Broadcast Law Blog

Broadcast Law Blog

Bill Introduced in Congress to Repeal FCC Information Collection Requirements for Noncommercial Biennial Ownership Reports

Posted in General FCC, Noncommercial Broadcasting

A bill was introduced in Congress this week (see press release here) proposing to roll back the FCC’s requirement that noncommercial broadcasters, in connection with the Biennial Ownership Reports that are due by December 1 of this year, get an FCC Registration Number for every person who has an attributable interest in a noncommercial licensee. As we wrote here and here when the FCC adopted this requirement, and here when the FCC’s Media Bureau rejected reconsideration petitions just a few weeks ago, that would require noncommercial stations to get the Social Security Number from each of their Board members (or a substitute set of personal information including the last 4 digits of the Social Security Number) in order to apply for the FRN. While the personal information would not be made public, many worry that Board members, especially those serving on the Board of an organization where the broadcast operations are but a small part of the institution’s mission (e.g. a Board member on the Board of a university that has a radio license) would be reluctant to provide that information – and either discourage people from participating on the Board or put them in peril of FCC enforcement actions if they refuse to provide their personal information.

The introduction of the bill was hailed by Commissioner O’Rielly in a statement (here), where he expressed his hope that the information collection requirement would be repealed, either through this legislative action or by the FCC under the new administration which will start its work next week. Either way, noncommercial licensees may see some relief from this obligation. Stay tuned to see how this develops in the coming months.

Petitions to Participate in Copyright Royalty Board Proceeding to Establish Royalty Rates for Business Establishment Services Due by February 2, 2017

Posted in Intellectual Property, Music Rights

Early this month, the Copyright Royalty Board announced that it will be starting a new proceeding to set the royalty rates to be paid by “business establishment services” for the rights to make ephemeral copies of sound recordings. The rates will apply for the period 2019-2023. Interested parties must file a Petition to Participate by February 2, along with a statement of their interest in the proceeding, and a check for $150 to cover filing fees. Details on the filing requirements are set out in the CRB’s Notice.

As we have written before, the “business establishment service” is different from most other CRB royalty proceedings. The parties subject to the royalty are the service providers who package music programming to be played by businesses and distribute that programming to these establishments like bars, restaurants, and retail stores. The establishments themselves have no obligation to pay a public performance fee for the sounds recordings played at their businesses (though they do have to pay for the underlying musical composition – the words and music – to performing rights organizations like ASCAP and BMI – see our articles here and here). But the services who package this programming and make temporary copies of the sound recordings in order to transmit that programming to their retail customers, are deemed to owe a royalty for the “ephemeral copies” that they make. In the past, these CRB cases have usually settled, establishing a percentage of revenue royalty with a fairly large upfront minimum fee (see our article here on the last settlement setting the rates at 12.5% of revenue with a minimum fee of $10,000). Parties who file to participate in this upcoming proceeding will be able to engage in settlement discussions over the new royalty or, if those discussions are not productive, to participate in the hearings that the CRB will hold in order to set the rates.

As Super Bowl Approaches, Advertisers Should Be Aware of The NFL’s Efforts to Protect Its Golden Goose – 2017 Update

Posted in Advertising Issues, Intellectual Property, Trademark

Last year, we posted some guidelines about engaging in or accepting advertising or promotions that directly or indirectly alludes to the Super Bowl without a license from the NFL. We are at that time of year again, so here is an updated version of our prior post.

In addition to the monies it receives annually for the right to broadcast the Super Bowl, the NFL receives more than $1 billion in income from licensing the use of the SUPER BOWL trademark and logo. Not surprisingly, is extremely aggressive in protecting its golden goose from anything it views as unauthorized efforts to trade off the goodwill associated with the game. Accordingly, with the coin toss almost upon us, advertisers need to take special care before publishing ads or engaging in promotional activities that refer to the Super Bowl. Broadcasters and other news publishers have latitude to use the phrase “Super Bowl” in their news and other editorial content, but they need to wary of engaging in activities, particularly in advertising and promotion, that the NFL may view as trademark or copyright infringement. (These risks also apply to the use of “Final Four” or “March Madness” in connection with the upcoming NCAA Basketball Tournament.)

Simply put, the NFL views any commercial activity that uses or refers to the Super Bowl to draw attention as a violation of its trademark rights. Many of the activities challenged by the league undoubtedly deserve a yellow flag. However, the NFL’s rule book defines trademark violations very broadly. If anyone were willing to throw the red flag to challenge the league’s position, a review from the booth might reverse some of those calls. Continue Reading

Background on the GMR/RMLC Dispute – 5 Questions on the Basics of the Controversy

Posted in Broadcast Performance Royalty, Intellectual Property, Music Rights

Commercial radio broadcasters have been seeing numerous communications over the last week about Global Music Rights (GMR) and its seemingly contentious music royalty negotiations with the Radio Music License Committee (RMLC). Many stations are confused about this controversy and what it is all about. The 5 questions below, and the links at the end of the questions, try to shed some light on the issues. Stations need to carefully consider their options, and seek advice where necessary, to determine what they will do by January 31 with respect to the interim license that GMR has offered to stations. The questions below hopefully provide some background on these issues.

 What is GMR and why isn’t the music they represent covered by the other organizations like BMI, ASCAP, and SESAC?

 GMR is a new performing rights organization. Like ASCAP, BMI and SESAC, they represent songwriters and collect royalties from music users for the public performance of these songwriter’s compositions. They will collect not just from radio, but from all music users – they have already reached out to business music services that provide the music played in retail stores, restaurants and other businesses and no doubt have or will license other companies that make music available to the public. Most songwriters represented by GMR used to be represented by ASCAP or BMI, but these songwriters have withdrawn from ASCAP and BMI and joined GMR, allegedly to attempt to increase the amounts that they are paid for the use of the songs that they have written. For radio, these withdrawals became effective on January 1 of this year, when the old license agreements between ASCAP and BMI and the commercial radio industry expired.

What does a station need to, in order to protect itself while negotiations are going on?

Because the penalties for playing a song without a license can be as much at $150,000 per song, stations either need to purge all GMR music from their stations or sign a license agreement with GMR. If you decide to purge their music from your stations, don’t forget about music that may appear in commercials or syndicated programming. Also remember that we are talking about the musical composition, not the recording of the song by any particular band or singer. Even the broadcast of a high school band playing a GMR song at half time of some football game, or the broadcast of a local middle school choral concert, could trigger the royalty obligation to GMR. Continue Reading

First Chance for New FCC to Deregulate – Abolition of Requirement to Maintain Public File of Letters from the Public About Broadcast Station Operations on January 31 Tentative Agenda

Posted in AM Radio, FM Radio, General FCC, Public Interest Obligations/Localism, Television

The FCC yesterday released its tentative agenda for its January meeting, to be held on January 31. This will be the first meeting of the post-Chairman Wheeler era, and the two Republican commissioners will be in the majority for the first time in 8 years. There is a single item on the tentative agenda – the abolition of the requirement that broadcasters maintain a paper public file, open for public inspection, containing letters and emails from the public about station operations.  The order also deals with the obligation of cable operators to maintain information about their headends in their public file. We wrote in more detail about the FCC’s proposal to abolish this requirement, here. On January 31, we may see the first deregulatory actions of this new Republican-majority Commission. It will be worth watching to get our initial indication of how the regulatory treatment of broadcasters may change under the new Administration.

FCC Extends Comment Dates on Petitions for Reconsideration of the Media Ownership Rules

Posted in Multiple Ownership Rules

The FCC today announced that it is extending, by one week, the time in which to file comments on the Petitions for Reconsideration of the FCC’s decision on media ownership rules. The challenges, about which we wrote here, deal with issues including the local television ownership limits, the newspaper-broadcast cross-ownership rules, the attribution for multiple ownership purposes of television stations subject to joint sales agreements, and the counting of radio stations in a local ownership compliance analysis when those stations are located in “embedded markets.” The new deadline for comments on the reconsideration petitions is now January 24, with reply comments now due February 3.

 

FCC Clarifies Public File Obligations for Identifying Issues and Sponsors for Political Ads – Admonishes Numerous TV Stations for Violations

Posted in Advertising Issues, Political Broadcasting, Television

Late Friday, the FCC’s Media Bureau issued an order (at this time available in Word format only, here) clarifying its public file rules for political ads – both ads from candidates and from third-party groups.  The FCC’s clarifications require broadcasters who run candidate or issue advertising to include information about not only the candidates mentioned in an ad, but also any Federal issues that the ad addresses.  On sponsorship identification, the FCC focused on third-party ads, requiring that broadcasters make an inquiry as to the complete set of executive officers or the complete board of directors of any sponsor.  The FCC went on to admonish a number of stations for violating the rules but, as the rules were just clarified, only admonished these stations rather than issuing any fines. This decision was in response to complaints filed by the Campaign Legal Center and the Sunlight Foundation alleging the public file omissions of these stations – complaints that we wrote about here.

The FCC’s order interprets Section 315(e) of the Communications Act, which sets the rules for the disclosures required for political ads.  Under that Section, any political ad that deals with a legally qualified candidate, an election for a Federal office, or with any political issue of national importance, must disclose a variety of information.  That information requires that, in connection with any request for political time, the station must disclose in its public file (1) whether or not the request was accepted, (2) the class of time purchased, (3) the price at which it was sold, (4) the name of the candidate that the ad addresses or the election to which it is directed or the issue discussed, (5) if the ad was bought by a candidate’s authorized committee, the name of the committee and its treasurer, and (6) if the ad was not placed by a candidate’s committee, the name of the sponsor and, where the sponsor is not an individual, the name of the sponsor’s chief executive officers or its executive committee or its board of directors, plus the name, phone number and address of a contact person at the committee.  These requirements were clarified in several respects by the FCC’s order. Continue Reading

A Broadcasters Calendar of Regulatory Obligations for 2017

Posted in AM Radio, FM Radio, General FCC, Internet Radio, Political Broadcasting, Television

At the beginning of each year, we publish our broadcaster’s calendar of important dates – setting out the many dates for which broadcasters should be on alert as this year progresses.  The Broadcasters Calendar for 2017 is available here.  The dates set out on the calendar include FCC filing deadlines and dates by which the FCC requires that certain documents be added to a station’s public file.  These dates just recently changed for noncommercial broadcasters as the FCC suspended its requirement that noncommercial stations file Biennial Ownership reports every other anniversary of their license renewal filing (see our post here). Instead, their reports will be due on December 1 deadline which is the deadline for all stations, both commercial and noncommercial, to file these Biennial reports. That deadline is included on this calendar. In some states there are political windows even in what seemingly is an off year for elections (two governors and several big-city mayoral races are particularly noteworthy). The date for the beginning of the lowest unit rate window for the November general election is on the calendar, but stations need to check locally for primary dates and for any special elections that may be held in their service areas. Also included are some copyright deadlines, including dates to make payments to SoundExchange for Internet streaming royalties.

While the dates on this calendar may change, and new ones may be added, this at least gives you a start in planning your regulatory obligations. And, remember, you should always talk to your own attorney to make sure what dates are important to you.

FCC Denies Reconsideration of Noncommercial Broadcasting Ownership Report Requirements – But Signs that New Commission May See Things Differently

Posted in EEO Compliance/Diversity, General FCC, Multiple Ownership Rules, Noncommercial Broadcasting

The FCC’s Media Bureau yesterday issued an order denying reconsideration of the full Commission decision from last year, synchronizing the Biennial Ownership Report filing requirement for noncommercial broadcasters with that of commercial broadcasters, and requiring that all individuals who have attributable interests in these stations obtain an FCC Registration Number (an “FRN”)(see our summary of the FCC order from last year here). Yesterday’s decision triggered a rapid objection from the Commission’s Republican Commissioners, promising to review this decision after the Inauguration when Republicans will likely control the FCC. What is the controversy?

Obtaining an FRN requires supplying the FCC with an individual’s Social Security Number (“SSN”). Last year’s order also provided that stations could obtain a “Restricted Use FRN” for attributable interest holders who did not want to provide their SSN to the FCC, but such individuals would still have to provide at least the last 4 digits of their SSN, along with other specifically identifiable information including their residence address and date of birth. While none of this information is public (it is merely stored in FCC databases that issue the FRN), many noncommercial licensees objected to the requirements, believing that members of their governing boards, who are considered attributable owners for FCC purposes, may be very reluctant to provide that information to stations or the FCC. They pointed particularly to situations like university or other stations operated by educational institutions, where board members volunteer not because they are interested in broadcasting, but instead because they hope to influence the educational objectives of the university. The fear is that having to provide this information could discourage people from serving on these governing boards of educational and similar institutions. In some cases, noncommercial station board members have no real choice about their service – the position is required by virtue of public posts such as university president or school superintendent. See our summary here of those objections. Continue Reading

FCC Approves Up to 49% Foreign Ownership of Univision – What Guidance is Provided to Potential Foreign Investors in US Broadcast Stations?

Posted in General FCC, Multiple Ownership Rules, Public Interest Obligations/Localism

In a decision released yesterday, the FCC issued a Declaratory Ruling permitting certain identified foreign companies and individuals to own up to 40% of the voting interests in Univision, and allowed aggregate foreign ownership of up to 49% of the equity of the company. This decision noted that it was based not on the new rules for analyzing foreign ownership in broadcast stations approved by the Commission in late September (see our summary here), as those rules were not yet effective as they were only published in the Federal Register last month and certain aspects still needed to undergo analysis under the Paperwork Reduction Act. Instead, the request for the ruling in this case was analyzed under the 2003 Declaratory Ruling on ownership (see our summary here), the same ad hoc analysis used to review and approve Pandora’s acquisition of a radio station in 2015. While technically, the new rules did not apply to this proceeding, it is clear that the analysis of this decision would not be much different, as the Commission specifically refers to the new rules as setting what is reasonable in its ad hoc analysis of the circumstances of this case. Thus, this decision provides a good basis for determining what issues any potential foreign investor in a US broadcast station would face, particularly when investing in a public US company.

Even though the FCC looked to the new rules for guidance, the final conditions look much like those imposed on Pandora. Univision is required to seek specific approval for any acquisition of stock by any foreign shareholder not specifically approved in this order if that investor seeks to acquire an interest (either voting or equity) of greater than 5% of the company. The company must actively monitor its shareholders to assure that no specific foreign shareholder exceeds that 5% threshold and that foreign ownership does not exceed the aggregate 49% limit. The company cannot simply rely on the address of its shareholders in making a determination as to whether or not they are foreign, but instead must use reasonable efforts as defined in the October order (and set out in our summary) to establish the citizenship and ownership of its investors. The company also must insure that its organizational documents provide that, if any foreign owner causes the station to violate one of the restrictions imposed by the Declaratory Ruling, the company can redeem the stock of the owner. The company must also have provisions providing for the right to restrict foreign ownership and the right to require disclosure of citizenship information. The decision also notes that Executive Branch agencies had reviewed the proposal and did not find any potential security issues. Continue Reading