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At the seminar, we also discussed sponsorship identification, and how stations must acknowledge the sponsor of anything of value that they receive in exchange for any on-air statement.  On Friday, the FCC fined two television stations for receiving video news releases that were used on the air.  These cases made clear that the broadcaster must acknowledge who paid for the production of a video news release that overtly promotes a commercial product - even if the station received nothing from the sponsor except for the video news release itself.  A summary of those decisions can be found here.

Other material of relevance to the broadcasters who attended the seminar include the following:

• A guide to the contents of a station's public inspection file can be found here.
• A guide to preparing for the upcoming license renewal can be found here.
• An article on the required on-air disclosures about the material rules of a broadcaster's contest can be found here
• Slides from last year's Utah seminar on the FCC's EEO rules can be found here, and a guide to EEO compliance can be found here.
• Information about the issues being considered in the FCC's proceeding on potentially repurposing some of the television spectrum can be found here.  
• The FCC's call for stations to register by April 5 their translators, LPTVs and the paths to cable head-ends and satellite receive locations to protect them from white spaces devices is summarized in our article here.

Other issues of importance to broadcasters are routinely summarized the blog. 

The Public Notice also requires that stations that have license renewals pending from the last license renewal cycle file another application updating all their information from the time since their last renewal application was filed.  We had suggested that this would occur in our article reporting on the FCC's attempts to clear up some of the backlog of old renewal cases.  But this notice makes clear that broadcasters who have had their applications held up (for the most part due to indecency complaints), must file another license renewal application (which itself will presumably not be acted on while the indecency issue remains unresolved).

The RF certification is actually a reduction in paperwork, eliminating the need for stations that have had no change in the RF situation at their tower sites from having to provide any sort of exhibit explaining why no RF issue exists.  That exhibit will still be required if new antennas have been added at the station's tower site, changing the RF situation there.

The certification about whether a station has been off the air for 30 days arises as the FCC has suggested that a prolonged period of silence by a station could affect the FCC's determination of whether the station is operating in the public interest.  The newspaper certification is required as the rules preclude the FCC from granting any application for a license for an AM, FM or TV station if any attributable party owns an interest in a daily newspaper that serves substantially the same area (unless the FCC makes a public interest finding that such cross-ownership is acceptable).  Thus, the FCC will not grant an application to acquire a broadcast station if an owner has interests in a daily paper.  But the FCC has no jurisdiction over whether an existing licensee subsequently buys a daily newspaper.  The first chance that the FCC may have to deal with broadcast-newspaper cross-ownership created by the subsequent purchase of a daily newspaper may be in connection with the station's renewal application.

The FCC also notes that they will not be mailing any reminders to broadcasters about the need for the filing of the license renewal application.  At most, applicants will get an email reminder from the FCC. but only if their email address is current and on file at the FCC.  The FCC suggests that stations update this information now to avoid issues later.  There is a base fine of $4000 for a late-filed renewal. 

Renewal applications are fast approaching.  Read this public notice - and be ready!

Mandatory EEO filings are another source of documentation that can cause issues for stations.  Stations should have their EEO Annual Public File Reports in their public inspection file for every year of this renewal term, and should have their most recent Annual Report posted on their website (if they have a site).  For television stations with 5 or more employees, and for radio employment units with more than 10 employees, you should have also filed a Form 397 Mid-Term EEO Report with the FCC at the mid-point of your license term (all but TV stations in the last few renewal windows should have already filed that report).  Details of your EEO obligations (including the slides from a recent presentation summarizing the EEO rules), and links to various EEO advisories that our firm has published, are available here.

Recent FCC Form 323 ownership reports should also be in the public file.  Our reminder on the ownership reports that all commercial stations should have filed at the beginning of July can be found here.  Noncommercial stations need to remain alert to their mandatory biennial reports, which are due every two years, computed from the date on which your state's license renewal application should have been filed.

There are other issues that come up in connection with the broadcast public inspection file.  For our Davis Wright Tremaine advisory on the Basics of the Public Inspection file for Commercial Broadcasters, setting out all of the documents that are required for inclusion in the public file, you can go here.

Now is the time for stations to review other compliance issues.  RF radiation issues are considered at renewal time so, especially if there have been changes at your transmitter site since the last renewal, check to be sure that you are in compliance with all limits there.

Check your licenses to make sure that all of your operating facilities are authorized.  Make sure that stations have licenses for all STLs, remote pick-ups and other auxiliary facilities, and that (especially if there has been a recent sale of your station) all such licenses are now listed in the current licensee's name.  Make sure that the FCC has the correct mailing address for your station on file, so that any notices go to the correct place.

Also remember that, for the first time this year, the license renewal application is supposed to have a certification that stations are not discriminating in the sale of advertising time. We have written about this requirement before (see our posts here and here).  This requirement is one on which the FCC has never provided much guidance.  The Commission has said that station advertising contracts should have certifications that state that advertisers are not making their buying decisions for discriminatory purposes, an example of such a certification we provided here.  But consult with your attorneys to make sure that you are ready for this new license renewal question.

This is a good time for stations to make sure that their operations are in good order in all respects.  Correct issues that might exist, so that you don't need to scramble to do so when the license renewal is due.  And make sure that your stations are serving their communities, and doing their best to address any criticisms that may be coming their way from their listeners.  At renewal time, you want friends who will verify how well your station serves your community, not enemies who may be ready to complain to the FCC about your performance.  Stations should obviously be doing this at all times but, with the renewal season soon to be upon us, be sure that these efforts are not put in the "to do" pile, but are instead action items for immediate attention.   Your license renewal application will be due sooner than you think, no matter whether your station is in Virginia and filing next year, or in Pennsylvania where that four year delay can pass very quickly.  Be ready. 

For instance, while the Commission today seems to recognize that there are certain situations where it is appropriate to target the advertising of certain products to a specific gender, they fail to address whether it may also be appropriate to target advertising of certain products based on race or ethnicity.  In fact, many broadcast stations are now formatted to take advantage of that targeting - for instance Spanish language stations have one of the fastest growing advertising markets in the country, with advertising targeted to the audiences of those stations.  But what about the ad for a heavy metal band where the concert promoter specifically says that it wants the concert to be advertised only on a hard rock station, which may have a low minority audience.  Would that direction be judged discriminatory as the advertising order does target a specific audience that is largely not a "minority" audience?  Obviously, there may be heavy metal fans who also listen to Spanish language or urban stations, but you are more likely to have a higher concentration of fans on a hard rock station.  If that kind of targeting is acceptable (and it isn't it really the goal of having niche formatted radio stations to reach a particular demographic, and the goal of targeted advertising in other media, like the Internet, where advertisers seek to send their ads to consumers most likely to react to it?)?  When is targeted marketing acceptable and when is it not?  The Commission really needs to provide more guidance before the license renewal cycle starts next year, so that stations have the advice necessary to certify whether or not they are complying with this seemingly unclear rule.

On a more practical level, in 2008, we provided some suggested language for a certification for station's advertising contracts, as the FCC had not mandated any language - and in fact specifically declined to do so.  With the change in the FCC language in today's Erratum, we would suggest the following language:

This station does not discriminate in the sale of advertising time, and will accept no advertising which is placed with an intent to discriminate on the basis of race or ethnicity.  Advertiser hereby certifies that it is not buying broadcasting air time under this advertising sales contract for a discriminatory purpose, including but not limited to decisions not to place advertising on particular stations on the basis of race, national origin, or ancestry.

Industry organizations are supposed to get together to come up with an industry approved program to comply with this rule.  Until we get more guidance from these groups or the FCC, we guess that this language will have to do.

Nevertheless, it seems fairly clear that broadcasters will need to observe these requirements, as they will, at some point, need to certify that advertisers have not utilized the no Urban/no Spanish dictates.  One of the requests by parties complaining of the Mini Cooper order was that the FCC set up an officer to enforce this requirement.  Certainly, some more instruction on this new requirement will be necessary for mishaps like the Mini Cooper case to be avoided. 

The specific proposals that were adopted, and which will go into effect 30 days after Federal Register publication, include:

• Allowing designated entities to purchase construction permits for new stations that are nearing their expiration dates, and giving the designated entity 18 months after the purchase in which to construct the new stations.
• Modified the Equity Debt Plus rule (which makes an otherwise non-attributable ownership in a broadcast station interest attributable if the interest exceeds 33% of the financial interest - debt plus equity - in the company and either (a) the holder has an attributable ownership interest in another station in the same market, or (b) it provides more than 15% of the programming to a station) to allow that holder to have a financial interest in a designated entity if (i) the interest is less than 50%, or (ii) the financial interest is less than 80% and the holder of the interest has no equity interest, option, agreement, or understanding by which it can acquire an equity interest in the designated entity
• Revived the FCC's distress sale policy by allowing a broadcaster whose license has been set for a revocation hearing or is facing a renewal challenge on basic qualifications grounds to sell to a designated entity to avoid the issues that it is facing.  Ordinarily, if a licensee is facing issues which could lead to a loss of license, it is not allowed to sell the station until the issues are resolved.
• Allowed the sale of existing grandfathered combinations of radio stations which exceed the limits established by the multiple ownership rules (as revised in 2003) to one owner, provided that the owner agrees to sell the stations which exceed the limits to a designated entity within a year
• Provided additional time for spin-offs of broadcast stations in "substantial transactions" if efforts were being made to sell excess stations to designated entities
• Gave a preference to companies which "incubated" companies owned by designated entities (i.e. provided them financing or other similar assistance) if the company was in a situation where the company and another both filed, on the same day, to create a TV duopoly in a market where only one such duopoly could exist (i.e because there must be 8 separately owned and controlled television operators remaining in a market after the permitted combination).
• Adopted a new rule prohibiting discrimination in the sale of a commercial broadcast station on the base of race, sex, religion or national origin.  A certification that no discrimination has taken place will be required in applications submitted to the FCC for approval of station sales.
• Adopted a zero tolerance policy against "ownership fraud," situations where the putative owner of a station is not truly involved in station operations.  The FCC promises to try to resolve any such allegations within 90 days, and also promised to keep confidential, to the extent that it can consistent with the Freedom of Information Act, the names of whistleblowers on such frauds
• Adopted a rule prohibiting any advertising contract containing "no urban" or "no Spanish" dictates, meaning that an advertiser cannot specify in an advertising contract that the ads will not run on stations targeted to the African-American or Hispanic communities.  A certification that no such advertising discrimination has taken place will be required in license renewal applications.
• Agreed to conduct a number of initiatives to promote minority ownership, including conducting a study of the extent of minority and female ownership in broadcasting (and amending the FCC Form 323 Ownership Report to obtain such information), encouraging local banks to lend to the broadcast industry, holding an access to capital summit, and publishing a guidebook on diversity in contracting and ownership.

While some of these initiatives seem to have real promise for designated entities (e.g the sale of expiring construction permits for new stations and the distress sale policy expansion), others seem to be less likely to be used.  Just how often will two television operators file an application to create a duopoly on the same day in a market with just 9 independent television voices?  I don't know that it has ever occurred, and doubt that it will be likely enough to occur in the future to provide much incentive for companies to enter into incubation agreements.

Several other proposals really need more details to avoid being a trap for the unwary, getting broadcasters into trouble for routine practices.  For instance, the Commission does not explain how this would they will insure that there is no discrimination in the sale of a broadcast station, or exactly what circumstances they would consider to be discriminatory.  For instance, to what extent must a seller go to make sure that the station is offered to minority and female prospective purchasers?  If there is a direct sale from one non-minority to another without any advertisement of the availability of the station, has there been some sort of discrimination?  Or if there is a sale of a religious commercial radio station to another person of the same religious affiliation, has there been discrimination?  The Commission does not address these questions. "Ownership fraud" is also curiously undefined.  What will happen to an entity that is found to have engaged in such fraud?  How can the FCC fulfill its promise to resolve allegations of fraud within 90 days - a very quick resolution for what can be a very complex issue?  These questions are unanswered.

Perhaps most surprising is the limited discussion of the prohibition on no urban-no Spanish dictates, as press reports had indicated that members of the advertising community had been visiting the Commission, lobbying on the issue.  But the Commission says nothing more than that there is a prohibition on these clauses in advertising contracts.  But if a broadcast company owns two stations - one a Spanish language station and the other an Adult Contemporary station broadcasting in English, if an advertiser says "run my ads only on the AC station", does that violate the prohibition?  If so, that might actually encourage some groups to avoid programming Spanish and urban formatted stations, to avoid having advertisers specify that their advertising run on only one or two other stations, and perhaps creating an issue even if the advertiser was just trying to reach the unique demographic served by that particular station.

Apparently, these issues will be sorted out through cases or future FCC pronouncements.  But, for now, broadcasters will have to guess what they mean. 

The FCC was also planning to consider at its December 18 meeting the commencement of a new proceeding to inquire as to whether it should adopt new rules or policies for embedded advertising - advertising that is incorporated into broadcast programming rather being than placed into a stand-alone commercial.  That order was removed from the FCC's agenda at the last moment, but will no doubt reappear at some point during 2008.  Together with other issues dealing with sponsorship identification in video news releases (see our description of a recent enforcement action here) and in connection with payola allegations, the Commission will be exploring whether broadcasters are trying to persuade their audiences to take action without giving the audience sufficient warning that they are being persuaded. 

All of these issues will be addressed in coming months - so advertising practices may well have to be modified to respond to Washington dictates in the new year.