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

Last week, we wrote about a Commission decision that said that only one application in a noncommercial MX Group can be granted even if, when the first is granted, there are other applications in that group that would not be mutually exclusive with (i.e. would not create any prohibited interference to) the winning applicant.  While multiple applicants can be granted out of an MX Group if there is a settlement, only one application will be granted when the point system analysis is performed. Well - if you have an application still pending in the 2007 NCE Window and were contemplating a settlement, now is the time to do it.  In February, the Commission released an order deciding the winner in 59 different MX groups.  A second such decision is now circulating among the Commissioners for approval, and we hear that a third will soon follow as the FCC accelerates its review of the remaining applications from the 2007 window. Once these orders are released by the Commission, there is no more chance to settle any case decided in such an order, and thus only one application from any group will be granted.  So, if you are planning a settlement, do it now.

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In 2008, the FCC adopted a requirement that broadcast stations include in their advertising contracts a provision that says that advertisers will not discriminate on the basis of race or gender.  We wrote about that requirement here, and our post was greeted with significant surprise by many broadcasters as the requirement did not glean much publicity when it was first adopted.  Today, the FCC issued an Erratum to that two year old requirement, eliminating from the certification its application to discrimination in advertising based on gender.  Instead, the Erratum stated it was only discrimination based on race or ethnicity that was prohibited.  The Erratum stated that this language "more accurately" reflected the "Commission's clear intent" in adopting the requirement for the certification in advertising contracts.

The removal of "gender" from the advertising discrimination certification seems to recognize the common-sense advertising principal that some advertising, by its very nature, may be targeted to one gender or another.  But the correction of this language through an Erratum seems to avoid many of the hard issues that remain with this certification.  The Commission was very terse in its explanation of how this certification was supposed to work and exactly what it was supposed to prevent.  There were certain situations that seem to fit within the prohibitions - situations where the advertiser of a general market product refuses to allow it to be advertised on stations that target minority audiences (see our discussion of the Mini Cooper advertising controversy here).  This was to avoid the "no Spanish, no urban dictates", ruling out advertising on stations with urban formats or those programmed in Spanish, that some felt were attached to some advertising orders.  But there are many other questions that remain to be clarified.

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David Oxenford, Bob Corn-Revere, David Silverman, Brendan Holland, and others from Davis Wright Tremaine's media and communications practice will be in Las Vegas, Nevada from April 10-15 for the 2010 NAB Show.  The NAB convention is an annual event and a focal point for engineering, legal, and business issues for the broadcasting and greater media worlds.  Bob Corn-Revere will be speaking at the American Bar Association Conference, Representing Your Local Broadcaster, on April 11, on a panel on new technology and the dangers it poses for journalists reporting from disaster areas or other scenes where immediate verification of information is not possible - the panel is called:  "Clear and Present Danger, Guiding Journalists Through the Catastrophic Perils."  David Oxenford, on the morning of April 12, will be speaking at the NAB Show on a panel called, "Copyright Licensing: Seeking a Bridge Over Troubled Waters", a panel dealing with the proposed broadcast performance royalty, streaming fees, the current ASCAP and BMI negotiations, and other copyright issues that arise in day-to-day operation of a broadcast station.  Dave will also be moderating a panel at the Radio and Internet Newsletter's RAIN Internet Radio Summit, to be held in conjunction with the NAB Show, at the Renaissance Hotel on April 12.  Be sure to join us at these and other events in Las Vegas.

To help you attend the Show, we have been offered some discounts and free admissions for our readers.  The RAIN Summit, Internet Radio's main event, has offered readers of the Broadcast Law Blog a 30% discount on admission to the conference.  That conference includes a full day of discussion of Internet radio topics, and will feature many of the industry's biggest names.  From past experience, this always a great event with much great information, important for anyone with any interest in Internet radio and digital media.  The Summit features great networking opportunities, with a box lunch and post-conference reception.  An Exhibit Hall pass to the NAB Show is also included for RAIN attendees

For those not interested in Internet radio, we can still get you into the NAB Show's Exhibit Hall - for free!  The NAB has offered our readers free access to the Exhibit Hall at the show. This free Exhibits-Only pass includes:

• Access to the Exhibit Hall at the Show
• Access to the Opening Keynote and State of the Industry Address
• Access to Info Sessions on the Convention floor
• Content Theater and Destination Broadband Theater

To find out how to register for these discounted offers, click on the Continue Reading link below.

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In a decision released last week, the FCC's Audio Division denied the application for a new noncommercial FM station which had tentatively been selected to receive a permit for a new station because the applicant did not have reasonable assurance of transmitter site availability when it originally filed its application.  This case makes clear how important that issue can be in connection with any application for a new broadcast station, and even in connection with applications for site changes by existing broadcasters.  The FCC has long required that a broadcaster, before filing an application for a new or modified station, have reasonable assurance of transmitter site availability. This obligation applies not only to full-power radio and television applications, but also to applications for low power TV (LPTV) or low power FM (LPFM) stations, and to applications for FM or TV translators as well.  The reasonable assurance requirement basically insures that the applicant is making a realistic proposal to the FCC, one that can likely be built, and not just some theoretical proposal for a site at which a station could never be constructed.  If reasonable assurance is not obtained before the application is filed, the application is subject to dismissal, as this case makes clear.

Reasonable assurance has never required a binding legal commitment for the use of a particular transmitter site, but this case makes clear that something more than a mere possibility of the availability of the site is necessary.  In this case, a representative of the application had communicated with the tower owner, who said that the tower was currently at capacity, but that it was possible that, over time, some space on the tower could become available.  The FCC's Audio Division concluded that was not enough, as it did not demonstrate a present availability to the applicant of the site at the time that the application was filed.  The FCC discussed the need for the applicant and the site owner to have a "meeting of the minds" as to the availability of the site before an applicant can specify it.  The assurance cannot be contingent on a future event that is unlikely to occur.

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Incomplete public inspection files were the largest source of fines during the last license renewal cycle.  We wrote last week about two noncommercial broadcasters whose renewal applications filed many years ago have just now led to consent decrees and voluntary contributions to the US treasury in lieu of fines.  To help commercial broadcasters avoid these issues, we have prepared a Guide to the Basics of Public Inspection File Obligations for Commercial Radio and Television Broadcasters, discussing the rules that need to be followed with respect to the availability of the file to the public, its required contents, and the time period for the retention of documents kept in the file.  The Guide also has links to some of our other advisories that deal in more detail with the obligations to keep specific types of documents in the file - including political broadcasting documents, quarterly issues programs lists, EEO reports and children's television reports.  Read the guide, available here, review your operations and be prepared for the next renewal cycle.

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The FCC today issued a Public Notice  instructing applicants for new analog low power TV (LPTV) stations to amend their pending short-form applications by May 24th in order to specify digital operations. If the short-form application is not amended by May 24th it will be dismissed.  As some of you may recall, way back in 2000 the FCC opened a window for the filing of new LPTV stations. Rather than full applications, at the time applicants were simply required to file a "short form" tech-box application specifying the basic parameters of the proposal.  And of course, at the time the proposals were all for new analog LPTV facilities. Over the years, many of these proposals were found to be non-mutually exclusive, and the applicant applied for and received construction permits for new LPTV stations.  Other proposals were conflicted and were included in an FCC Auction to resolve the conflict, which also resulted in the grant of new construction permits. Many others, however, remained mutually exclusive and deadlocked. The FCC has now decided that, as it will no longer grant any new analog LPTV stations, any remaining proposals that are still pending must be amended to specify digital operations. 

Today's action is consistent with the Commission's pronouncement made last Summer when it announced the opportunity to commence filings for new LPTV stations in rural areas (which we wrote about here).  At that time, the FCC stated that going forward it would grant only digital LPTV stations and not any new analog LPTVs.  It's unclear why today's Public Notice was not released last year once that decision was made, but in any event today's action would appear to be one more step towards the ultimate transition of all LPTV stations to digital operations, which was mentioned as part of last week's National Broadband Plan (which we discussed here).  While the Commission has not yet set a date for the transition of existing analog LPTV stations to digital, the Broadband Plan suggested accelerating that process to migrate all broadcast television to digital operations.  However, the Plan also suggested potentially repacking the television spectrum, encouraging the consolidation of television operations, and changing interference protections for teleivsion stations, so whether the Commission would move forward with requiring analog LPTV stations to convert to DTV without clarifying some of these new proposals and their impact on low power television stations is unclear.  One other observation:  with the potential conversion to digital operations looming, the days of analog LPTV stations operating on TV Channel 6 and broadcasting audio intended to be received by FM radios would appear to be numbered. 

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The Copyright Royalty Board has announced its approval of new sound recording performance royalties for "new subscription services", i.e. music services provided to the customers of cable or satellite television systems by companies not in this business in 1998 at the time of the adoption of the Digital Millennium Copyright Act.   This royalty was adopted after a settlement between Sirius XM Radio, the only music service which filed to participate in this proceeding, and SoundExchange.  The settlement as approved provides for royalties that are the higher of 15% of the revenues of the service (subscription payments plus other revenues such as advertising and sponsorships provided by the service), or a minimum per subscriber fee that increases over the five year course of the royalty period.  The details of this settlement, including the escalating per subscriber royalties, can be found in the Federal Register notice of its approval, here.

This royalty has very limited applicability, governing only the payments due from audio services "transmitted to residential subscribers of a television service through a Provider which is marketed as and is in fact primarily a video service," i.e. music services bundled with a subscription to a cable or DBS service - and only where that service is delivered to residential users.  Given the limited applicability of this service, one might be inclined to ignore its adoption.  However, broadcasters in particular should pay attention to this royalty, as it is again indicative of the value that the music copyright holders and SoundExchange place on the use of their music in an audio service, and thus of what SoundExchange would seek were they to get a performance royalty on over-the-air broadcasting.   

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In two consent decrees released last week, the FCC's Enforcement Bureau agreed to significant "voluntary contributions" to the US Treasury to settle noncompliance issues reported in license renewal applications filed by noncommercial radio stations.  Both stations had voluntarily reported public inspection file issues in their license renewals.  One admitted to having no issues programs lists in its public file and having filed no biennial ownership reports for the license renewal period.  The other admitted that it was missing several years worth of quarterly issues programs lists.  In the first case, the FCC agreed to a $10,000 contribution in lieu of a fine (see the agreement here), in the other case a $1700 contribution (which was less than might normally be the case, as it was reduced by a financial hardship showing - see the order here and the agreement with the FCC here).  These cases demonstrate the significance that the FCC places on public file issues - the biggest source of fines in the last license renewal cycle.  With a new license renewal cycle beginning in June 2011, now is the time for all broadcasters - commercial and noncommercial - to make sure that they are ready for the beginning of this cycle by clearing up any outstanding regulatory issues.

The fines also once again demonstrate that the Commission no longer treats noncommercial broadcasters differently than commercial broadcasters - fining noncommercial stations for violations just as it does their commercial brethren (see a previous post on this subject, here).  In these cases, the use of Consent Decrees also demonstrate the problems that issues arising at renewal time can cause.  If a station's license renewal reports a problem, such as an incomplete public file, the application is pulled out of the routine processing pile for further scrutiny.  Such scrutiny can often take a year, and sometimes several years, to resolve.  While the renewal application is in this state of limbo, a sale of the station will not be approved, and sometimes other regulatory actions can be held up (in fact, in one of these cases, a transfer of control of the licensee company was delayed while this issue was being resolved).  Thus, to avoid these lengthy delays, stations often decide to pursue the consent decree route to try to resolve the issue more quickly than would be the case if the application were just left with the FCC to run its course.

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In recent weeks, SoundExchange has begun to send letters to broadcasters who are streaming their signals on the Internet without paying their SoundExchange royalties.  Despite all of the publicity about Internet radio royalties and the controversy about the rates for those royalties, there still seem to be webcasters unfamiliar with their obligations to SoundExchange.  As we have written many times, SoundExchange collects royalties for the public performance of the "sound recording", a song as recorded by a particular artist.  Those royalties, which are charged only to digital media companies like Internet radio, satellite radio and digital cable radio, are paid half to the copyright holder in the recording (usually the record company for most popular songs) and half to the performers on the recording.  These royalties are paid in addition to the royalties paid to ASCAP, BMI and SESAC for the public performance of the musical work - the underlying musical composition, the words and music of a song - money that is paid to the composers of that musical work.  So just paying ASCAP, BMI and SESAC is insufficient to cover your streaming operations when music is being used. 

While these royalties have been law since 1998, and have been set by decisions first by a CARP (Copyright Arbitration Royalty Panel) in 2003, and then by the Copyright Royalty Board in 2007, it seems like some companies still have not gotten the message about the obligations to pay these fees.  Thus, in the last few weeks, SoundExchange has been sending out letters to companies that have not been paying.  The letter are not particularly threatening - instead pointing out the obligations that companies have to pay the royalties, and asking if the webcaster may be paying under some corporate name that is not readily apparent from the website.  The letter also points the webcaster to the SoundExchange website for more information.  Finally, it notes that SoundExchange represents the copyright holders for collections purposes, and notes that nothing in the polite letter waives any rights that those holders have to pursue actions for failure to pay the royalties - in other words to sue for Copyright infringement.   So, gently, webcasters are reminded to pay their royalties or risk being sued for copyright infringement, with potential large penalties for playing music without the necessary licenses.

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Using music on your website, employees on Facebook or twitter, doing podcasts?  Everyone needs a guide to the legal issues that you may face as broadcasters move their content to new platforms.  At the Convention of the Oklahoma Association of Broadcasters, held in Oklahoma City on March 18-19, David Oxenford conducted a seminar on Legal Issues for Broadcasters Operating in a Digital World – dealing with legal issues that broadcasters need to take into account when moving their content and presence beyond their over-the-air signals.  The PowerPoint presentation used in that seminar is available here.  Other issues that were discussed in that session include:

• Use of music on websites (see our guide to Music Rights for Digital Media Companies here)
• Domain name issues (see our recent post on new domain names here)
• FTC guidelines on disclosing consideration given to bloggers and other users of social media sites (see our post on that subject here)
• Legal issues that arise from the social media (see Davis Wright Tremaine's webcast on the social media, here)
• Issues in connection with user generated content (see our posts here)

In addition, David conducted a separate seminar on FCC issues facing broadcasters.  A copy of the PowerPoint from that presentation is available here.  Issues discussed in that session included:

• The FCC's National Broadband Plan and its impact on television broadcasters (see our post here)
• The proposed broadcast performance royalty (or performance tax, see our post here)
• The FCC proceeding on the Future of Media (see our posts here and here)
• The recent Citizens United decision and its impact on political broadcasting rules (see our description of that case here, and our Political Broadcasting Guide, here)
• A variety of fines imposed on stations for violations of FCC rules - a summary of many of the recent fines can be found here.

 Broadcasters and others interested in the Digital Media should watch our Blog for future developments on all these issues and the many other legal matters of importance to their businesses. 

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$15,000 per station was the cost of a broadcast licensee’s failure to adequately supervise two stations of which he was the licensee, but which were operated pursuant to time brokerage agreements or LMAs. Like many stations in these tough economic times, this licensee decided to allow a third party to provide the bulk of the programming and retain the bulk of the sales revenues, in exchange for a payment. However, as the licensee remained the licensee, he was required to maintain and exercise control over the station’s operations, and maintain a meaningful staff presence at the station. In reviewing the operations of these stations, the FCC’s Enforcement Bureau in recent decisions (here and here) concluded that the adequacy of that control was insufficient – providing a warning to other station licensees operating under LMA agreements that they must maintain operational control over the stations that they own.

The FCC has long said that a licensee must maintain a meaningful staff presence at a station, even if the station receives the vast majority of its programming from some other source – whether that is a network or programming provided under an LMA. Meaningful presence has required that at least two employees at the station be employed by the licensee, one of whom must be managerial and perform no services for the broker providing the programming under the LMA. This case makes clear that these required licensee employees must be physically present at the station’s main studio on a regular day to day basis – they cannot be located at some distant location supervising the station remotely or only periodically present at the main studio. Failure to have the station’s main studio manned by the required personnel in and of itself accounted for $7000 of the fine in this case.

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In a recent decision, the FCC upheld the dismissal of a noncommercial FM application filed during the 2007 NCE FM window, despite the fact that the application was not mutually exclusive with any other pending application. This somewhat unusual result came about following the selection of a winner from among a group of mutually exclusive noncommercial applications. That group of mutually exclusive applicants (or, as the FCC calls it, an “MX Group”) contained a number of applications in a “daisy chain.”   As an example, a daisy chain would be where Applicant A was mutually exclusive with Applicant B, and Applicant B was mutually exclusive with Applicant C, and Applicant C was mutually exclusive with Applicant D, but Applicants C and A were not themselves mutually exclusive.  In the case decided last week, there were actually 13 applications in the chain.  When the FCC used its point system for evaluating noncommercial applications, it selected a winner and dismissed all of the remaining applicants.  One of those dismissed applicants, The Helpline, asked the FCC to reconsider the dismissal of its application, arguing that, when you dismissed all of the applications that were mutually exclusive with the winning applicant, the technical facilities proposed by the Helpline would no longer be mutually exclusive with any application and thus could be granted as well. The FCC denied that request.

Why was that request denied? In its order establishing the rules governing the processing of noncommercial FM applications in the 2007 NCE window, the FCC decided that it would grant only one application out of any MX Group, even where not all of the applications in that group were mutually exclusive with each other. According to last week's order, the Commission considered allowing the grant of more than one applicant in a group, but determined that doing so could lead to the grant of an application that is “inferior” to other applications, and which would not necessarily represent the best use of the spectrum, so they decided to grant only one applicant from each MX Group.

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On March 16, David Oxenford spoke at a Continuing Legal Education Seminar on the FCC’s Political Broadcasting rules. The panel, sponsored by the Federal Communications Bar Association, included another attorney in private practice, an attorney from the NAB, Bobby Baker (the head of the FCC’s Political Broadcasting office), and a media time buyer for political candidates. The panel not only discussed the basic rules governing political advertising on broadcast stations, but also dealt with topics including the impact of the Citizen’s United case on FCC rules (see our post here on that topic), issues of what to do if a political spot contains objectionable content, and how stations should deal with complaints from candidates about the content of political ads. Many of these topics and others are discussed in the Davis Wright Tremaine Political Broadcasting Guide, available here.  The discussion also provided a useful reminder on certain aspects of the law regarding how much broadcast stations can charge political candidates for the purchase of advertising time on broadcast stations.

At the session, the political time buyer complained that broadcast stations were trying to charge political candidates premium prices for purchases of advertising time outside the “political window.” During the window, 45 days before a primary and 60 days before a general election, stations are required to charge candidates the “lowest unit rate” charged for any spot of the same class of time run on the broadcast station. Outside the window, broadcasters do not have to charge lowest unit rates but, as the buyer reminded the audience, they do still need to charge “comparable rates” to what the station charges advertisers for the same type of purchase. So, while candidates do not get volume discounts without buying in volume (as they do during the window), if they do buy in the required volume, they should get the same discount that other advertisers get. Stations should not “mark up” the rates charged to political candidates outside of the window.

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The FCC’s Media Bureau today asked for public comment on the Petition recently filed by a number of multichannel video providers - including seven large cable companies, both DBS companies, and Verizon – along with the American Cable Association and several public interest and trade organizations. The Petition seeks changes in the rules governing the retransmission consent process, including potentially requiring arbitration of disputes and limiting the ability of television stations to withhold their signals while the retransmission consent negotiation process is proceeding. Comments in this proceeding are due on April 19 and replies on May 4.

This Petition was prompted in part by several recent high profile retransmission consent negotiations, where television stations threatened to pull their signals from cable systems if their requests for compensation were not met. While television companies argue that being able to pull their signals is a necessary bargaining chip in the negotiation process, petitioners submit that the changed video marketplace makes this option unreasonable, as it can harm both the video provider and the local viewers who are deprived of the station’s signal while negotiations are ongoing.

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The .co top level domain (TLD) is being opened to the general public, and one can envision a run on registrations similar to that experienced for .com.  It is easy to see why the Colombia country code, formerly available in that country only, may become very popular in the US and elsewhere.  For one thing, .co is the standard abbreviation for "company."   It is also a very common misspelling of .com.  It has been estimated that google.co gets 15,000 hits per day by mistake.   From April 26 until June 10, a window will open in which only registered trademark owners will be able to register their marks in the .co TLD.  Beginning in July, however, .co will be opened to the general public.  We suggest that any companies with registered marks protect those marks in the .co TLD in April, and those that do not should register their call signs, company names or nicknames as soon as possible in July.  If someone else registers your call sign or company name in the .co TLD before you do, it could be very difficult and costly to recover it.

It is difficult to believe that the first .com domain name was registered just 25 years ago this week.  By the end of 1985, only five .com domain names had been registered.   Ten years later there were 120,000 .com domain names.  Now, there are nearly 85 million registered .com domain names.  Beginning sometime next year (2011), ICANN (the Internet Corporation for Assigned Names and Numbers) is expected to allow companies to buy their own TLDs (meaning that your company name could follow the "dot" in a URL), although the cost is expected to be close to $200,000 per TLD.  However, Canon has already announced that it intends to apply for .canon, and it is expected that other large companies will follow suit.

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In the last two weeks, David Oxenford has, at two different conferences, moderated panels on digital music rights and licenses.  At the Digital Music Forum East, in New York City on February 25, 2010, his panel focused on rights and licenses generally, featuring panelists from SoundExchange, BMI, the Harry Fox Agency, Rightsflow and MediaNet.  As a handout, David provided copies of Davis Wright Tremaine's Guide to The Basics of Digital Music Licensing, available here.  Discussion on the panel included the question of when there is a public performance versus when there is a reproduction of a copyrighted piece of music (see our post here), royalties for interactive streaming (see our post here), and the difference between a sound recording and a musical composition, rights to both of which are needed in most digital uses of music (see our post here).

At the RAIN Summit North, held at Canadian Music Week on March 12, David's panel discussed the music royalty structure for Internet Radio companies in Canada. Panelists included the CEO of  Re:Sound (the Canadian version of SoundExchange, collecting royalties for the public performance of sound recordings) and the head of CMRRA-SODRAC (CSI), the Canadian Rights Society that collects for reproductions of musical compositions.  In Canada, broadcasters and Internet radio companies pay not only to SOCAN, the Canadian equivalent of ASCAP, BMI and SESAC in collecting for the public performance of musical compositions, but also to CSI for the reproductions of musical compositions made in servers, buffers and other digital reproductions. 

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Just a reminder that all Video Programming Distributors -- which includes broadcast television stations --  must identify a contact person for closed captioning issues, both immediate issues and general complaints, and file that contact information with the FCC by March 22, 2010.  As we've discussed previously, new FCC closed captioning rules recently went into effect that require video programming distributors to establish a contact for handling immediate closed captioning concerns, as well a contact for receiving written captioning complaints of a general or non-time sensitive nature.  In order to assist viewers and potentially facilitate the resolution of such captioning complaints, the rules require that video programming distributors publicize the appropriate contact information and also provide the information to the Commission, which will maintain a database open to consumers.  

Accordingly, by March 22, 2010, television stations must designate a contact person, post the necessary contact information on their web site (and in any phone directories the station may advertise in), and submit the information to the FCC.  The best way for stations to file this information with the FCC is to visit the FCC's Web site and submit the information online. The Commission’s Web site contains a detailed form with step-by-step instructions that will walk applicants through the process.  Alternatively, the contact information can be e-mailed directly to the FCC’s Disability Rights Office at: CLOSEDCAPTIONING_POC@fcc.gov.

Video programming distributors must keep their contact information current and update both their Web sites and the Commission’s database within 10 business days of any changes to the information.  Further details about the contact information requirement and the revised FCC closed captioning complaint rules can be found in our earlier posting here. 

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The FCC today released its National Broadband Plan to Congress, and in it spelled out its suggestions for the future of television. Facilitating the deployment of ubiquitous, dependable wireless broadband service is identified as a fundamental goal of the Commission’s proposals. The authors of the Commission’s report have viewed the problems experienced by some wireless broadband providers in major markets as indicative of a coming shortage in wireless capacity. Specifically, the Commission is concerned that as more and more applications for wireless broadband are deployed, the capacity of existing wireless spectrum will be exhausted, foreclosing opportunities presented by wireless broadband. And, as detailed below, the Commission sees the television spectrum as providing a significant part of the answer to that perceived spectrum shortfall.

The opportunities for broadband are many, in the view of the authors of the study. The Commission sees growing demand and future applications for wireless broadband not just in the areas of entertainment and commercial applications, but also in education, health, energy conservation, civic involvement, and public safety, among others. However, the Commission fears that sufficient spectrum will not be available to meet all of these needs.

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Broadcasters need to be aware that ASCAP, BMI and SESAC (the "performing rights organizations" or PROs) don't cover them for all uses of music - especially uses that may be made on station websites.  Offering downloads, podcasts, and streaming video featuring music all require specific permission from music rights holders.  And, as we wrote just last week, incorporating music into recorded commercials also requires specific permission from rights holders - not just your routine payment to the PROs.  As music usually has two different classes of rights holders - those that hold the rights to the musical composition (the lyrics and music in the song, usually held by a publishing company), and the rights to the "sound recording" or "master recording" (usually held by the record companies), knowing who to ask for what rights can sometimes be complicated.  To help explain some of the basic issues of where to go for what rights, Davis Wright Tremaine has put together a Guide to the Basics of Music Licensing, available here. 

The Guide also addresses some of the controversial issues in music licensing, and the question of "fair use", a concept often cited but also often misunderstood.  So check out ourGuide for a basic introduction to the law governing music rights issues. 

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In one more indication that the Broadcast Performance Royalty (or "performance tax" as opponents of the legislation call it) is not dead yet is an article in yesterday's New York Times reviewing the issues at stake in the proceeding.  What was perhaps most interesting about that article was the fact that it appeared only one page away from an article about Internet Radio service Pandora, and a discussion of how that hugely popular service was almost driven out of business by music royalties set by the Copyright Royalty Board in their 2007 royalty decision.  The article about the broadcast performance royalty mentions that one of the difficulties in assessing the impact of the proposed royalty is that no one knows how much it will be, as it would be set by the Copyright Royalty Judges on the CRB.  Yet the Times makes no mention of the controversy over the previous decisions of the Board in the context of the Internet radio royalties, and how such royalties almost impacted services such as Pandora.  

How much would the proposed royalties on broadcasters be?  We have written before on that subject,here.  Under previous decisions using the "willing buyer, willing seller" royalty standard which is set out in the legislation that has passed House and Senate Judiciary committees dealing with this issue, the lowest royalty for the use of music in any case before the CRB has been 15% of gross revenues.  Even using a standard seemingly more favorable to the copyright user (the 801(b) standard that assesses more than the economic value of the music but also looks at the impact that the royalty would have on the stability of the industry on which it is imposed), the royalties have been in the vicinity of 7% of gross revenues for both satellite radio and digital cable radio, the two services that are subject to royalties set using the 801(b) standard.  This is more than broadcasters currently pay to ASCAP, BMI and SESAC - rates which are also currently the subject of proceedings to determine if these rates should be changed (see our posts here and here).   

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David Silverman participated on a panel discussing the legal aspects of social media at the Great Lakes Broadcasting Conference in Lansing, Michigan on March 3, 2010. His PowerPoint presentation focused on the risks and benefits of using Twitter, Facebook and other social media in the employment context, including use by broadcasters. There are a number of laws that impact both the protection and vulnerability of social media. The bottom line is that stations need to determine the extent to which social media use will be permitted and/or encouraged in the workplace and then develop a social media policy that will delineate the ways in which station employees can use social media with regard to station matters, while at work or at home.  A copy of David's PowerPoint presentation from the session is available here. 

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Using music in commercials is not as simple as just paying your ASCAP, BMI and SESAC royalties.  While many broadcasters think that paying these royalties is enough to give them the rights to do anything they want with music on their stations, it does not.  The payments to these Performing Rights Organizations (PROs) only cover the right to publicly perform music, i.e. to broadcast it.  They do not give you the right to take the music and "synchronize" it with other words or video material, e.g.  you cannot put music in a recorded commercial or otherwise permanently fix it into a recorded audio or video production.  Instead, to make such a production, the producer needs to get the rights to both the underlying musical composition (the words and musical notes) and, if you are planning to use a particular recording of a song, the rights to use that particular recording ( the "sound recording" or "master recording").  Getting these rights may very well require that you deal both with the record company or performing artist whose recording you plan to use, and the publishing company that represents the composer of the music.  And, as some artists may have concerns about having their music used to pitch some products, getting the rights to that artist's version of a particular song may not be easy. 

Even using the tune of a familiar song in an advertisement, with different words, is not permitted without getting the rights to do so from the publishing company.  A copyright holder in a musical composition has the right to prepare "derivative works" of that composition.  A derivative work is one that uses the original copyrighted material, but changes it somehow - like putting new words to an old tune.  Many think that "fair use" permits the making of a parody of a song, so they are allowed to use the tune as long as they produce a new version that is funny.  However, in the copyright world, fair use is not that simple.  A parody, to allow use of the original tune, must be making commentary or criticism of the original song.  Being independently funny or amusing, or otherwise dealing with some independent social or political issue, does not give you the right to use the music without securing permission from the composer of the music first.  A recent story in the Hollywood reporter's legal blog, THR,esq.com, told the story of a Congressional candidate, Joe Walsh, who thought that it would be cute to use the music of former Eagle Joe Walsh, to make fun of Democratic politicians.  As set out in that story, Eagle Joe Walsh's attorney did not find the campaign song very funny, and sent a very strong letter objecting to that use (the LA Times site had at one point had a link to a video of a band playing the candidate's version of the Joe Walsh song "Walk Away", but it now says that the video has been taken down due to a copyright objection). Don't let your station be the recipient of such a letter - get the rights to use music in commercials or other productions. 

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The FCC's rules limiting the common ownership of radio and television stations, and of television stations and daily newspapers, are triggered by the Grade A contours of the television station encompassing the city of license of the radio station, or the city in which the newspaper is published.  Since June, there has been one problem with the application of that rule (Section 73.3555) - television stations in the digital world no longer have Grade A contours.  When adopting service contours for digital television, the FCC specified a Noise Limited Service Contour ("NLSC") as essentially the equivalent of the Grade B contour of an analog television signal - the contour at which the majority of people can receive the signal a majority of the time.  The FCC also specified a principal city contour - the signal level that needed to be placed over a station's city of license.  But the FCC never bothered to specify the Grade A contour, despite the fact that the cross-ownership rules were premised on that contour.  In a case decided last week involving the financial restructuring of a radio company, the FCC's Media Bureau staff decided that they would use the NLSC as a proxy for the Grade A contour until such time as the full Commission otherwise directed.

This decision actually makes common ownership of television stations and either newspapers or radio stations somewhat more difficult, as the noise limited contour, approximating the old analog Grade B contour, actually extends further than where the Grade A contour would have reached (when a digital station replicated its analog service area).  Thus, using this standard, the owners of a television station could be precluded from having attributable interests in radio stations or daily papers in more communities than would have been the case in the analog world.  As the FCC is now embarking on its review of the multiple ownership rules (as we have written before), the FCC may well revisit this issue in the course of that review.

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Getting legal education from a fake news program is always dangerous, but a recent episode of the Stephen Colbert Show, here, nicely demonstrated trademark law.  The clip illustrates what we have written before, that the term "Olympics", like "Super Bowl" and "March Madness" are trademarked, and attempts to use them in commercials or promotions, or to otherwise imply that a product or program is associated with one of these events, can lead a broadcaster into legal trouble and potential liability.  The Colbert program shows Stephen discussing with his brother, a trademark lawyer, Stephen's ideas for associating his program with the Olympics and, when his brother consistently rejects the plans, Colbert tries to change the 5 ringed Olympic symbol to five interlocking triangles, and other symbols that are similar, and Colbert is told that each is likely to bring a lawsuit.  Only when Colbert abandons the Olympic name, and the symbols, and comes up with a name - The Quadrennial Cold Weather Athletic Competition - that is the equivalent to the "Big Game" that many use when referencing the Super Bowl, was the brother satisfied that Colbert would not get successfully sued.  Stations should take similar precautions when thinking about using these terms in their programs.

Using the trademarked word or phrase in news reports about the event, or in other commentary, is in many cases just fine.  But trying to imply an endorsement or connection to the event for which true sponsors pay "big bucks", can get you into trouble, as explained by Mr. Colbert.  Thus, just as we looked to Colbert for examples of how music licensing works, and on when a candidate becomes legally qualified, he illustrated another legal concept.  When will we next look to Mr. Colbert for an explanation of the law?  Stay tuned.

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