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In its rush to complete the "analog nightlight" program rules in time for television stations to make plans for the February 17 end date for analog television, and to comply with a statutory mandate to have the program in place by January 15, the FCC will require some people to work through their New Years Weekend to have comments to the FCC by Monday, January 5.  Federal Register publication of the Commission's Notice of Proposed Rulemaking on this proposal took place today.  We wrote about the program to allow some analog television stations to operate for 30 days after the end of the digital transition, to carry emergency information and to inform viewers who missed the message on the digital conversion about what they need to do to receive digital television, and about some of the issues posed by the FCC, here.  Reply comments on this proposal are due three days later -January 8. 

As the comment date is also when stations who were not included on the original list of those who automatically qualify for nightlight status are supposed to ask to be included and show how they will protect digital television operations, some engineers will also need to be busy this weekend.  With this short response time, station operators need to quickly get going on the comments due on Monday. 

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Last week, the FCC introduced a new service to fill in gaps in the service of a digital television station - permitting television stations to immediately apply for Special Temporary Authority to construct digital translators.  Translators rebroadcast the signal of a full-power station, but operate on a channel different than the main station they retransmit.  The Commission has already authorized stations to operate on-channel low-power facilities in the Distributed Transmission Service (DTS) proceeding, about which we wrote here.  The digital translators, however, will only be authorized to serve areas that had received analog service from the television station but which will lose that service when the station goes fully digital, thus raising questions as to how much use these stations will really be.  In a Public Notice released today, providing filing information for these translators, the Commission states that the translators can only serve this loss area.  While the authorization of this Digital Low Power Television Translator service will begin immediately on an STA basis, the Commission's order came out only in a Notice of Proposed Rulemaking, which could ultimately be rejected by the Commission after public comments are submitted.

The Commission seeks comments on a number of proposals made in this proceeding, including the following:

• The new translators would operate on Channels 2-59, with those operations on channels 53-59 being authorized only where the applicant can show that there is no other channel on which a translator can operate
• These translators will be given application priority over all other translator applications except those for the displacement of an existing translator or LPTV station, which would have co-equal priority
• The translators would be authorized as part of the main station license, would be renewed as part of the main station license, and could not be sold except with the main station.
• The translators will be authorized to fill in the area served by an analog full-power station but lost when the station converts to digital.  The Commission seeks comments as to whether even a nominal extension of the coverage area will be permitted (it apparently will not for authorizations initially granted through an STA) 
• Applicants receiving an authorization for this service will be given a construction permit - and the Commission asks if that permit should be limited to a period of six months so that service to the public will be initiated quickly.
• The Commission also asks how this service should interact with white spaces devices recently authorized by the Commission (see our summary).

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 Just when you think that the year will come to a quiet end, something always seems to pop up.  Today, the Copyright Royalty Board announced a Notice of Proposed Rulemaking that would change the reporting requirements for services that pay royalties for the use of sound recordings to SoundExchange.  The proposed new rules would require that Reports of Use submitted by services relying on the statutory royalty contain "full census reporting" of all songs played by any service.  Services would include all users of music who pay royalties due under Sections 112 or 114 of the Copyright Act - including Internet Radio, satellite radio, digital cable radio, digitally transmitted business establishment services, and radio-like services delivered by other digital means, including deliveries to cell phones. This reporting requirement would replace the current system, about which we wrote here, that only requires reporting for two weeks each quarter.  Under the new rules, an Internet radio service would have to submit the name of every song that they play to SoundExchange, along with information as to how many times that song played, the name of the featured artist, and either the recording's ISRC code or both the album title and label.  Comments on this proposal are due by January 29.

Currently, the quarterly reports are filed electronically using an ASCII format and using either an Excel or Quattro Pro spreadsheet template as created by SoundExchange.  The Board asks for comments as to whether there are technological impediments to providing this information in this manner, and if other changes should be made to more easily facilitate the delivery of this information.  The Copyright Royalty Judges who make up the CRB expressed their opinion that the full census reporting is preferable to the limited information now provided, so that SoundExchange does not need to rely on estimates or projections to insure that all artists are fairly compensated when their works are played.  Using census reporting, all artists can be paid based on how often their songs are actually played.

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Congress recently passed legislation authorizing an analog "nightlight" or lifeline for those left behind after the digital transition.  This law was designed to allow certain full-power stations to remain operating in analog on February 18, with information about the digital transition for those people who otherwise managed to miss the information about that deadline.  This past week, while Santa was making his deliveries, the FCC released its proposals for implementing this authorization.  The Notice of Proposed Rulemaking sets out a list of stations that can take advantage of the authorization automatically, and the process for other stations being able to operate such a service.  In addition, the Notice proposes restrictions on the nightlight operation, the length of service, and miscellaneous other matters.  Given the tight timeframe before implementation on the end date of the digital transition, comments on the FCC's proposals will be due 5 days after they are published in the Federal Register, and replies 3 days later.

The proposals include the following:

• Analog operation would be permitted by authorized stations for only 30 days after the end of the digital transition, through the end of the day on March 19, 2009.
• The nightlight service can only include information about local emergencies, and information about how viewers can get digital television services.  The information about how to get digital services should be in English and Spanish, and accessible to those with disabilities.  No advertising will be permitted.
• The Commission attached to its Notice of Proposed Rulemaking a list of eligible stations .  Such stations, if they are interested in participating, need to electronically file by February 10 a request for Special Temporary Authority to operate the nightlight .  No filing fee will be required.
• Stations not listed may still participate by demonstrating how they will protect all digital operations, through lower power, terrain shielding, directional antennas or similar techniques.  Comments showing how they will participate should be filed in the comment period for the NPRM.
• The nightlight service will not be entitled to mandatory cable carriage.

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The FCC last week issued an order fining a broadcast  tower owner $2000 for failure to monitor the lights on its tower.  The FCC requires that a tower owner either monitor the tower by visual inspection or by a properly installed automatic monitoring system, at least once every 24 hours.  In this case, the tower owner had an automatic monitoring system installed on the tower, yet apparently its employees did not properly monitor the system  The monitoring of the automatic system was conducted during daytime hours, when no problem was indicated - but when the tower lights themselves were not lit.  During nighttime hours, the monitoring system did apparently warn that the lights were not all in operation, but the owner's employees were not monitoring the system during those hours.  Essentially, the FCC found that a licensee must know how to monitor its own system and detect outages.  If there are outages and they are not caught within 24 hours, a licensee is looking for problems. 

As FAA and safety issues are high on the FCC's list of enforcement priorities, communications tower owners should be sure that their systems are in operating order, and properly monitored, to avoid problems.  Safety issues can result in problems, even if the station has passed a review through an alternate inspection program, given the importance of these issues and their visibility - as tower lights that are not operating can easily be seen by an inspector of from someone associated with the aviation community.  So be sure that these issues are carefully monitored. 

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In several decisions released on Friday (here, here and here), the FCC fined Class A TV stations for not meeting their obligations under the Children's Television Rules to notify their viewers about the location of their public file containing information about the educational and informational programming they broadcast directed to children, and for failure to inform local program guides of the target ages for this educational and informational programming.  Class A TV stations are essentially LPTV stations that, early in the decade, were certified for Class A status, meaning that they cannot be displaced by subsequent authorizations for new full power stations or changes in the facilities of full power TV stations. These stations had to certify that they broadcast at least three hours of local programming per week, and also had to meet all the other obligations that are applicable to full power stations (but not necessarily to other Low Power Television Stations), e.g. local main studio, local public file, children's television obligations.  A fine of $4000 was imposed on the stations for these failures.

The cases remind Class A stations of their public interest obligations.  It also reminds all stations of their obligations to publicize the existence of its children's television compliance records, and to insure that program guides not only know about their educational and informational programming but also about the ages to which this programming is targeted.  Little details, but details that cost many licensees money for their forgetfulness during the last license renewal cycle. 

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The FCC's staff today issued an Order resolving 26 Groups of mutually exclusive FM applications submitted last year in the filing window for new noncommercial FM stations. We wrote about a previous order in August, processing a smaller group of such applicants.  In each of these groups, the Commission analyzed the coverage proposed by the applicants to determine if the technical service that they propose to provide was superior to that of other applicants - a "fair distribution analysis."  In these cases, the Commission found that one applicant was preferred under an analysis that looks at the populations to be served by these applicants that do not already currently receive service from more than one noncommercial station.  The "tentative selectees" of the Commission are now subject to the filing of petitions to deny and, if no petitions are filed in the 30 day filing window, these applications will be granted. 

This Order did not deal with cases where there was no dispositive preference based on coverage - cases where the FCC will have to conduct a "points system" analysis (see our summary of those factors here).  Presumably, those will come later.  For parties who had applications on the Order and who were not winners, a review of the decision is in order.  The Commission has been known to make mistakes in this kind of analysis and, as much reliance is put on information supplied by applicants, some of the information may not be correct, or may not rely on consistent assumptions applied in the same way in counting the populations served by each applicant.  We've heard that there may be some of these windows where the winning applicant ignored (or asked for a waiver of) the limitations on the power of noncommercial stations near Channel 6 TV stations, on the theory that most of these TV stations, operating adjacent to the FM band, will be going away in February after the digital television conversion.  This is a controversial issue (see our post here on the Commission's action with respect to applications to improve existing stations that relied on the same assumptions), which may well be challenged in reconsideration filings if these rumors are true.  So, as always, stay tuned to see how this process develops. 

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Yesterday, the Detroit Free Press and the Detroit Morning News, which operate their publication and distribution operations through a joint operating agreement, announced that they will cut back on the physical publication of their papers - publishing full editions delivered to homes only three days a week.  On other days, the papers will publish an abbreviated version, available only on newsstands.  The papers will not abandon news coverage the remainder of the week, but will instead concentrate on their on-line presence, showing the power of the Internet to disrupt traditional media.  As we said years ago in one of our first posts on this blog - New Media Changes Everything, and it seems that this is just another indication of how true that is.  The broadcast media, particularly radio, has often looked at the advertisers served by the daily paper as a ripe source of new business, and may well see the Detroit change as a major business opportunity.  But does it also change the FCC's consideration of the multiple ownership rules applicable to radio and television cross-ownership with newspapers?

The FCC's multiple ownership rules prohibit the ownership of a broadcast station and a "daily" newspaper that serve the same area.  The rules define a daily paper as one that is "published" at least four days each week, and is circulated "generally in the community."  Here, the Detroit papers arguably will not meet that 4 day a week requirement - at least for a publication that is generally circulated throughout the community.  Of course, some may argue that the abbreviated newsstand copy constitutes a daily publication but one would assume that, sooner or later, even that will disappear.  Thus, while there has been so much controversy about the Commission's decision of one year ago (summarized here) deciding that combinations of broadcast properties and newspapers in Top 20 markets were presumed to be permissible, while those in smaller markets were not, one questions whether this still makes any sense in today's marketplace where seemingly few can profitably publish a daily paper in most markets, and no one seems to want to rescue the many papers that have fallen on hard times. 

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Recently, it seems like you can't read a broadcast industry newsletter without seeing an article about employment reductions or layoffs at some station - sometimes the whole newsletter seems to be dominated by such reports.  In this climate, broadcasters need to consider the employment law issues that can arise in such situations.  The Davis Wright Tremaine Employment law practice group has published an Advisory, available here, which provides advice - both legal and practical - for such downsizing a workforce in any industry.  Read the memo, and consider such issues, as legal issues in an employment context can bring civil penalties which can add to a broadcaster's economic distress in these tough times.  In addition, violations of employment laws need to be reported both on a broadcaster's Mid-Term EEO report (FCC Form 397, see our bulletin on the last group of stations required to file such reports, here ), as well as on their license renewal applications.  So act carefully if faced with these wrenching employment decisions. 

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The digital television conversion end game is upon us, and everyone seems to be getting a little testy.  Seemingly, not everyone is convinced that the consumer education efforts have prepared the public for the transition, and thus Washington seems to be preparing for problems.  But, in a last minute attempt to solve some of the potential issues, both Congress and the new Administration have stepped into the breach to put pressure on broadcasters and the FCC to be prepared to deal with the February end date for analog TV.  Congress passed legislation authorizing the FCC to allow some television stations in each market to continue to operate in analog after the end of the transition to tell consumers who didn't make the switch what to do (an analog "life line service").  At the same time, Congress urged the FCC to mind the transition and not start off on new regulatory battles, causing the cancellation of this week's FCC meeting.  In this event-filled 10 days, the new Obama administration also stepped into the DTV transition, a potentially significant issue that will face the new administration less than a month after taking office, pushing broadcasters, cable companies and direct broadcast satellite companies to pay for and establish phone banks to provide assistance to consumers stranded by the transition.

The cancellation of the Commission's meeting was perhaps the strangest of these matters.  The FCC was prepared to hold a meeting later this week, with a full schedule of items to consider, including various items related, in one way or another, to the digital transition.  Included were a series of fines to broadcasters, consumer electronics stores, and others for not doing everything required by the rules to facilitate the digital transition.  The Commission was also planning to start the rulemaking process to authorize digital "fill-in" translators, i.e. low powered TV stations rebroadcasting a main station on other channels within the main station's service area to fill holes in digital service.  Plus, the FCC was to deal with the Chairman's proposals for a free wireless Internet service on channels being vacated by television stations as part of the transition.  Yet, Congressman Henry Waxman, the new chair of the House Energy and Commerce Committee, and Senator Rockefeller, the newly appointed Chairman of the Senate Commerce Committee ( the committees with responsibility over the FCC) wrote a letter to the FCC saying that it should concentrate its efforts on the transition, and not take up issues on which the new administration may want a role (perhaps the wireless service).  After receiving the letter, the December meeting was canceled (the first time in memory that the FCC did not have a monthly meeting as seemingly required by Section 5 of the Communications Act). 

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In a Sunday column, George Will revisited conservative commentators' biggest fear - the return of the Fairness Doctrine.  Will went into depth on the history of the doctrine, the growth in the number of broadcast outlets in recent years, and growth in talk programming since the doctrine was abolished, all to argue against its reimposition.  This column prompted a response on MSNBC's Countdown Program the next day, ranking Will third on Keith Olbermann's Worst Person's segment - not for Will's argument against the return of the Fairness Doctrine, but for his even bringing up the issue of the possible return of the Doctrine.  Olbermann in effect accused Will of inciting unfounded fears of the doctrine's return, citing President-elect Obama's statement that he did not favor its return, and claiming that the Democrats in Congress otherwise were not pushing for its reimposition.  So what's the truth here?

As always, the truth always seems to lie somewhere in between these two extreme points of view.  The President-elect has indeed stated that he did not favor the return of the Fairness Doctrine and, while there have been no major efforts to reinstate the Doctrine yet announced, there is a proposal in almost every Congress for its return (see, for instance, our post on Congressman Kucinich's proposal to reimpose the Doctrine made two years ago and another post about the suggestion in support of its return made by Congressman Dingell six months later).  Other Congressional statements have also not ruled out an effort to bring it back, including a statement by Senator Schumer  of New York who, when asked about the Doctrine, asked: who could be against Fairness?  While we won't see the Doctrine return in what little is left of this year, who knows what efforts could be made next year to try to resurrect it - though the changes in the media landscape since the FCC declared the doctrine unconstitutional, as outlined by Will and about which we have written before, would seem to make its justification almost impossible on constitutional grounds (e.g. there is seemingly little scarcity that would justify the rule applying only to broadcasters and not any other medium).  But a simple matter of probable unconstitutionality has never stopped Congress from considering legislation before, so who knows what we might see considered this year - though, as Olbermann and Will's comments demonstrate, it seems as if neither end of the political spectrum really want the Doctrine to return.

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As the Obama administration fills its top level government posts, all eyes are now turning to the next levels of government appointments which, at some point, will include a new Chair of the FCC and potentially other new FCC Commissioners. We wrote about our hopes for an Obama administration at the FCC immediately after the election, and now other voices in Washington are weighing in. And, as one might expect, with so many different perspectives, the advice is far from consistent. As we wrote in our analysis, the appointment of the FCC Chair is crucial as it is the FCC Chair, far more than the President or the White House, who sets the tone for Communications policy. This is made clear by the extensive regulations either adopted or proposed for broadcasters by the current Republican FCC, seemingly at the direction of the current chairman, regulations that would not have been expected from a Republican administration.  In light of the economic challenges facing broadcasters, as evidenced by today's news that two television companies - Tribune and Equity - declared bankruptcy, and another, NBC, has announced a cut back in prime time programming, replacing it with a prime time, 5 day a week Jay Leno program. 

So what should the transition team look to accomplish at the FCC?  In one of the most perceptive articles that I’ve seen recently, Harry Jessell in TV Newsday has urged the new Commission to simply do nothing on broadcast regulation for the next year. The current state of the economy and its ramifications for the advertising that is the lifeblood of the broadcast industry simply leaves no room for broadcasters to have to bear new costs for new regulations.  Broadcasting and Cable magazine has echoed that sentiment last week.  Recently, not only have we seen the economy and the state of the broadcast industry been reflected by the actions announced by Tribune, Equity and NBC today, but we’ve seen numerous mainstream press articles about the economic peril in which the entire broadcast industry finds itself.  In one recent article, radio’s dramatic decline in revenues was highlighted, even as the industry's listenership remains high (as confirmed by BIA’s recent prediction that radio revenues will decline by 7% in the coming year, coming after declines this year – perhaps the first two year decline in revenues in radio history). I recently attended the Radio Ink Forecast 2009 conference in New York.   While the conference is off the record, I don’t think that I’d be betraying any confidences to state that there was much concern about the short term health of the radio industry. 

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Yesterday, it was announced that CBS would be operating Yahoo's Launchcast Internet Radio operations.  This is ironic as the industry seems to have now come full circle, as Yahoo's Internet Radio operations include the interests that they received when they purchased Mark Cuban's Broadcast.com, which had a substantial part of its business in the streaming of terrestrial radio stations.  While Yahoo long ago stopped streaming the broadcast signals retransmitted by Broadcast.com, it is ironic that a traditional broadcast company has now taken much of the control of not only the Internet radio operations of Yahoo, but also those of AOL and Last.FM (see our post on the AOL deal here).  Explicitly blamed for Yahoo's decision to turn its Internet radio operations over to CBS was, according to press reports, its concerns over the Internet radio royalties as set by the Copyright Royalty Board last year, a decision about which we have written extensively.  How will this transaction affect the debate over those royalties?

Initially, this action once again shows that assumptions about the state of the Internet radio industry that colored the perception of the Copyright Royalty Judges in their determination of the royalty rates were incorrect.  While not explicitly part of the grounds of the CRB decision on the webcaster's royalty, there was much testimony in the CRB proceeding that suggested that Internet radio brought customers to portal sites, and that higher royalties were justified by the value that these visitors added to the portals when the listeners engaged in other activities at the portal.   Yet, that model now seems in tatters, as both AOL and Yahoo have turned their operations over to CBS.  This seems to emphatically demonstrate that the economics of Internet radio operations, whether stand-alone or as part of portals, simply do not justify the royalties that were imposed (see our discussion of the Pandora economic and the royalties here).

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Today FCC Chairman Kevin J. Martin released a tentative agenda for the scheduled December 18, 2008 Open Commission Meeting.  The tentative agenda, available here, contains a number of items that the Chairman has circulated to the other Commissioners for consideration at the upcoming Open Meeting.  Whether these items actually make it to the agenda for that meeting remains to be seen, as the formal agenda for the meeting will not be released until one week before the meeting.  Of particular interest to broadcasters are the following items:

• Program Carriage and Program Access-  A Report and Order modifying the program carriage rules and procedures and a Further Notice of Proposed Rulemaking seeking comment on the practices of programmers and broadcasters.

• DTV Translators-  A Notice of Proposed Rulemaking proposing a new digital television translator service for analog loss areas.

• DTV Consumer Education Notice of Apparent Liability-  An omnibus Notice of Apparent Liability against various companies for apparent violations of the Commission’s DTV consumer education requirements.

It is unknown whether the Notice of Apparent Liability for Forfeiture (FCC-speak for a fine) will include broadcast television stations, retailers, multi-channel video providers, or some combination of all three, but the fact that the FCC intends to fine parties for failing to comply with the FCC's DTV education rules is a strong indication of how seriously it is taking the DTV transition.   

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