$16.57 Million Verdict in Hold Your Wee for Wii Case - What are the FCC Implications and What Should Broadcasters Learn?

A jury in Sacramento returned a $16.57 million verdict against Entercom Broadcasting's local subsidiary in the case involving the death of a contestant in a radio station-sponsored contest.  The contest - drinking water and waiting to see which contestant would win the Nintendo Wii by being the last to have to use the bathroom - led to the death of contestant Jennifer Strange by water intoxication.  The station had argued that water intoxication was not a readily known risk of the contest that could have reasonably been anticipated.  The plaintiff's case, to refute this argument, included testimony of warnings from on-air station callers of the risks, and health complaints from contestants themselves, which were apparently ignored or minimized by the station employees who were involved in supervising the contest.  This Blog does not purport to address negligence and personal liability questions, which we will leave to others.  Instead, we'll talk about the lesson to broadcasters and the FCC impact of this case.

First, the decision itself serves as a warning to broadcasters of the need to make employees aware of the ramifications of what goes on at a station.  In a Radio Ink Column today, Publisher Eric Rhoads suggests that broadcasters must be careful in what they do, but also submits that owners and managers cannot take the fun out of radio.  And while I wholeheartedly agree with the last sentiment, the fact that radio can be a fun business is all the more reason that owners and managers need to be careful about what goes on at a station.  While we hate to be the lawyers who ruin all the fun, management does need to make employees aware of the nature of the broadcast medium, and the fact that real people are impacted by whatever is done on the station - whether it be a "joke" on the air which some people find offensive, a dangerous contest, or simply putting off compliance with some FCC rule.  We are in a litigious time, and we have an FCC and a Congress with lots of pending matters that could determine the future of the industry.  While it may seem amazing, a single contest gone wrong or wardrobe malfunction can set the tone for the regulation of an entire industry.  So, while broadcast managers need to avoid being the heavies and playing it so safe that they take the fun out of broadcasting, they do need to impress on employees that they must be aware of the ramifications that their actions can have.  Broadcasting is still a powerful medium, and because of that fact, actions taken by broadcasters can have an impact that is magnified far beyond what might be the case in other media or other industries.  And because it is such a regulated industry, that impact can have huge consequences.

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December 15 Deadline Set for Broadcasters to File Ownership Reports on New Form 323

As we expected, the FCC has set the date for the filing of the newly revised Ownership Reports on the revised FCC Form 323All commercial broadcast stations nationwide will need to file by December 15, according to the Public Notice released today.  According to the Public Notice, the Form will be available in the FCC's CDBS electronic filing system by approximately November 16, and licensees can start to file as soon as the form is available.  The new report replaces the biennial ownership reports that had been filed every two years on the anniversary date of the filing of a station's license renewal.  Now, there will be a single nationwide filing deadline of November 1 every other year.  The revised form is intended to give the Commission greater information about broadcast station owners, so that the Commission can better evaluate the status of diversity in broadcast ownership (see our post here for more information).

The FCC promises a Frequently Asked Questions website on the new form, to be available in the near future.  Watch for it, and be prepared to file by December 15. 

Look for New Ownership Report Soon With Filing Deadline Likely for December

The FCC's struggles to get a new FCC Ownership Report adopted, and to establish a uniform filing date for ownership reports from all commercial broadcasters, seems to be coming to an end.  The new Form 323 Ownership Report was approved by the Office of Management and Budget last week, with the OMB apparently finding the FCC's recent revisions of the form (about which we wrote here) to be sufficient to answer objections that had been raised about its paperwork burden.   From comments made by the Chief of the FCC's Media Bureau at a recent meeting of communications lawyers in Washington DC, the Commission's staff is readying the form for its public debut and, once the details are worked out, commercial licensees will have about 30 days to complete the report and file it electronically at the FCC.  He suggested that the Commission was looking at a December filing deadline - so be on the alert for the Commission's announcement of the new filing deadline to make sure that your report is timely filed by the date that the Commission establishes. 

FCC Commences Proceeding on Children and Electronic Media

On Friday, the Commission formally began a rule making proceeding regarding children and electronic media.  Aware of the vast opportunities, but also the potential risks inherent in today's (and tomorrow's) electronic media, the Commission is seeking to gather information about the extent to which children are using media today, the benefits and risks of the various technologies, and the ways in which society can improve the benefits while minimizing the risks.  Formally entitled "Empowering Parents and Protecting Children in an Evolving Media Landscape", the proceeding is aimed at building a record to inform and guide the Commission's future actions in this area. 

Clearly, these are big picture questions the FCC is dealing with at this stage, but with Friday's Notice of Inquiry the Commission seeks to break the issues down into several areas of inquiry and solicit comment from interested parties.  For example, with respect to the potential benefits, the Commission has identified six principle benefits it sees from electronic media and seeks input about each, including:  (i) improved access to educational content; (ii) ability to acquire technological literacy necessary in a global economy; (iii) ability to develop new skills in the use of technology and the creation of content; and (iv) facilitating new forms of communication with family and peers.  With respect to risks, the Commission has noted a range of potential dangers ranging from the possible exposure to child predators to the impact of excessive or exploitative advertisements.  The Commission's item also asks broad societal questions, such as whether there is a minimum level of media literacy that is required to participate effectively in modern society, and if so, how do we ensure that future generations gain the necessary exposure to electronic media.  At this stage of the process, the Commission is truly asking questions rather than proposing specific rules.  And in fact, there may be potential issues related to regulation in some of these areas, including First Amendment problems in connection with restricting access to indecent material in different types of electronic media. 

Just as an aside, the Notice quietly notes that the Commission previously released Notices of Proposed Rule Makings involving interactive television and embedded advertising on television, respectively.  While the FCC does not incorporate those open matters into this new proceeding, it does invite parties wishing to update the record on issues regarding embedded advertising in broadcast and cable television or interactive television to file ex parte submissions in the earlier dockets. 

The deadline for submitting Comments in this proceeding will be 60 days after publication of the Notice of Inquiry in the Federal Register, with Reply Comments due within 90 days of publication.  Comments may be filed with the Commission on paper, or online using the FCC's newly revamped Electronic Comment Filing System. 

Could Calls on the FCC for More Spectrum Lead to the End of Over The Air TV?

An article from TV NewsCheck last week reported on an approach by an FCC representative to television operators, floating an idea that the FCC would "buy" TV spectrum from existing television station operators, and repurpose that spectrum for wireless users - presumably some sort of wireless broadband.  The funds to buy the spectrum would come from the auction of the frequencies.  Over-the-air TV viewers would perhaps be left with a limited over-the-air service.  Today, another article cites a study filed at the Commission that suggests that the auction of TV spectrum could bring in more than three times the value of what that spectrum is for broadcasting.  Could these developments grow into a ground swell that could signal the end of over-the-air television?  Nicholas Negroponte made the much quoted observation almost 15 years ago, before the Internet was the multi-media service that it is today - that communications devices that were wired will become unwired, and those that were wireless would become wired - the "Negroponte Switch" or the process of "unwiring."  But is this switch inevitable for television, and is it in the industry's best interest?

The theory of unwiring looked at the growing demands of wireless data networks for more and more bandwidth. While voice and data services were, at one time, wired services (the plain old telephone, the fax, even the telegraph), more and more of that information is now being digitally packaged and delivered wirelessly.  At the same time, video programming was delivered through wireless over-the-air television (though no one ever referred to it as "wireless"), but each year is more and more delivered by wired means (by cable companies and what used to be telephone companies).  At this point, estimates are that only a bit more than 10% of television households get their television programming exclusively from over-the-air reception.  Looking at this transition, some have theorized that the progression would continue, and the broadcast services would end up being delivered to fixed locations by wire, while the data services would be delivered wirelessly.

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FCC Postpones Window for New Noncomercial FM Radio Stations Until February 2010

Last Friday we posted about the FCC's announcement that it would open a filing window in December for noncommercial applicants interested in seeking authority for 67 existing vacant FM allotments.  Today, the FCC revised the timing of that window and postponed the opening until February 2010.  Accordingly, rather than accepting applications for these vacant noncommercial allocations in December, the window for filing will now be from February 19 through February 26, 2010.  In addition, the accompanying freeze on the filing of commercial and noncommercial minor modifications will now go into effect on February 6th and last through the closing of the window on February 26, 2010.  The FCC postponed the window in response to a request from a group of noncommercial entities and associations who said that two months would not be enough time for interested applicants to get approval from their boards and pull together an application.  The FCC agreed and pushed the date back.  So noncommercial entities interested in filing for these new stations have some additional time to prepare.  Further information is available in our earlier blog and in the FCC's Public Notice released today. 

FCC Releases Agenda for First Workshop on Revisions to its Multiple Ownership Rules - Localism and Economic Competition Issues Included

The FCC has released the agenda for its Workshop on the multiple ownership rules (about which we wrote here).  The workshop will span three mornings (November 2-4), and will include live testimony from a different panel each morning.  The first panel will include the academic perspective on ownership rules, the second the view from "public interest organizations", and the third from industry representatives, though the participants on that panel are, at this point, the most unsettled.  The Commission also requests written comments from the public, which can be filed through November 20.  As we wrote when this topic first came up last month, these workshops are the first step in the FCC's consideration of the multiple ownership rules - a review that it is required to conduct once every 4 years - with 2010 being the year in which such review is required. 

The Commission sets out a series of questions that it would like to have addressed.  These questions include:

  • The FCC is required by statute to consider the rules governing local radio ownership, local television ownership, radio-TV cross-ownership, broadcast-newspaper cross-ownership and the dual network rule.  The Commission asks if it should consider other rules in the context of this proceeding.
  • In assessing ownership rules, should the Commission treat each rule in isolation, or should it look at all media together and attempt to craft more general rules addressing media consolidation as a whole in relevant markets?
  • Should rules that are adopted be "bright line" rules, that limit entities to specific numbers of stations, or should the Commission make a case by case determination of whether a combination is in the public interest, subject to some general principles?
  • Should the Commission address the traditional concepts of competition, diversity and localism to this proceeding, or come up with new ways of looking at these concepts, or different concepts to assess ownership goals?
  •  How should the FCC analyze competition, localism and diversity in today's marketplace?  What are the relevant markets for analysis?  What metrics should be used?
  • What studies or analysis should the FCC use to inform its decisions on these topics.

 

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House Committee Passes Bill to Allow for More LPFM Stations - With Some Protections for Existing Broadcasters

Last Thursday, the possibility of more Low Power FM (LPFM) stations came a step closer, as a subcommittee of the House of Representatives Energy and Commerce Committee passed a bill (the text of which is here) which would remove existing Congressional restrictions on the FCC adopting rules to ignore potential interference from new LPFM stations to full power FMs operating on third-adjacent channels.  With this committee approval coming at the same time as the Senate Judiciary Committee's approval of a bill that would authorize a sound recording performance royalty on radio broadcasters' over-the-air programming, this was not a good day legislatively for traditional broadcasters.  But it certainly could have been worse, as the LPFM bill does contain new provisions that would serve to extend some protection to existing broadcasters from interference from new LPFM stations.  Perhaps because of these new protections, the committee action was unanimous.

 The new protections built into the bill include the following:

  • Protection for third-adjacent channel full-power FM stations providing reading services for the blind
  • Providing protection for FM translator input signals from interference from new LPFM stations
  • For a year after a new LPFM goes on the air, it must broadcast notices that any listener who experiences interference to another FM station or FM translator from this new LPFM should report that interference to the LPFM station.  In the event that interference is reported:
    • The LPFM must notify the FCC and the third-adjacent channel station that is getting interference
    • The LPFM station must address the interference that arises
    • The FCC is charged with looking for ways to assist the LPFM in remediating interference, including allowing co-location of the LPFM at the same tower site as the FM station or FM translator to which interference is being caused
    • The FCC will investigate allegations of interference from an FM broadcaster or FM translator, no matter how far that interference is from the station, and even if the interference is to mobile reception

The bill does not say, however, what happens if the interference is not remediated.  Under current FCC rules for the FM translator service, a new translator must sign off if interference to existing stations cannot be resolved.  The bill does not specify that remedy for LPFM.  This issue remains to be resolved if the bill eventually passes Congress.

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FCC Provides Further Guidance and Seeks Additional Input on Media Ownership Reporting

On Friday the Commission released a further Order confirming certain recent changes to its ownership reporting requirements for commercial broadcast stations and soliciting additional input on the reporting of certain non-attributable interest holders.  Earlier this year, the Commission revised its rules regarding the reporting of ownership interests by commercial broadcasters.  The FCC also recast its FCC Form 323 Ownership Report to collect and organize the ownership data in a more useful manner.  (Our earlier summary of those changes can be found here.)  By its Order last week, the Commission denied a Petition for Reconsideration filed by the National Association of Broadcasters and reiterated that sole proprietors must file an FCC Form 323 biennially to report on their ownership interests. 

In addition, the Commission ratified the Media Bureau's recent decision to push back the filing deadline for the FCC Form 323 from November 1st to no earlier than 30 days after the Office of Management and Budget (OMB) approves the modifications to the Form 323.  The revisions to the FCC Form 323 are still under consideration and it is not clear when the OMB will approve the collection of the information required by the new version of the Form.  (See our earlier posts here and here regarding the OMB's review of the Form 323 under the Paperwork Reduction Act.)  The Commission also noted its agreement with the Media Bureau's decision to require that each and every filing entity obtain an FCC Registration Number ("FRN") in order to complete the ownership reporting, and that each officer, director, and shareholder disclosed on the report also have an FRN.

With respect to the reporting of certain non-attributable interests, the Commission's Order granted the NAB's request for reconsideration and deleted the previously adopted requirement that entities with a single majority shareholder disclose all minority shareholders (despite the single majority shareholder exemption) and that "eligible entities" disclose otherwise non-attributable investors.  The NAB had argued, and the FCC agreed, that the logic for requiring the reporting of these two types of non-attributable interest holders was ill defined and that the intention to impose this requirement was not explicitly stated or developed in the record leading up to the rule change this past May.  Accordingly, the Commission has opened a further comment period to address the specific question of whether these two types of non-attributable interest holders should be divulged on commercial broadcasters' biennial ownership reports.  Comments on this narrow topic will be due within 30 days of when this Order and Further NPRM are published in the Federal Register, with Reply Comments due within 45 days of publication.  A full copy of the Commission's Order and NPRM, including details on how comments can be filed in this proceeding, is available here

FCC Opens Filing Window for New Noncommercial Educational FM Stations, Imposes Freeze on Minor Changes

The FCC today announced the opening of a filing window for noncommercial applicants interested in seeking authority for 67 existing vacant FM allotments.  Applications on FCC Form 340 will be accepted from December 11th through December 18th for these vacant FM allotments in the non-reserved band between Channels 221 and 300.  A full listing of the allotments that are available can be found here.  Although the vacant channels are in the non-reserved FM Band these particular allocations have been reserved exclusively for noncommercial use.  Thus, the window is restricted to noncommercial educational applicants only.

In the event that multiple applications are filed seeking the same allotment, then the channel will be awarded by applying the Commission's comparative point system for noncommercial applicants.  Further details on filing an application can be found in today's Public Notice, and complete step-by-step instructions are available on the Commission's website here

In order to provide stability and predictability for applicants interested in filing for these vacant allotments, the FCC is imposing a freeze on the filing of minor change applications for both commercial and noncommercial FM radio stations.  The freeze will go into effect after 11:59 PM on November 25, 2009 and remain in effect through the close of the filing window.  Accordingly, any existing FM stations that intend to file a minor modification in November and December should plan ahead so they don't get delayed by the freeze.  In addition, the FCC has also imposed a freeze, effective immediately, on any applications proposing to change the reference coordinates for these 67 allotments.  Similarly, petitions or counterproposals proposing a change in the class, channel, or community of license of any of the allotments will not be accepted until December 19th, after the filing window has closed. 

Senate Judiciary Committee Approves Broadcast Performance Royalty - With Issues Yet to Resolve

The Senate Judiciary Committee today approved the bill to impose a performance royalty (or the "performance tax" as the NAB had called it) on radio broadcasters for the public performance of sound recordings on their over-the-air stations.  As was the case in the House of Representatives when its Judiciary Committee approved their version of the bill, the Committee acknowledged that there was still work to do before a final bill would be ready for the full Congress.  Nevertheless, this is the first time that the Judiciary Committees in both Houses of Congress have approved the performance royalty, serving as a warning to broadcasters that this issue may well be moving to a showdown before the full House and Senate during the current session of Congress. 

There was only limited debate on the bill at the Committee hearing, yet several open issues were identified.  The Committee made clear that, even though it was approving the bill in the form introduced and amended by its managers, there were still changes that would be made in the future before any legislation was ready to be finalized.  Senator Feinstein of California discussed several of the issues.  First, the bill as amended by the Senate managers (Senators Leahy and Hatch), the bill provided relief for small broadcasters so that any performance royalty would not impose an undue burden on them.  The bill proposed the following royalty structure for small broadcasters:

(I) revenues of less than $50,000 - a royalty fee of $100 per year;

(II) revenues of at least $50,000 but less than $100,000 - a royalty fee of $500 per year;

(III) revenues of at least $100,000 but less than $500,000 – a royalty of $2,500 per year;

(IV) revenues of at least $500,000 but less than $1,250,000 – a royalty of $5,000 per year.

Senator Feinstein, who stated that she favored parity between all music services that pay a royalty, suggested that this same royalty structure should be applied to small webcasters who, under current settlement agreements, can pay almost 30 times the amount that a small broadcaster with the same revenues would pay under this bill - and those settlements were an improvement on the royalties that would have been paid under the decision of the Copyright Royalty Board.  Senator Feinstein stated that "the parties" were working on an agreement that would amend the bill to extend these rates to small webcasters.

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Another FCC EEO Audit - This Time for Cable Systems, Not Broadcasters

As we've written before, the FCC every year aims to randomly audit 5% of all broadcast stations and multichannel video programming distributors (MVPDs) to assure their compliance with the Commission's EEO rules.  Every few months, the FCC releases a list of the lucky regulatees who have to respond to the audit.  Today, the Commission issued another one of these audit lists - this time for MVPDs, principally cable systems.   No broadcasters are on the list - this time.  The cable systems and other MVPDs who are subject to the audit are listed on the attachment to the FCC's Public Notice released today, here.

Broadcasters may not have been subject to this round of audits, but the audits will roll around again, and broadcasters will be subject the audit when the next one is conducted.  Thus, broadcasters should review their practices to ensure that they are in compliance with the requirements of the Commission's rules.  Our Advisory setting out those requirements can be found here.

FCC Announces Date on Which Noncommercial FM Stations Can Ignore Analog Channel 6 TV Allotments

The FCC today announced that, effective October 27, noncommercial FM stations need no longer protect Channel 6 analog television channels.  The lower end of the FM band, which is reserved for noncommercial educational FM broadcasting, is immediately adjacent to TV Channel 6.  As most television stations abandoned Channel 6 in June when the digital television transition occurred, noncommercial stations had been protecting stations that were no longer there.  However, as we wrote here, the FCC wanted to deal with noncommercial licensees that were trying to jump the gun by filing applications contingent on the disappearance of the Channel 6 station even before the analog television stations had stopped operating.  To give all noncommercial FM stations an equal opportunity to take advantage of the clearing of Channel 6 in most television markets, the Commission set this uniform date for taking advantage of this change in television station operations.  Of course, noncommercial FM stations need to protect the handful of television stations that continue to operate digitally on Channel 6.  Today's public notice notes that noncommercial FM applications trying to take advantage of the fact that Channel 6 has been vacated in their market by filing an application before the October 27 date will be dismissed unless they had specific unconditional permission of the Channel 6 station.

Note that while the FCC has made the process equal for all noncommercial FM stations, there are questions about whether an unfair advantage may have been given to some LPTV stations in the recent LPTV filing window, where channel 6 applications were not prohibited (see our post here).  Some noncommercial broadcasters were concerned that some of these LPTV applicants could take advantage of the vacating of Channel 6 in their market by filing an application for a new LPTV station that could preclude the filing of an FM application once the window announced in this public notice opened.  To some extent, this may not be a major issue, as the LPTV window for applications for major markets does not open until January.  But we will see if this concern actually resulted in any issues in more rural areas as the LPTV applications that have already been filed in these areas are processed in coming months.  But for NCE FM stations that were precluded from filing for upgrades by a Channel 6 TV station that disappeared after the digital transition, the wait for filing opportunities will soon be over.

Copyright Royalty Board Requires Census Reporting for All Webcasters Except for Small Broadcasters

The Copyright Royalty Board has ordered that most digital music services provide "census reporting" of all songs played by their service, along with other information including the number of listeners who heard each song each time it was played.  The decision, published in the Federal Register today, is a follow up to the Notice of Proposed Rulemaking about which we wrote here, proposing this new permanent rule to replace the interim requirements that required that digital music services provide that information for two weeks each quarter.  The only exception to the new obligation was for "small broadcasters" - i.e. those broadcasters who are only obligated to pay the minimum $500 annual royalty. These small broadcasters will continue to report on the songs that they play for only two weeks each quarter.

The new general rule requiring census reporting applies to all digital music services that pay royalties to SoundExchange for the public performance of sound recordings. However, the obligations set out in this general rule do not replace different rules that may be contained in settlement agreements entered into between services and SoundExchange.  Settlements with recordkeeping exemptions include the broadcaster settlement (summarized here), which give stations the ability to exclude some of their tuning hours from the census reporting requirements that were included in that settlement, and the noncommercial settlement agreements summarized here.  The CRB decision also excludes those services where per performance reporting is not possible (such as satellite radio services where there is no easy way to count performances). 

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STA Request Saves Broadcast Station License From Cancellation For Being Off the Air for A Full Year

Section 312(g) of the Communications Act authorizes the FCC to cancel the license of any broadcast station that has not operated for a full year.   In a recent case, the Commission clarified when it would choose to use that authority to cancel the license of a station that had not been on the air with authorized facilities within that one year period.  In this case, the FCC decided not to cancel the license of a station whose tower was destroyed, where the station came back on the air from the old site but with reduced facilities before the end of the one year period, even though the resumption of operations was initially conducted without FCC authority for the low power operation. The station did, however, ask for Special Temporary Authority to operate with these facilities, authority which was not granted until several weeks after the station had resumed operation.  As the station had requested the authority to resume operations, and had been candid with the FCC about its operations and intentions, the Commission did not cancel the license, but it did fine the station $7000 for operating with unauthorized facilities during the period before the STA was granted.

The decision distinguished the actions of the licensee here with that of the licensee in another case, about which we wrote here, where the FCC canceled the license of a station that was forced off the air at its licensed site, and came back on the air just before the end of the one year period from a totally new site where it had no FCC authority, and where it could not get FAA approval for operations.  The Commission stated that the element of deception in the earlier case, with the station coming on the air at a site where it could not get FCC approval as the FAA had refused its operations from the site, was the distinguishing factor which caused that station license to be canceled. 

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ASCAP and BMI - Another Royalty Battle for Broadcasters?

While we have written much about the battle over the broadcast performance royalty (or the "performance tax" as broadcasters call it) - whether broadcasters will have to pay artists and record labels for the right to play their music on the air - we have not written much about another looming issue with the royalties that broadcasters must pay to play music on their stations.  While broadcasters are very familiar with the ASCAP and BMI royalties, they may not be fully aware that there is a looming dispute over the amount that broadcasters will pay to these organizations in the near future.  At a panel that I moderated at the NAB Radio Show, Bill Velez, the head of the Radio Music Licensing Committee, talked about the current negotiations for the renewal of the royalty agreements between radio stations and these two Performing Rights Organizations ("PROs").  Both of the current agreements expire at the end of this year, and the RMLC is in the process of trying to negotiate new agreements.  However, because many broadcasters feel that the current deals charge more for these music rights than is justified in the current economic environment, while the PROs are reluctant to decrease the royalties that the composers they represent currently receive, the differing perceptions of the value of these rights could lead to litigation over the amount that should be paid by broadcasters for the use of this music.

First, it is important to understand what rights ASCAP and BMI are providing. These organizations, along with SESAC (about which we have written here), provide the copyright license for the "public performance" of the "musical work" or the composition, the words and musical notes to a song.  This is in contrast to the rights to the sound recording (the song as performed and recorded by a specific artist), which is licensed by SoundExchange.  Webcasters have to pay ASCAP and BMI for the use of the composition, as well as paying SoundExchange for the use of the sound recording when streaming music on the Internet.  Broadcasters only have the obligation to pay ASCAP,BMI and SESAC for the composition in connection with their over the air broadcasts but do not, under the current law (unless the broadcast performance royalty is passed), have to pay SoundExchange.  Because the current ASCAP and BMI royalties have been in place for several years, most broadcasters probably don't think much about them, but they may have to in the near future.

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Ownership Report Filing Requirement Officially Suspended Until New Form 323 is Approved by the OMB

Just this morning, we posted a comment about the new FCC Form 323 Ownership Report that was supposed to be required of all commercial broadcasters on November 1 of this year, and then on November 1 of every other year thereafter.  We wrote about how the approval of the form by the Office of Management and Budget under the Paperwork Reduction Act had been held up, and that the November 1 filing deadline looked unlikely.  Well, the FCC today issued an Order officially putting the November 1 filing obligation on hold pending approval of the new form.  There had been a suggestion in the FCC's order issued in late May, which suspended ownership filings for stations in states that had ownership filing obligations between then and November 1, that stations in these states would have to file on the old form on November 1 if the new form was not adopted by that date.  Today's Order suspends even that obligation.  Thus, no station needs to be prepared to file the new Ownership Report until the new version of Form 323 is approved by the Office of Management and Budget - whenever that may be.  Stayed tuned for more developments.

So What Happened to Those New Ownership Reports that Were Supposed to Be Filed on November 1?

Several months ago, we wrote of the FCC's requirements for a new biennial Ownership Report for all commercial broadcast stations - to be filed by all stations in every state on November 1 of every other year - beginning with November 1 of this year.  The FCC has even suspended the requirements for commercial stations to file reports that were due between the date that the rule was adopted and November 1 (reports being due on the even anniversaries of the filing of license renewal applications for stations in the state to which the station is licensed). Yet, here we are, less than a month from the supposed filing deadline for the new forms, and we've not seen any notice from the FCC that the new forms are ready to be used or any reminder for broadcasters to prepare and file those reports.  What gives?  Well, the Paperwork Reduction Act has struck again.

We've written about the Paperwork Reduction Act before, and its obligation that the FCC (or almost any other government agency) has to justify any new paperwork obligation that it is imposing on companies that it regulates - showing that the burden is as minimal as possible and serves a necessary regulatory process.  Here, when the new ownership reports on FCC Form 323 were submitted to the Office of Management and Budget for approval under the Paperwork Reduction Act, several parties, including the NAB, objected that information requested by the new form was unnecessarily complex, and in fact might violate other Federal laws (in particular Federal Privacy laws) as they required not only the filing of information about the companies who own radio stations with identification of their owners, but required that each and every attributable owner of a station (and actually including a few nonattributable owners who must be reported under the new reporting scheme), obtain an FCC "FRN" identification number that would be attached to that person and uniquely identify them in connection with each and every broadcast interest that they have.  In most cases, that would require that the individual provide a social security number (and  corporate entities would have to file Taxpayer ID numbers).  While the FCC promised to keep those identification numbers private, security issues were not addressed and questions were raised why the Commission had to put so many individuals through so much of a burden when the FCC reports had not been adopted to track individual ownership interests, but instead to track the minority ownership of broadcast stations.  Other issues with the new forms were also raised, as the new forms would have required many filings for stations held in independent corporations, but with a common parent company as parent companies cannot simply cross-reference multiple licensee companies that they own, but instead have to file multiple ownership reports for each licensee company in which they have an interest.  In addition, ownership structures and other broadcast interests can no longer be identified by PDF attachments, but they instead needed to be separately entered into their own fields on the new form.  The idea was to make the information searchable - but it would also result in vastly more time to prepare these reports.

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