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This week, the Chairman of the US House of Representatives Judiciary Committee issued a press release stating that he intends that the Committee do a thorough reexamination of the Copyright Act, noting that new technologies stemming from digital media have upset many settled expectations in Copyright Law, and confused many issues. That this release was issued in the same week as a decision of New York’s Supreme Court, Appellate Division, First Department, on the obscure issue of pre-1972 sound recordings is perhaps appropriate, as this decision demonstrates how an obscure provision of the copyright act can have a fundamental effect on the functioning of many online media outlets – including essentially any outlet that allows user-generated content with audio. The Court’s ruling, which conflicts with a Federal Court’s decision on the same question, would essentially remove the safe harbor protection for sites that allow for the posting of user generated content – where that content contains any pre-1972 sound recordings which don’t fall within the protections of the Copyright Act. Let’s explore this decision and its ramifications in a little more depth.

As we have written before, an Internet service that allows users to post content to that service is exempt from any liability for that content under two statutes. The Digital Millennium Copyright Act insulates the service from any claims of copyright infringement contained in any of the user generated content, if the service has met several standards. These standards include the obligations for the service to take down the infringing material if given proper notice from the copyright holder. The Service cannot encourage the infringement or profit directly from the infringement itself, and it must register a contact person with the Copyright Office so that the copyright owner knows who to contact to provide the notice of the takedown. While the exact meaning of some of these provisions is subject to some debate (including debate in recent cases, including one that Viacom has been prosecuting against YouTube that we may address in a subsequent post), the general concept is well-established.

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We’ve written extensively about copyright issues for audio services, but the big copyright decision that recently made headlines is a TV issue, though one that could have an impact on audio as well. That was the Second Circuit decision in the Aereo case – upholding a lower court decision allowing a company to retransmit over-the-air TV signals to consumers over the Internet – without any royalties to the TV broadcasters or television program producers. The decision looked at the issue of what defines a “public performance” that would require the consent of the copyright owner. The Court found that there is no public performance of television programming where the service is set up so that the programming is streamed to the viewer individually, at their demand, rather than transmitted all at once to multiple consumers – as by a cable system or a  satellite television service. The decision is a controversial one – decided by a 2 to 1 vote with the dissenting judge issuing a strong dissent arguing that the Aereo service was nothing more than a “sham” designed to evade the royalty obligations or copyright permissions that would be necessary if the service were deemed a cable system or other type of multichannel video provider. What does this decision really mean for television stations, and could it have broader implications for the reuse of all sorts of broadcast content on the Internet?

The decision focused on the question of whether the Aereo service “publicly performs” the programming that it sends to its subscribers. Under the Copyright Act, a copyright owner has a bundle of rights which it has the exclusive ability to exploit. This includes the right to copy the copyrighted work, to distribute it, to make a “derivative work” (a work that uses the copyrighted material and changes it in some way - like putting new words to the melody of a copyrighted song), and the right to publicly perform it. The definition of a public performance includes any transmission or retransmission of a performance to multiple individuals at the same time or at different times. This language was added to the Copyright Act at the time of the advent of cable television, to make clear that services like cable, that take an existing performance (like that of a broadcast television station) and then further transmit it to other people (even people who could theoretically pick up the original performance) were themselves making a public performance that needed the consent of the copyright holder or a government-imposed statutory license (which allows the performance as long as the party making the performance pays the copyright holder an amount set by the government). From a cursory look, it would appear that Aereo is retransmitting the signal of the TV station to all of its customers. Why, then, did the Court rule that no public performance was involved?

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April is one of those months in which many FCC obligations are triggered for broadcasters. There are the normal obligations, like the Quarterly Issues Programs lists, that need to be in the public file of all broadcast stations, radio and TV, commercial and noncommercial, by April 10. Quarterly Children's television reports are due to be submitted by TV stations. And there are renewal obligations for stations in many states, as well as EEO Public File Reports that are due to be placed in station's public files and on their websites. The end of March also brings the obligation for television broadcasters to start captioning live and near-live programming that is captioned on air, and then rebroadcast on the Internet. Finally, there are comment deadlines on the FCC's proposal to relax the foreign ownership limits, and an FM auction and continuing FM translator filing requirements.

Radio stations in Texas and television stations in Tennessee, Kentucky and Indiana have renewal applications due on April 1. The license renewal pre-filing broadcast announcements for radio stations in Arizona, Idaho, Nevada, New Mexico, Utah and Wyoming, and for TV stations in Michigan and Ohio, must begin on April 1. All of these stations will be filing their renewals by June 1. EEO Annual Public file reports for all stations (radio and TV) with five or more full-time employees, which are located in Texas, Tennessee, Kentucky, Delaware, Pennsylvania or Indiana, must be placed in their public files (which are now online for TV broadcasters) by April 1.   Noncommercial radio stations in Texas, and noncommercial TV stations in Tennessee, Indiana Delaware, Pennsylvania, and Kentucky must also file their Biennial Ownership Reports by April 1. 

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In the digital world, it seems that everything is reinvented, and someone claims that they have a patent on that reinvention. In the last few weeks, we have seen news about patent claims asserted against radio broadcasters for their digital music storage systems, against public broadcasters for podcasts, and even against companies trying to comply with the FCC's new guidelines for E-911 (emergency communications over wireless and VoIP networks) providers. These claims highlight that media companies and others in the communications industry have to be prepared for patent litigation almost as a cost of doing business – and need to consult with patent lawyers about strategies if they are faced with such claims, and consider the potential of concerted defenses with others similarly situated if the defense does not violate other laws (such as the antitrust laws). What claims have been raised recently?

Over the last two years, thousands of radio stations across the country have received letters claiming that their digital music storage systems violated a patent from a company called Mission Abstract Data. While the patents in question have a checkered history at the Patent Office – after being issued, they were reexamined and their basis questioned, with the Patent Office ultimately agreeing that the patents, as limited through the reexamination, were in fact valid. But that decision was itself challenged by equipment manufacturers whose music systems could infringe on the patent. That further reexamination is still underway.  Nevertheless, as that reexamination continues, the company that currently has rights to the patent, Digimedia, has sued four radio station owners in Texas claiming that they are violating these patents controlled by the company. These suits are in addition to a long-pending case against a number of large broadcasters, which has been stayed pending the outcome of the Patent Office reexamination (though the patent holder has asked that the stay be lifted – an argument to be considered later this month). Some observers have suggested that these new suits may be a precursor to other actions to try to convince reluctant broadcasters to take out a license rather than fight a lawsuit.

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Having broadcast all of the material rules of a station’s contest was not enough to avoid a $10,000 fine for having misleading rules – when there were errors in the contest deadlines posted on a station’s website and in emails sent to contest participants. In an FCC Notice of Apparent Liability proposing a fine for a North Carolina FM station, the Commission also upped the fine from the usual $4000 base fine for a contest violation to $10,000, because the corporate parent of the licensee had been hit with two other fines for contest violations (one in 2009 and one almost two decades ago, in 1994) and as the company had very significant revenues in the past year.

The contest was called “Carolina Cuties”, where contestants posted pictures of their babies on the station’s website, the winning picture to be selected by a vote of station listeners.   The station’s on-air announcements properly stated that the voting could continue through September 5 of last year, with the winner announced on September 6. But, on the website, during a week at the end of August, it was stated that the winner would be selected on September 4.  This was later updated to say that the voting deadline was September 4, but correctly stating that the prize would be awarded on the 6th.   An email to contestants also used the September 4 voting deadline date. Votes were in fact taken through September 5, as announced on the air. Nevertheless, as the website and emails stated that the voting deadline was September 4, the Commission determined that the station contest was not conducted “substantially as announced or advertised,” and proposed to levy the fine.

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At this year's NAB Convention, digital issues were much talked about.  In fact, the NAB held, for the first time, a day and a half session focusing on radio stations and their digital efforts, called the Digital Strategies Exchange.  I was on a panel called the Consultant's Corner, and discussed legal issues that broadcasters may face as they move more and more into the digital world.  The PowerPoint slides that accompanied my presentation can be found here.

Digital issues for broadcasters go far beyond the streaming royalties for webcasting that we have written about so much in these pages.  Recent cases, like the one that we wrote about here, have imposed the FCC's disclosure requirements on contests conducted on a station website that is even mentioned on-air.  Broadcasters need to be careful about protecting their branding, as putting a slogan or positioning statement on the Internet makes it available to people worldwide.  If a station has not been careful in picking its branding statement, the worldwide exposure can just be an alert of a potential infringement to a trademark or service mark owner. Using music online in ways other than webcasting can pose legal issues as we explained in our advisory here.  Sponsorship identification obligations like those that apply to broadcasters have been imposed on online media where companies are given any consideration for endorsements or testimonials (see our article here).  And allowing listeners to post videos or music or other content could potentially lead to liability for any copyright violations if a station does not register an agent with the Copyright Office to receive notices of infringement so that the station can take down infringing content (the Copyright Office's instructions for doing so can be found by clicking here).  These are but a few of the issues covered in my presentation in Las Vegas.  As in any other business endeavor, make sure that you know the rules of the road to avoid the legal issues that might otherwise arise. 

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The FCC released a Notice of Apparent Liability proposing a $22,000 fine for a contest to win a car conducted by a cluster of five stations.  The contest (the award of a car to the entrant who produced the best commercial for the car, as voted on by website users) was conducted principally through the stations' websites.  But the stations did promote the fact that the contest was being conducted on the air.  A disappointed contestant accused the licensee of rigging the contest by awarding the prize to a friend of a station employee for a video that was entered after the official end of the contest.  The FCC totally rejected the basis of the complaint (finding no basis for the conclusion that favoritism had been shown - especially as voting for the winner was done by website visitors, not station employees).  Nevertheless, the FCC proposed the $22,000 fine for the failure to broadcast all of the material rules of the contest on the air.  This proposed fine reinforces two principles that we have written about in previous cases:

1. You must provide all of the material rules of the contest in on-air announcements a sufficient number of times so that a listener could be expected to hear such announcements (see our article here about what are considered the "material terms" of a contest), and
2. The rules for a contest that is primarily conducted through a station website must still be broadcast on the air if the fact that the contest is occurring on the website is promoted over the air (see our article on a previous case reaching the same conclusion).

Here, the licensee posted the rules of the contest online, which one might think would be sufficient, as all contestants entered online, and the winner was selected through online voting.  But the FCC felt that some of the information given on the air (and in the contest rules) about entry dates was somewhat ambiguous, and decided that, once a contest by a broadcaster is mentioned on the air, all the rules must be given on the air.  As the contest was conducted by multiple stations, the fine reflects a multiple of the FCC's standard $4000 fine for a contest rule violation. This decision seems to penalize a broadcaster for being a broadcaster, as a similar contest, had it been run by the car company instead of the station, could have been promoted and conducted in exactly the same way, and the FCC would not have penalized the station.  But according to the FCC's interpretation of Section 73.1216 of its rule regarding station contests, a station conducting a contest on its website, but promoted on the air, needs to be careful to publicize all of the material rules on the air avoid this FCC trap for the unwary. 

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This afternoon, the FCC released its long-anticipated Report and Order (R&O) setting forth the Commission’s new closed captioning rules for IP-delivered video programming, pursuant to the 21st Century Communications and Video Accessibility Act (CVAA). 

As we explained when the rules were first proposed in September, the CVAA directed the FCC to establish how and when certain IP-delivered video programming must be captioned, as well as the closed captioning capabilities for devices used to view video programming. The R&O adopts closed captioning requirements for owners, providers, and distributors of IP-delivered video programming; a safe harbor technical standard and delivery format for IP video captions; a staggered compliance schedule; complaint rules; and requirements for manufacturers of devices used to view the video programming at issue.

We are currently reviewing this comprehensive rulemaking, and will post our in-depth review next week, both here and on our DWT Advisories page.

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The FCC has set the date for comments on the proposal for television stations to maintain an online public inspection file, including an online political file (see Federal Register notice here).  Comments are due on December 22.  Replies are due on January 6.  Happy Holidays from the FCC!  We summarized the FCC's proposals here and here.  While the proposed new rules will relieve stations from the burden of hosting the files themselves (as the FCC is proposing to host all of the files on its own servers), it still requires that stations upload their information - including all information that is put in their political file, into a new electronic reporting system to be devised by the FCC.  As we described in detail in our summary of the proposal for the online public file, the FCC is asking whether certain new public file obligations should be added to those currently in place.  These include possible posting of comments on programming that come from the station's social media efforts in addition to the letters and emails currently required; a proposed requirement to place in the public file information about sponsorship identification of all "pay for play" material that is broadcast on a station (currently only broadcast, not kept in any paper form); a requirement to provide information about shared services agreements and the programming that they provide to a station; and a requirement that all information about fines and other enforcement actions taken against a station be posted to the online file.  So how much does the FCC think that this will cost stations?

As we wrote yesterday, in adopting rules, the FCC is currently bound by the Paperwork Reduction and the Regulatory Flexibility Acts, both of which require some assessment of the impact of new regulations, particularly on small businesses.  In the Federal Register publication, the FCC's assessment of the regulatory burden of these proposed new obligations is broken down into several pieces.  The burden for the new online public file requirement, including the posting of the political file, is set forth as follows:

Respondents/Affected Parties: Business or other for-profit entities; Not for-profit institutions; Individuals or households

Number of Respondents and Responses: 25,422 respondents; 59,833 responses

Estimated Time per Response: 1 to 104 hours.

Frequency of Response: On occasion reporting requirement; Recordkeeping requirement; Third party disclosure requirement

 Obligation To Respond: Required to obtain or retain benefits. The statutory authority for this collection of information is contained in 47 U.S.C 151, 152, 154(i), 303, 307 and 308

Total Annual Burden: 2,158,909 hours

 Total Annual Costs: $801,150.00

Stations should look at and evaluate these numbers as part of their response, as the FCC has invited a cost-benefit analysis of the proposed new rules.  How is it that the FCC assumes that the regulatory burden would be over 2 million hours, but that the costs would be less than a million dollars?  How will this work be done and paid for?  It is also interested in that the number of respondents is listed as 25,422.  As there are only 1,782 full-power television stations and about 450 Class A stations according to the last FCC Report on station totals, who else is expected to report on this form?  The FCC, in its Notice of Proposed Rulemaking, specifically exempted radio from the obligations for an online public file - at least for the time being.

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Do you allow the posting of content created by third parties on your website (e.g. videos, audio files, or even written comments)?  Do you run any on-line service where you collect information provided by third parties (whether that be a dating service, auction site or other classified service)?  If you do, you probably know that you are safe from copyright claims for infringing content that is posted by those who are not your employees or agents if you follow certain steps.  We have written about these steps to give you the "safe harbor" from copyright liability for "user-generated content" before.  The steps include requirements that you not encourage or profit from the infringing content, that you have terms of use for your service that forbid users from posting infringing content, and that you take down infringing content when you receive notice from copyright holders that it has been uploaded to your site or service by a third party.  To take advantage of this safe harbor from liability, services are required to register with the Copyright Office the name of someone in their company who can be served with "take-down notices" from copyright owners.  The process of registration is now proposed to be changed in a Notice of Proposed Rulemaking just issued by the Copyright Office.  Comments on this notice can be filed through November 28. Replies are due by December 27.

The safe harbor was created by the Digital Millennium Copyright Act, adopted in 1998.  Since that time, the registration of agents to receive take-down notices has been governed by interim rules.  Services register by sending a paper form and a filing fee to the Copyright Office, and that information is manually entered by the Copyright Office into a list that is available on the Copyright Office website.  From experience, the time from the filing of such a registration to its appearance on the Copyright Office's website can take several weeks or more.  The Copyright Office, in its Notice, states that it has done some informal checks on the information in its database of registered agents, and found that the list contains duplicate registrations, registrations for companies or sites that are no longer in operation (services are supposed to tell the Office when they stop their operations), and many outdated addresses (services are supposed to update their agents as employees change, but apparently they sometimes forget).  The NPRM proposes to move to an electronic registration system, which will automatically request a verification of the registered information on a regular basis.  In making this proposal, the Copyright Office asks for public comment on a number of issues.

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Dave Oxenford this week conducted a seminar on legal issues facing broadcasters in their digital media efforts.  The seminar was organized by the Michigan Association of Broadcasters, and originated before a group of broadcasters in Lansing, but was webcast live to broadcasters in ten other states.  Dave addressed a variety of legal issues for broadcasters in connection with their website operations and other digital media platforms.  These issues included a discussion of service marks and copyrights, employment matters, music on websites, the use of social media, privacy, and sponsorship disclosure.  The slides used in the Lansing presentation are available here.    During the seminar, Dave also mentioned that stations with websites featuring user-generated content, to help insulate themselves from copyright infringement that might occur in the content posted to their website by their audience, should take advantage of the registration with the Copyright Office that may provide safe harbor protection if a station follows the rules and takes down offending content when identified by a copyright holder.  The Copyright Office instructions for registration can be found here.   

One of the most common issues that arise with radio station websites is the streaming of their programming.  In August, Dave gave a presentation to the Texas Association of Broadcasters providing  a step-by-step guide to streaming issues, with a summary of the royalty rates paid by different types of streaming companies.  That summary to Internet Radio issues is available here.  Additional information about use of music on the Internet can be found in Davis Wright Tremaine's Guide to The Basics of Music Licensing in a Digital Age.   Dave also presented this seminar at the Connecticut Broadcasters Association's Annual Convention in Hartford on October 14.

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Last week, the Department of Commerce's Internet Policy Task Force asked for comments on the relationship between the protection of copyrighted content on the Internet and the effect of such protections on technology innovation and the expectations of consumers.  The purpose of the inquiry is to develop a report to be circulated among the various government departments that have power over the enforcement of copyrights and the development of rules and regulations that deal with copyrighted materials - to essentially develop government policy in this area.  While the request for comments dwell on the concerns about copyright infringement that are raised by many Internet applications, the proceeding will obviously be controversial among media companies.  Many of these companies are concerned about the unauthorized use of their content on various websites, while other media companies (or divisions of the same media companies who are concerned about the unauthorized use of content) are concerned about too tight restrictions on the use of copyrighted content and how that will impact various websites, especially those that feature user-generated content.

As we have written before, the Digital Millennium Copyright Act allows Internet companies to allow users to post material on their websites, without fear of liability, if they take certain precautions - including adopting terms of use warning users that they need to observe the intellectual property rights of others, not otherwise encouraging infringing uses, registering with the Copyright Office to provide a contact person at the website operator that a copyright owner can contact if they believe that their content is being used improperly, and taking steps to take down improper content if the website operator is notified of the infringing use.    This Commerce Department's notice asks if this "safe harbor" provision has served the public interest, or if adjustments to this regime should be made.  Obviously, many websites that have grown businesses based on user generated content (e.g. many of the social networking and video-sharing sites) and will be very concerned with a proposal to alter their safe harbor and require them to take on a greater burden of reviewing content for potential copyright violations, while many content owners, who have complained about the inability to monitor all of these sites, may be looking for these reforms.   Obviously, there will be conflicting views on these proposals.

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Broadcasters have a host of other legal issues that they should consider in connection with their digital presence.  At last week's Maine Association of Broadcasters Annual Convention in Bangor, Dave Oxenford addressed these issues, including service marks and copyrights, employment matters, music on websites, the use of social media, privacy and sponsorship disclosure.  A copy of Dave's presentation on the Legal Issues in the Cyber Jungle is available here.    Dave also mentioned that stations with websites featuring user-generated content, to help insulate themselves from copyright infringement that might occur in the posts from their audience members, should take advantage of the registration with the Copyright Office that may provide safe harbor protection if a station follows the rules and takes down offending content when identified by a copyright holder.  The Copyright Office instructions for registration can be found here.   

One of the most common issues that arise with radio station websites is the streaming of their programming.  In August, Dave gave a presentation to the Texas Association of Broadcasters providing  a step-by-step guide to streaming issues, with a summary of the royalty rates paid by different types of streaming companies.  That summary to Internet Radio issues is available here.  Additional information about use of music on the Internet can be found in Davis Wright Tremaine's Guide to The Basics of Music Licensing in a Digital Age. 

Dave will be presenting a version of the Cyber Jungle presentation to the Michigan Association of Broadcasters on October 12, a presentation that will be webcast to several other states.  Information and registration for that seminar is available here.

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So you want to start streaming your radio station on the Internet?  Or maybe you want to start a whole new Internet radio station.  In a session at last week's Texas Association of Broadcasters Annual Convention in Austin, Dave Oxenford talked about the legal considerations starting an Internet radio station, while Chris Dusterhoff of Bryan Broadcasting in Bryan/College Station, Texas talked about some of the technical and business issues in doing so.  A copy of Dave's PowerPoint presentation from that session is available here.  The presentation addresses some of the issues that you need to consider, including the music royalties that will be required from most webcasting operations. 

In addition to the issues involved in streaming your signal on the Internet, broadcasters have a host of other legal issues that they should consider in connection with their digital presence.  Issues that arise with service marks and copyrights, with employment issues, social media, privacy and sponsorship disclosure were all addressed in Dave's presentation on the Legal Issues in the Cyber Jungle.  A copy of his PowerPoint presentation is available here.  Dave also mentioned that stations with websites featuring user-generated content, to help insulate themselves from copyright infringement that might occur in the posts from their audience members, should take advantage of the registration with the Copyright Office that may provide safe harbor protection if a station follows the rules and takes down offending content when identified by a copyright holder.  The Copyright Office instructions for registration can be found here.   Additional information about use of music on the Internet can be found in Davis Wright Tremaine's Guide to The Basics of Music Licensing in a Digital Age. 

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Davis Wright Tremaine attorneys David Oxenford and Rob Driscoll conducted a seminar -  Using Music in Digital Media: Business and Legal Issues - on June 16, 2010 in New York City.  The seminar was presented to attorneys from committees of the New York State and New York City bar associations.  In the seminar, Dave and Rob discussed the music licensing issues that can arise when music is used in digital media - touching on everything from royalties for the streaming of music by Internet radio stations, to the use of music in video productions or in advertisements that may be displayed online, to the occasional use of music by a business on its website to enhance the "stickiness" of that site.  The PowerPoint presentation from the seminar is available here.  Many of the issues that were covered in the seminar are discussed in Dave and Rob's memo the on The Basics of Using Music in Digital Media, available by clicking on this link.

Another topic that was discussed was the use of music in user-generated content, and how website operators can avoid liability that may arise from the posting on their sites of content using music and other copyrighted materials by users over whom the site owner has no control.  The Digital Millennium Copyright Act provides protection for those who host sites where such content is posted, but certain formalities need to be observed by the site owner to insure that they receive the law's full protection.  Site owners cannot encourage the posting of copyrighted content unless the appropriate clearances have been obtained, they cannot have actual knowledge of the infringing content, they cannot receive a direct financial benefit from the infringement, and they must act promptly to remove infringing content if notified that it is on their site.  To make this notification possible, to provide a "safe harbor" under the DMCA, a website owner needs to place a notice on its website in a "location accessible to the public," and register with the Copyright Office, the name of a person to be contacted by a copyright owner if the owner finds its content being used on the site without permission.  This notice must provide the contact person's address, phone number and email address.  Information about registering the contact person with the Copyright Office, a list of those website operators who have registered, and a link to the form to be used to register a contact person, can be found here.

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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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At more and more broadcast conventions, station owners have been asking questions about their legal liability for the use of social media.  What is their liability for the use of Facebook, Twitter, MySpace or other services?  Could owners have liability if their station maintains its own page on which friends and followers may post statements which are defamatory or which could otherwise give rise to a lawsuit?  Can an employee's actions on his or her own pages be attributed to the station?  Should stations restrict the use of social media by their employees on company time, or can that itself give rise to liability?  These are the same questions being asked by employers in other industries, and Davis Wright Tremaine is conducting two free on-line seminars on December 9 and December 15 to answer these questions.

While these seminars are not directed exclusively to broadcasters, they will address topics that broadcasters will find helpful in answering their questions on the use of social media.  Specific topics to be discussed include:

• Social media mechanics: How does social media work and what are employees doing on these sites?
• Employer liabilities: What new types of legal risks are created by employees using social media? How can employers protect themselves?
• Expectations of privacy: Do employers who blog or use social media in the workplace still enjoy a right to privacy? What can employers lawfully do to monitor or control online activities?
• Social media policies: What are the options and what should it contain? Is it necessary for your company to have a written policy?
• Managing defamation: If you or your company is defamed online, what can you do? What should you do?

More information on these free on-line seminars is available here.  To register for these free seminars, go the the registration site here.

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In the next few days, concerns about the protection of children from indecency and violence could lead to a report from the FCC to Congress urging use of the V Chip and other parental controls in devices other than television sets.  Remarks several weeks ago by FCC Chair Julius Genachowski suggesting that the FCC might want to look at content regulation beyond the broadcast medium, a view reiterated in an interview yesterday in TV NewsCheck, also suggest that  concerns about the exposure of children to indecency and other troubling programming on cable, online and by wireless devices may lead the FCC into unprecedented extensions of its regulation of entertainment content beyond the broadcast media.  An article today from Bloomberg News confirms that the FCC will be starting an inquiry to see if the television program ratings should be extended to cable and wireless entertainment services.  This extension of Federal regulation to protect children is occurring at the same time that similar concerns are being expressed by state legislatures, including the adoption of a recent law in Maine that effectively prohibits direct marketing to minors.

The report due this week follows a Notice of Inquiry issued by the Commission in March, as required by the Child Safe Viewing Act, legislation passed by Congress.  The law required that the FCC solicit public comment on "advanced blocking technology", the next generation of the V Chip, to see if these technologies can and should be extended to video programming other than broadcast television, including online communications, wireless communications (including video delivered to mobile  devices), DVRs and other video recorders, DVD players, and cable television.  The FCC Notice also asked why the current V Chip has seemingly not been used much by parents.  The FCC even asks if rules should be extended to video games - which were not specifically named in the legislation.  This would seemingly extend the FCC's jurisdiction far beyond its current limits.  The FCC's report is due by August 29. 

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As you may have heard, Facebook is going to allow users to register names in their Facebook URL, replacing the former random ID numbers.  This policy, announced in a Facebook blog post earlier this week will become effective on a first come, first served basis beginning Saturday, June 13 at 12:01 am.  This new policy creates the danger that Facebook users may try to register as their user name words or phrases that could infringe on a company name, trademarked slogan, or even a broadcast station's call signs.  To prevent others from using your company's name, call sign or other trademark, Facebook has created a form allowing rights holders to register their marks ahead of time.  To protect your intellectual property in the easiest manner possible (without the need for costly infringement lawsuits of other actions), companies should take advantage of the procedures outlined by Facebook itself, and register with the company.

A couple of caveats:  

1. User names have to be at least five alphanumeric characters.  This means that four letter call signs cannot be used as user names unless used with a suffix or frequency.  Since periods are the only punctuation allowed, acceptable user names might be WXYZ.FM, or FM98.1, for example. 
2. In order to prevent someone from using your trademark in advance, it appears that it must be a registered mark.  However, a separate form appears to allow intellectual property rights holders to reclaim a user name, even if it is not a registered trademark.  Thus, if your company name, mark or call sign is unregistered, you can either register it as your own Facebook user name or wait until someone else does that and complain after the fact.  You do not need to be a Facebook user to submit the intellectual property rights forms described above.

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This past week, I attended the BIAfn Winning Media Strategies Conference in Washington, DC.  During the course of the conference, there was much talk about how broadcasters and publishers need to provide unique service to their communities in order to survive in the competitive media marketplace.  The point was made over and over again that, in each market there are unique attributes and personalities that a station should be covering in its programming, and should be exploiting even more broadly through their digital assets, to tie it to its community.  Only by doing so will the station be able to survive in the new media environment - and by doing so, the station may be able to thrive.  In fact, I was stuck by a statement by USC's Adam Clayton Powell III that domination of the local online and digital media marketplace was "the broadcasters to lose."  In other words, the broadcaster has such unque promotional abilities with its current audience that it can establish its brand in the online and in the mobile world far easier than other media players.  But there were also the repeated warning that there is more and more competition for this local digital market from new entrants and other media entities and that, if the broadcasters did not take advantage of their current advantage, the local service would come from someone else.  What most stuck me was that there was no question that the superservice to local needs would be coming from someone - broadcaster or not - as a result of marketplace developments, not because of any government mandate.  The broadcaster has to adapt to and compete in this new media marketplace or become culturally and economically irrelevant.  The broadcaster needs to serve the local market to meet these challenges, not because some Washington agency has ordered him to do so.  And the broadcaster needs to serve his community in a way that the public will find compelling, not in a way that the government thinks is best.

At BIAfn, the presentation that made the greatest impact was probably that of Greenspun Media from Las Vegas, which has reinvented a secondary newspaper and a Low Power TV station as an on-line powerhouse, uncovering the aspects of the community that would draw the largest audience and covering that information in great detail.  The Las Vegas Sun site not only covers hard news, but also the gaming industry, University of Las Vegas sports and even state government issues in a way that its audience seems to find interesting.  Even a history of Las Vegas, in great detail, is included.  And video plays a big part of the site, with the company in development of a hip news and events program, 702.tv, that will soon be a daily program on the television station and online (featuring local "celebrities" doing the weather, including strippers and Neil Diamond sound-alikes).  While some attendees at the conference thought that Las Vegas presented unique opportunities that might not be available in all communities, many were immediately speculating on the opportunities in their own communities to find unique personalities and events that could be developed on-air and on-line in ways to maximize their connection with their audience. 

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A decision by a US District Court in New York was just released, setting the rates to be paid to ASCAP for the use of their composers' music by Yahoo!, AOL and Real Networks.  The decision set the ASCAP rates at 2.5% of the revenues that were received by these services in connection with the music portions of their websites.  These rates were set by the Court, acting as a rate court under the antitrust consent decree that was originally imposed on ASCAP in 1941.  Under the Consent Decree, if a new service and ASCAP cannot voluntarily agree to a rate for the use of the compositions represented by ASCAP, the rates will be set by the rate court.  The Court explained that they used a "willing buyer, willing seller" model to determine the rates that parties would have negotiated in a marketplace transaction  - essentially the same standard used by the Copyright Royalty Board in setting the rates to be paid to SoundExchange for the use of sound recordings by non-interactive webcasters (see our post here for details of the CRB decision).  The ASCAP decision, if nothing else, is interesting for the contrasts between many of the underlying assumptions of the Court in this rate-setting proceeding and the assumptions used by the Copyright Royalty Board in setting sound recording royalty rates.

First, some basics on this decision.  ASCAP represents the composers of music (as do BMI and SESAC) in connection with the public performance of any composition.  This decision covered all performances of music by these services - not just Internet radio type services.  Thus, on-demand streams (where a listener can pick the music that he or she wants to hear), music videos, music in user-generated content, karaoke type uses, and music in the background of news or other video programming, are all covered by the rate set in this decision.  Note that the decision does not cover downloads, presumably based on a prior court decision that concluded that downloads do not involve a public performance (see our post here).  In contrast, the CRB decision covered the use of the "sound recording" - the song as actually recorded by a particular artist - and covers only "non-interactive services," essentially Internet radio services where users cannot pick the music that they will be hearing.

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Website operators who allow the posting of user-generated content on their sites enjoy broad immunity from legal liability.  This includes immunity from copyright violations if the site owner registers with the Copyright Office, does not encourage the copyright violations and takes down infringing content upon receiving notice from a copyright owner (see our post here for more information).  There is also broad immunity from liability for other legal violations that may occur within user-generated content.  In a recent case, involving the website Roommates.com, the US Court of Appeals determined that the immunity is broad, but not unlimited if the site is set up so as to elicit the improper conduct.  A memo from attorneys in various Davis Wright Tremaine offices, which can be found here, provides details of the Roommates.com case and its implications.

In the case, suit was filed against the company, alleging violations of the Fair Housing Act, as the site had pull-down menus which allowed users to identify their sex, sexual orientation, and whether or not they had children.  Including any of this information in a housing advertisement can lead to liability under the law.  The Court found that, if this information had been volunteered by users acting on their own, the site owner would have no liability.  But because the site had the drop-down menus that prompted the answers that were prohibited under the law, liability was found.

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While US webcasters may think that they have legal issues - whether it be the Internet radio music royalties that have been such a concern (see our coverage, here) or the copyright and other liability issues that surround user-generated content on various websites (see our story here), they face nothing like new rules that were recently adopted for webcasters in China.  The new rules require government permits from two separate Chinese government agencies before webcasting operations can begin.  In addition, the rules appear to require ownership and control of webcasting operations by state-owned companies.  A memo on these new rules, prepared by attorneys from Davis Wright Tremaine's Shanghai office, can be found here.

These rules apply to streaming audio and video delivered to mobile and wireless devices.  The rules also require yet another permit for sites that contain news content, and require taping of programs (a proposal made by our own FCC in connection with broadcast programs to monitor for indecency) to monitor for program content that may offend government requirements.  Clearly, it's a different system than that in place in the US - one which website operators interested in an operation in China should study carefully.  Again, details can be found in the memo prepared by the attorneys in our Shanghai office.

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As more and more broadcasters create and use websites (and, to some extent, are required to post more information on those sites by the FCC, see our post here), they should be cautious about the legal liabilities that arise from these sites.  For instance, as websites are used to gather personal information for listener's clubs, news alerts or for e-commerce purposes, the site owners need to be concerned about privacy issues. Many states are now requiring privacy policies to be posted on websites that gather personal information.  In a recent decision, the Federal Trade Commission entered into a consent decree with a website owner who had not abided by the privacy policy that it posted, requiring that the site owner hire security consultants and regularly file reports, for the next 20 years, with the FTC on its efforts to comply with its policies.  This case is a demonstration that website owners should not casually adopt privacy policies without fully understanding and adhering to their terms.

Davis Wright Tremaine's Privacy and Security blog features a summary of this consent decree and explains the ramifications of the decision.  Broadcasters and other website owners should learn from this decision that they should not blindly copy a privacy policy that they find on some other website and adopt it as their own.  Instead, they need to carefully craft a privacy disclosure that honestly discloses their policies and practices.  In this case, the website owner promised that personal information would be maintained in a secure fashion, yet the FTC found that simple hacking techniques were able to get access to that information.  For website owners who are collecting private information, and promising privacy and security, to avoid legal issues in the future, make sure that you are living up to your promises. 

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Each year, Internet radio stations must pay a minimum fee to SoundExchange, and that fee is due by January 31.  These minimum fees are applied against  the obligations of a Internet radio service to pay royalties for the use of sound recordings on their stations.  SoundExchange does not send bills, so webcasters must remember, on their own, to make the payments.  For commercial webcasters (including broadcasters who stream their signals on the Internet), under the Copyright Royalty Board decision released last March, a minimum fee of $500 per channel is due.  While SoundExchange and certain large webcasters agreed to cap this minimum fee liability at $50,000 no matter how many channels a webcaster transmits (see our post here), this agreement has yet to be submitted to the CRB for approval.  Minimum payments are also due from noncommercial and small webcasters.

Under the CRB decision, noncommercial webcasters also owe a minimum fee of $500 per channel.  Small webcasters, who earlier this year accepted the SoundExchange offer about which we wrote here, owe a minimum fee of $2000 if they had 2007 revenues of less than $50,000, and minimum fees of $5000 if their 2007 revenues exceeded $50,000.  Note that details about these minimums are difficult to locate on the SoundExchange website.  Nevertheless, the current rules require that these payments be made.  Future settlement negotiations may adjust some of these minimums but, as of this moment, the failure to pay the minimum fees could, at a minimum, subject an Internet radio service to penalty fees and interest payments. 

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With 2008 almost upon us, webcasters streaming music on the Internet need to remember that the way of computing and paying royalties to SoundExchange will shift on January 1- a change that may be especially important for broadcast stations.  Under the Copyright Royalty Board decision reached last March, webcasters must pay royalties computed on a per "performance" basis.  A performance is a per song, per listener computation.  In other words, if an Internet radio station plays a song and 15 listeners are logged into the station at the time that the song plays, there would be 15 performances on which the royalty would need to be paid.  While broadcasters objected that they did not (and in many cases could not) track the number of performances that were made by their stations on the Internet, the CRB, on reconsideration of their initial decision, only went so far as the give stations an interim rate based on the number of  "Aggregate tuning hours" that a station served (e.g. one listener listening for one hour, or two for a half hour each would both be the equivalent of one aggregate tuning hour).   See our post, here, on the CRB's reconsideration decision.  The aggregate tuning hour (or ATH) metric is one that is more readily obtain from a content delivery network or other bandwidth provider, and a metric that has been used since the first royalties were established in 2002.  Yet as of January 1, as the interim ATH rate applied only to 2006 and 2007, that method of payment will no longer be available, and many webcasters are wondering what to do to compute the per performance royalty.

Neither the CRB decision nor SoundExchange, which collects the royalties, explained what a webcaster who cannot count performances is to do when the option to pay based on aggregate tuning hours disappears.   The royalty for January performances is due to be paid to SoundExchange on March 16 (45 days after the end of the month), and a webcaster preparing to file its royalty statement on that day will need to have a performance count to include on its statement.  Many Internet radio companies have been trying to determine how to count performances and, while there are some services that offer to provide software to do so, it is my understanding that none are foolproof and, in some cases, they may not be able to get a complete count of performances.  And many smaller stations may not be able to afford such systems.

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