Broadcast Law Blog

FCC Begins Investigation of Embedded Advertising and Sponsorship Identification

David Oxenford — 2008-07-03T12:21:17-05:00

Last week, the FCC commenced its long anticipated proceeding to reexamine its sponsorship identification rules. This proceeding has been rumored for over six months, having appeared on an agenda for a Commission open meeting in December, only to be pulled from the agenda days before it was to have been voted on. The Commission has initiated this proceeding, to a great degree, at the urging of Commissioner Adelstein who has been vocal in his concerns that the broadcast and advertising industries, in adopting advertising techniques to respond to technological and marketplace changes, has been exposing the public to commercial messages without their knowledge. One of the principal practices of concern to the Commission, though not the only one, is embedded advertising (as the Commission refers to product placement and product integration into the dialog and/or plot of a program). While many of the trade press reports have focused on embedded advertising, this proceeding is wide-ranging and important to the broadcast, cable and advertising industries. Comments on the proceeding will be due 60 days after its publication in the Federal Register, with replies 30 days later. We have prepared an Advisory, summarizing the issues raised by the Commission in this proceeding, which can be found here.

According to trade press reports, this proceeding was initially planned as a Notice of Proposed Rulemaking (NPRM), which would have proposed rules which, after public comment, could have been immediately adopted. After significant lobbying from the advertising community, the Notice was released in two parts. First, there is a Notice of Inquiry (NOI), asking a series of questions about the current state of advertising on broadcast and cable outlets, and asking how the Commission should amend its rules to deal with new advertising techniques. Second, the Commission’s announcement contains an NPRM with respect to certain specific items, including proposing to clarify the type of sponsorship identification necessary in television advertising, the extension of the sponsorship identification rules beyond local origination cablecasting to cable network programming, and clarification of the rules with respect to live-read radio commercials. The specifics of the NOI and the NPRM are set forth in our Advisory.

]]>Also of interest was the Commission's discussion of the background of the sponsorship identification rules. In its discussion, the Commission raised a number of issues with common broadcast techniques and whether or not these were consistent with existing precedent - some of that precedent dating back 40 years. For instance, the FCC cited a policy statement from the 1960s that stated that "teaser" announcements of a few seconds duration were impermissible if the sponsor was not clear from the teaser itself, even if the sponsor became clear in a later announcement in the same program. The use of "cwickies" by the CW Network was identified as a potential area of concern by the FCC.

The Commission also questioned whether there was a need for sponsorship identifications in interview programs where there was consideration given to the program for the inclusion of broadcast material. The FCC worried about "hidden commercials." That discussion was most likely triggered by the concerns over Video News Releases ("VNRs") and by payments to spokesmen to plug government programs without disclosing that they had been paid (as in the Armstrong Williams program which was the subject of a fine about which we wrote here, and the recent controversy about ex-military officers who offered on-air opinions on the War on Terror without disclosing their financial connections to the Defense Department). However, it would seemingly have a far greater impact. In watching television programs in the last few days, I've been wondering how far the FCC's concern could go. On virtually every talk program, from the late night programs like the Daily Show or the Leno or Letterman, to daytime TV programs like Oprah or the Today Show, one staple is the author who is plugging his or her book or the actor plugging his or her movie. Could the provision of the guest on these programs for no payment by the TV show be construed as the receipt of valuable consideration by the book publishers or movie companies who are paying the costs of the promotional tour by the author or actor? Watching another cable television talk program, I noted the presence of numerous coffee cups with a recognizable logo on the desk of the hosts. Was that coffee paid for by the hosts, or was it provided by the coffee company just for the promotional value of having its cups appear on screen? While FCC policy currently allows the provision of material used in a program at no charge if the material is not unnecessarily highlighted in the program (so the piano may be provided by Steinway and its logo may be seen when the focus is on the player's fingers, there is no tight focus on the logo nor is there a plug at the end of the concerto remarking on how amazing the piano was). But would even the existing indirect plugs be permitted (without a sponsorship identification) if rules were adopted to address some of the concerns expressed by the FCC.

The way that the advertising and broadcasting businesses work together could be profoundly affected by this proceeding. Read our Advisory, read the FCC's Notice, and watch for the comment date. Think about the concerns that should be addressed by the Commission before enacting any new rules in this area, and let them know of these concerns before any new rules are adopted.

When is an FCC Fine Excessive? - The 2% Solution

David Oxenford — 2008-07-02T19:30:11-05:00

In two recent FCC decisions, one dealing with a commercial operator and that other with a noncommercial licensee, the Commission's staff addressed the issue of how large an FCC fine could be imposed on a broadcaster without that fine being subject to reduction because of the licensee's inability to pay. In the first case, a commercial station was fined for violations of the EAS rules. As we've written before, EAS seems to be the most common violation found at broadcast stations by FCC inspectors. However, what is most notable about this decision is not the violation, but the Commission's discussion of the penalty for that violation. As in many cases, the licensee argued that, as it had experienced several years of financial losses, the amount of its fine should be reduced as the payment of that fine would impose a financial burden on it. The FCC rejected the argument, finding that as the fine was less than 2% of the licensee's gross revenues, it was not excessive. The Commission stated that, while profits and losses may be important in determining whether a licensee can pay a fine, in most cases, if the fine is less than 2% of gross revenues, it will not be considered excessive even if the licensee has not been making a profit as it it not a significant overall expense. Therefore, the Commission refused to reduce the fine because of financial hardship argument.

In the noncommercial case, the applicant claimed that a fine that it was issued for not having any quarterly programs issues lists in it public file should have been reduced because that fine would significantly deplete the station's budget that had been allocated to it by the School District with which it was associated. However, the licensee only provided the FCC with information concerning the budget allotted to the radio station, and it did not provide any financial information about finances of the licensee school district. Without that information, the Commission stated that it could not determine that the fine was excessive, so it did not reduce the fine on the basis of financial hardship. Clearly, the Commission is not anxious to reduce a fine based on the licensees financial inability to pay, so a licensee looking for such a reduction must carefully document its request showing that the fine would impose a financial hardship.

Broadcast Performance Royalty Passes House Subcommittee - But It's Not Done Yet

David Oxenford — 2008-06-27T20:19:30-05:00

Once again, the extension of the sound recording performance royalty to broadcasters has become a hot topic in Washington. The subcommittee on Courts, the Internet and Intellectual Property of the House Judiciary Committee yesterday approved the bill introduced by Congressman Berman (about which we first reported here). That bill would include broadcasters in the Section 114 sound recoding royalty currently applicable to digital music users including Internet radio, satellite radio and cable radio. Under the bill, the Copyright Royalty Board would be charged with the responsibility of determining what a royalty would be using the "willing buyer, willing seller" standard. Following this subcommittee approval, the bill would next be considered by the full committee. To become law, the Committee and the full House of Representatives would have to approve it, and similar legislation would need to be enacted by the Senate. As the NAB has garnered the support of a majority of the members of the House on a non-binding resolution opposing the imposition of the royalty on broadcasters, and as there is not much time remaining in the legislative session before the election and the end of this Congress, the whole process may well have to start fresh in 2009 (bills have to be reintroduced after the end of each two-year Congressional session). Yet, with all of the controversy over the issue in recent weeks, it appears certain that the issue will arise again, so it is important to look at some of the recent action.

Two weeks ago, the House subcommittee held a hearing on the issue. Prior to the hearing, the MusicFirst Coalition (principally supported by the RIAA and the affiliated record companies as 50% of any royalty goes to the copyright holders who are usually the labels) had Nancy Sinatra and the Nitty Gritty Dirt Band making the rounds on Capitol Hill in support of the royalty. These appearances follow the precedent set in earlier Capitol Hill proceedings, where the Coalition has brought in niche or oldies artists to address Congress - not major popular current acts. The artists who have testified (who have included Judy Collins, Sam Moore, Lyle Lovett, and Alice Peacock) have argued that the additional income that they would receive from a performance royalty would supplement their incomes which, in some cases, has either never been great or has declined as the demand or ability to tour has declined. The argument is always made that the royalty will encourage musicians to produce their music – though it is rarely if ever claimed that music wouldn’t be made if the royalty is not adopted, as songs have been written and sung for time immemorial, well before any royalty existed, merely for the pleasure or to fulfill the need for self-expression. The question is not one of ensuring the availability of music, but instead it is one about who should get how much of whatever money is made, directly or indirectly, from the use of that music.

]]>One question that, to me, looms large is whether most artists would in fact be better off with a performance royalty. In many cases, the very artists who are testifying in support of the royalties would receive minimal revenue from the royalty, and that royalty may well end up hurting many of these same acts. How many times are Nitty Gritty Dirt Band songs played on the radio? When was the last time that you heard “These Boots Are Made for Walking” on the radio? The imposition of a performance royalty (or performance tax, as the NAB has called it) could encourage stations with niche music formats to abandon those formats. Already stations are abandoning 60s and even 70s based oldies formats (less airplay for Nancy Sinatra), and if they have to pay more for the use of those recordings, will these stations keep playing them? Similarly, there are few bluegrass stations, and the likelihood of more developing will not be helped by the introduction of a performance royalty. If a station could make roughly equivalent amounts from airing news-talk programming and not paying a royalty or some niche format where a royalty would be due, which choice do you think a station will make? Instead, it seems that stations will play the music that their audience may demand – the most popular and safest music - or abandon or severely limit the playing of music to avoid the royalty.

While the proponents of the royalty have downplayed the promotional benefits of radio airplay, even arguing that airplay harms artists as listeners substitute radio listening for the need to buy a CD or download, even the music industry’s own expert testified before the Copyright Royalty Board that the net promotional value was probably greatest for up and coming bands, while that negative impact might only occur for well-known acts who have other avenues through which to promote their music. Thus, the imposition of the royalty would seemingly make the rich get richer, while limiting the avenues for promotion for lesser known acts.

SoundExchange, which collects the digital royalties, has itself suggested in a recent press release that the fees that the royalties they seek, like those imposed on Internet Radio, are reasonable. SoundExchange points to predictions as to the revenue that Internet radio will received by 2020 and claims that more and more services are signing up to provide Internet radio service under the royalties set by the CRB.. They make much of the “AOL-CBS partnership”, when instead what appears to have happened is that one of the biggest Internet radio companies has essentially left the business, surrendering their service to CBS. As we just wrote, MSN has also abandoned the business, Yahoo has been decreasing their listening hours, and Pandora has been repeatedly been stating that they cannot operate under the current royalties. The Internet radio-like services that have been getting the most recent promotion and press coverage – services like Last.FM and Imeem, have negotiated their own private deals as they provide interactive services not subject to the royalty. If not for small webcasters paying under the special terms for those stations, or for larger broadcasters who may have different on-line economics (i.e. they essentially have no programming costs as they repurpose their existing content on the web, though even there most small broadcasters are petrified of developing a large on-line audience that could bankrupt them), the Internet radio industry would be crashing.

The recent discussion has also turned to parity in royalties. The record labels argue that broadcasters don’t pay a royalty as other digital services do because of an historical "loophole" in the Copyright Act. But this argument could just as easily be reversed. The record companies only get the royalty because of the provisions of the Copyright Act created only in the late 1990s, for the first time creating a public performance right in a sound recording. If the RIAA/SoundExchange position were to be accepted, it would seem clear that the same “loophole” would also apply to other public performances of sound recordings – like the playing of records in bars and restaurants, stores, stadiums, and in other public places. While the current bill does not provide for such an extension, isn’t that the logical extension? The performance royalty paid to composers is paid by these venues so, using the Music First logic that there should be "parity", wouldn’t these venues be next?

The argument of parity simply does not ring true As we have written, here, the SoundExchange proposal embodied in the initial bill for small broadcasters is a flat fee of $5000 per year if the broadcaster has less than $1.25 million in revenue. Yet under SoundExchange’s special deal for small webcasters, a webcaster making $1.25 million would be paying over $150,000 in royalties. Where is the fairness and parity there? Is SoundExchange wiling to support a similar limitation in the royalties paid by small webcasters? Similarly, if SoundExchange is seeking the same royalty as has been determined “fair” by earlier CRB proceedings, the royalty on broadcasters could exceed 20% of their gross revenues for a music station (see our computations here). In this day of declining radio profits, such a royalty would be crushing for most stations, perhaps ensuring the demise of over-the-air broadcasting (as reportedly predicted by Steve Ballmer of Microsoft), making issues of the digital divide incredibly acute. The news, information and entertainment provided by radio broadcaster would disappear, and music entertainment would be available only to those who have access to wireless high-speed Internet connections. That will not be the same as the ubiquitous service offered by free over the air radio currently.

While the subcommittee reportedly wanted to make some changes in the bill before it advances to the full Committee, these fundamental issues need to be considered. Essentially, while it is very easy to say that musicians should be compensated for the use of their work, the unintended consequences of the royalty are great. Congress and even the artists and labels need to carefully consider these issues before moving on the enactment of any performance royalty.

Yes We Do Exist - Claims Copyright Royalty Board

David Oxenford — 2008-06-25T23:04:46-05:00

We recently wrote about the challenge to appointment of the Copyright Royalty Board's judges filed by Royalty Logic as part of the appeal of the Board's decision on Internet Radio royalties. Royalty Logic argued that the appointment of the Copyright Royalty Judges was improper, as the Librarian of Congress was not the "head of a department" who can appoint lesser government officials under the Appointments Clause of the Constitution. Thus, Royalty Logic contends that the decision reached by the Board as to Internet radio royalties was a nullity, as the Board effectively does not legally exist. Earlier this week, the Board and SoundExchange filed their replies to the Royalty Logic motion, arguing that, in fact, the Librarian is the head of a department, as he is appointed by the President and approved by Congress and runs a government "department," i.e. the Library of Congress, of which the Copyright Office is a part. In demonstrating that the Library is a department, the briefs reach back to the creation of the Library by Thomas Jefferson, and look at the legislative history of legislation modifying the powers of the Library and the process for the appointment of the Librarian - legislation passed in 1870 and 1897. Essentially, the very technical argument about why the Board was not properly constituted was met with an equally technical one that says it was properly formed. Clearly, arguments only lawyers could love.

While Royalty Logic will have the opportunity to respond, the litigation process continues on the main portion of the appeal, as SoundExchange filed its intervenor's brief the week before last, defending the decision of the Copyright Royalty Board. In one notable departure, SoundExchange, while contending that the Board was correct in determining the minimum fees that would be required of webcasters, it said that, because of the agreement that it reached with certain webcasters that would cap minimum fees at $50,000 no matter how many channels a service might have (see our discussion of the agreement here), it asked that the Court remand that one limited matter back to the Board for adoption of the limitation on minimum fees so that it would apply to all webcasters and not just those who signed the agreement. In all other respects, SoundExchange opposed the briefs of the webcasters.

]]>Thus, almost one full year after the royalties were made effective, those royalties continue in place. This week, we saw the second major webcaster pull the plug on its Internet Radio operations. AOL months ago agree to allow CBS to run its Internet Radio operations, and now Microsoft's MSN service has now announced that it is terminating its Internet radio service which had been powered by Pandora. Spokesman for Pandora itself have stated that the royalties don't allow for its business model to succeed (despite reported revenues of $25 million). The Small Commercial Webcasters that I have represented in the case still have reached no settlement in the case, and other small webcasters only exist because of a special rate unilaterally offered by SoundExchange, even though it has a number of limitations and problems (see our post here). While SoundExchange has claimed that the rate arrived at last year is fair and that the industry is growing even with the rate, who is paying it other than a few broadcasters who can run the service has an adjunct to their broadcast service as more or less a loss leader? And what will happen when the rates rise by another 20% next year? These practical questions remain as the appeal process moves slowly forward.

George Carlin - Writing the Indeceny Rules the FCC Never Did

David Oxenford — 2008-06-23T10:10:45-05:00

Today's morning newscasts were filled with the stories of the passing of George Carlin - a comedian and satirist who effectively wrote the indecency regulations that most broadcasters abide by - without the FCC ever having had to adopt the regulations that he attributed to them. In the broadcast world, Mr. Carlin was probably best known for his routine about the Seven Words that You Can Never Say on TV. When that routine was aired by a New York radio station, and heard by a parent who claimed that he had a child in his car when the routine came over his radio in the middle of the day, the resulting FCC action against the station resulted in appeals that ended in the Supreme Court which, in its Pacifica case, upheld the right of the FCC to adopt indecency rules for the broadcast media to channel speech that is indecent, though not legally obscene, into hours when children are not likely to be listening. But what this case and the FCC ruling did not hold are perhaps more misunderstood than what the case did hold.

First, the case was about "indecency" not "obscenity." Many of this morning's newscasts referred to the Pacifica decision as being an Obscenity decision. Obscenity is speech that can be banned no matter what the time and place, as it is speech that is deemed to have no socially redeeming value. Indecency, on the other hand, is a far more limited concept. Indecent speech is speech that is constitutionally protected - it has some social significance such as the social commentary clearly conveyed by the Carlin routine. It cannot be constitutionally banned. But the Supreme Court upheld the FCC's decision in the Pacifica case that, because of the intrusive nature of the broadcast media, it can be limited to hours where children are not likely to be in the audience. Hence, the FCC has a "safe harbor" that allows indecent programming between the hours of 10 PM and 6 AM, when "obscene" programming is never allowed on the air.

]]>But perhaps the greatest misimpression of the Carlin routine is the widely held belief that there are in fact Seven Dirty Words that you can never say on the air. In fact, that is not and has never been the FCC's holding. In fact, until recently, there were no words that were specifically banned on the air - all had to be evaluated by context. Even though recent FCC decisions have tried to make the "F-word" and the "S-word" into those words that you can never say on TV (or radio) outside the safe harbor, even those bans are not absolute as the FCC's approval of the airing of Saving Private Ryan during prime time hours has shown. (and, as we have written before, these new rules have not fared well so far in the Courts and may be headed back to the Supreme Court for further review). The other words in the Carlin routine have never been specifically prohibited in all contexts - some in fact have been deemed not by themselves indecent in subsequent FCC cases. Instead, under the rules that the FCC has tried to enforce, a contextual review of the program must be done to determine if, in context, the words were used to shock or titillate, and whether they were used to describe sexual or excretory functions. That is obviously a difficult issue to decide, and one that has taken up much legal time and argument since the Pacifica decision. (See our memo, here, discussing some of the lines drawn by the FCC).

Yet, despite the fact that the FCC never adopted a list of Seven Words that You Can Never Say On TV, many broadcasters believe that they have, and we probably have Mr. Carlin to thank for that belief. Perhaps there will be Carlin retrospectives on broadcast stations in coming days - but they are unlikely to run during the middle of the day.

Proposal Filed at the FCC for Increase in HD Radio Power

David Oxenford — 2008-06-22T18:07:55-05:00

In a proposal filed by many of the nation's largest radio broadcasters, a request was made that the FCC allow FM stations operating with the HD Radio (or "IBOC system" - for "In Band On Channel" as the digital signal is transmitted on the same channel as the current analog signal) to increase power by up to 10 dbu, which is said to be less than 10% of a station's authorized analog power. The proposal cites the power increase as one that, in most cases, can be made without interference to adjacent channel stations. In certain instances, particularly those of grandfathered short-spaced stations, only certain lesser power increases would be permitted under this proposal. The proponents contend that the increased power will help stations replicate their analog service and increase building penetration so that the service can be received inside large office buildings and even in parking garages. The proponents submit engineering studies that support their position.

I have worded this post very cautiously. We write about many significant and controversial issues on this blog - e.g. indecency, music royalties, multiple ownership rules - but the most animated responses we usually receive is when a post deals with HD Radio. While we have written about many broadcasters who have adopted the HD radio system and are using the multicast ability to bring new services to their communities, we recognize that there are many critics of the programming on HD Radio, or the design of the tuning functions on the radio, or for the lack of the consumer "value proposition" for the purchase of a new radio required to receive the digital transmissions. However, we have found that there are also many who feel vehemently that there are engineering issues with the service. So we post this notice of the FCC filing, and look forward to the response that we will receive.

The Regulation of TV Programming for Children - Embedded and Interactive Advertising, Violence, and Ratings

David Oxenford — 2008-06-22T12:00:00-05:00

In several recent speeches and press releases, FCC Commissioner Jonathan Adelstein has challenged the FCC to do more in the regulation of children's programming. In a recent Press Release, the Commissioner outlined proposals including the following:

Improve the V-Chip and other program blocking technologies
Improve ratings information for television programming - including potentially having third parties review programming for its suitability to children as opposed to the television programmers themselves doing the ratings
In the context of a proceeding on Embedded Advertising that has been rumored for quite some time, look at how such advertising is used in children's programming
Restrict interactive advertising directed at children.
Convene a summit to explore these issues

In addition to these proposal, the Commissioner gave a recent speech to the Media Institute in which he expanded on these ideas, and also lengthened this agenda to include further Commission action to define and restrict violent programming. He also expressed his regrets over the recent decision overturning the FCC's fines for fleeting expletives and urged that action be taken to overturn this decision (see our post here on the FCC's appeal of that decision). And in yet another recent speech, he emphasized the proceeding on Interactive advertising in children's programming, remarking on how the Commission has a pending proceeding that has been pending and unresolved for several years. He cited the Commission's tentative conclusion to ban such ads, as broadcasters form a "portal" for children's entrance to the Internet. While the Commissioner expressed that the FCC had little jurisdiction to do much on the Internet itself (but see our recent post as asking whether the FCC may soon get more power over the Internet), he felt that restrictions on the links to the Internet from television programs would be useful in protecting children.

]]>One interesting note is that, in his most recent speech, the Commissioner makes clear that the long-rumored proceeding on embedded advertising has enough votes to be issued, but it is being held up for various unspecified reasons. Presumably, this proceeding will look at issues including product placement and other instances where consideration is given to a programmer for the mention or inclusion of a product. Look for that proceeding to be out soon.

David Oxenford Conducts Seminar for Montana Broadcasters on Issues that Keep Them Up at Night

David Oxenford — 2008-06-21T10:21:19-05:00

On June 30, 2008, David Oxenford attended the Montana Broadcasters Association Annual Convention in Whitefish, Montana, and presented a seminar titled: Staying Out Of Trouble in Washington - FCC Fines, Streaming Fees and Whatever Else Keeps You Up At Night. During the seminar, David discussed topics including the FCC's localism proceeding, the DTV transition, streaming fees and the proposed broadcast performance royalty, as well as the current issues with FCC fines and enforcement matters.

A copy of the PowerPoint shown at the seminar is posted here.

Closed Captions and Video Description - The First Step to FCC Regulation of On-Line Media?

David Oxenford — 2008-06-21T00:38:45-05:00

A recent Washington Post article highlights a bill that was recently introduced in Congress suggesting that the FCC bring back their rules for audio descriptions of video programming - rules which were thrown out by the Courts several years ago as being beyond the scope of the Commission's authority without explicit Congressional authorization. But not only does this bill propose to give that missing Congressional approval to the FCC to re-introduce video description requirements for broadcast television, but it would authorize the FCC to introduce these rules, and closed-captioning requirements, on all video screens, including MP3 players, wireless devices and other video devices getting their programming through the Internet or other digital technologies. With this bill, and various other proposals that have surfaced in recent months, it seems more and more likely that, as the Internet becomes even more important in the provision of broadcast-like programming in the future, the FCC may be called on by Congress to impose broadcast-like restrictions on that programming.

The full text of the recent bill, introduced by Congressman Markey, Chair of the House Subcommittee on Telecommunications and the Internet, can be found here. A summary of the bill is also available on Congressman Markey's website. The bill deals first with the accessibility of telephones and other communications devices, before setting out the provisions dealing with the captioning and video description requirements for broadcast and Internet video devices. The bill first asks the FCC to study and report to Congress on the issues with captioning and video description on video devices, and then asks the FCC to adopt rules governing these matters, making video programming placed on the Internet that was either broadcast on a television stations or which is "comparable" to broadcast programming to be subject to these rules. The idea is to make all TV-like programming subject to the rules, no matter what device it is viewed on. Presumably, if adopted, the law would allow the FCC to make exemptions for certain types of programming (just as it currently allows exemptions from the current closed captioning requirements for small entities that have insufficient resources to caption a program). The bill also requires that the FCC make sure that program guides and emergency information are available to those with hearing or visual difficulties, and that the navigation devices on video receivers can be worked by those with disabilities. So the FCC would have much to do to comply with this law, if adopted, and all within an 18 month period.

]]>Of course, as we are now entering the summer before a major Federal election, Congress will be preoccupied with various political campaigns, and will deal principally with that legislation that needs to get passed. But whether or not this bill is adopted this Congressional session, the mere fact that it has been introduced (and featured in a Washington Post story) may well mean that the issue will return in future Congresses.

This is not the only indication that the FCC will become involved in Internet programming issues in coming years. In a recent debate between surrogates of the two Presidential candidates, press reports indicate that former FCC Chairman Michael Powell, speaking on behalf of the McCain campaign, indicated that the FCC under a President McCain would look to make programming regulation uniform across various platforms - which could mean between broadcast and cable platforms, though some interpreted it to mean that such rules would be extended to the Internet as well. Through such platform parity, could this mean that, for instance, the enforcement of indecency laws and policies would spread to the Internet?

Whether it's captioning or indecency, the Wild West of the Internet may one day in the not too distant future have a new sheriff to deal with - one with which broadcasters are already very familiar.

The Politcal Broadcasting Implications of An Olympic Ad Buy

David Oxenford — 2008-06-20T17:25:22-05:00

According to press reports, the Obama campaign is contemplating an ad schedule during the upcoming Summer Olympics. This raises the question of what political broadcasting rules would apply to such a buy. The Olympics run from August 8 through 24, before the lowest unit rate window for political candidates. Thus, the Obama campaign is not entitled to lowest unit rates. Instead, the candidate would only be entitled to a "comparable rate" to what a commercial advertiser in a similar situation would receive. The campaign would not get frequency discounts that a big Olympics sponsor might get, unless the campaign bought in the same frequency, or other discounts that may apply to larger advertisers. But the reasonable access provisions of the rules do apply once you have a legally qualified candidate, so it would seem as if at least some political ads would have to be placed in the Olympic programming. In various political seminars held throughout the country, when this question has been raised, the FCC representatives have consistently said that, given the fact that the Olympics run for such a long period, at least some access must be made available to Federal candidates who are willing to pay the price that the airtime commands.

During the Super Bowl, the Obama campaign bought time, but it was purchased on local stations, not on the network itself (see our post here). Affiliates of NBC would also have reasonable access issues of their own, were the Obama campaign to approach them directly, or were some local Federal candidate to request time on their stations. As these stations have less inventory during the Olympics than does the network, the amount of time that would have to be provided would be less (and a candidate need not be given access to the exact time spot that they might request - not everyone can get the coveted spots in certain high profile event's finals - as long as the access that they are given is reasonable under the circumstances). But the access rules would apply -so at least some access would have to be given. Note that in a few states with late primaries for Congress and the Senate, it is possible that there would be Federal candidates entitled to lowest unit rates, even during the Olympics. State and local candidates, however, have no right of access, so stations would not have to sell them time in the Olympics.

]]>It is interesting to note that Senator Obama will not officially be the Democratic candidate during the Olympics, as the Democratic Convention will not occur until immediately after the Olympics conclude. Certainly, the primaries are over. Is Obama really a legally qualified candidate before the Convention? Seemingly, at that point, he is still a candidate for the nomination and, having made a"substantially showing" that he is a candidate in 10 states, under FCC rules he would be qualified in all states. So, whether as a candidate for the nomination or for the general election, it would seem that the reasonable access rules would apply. So we may well have a Little politics with our sports this summer - rather than having one following on the heels of the other.

For more on the law of Political Broadcasting, check out our Political Broadcasting Guide.

David Oxenford Presents Politcal Broadcasting Webinar to Kansas Broadcasters

David Oxenford — 2008-06-20T10:04:50-05:00

On June 25 and June 30, David Oxenford presented a webinar to members of the Kansas Association of Broadcasters on the FCC's political broadcasting rules and policies. The webinars discussed topics including reasonable access, equal opportunities, lowest unit rates, and political advertising paperwork requirements.

A copy of the Davis Wright Tremaine Political Broadcasting Guide can be found here.

A copy of the PowerPoint used in the presentation is available here.

NCE Application Processing Marches On - FCC Identifies A Number of Groups of Mutually Exclusive Applications

David Oxenford — 2008-06-19T21:46:12-05:00

The processing of the applications for new noncommercial FM stations marches on. This week, the FCC released a list of groups of Mutually Exclusive applications (commonly known by those who regularly deal with the FCC as "MX groups"), i.e. applications that are linked together in that, because of interference concerns, not all can be granted. In some cases, all of the applications in an MX group overlap with each other so that only one can be granted. In other cases, referred to as "daisy chains", you have a situation where Application A precludes Application B from being granted, and Application B prevents Application C from being granted. While A and C could be granted if not for B, all three end up in a single MX group. According to the Public Notice released with the list of MX groups, the applications on this list are all situations were there are 13 or fewer applicants in the MX group. MX groups with a greater number of applications will appear on a subsequent public notice. MX Groups with 4 or fewer applications were identified back in March.

The Commission has advised all applicants to review the lists to see if they were included in an MX group erroneously or omitted from an MX group in which they should have been included. If they discover a mistake, the applicant should file, within 30 days, notice with the FCC so that its application can be processed with the group to which it belongs. Applicants can also try to work out settlements during the 30 day comment period (or notify the FCC at the end of the period that they are still working on a settlement). Otherwise, at the end of the 30 day period the FCC promises to begin work to resolve the MX cases through the use of the point system (which we explained, here). So the process marches on, and we should start to see more applications from the noncommercial filing window acted on in the coming months.

FCC Announces that Form 388 Will Be Filed in CDBS

David Oxenford — 2008-06-16T23:09:58-05:00

FCC Form 388 reports on the efforts of television stations to educate their viewers about the digital television transition. We wrote about the details of that new form, filed for the first time in April. When the form was last filed, as it had been adopted only days before, the Commission did not have time to update its CDBS system to allow for the electronic filing of that form in the system where all other FCC forms are submitted. Instead, the FCC required that first form be filed in ECFS, the system usually used for filing rulemaking comments in docketed proceedings. However, the Commission has just announced that the form is now available in CDBS so, when the form is next submitted on or before the July 10 deadline, reporting on the last three month's DTV educational activities, broadcasters can use the standard filing system. The ECFS filing system caused great consternation among broadcasters and the FCC, as it did not automatically link up the reports with the stations that submitted them. Thus, many stations that timely filed the form received admonitions from the FCC, alleging that the forms had not properly been submitted. Hopefully, as the standard filing system can now be used, those sorts of issues will be avoided. So remember to file the form by the deadline, and to use the CDBS system this time around.

FCC Extends Comment Deadline in Diversity Proceeding

David Oxenford — 2008-06-16T22:43:42-05:00

The FCC today issued an order extending the comment deadline in its Broadcast Diversity proceeding, extending the comment date a full month until July 30, with Reply Comments now due on August 29. This important proceeding, about which we wrote here, will address many issues, including proposals to, among other things, repurpose television Channel 6 (and possibly Channel 5) for FM use after the completion of the television digital transition, to allow FM licensees who multicast to sell one of their multicast channels independently of the main channel, to allow certain AM stations with expanded band channels to avoid turning in one of their channels at the end of the 5 year transition period if the licensee is a designated entity (or sells one of its channels to a designated entity), and to provide Class A television stations with must-carry status. The rulemaking proceeding will also look at whether the current definition of a designated entity (focusing on the fact that it is a small business as opposed to any review of the race or gender of its owners) is the one that the FCC should continue to use. Thus, this is an important proceeding in which many broadcasters should be interested, and now you have more time to prepare comments on the issues that are raised.

EAS Violations - Two Non-Commonly Owned Stations Cannot Share the Same EAS Receiver

David Oxenford — 2008-06-13T17:57:08-05:00

The FCC has just issued orders fining two stations, one for $8000 and one for $5000, for not having EAS receivers that were in compliance with FCC rules. The stations, which are located in the same building, shared one EAS receiver. According to FCC rules, co-located stations can share EAS receivers when they are also co-owned. Here, however, the stations were not under common ownership so, under the rules, they could not share the same receiver. In addition, in connection with the station that received the higher fine, the FCC noted that the receiver was not properly calibrated, having incorrect date and time information - being set permanently on January 10, 1995. As the system was set up to automatically retransmit the required monthly EAS tests, and those tests would not be properly relayed if they were encoded with a date that the system did not think had yet occurred, the station had not been transmitting the required monthly tests, nor noting the failure to do so in their station log.

In attending several engineering seminars at broadcast conventions in the last few months, I've noted that broadcast compliance inspectors consistently identify non-working EAS receivers as the number one compliance problem at broadcast stations. And one of the biggest problems is with receivers that either have never had the correct date set, or which have a clock which is malfunctioning so that the correct date and time is not properly updated. Inspectors have also noted that many times they find EAS receivers not having the proper audio inputs so that they can receive the station that they are supposed to be monitoring, or proper outputs so that they can relay the tests that they do receive. And, as a station's chief operator is supposed to be weekly checking the station's log, which should include a record of all EAS tests sent and received, these discrepancies should be noted within a few days - yet they often go unnoticed for long periods of time - meaning that the station can also be fined for not having properly maintained their station log. As these fines can add up, stations should insure that their equipment is working and monitored to avoid making some involuntary contributions to the US Treasury.