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Every year, about this time, I dust off the crystal ball to offer a look at the year ahead to see what Washington has in store for broadcasters. This year, like many in the recent past, Washington will consider important issues for both radio and TV, as well as issues affecting the growing on-line presence of broadcasters. The FCC, Congress, and other government agencies are never afraid to provide their views on what the industry should be doing but, unlike other members of the broadcasters' audience, they can force broadcasters to pay attention to their views by way of new laws and regulations. And there is never a shortage of ideas from Washington as to how broadcasters should act. Some of the issues discussed below are perennials, coming back over and over again on my yearly list (often without resolution), while others are unique to this coming year.

Last week, we published a calendar of regulatory deadlines for broadcasters.  This article looks ahead, providing a preview of what other changes might be coming for broadcasters this year – but these are delivered with no guarantees that the issues listed will in fact bubble up to the top of the FCC's long list of pending items, or that they will be resolved when we predict. But at least this gives you some warning of what might be coming your way this year. Issues unique to radio and TV, and those that could affect the broadcast industry generally, are addressed below.

General Broadcast Issues

 

There are numerous issues before the FCC that affect both radio and television broadcasters, some of which have been pending for many years and are ripe for resolution, while others are raised in proceedings that are just beginning. These include:

 

Multiple Ownership Rules Review: The FCC is very close to resolving its Quadrennial review of its multiple ownership proceeding, officially begun in 2011 with a Notice of Proposed Rulemaking. The rumors were that the FCC was ready to issue an order at the end of 2012 relaxing the rules against the cross-ownership of broadcast stations and newspapers, as well as the radio-television cross-interest prohibitions, while leaving most other rules in place. TV Joint Sales Agreements were also rumored to be part of the FCC's considerations – perhaps making some or all of these agreements attributable. But even these modest changes in the rules are now on hold, while parties submit comments on the impact of any relaxation of the ownership rules on minority ownership. Still, we would expect that some decision on changes to the ownership rules should be expected at some point this year – probably early in the year. 

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If your station engages in children's programming and maintains a website or web page directed to children under the age of 13, this case may be of interest to you. 

The operator of a website called Skid-e-Kids, a self-described “Facebook and MySpace for kids,” has learned that it is not enough merely to have a privacy policy that requires parental consent prior to obtaining personal information online from children under the age of 13. Such website operators must actually abide by that policy as well. The Federal Trade Commission (FTC) reinforced that lesson via an enforcement action and settlement with the company this week.

Skid-e-Kids (skidekids.com) advertises itself as “Safe, Fun and very educational.” Their target group is children ages 7-14. The Children’s Online Privacy Protection Act of 1998 (COPPA) and corresponding FTC rule require parental consent before children under the age of 13 can be requested or required to provide personal information online.

Skid-e-Kids had a Privacy Policy that “requires child users to provide a parent’s valid email address in order to register on the website.” In practice, however, that was not the case. Children were required to provide a birth date, gender, user name, password and email address prior to using the website. Once that information was provided, the child was automatically registered on the website. Worse still, Skid-e-Kids did not even request a parent’s email address and made no attempt to notify parents or obtain parental consent.

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If your station programs to children under the age of 13 or maintains a website or online presence directed to children under age 13, you should be aware of new rules proposed by the Federal Trade Commission (FTC) that will affect both the types of information you are allowed to collect from children and the manner in which it is collected.  The proposed rules, summarized here, would modify the Children's Online Privacy Protection Rule enacted by the FTC to enforce the Children's Online Privacy Protection Act (COPPA) enacted by Congress in 2000.

COPPA requires parental consent whenever personal information is collected from children under the age of 13.  The proposed rules, which would be the first changes made by the FTC since COPPA was enacted, are intended to reflect the recent popularity of social networking, smartphones and the availability of geolocation information.

Stations that have websites or apps dedicated to youth sports leagues or other children's activities could well be subject to these requirements, summarized in our recent Client Advisory available here.  Interested parties may file comments on the new rules by November 28, 2011.

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Legal issues regarding privacy have long been an issue for broadcasters and other media companies.  Traditionally, privacy concerns for media companies have arisen in the context of news gathering, advertising or other on-air content that either was gathered in a way that intruded on someone's privacy, or which used private facts or personal images, without consent, for commercial purposes.   As technology developed, privacy related issues followed. There are legal restrictions setting out rules about using automated calling (or texting) for commercial purposes to people who have not consented, sending faxes to persons who have not given you permission to use their fax numbers, and sending unsolicited emails.  Online, the issues increase, with rules or policies in existence or in development.  There long have been rules about collecting personal information about children under the age of 13 (under COPPA - the Children's Online Privacy Protection Act, see information about a recent enforcement action here).  Other laws govern the need to keep secure any private information that you collect about others - like credit card information that you may collect from advertising clients or listeners who buy merchandise or other goods from the station (everything from tee shirts to Groupon-like coupons).  And recently, there have been a number of lawsuits and government actions targeting the collection and unauthorized use of personally identifiable information about website visitors (or those using a station App) without knowledge or consent.  All of these issues were discussed during a webinar that Ronnie London and I conducted for the Texas Association of Broadcasters.  The slides from that session, providing a good outline of many of the basic legal issues that arise in connection with privacy issues, are available here.

We've written about these new media privacy issues before, and our firm's Privacy and Security Blog cover these issues regularly.   This is an important area that broadcasters need to pay attention to, especially as they increase commercial activity from their websites, on mobile applications, and in other forms of digital media.  Plaintiff''s attorneys are looking for companies who do not adhere to their privacy policies or who provide personally identifiable information (known as "PII" in the privacy world) to third parties without permission.  Congress, the FTC, the FCC, and the Commerce Department have all been looking at new regulatory regimes to govern privacy in many areas - including enhanced and targeted advertising, and the use of geo-location information.  Pay attention to these development as, while the web offers many new opportunities to increase revenues, it also may well bring new legal concerns for broadcasters beyond those FCC issues with which broadcasters have so long concerned themselves.

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As broadcasters pursue their digital future, new legal issues arise to greet their entry into the on-line world and to add to the challenges posed by the new media. Over the last few years, we’ve have written extensively about music rights and their impact on webcasters, broadcasters, and other digital media companies. We’ve talked about patent law issues that have faced digital media companies. And we’ve discussed other content issues, like FTC online sponsorship disclosure requirements, that have arisen from time to time. But the one issue that now seems poised to dominate the legal conversation in coming months (or years) is that of privacy. This past week, we saw Pandora announce that it has received a subpoena from a Federal grand jury in connection with an investigation into the use of information collected from various mobile apps, and whether users of these apps were aware of the use of their private information. Other companies apparently received this same request.  This investigation is but the tip of the iceberg on privacy issues facing media companies operating in the digital world - challenges coming from the courts and from legislative and administrative initiatives in Washington.

Everyone knows that one of the great benefits of the Internet and the many services available on-line and through mobile apps, is the ability to personalize so as to provide a unique listening or viewing experience for every user. Instead of being limited to the linear programming that a broadcast service provides to all users at the same time, users can tailor their digital media experience to give them what they want and, as wireless broadband penetration increases through smart phones and other devices, almost whenever they want it. In some cases, the costs of providing an individualized service, because of bandwidth needs, royalties and license fees and for other reasons, the cost per each additional listener is often higher than that incurred by the traditional media. And online users thus far have been unwilling to tolerate the commercial advertising load that a traditional media experience might provide. To meet these higher marginal costs, and the lower spot loads, many digital media companies have looked to personalization of advertising to allow for higher advertising rates on the theory that advertising will be more efficient if you can guarantee that it will be targeted to reach its intended audience – geographical, demographic or based on expressed interests. As digital media companies have sought to refine the targeting available through their advertising, privacy issues have arisen.

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