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In a decision released this week, the FCC fined a station group in Alaska for violations of its EEO Rules.  The station group had failed to do any outreach for about a quarter of its job openings.  However, what was notable about the decision was that the Commission also faulted the licensee for using only one website for recruiting for another quarter of its job openings.  The FCC decision stated that reliance on the Internet as the sole recruitment source for job openings was insufficient to achieve the required wide dissemination of notice of the job opening, as the FCC did not believe that the Internet was sufficiently universal to provide notice of that opening to all groups within a entire community.

While in this day and age, it is certainly questionable as to whether Internet access is less ubiquitous than newspaper readership, this is the Commission's position at this point.  Thus, stations are advised that, to be in compliance with the Commission's rules, they must rely on sources in addition to the Internet when publicizing job openings. 

For more information about achieving compliance with the FCC's EEO rules, see our advisory outlining the rules and providing model forms necessary to document that compliance.

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At the Open Meeting on September 26, the Commissioners unanimously adopted a Second Order on Reconsideration and Second Report and Order resolving several issues regarding the children's television programming obligations for television broadcasters.  Specifically, the Order modifies the children's rules to clarify the FCC's rules regarding host-selling, the definition of commercial matter and the display of website addresses during children's programming, .  The Order also eliminates the cap on the number of preemptions that are permitted for a qualifying core program, and clarifies the limits on the repeat of core programs on multi-cast DTV channels.  The Order is a result of a Joint Proposal of Industry and Advocates that sought reconsideration and clarification of the Commission's 2004 Children's Television Order.  A copy of the Joint Proposal is available on the FCC's website here.  The Commission's News Release provides some details regarding the forthcoming Order, and we will post the full details of the modified rules once the text of the Order is released. 

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On August 18, we reported on meetings held between Senator Brownback of Kansas and representatives of the advertising community dealing with the subject of the advertising of "unhealthy foods."  It looks like those meetings have led to action as, according to a Hollywood Reporter story today, the FCC will be forming an obesity task force to look at such advertising.

FCC task forces often do nothing more than study an issue, but sometimes they develop  recommendations that lead to regulatory actions.  No matter where this task force ends up, broadcasters need to stay involved in the process to make sure that it does not lead to ill-defined rules that are difficult or impossible to comply with.  Can you imagine having to weigh the fat content or caloric impact of all foods that are being advertised on your station?  Might you have to channel McDonald's chicken McNuggets ads to some late-night safe harbor, while the ads for salads would be permissible at any time of day?  The permutations that are possible are both innumerable and a little frightening.  This is a proceeding that bears careful monitoring by the broadcaster.

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At a continuing legal education seminar held by the Federal Communications Bar Association a week ago, Bobby Baker, the FCC’s chief of the Office of Political Programming, confirmed an issue that has been confounding broadcasters for many months. In recent years, several organizations, including Google’s dMarc service, have begun to take remnant advertising inventory from broadcasters, and to market that inventory on-line. For this left-over spot time, prices that are charged for such time are often less than a local advertiser would pay for similar time on the same radio station.

Given that we are now in a political window, the issue has been raised as to the impact that the sale of a station’s advertising time through one of these on-line services has on the services lowest unit rate for political candidates. The simple answer given last week was that, if a commercial advertiser can buy a particular spot on a particular station using an on-line service, and that spot carries with it the same rights that a spot purchased directly from the station has (e.g. it runs in the same time period, has the same protections against pre-emption, it carries similar make-good rights), then the spot must be considered in the station’s lowest unit rate analysis for spots of the same class. While not specifically addressed by Bobby at the seminar, it would seem that  even if the spot has unique properties from spots sold locally (e.g. high level of preemptibility, no make good or preemption protection, a different rotation), it would form a different class of time that must be offered to the candidate who requests information about all classes and rotations, even if the candidate buys direct without using one of these electronic services. Spots sold through these on-line services would be like spots sold by a station’s rep firm, which similarly must be considered in a lowest unit rate analysis.

However, if the spot is sold as part of a package with other stations, where the advertiser buys on a cost-per-thousand basis or based on some other form of audience delivery, and where the advertiser does not have the ability to buy spots on any single station, then the spot does not impact on the station’s lowest unit rate. This would be an application of the FCC’s policy with respect to unwired networks and other sales of multiple stations, which has held that such sales do not affect lowest unit rates.  As other advertising issues arise during this political season, look for advice here.

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It has been reported that a draft Notice of Proposed Rule Making regarding the effects of communications towers on migratory birds is circulating among the Commissioners.  In April of this year, it was reported that an NPRM on this issue was expected in the (then) near future.  (See for example, TelecomWeb and BroadcastEngineering.)  It's now the end of September, and it seems this item is finally gaining traction, according to trade press reports.  These reports indicate that Chairman Martin's office is circulating a draft NPRM on the issue on among the FCC Commissioners.  In 2003, the Commission issued a Notice of Inquiry on this matter under then-Chairman Michael Powell, and opened a proceeding as docket WT 03-187.  Although the NPRM was not included on the agenda for this week's Open Meeting, it seems the item is no longer on the back burner.

Together with the FAA's current proceeding on requiring additional FAA applications when changes are made to communications towers (which we discussed in June, here), this new proceeding could make construction and modification of new towers more difficult.  Parties interested in commenting in this proceeding should sharpen their pencils and update their data, to be prepared when the NPRM is actually released.   

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Every two years, the FCC increases its application filing fees in order to reflect the change in the consumer price index.  As it has now been two years since the last increase, on September 6, 2006, the Commission released its Order adopting the new filing fees, which will apply until the fall of 2008.  The new fee amounts have been published in the Federal Register, and will become effective on October 17, 2006.  A copy of the Order including the full listing of the new application fees is available here.  And a few days before the new fees become effective, the FCC will post new fee guides organized by branches (Media Bureau, Common Carrier, etc.) on its web site here. 

Generally the increases are modest.  For example, in the broadcast realm the fee for ownership reports has increased from $55 to $60 per station; call sign changes have increased from $85 to $90; and assignment applications from $830 to $895 per station. 

So come October 17th, be sure to use the new fee amounts or else your application could be rejected by the FCC. 

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Today, the  FCC issued a Public Notice announcing a new FM Auction to be held on March 7, 2007.  This auction, designated Auction No. 70, will offer 124 construction permits for new FM allotments around the country.  A copy of the FCC's Public Notice is available here and a list of the 124 available allotments is available here.  Please note, this auction is separate and apart from Auction No. 68 which the FCC announced in August, and which offers for sale nine construction permits that remained unsold after two previous FM auctions.  Auction No. 68 is slated for January 10, 2007, and a listing of the nine allotments the FCC can't give away is available here.

With regard to Auction No. 70, the FCC's Public Notice solicits comments on the opening prices set for these 124 FM allotments, as well as on the rules that the FCC proposes to use for the auction.  Notably, the FCC proposes to not allow the withdrawal of any bids once a round of bidding has closed.  Those with auction experience may recall situations from previous auctions where standing high bids were withdrawn in the late rounds of bidding, leaving competing bidders scrambling, and often leaving those permits unsold at the conclusion of the auction.  Comments on the proposed opening bids and auction rules are due by October 5, 2006, and replies by October 13, 2006.  Once the comment period has run, more information regarding the timing of applications and the submission of upfront money to participate in the auction will be forthcoming.

 

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This afternoon, the Commission released an Order extending the time to comment in the recently re-opened multiple ownership rule making proceeding until October 23, 2006.  The comment deadline had been set for this Friday, September 22nd, but at the request of ION Media Networks, Inc. and others, the Commission decided to extend the time for filing comments by a month.  In addition, the deadline for Reply Comments in the proceeding have been pushed back and are now due by December 21, 2006. 

Based on Senator Barbara Boxer's recent revelations of suppressed internal FCC reports on multiple ownership issues, the extra time will not only allow interested third-parties more time to comment in the proceeding, it will also give the FCC time to consider what, if any, additional information it will add to the record itself. 

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As we reported on July 7 and 17, the FCC had intended to issue final rules on Ibiquity digital radio standard in July, but suddenly pulled the item off their agenda.  Currently, all broadcast stations operating in a digital mode are doing so on temporary authorizations pursuant to interim rules, and multicast operations are conducted pursuant to experimental authorizations. 

Rumors at the time, reported in our blog entries, attributed the delay to attempts to work out issues over the public interest obligations of broadcasters on their multicast channels.  Today, at the annual convention of the Maine Association of Broadcasters, an FCC representative, while not confirming that this was the basis of the delay, did say that there were requests by public interest groups for some quantification of the public interest obligations for these multicast channels, and also said that there was a pending proposal that leasing a digital subchannel to a community organization could be one way of meeting such obligations.

In thinking about this issue, it seems to me that the imposition of strict public interest obligations on these multicast channels may well impede their development.  These channels may be used in ways that are far different than traditional broadcast stations.  For instance, a station could use some of its multicast spectrum for an "all traffic and weather channel" (like that offered by satellite radio), or an all local sports channel.  Uses like these may develop as a way to give local audiences programming that they may want on demand, as a way to compete with satellite or on-line offerings.  If there are strict public interest obligations, requiring specified amounts of news or public affairs programs, the development of these innovative uses of the broadcast spectrum might be delayed.  The FCC should tread carefully, as they don't want to stifle the development of digital radio - or over-the-air radio's ability to compete with new technologies. 

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With only a week to go before comments are due in the FCC proceeding to determine whether or not to change the Multiple Ownership Rules (our summary of the issues on which the Commission sought comment can be found here), a controversy has arisen over a 2004 study concerning the effects of local ownership on news programming.  During the confirmation hearing on Chairman Martin's second term on the Commission, soon after the Chairman expressed his open mind about the outcome of the multiple ownership proceeding, California Senator Barbara Boxer produced a surprise.  She produced a report written by FCC economists purporting to show that television stations that are locally owned air more local news programming.  This report, though written in 2004, had never been released to the public.

The clear implication was that the Commission had tried to bury the report though as it contradicted FCC proposals to loosen ownership restrictions.  According to a report in TV Newsday,  the Chairman today sent a letter to Senator Boxer stating that neither he nor any of the other Commissioners knew of the existence of the report or any efforts to suppress its release.  However, in another news report released today, a former FCC attorney said that senior managers at the Commission ordered "every last piece" of the report destroyed. 

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A front page article in today's Washington Post reports that the National Republican Congressional Committee expects to spend about $45 million on negative campaign ads this year, attacking Democratic challengers on personal and character issues.  One academic quoted in the article indicated that this year's election may be "a more negative campaign that any in recent memory."

If the Republican Party spends money, no doubt the Democrats and other interest groups will be spending as well in this tight election with control of Congress potentially at stake.  For broadcasters, this means that they will be in for lots of controversy, and lots of work. 

When a legally-qualified candidate buys advertising time on a broadcast station, the station cannot censor that ad.  Therefore, the station is exempt from any liability for the content of that ad.  But when the ad is purchased by a non-candidate third party group, the station has no obligation to run the ad, and therefore, if the ad is defamatory, the broadcaster could have liability for running it.  Particularly if the broadcaster knows or suspects from the content of an ad that it is false, or is put on notice that the facts contained in the ad are untrue, the broadcaster faces liability if it does nothing to investigate the truth of that ad.  So, if a broadcaster is running an attack ad and gets a complaint about the truth of the ad (most likely from the candidate being attacked), the broadcaster needs to verify the truth of the claims being made before any further airing of the ad.  And usually the proponent of the ad will have reams of paper to support the claims that are made - support that needs to be evaluated by the broadcaster.

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Another executive of an on-line betting site was arrested late last week when changing planes in the United States.  According to a New York Times story, the executive of SportingBet was detained based on a warrant issued by Louisiana state authorities. 

As we wrote on July 18 and August 12, the arrest of an officer of BetOnSports.com caused the website to cease its operations in the United States.  This new arrest, based on the actions of state authorities, rather than Federal officials, may signal a new offensive against such sites.  In the past, we have found that many state authorities have been the first to approach broadcasters with threats of legal actions over advertisements for gambling websites.  This action may indicate that authorities will also be going after the sites themselves.

We warned in an August advisory that broadcasters needed to exercise great care in accepting advertising in any way related to on-line gaming.  Even the "dot net" sites, which don't take money for bets, but are for "educational purposes" or for fun using free points instead of money for betting, need to be approached with suspicion.  Check out the advisory for cautions on how to approach this increasingly hot topic.

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Today, the FCC released an order fining a station over $16,000 for not having a local main studio, for operating over its authorized power at night, and for not maintaining a local public inspection fine.  Many might think that these violations are obvious ones.  Yet weekly, the FCC issues notices of fines for stations all over the country.  So not all stations are paying attention.  Back in April, we published a bulletin highlighting a number of problem areas where the FCC has been finding violations and fining stations.  These are worth another look, as today's fine makes clear that the FCC remains vigilant in enforcing its rules.

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A few weeks ago, the New York Times featured an interesting article about the impact of Internet video and other new technologies on the traditional media.  The premise of the article is that big media players, like AOL, FOX and Disney are being forced into bold moves to keep up with the the Internet.  Decisions such as AOL's recent decision to from a subscription to a free service is one move cited by the article as being driven by the availability of free on-line content.  A comment by Rupert Murdoch that he would consider merging Direct TV with Echostar because of the competition from Internet video was another instance that the article cites as support for its premise.  This Sunday's Times featured another article on the impact of Internet technology on the distribution of music, including traditional radio.

These changes impact not only big media, but local media and small Internet players as well.  The choice provided by the Internet has already caused changes in everything from local television to Internet radio.  I started writing this post from rural Wisconsin, where I was for a family event.  Watching the local television station, WEAU-TV in Eau Claire, Wisconsin, I was somewhat surprised to see an a promotion for "build your own newscasts."  The station was promoting its website, and the ability to watch local news stories produced by the station on the website, watching only those stories that you want to see, when you want to see them.  This on-demand availability of new stories when done with local stories avoids most copyright issues.  And it allows local media to serve their audience in the way that the audience wants to be served. 

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This Friday, September 8, begins the 60 day "window" during which lowest unit rates will apply for broadcast advertising for the November 7 general election.  Stations should already be observing equal opportunities obligations and maintaining their political files, as these obligations exist as soon as there are legally qualified candidates, even outside of the political windows.  Reasonable access, the right of Federal candidates to demand to buy time on commercial broadcast stations, also applies as soon as there are legally qualified candidates.

According to reports in many publications, including the Wall Street Journal and Broadcasting and Cable Magazine, this may be one of the most active political broadcasting years ever.  With many observers believing that both the US House of Representatives and the Senate are potentially up for grabs, and there being many significant gubernatorial races in large states including New York, California, Texas and Michigan, money should flow into political advertising, straining the inventories of some broadcast stations in battleground states.  Now is the time, early in the campaign, for broadcasters to consider how to manage these political buys.  Remember that a station must give equal opportunities to opposing candidates to match spots run by their opponents within the prior 7 days.  So stations, when approached early in a campaign by candidates with lots of available funds, need to be careful about booking too many large buys from one side of a political race for spots to be run in the last days of the campaign.  By booking too many large buys now from only one side, the station may find itself, in the last few days of the campaign, with requests from the opposing candidate for equal time, which will have to be accommodated.  Accommodating those equal opportunities may require the preemption of commercial advertisers, something that stations may be loath to do to advertisers who will be around well after the political season ends.

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In our posting of July 17, we asked whether President Bush's comments to Tony Blair at the G-8 summit, which had occurred earlier that day, could get broadcasters who aired the unedited version into trouble under the Commission's indecency policies.  Well, it looks like the President may have indeed found a unique way to raise government revenue.  Press reports yesterday reported that  complaints were filed with the FCC asking that fines be imposed on stations that aired the President's comments without bleeping the "S-word."  Specifically, at least one complaint named a Maine television station airing the unedited comments, while another complaint was registered by the FCC about NPR's coverage of the event.

While unedited coverage of a news event had, in the past, in more tempered times, been found by the FCC to be permissible if the station felt that it was necessary to convey the context of the story (for instance, in the case of coverage of a mobster using some colorful language about the prosecution's case as he emerged from a courthouse).  But these days, with the recent FCC crackdown on even fleeting uses of expletives, stations are unsure of the law, and frightened of FCC actions.  And, with recently legislated higher indecency fines, which we reported on on June 16, the fears take on even more urgency for broadcasters.

For instance, CBS plans to air a documentary on 9-11, which includes footage of the reactions of emergency personnel at the site of the collapsing World Trade Center.  The reactions to the tragic events include some use of FCC-prohibited expletives.  This documentary has already aired twice on CBS without any adverse action.  Yet now, certain groups have reportedly suggested that complaints should be filed at the FCC about the upcoming airing of the program.  And now, reports state that at least one broadcaster has announced that they will delay the program until after 10 PM - in the FCC's "safe-harbor" where adult content will not be subject to FCC penalties as the potential for children in the audience is less.

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