February 2009

The FCC’s Order and Notice of Proposed Rulemaking implementing changes resulting from the Congressional delay in the DTV transition deadline and seeking comment on a number of proposed rule changes has been published in the Federal Register.  Comments on the Commission’s proposed rules, including changes to the transition procedures that would restrict the ability of television stations…

In the last two weeks, we have seen Capitol Hill rallies by the Free Radio Alliance, opposing what they term the “performance tax” on radio, and yesterday by the Music First Coalition, trying to persuade Congress to adopt a performance royalty on the use of sound recordings for the over-the-air signal of broadcast stations. We’ve written about the theories as to why a performance royalty on sound recordings should or should not be paid by broadcasters, but one question that now seems to be gaining more significance is the most practical of all questions – if a performance royalty is adopted, how would broadcasters pay for it?

 The recording industry and some Congressional supporters have argued in the past that, if the royalty was adopted, stations could simply raise their advertising rates to get the money to pay for the royalty. While we’ve always questioned that assumption (as, if broadcasters could get more money for their advertising spots, why wouldn’t they be doing so now simply to maximize revenues?), that question is even harder to answer in today’s radio environment. With the current recession, radio is reporting sales declines of as much as 20% from the prior year. Layoffs are hitting stations in almost every market. In this environment, it is difficult to imagine how any significant royalty could be paid by broadcasters without eating into their fundamental ability to serve the public – and perhaps to threaten the very existence of many music-intensive stations. And the structure of the royalty, as proposed in the pending legislation, makes the question of affordability even harder to address.Continue Reading Rallies on Capitol Hill on the Performance Royalty – Who Will Pay?

The FCC late Friday released an Order and Notice of Proposed Rulemaking addressing a number of issues which arose as a result of the Congressional delay in the DTV transition deadline from February 17 until June 12.  In many cases, the actions taken in the Order are ministerial – e.g. changing the expiration dates on digital construction permits from February to June.  But there were also a number of substantive issues addressed by the order – including the public education requirements for the remainder of the transition and the potential for delaying any further terminations of analog service until at least April, and subjecting any planned termination of analog service before June 12 to additional scrutiny to determine if that termination would serve the public interest.   This is despite what many have termed a relatively uneventful termination of analog service on February 17 by over 400 stations nationwide.  Comments on this change in the transition procedures are to be filed on an expedited basis – within 5 days of the publication of this order in the Federal Register.

The delay of the early termination of service is likely to cause the most controversy, as Senate Republicans backed the transition delay only after specifically including in the legislation language that seemingly permitted such transitions under the rules that were in place at the time that the legislation was adopted (see our post here).  This would seemingly have permitted stations to terminate analog service within 90 days of the June 12 deadline, provided they had given their listeners at least 30 days notice of their plans.  A number of stations have started to provide that notice, planning a termination in March. But the Commission has tentatively concluded that it can amend the process for termination, and has set the date of March 17 for a notice to be filed at the FCC by all stations that want to terminate analog service before June 12.  As the Commission plans to continue to require 30 days public notice of the termination, and as they won’t allow any termination decision to become official until the March 17 filing, the earliest a station can terminate analog service under this proposal (absent a technical issue or other extreme circumstance) would be April 16. Continue Reading FCC Releases More Details of Delayed DTV Transition – No More DTV Conversions Until April?

In a decision released this week, the FCC granted the application of an FM station for license renewal, denying petitions filed by two former employees who contended that the station had violated a number of FCC rules.  After the FCC inspected the station and found only a few minor issues with the station’s public file…

The FCC has an open proceeding pending to allow AM stations to use FM translators.  As we have written, while this proceeding continues, the Commission is allowing AM stations to rebroadcast their signals on FM translators on under Special Temporary Authority.  In a case decided today, the FCC made clear that this is only…

The FCC today issued two fines to stations who violated the FCC’s rule against airing phone calls for which permission had not been received before the call was either taped for broadcast or aired live.  We’ve written about other fines for the violation of this rule, Section 73.1206, many times (see here, here, and here).  What was interesting about the new cases is that they made clear that a station needs to get permission to record or broadcast the phone call even before the person at the other end of the line says "hello."  

In one case, the station was broadcasting using a tape delay.  The station placed a call to a local restaurant and, when the person at the other end of the line said hello, the station DJ informed the restaurant employee that he was being broadcast and asked if that was OK.  The person responded "yep."  But he changed his mind later in the call.  The station claimed that, had the person not given permission, the tape delay would have allowed the call to be dumped but, as permission was given, the station continued to run with the conversation on the air. The FCC found that insufficient, as permission had not been received prior to the person saying hello.  The second case was much more straightforward – a wake up call by the station to a randomly selected phone number.  While the station immediately informed the person who answered the phone that the call was on the air – that did not happen until the recipient of the call had already said hello.  In the first case, the fine was $6000 – in the second, $3200.Continue Reading More Fines for Stations That Broadcast Telephone Conversations Without Prior Permission – Permission After “Hello” Is Too Late

Many television stations are making the conversion to all-digital operations today (see our post here for details).  These stations should remember that the DTV Consumer Education efforts that are currently in place apply to both the analog channel and the primary digital channel, and thus will continue after the conversion. Based on the current rules, …

While all the details are not out yet, the trade press has been filled with announcements this evening reporting that SoundExchange and the National Association of Broadcasters have reached a deal on Internet Radio Royalties.  This deal will apparently settle the royalty dispute between broadcasters and SoundExchange for royalties covering 2006-2010 which arose from the 2007 Copyright Royalty Board decision, as well as the upcoming proceeding for the royalties for 2011-2015.  According to the press reports, the royalties are slightly reduced from those decided by the CRB for the remainder of the current period, and continue to rise for the period 2011-2015 until they reach $.0025 per performance in 2015.  According to the press release issued by the parties, there was also an agreement between the NAB and the four major labels that would waive the limits on the use of music by broadcasters that are imposed by the Digital Millennium Copyright Act.

These limits, referred to as the performance complement, set out requirements on how many songs from the same artist or same CD can be played within given time periods which, if not observed, can disqualify a webcast from qualifying for the statutory license.  If a webcaster cannot rely on the statutory license, it would have to negotiate with each copyright holder for the rights to use the music that it plays.  The performance complement imposed requirements including:

  • No preannouncing when a song will play
  • No more than 3 songs in a row by the same artist
  • Not more than 4 songs by same artist in a 3 hour period
  • No more than 2 songs from same CD in a row
  • Identify song, artist and CD title in writing on the website as the song is being played

It will be interesting to see the details of this agreement setting out what aspects of these rules are being waived.Continue Reading SoundExchange and NAB Announce Settlement on Internet Radio Royalties

With February 17 only two days away – when all television stations had planned to be terminating their analog service until Congress passed the extension of the conversion deadline until June 12 – many stations are still planning to convert to fully digital operations on that date.  In the last few days, we have seen a flurry of FCC orders about the conversion – including one issued late Friday night modifying requirements that had previously been announced, including the requirement that stations providing analog nightlight service provide emergency information in Spanish.  As stations complained that they did not have the ability to translate their emergency information into Spanish, the FCC dropped the requirement (though still requiring information about the DTV transition to be broadcast in English and Spanish, probably assuming that Spanish-language PSAs providing the necessary information can be obtained from the NAB or other broadcast groups).  That order also officially extended all digital construction permits that would have otherwise expired on February 17, and extended the conditions that are on many of the permits prohibiting digital operations on their final digital channels until the new transition deadline – unless these stations get explicit permission from the FCC to transition early by showing that they will not cause any interference to other stations when they operate on their new digital channels.

The Commission also has been publishing lists of the stations that had intended to go all-digital by February 17 despite the extension.   First, the Commission released a Public Notice of all stations that had initially indicated that they would go silent, with a market-by-market analysis of which stations would go all-digital on February 17 (marked in red) and which would continue in analog.  After analyzing that list, the Commission issued another Public Notice, with a list of stations that could not go all-digital without submitting certifications that they would meet certain consumer education requirements after the transition – including having at least one commercial station in a market continuing to broadcast a nightlight service that not only included information about the digital transition, but also news and emergency information, for at least 60 days.  the certifications also required having a local call center for those who have questions about the transition, having a walk-in center where people can come for assistance with their digital converters, and otherwise taking steps to publicize the transition.  Stations either needed to make these certifications, provide another public interest reason why they had to terminate analog operations on February 17, or agree to continue their analog operations.Continue Reading Countdown to February 17 – Some TV Stations Still Going All-Digital Despite the Extension of the Conversion Deadline