March 2007

The FCC yesterday released a Public Notice announcing that the new Form 340 – Application for Construction Permit for Noncommercial Station – has been approved and is now effective.  This is the revised form that allows noncommercial FM stations operating in the educational reserved band to file for city of license changes as minor changes, rather…

The FCC yesterday approved the sale of the stock of Univision Communications to a consortium of private equity companies.  In order to approve the deal, the FCC agreed to a $24 million dollar payment to the US Treasury by Univision as part of a consent decree for alleged violations of the children’s television rules.  The consent decree, attached to the FCC decision on the sale, while providing for one of the largest fines ever paid to the FCC, provides little guidance to broadcasters on what constitutes educational and informational programming directed to children, the source of the violation found by the FCC. But the separate Statement of Commissioner Copps raises a new issue – one he looks for the FCC to study and report on – the effect of private equity and debt on the ability of broadcasters to operate in the public interest. 

The Copps opinion suggests that the debt incurred in connection with acquisitions by private equity companies may impair the ability of broadcast stations to operate in the public interest, as money needed for operations is instead funneled into debt repayment.  Of course, private equity firms are not the first owners of broadcast companies to incur debt, nor is there any evidence that I have seen that private equity companies which own broadcast companies have proportionally more debt than other broadcast owners.  What would the FCC hope to accomplish through such an investigation?  I can’t see the FCC evaluating each transaction that comes before it to determine if the proposed debt structure would be too much of a burden on the operations of a station.  Nor could I foresee the FCC putting broadcast ownership restrictions on certain classes of otherwise qualified potential broadcast owners.Continue Reading Follow the Money and Find the Public Interest?

Two press releases on the Internet radio music royalty controversy were issued late last week from groups appealing to musicians  – and they couldn’t have been more different in tone.  The Future of Music Coalition, a group dedicated to voicing the opinions of musicians and citizens on Washington policy decisions regarding copyright and technology issues, released a well considered  position statement finding that webcasters – especially small commercial webcasters and noncommercial entities – "represent a rich and diverse set of listening opportunities" which provide opportunities for musicians by exposing listeners to music that is not heard elsewhere.  FMC suggests that multiple tiers of licensing are necessary so that all kinds of webcasters can continue to exist (unlike the one size fits all scheme adopted by the Copyright Royalty Board).  FMC urges SoundExchange and the webcasters to come to a settlement that will preserve webcasting while fairly compensating musicians.

By contrast, SoundExchange argues in its press release that some webcasters are acting in bad faith in arguing that the rates are too high – and are "engaged in a campaign of misinformation about the process, the decision itself, and the impact of the decision on the participants."  The Press Release itself is subtitled "Suggests Some Webcasters Not Telling the Truth About the Royalty Process."  The release promises an attached summary of the Board’s decision but, at the time of this posting, that summary was not apparent on the SoundExchange website.  The only misrepresentation cited by SoundExchange is the claim by webcasters that the process which arrived at the rates was unfair.  However, as pointed out by editor Kurt Hanson (a client of mine in this proceeding) on the Radio and Internet Newsletter site, here, a decision that overlooks its real world effects can fairly be characterized as being unfair.  Information about the real economics of the industry, which SoundExchange may not have appreciated, demonstrates that unfairness.Continue Reading A Tale of Two Press Releases – Who Is A Musician to Believe?

At the Oklahoma Association of Broadcasters meeting last week, David Donovan, President of the Association for Maximum Service Television, discussed the digital television transition, and the significant issues that face television broadcasters as the February 17, 2009 deadline for the transition to digital television approaches. The theme of David’s message was that, for the transition to go smoothly, television broadcasters need to be actively planning now for that end date. Without planning and coordination now, some broadcasters won’t be ready for the transition deadline, and others may have difficulty operating interference-free because of the actions of others.

David’s presentation, DTV – When the Rubber Meets the Road – can be found on the MSTV website. Among David’s key points was that the Table of Television Allotments as adopted by the FCC, in order to compress all existing stations into the smaller television spectrum that will exist after the transition, relies on re-using channels that are currently being used by one station as the ultimate digital channel of another station in the same or adjacent market. Unless these stations coordinate their transition to digital, interference issues can result and, in some cases, the transition may be delayed. In the simplest example, a station might have both its analog and digital operations outside the “core” channels that will be available for television use after the February 19, 2009 deadline. In the Table of Allotments, that station may have been assigned as its digital channel for post-2009 operations a channel currently being used by another station in the market. If the station currently using that channel does not move to its own digital channel on time, the out-of-core station cannot begin its in-core digital operations. In some cases, as many as five or six stations’ ultimate digital operations may be mutually dependent, and will need to be coordinated, perhaps on the last day of the digital transition. Problems with one station’s transition may prevent the conversion of all of the other related stations. Thus, it will be in each station’s mutual interest to assist all other related stations to make sure that all are ready to meet the transition deadline.Continue Reading Digital TV Transition End Game Issues Loom