Broadcast Law Blog

Broadcast Law Blog

Radio Music License Committee Settles Antitrust Suit Against SESAC – What Does it Mean for the Radio Industry?

Posted in AM Radio, Broadcast Performance Royalty, Digital Radio, FM Radio, Intellectual Property, Internet Radio, Music Rights

Yesterday, it was announced that the Radio Music License Committee (RMLC) settled its lawsuit with SESAC (see the press release here, and the full agreement here), where the RMLC had charged that SESAC’s practices in collecting its music royalties from the radio industry violated the antitrust laws (we wrote about the filing of the lawsuit here). While there was no admission of guilt by SESAC, it did agree that, between now and 2037, it will negotiate royalties with RMLC on an industry wide basis (up to now, SESAC could negotiate on a station-by-station basis). If RMLC and SESAC can’t agree to a royalty, the royalty rate will be set by an arbitrator – and past SESAC royalties would not have any precedential value in such proceedings (broadcasters have contended that past SESAC rates are far more, in comparison to those charged by ASCAP and BMI, then would be warranted based on the percentage of music from SESAC writers that is played on most radio stations). In subjecting SESAC to industry-wide negotiations and potential arbitration, the settlement is very similar to the deal reached in antitrust litigation between SESAC and the TV Music License Committee (about which we wrote here).

The settlement also tracks the structure of RMLC agreements with ASCAP and BMI (see our articles here and here) in that future SESAC licenses will cover broadcasters not only for their over-the-air programming, but also for their Internet streams and their HD channels (which were charged separately by SESAC for many stations). However, the agreement provides that the unitary license should not diminish the total royalties that would have been paid by the industry to SESAC if these rates were negotiated separately.   In other words, the effect of the unitary license is simply administrative convenience – everything is covered by a single license, so each station does not need multiple licenses from SESAC for its normal broadcast activities. However, unlike the ASCAP and BMI agreements, this agreement puts limits on this unified coverage for a broadcaster’s business that is outside the retransmission of the broadcaster’s over-the-air signals, excluding on-demand subscription services (presumably ruling out Rdio, in which Cumulus has an interest, from being covered by the radio license), and also excluding music-intensive custom radio, specifically ruling out Pandora and iHeartRadio from relying on this license for their online services. The agreement also says that other music users that are not primarily radio operators cannot get coverage for these other non-broadcast businesses simply by buying a radio station. What else does the agreement provide? Continue Reading

Church Programming Not Exempt From Captioning Requirements – FCC Looks to Total Assets of Programmer in Denying Economic Exemptions, and Decides There are No Religious Freedom Constitutional Issues

Posted in Digital Television, Noncommercial Broadcasting, Programming Regulations, Public Interest Obligations/Localism, Television

In several recent cases, the FCC has denied exemptions from the requirement that programming carried on TV stations and MVPDs have closed captions to serve the hearing impaired members of the viewing audience. While exemptions from these requirements are allowed if a programmer can demonstrate that the captioning would present an economic hardship, these waivers are difficult to receive as a programmer must show that, looking at its overall operations, there are insufficient financial resources to afford the captioning for the program (see our article here). In the recent cases, the FCC has looked beyond simply the net income of the programmer in deciding if the programmer is financially capable of paying for the captioning, and in cases released yesterday, the FCC also looked at the overall assets of the programmer to see if it has the capacity to caption the program. Even if funds must be diverted from other programs of the programmer, the availability of funds to the programming organization was enough for the FCC to deny the requested exemption. Specifically, in the three recent cases, religious organizations which produced a single program claimed that, in order to caption their programs, they would have to divert resources from other programs. The FCC found that, as long as the money is there, the programs need to be captioned even if other activities of the organization suffer.

The FCC made that clear in a case decided a few weeks ago. There, it decided that, if a church had sufficient income to pay for captioning, even if it had to divert resources from other “ministries” engaged in by the church, it could not escape the obligation to caption its program. That case was relied on in another decision released yesterday, where a religious organization had been operating at a close to break-even mark over the two years for which it provided its finances, as the FCC said that it had sufficient assets to pay for the captioning – not relying solely on the income of the organization. In another case involving a larger church with greater income and expenses (which were also roughly in balance in the last two years according to the financial statements provided), the FCC there too looked to the current assets of the church (including investments in securities, bank deposits and pledges receivable). The fact that these assets were significantly in excess of current liabilities, led to a determination that captioning was financially feasible for this church. The FCC also rejected an argument that its rules placed an unconstitutional burden on religious freedom – finding that the burden was one imposed on all programmers and was not directed to religious programmers, and was therefore constitutional. So what does it take to get an exemption? Continue Reading

A Compulsory License for Internet TV Platforms to Retransmit Broadcast TV? One US District Court Considering FilmOnX Seems to Think So

Posted in Cable Carriage, Digital Television, Internet Video, On Line Media, Television, Website Issues

 

Over-the-top video systems, using the Internet to transmit over-the-air TV signals to consumers, are back in the news. Last week, a US District Court Judge in the Central District of California, in a case involving FilmOnX, an Aereo-like service that had been involved in many of the court decisions that had preceded the Supreme Court’s Aereo decision, suggested that such platforms can get that public performance right through the statutory license provided by Section 111 of the Copyright Act – the same section of the Act that allows cable systems to retransmit broadcast signals without getting permission from every copyright holder of every program broadcast on those stations. Just last year, we were writing about the Supreme Court decision in the Aereo case, where the Court determined that a company could not use an Internet-based platform to stream the signals of over-the-air television stations within their own markets without first getting public performance rights from the stations themselves. The new decision raises the potential of a new way for these Internet services to try to get the rights to rebroadcast TV signals.

The FilmOn decision was on a motion for summary decision, and is a very tentative decision – the Judge recognizing that he was weighing in on a very sensitive subject, going where both the FCC and the Copyright Office have thus far feared to tread, and disagreeing with the Second Circuit Court of Appeals that had held the opposite several years ago in the Ivi decision. The FilmOn decision is a preliminary one – subject to further argument before the Judge at the end of the month. Even if adopted as written, the judge recognized the potential impact of his decision, and the fact that it contradicted Ivi and other decisions. Thus, the decision stated that its effect would be stayed pending an immediate appeal to the Ninth Circuit Court of Appeals. So, even if finalized, we have not seen the last of this argument yet. Continue Reading

$90,000 Payment to FCC by TV Owner for Claiming Reruns of One-Time Programs as Meeting “CORE” Children’s Educational and Informational Programming Requirement

Posted in Children's Programming and Advertising, FCC Fines, License Renewal, Low Power Television/Class A TV, Television

On Friday, the FCC announced a consent decree for violations of the requirements that TV stations provide at least three weekly hours of CORE programming addressing the educational and informational needs of children. The operator of eight TV and Class A TV stations in the southeast US agreed to make a $90,000 “voluntary contribution” to the Federal government and to adopt new practices to insure future compliance with the CORE programming requirements. The FCC had held up the license renewals of many of its stations as the licensee had claimed reruns of one-time programs as fulfilling the CORE requirements. As explained in the FCC’s Order, the FCC does not consider such programming to meet the requirements of the children’s television rules.

Under the rules, the FCC has the following requirements for CORE programming meeting the educational and informational (“E/I” in the language used by the FCC) needs of children:

(1) serving the E/I needs of children ages 16 and under is a significant purpose of the programming;

(2) the program is to be aired between the hours of 7:00 a.m. and 10:00 p.m.;

(3) the program is a regularly-scheduled weekly program;

(4) the program must be at least 30 minutes in length;

(5) the program is identified as being specifically designed to educate and inform children through the on-screen display of the E/I symbol throughout the program;

(6) the educational objective and the target child audience are specified in writing in the licensee’s Children’s Television Programming Report; and

(7) the licensee must provide instructions for listing the program as E/I, including an indication of the age group for which the program is intended, to publishers of TV program guides.

In this case, the licensee was deemed to have violated criteria number 3 above – as its programming was not “regularly scheduled.” Continue Reading

March 29, 2016 Proposed in FCC Documents for Start of TV Incentive Auction

Posted in Broadcast Auctions, Digital Television, Incentive Auctions/Broadband Report, Television

It looks like the dates for the FCC incentive auction (where some broadcasters will sell their spectrum to the FCC to be repackaged and resold to wireless companies for wireless broadband purposes) are becoming clear.  After this week’s delay of the consideration of the incentive auction items (see our article here), the drafts of the FCC orders that were not considered at yesterday’s meeting have now appeared on the list that the FCC maintains of items that are circulating among the Commissioners for consideration.  The list includes the following entry with a March 29 auction start date (the June 25 date being the date that the item was first circulated to the Commissioners, “WTB” referring to the FCC’s Wireless Telecommunications Bureau that wrote the order) :

06/25/2015 WTB Broadcast Incentive Auction to Begin March 29, 2016; Procedures for Competitive Bidding in Auction 1000, Including Initial Clearing Target Determination, Qualifying to Bid, and Bidding in Auctions 1001 (Reverse) and 1002 (Forward)

So, for the first time, we have a date attached to the start of the incentive auction. If the incentive auction does in fact go forward as set out in this document in March of next year, the preliminary filings by broadcasters and wireless companies expressing intent to participate in the auction could be due late this year or very early next year, though obviously we don’t know those dates yet.

One cautionary note, this notice with the March 29 date refers merely to an item being circulated – it could be voted down or modified before it becomes final.  This date, as well as detailed procedures for the auction, will become more definitive after the FCC meeting on August 6.  But this notice certainly gives us a look at where the FCC is heading in their incentive auction planning. A deadline focuses the mind – and this date, even if preliminary, should focus all TV broadcasters on their plans for the incentive auction.

Jonathan Cohen of my office and I will be doing a webinar for the Michigan Association of Broadcasters, which will be made available through several other state broadcast associations, in August (it was to be on August 4 but will likely be postponed until after the FCC’s August meeting).  Contact your state association for information as to whether or not they will be participating in the webinar and for registration information.

FCC Asks for Comments on Petition for Rulemaking that Would Tie TV License Renewals to Restrictions on Blackouts after the Expiration of Retransmission Consent Agreements

Posted in Cable Carriage, Digital Television, Intellectual Property, License Renewal, Public Interest Obligations/Localism, Television

The FCC issued a public notice seeking comment on a Petition for Rulemaking filed by cable operator Mediacom asking for the FCC to require TV stations, in their license renewal applications, to certify that the licensee will not block any multichannel video programming distributor (i.e. cable or satellite TV) from carrying the signal of the station at the end of a retransmission consent agreement unless the station is accessible over-the-air or by Internet streams to at least 90% of the homes in the market served by the MVPD. Comments on this Petition are due by August 14. This is an initial Petition for Rulemaking (which can be viewed here), so these comments will inform the FCC as to whether to further pursue the proposals made in the Petition through a formal Notice of Proposed Rulemaking which would be needed before a rule change.

Obviously, this petition raises controversial issues. Mediacom asserts that it is looking after the interests of consumers in being able to access television programming – and not losing that access during retransmission consent negotiations. Broadcasters, on the other hand, feel that the ability to remove their signal from an MVPD is their most effective bargaining chip in retransmission consent negotiations. Broadcasters will no doubt argue that they have the rights to their programming and, if the MVPD will not agree to terms for its carriage, the MVPD should no longer have the right to carry the programming. Continue Reading

FCC Delays Consideration of TV Incentive Auction Procedures

Posted in Broadcast Auctions, Digital Television, Incentive Auctions/Broadband Report, Television

The FCC was today supposed to be considering the adoption of a public notice that would specify the detailed procedures to be used in the incentive auction (see our articles here and here).  In the incentive auction, the FCC will buy the spectrum used by a number of TV stations, repack the remaining TV stations into a more compact TV band, and then resell the vacated spectrum to wireless companies for wireless broadband and other wireless uses.  However, yesterday, it was announced that the consideration of these matters would be delayed until the FCC’s August 6 meeting.

The details of the auction are incredibly complicated. In recent weeks, a number of proposals have been raised about the use of the “duplex gap” between the wireless frequencies to be used for the upload and the download of wireless communications, specifically including debates about whether TV stations that do not sell out in the auction, and don’t fit into the repacked TV band in congested markets, could end up in this band. If TV stations end up in the duplex gap, it would displace unlicensed spectrum users, including wireless microphone users, that were initially to use the spectrum and it could potentially create consumer reception issues for any TV stations that end up in this spectrum removed from the adjacent TV stations, where the spectrum would be used for TV in only a limited number of markets. Continue Reading

FCC Takes Hard Line on Efforts to Keep Alive Expiring Construction Permits for Both New FM Stations and Modifications of Existing Stations

Posted in FM Radio, Public Interest Obligations/Localism

In the last month, the FCC has released two decisions dealing with efforts by holders of expiring FM construction permits to retain the rights to construct the technical facilities authorized by that permit beyond the expiration date of the permit. In one case, the FCC announced a policy that, from now on, the construction of temporary facilities will be insufficient to warrant the grant of a license application for a new station. In another case, the FCC decided that a station that had an expiring construction permit for modified facilities to upgrade its station from a Class C1 to a Class C0 station, which had twice expired before and been replaced by a new CP each time, was subject to a competing applications filed the day after the expiration of the most recent CP. It is clear from these cases that the FCC’s Audio Division is taking a hard line on the three year deadline on the construction of new facilities for FM stations, and is reluctant to preserve expiring permits, especially if the permit blocks opportunities for the use of the frequency elsewhere.

The first case involved a permittee of a new station who, immediately before the expiration of the three years that it was given by its construction permit to build the station, turned it on and filed a license application that was quickly granted by the FCC. About 10 days later, the new licensee requested authority to go silent while it sought approval of its construction plans for a permanent facility. The station remained silent for almost a year, before recommencing temporary operations from a different transmitter site pursuant to an STA. When the licensee filed for the renewal of its license and another application to move to a different transmitter site and to change city of license, a competitor objected, arguing that the licensee had misrepresented facts to the FCC about whether its station was ready for its initial operations from its original site and contending that the original license should never have been granted. Continue Reading

Our Quarterly Review of the Legal and Regulatory Issues Facing TV Broadcasters

Posted in Digital Television, General FCC, Incentive Auctions/Broadband Report, Low Power Television/Class A TV, Multiple Ownership Rules, Programming Regulations, Public Interest Obligations/Localism, Television

Each quarter, my partner David O’Connor and I update a list of the legal and regulatory issues facing TV broadcasters. That list of issues is published by TVNewsCheck and is available on their website, here. Our latest update was published today, and provides a summary of the status of legal and regulatory issues ranging from the adoption of the ATSC 3.0 standard at one end of the alphabet to White Spaces and Wireless Microphones on the other – with summaries of other issues including JSAs, the Incentive Auction, EEO compliance, and Sponsorship Identification, along with dozens of other topics, many with links to our more detailed discussions here on the Blog. So if you are wondering what legal and regulatory issues TV broadcasters should be considering this summer, or are looking for the current status of any proceeding potentially impacting TV broadcasters, check out our most recent updated summary, here.