Broadcast Law Blog : Broadcast Lawyer & Attorney : Davis Wright Tremaine Law Firm : Broadcast Law Blog : Seattle, Los Angeles, Washington D.C., New York, San Francisco, Shanghai

As the clock ticks down to the July 15 effective date of the royalty rates for Internet Radio as determined by the Copyright Royalty Board, webcasters held a Day of Silence today, June 26, to demonstrate to listeners what may well happen if the rates go into effect, and to galvanize their listeners to ask Congress for relief. With the Day of Silence bringing publicity to the Congressional efforts to put the webcasting royalties on hold and to change the standard applied by the Copyright Royalty Board so that it is not focused completely on a hypothetical "willing buyer, willing seller" model, it's worth looking at some of the other issues that have arisen in the royalty battle in the last few days - including further pleadings filed in connection with the Motion for Stay currently pending in the US Court of Appeals, and the Congressional hearing that will occur on Thursday. 

As we've written before, there is currently pending a Motion for Stay of the CRB decision which was submitted jointly by the large and small webcasters and NPR.  Last week, the Department of Justice, acting on behalf of the Copyright Royalty Board to defend the royalty decision, and SoundExchange, each filed oppositions to the Motion for Stay. Each raised many of the same arguments. First, they argued that the large webcasters had procedurally forfeited their rights to challenge the question of the $500 per channel minimum fee by not raising their objection early enough in the CRB proceeding. The DOJ also argued that the damage from the minimum fee was speculative as there was no way to know how that minimum fee would be interpreted. The DOJ contended that, as it was unclear that SoundExchange would prevail on any claim that those Internet Radio services that produced a unique stream for each listener would have to pay $500 for each such stream, the question might end up in a lawsuit – but wouldn’t inevitably lead to the irreparable harm that is necessary for a stay to be issued.

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The Senate Committee on Commerce, Science and Transportation today held its hearing on the Impact of Media Violence on Children.  Senator Rockefeller opened the hearings with a statement addressing what he sees as an unprecedented level of violent content in the media and citing studies that show that exposure to such violence is detrimental to children.  Rather than giving parents more tools to reduce or restrict their children's access to violent programming, Senator Rockefeller asserted that parents want violent and sexual content off the air entirely.  In no uncertain words, the Senator blamed the entertainment industry in general and television in particular for failing to put the interests of children ahead of their own profits.  Faced with the industry's failure, Senator Rockefeller plans to reintroduce his bill from last year proposing to define and restrict violent programming in a manner similar to the way in which indecency is regulated on broadcast television.  While other senators shared Senator Rockefeller's concerns about sex and violence in the media, many expressed concern over the constitutional issues involved in trying to regulate violent programming on broadcast television. 

Although FCC Chairman Martin was unable to attend today's hearing, the Committee heard testimony from a panel that included Tim Winter of the Parents television Council, Peter Liguori of Fox Broadcasting, Dr. Dale Kunkel from the University of Arizona, Jeff J. McIntyre of the American Psychological Association, and Laurence H. Tribe of Harvard Law School.  The panel members' statements, as well as the statements prepared by several members of the Committee are available here.  As should be clear from the composition of the panel, there is much debate about whether exposure to violent images creates violent children, whether violent programming can be regulated by the government consistent with the constitution, and whether the entertainment industry is liable for the perceived debasing of American culture.  Clearly, this hearing was not going to resolve those weighty issues in the span of a morning, however, it is obvious that the debate about violence on television will be around for another session of congress, and may very well become an issue in the upcoming election year.  



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As we wrote in January, the U.S. Supreme Court decided to revisit the Bipartisan Campaign Reform Act ("BCRA"), insofar as that law prohibited any corporate expenditure on issue ads mentioning the names of candidates during the period 30 days before a Federal primary and 60 days before a Federal general election.  In a fractured opinion released this week, the Court upheld a U.S. District Court opinion finding that prohibition unconstitutional as applied to a Wisconsin Right to Life group that had aired ads in 2004 urging voters to contact Wisconsin Senators Feingold and Kohl to oppose a Senate filibuster.  The ads did not specifically support or oppose the election of Senator Feingold, who was up for reelection that year, though the FEC had found that any ad mentioning a candidate in the pre-election period was prohibited by BCRA.  The decision in the case, Federal Election Commission v. Wisconsin Right to Life, Inc., will no doubt lead to more issue advertising airing on broadcast stations during the 2008 election.

The only thing that a majority of Supreme Court Justices agreed on was that it had jurisdiction to hear this appeal.  Chief Justice Roberts, along with Justice Alito, followed the District Court opinion in opining that BCRA was unconstitutional as applied to pure issue ads that happen to mention federal candidates who are up for election.  In other words, where it was not clear that the ad was intended to be about the election (as the ad never mentioned the election, only urging voters to complain to Senator Feingold about his position on an issue), the First Amendment rights of the group sponsoring the ads should outweigh any interests that the Federal government has in reducing corporate campaign contributions. 

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Should artists waive their rights to performance royalties in order to get airplay on broadcast or Internet radio stations? That questions has come to the fore based on a click-through agreement that Clear Channel included on a website set up to allow independent bands to upload their music for consideration for airplay by its stations. While artist groups, including the Future of Music Coalition, condemned that action, there are always two sides to the story, as was made clear in a segment broadcast on NPR’s Morning Edition, in which I offered some comments. As set forth in that segment, artists may be perfectly willing to allow unrestricted use of a song or two in order to secure the promotional value that may result from the airplay that might be received. For the broadcaster or Internet site seeking such permission, getting all rights upfront may well be an important consideration in deciding whether or not to feature a song – especially in the digital media.

Critics of the waiver made much of the fact that the site was set up at least partially to meet Clear Channel’s informal commitment made as part of the FCC payola settlement to feature more independent music, even though that commitment was not a formal part of the settlement agreement.  (See our summary of the payola settlement, here).  Even to the extent that the informal commitments made by the big broadcasters encompassed making time available to more independent musicians, the critics ignore the fact that the companies do not need any waiver of any sound recording performance royalty in connection with the over-the-air broadcast of those songs, as there currently is no public performance right in a sound recording for over the air broadcasting (though artists and record lables are now pushing for such a royalty, see our story here). Thus, the use of the waiver was only for the digital world – which was not covered by the FCC's jurisdiction over payola promises or the promises to increase the use of independent music. So, effectively, the company is being chastised for trying to minimize their costs on giving the music even greater circulation through their digital platforms than they initially promised.

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As we reported earlier, even though it has been almost a year since President Bush signed legislation raising the fines for broadcast indecency to $325,000 per occurrence, the FCC only recently adopted rules to officially implement the increased fines.  The rule to implement the statutory mandate was published in the Federal Register today, setting July 20th as the effective date for the new higher fines.   A copy of the Federal Register publice notice is available here (just below the list of millet and soybeans).  Once the increased fines become effective, the Commission's stick for discouraging speech that it might deem to be indecent will be a whole lot bigger.  It will be interesting to see if the Commission elects to impose a substantial forfeiture using the larger fines while various aspects of its indecency regime remain under review. 

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Just when Internet music companies were starting to understand one set of royalties applicable to the use of music on the Internet through the controversy over the Copyright Royalty board decision on royalties for the public performance of sound recordings in a digital delivery system, the Copyright Office held a hearing on Friday to discuss an entirely different royalty - the "mechanical" royalty for the use of the "musical work" in making a "phonorecord."  In plain English, the copyright holder in the publishing rights in a musical composition (the underlying words and music in a song) is entitled to a royalty when a copy of a song using that composition is made.  While that doesn't sound too complicated, when copies are made in the digital transmission of music over the Internet (and even in other digital media), all sorts of questions arise.  And in the conversations on Friday, questions were raised as to whether the obligation to pay a royalty for making a digital copy even applied to the streaming of a song on the Internet or possibly even the playing of a song on an HD Radio station.  These stations already pay (to ASCAP, BMI and SESAC) for the public performance of a musical composition, but the mechanical royalty is for a different right, and is collected by a different group, and the question being raised was whether a different royalty is also due when music is used a digital context.  This is also different than the SoundExchange royalty that is paid for the public performance of a sound recording (a particular song as recorded by a particular artist).

The Copyright Office held this Roundtable to update the record in a proceeding begun by a Notice of Inquiry issued in 2001 to try to determine how to apply in a digital world the mechanical royalty and the compulsory license for that royalty under Section 115 of the Copyright Act.  That section applies to the use of a composition in the making of a record or CD.  The artist or record company would have to pay the publishing company a flat fee per copy to obtain the rights to use the underlying song.  That fee is currently about 9 cents per copy, though the Copyright Royalty Board is is in the midst of a proceeding that is to determine whether that royalty should be changed.  When applied to the making of a physical copy, that concept is not hard to understand (though, as set forth below, it is not easy to administer).  But, in a digital world, questions arise as to when the obligation to pay a royalty arises.

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With July 15 now less than a month away, the new Internet Radio music royalties are still scheduled to go into effect.  Congressional legislation is slowly being considered, and a Motion for Stay to put the regulations on hold pending appeal has been filed (see our post here).  Some discussions on settlement have also taken place, though no deals have been done.  Without some action, payments under the new rules will soon be due.  See our memo, here, for more details on the CRB decision, and all of our posts on this issue, here.  While the legal and legislative actions are still proceeding, and the clock is counting down, the coverage in the popular media continues to grow.  In two recent discussions of the issue, SoundExchange spokesmen seem to blame Internet Radio for the current woes of the recording industry and to justify the high royalty rates through comparisons to the illegal pirating of copyrighted music.  All of these issues will be discussed at a seminar that I am moderating later this week at the Digital Media Conference in the Washington DC area.

One example of SoundExchange's recent claims can be found in a series of articles found on the Los Angeles Times website featuring a "Dust-up" exchange of viewpoints on the Internet radio issue,  between Kurt Hanson, owner of Internet radio broadcaster Accuradio and the publisher of the Radio and Internet newsletter, and Jay Rosenthal, a Board member of SoundExchange.  Mr. Rosenthal, in attacking the value of Internet radio as a promotional tool, said that while webcasters might excite people about new music, most new music is now illegally downloaded so that the promotion doesn't actually help the artists.  But, as Kurt Hanson points out, that would essentially be an excuse for never promoting any music in any venue - in fact it seemingly would be an excuse for shutting down the recording industry.  If music promotion just leads to illegal file sharing sites, and little or no music is ever to be sold again, why bother?  Does the recording industry really expect to make up for lost sales by receiving royalties from Internet radio?  Yet the same point seems to be made by SoundExchange President John Simson in a piece done by the PBS program NOW.  That program focused on the Internet Radio station Radio Paradise and how its popular, eclectic music mix will be silenced if the new royalties go into effect.  In that story, Simson also points to illegal downloading as causing the woes of the music industry, seemingly implying that this justifies outrageous royalties - yet offers nothing to tie downloading to Internet radio.

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In our recent summary of the Commission's order on Digital Radio, we wrote about the Further Notice of Proposed Rulemaking that raised specific proposals to adopt new rules regulating the public interest obligations of radio broadcasters.  These proposals included the possible requirements for a standardized disclosure form for a stations public service programs, limits on a station's ability to originate programming from locations other than the station's main studio, and possible limitations on the current ability of stations to operate without manned studios.  A recent Commission decision reminds television broadcasters that there is another proceeding - one six years old - that proposes many of the same restrictions on television broadcasters.  Does the recent mention of this proceeding that so closely parallels the recent radio proposals indicate that some action may soon be forthcoming on the TV proceeding?

The TV proceeding was mentioned in an FCC decision released last week rejecting Petitions to Deny that had been filed against a number of license renewal applications for television stations in Wisconsin and Illinois alleging that the stations had not adequately served the public interest through the broadcast of issue responsive programming, especially programming covering election issues.  In rejecting those Petitions, the FCC stated that its ability to second guess the editorial discretion of a licensee was limited by the First Amendment and by the Communications Act's prohibition against broadcast censorship.  In this case, the FCC said that the showing made by the Petitioner was not sufficient to demonstrate that the stations had not served the public interest of their communities.  However, the decision noted that the Commission was considering quantitative standards for evaluating the public service of broadcast licensees, citing to the long-pending rulemaking proceeding, and implying that the evaluation of these licensees might have been at least somewhat different had these proposed standards been in place.

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A reminder to all radio and television broadcast stations, both commercial and noncommercial, that Quarterly Issues Programs Lists reporting on the important issues facing the stations' communities, and the programs aired in the months of April, May, and June dealing with those issues must be prepared and placed in the stations' public inspection file by July 10, 2007.   The failure to have a complete set of Quarterly Issues Programs lists, which were timely prepared and placed in a station’s public file, can lead to significant fines at license renewal time so all stations are urged to prepare their Quarterly Issues Programs lists in a timely fashion.  See our full advisory here for further details. 

In addition,commercial full power and Class A low power television stations are reminded that Children's Television Programming Reports on FCC Form 398 must be prepared and filed electronically with the FCC by July 10, 2007.  The Reports must also be placed in stations' public inspection files by that date.  Our recent advisory is available here with all the details, including the requirements for DTV stations airing multiple program streams and details about the new Form 398.  Quarterly certifications regarding compliance with the commercial limitations in Children's Programming should also be prepared and placed in the public inspection file by July 10th. 

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The FCC today announced another round of EEO audits of broadcast stations throughout the country.  The FCC's Public Notice of the audits, and the list of the stations that are affected, can be found here.  Broadcasters should review this list carefully, both by call letter and licensee name, as we have noted situations where the FCC's list of licensee names used in this audit is not accurate, even though the licensee is correct elsewhere in the FCC's databases.  The audit letters were dated June 12, and responses are due in 30 days.  These letters usually require answers to an extensive list of questions, as well as the submission of supporting documentation to show a licensee's compliance with the FCC's EEO rules over the last two years.  We have written a Guide to the FCC's EEO requirements, which can be found here, to help broadcasters assure their compliance with these rules.  Whether or not a broadcaster is on this audit list, this opportunity should be used to review your EEO compliance, as the Commission conducts these audits on a regular basis - so you could be next. 

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Last week’s announcement of the partnership between eBay and Bid4Spots and the impending full launch of Google’s service to sell online radio spots beg for FCC action to clarify how these services will be treated for lowest unit rate purposes. We have written about this issue before (see our note here), and the increasing number of online sales tools for broadcast advertising inventory highlights the issue. If advertisers can buy spots using these online systems on a single station, or if stations offer their spots to a particular advertiser at a set price for a specific class of spot, it would seem that these spots could have an effect on the station’s lowest unit rate if the spots sold through the online systems run during lowest unit rate periods (45 days before a primary or 60 days before a general election.). For the peace of mind for all broadcasters, it would be worth the FCC clarifying the status of these services as we hurtle toward what will probably be the busiest political year ever.

In looking at some of these systems, it appears that some of these systems are premised on specific stations offering spots to advertisers on a cost-per-point basis, for specific dayparts as designated by the advertiser and agreed to by the station.  For instance Bid4Spots system advertises that it holds an auction to sell the spots on Thursday for the following week.  And it appears that spots must be sold by a station in specific dayparts on a non-preemeptible basis. For the week in which the spots are offered, the sale of such spots would appear to set a lowest unit rate for non-preemptible spots that run in the same time period. 

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In April, the FCC agreed to Consent Decrees calling for fines totaling $12.5 million from four of the country's largest radio broadcasters in order to settle allegations that these companies had engaged in violations of the FCC's payola rules. Recently, another public radio company stated in one of its SEC filings that it had received an inquiry from the FCC about practices at its stations, and rumors have been heard in Washington that there have been letters of inquiry on the subject sent out to other broadcast companies.  With this atmosphere, we thought that an analysis of the terms of the Consent Decrees, which imposed very specific operating conditions on these broadcast companies, was in order.  Thus, we have just published a detailed analysis, A $12.5 Million Teaching Tool - The Payola Consent Decrees, here.  This memo details provisions of those Consent Decrees which impose conditions on these companies requiring, among other things: limits on gifts that their employees can take from representatives of record companies, reporting requirements about their dealings with music companies, and requirements for the education of these companies employees about the requirements of the payola rules.  As set out in the memo, these Consent Decrees can serve as a set of best practices for all broadcasters in complying with the payola rules.

With the FCC restarting its Localism proceeding, about which we wrote yesterday, which asked for public comment on payola practices of broadcasters, the FCC's focus on payola has not abated with the $12.5 million fines imposed by the Consent Decrees.  So broadcasters should be assessing their policies to make sure that, if they get an inquiry letter from the FCC, they are able to provide responses that would lead to trouble.  We hope that this memo helps with that assessment.

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The FCC, after taking two years off, is looking to finish their field hearings on Localism by scheduling a hearing in Portland, Maine on June 29.  This hearing is not one of the six hearings to discuss possible new multiple ownership rules, but instead a continuation of the hearings started by Chairman Powell after public controversy over the 2003 multiple ownership rules.  In an ironic twist of fate, this public notice was released on the Friday before the National Association of Broadcasters Educational Foundation hosts their Service to America Awards Dinner to honor broadcasters and the public service commitment that they have to their communities.  Thus, while the FCC is looking in the hinterlands for evidence of the responsiveness of the broadcast industry to the needs of their listeners, some of the best evidence of that service was on display some 12 blocks from the FCC's headquarters.

The Localism hearings were part of a larger proceeding begun in response to the controversy after the 2003 multiple ownership rules.  When the Democratic Commissioners, Congressional legislators from both parties, and a variety of citizen's groups from across the political spectrum complained about how the public's input was not sought before the rules were adopted, the FCC tried to respond to some of those complaints by putting out a Notice of Inquiry on Localism.  The proceeding was to assess how well broadcasters were serving their communities, and the Notice asked for public comment on a grab bag of issues including the following:

• whether a broadcaster's public interest obligations should be quantified (bringing back obligations abolished in the 1980s that required specific amounts of the programming of broadcast stations to be devoted to news and public affairs programming), 
• should broadcasters be required to play specific amounts of local music,
• is payola a major issue,
• whether more programming should be devoted to political campaigns, 
• whether the voices of minorities were being heard on the airwaves.
• if the FCC should authorize more LPFM stations and take other steps to make airtime available to new entrants

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In the last few months, attention of the broadcast press has been focused on the pressing regulatory issues of the day - matters such as content regulation (indecency, violence and junk food advertising), the digital conversion of radio and TV, and the new digital media landscape and its impact on broadcasters (XM/Sirius, You Tube and Internet video, and Internet radio).  Almost forgotten is the multiple ownership proceeding that began in earnest last summer when the FCC issued its Notice of Proposed Rule making (see our summary here), but which has really been pending in front of the Commission since the US Court of Appeals issued its Stay of the FCC's 2003 Order adopting "new" ownership rules.  This week, at least some attention was brought back to the issue following the release by the organization Free Press of a study  that purports to document the effects that consolidation has had on minority and female ownership in the broadcast media.  Coupled with an electronic press conference featuring the two Democratic FCC Commissioners, the report merited an article in the Los Angeles Times and other mainstream press outlets.  It is a study that should be read by broadcasters, as it will likely form part of the debate on this most important issue.

While studies have been issued on and off throughout the debate over the multiple ownership rules, seemingly proving almost whatever the party providing the study wants to prove, this study should not be ignored.  Executive summaries and a full copy of the report can be found here.  The report purports to show that consolidation in the media holds down minority and female ownership.  And, unlike many other studies that have obvious design flaws and seem to be based on faulty assumptions, this one considers many of the obvious objections.  It does not under count minority ownership - in fact it takes the FCC to task for under counting such ownership, and actually reports higher amounts of minority and female ownership than the FCC itself had acknowledged.  The report also addresses the usual response to such studies - that it is a question of access to capital that results in the disparities - by doing a comparison of minority and female ownership in broadcasting to that ownership in other industries, and finding broadcasting very close to the bottom in diverse ownership.

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Following on the heels of a letter from Congress urging FCC action on DTV consumer education efforts and a recent study released by the Association of Public Television Stations (APTS) about the woeful state of DTV knowledge, the FCC has turned up the heat on its efforts to inform the public about the DTV transition.  Today, the Commission released two Consumer Advisories aimed at informing consumers about the transition to digital television.  The first, entitled "Buying the Right TV: What Every Consumer Should Know" is available here, and provides a quick-hit introduction to the DTV transition and the Converter Box Coupon Program.  The second, available here, is entitled "Closed Captioning for Digital Television" and is aimed at ensuring that consumers continue to have access to closed captioning on their digital television sets. 

These consumer education efforts come on the same day that the Commission released several citation letters to on-line electronics retailers, such as Best Buy, RadioShack, and Target, admonishing them for not displaying the required Consumer Alert label displayed on equipment that contained an analog tuner, but not a digital tuner.  The citation letters inform the retailers of their labeling obligations and threaten to fine them, as permitted by the statute, for future violations of the labeling requirements. 

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We wrote yesterday about the Second Circuit Court of Appeals ruling throwing out two FCC indecency fines.  Further details on the legal reasoning in that decision are given in our firm's advisory published today. The decision also provoked heated reactions from two of the FCC Commissioners.  Commissioner Copps issued a statement warning broadcasters not to engage in gratuitous sex and violence on television.  Chairman Martin's statement was even more aggressive - using the "F-word" and the "S-word" freely - without resorting to the euphemisms that we employ here to avoid triggering spam blockers - for the shock value to emphasize how he believed that a liberal court overlooked the what he thought was a common-sense FCC decision with which most people would agree.

 It seems unlikely that there were many broadcasters waiting for this decision to give them the green light to run out and start gratuitously airing sex and violence.  Look at basic cable.  Years ago, court rulings held that indecency rules did not apply to cable television.  Yet, as I'm writing this, the Daily Show on Comedy Central is airing, and all the explicatives that are of such concern to the Commission are edited out of the program - and this is for a program that is not only on cable, but also is airing at 11 PM, in the safe harbor where indecent programming can air even on broadcast television.  And who has seen a rush of indecent programming on broadcast television in those safe harbor hours?  The Court decision only reached the common sense decision that the passing use of an explicative should not jeopardize an FCC license.  No matter what the Commissioners statements may say, the ruling was not one that opens the door to filth flooding the airwaves, but instead it was only one that demanded that the FCC apply logic and consistency in line with constitutional requirements when making its rulings. 

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The past few days have been eventful ones in the battle over Internet radio royalties.  Appeals from the decision of the Copyright Royalty Board decision (see our memo explaining that decision, as well as our coverage of the history of this case) were submitted by virtually all of the parties to the case.  In addition, the National Association of Broadcasters, which had not previously been a party to the case, filed a request to intervene in the appeal to argue that the CRB decision adversely affects its members.  Also in Court, a Motion for Stay of the decision was submitted, asking that the CRB decision be held in abeyance while the appeal progresses.  The "appeals" that were filed last week are simply notices that parties dispute the legal basis for the decision, and that they are asking that the Court review that decision.  These filings don't contain any substantive arguments.  Those come later, once the Court sets up a briefing schedule and a date for oral arguments - all of which will occur much later in the year.  As the CRB decision goes into effect on July 15, absent a Stay, the appeal would have no effect on the obligations to begin to pay royalties at the new rates.

The Stay was filed by the large webcasters represented by DiMA, the smaller independent webcasters that I have represented in this case, and NPR.  To be granted a stay, the Court must look at a number of factors.  These include the likelihood that the party seeking the stay will be successful on appeal, the fact that irreparable harm will occur if the stay is not granted, the harm that would be caused by the grant of a stay, and the public interest benefits that would be advanced by the stay.  The Motion filed last week addressed these points.  It raised a number of substantive issues including the minimum per channel fee  set by the CRB decision, the lack of a percentage of revenue fee for smaller webcasters, and issues about the ability of NPR stations to track the metrics necessary to comply with the CRB decision.  The Motion raised the prospect of immediate and irreparable harm that would occur if the decision was not stayed, as several webcasters stated that enforcement of the new rates could put them out of business.

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Just as the FCC issued its order to implement the statutory increase in the amount of indecency fines, raising them to $325,000 per violation (see our comment, here), its enforcement of its indecency policy may be dead in its tracks.  A three judge panel of the US Court of Appeals for the Second Circuit, in a 2 to 1 decision released today, rejected the FCC's actions against a number of television networks for broadcast indecency.  The FCC actions were in the context of "fleeting utterances," i.e. the use of specific words that the FCC determined were indecent whenever they were used.  The Court rejected the FCC decision as being arbitrary and capricious, as the FCC decisions overturned without sufficient rational explanation years of FCC precedent that had had held that the isolated use of these words was not actionable.  The FCC actions were sent back to the FCC for further consideration to see if the Commission could craft a decision that provided a rational explanation for this departure from precedent.

However, this may prove to be impossible.  While the Court's decision was based on the FCC's failure to provide a rational basis for its departure from precedent, the Court also said that it was difficult to imagine how the FCC could constitutionally justify its actions.  The Court pointed to the inconsistent decisions of the FCC - fining stations for the use of the "F-word" and the "S-word" in isolated utterances during awards shows, and when used in the context of a program like PBS'  The Blues, but finding that the same words were not actionable when used in Saving Private Ryan or when used by a Survivor contestant interviewed on CBS' morning show.  In the Survivor case, the Court indicated particular confusion, as the Commission went out of its way to say that there was no blanket exclusion of news programming from the application of its indecency rules, but then it proceeded to find the softest of news - the Survivor cast-away interview - as being of sufficient importance to merit exclusion from any fine.  The Court felt that these decisions were so conflicting that a licensee would not be able to decide whether a use was permissible or not - and that such confusion, leaving so much arbitrary discretion in the hands of government decision-makers as to where to draw lines between the permissible and impermissible, would not withstand constitutional scrutiny.  It would have a chilling effect on free speech - and could be enforced in an arbitrary manner that could favor one point of view over another.

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This past week, former Senator Fred Thompson created a committee to explore a run for the Presidency.  In every article written about the former Senator, like one recently run in the Washington Post, mention is made of his current broadcasting career - his role on Law and Order and as a guest host on Paul Harvey's radio program.  And all the articles assume that the campaign will result in the termination of these roles, and also present issues about the broadcast and cablecast of reruns of Law and Order episodes and old movies in which he appeared.  In some cases, that is true.  In others, it remains to be seen.  But the potential candidacy does offer a good opportunity for a review of the equal time obligations of broadcasters under FCC rules.

"Equal time" or "equal opportunities" require that broadcast stations give treat candidates for the same political race in an even-handed fashion.  If they sell time to one candidate, they have to give the other candidate equal opportunities to buy the same amount of time in programs reaching roughly the same size audience.  If time is provided to a candidate without charge, and the candidate's on-air appearance is outside of a news or news interview programs and is not part of on-the-spot coverage of a news event, then the broadcaster must make equal time available to the opposing candidate, if that candidate requests it within 7 days of the use by the first candidate.

However, none of these obligations arise until a candidate is legally qualified - essentially when he or she has filed the necessary papers to obtain a place on the ballot in accordance with the governing law of the jurisdiction in which the election will be held.  In Thompson's case, as he has not even officially announced that he is running, he is not yet a legally qualified candidate, so for the time being, there is no issue with the continued airing of the programs in which he appears. 

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Yesterday’s New York Times featured an article on its Opinion/Editorial page written by FCC Commissioner Michael Copps, suggesting that enforcement of the public interest obligations of broadcaster become more stringent. Commissioner Copps suggested that broadcasters needed to have their responsiveness to the needs of their community scrutinized more closely, and more often. Among other actions, the Commissioner suggested that license renewal period for broadcasters be shortened from the current eight year term, to once every three years – as well as a host of more stringent and specific programming obligations. Coming on the heels of the FCC’s proposal in the Further Notice of Proposed Rulemaking on Digital Radio (see our summary, here) to explore the local service of broadcasters through a checklist public file report quantifying their public interest service, as well as mandating more local program origination and a greater local presence for stations, local service seems to have emerged as a major issue of concern that may be played out in FCC proceedings in this year leading up to the 2008 Presidential election.

The Copps proposal to shorten license renewal terms back to the three years, and to stiffen the renewal process, asks that the FCC return to a system that required broadcasters to spend significant sums of money on administrative matters that could have better gone to broadcast operations. And the sums that used to be spent on license renewal applications had minimal real impact on the public interest.   While from time to time, broadcasters did run into scrutiny at renewal time, the vast majority of broadcasters’ applications were reviewed in a perfunctory manner and renewed – just as they are today. And with the Commission’s depleted resources that are already stretched thin, it seems unlikely that its staff would be able to provide much greater scrutiny to renewal applications that are filed more than twice as often as they are currently – more than doubling the workload of the already overburdened Commission staff.

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It's been almost a year since President Bush signed legislation raising the fines for broadcast indecency to $325,000 per occurrence.  Even though the legislation was effective on June 15, 2006, the higher fines have not yet gone into effect as the FCC had never adopted rules to officially implement them - until today.  Today, the FCC issued an order adopting a rule to implement the statutory mandate - and the new higher fines will go into effect 30 days after this order is published in the Federal Register, which will presumably be quite soon.

There was no explanation for the Commission's delay in adopting the new rule.  As the change was mandated by statute, the adoption of the new rule did not require public notice and comment.  All the Commission needed to do was to put out the Order that was released today.  Perhaps the Commission was concerned about the pending Court cases to resolve whether their enforcement of the rules is constitutional (see our comment here).  In fact, in opposing the expedited consideration of one of the appeals of a Commission indecency fine, the Commission specifically made the point that there was no need to for prompt consideration as the chilling effect of the Commission policies was limited as the new fines had not yet gone in to effect.  But, for whatever reason, the Commission has finally decided to act, and the new fines will soon be effective.  Now we just need to watch for the Court decisions to see if the enforcement of those fines will be permitted.

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As a result of the unavailability of the most recent Form 398 Children's Television Programming Reports, and perhaps in recognition that it had set an overly aggressive pace for submitting comments, the Commission yesterday extended the time for interested parties to file comments regarding the status of children's television programming until September 4, 2007.  Similarly,  the time for reply comments has been extended until October 1st.  A copy of yesterday's Public Notice granting the extension is available here. 

As we reported earlier, in April the FCC issued a Public Notice asking for information as to the compliance of television broadcasters with their obligations to provide programming that addresses the educational and informational needs of children.  The Notice stated that it was a follow-up to the Commission's 2004 Order addressing the children's broadcasting obligations of digital television broadcasters, however, the notice also referred to the recent $24 million settlement with Univision, which resolved allegations that Univision had misclassified entertainment programming as being educational programming addressed to children.  The Commission's Notice seeks input regarding whether television broadcasters are complying with the rules, and whether the rules provide sufficient guidance to broadcasters as to what kind of programming satisfies the rules for educational broadcasting.   Thus, in order to give parties time to access and review the Form 398 Reports from the First Quarter of 2007 (which are not due until June 10th), the Commission has granted an additional two months for comments. 

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