instance, different political ads could run in different parts of a station’s market?

There may well be concerns of broadcasters on many of these issues. In the initial comments, several broadcasters worried about the general degradation of the FM band from more and more signals creating pockets of interference here and there. What would listeners reactions be to such interference?

Others worry about the impact on the economics of smaller stations dependent on local advertising dollars to support their local service. If a big central-city station can originate unique ads in different outlying parts of its metropolitan area, will these ads impinge on the ability of stations targeting these outlying communities to support their locally-targeted programming? Will big regional stations in more rural areas be able to do the same thing – compete for local dollars in each smaller community in its service area – dollars that currently go to stations that just serve those smaller communities? It is interesting that the NPRM does not even mention Section 307(b) of the Communications Act, that requires the FCC to allocate service among the communities of the US. Section 307(b) has long been cited as requiring the assessment of the impact of a new service on service that is being provided to local communities.

We can expect this will be a contentious proceeding with comments coming in on all of these issues. Resolution will likely not come until later next year, and perhaps even some time after that. To express your views, be ready when the comment dates in this proceeding are announced. Comments will be due in 2021 – 30 days after the NPRM is published in the Federal Register. Reply comments will be due 60 days after the Federal Register publication.

Broadcasters and Giving Tuesday

Tue, 01 Dec 2020 15:47:55 GMT

This has obviously been a most unusual year. So, on this Giving Tuesday (and it is also near my birthday, perhaps contributing to the desire to do something different), I thought that I would depart from our usual coverage of legal and policy issues and talk about something else – broadcasters giving back. Broadcasters have long been known for their service to their communities, service celebrated in a statement by soon-to-depart Chairman Pai and in a tweet from Commissioner Rosenworcel (a potential replacement for the chairman in a new administration) on commercial radio’s 100^th anniversary last month. And while broadcasters are always giving back to their communities and should be celebrated for that, those of us who make our living in some aspect of the industry should recognize that there are plenty of ways for us to give back as well – both to those in the industry who are not as fortunate as some of the familiar success stories we hear, and to those who need assistance in obtaining education and training to enter the media industry we so appreciate.

During this year, those of us who have remained healthy and employed are truly blessed. While it may be a cliché, you don’t realize what you have until it is gone. We should all be thankful for jobs, friends and good fortune, and I urge readers who can to give back where possible. In the broadcast industry itself, there are many groups doing good work. One in particular that I think bears mention is the Broadcasters Foundation of America, which provides relief to broadcasters and former broadcasters who have, for one reason or another, fallen on hard times – whether that be for health reasons or because of some other disaster that has affected their lives. The Foundation deserves your consideration. More about the Foundation and its service, and ways to contribute, can be found at their website, here.

For readers of the Blog in the Washington DC area, including the many DC lawyers who read our articles, the Federal Communications Bar Association, the association of lawyers who work with communications companies, has its own Foundation that is active in helping in the DC community, including in giving scholarships to local students. More on the FCBA foundation, here.

In a normal year, I spend significant time on the road, visiting with broadcasters and others in the media industry at state and national conventions. While this year has been different, we should still remember that many state broadcast associations run charitable foundations – often using the funds that they receive to provide for internships and scholarships to students interested in the broadcast industry. Because of the cancellation of many broadcast conventions this year, many of these foundations have not been able to conduct their auctions, raffles and other fundraisers that help fund these organizations. What could be a better investment than training the next generation of broadcasters to be prepared to provide the service from radio and TV that the public will demand tomorrow and into the future? Contact your local state broadcast association for more information about these foundations.

In addition to the broadcast world, I often write on this Blog about music issues. While I am not as familiar with all the charitable organizations in the music industry as I am with those in broadcasting, there are many – and there are many in need this year with much of the industry, especially live events, upended by the pandemic. For those music industry readers, do your own research and find one of the many charitable organizations that benefit different groups in the industry, and consider them in your end-of-year giving.

These are but a few of the many ways for broadcasters and those in the broader media industry to contribute to their communities. As we begin to gear up for what will no doubt be a different holiday season, all of us should consider how we can give back – whether it is monetarily, though service, or in other ways. Enjoy your success and remember others as well.

December Regulatory Dates for Broadcasters: License Renewals, EEO Filings, DTV ...

Mon, 30 Nov 2020 16:23:35 GMT

December is a busy month for broadcasters with routine filings to complete and action on FCC proceedings that will carry over to the next administration. Keep on top of these dates and deadlines even as your calendar fills up with holiday celebrations.

We start at the beginning of the month, with December 1 being the deadline for the filing of applications for the renewal of license of radio stations in Colorado, Minnesota, Montana, North Dakota, and South Dakota, and TV stations in Alabama and Georgia. These stations should have already reviewed their public file (as we noted here, stations should pay particularly close attention to their political files) and be putting the finishing touches on their renewal application (see our article about license renewal preparation here).

These December 1 stations are the first group to file license renewal applications subject to the FCC’s new rules for post-filing announcements. The FCC has eliminated the previous announcement schedule that required announcements on the 1^st and 16^th of each month during specific time periods for three months and now requires six announcements over a four-week period, beginning on the date the FCC announces that the renewal application has been accepted for filing. The new rule also requires commercial and noncommercial stations that are not operating when their renewals are filed to post a notice on their websites or, if the station does not have a website, on the website of a parent or affiliated company, or if the station does not have such a site, on some publicly accessible site (like a community bulletin board, local newspaper site, or that of a state broadcasters association). Stations with translators also need to post online notice about the translator’s renewal its primary station’s website. Check out all the new local public notice rules, here, and read our posts providing more details about these requirements here and here.

Stations filing for license renewal must also submit FCC Form 2100, Schedule 396, also known as the Broadcast Equal Employment Opportunity Program Report, even if they are not part of a station employment unit with five or more full-time employees. A station employment unit is one or more commonly controlled stations in the same geographic area that share at least one employee.

On or before December 1, full power radio and TV stations licensed to communities in Alabama, Connecticut, Colorado, Georgia, Maine, Massachusetts, Minnesota, Montana, New Hampshire, North Dakota, Rhode Island, South Dakota, and Vermont with five or more full-time employees in their station employment unit must upload to their online public file an annual Equal Employment Opportunity report detailing the employment unit’s hiring and outreach efforts from December 1, 2019 to November 30, 2020.

By December 1, digital television stations that provided ancillary or supplementary services between October 1, 2019 and September 30, 2020 must submit FCC Form 2100, Schedule G, and pay in fees 5% of the gross revenue derived from any ancillary or supplementary services provided. Ancillary and supplemental services do not include non-subscription video channels delivered directly to the public but do include any other services provided over the station’s spectrum from which the station receives compensation, including “computer software distribution, data transmissions, teletext, interactive materials, aural messages, paging services, or audio signals, [and] subscription video.” Stations that provided no such services are no longer required to file a report.

At the Commission’s December 10 Open Meeting, the Commissioners will vote on new rules for Broadcast Internet (ATSC 3.0) services. The principal changes addressed in the FCC’s draft order are clarifications of the rules on the annual ancillary and supplementary services fee. The changes in the draft order include reducing the fees to be paid by noncommercial television stations that offer new noncommercial, non-broadcast services through their ATSC 3.0 operations. Ancillary services are not allowed to “derogate” the broadcast service and, in the draft order, the Commission would retain its current interpretation of “derogate” as meaning that a station must continue to offer at least one standard definition television programming channel.

By December 10, radio stations that entered into a consent decree with the Media Bureau over violations with their online political file in the first round of consent decrees that were released in August and September must submit their first compliance report. This report documents compliance with the political file rules from October 4, 2020 through Election Day on November 3, 2020. These stations must email their compliance spreadsheet to the FCC’s political programming staff. The spreadsheet does not get uploaded to the station’s public file. Review your consent decree closely for any other requirements applicable to your operations. We wrote about the consent decrees, here.

Reply briefs in the FCC v. Prometheus Radio Project case are due to the Supreme Court by December 16. This case is a review of a lower court’s decision to reject the FCC’s 2017 broadcast ownership changes. These briefs follow the briefs filed in November (you can read them here) by the FCC (through the Solicitor General), the National Association of Broadcasters, and other broadcast industry parties. The Court is set to hear oral arguments on January 19, 2021 and then issue a decision later in the year. See our post on this case, here.

Comments are due by December 24 in two FCC proceedings. The first proceeding is a proposal to enhance and standardize sponsorship identification requirements for broadcast programming that is paid for, or provided by, foreign governments or their representatives. The proposed rules set out specific disclosure obligations to inform audiences of a foreign government’s influence over the programming to which they are listening or viewing. Reply comments are due by January 25, 2021.

The second proceeding is an attempt to resolve an open question raised by the NAB about which licensee is legally responsible for the simulcasted programming from another licensee, including programming that airs on a host station’s subchannel as the ATSC 1.0 “lighthouse” signal of another station that has converted to NextGen TV (ATSC 3.0). See our blog post, here, for more details. Reply comments are due by January 25, 2021.

We are also expecting a Notice of Proposed Rulemaking from the FCC on the proposal to allow FM boosters to transmit limited amounts of programming different than that being broadcast on their primary station. This “zonecasting” proposal would allow for different commercials or news reports to be broadcast in different parts of a station’s service area. See our articles here and here on the initial FCC request for comments on this proposal.

The FCC may also adopt an order on its proposal to expand the use of television distributed transmission systems, as a draft item was circulated among FCC Commissioners for their review last week. See our article here on the Notice of Proposed Rulemaking on this proposal adopted by the FCC earlier this year.

Be sure to check with your station counsel for more details about these dates and whether there are any other important dates this month applicable to your station’s operations. We wish you a safe, healthy, and happy holiday season – but keep watching for additional regulatory matters that may arise as we count down the remaining days of this year (and as we anticipate the start of a new administration at the FCC in January).