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The FCC just issued a Report to Congress concerning the access of television viewers to in-state television stations.  This report was requested by Congress as part of STELA (the Satellite Television Extension and Localism Act), which extended the compulsory license for direct to home satellite television operators (DISH and DirecTV) - a license which gives them copyright clearances to retransmit all the programming transmitted by the broadcast television stations that they make available as part of their service packages.  Congress also requested a Report from the Copyright Office on the need for the compulsory license - a report also issued this week, which we will write about in another article.  The issue of access to in-state television stations has been a controversial issue, as several Congressmen have sought (and in a few cases actually received) legislative authority for cable providers to carry out-of-market television stations on cable systems serving areas in one state that are part of television markets where the television stations come from a different state.  The report refers to these areas as "orphan counties."  Once legislative authority was granted in one state, many other bills popped up in Congress trying for the same relief in their state - causing concern that the existing television markets (or Designated Market Areas or "DMAs", designated by the Nielsen Company) might be undermined.  To see what impact such changes would have, Congress requested this report from the FCC.

The report for the most part does not make recommendations, but instead simply provides information about the service provided to US television viewers, the potential options for bringing an in-state service to all viewers, and the issues that such proposals would raise. Perhaps the most interesting fact revealed by the report is that 99.98% of all US television households already have access to an in-state television station, either over-the-air or through a Multichannel Video Programming Distributor (e.g. cable or satellite TV system), so this is a very isolated issue.  However,when the FCC sought comments on the issues discussed in the report, a number of individuals in particular DMAs responded about situations where they could not get access to in-state television stations and asked that something be done.  The report assesses the implications of any action that could be taken.

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The Commission's recent Order establishing the rules and time line for low power television stations to convert to DTV has now been published in the Federal Register, meaning that most of the new rules regarding the conversion of low power television stations to digital television are now in effect.  As we wrote about extensively here,on July 15, 2011, the FCC adopted a Report and Order regarding the transition of low power television stations (LPTV), TV translator, and Class A low power stations to digital.  As set forth in that Order, September 1, 2015 will be the hard date for the conversion of all remaining analog LPTV stations to digital. The Order adopts the specific procedures, rules, and timing of the digital conversion for those stations, and with Friday's publication in the Federal Register, those rules are now in effect, with two exceptions.  The extension of the "ancillary and supplementary" rules to LPTV permittees operating pursuant to an STA is still awaiting OMB approval, as is the requirement that stations that have not yet taken steps to convert to digital must notify the FCC of their digital transition plans.  This second requirement will force stations to consider their digital future and share their transition plans with the Commission.  Once the OMB approves the collection of information inherent in that requirement, that part of the new rules will go into effect, and the FCC will announce the timing and requirements by a further public notice.

The FCC's DTV LPTV Order also established December 31, 2011 as the deadline for all LPTV and TV translator stations operating on out-of-core channels -- that is Channels 52 to 69 -- to cease operation. Any station that operates outside the core that does not already have a construction permit for a core band operation must file for a construction permit for the core band by September 1, 2011. Given that today is August 30th, hopefully out-of-core stations have their ducks in a row and are already on file, or preparing to file displacement applications to move into the core.  The FCC states that there will be no hardship extensions of the December 31 deadline – meaning that such stations must terminate operations no later than December 31 of this year no matter what. 

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Changing the city of license of a broadcast station was made more difficult by the FCC's rural radio order.  That order, about which we wrote here, imposed substantial obstacles on broadcasters attempting to move their stations from rural areas into urbanized areas - making such moves difficult if not impossible in many cases.  However, in two recent cases, the FCC clarified that decision so as to permit some changes to be made without the substantial new showings. Specifically, these cases permit the move of stations from one city within a market to another in the same market, or from one urbanized area to another, without doing the complex showing that might otherwise be required.

The rural radio decision had changed the an FCC policy that had favored, in allocations decisions, a first transmission service (i.e. the first station licensed to a community) to a large community within an urbanized area over a service to a less populous community, even if that community was outside an urbanized area.  After the rural radio decision, there was a presumption that service to any community within an urbanized area was service to the entire urbanized area - so a first service to a suburban community, instead of being treated as the first transmission service to that community, was treated as if it were the 20th (or 30th or 40th,depending on the number of stations in the entire market) service to the urban area.  Thus, the proposal would routinely not be entitled to a preference over a new service to a community outside of the urban area in the absence of a complex and convincing "Tuck showing" that analyzed a number of factors to show that the suburban community was independent of the central city in the urban area and that the proposed station would really meet the needs of this independent community, not of the whole urbanized area.  In one decision released last month, the FCC made clear that a move from one city within an urbanized are to another within the same urbanized area did not need this Tuck showing, as both were considered part of the same community for allocations purposes.  In a variation on that theme in a case released last week, the FCC's staff held that a move of a station from one urban area to an adjacent urban area did not require the showing.  Presumably this was because each urban area would have dozens of services, so that loss of one service in one market and the gain in another would be inconsequential.  Seemingly simple decisions, but ones that can save applicants significant time and trouble when filing city of license change applications for stations that are already located within urbanized areas. 

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The FCC just issued a public notice extending the comment deadline in its proceeding to determine how to process the FM translator applications pending from the 2003 FM translator window so as to not unduly preempt opportunities for new LPFM stations.  Comments were originally due to be filed today, but the deadline has now been extended to September 6, based on transportation and communications concerns in light of the disruptions caused by Hurricane Irene.  Reply comments will now be due on September 20.  We summarized the issues in this proceeding here and here.   Many are awaiting the conclusion of this proceeding - including those who have had an 8 year wait for the processing of FM translator applications from the 2003 Window as well as those looking forward to the opening of a window for applications for new LPFM stations.  Presumably, this short delay in the comment deadline will not unduly delay this highly contested proceeding, as the Commission will no doubt have many technical and legal issues to resolve, some stemming need to interpret the meaning of the Local Community Radio Act enacted by Congress late last year.

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How do you secure a loan to an FCC broadcast licensee? This was the issue discussed by a case released by the Commission last week – addressing the FCC’s policies prohibiting a station creditor from foreclosing on a broadcast license and also restricting the sale of a “bare license.” While this case involved an action for collection by a judgment creditor, it is instructive as to how any broadcast creditor, including a lender to a broadcast licensee, should act to secure loans or other financial obligations of a broadcaster, and how the creditor can exercise its rights in the event of a default. It is also instructive as to how to proceed to enforce a loan obligation to any FCC licensee - in the broadcast services or in the other services regulated by the FCC.  As the FCC has a long-standing policy prohibiting a lender from taking a security interest directly in an FCC license, lenders need to pay careful attention in documenting loans and in enforcing security agreements upon defaults to make sure that their interests are protected. 

Lenders cannot foreclose directly on a license when a broadcaster defaults on its obligations, as the FCC has made clear that a license is not a property right that can be used for security. The FCC has said that a license is not subject to “mortgage, security interest, or lien, pledge, attachment, seizure, or similar property right.”   As the license cannot be attached, to get at the value of the license if there is a default and the debtor won’t cooperate in a voluntary foreclosure, the Lender has to go to court and have a receiver or trustee appointed to oversee the assets of the debtor. An involuntary transfer to a trustee or receiver pursuant to a court order can be approved by the FCC expeditiously on a “short form” (Form 316 in the broadcast services) transfer application. Once appointed, the trustee can sell the sell the station (pursuant to FCC approval on a subsequent "long-form" application) and distribute the proceeds to the creditors. In the case decided last week, the actions of the local court that was attempting to enforce the rights of the creditor gave the Commission pause.

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Yesterday, the FCC released its Report and Order (available here) reinstating its “video description” rules, which require that certain broadcast stations and nonbroadcast networks provide audio narration of the action depicted in the video portion of the television programming.  The Commission originally adopted such rules back in 2000, but they were subsequently vacated by the D.C. Court of Appeals for lack of sufficient authority.  This past year, Congress rectified that lack of authority by enacting the Twenty-First Century Communications and Video Accessibility Act (CVAA), which was signed into law last October. DWT previously discussed the FCC’s rulemaking to reinstate the video description rules back in March (available here), and has now released a further advisory on the newly adopted rules available here.

In a nutshell, the rules require large-market broadcast affiliates of the top four national networks, and cable operators and DBS providers with more than 50,000 subscribers, to provide programming with audio-narrated descriptions of a program’s key visual elements, beginning mid-2012. While the FCC originally proposed to require full compliance by Jan. 1, 2012, the R&O pushes that date back six months, to July 1, 2012.  Highlights  of the reinstated video description rules are as follows:

• Broadcast affiliates of the top four national networks—ABC, CBS, Fox, and NBC—located in the top 25 television markets as determined by Nielsen as of Jan. 1, 2011, must provide 50 hours per calendar quarter of prime-time and/or children’s programming with video descriptions. 
• The list of the top 25 television markets are those determined by Nielsen as of Jan. 1, 2011. To the extent a station in a top 25 market becomes newly affiliated with a top-four network, it must start providing video description in the same manner as current ABC, CBS, Fox, and NBC affiliates in the top 25 markets, beginning no later than three months after finalizing the new affiliation agreement.
• Going forward, the video description requirements will extend to major network broadcast affiliates in the top 60 markets beginning July 1, 2015. Rankings for the top 60 markets at that time will be based on Nielsen ratings as of Jan. 1, 2015. 

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There has been much focus on emergency communications recently, with the East Coast earthquake re-igniting the debate over FM-enabled mobile phones, and with Hurricane Irene forcing stations to gear up for emergency coverage in the coming days.  But even without these unusual events, the emergency communications world has been much in the news, given the current requirement for broadcast stations to be ready for the new Common Alerting Protocol ("CAP"), an Internet-based alerting system, by the end of September, and with the first-ever test of the National EAS system scheduled for November.  The CAP conversion date has recently been the subject of debate in a number of FCC filings - and there seems like a good chance that the September 30 deadline will be delayed - if for no other reason than the fact that the FCC has yet to adopt final rules for the equipment required for such compliance.  The National Test, however, should go on as scheduled.  More on all of these subjects below.

First, the coming hurricane should prompt stations to be ready for potential emergency operations.  The FCC in the past has publicized its Disaster Information Reporting System (DIRS).  Stations can voluntarily register with DIRS to give the FCC a contact person to assess damage after the storm, and to notify the FCC of the need for any aide that the Commission might be able to provide.  During the aftermath of Hurricane Katrina, I was personally involved in discussions with FCC personnel who coordinated with other government agencies to get clearance for diesel tanker trucks to gain access to restricted area to deliver fuel to a client's radio station that was still operational (on generator power) providing emergency information to Mississippi's Gulf Coast. The FCC personnel can be of great assistance in such situations, so DIRS registrations may be worth considering.  The FCC's website also provides helpful information about planning for disaster recovery  and about hurricanes specifically.  FCC emergency contact information is also on their site.

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We wrote about FCC Chairman Genachowski's announcement of the repeal of the Fairness Doctrine as part of the FCC's repeal of 83 media related rules.  Well, the full text of the repeal was released today, and the Fairness Doctrine really was the only real headline.  For broadcasters, all of the other deleted rules were even less relevant than the Fairness Doctrine (which had been effectively dead for almost 25 years before it was repealed).  10 of the 83 deleted rules dealt with the "broadcast flag", an FCC rule for digitally watermarking DTV programming so that copies could be identified by their source - rules that were thrown out years ago by the Court of Appeals as exceeding the FCC's authority.  Another 57 of the "deleted" rules are rules that are still fully on the Commission's books - just in a different section of the rule book.  Decades ago, most broadcast rules were moved out of Part 1 of the FCC rules (which deals with general FCC procedures) to Part 73 (which sets out the substance of the rules for broadcasters).  This week's action merely deletes the 53 rules that remained in Part 1, where the entire text of the deleted rule was to refer the reader to the corresponding rule section in Part 73, where the substantive rules still reside and are still fully enforced (including matters such as the FCC's EEO rule).  So, when the FCC claims that 83 rules were deleted, that really is not saying much.  These non-substantive changes, combined with the almost meaningless deletion of the Fairness Doctrine rule (see our article on that deletion) don't bring any regulatory relief, on a day to day basis, to any broadcaster.

Congress is apparently not content with these rule changes.  In a press release  issued this week, Chairman of the House Energy and Commerce Committee, Fred Upton, and the chair of its subcommittee on Communications and Technology, Greg Walden, welcomed the repeal of the Fairness Doctrine, but stated that they looked forward to additional deregulation pursuant to the President's Executive Order asking agencies to reduce regulation to stimulate the economy.  The release also suggested that the FCC should only adopt rules after the rules were proposed and fully subject to public comment and fully reviewed to determine their effectiveness and their economic effect.  The Congressmen suggested that the FCC had not always done that.  Wonder what regulations they were thinking about?  I've got my thoughts (perhaps rural radio or even the decision by former Republican FCC Chairman Kevin Martin to amend the newspaper/broadcast cross-ownership rules following a decision-making process recently criticized by the Third Circuit).  Any nominations from our readers?

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In 2009, the FCC adopted a uniform deadline for all commercial broadcast licensees to file an FCC Form 323 Biennial Ownership Report.  The due date for that report was supposed to be November 1 of that year, but was postponed until July of 2010 when problems popped up with the new forms.  The next Biennial Ownership reporting date was scheduled to be November 1 of this year (two years after the originally scheduled date for the first report to use the new form) - but the FCC today issued a Public Notice postponing the filing deadline for one month, to December 1.  This delay was justified so as to give broadcasters, especially those with many media interests held in different companies, more time to complete what can be a cumbersome process of filling out all of the reports and exhibits that need to be submitted.  Reports need to be filed by December 1, but all information still needs to be reported as of October 1 of this year - a standard reporting date that will remain constant each year to give the FCC a snapshot of the composition of ownership in the broadcast world.

The revised ownership report filing processwas adopted so that the FCC could get an accurate report on the ownership of broadcast properties by minorities and women, a goal that has taken on added significance in light of the Third Circuit Court of Appeal's recent decision in Prometheus Radio Project v FCC, rejecting the FCC's efforts to diversify ownership in the media through the use of a system giving preferences to qualified entities, i.e. small businesses.  As we wrote last month, the Court found that the FCC's goal was to promote minority and female ownership, which was not fostered by its concentration on small businesses.  One of the issues on which the Court faulted the FCC was the lack of information about the current broadcast ownership interests of minorities and women, so that the FCC could do a "Adarand study" as to whether there are effects of past discrimination reflected in the current ownership of broadcast stations that need to be remedied by affirmative action efforts based on race or gender.  These new ownership reports are designed to help to provide that information.

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Yesterday, FCC Chairman Genachowski issued a press release stating that the FCC was abolishing the Fairness Doctrine as part of its clearing of its book of 83 obsolete media rules.  What should the reaction of broadcasters be now that the Fairness Doctrine has been officially abolished?  Probably, a collective yawn.  In 1987 - almost 25 years ago - the FCC felt that it could not enforce the doctrine as it was an unconstitutional restriction on the freedom of speech of broadcasters.  Since then, we have had no instances where the FCC has tried to revive the doctrine.  While, as we have written before, the revival of the doctrine is a political issue that is from time to time bandied about as something horrible one political party or another plans to impose on America, there really has been no serious attempt to bring the doctrine back in this decade.  So the repeal of the actual FCC rule that sets out the doctrine is really inconsequential, as it practically changes nothing.

What remains unknown about yesterday's announcement from the Chairman is just how far this repeal goes.  While certain corollaries of the Doctrine - including the political editorializing and personal attack rules - have been specifically mentioned in press reports as being repealed, the one vestige of the doctrine that potentially has some vitality - the Zapple Doctrine compelling a station to provide time to the supporters of one candidate if the station provides time to the supporters of another candidate in a political race, has never specifically been abolished, and is not mentioned in the Chairman's statement.  Zapple, also known as "quasi-equal opportunities", has been argued in in various recent controversies, including in connection with the Swift Boat attacks on John Kerry, when Kerry supporters claimed that they should get equal time to respond should certain television stations air the anti-Kerry Swift Boat "documentary."  We have written about Zapple many times (see, for instance, here, in connection with the Citizens United decision).  What would be beneficial to broadcasters would be a determination as to whether Zapple has any remaining vitality, as some have felt that this doctrine is justified independent of the Fairness Doctrine.  Perhaps that clarification will come when the full text of the FCC action is released.

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The FCC today froze all applications for TV channel 51 by both applicants for full-power and low power facilities.  Channel 51 is immediately adjacent to the parts of the television bands that were reclaimed for wireless uses during the DTV transition.  Wireless users, including CTIA and the Rural Cellular Association, have sought to restrict use of Channel 51 because of the potential for interference to the wireless users in these new wireless frequencies.  Today's order not only freezes new applications for Channel 51 by both full-power and low power TV stations (including LPTV, TV translator and Class A TV stations), but it also freezes the processing of pending applications for the channel.  At the same time, the FCC has taken steps to encourage existing users of the channel to vacate it, giving low power applicants 60 days to amend pending applications to specify lower channels.

The freeze on applications is supposedly temporary, while the FCC considers a proposal for a rulemaking to permanently clear Channel 51 of TV users to eliminate the alleged interference to wireless users.  But, given the action here, and the FCC's other actions to clear portions of the TV spectrum for wireless users, it certainly looks like the FCC is predisposed to adopting the proposal of the wireless users to clear this channel.  The freeze affects proposals not only for new channels on this band, but also applications for increases in the facilities of stations already in the band so as to preserve the "status quo."  The FCC will consider waivers of the freeze, but only to replace existing facilities with new ones where the existing facilities need to be replaced or changed due damage by storm, zoning proceedings, or "unforeseen events."  Any new facilities must keep the station within its current coverage area.  No waivers of this requirement will be issued to low power stations - while full-power stations may be able to exceed their current contours only through a waiver request that demonstrates that some expansion is necessary to preserve existing coverage or the quality of service to the public.

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The debate over repurposing some of the television spectrum for wireless broadband have been raging over the normally quiet Washington summer, as issues as diverse as the budget negotiations, the tenth anniversary of 9-11 and international treaties all play their part in the discussions.  Whatever changes are made could have a profound impact on TV broadcasters nationwide, not just those in the congested metropolitan markets where everyone acknowledges that any spectrum crunch that may exist would be most acute.  This week, Congressman John Dingell, long one of the most influential Congressmen on telecommunications issues, complained that the FCC was deliberately withholding details of its plans for spectrum allocation - plans that the National Association of Broadcasters have challenged as unworkable as they would doom over-the-air television in many markets, especially those near the Canadian border.  With all the issues swirling around the spectrum reallocation debate, the realistic timing of any reallocation of the spectrum and the real impact on the free over-the-air television broadcast industry are becoming major issues being considered in Washington.

The FCC has been pursuing the idea of repurposing some of the television spectrum for wireless broadband use since well before the Broadband Report was issued last year.  As we summarized in our review of the Broadband Report, the FCC suggested that as much as 120 MHz of television spectrum could be reallocated from TV to wireless broadband uses.  The FCC and the consumer electronics and wireless industries have contended that there is a looming spectrum crunch, particularly in major markets, as smart phones, tablets and other connected devices become a bigger part of the lives of many consumers in serving not only their entertainment needs, but also providing information and business services.  The FCC's Broadband Report thought that as much as 500 MHz of spectrum would eventually be needed, and that 120 MHz could come from the television spectrum, which proponents feel has been underutilized by broadcasters since the digital television transition in 2009.  Proponents of the reallocation contend most consumers get their TV service not over the air, but from cable or satellite providers, so the need for spectrum dedicated to broadcast television is far less than it was 70 years ago when the television service was first popularized.  Broadcasters, of course disagree with that assessment, contending that the digital transition is still very new, and that uses of the digital spectrum - including a mobile DTV service and multicast channels - are just developing.  Moreover, TV broadcasters have argued that their digital offerings, when combined with Internet service, are providing an option to many to "cut the cord" from pay TV options, leading to more over-the-air viewing.  In recent weeks, as detailed below, the National Association of Broadcasters has also been contending that the proposed reallocation would irreparably damage the over-the-air television industry, especially in markets in the Northeast and near the Canadian border where, in some markets, the reallocation would be impossible without ending most or all over-the-air television service.  The radically different pictures painted by the participants in this debate have led to some of the recent charges that the FCC is being less than forthcoming about the manner in which this transition would occur and the impact that it would have on broadcast TV. 

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The FCC has now released its Public Notice formally announcing the payment deadline for the 2011 Annual Regulatory Fees, which will be due by 11:59 pm E.T. on September 14, 2011.  The fees must be processed electronically using the FCC's Fee Filer website, which can be accessed here.   That site is now ready to accept the payment of the 2011 Regulatory Fees, and licensees must log-on to the Fee Filer website using their FRN (FCC Registration Number) and password to review the fees that have been pre-populated in for that particular licensee.  While the list of stations and authorizations reflected in the database should be similar to the list from last year, licensees should carefully review the information and ensure that all stations and authorizations held by the licensee are included.  In particular, stations acquired during the year or new broadcast auxiliaries obtained during the year may not appear on the list and may need to be added. Please note, the FCC will not mail a bill or a reminder to broadcast stations this year, so it is the responsibility of each licensee to determine the extent of its reg fee obligation. 

More information regarding the annual regulatory fees, including instructions for submitting the fees, is available from the Regulatory Fees page of the FCC’s website, available here. UPDATE:  In addition, with regard to broadcast radio and television stations, the FCC has made available a “look-up” database to allow licensees of broadcast stations to confirm the amount owed for each particular station. That look-up database is now available at: www.fccfees.com. 

Consistent with the procedures adopted last year, all licensees are required to pay the annual regulatory fees online via the FCC’s Fee Filer website. In order to access the Fee Filer website and remit the regulatory fee payment, licensees must have a valid FCC Registration Number (FRN) and related password. Payment may be made electronically by credit card or debit card, by check or money order, or by wire transfer. If a licensee prefers to remit payment by check or money order, the licensee must first use the FCC’s electronic Fee Filer system to create a Form 159-E voucher generated by the Fee Filer system. That Form 159-E voucher must then accompany the submission of payment by check or money order, which must be sent to the FCC’s receiving bank in St. Louis, Mo. 

As in the past, payments received after 11:59 pm E.T on Sept. 14, 2011, will automatically incur a 25% late payment fee.  So licensees are encouraged to review and pay their reg fees early to avoid any penalty.  For those needing more details, please see the Commission's full reg fee Order, which contains the 2011 fees for all types of authorizations.

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Microwave frequencies used by television stations for their TV Pick-Ups for the transport of programming, and by cable systems for their CARS relays, were the subject of an FCC order last week looking to repurpose these frequencies to provide backhaul for wireless broadband and other telecommunications uses.  The Commission's order sets out to protect existing users, but to allow these frequencies to be used by wireless users in rural areas where there will not be interference to licensed broadcast or cable users.  Our firm's Broadband Law Advisor Blog summarizes this order and the request for further comments in this proceeding.  Comments are due October 4 and Replies on October 25. 

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Advertising from Stephen Colbert's Super PAC was rejected by Des Moines television station WOI-TV, based on its belief that these commercials would be confusing to Iowa voters.  Colbert, the host of Comedy Central's the Colbert Report, has formed his own Political Action Committee to run ads during the upcoming Presidential election.  The first ads ran in Iowa this past week - making fun of the amount of third party money that was being spent on political advertising in Iowa and urging voters to vote for "Rick Parry", with an "a" rather than "Rick Perry."   WOI-TV, rejected them, while the spots ran on all other stations in Iowa's capitol city.  Are there legal issues with this station deciding not to run these ads?

Not at all.  The FCC has said many times that broadcast stations are not "common carriers," meaning that they don't have to run all advertising time that advertisers want to run on their stations.  Instead, stations pick and choose among the ads that are brought their way, and stations have an affirmative duty to reject ads that they feel are not in the public interest.  So, while many may question whether these Colbert ads were outside of the norms applied to advertising in the public interest (as Colbert himself argued that the station runs many other ads as likely to confuse the public on many issues), the station has the absolute, non-delegable duty to decide on its own what is and what is not in the public interest - with the very narrow exception of candidate ads.

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US broadcasters often complain about FCC regulations on programming, but they don't realize how easy they have it compared to much of the rest of the world.  I recently spent several days in one of the former Soviet Republics discussing broadcast regulation with broadcaster representatives, employees of the country's regulatory agency, and members of citizen advocacy groups.  What seemed most surprising to those in this developing capitalist country was the fact that, in the US, broadcasters can change formats at will to react to marketplace conditions.  This is not a freedom enjoyed in much of the rest of the world - even in Western Europe or in Canada.  We've written many times (see, for instance our article here) that the FCC does not consider format issues - even where there are citizens complaints about a proposed change in format or a sale of a station that will probably lead to such a change.  In fact, just last Friday, the FCC again reached that same conclusion, finding that it will not prevent a sale because the sale will result in a format change.  The FCC has determined that format choices are a business decision protected by the First Amendment, so broadcasters are free to change at will, without the government interfering in these programming decisions.

In the country that I visited, their regulatory agency issues station licenses with strict format restrictions.  The agency even regulates networks (both broadcast and cable) to make sure that their programming meets the needs of the communities that they are intended to serve and that the programmers comply with various regulatory and structural requirements.  Unlike in the US, where there may be penalties when a company violates the limited program restrictions that are in place (e.g. political broadcasting, children's television obligations, indecency rules), in many countries, even the decision as to what kind of entertainment programming to offer is subject to government review.  This country is certainly not unique in regulating broadcasting in that way.  In looking at the website of Ofcom, the regulatory authority for the United Kingdom, you can see how closely formats are regulated.  One recent request for public comment (which could not be approved on an expedited pro forma basis as it was deemed to raise significant questions requiring public input before a decision could be made), proposed the following change in the format of a radio station:

Current Character of Service

A RHYTHMIC-BASED MUSIC AND INFORMATION STATION PRIMARILY FOR LISTENERS OF AFRICAN OR AFRO-CARIBBEAN ORIGIN, BUT WITH CROSS-OVER APPEAL TO YOUNG WHITE FANS OF URBAN CONTEMPORARY BLACK MUSIC AND AT LEAST 26 HOURS A WEEK OF IDENTIFIABLE SPECIALIST MUSIC PROGRAMMES (TO INCLUDE REGGAE, RnB AND HIP HOP RHYTHMIC-BASED (e.g. DANCE, CLUB etc).

Proposed Character of Service

A RHYTHMIC-BASED MUSIC-LED SERVICE FOR 15-29 YEAR-OLDS SUPPLEMENTED WITH NEWS, INFORMATION AND ENTERTAINMENT. THE SERVICE SHOULD HAVE PARTICULAR APPEAL FOR LISTENERS IN THEIR 20s AND AT LEAST 12 HOURS A WEEK OF IDENTIFIABLE SPECIALIST MUSIC PROGRAMMES.

Can you imagine a requirement that the FCC look at each proposal of a radio station to make programming changes along the lines set out above?  Some US stations make these kind of changes routinely, trying to fine tune their programming to provide the best service that they can to the public.  Stations in the US do the research to determine what programming they will broadcast, and how to insure that programming will reach the biggest and best audience - and the station's decisions are not subject to second guessing by the government.  In some of these other countries, the government does the research to determine what format it thinks is best for the public.  While we had more regulation in the past - these systems are obviously far different from what we do in regulating formats today.

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Noncommercial broadcasters get no breaks when dealing with proposed FCC fines, said the Commission's Media Bureau in two cases released this week.  While many noncommercial broadcasters may yearn for a day when they were treated leniently if violations were discovered - getting off with perhaps an admonishment letter - those days are over, as they have been for some time. In one case released this week, the FCC specifically states that noncommercial broadcasters are no different than commercial ones when dealing with fines (or "forfeitures" as they are called by the FCC).  If the noncommercial broadcaster violates a rule, they will be treated just like a commercial broadcaster, and have to pay the same fine as would the commercial broadcaster.  

Noncommercial broadcasters have often argued that they cannot afford to pay big fines, as their budgets are limited.  Even when noncommercial stations are owned by colleges or local governments, they have limited budgets, and fines don't figure into them.  But, in two recent cases, the FCC has rejected arguments for the reduction of proposed fines based on financial hardship, in both cases finding that the budget of the station was not important - it is the total budget of the licensee that is important in assessing if a fine is too much (see our post about how the FCC determines if a fine should be reduced because its payment would create a financial hardship on a station).  In the case cited above, the FCC said that it was the local government agency (a metropolitan school district) that was the licensee, and its financial resources should have been assessed in determining whether the proposed fine was too great.  In a second case, it was a state university that owned the station, and the FCC said that it would look to the overall finances of the university in determining if the fine was too high - not the amount budgeted for the station.  In neither case had the licensee put forward a financial showing for the full licensee organization, so the FCC rejected the requests for reductions of the fines based on financial hardship.

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When a problem arises with a station that could give rise to a fine, how long does the FCC have to act on that complaint and issue a fine?  How long must a licensee worry about that problem and whether it will result in a fine?  Does a sale cut off liability for a problem when the seller was the licensee?  Two cases released yesterday, one resulting in a fine and the other where one was canceled, help explain the Commission's policy.  The Communications Act says that the FCC cannot issue a fine (a "forfeiture" in FCC language) if the conduct occurred more than one year ago or before the beginning of the current license term, whichever is earlier.  In these two cases, the FCC was faced with broadcasters who had problems in their last license renewal term - one filed its renewal late, and the other was missing Quarterly Issues Programs lists in its public file.  In the first  case, the FCC on the same day granted a license renewal and issued a Notice of Apparent Liability proposing to fine a station for the late-filed renewal.  In the second case, the Notice of Apparent Liability for the missing QPIs was issued 3 days after the renewal grant.  In both cases, the actions giving rise to the fine occurred far more than one year before the date of the FCC's Notice of Apparent Liability.  In the case where the renewal grant and the Notice of Apparent Liability were issued on the same day, the FCC held that it could reach back to get the old misconduct, as the new license term had not yet begun when the NOA was issued.  But in the case where the Notice of Apparent Liability was issued three days later, the fine was thrown out, as that 3 day old license precluded the FCC from going after any conduct that was more than one year old.  So, if you get a renewal, you appear to be off the hook for conduct that occurred more than a year ago.  Three days made a $10,000 difference to this licensee. 

But selling a station does not take you off the hook - if you are within the time limits discussed above.  In the case where the fine was upheld, the licensee was no longer the station's owner, having sold it several years before.  The company argued that, as it was no longer a licensee, it was not subject to FCC jurisdiction, and could not be made to pay a fine.  The FCC rejected that assertion, finding that, because the actions took place when the company was an FCC licensee, and because the FCC acted within the time frames set out above, the fine was proper.  So if you sell a station while an FCC investigation into one of your actions is still pending and that action could lead to a fine, you can't totally relax and enjoy the sales proceeds, as the FCC can still come after you!

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Another EEO audit was announced by the FCC today - hitting about 100 radio stations this time around. The Commission has pledged to audit 5% of all broadcast stations and cable systems each year to assure their compliance with the Commission's EEO rules - requiring wide dissemination of information about job openings and supplemental efforts to educate their communities about job opportunities in the media industry.  Today's Public Notice announcing the audit is here.  The list of stations subject to the audit is here.  The form of the audit letter is available here.  Responses from the audited stations are due by September 12.

All stations should review the audit letter as it provides a good outline of the documents that stations should be retaining to demonstrate their compliance with the FCC's EEO rules.  For more information about compliance with the EEO rules, see our advisory on the basics of the EEO rules, here, and our most recent advisory on the requirements for the annual EEO public inspection file report, here.

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The failure to follow FCC filing rules when a station finished construction of new facilities under a construction permit will apparently cost a radio station $7000 according to a recentNotice of Apparent Liability released by the Commission's Media Bureau.  Before a broadcast station can make most changes to its technical facilities, it must apply to the FCC for approval, which the FCC grants by way of a construction permit.  In most cases, the broadcaster has 3 years to construct the proposed facilities.  Once construction is complete, the broadcaster must notify the FCC of that fact by filing an application for a license on FCC Form 302.  That form gives details of the construction, so that the FCC can tell that the station was built in the manner authorized by the construction permit, and in accordance with any conditions placed on construction in the permit.  In this case, the broadcaster built the new facilities that it proposed within the 3 year period, but forgot to file the Form 302 - and only did so 3 years after the end of the construction period.  Under this Notice, the late filing, and the failure to ask for special temporary authority ("STA") to operate the station after the failure to file was discovered, may cost the station $7000.

In the past, the FCC had allowed some stations to file their license application late, if construction had occurred in a timely fashion, and where the licensee provided proof of the timely construction.  In this decision, the FCC found that these cases were situations where the late filing was for an insignificant period of time - a few days or weeks at the most, not for the years that went by in the case here.  The late filing, and the fact that, as the construction permit had expired and no license had been granted, the station was deemed to have been operating without authority at the new site, warranted the $7000 fine in the FCC's opinion.  The case not only serves as a reminder to those with construction permits to file their license applications on time after they complete construction, but also shows that while the FCC may show some flexibility in enforcing its procedural rules, it will not allow licensees to ignore them for long periods.  So be careful to meet the requirements of the rules, or look for big fines from the Commission. 

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What does SoundExchange do when it collects royalties from an Internet radio operator, but the operator doesn't provide complete information about the songs that were played?  That question was raised by the Copyright Royalty Board in a Notice of Proposed Rulemaking on a proposal by SoundExchange for the distribution of such royalties, about which we wrote here.  The CRB has now agreed  to SoundExchange's proposal to distribute this money via a "proxy system."  In other words, SoundExchange will be distributing the money pro rata based on the information that it has for the songs on which similar services did accurately report.  The CRB provided the authority for this distribution by proxy for unallocated money collected during the period 2004 through 2009, which SoundExchange reports now amounts to approximately $19.4 million (down from the $28 million reported when the CRB's Notice was released in April). 

Why is there no information for these songs?  As we wrote when the CRB Notice was first released, there are many reasons, beyond simple failure of Internet radio services to meet the requirements for reporting set out in the CRB rules (about which we wrote here).  There are also situations where, under various settlement agreements, no reporting is necessary.  For instance, under the settlement agreement with broadcasters, no reporting is necessary for a certain percentage of songs played by each station.  Even under the CRB rules, there is a recognition that certain small webcasters (particularly noncommercial operators) can't afford all of the software that is necessary for the recordkeeping required of large webcasters. There will always be some songs for which no information is available, thus the need for this proxy system to distribute the money.  And, as the result of the CRB action, SoundExchange now has the authority to use this system. 

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