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The FCC today released another Public Notice announcing the random audit of the EEO performance of a number of broadcast stations – listing both radio and television stations that have to respond, with stations spread throughout the country.  The FCC has promised to annually audit 5% of all broadcast licensees to assess their compliance with the FCC’s EEO rules.  These rules require the wide dissemination of information about job openings at their stations and "supplemental efforts" to educate their communities about employment opportunities at broadcast stations, even in the absence of employment openings.  The FCC’s audit letter requires the submission of two years worth of the Annual Public File reports that stations prepare each year on the anniversary date of the filing of their license renewal applications.  These reports are placed in the station’s public file and posted on their websites (if they have websites).  The FCC’s public notice about this audit emphasizes the requirement for posting the Annual Report on a station’s website, perhaps confirming rumors that we have heard about the FCC’s staffers browsing station websites to look for these reports.

Stations are given until May 4 to complete the audit responses and submit them to the Commission.  Note that information needs to be supplied not just for the station named on the list, but also for all other stations in the same "station employment unit," i.e. a group of stations under common control, that serve the same general geographic area, and which have at least one common employee.  As recent audits have led to significant FCC fines (see our story here about fines issues just before the holidays), broadcasters who are listed on this audit list should take care in preparing their responses.  The audit notice should also remind other licensees who are lucky enough to avoid having been selected for inclusion on this audit list to review their EEO programs for FCC compliance purposes, as they could very well find themselves not so fortunate when the next FCC audit is announced.Continue Reading FCC Launches New Round of EEO Audits – Highlights the Requirment for Posting Annual Report on Station’s Website

The FCC has released another Public Notice that it is auditing the EEO performance of a number of the entities that it regulates.  However, this time, the audits are not of broadcasters, but instead of cable companies and other multichannel video programming distributors who are subject to essentially the same EEO rules as broadcasters.  The…

Under the compulsory license for the use of sound recordings – the license which allows Internet radio services to use all legally recorded sound recordings by paying a royalty set by the Copyright Royalty Board – the designated collection agency can, once each year, audit a licensee to assess its compliance with the royalty requirements.  Under the law, when the collective decides to audit a company, it must notify the Copyright Royalty Board, who then gives public notice of the fact that an audit is to take place.  The Copyright Royalty Board has just announced that SoundExchange has decided to audit Last.FM.  Based on a number of public statements, SoundExchange has been citing Last.FM as an example of problems with royalties – contending that Last.FM had paid royalties of only a couple of thousand dollars a year, under the Small Webcasters Settlement Act, just before selling out to CBS for over $200 million.  Given SoundExchange’s tough talk about Last.FM, this notice of an audit is not surprising.  SoundExchange’s focus on this company illustrates the difficulty of valuing music use, and the different perceptions of music users and copyright holders as to what that value should be.

 In past years, SoundExchange has audited a number of webcasters – usually large webcasters.  As SoundExchange must bear the cost of the audit unless a significant underpayment is discovered, it is unlikely that more than a few companies will be audited each year.  However, as SoundExchange has made such a big deal of Last.FM, with witnesses on performance royalty issues mentioning it at Congressional hearings, and representatives mentioning it on various industry conferences (including SoundExchange President John Simson’s reference to the company on a panel on which we jointly appeared at Canadian Music Week earlier this month), many expected that an audit would be forthcoming.Continue Reading SoundExchange to Audit Internet Radio Royalty Payments of Last.FM – What is the Value of Music?

In two decisions released this week by the FCC, here and here, two large broadcast group owners were admonished for failures to comply with the FCC’s EEO rules. In both cases, failures to widely disseminate information about job openings in one market were discovered by the FCC in the course of random EEO audits that selected these stations for review. In both cases, the Commission determined that the violations were serious, and imposed reporting conditions (essentially subjecting the stations to an FCC audit of their EEO annual public file reports every year for the next 3 years). And in each case, the FCC would have fined the stations for their violations, but the Commission moved too slow, as in both cases, license renewals were granted between the time of the violations and the EEO audit.  Under provisions of the Communications Act, the Commission cannot fine a station for action that occurred during a prior renewal term – so the grant of the renewals cut off the possibility of a fine in these cases.

These actions highlight the importance of complying with the Commission’s EEO rules, which we have summarized in our EEO Guide, here. In particular, in both cases, the station groups had not widely disseminated information about job openings, as required by the rules. Wide dissemination requires the use of recruitment sources designed to reach all groups within a community to allow their members to learn about the job openings at the station. The Commission’s aim is to bring into the broadcast workforce employees representing diverse groups within a community rather than hiring all their employees from traditional broadcast sources.  In these cases, the stations had used only corporate websites, on-air announcements, and word of mouth recruiting. No outside sources, or sources reasonably likely to reach the entire community, were used by the broadcasters, hence the admonition and the reporting conditions. Continue Reading What a Difference A Renewal Makes – FCC Admonishes Two Broadcasters for EEO Violations, Fines Would Have Followed if Renewals Had Not Recently Been Granted

The FCC today announced another round of EEO audits of broadcast stations throughout the country.  The FCC’s Public Notice of the audits, and the list of the stations that are affected, can be found here.  Broadcasters should review this list carefully, both by call letter and licensee name, as we have noted situations where the…