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The next two items address the signal prediction and measurement rules, which guide determinations as to whether or not a particular location receives an adequate digital signal.  The reception of such a signal is the crux of the determination of whether a particular household is served or unserved, in which case it is eligible to receive distant signals.  Specifically, the Commission adopted a point-to-point predictive model for determining reception of an over-the-air DTV of a suitable strength at a particular location.  As proposed, the predictive model for digital signals is based on the current model used for predicting reception of analog signals.  And settling one of the main issues up for debate in this area, the Commission decided to retain the use of an outdoor receiving antenna as part of the predictive model, declining to change its rules to contemplate an indoor antenna. 

In addition, in the event that it becomes necessary to measure the field strength of a digital television signal, the Commission's second item updates the Commission's rules to address the measurement of DTV signals.  As an initial matter, the Commission clarified that only in-market signals are relevant for determining whether a station is unserved.  Consistent with the approach for the predictive model, the Commission decided that the rules would continue to rely on an outdoor signal intensity test to determine eligibility to receive distant network signals.  The Commission found that no reliable indoor testing method had been proposed and sided with the broadcasters as it found the methodology proposed by the satellite carriers for indoor testing to be flawed.  The Commission also refrained from making any special provisions for multicast signals in either the predictive model or the field strength measurements, reasoning that the reception of any particular program stream is equally available in the station's signal.  A copy of the Order on the predictive reception model is available here, and the Order regarding the field strength measurements can be found here. 

Finally, in the last item in the bunch, the Commission released a Public Notice soliciting input regarding the reception and consumer use of signals from a community licensed to a different state than the subscriber.  STELA mandated that the FCC prepare a report to Congress by August 27, 2011, addressing the following issues:  1.) the number of households in a State that receive the signals of local broadcast stations assigned to a community of license located in a different State; 2.) to what extent do consumers in each local market have access to in-state broadcast programming over-the-air or from a multichannel video programming distributor; and 3.) are there alternatives to DMAs to define “local” markets that would provide consumers with more in-state broadcast programming.   Clearly, the answers to some of these questions could have a significant impact on local television stations, and interested parties should consider filing comments to provide the FCC with data on these issues.  The issue of access to "in-state" television stations, regardless of DMA boundaries, has come up in previous Congresses.  By this request for a Commission report, Congress could be fishing for a basis to change the rules governing the importation of signals and the determination of what signals a particular subscriber is eligible to receive.  Comments will be due 45 days after the item is published in the Federal Register, with Reply Comments due 30 days after that.  A copy of the Public Notice is available here. 

The departure of David Rehr does not mean that the NAB will not be dealing with these issues.  Much will depend on what other changes occur in the Association as a result of his departure, and the degree to which the change at the top will distract the remainder of the staff when there are so many other pressing issues that need their focus.  The NAB's Legal team dealing with FCC issues is experienced, and many members were there before Rehr started in his position, and they are likely to remain in place dealing with the fires burning at the FCC.  The Government Relations staff, dealing with Congress, includes several newer recruits, but they are professionals who can hopefully mind the store on the Hill and address the issues while the NAB leadership transition is under way. 

And what will a new leader for the NAB need to bring to his or her position?   They will need to remind Washington of the continuing importance of broadcasters to the communities that they serve. They will need to convince Washington to treat broadcasters like a grown-up medium entitled to its full First Amendment rights to exercise its own journalistic judgment on how to best to serve the public interest - judgment derived from broadcaster's own experience in their communities and from marketplace realities, not by dictates from Washington. They will need to be able to remind the music industry that musicians were and are begging radio stations for the airplay of their music.   Washington needs to be reminded of the amazing broadcast service that has grown up in this country, that serves almost every corner of the country with radio and television service, which cannot be allowed to be nitpicked by needless regulation at a time that the industry is facing the biggest competitive challenges that it has ever faced. Let’s hope that the new head of the NAB can sufficient convey to Washington the magic of radio and TV - magic that cause these media to still be the most used media in the country - essential to most people in their day-to-day lives - so that legislators remember just how important the medium is.

I've seen some speculation in various reports that the new Commission will roll back the 1996 Telecommunications Act broadcast ownership reforms (which are, for the most part, statutory, so that they can only be undone by an act of Congress, not by the FCC), or at least that the Commission will roll back the limited multiple ownership relief granted to newspaper owners in the largest broadcast markets, allowing combinations with broadcast stations in those markets (see our summary here).  Those beliefs seem far-fetched, given the state of the broadcast industry.  And not only far-fetched but unnecessary, as there are few newspaper companies that have the financial ability to buy a daytime-only AM station much less a TV in their markets, and radio group ownership similarly seems to be coming undone by the workings of the market, as many aggregators are selling off stations - many at prices unheard of a year ago.  We've previously quoted the musings of a broadcast trade-press reporter, who stated "I often wonder if the newspaper-broadcast cross-ownership rules will outlive newspapers themselves."  With the news of the cut-backs in the publication of the Detroit Newspapers, the announcements of sales or shut-downs of competitive newspapers in Seattle and Denver, and even an article speculating on the potential bankruptcy of the New York Times (since disputed by the Times ), the fear of the power of the old media simply does not cut it in today's media world. 

In fact, a Commission focused on the future will be looking at what the real state of media competition is and will be in the future.  in the last week, we seen multiple reports from the Consumer Electronics Show, all about the Internet connectivity of all sorts of devices.  New devices, like TVs with built-in connectivity, so that you can watch your YouTube videos (or those from Hulu or other sites with aggregated television programming) on your wide-screen TV, will no doubt further erode the market share of television stations.  Radio, too, was greeted with articles about mobile Internet receivers, bringing Internet radio and other Internet audio sources to cars and even bedside clock radios - meaning more competition.  In this environment - does the FCC need to regulate broadcast localism?  Not when broadcasters will be doing it out of self-defense, as localism will truly be the only way that broadcasters can distinguish themselves from the flood of other media coming to every consumer.  The government does not need to tell broadcasters how to serve their communities - they will be or they will be gone.

So, we too will be hopeful for the future, and will welcome the new Chairman and will here watch the actions that he takes that will help to shape the future of the broadcast industry. 

The FCC will also have to complete the digital transition of TV translators and LPTV stations, which are not bound by the February 2009 conversion deadline. The FCC will need to set a digital conversion deadline – a conversion that many translator and low power licensees are not looking forward to paying for, but which may be necessary to preserve their over-the-air viewership as the analog tuner becomes an historical relic.

Radio, too, has its own technical issues to deal with. The Commission will be faced with resolving proposals for increased power for HD Radio operations (In-Band On Channel or IBOC digital radio), which some broadcasters have opposed as holding the potential for adjacent channel interference. The Commission will also be faced with resolving proposals for making the measurement of AM antenna patterns easier but, on a most fundamental level, it has also been asked to recapture some of the television spectrum, including Channel 6 and possibly Channel 5, and to use that spectrum for new radio stations. While some worry about the increased competition that new radio channels could bring, others see the expanded FM band as a way to eliminate congestion on the current band – giving LPFM stations places to operate without restricting FM upgrades or endangering FM translators – and others have even suggested that some or all AM stations could be moved onto these channels. This is likely to be a long-term project, but one that may get serious consideration this year.

Programming, too, may come in for more review this year. The Commission’s rules, adopted a full year ago, requiring TV stations to document in minute detail their public interest programming on Form 355, has never been implemented, as the form has never been approved by the Office of Management and Budget as being in compliance with the Paperwork Reduction Act. As this form required so much new information, for no appreciable purpose, it seems unlikely that it could survive such a review. Thus, the Form may be revised before being implemented, or it may wait for new FCC programming rules to be adopted as part of the FCC’s localism proceeding, mandating some form of public interest programming, which could then be used to justify the collection of some data requested by the questions on Form 355.

Other aspects of the localism proceeding seem likely to be resolved in 2009. The proposal for a fully manned main studio during all hours of operation, located in the station’s city of license, seems to be less likely to be adopted as regulators realize the costs that such a requirement would impose. Yet requirements for some form of mandatory ascertainment of community needs, plus some enhanced disclosure of public interest programming, seem more likely. Some of the proposals rumored to be on the table include requiring that broadcasters be judged by whether they perform certain tasks set out on a menu of options by which they would demonstrate their service of the public interest. One would hope that any set of menu options would be broad enough to recognize all the diverse ways that broadcasters serve their communities, and not so restrictive as to make every station meet the public interest in the same cookie-cutter way, and thus eliminating diversity in approaches that has allowed the broadcast industry to flourish.

The return of the Fairness Doctrine, which many conservative pundits have predicted, is unlikely because of the constitutional and practical problems of implementation. Yet some fear that  mandated political coverage and issue-responsive programming, which is more likely,  may effectively take the place of the Doctrine. Restrictions on violent programming could also be at the top of the Congressional agenda, as Senator Rockefeller, the new head of the Senate Commerce Committee, has supported such regulation in the past. . 

In the advertising world, the FCC will be resolving its embedded advertising and product placement proceeding, where some “public interest” groups have advocated a total ban on such advertising, while others have suggested immediate sponsorship identification, through a crawl or superimposed caption, of any product for which consideration has been paid for its inclusion. The related issue of video news releases – whether stations have to identify on-air anything given them at no charge (e.g. a script, video footage, etc.) before its inclusion into a news report – will also likely be resolved. Some have also suggested that the Commission may be planning some adjustments to its payola rules, though what those changes would be, and how they would improve on the current rules, is hard to fathom.

There is also real concern that the Congressional committees which oversee the FCC may well push proposals for limits on prescription drug advertising. The new chairman of the House Energy and Commerce Committee, Henry Waxman, has favored a moratorium on such advertising while the industry works out rules that restrict various perceived abuses. If industry voluntary agreements don’t satisfy Congress, new restrictions on advertising directed to children are also possible, especially in connection with ads for food considered unhealthy (however that may be defined).

Copyright issues could also impact the broadcast industry this year – perhaps in ways more fundamental than any of those other issues listed above. For radio, we may see the webcasting royalties issue be resolved one way or the other. Congress has given webcasters and the recording industry until February 15 to settle the webcasting royalty issues and, if that doesn’t result in a resolution of the issue, the pending appeals will be argued this year and perhaps resolved by the end of the year. 

2009 will also bring about a renewed attempt by the recording industry to impose a performance royalty on broadcasters for their over-the-air signals, the “performance tax” as it has been labeled by the NAB. That performance royalty would require broadcasters to pay the recording industry and recording artists royalties for the use of music over the air – in addition to the ASCAP, BMI and SESAC royalties that are already paid to the composers. The recording industry was able to get that proposal through the House Judiciary Committee last year, and will make a renewed attempt to have it adopted by Congress. If such an attempt is successful, this could potentially result in the transfer of billions of dollars from broadcasting to the recording industry.

TV has its own copyright issues, as the law permitting Dish and DirecTV to import local broadcast stations into local markets must be renewed, and some have suggested that this might be the time to reexamine the must-carry and retransmission consent process for both cable and satellite. While nothing firm is on the table, this issue could arise just as retransmission consent fees are beginning to offer television broadcasters a meaningful new revenue stream.

All of these issues seem like plenty - but we haven't even discussed the resolution of the indecency cases currently pending before the Supreme Court that should come this year.  The Commission ended 2008 with several large EEO fines, and this year may bring the resolution of long-pending petitions for reconsideration of the current EEO rules, as well as resolution of whether the Form 395 Annual Employment Report  will make its reappearance and whether the information on the form should be available to the public to judge the EEO performance of broadcasters or should the information be used simply for industry profiling.  Commissioner Adelstein suggested that the information should be public in his concurring opinion on these recent fines.  The FCC's change in its multiple ownership rules to allow some broadcast-newspaper combinations is still on appeal as it becomes increasingly irrelevant (as newspaper companies don't have the money to buy broadcast station, and broadcasters probably don't want to buy newspapers), and other issues as to the local radio ownership rules and the attribution of TV JSAs are still pending and may be resolved one day - perhaps this year.  Even political rules may be revisited in 2009 - as the Commission has never issued rules implementing the BCRA requirements, and it also has a long-pending proceeding to determine how to assess spots sold by on-line auctions for lowest unit rate purposes. 

With these (and other) possible changes in the regulatory landscape, one can only hope that the government regulates with a light touch. While the Democrats who have been on the FCC during the Bush years have advocated tough, detailed regulatory mandates, the Obama administration has offered the hope of a less doctrinaire, more inclusive regulatory process. Given the economic outlook for the coming year, and the costs and likely disruptions of the digital transition, an administration that promises hope should deliver some to broadcasters simply by taking a break from excessive regulation to give everyone a chance to adjust to the new realities of 2009. But stayed tuned to these pages to see what develops in this new year. 

No doubt some will say that the new rules are necessary not to regulate those broadcasters that responded in the ways that I set forth above, but for those who do not.  But that, to me, seems to beg the question of how you make rules about what is important to listeners.  While the national TV news reports may have made it seem like all of Iowa was underwater, in fact life went on as normal in many parts of the state, including the portions of Des Moines where I was.  People in those areas, while inconvenienced by road closures and while concerned about the plight of others in their community and their state, went about their lives.  And many stations continued with their normal programming, interrupting only as necessary with news and alerts - including EAS alerts about severe weather.  It seems to me that this was entirely appropriate - you don't want or need every station to be going wall-to-wall flood coverage when the majority of the people were not affected, when information about weather issues was available on many media outlets, and when emergency updates were given on virtually all outlets through EAS activations when National Weather Service or other sources indicated that severe weather threatened a particular community.  But for the vast majority of people, there was nothing wrong with providing them entertainment, sports, national news or spiritual programming serving their non-weather related needs.  In fact, I'm sure that some of the normal programming gave residents the ability to preserve somewhat of a normal life, without making the existing severe problems seem so all-encompassing that normal life would cease entirely.  All of these stations are serving their audiences. 

Broadcasters know their service areas, and they know their audiences.  They know what their audience wants to hear, and their stations are programmed to meet the needs of that audience.  People in larger cities know where to get wall-to-wall news, and they know where to get entertainment or other programming.  They don't go to the rock radio station to get full information about the governor's press conference any more than they go to the news-talk station to get information about concerts at the local civic center or music club.  In smaller towns, they know which station will have the information about their communities.  All broadcast stations are not, and cannot be, all things to all people.  But that is the beauty of the American system of broadcasting - station owners can choose how to serve their audiences, and by allowing that choice, audiences of virtually all interests can be served in the ways most relevant to them.  And broadcasters can freely adapt to changes in their audiences or changes in their markets, without needing government approval.

Broadcasters serve these communities, even if their main studio is two miles outside the city limits.  And they don't need to have some minimum wage employee babysitting the transmitter in the middle of the night.  As more than one Iowa Broadcaster told me, if there was a real emergency, their regular employees will cover it, even if it is in the middle of the night, as so many of the broadcasters in the hardest hit communities have been doing this last week.  They are not going to trust some low-wage overnight board operator with gathering and distributing important information.  In fact, many of the rural stations said that, if a rule was adopted requiring that they be manned during every hour of operation, their stations would probably be silent during overnight hours, eliminating EAS sources that run regardless of whether or not the station is manned, and abandoning the audience that now knows that they can rely on 24 hour service from virtually all broadcast stations.

At Monday's 10th Annual Service to America Awards - an award ceremony held in Washington DC each year to honor achievements in community service by broadcast stations - Commissioner Robert McDowell was presenting an award to a station that had performed a litany of public service programs for its community.  He marveled, in a way that was clearly a message to fellow Commissioners in the audience, how this kind of public service was all done without government mandate or intervention.  Broadcasters are serving their communities every day, as I witnessed in Iowa, and they don't need to have the FCC regulations telling them how.

The Commission, at the same time, announced that it was setting up contact representatives within the FCC to deal with questions from the public about how to deal with their local broadcasters - and how to get involved in the FCC's processes of regulating broadcasters.  Toll free numbers and email addresses of one contact representative to deal with radio matters, and another for TV, have been established.  Setting up these contacts seem to be part of the FCC's suspicion, reflected in their localism proceeding and in connection with many other recent FCC actions, that broadcasters are not adequately serving the public and that there is significant interest on the public's part to become active in the activities of broadcasters and their regulation by the Commission.  This suspicion also seems to be underlying the proposals for community advisory boards and manned main studios in a station's city of license, as reflected in the issues raised in the localism proceeding, where comments are due on Monday, April 28.

As the Commission is urging that the public monitor broadcasters and their adherence to the FCC's rules, broadcasters should start their compliance programs by updating the version of The Public and Broadcasting that is in their public file.

In the 1980s, the FCC looked at the competitive marketplace as justification for deregulation - finding that broadcasters, as a matter of self-preservation, would find their own ways of competing in their local markets, or they would perish.  Now, when the marketplace is so much more competitive, the FCC is proposing to bring back archaic regulations potentially requiring all stations in all markets to identical amounts of news, public affairs and local programs.  As we wrote recently, this simply does not make sense in a incredibly competitive media marketplace, where each station is looking to serve a unique audience that may or may not have interest in any specific category of programming.  Does it really make sense for an all sports station to have to do specific amounts of electoral coverage?  Or for their to be local music requirements - but only on those stations that choose to play music? 

And, as we wrote just last week, the burden of any paperwork requirement falls most heavily on the small broadcaster.  While dealing with mandatory paperwork burdens imposed by community advisory boards, mandatory focus groups, and quantitative programming obligations may be something that can be absorbed by a New York City station with 100 employees, how will it be handled by a station in some small town in Oklahoma that may have only 3 or 4 full-time employees? 

The real, practical effects of these rules simply have not been evaluated by the FCC.  While the rules may sound good in theory to those isolated inside the Beltway, how they will function in practice needs to be made clear to the Commission.  So file your comments by April 28th to be heard on the direction that the FCC will take for the future of broadcast regulation. 

We are certainly not advocating the adoption of such programming requirements.  In fact, we believe that such standards would be constitutionally suspect and would end up forcing all stations into cookie-cutter images of each other - at a time when the plethora of media choices now available demands that each station adopt a targeted identity catering to the needs of a unique and specific audience.  And in tailoring its service to specific audiences, a station cannot be constrained by specific program percentages, as each audience may have the same needs - some will not sit still for traditional news and public affairs programming, while others will demand it.  Forcing all stations to provide the same program choices simply leaves some audiences unserved.  While this may be most evident in radio, television will adapt too as there are more and more outlets for video programming.   TV will have to seek out the niches at which it will direct its programming.  Mandating a specific percentage of news, public affairs, election coverage, religious programming or anything else simply will not serve the public's interest in receiving wide and diverse programming choices.  For the individual consumer, having the programming that he or she wants when they want it is more important than insuring that some percentage of that station's programming is made up of local news.

As one broadcaster observed to me, these rules may have made some sense when broadcasters were all mass market stations, providing "full service" programming to their communities.  That was a time when there were few media outlets in each market, and to maximize audience, each station had to try to serve all elements of the community.  Now, as broadcast stations compete against programming coming from cable, satellite, Internet, mobile and other platforms, there really are few if any full-service stations, particularly in large broadcast markets.  Even broadcasters themselves, as they adapt to the multicast opportunities that are presented by digital transmission, will provide more competition in a marketplace, and hasten the need for focusing on the superserving the needs of particular audiences.

For now, the NAB is challenging in Court the implementation of the Form 355.  How the Commission will justify its retreat from the deregulation of the 1980s when it admits that this form currently serves no regulatory purpose is hard to imagine.  In the interim, comments on the potential for the adoption of specific quantitative programming obligations, as part of the Localism proceeding (see our summary here), are due on April 28.  Broadcasters should file comments to make sure that the Commission understands the current competitive marketplace, and how their programming will be constrained if they were all forced to adhere to the same arbitrarily set programming obligations for various categories of various types of programming.  It is a crucial proceeding that could determine the future of the broadcast industry - be sure to participate.

At the same time, competition from new media has increased exponentially.  Last week, Chrysler announced that it would provide Internet access in its cars, to make available all sorts of services, including streaming media and even downloading of movies from the car.   While there was a recent article in the Radio and Internet Newsletter suggesting that Internet radio delivered to mobile devices is not an easy thing, perhaps a mobile Internet device in a car, designed for multimedia purposes, would deliver that nirvana that webcasters seek - mobile access, where Internet radio can be competitive to terrestrial radio in the car, where much radio listening is done.

And if this type of competition is not enough, there have been articles this week that Apple is adding a mobile-music component to various of its devices, including the iPhone.  Apparently, the idea would be a subscription music service, like that offered by Rhapsody or Napster, that would deliver unlimited music to an Apple subscriber.  As Marc Ramsey, in his Hear 2.0 blog suggests, a service that provides unlimited amounts of music to a subscriber is essentially radio, or at least a substantial radio competitor.

With just these being just some of the week's announcements of potential competition to broadcasters, it is evident that there is more competition than ever.  Internet and satellite delivered audio and video, delivered almost anywhere, is a compeitior to broadcasting - a competitor that comes on top of the hundreds of new radio and television stations that have come on line since the Commission decided to look to the marketplace to insure that broadcasters would serve their communities.  As local programming serving a local audience is a broadcaster's way to compete against the new media - why does the FCC need to re-impose rules to get what broadcasters themselves need to do now more than ever?  Remember, comments are due in the localism proceeding on April 28.  Make your views known on this important subject. 

In the order, the FCC also minimizes the costs of complying with its new requirements.  The Commission suggests that the costs of digitizing a public inspection file would "involve a one-time cost of $15,000," and then could be maintained on a server for less than $20 a month.  Even if this cost is accurate (and as set forth below, there are reasons to doubt this), for a small market television station even that cost can be quite significant.  While the Commission suggests that small stations with minimal website operations can request a waiver of these requirements, it sets no standards by which such a waiver will be judged.  Similarly, the costs for the constant review of a station's programming necessary to complete the Form 355 will be substantial, as every day's programming will need to be timed, classified, and recorded so that the weekly averages that are reported on the Form can be computed, and as the report requires a complete catalog of all public interest programming.  Someone will have to make those computations, and prepare the required descriptions of the public interest programming, again not an insubstantial cost, especially for a small market station (and even for some larger market stations).  And for what purpose?  The Commission implies that it is for the greater good that will come from the information reported in the form - information which, as stated above, in the Commission's own eyes is currently of no regulatory significance.

These issues may well be played out in appeals or requests for reconsideration of the new rules.  But, unless and until the rules are changed, broadcasters will need to comply with the new requirements.  First, the provisions governing the on-line maintenance of the public file include the following (with our observations in parentheses):

• The Rules will become effective 60 days after the notice of their approval by the Office of Management and Budget (as required by the Paperwork Reduction Act - this is paperwork reduction?) is published in the Federal Register.
• Stations can either post the public file contents on their own website, or on the website of their State Broadcast Association (why would the Association volunteer to do that?).  Even if the State Association agrees to host the website, the station must have a link on its website to the report. 
• If a station has no website, it does not need to create one to comply with these rules (and it has no obligation to place the file on the State Association site).  But if it later develops a website, it must have the public file contents posted within 30 days.
• The contents of the political file do not need to be posted on the website
• Letters from the public do not need to be posted on the site - though emails from the public should be posted
• Documents that are posted on other sites, including the FCC site, need not also be stored on the station site, if a link to the documents is placed on the station's site
• The file must be accessible to the disabled, complying with Conformance Level A of the World Wide Web consortium's Web Content Accessibility (W3C/WAI) guidelines.  (Information may be found here).  This may preclude some files being stored solely in a PDF format (and will no doubt cause some consternation among those at stations, who we would expect to be most people, not familiar with these standards). 
• Twice each day, the station must publicize on the air, with its station identification, the availability of the file on the website.  At least one of those mentions must be between the hours of 6 PM and midnight.

The FCC Form 355 requires information including the following:

• A list of the station's programming streams (i.e. the analog channel and any digital multicast program streams) and "their main programming focus"
• A list of the parent company and affiliates of the company which owns the station (isn't this what Ownership Reports are for?)
• For each programming stream, the average number of weekly programming hours devoted to the following:
  • High Definition programming
  • National news
  • Local news produced by the station
  • Local news produced by some other entity (who must be identified)
  • Programming devoted to "local civic affairs," defined as programming designed to provide the public with information about local issues, including statements or interviews with local officials, discussions of local issues, and coverage of local legislative meetings.  This programming must be subtracted from the "news" programming reported above.
  • Coverage of local electoral affairs - basically coverage of local elections - which must also be subtracted from the news coverage numbers reported above
  • Independently produced programming, i.e programming not produced by a national network (presumably each local station will have to determine if a network has as little as a one-third interest in all programming that is being aired)
  • "Other" local programming - which is not defined but presumably would include sports, religious, and entertainment programming produced within the station's service area
  • Public service announcements
  • Paid public service announcements (a PSA-type announcement for which the station or any group that the station is affiliated with - presumably including state broadcast associations - receives something of value)
  • Closed captioned programming
• A list of each national news story that includes significant treatment of community issues, listing for each such program:
  • title, length and date and time of airing
  • whether it was aired on the primary channel of the station
  • whether it was locally produced
  • whether it previously aired on this station or any other station (how is a station supposed to figure out what other stations a national news program aired on?)
  • if it was part of a regularly scheduled news program
  • whether any consideration was received for the broadcast of the segment
• A list of all local news program segments dealing with community issues, providing the same information for each such segment as listed above for national news segments
• A list of all local civic affairs program segments that provides significant treatment of a community issue, with all the same details as listed above for news segments
• A list of all electoral affairs programs that includes significant treatment of community issues, with the same details as provided for news segments
• The title, length and date and time of the airing of all independently produced programming
• A list of all local programming not otherwise listed above, with title, length,and date and time of airing, and whether the station received consideration for airing the program
• For each PSA, the name of the sponsoring organization, the number of times the PSA ran, the length, and the percentage of times that were during prime time hours
• For each paid PSA, the same information as for unpaid PSAs
• Details of programming directed to "undeserved communities," defined as demographic segments of the community to which little or no programming is directed (query - if no programming is directed to a particular demographic segment, how can a station have anything to report in this category?)
• Details of religious services or other local religious broadcasts aired at no change
• A description of how the station determined that its programming met community needs
• Details on the amount of closed captioned programming broadcast by the station, and a list of exempt programs that were aired, with details as to the exemptions
• Whether the station voluntarily provided video description of any of its programs and, if so, how much
• Information about broadcasts about community emergencies, including a statement as to whether or not the station complied with the rules that require such programs to be accessible to the disabled
• Whether or not more than 3 hours per day of programming is provided pursuant to an LMA or JSA.

 As I was preparing this litany of information that the Form 355 will contain, I was trying to imagine how stations will comply with this requirement. As set out above, the form calls for an inventory of all program segments that deal with issues of public concern.  To fully comply with the rules, it would appear that a station will have to have staff members dedicated to monitoring all programming broadcast on the station - including on multicast streams and including all network and syndicated programming - to determine if the programming contains a significant discussion of important issues of public concern. Then, if any segment of any program does contain such a discussion, the station will have to write up the description of that program for inclusion on the Form 355, providing the duration, topic and time of broadcast of each such program. The Form 355 will not be a form that a station can simply fill out in the last few days of the quarter, but instead will require a minute-by-minute review of station operations, and a daily updating up information to be ready to upload it on the quarterly due date.

This would seem to be an incredibly burdensome requirement for any station. But, as with any new regulatory mandate, the burden falls hardest on small market stations. The costs and time to monitor station programming is essentially the same whether a station is in Glendive, Montana or New York City, as the amount of programming that a station broadcasts in either a big or a small market is essentially the same. Yet a New York City station has far greater resources from which to pay the costs of compliance with these rules. The small market station, in many cases already reeling under the costs of the digital transition, will be crushed by the new burden that these new rules entail. If ever the Paperwork Reduction Act should be brought to bear to reject a program for the regulatory burden it imposes, this should be the case. Lets hope that the Office of Management and Budget is more attuned to the burden that these rules create than was the FCC.

In addition to these specific proposals to be considered in this proceeding, the Commission mentions a number of other proceedings that are either underway or which will be initiated to consider other issues relevant to the consideration of localism in broadcasting.  The new proceedings to begin include:

Embedded Advertising.  The Commission specifically states in the NPRM that it believes that there are a number of broadcast practices that violate the spirit of the Commission's sponsorship identification rules.  On one of these issues, the Commission plans to launch a proceeding to investigate 'embedded advertising," commercial messages that are contained in program content (e.g. when the hero of a TV program sips a recognizable can of Coke or drives a Ford or goes to see a specific new movie).  That proceeding was on the Commission's agenda in December, but was pulled at the last minute but apparently will return in the near future.

Network-Affiliate Issues.  The Commission for years has had pending before it a petition by a group of owners of network affiliated television stations arguing that network affiliation agreements gave the networks too much power, effectively precluding affiliates from making programming choices that might better serve the interests of their communities.  It appears that the Commission will be resolving those issues, perhaps in a new proceeding to specifically consider some of those issues.

In-State Television Signal Availability.  The Commission promises to initiate a proceeding to determine if cable and satellite carriers should be permitted (or required) to provide subscribers with service from an in-state television station, even if the subscriber lives in a DMA where all the television stations originate in another state. 

FM Channel Availability.  The FCC has instructed its staff to come up with a tool to make it easier for the public to determine (on their own without hiring a consulting engineer) if a new FM station can be allotted at a particular community.  Look for this tool to appear on the FCC's website in the future. 

Other issues will be decided as part of other on-going proceedings.  These include:

Enhanced Disclosure Obligations.  In a simultaneously released Order, the FCC imposes certain enhanced disclosure obligations on television broadcasters - requiring that new forms be completed quarterly by broadcasters reporting on the types of programming that they broadcast, and requiring that public file information be maintained on the station's website (if the station has a website).  The imposition of similar requirement for radio is already under consideration in the Digital Radio proceeding.

Emergency Communications.  The obligations of broadcasters to communicate with their audiences in times of emergency, including communications with the hearing impaired and with audience members who do not speak English, are to be considered in an Emergency Communications docket that the Commission states will be decided soon

LPFM Issues.  Issues about providing LPFM stations with more protections from interference from full power stations, and a potential preference against FM translator stations, will be addressed in a Further Notice of Proposed Rulemaking in which the Commission will soon be receiving comments (see our post here)

Payola, Video News Releases and Sponsorship Identification.  The Commission currently has proceedings underway to enforce its payola rules in specific cases, and to gather more information about the use of Video News Releases (VNRs) by broadcasters, as well as certain specific enforcement actions.  The Commission intends to pursue these issues

Increase Opportunity for New Entrants.  In a separate proceeding adopted at the December meeting, the Commission adopted an order containing specific rules to enhance the opportunities for new entrants into broadcast ownership, thus increasing local media diversity.  That proceeding will also raise a number of new issues.  The text of the new rules adopted in that proceeding, and its proposals for other new rules, has not yet been released, but a number of localism related issues will be discussed in that proceeding.

Comments on this extensive list of proposals for new rules are due only 30 days after a summary of this proceeding is published in the Federal Register.  The Commission has given the public only 30 days to comment on proposals to return the broadcast industry to the regulatory structure of the 1980s.  All broadcasters should be paying attention to these proposals, as they will have a direct impact on their bottom line, and will also create numerous traps into which a broadcaster can fall at renewal time.  The five and ten thousand dollar fines that we saw in the last renewal cycle for stations that did not complete all of their quarterly issues programs lists may well be nothing compared to fines for violating some or all of these new standards if adopted.  Pay attention to this proceeding!

Now, here we are 25 years later, when the number of broadcast stations has doubled from the mid-1980s, and when there is all sorts of other competition that forces the broadcaster to serve its community, and the FCC is looking to reimpose a paternalistic regime where all stations have to broadcast specific types of content to avoid license renewal difficulties?  In today's world, with satellite and Internet radio and video and all of the other digital choices of entertainment, the broadcaster is forced by his or her self-interest to address what the local audience finds relevant, or the broadcaster will have that audience abandon the station for some other medium.  Now, more than ever, specific quantitative standards for broadcast programs are not needed. 

While the FCC and others seem to yearn for the "good old days", what really did the old rules mandate?  They required specific amounts of public affairs programs, so that usually meant that every radio station in a market was doing boring talk programs on a Sunday morning to satisfy the requirements.  And no one listened, and there was no choice of what to hear during those hours.  Every station was required to do specifically labeled "news" programs.  In the old days, most stations ran network newscasts to help fulfill these requirements, even though the audience of a particular station might not care about hard news.  Now, broadcasters use many different methodologies to determine the needs of their audiences, and meet those needs though "information" about local events supplied by the broadcaster  but maybe not in a traditional format, but perhaps as part of an entertainment format, but in a way that nevertheless builds up a  bond with the local community.  Do we want to do away with that flexibility so that someone in Washington can dictate the type of programming that best serves the public?

These findings by the Commission have not been made, and broadcasters can still submit letters or comments before the end of the comment period at 5:30 Eastern time on Friday, December 14. And then whatever proposals are ultimately adopted by the Commission will be available for comment as part of the Notice of Proposed Rulemaking.  Clearly, this is a proceeding in which all broadcasters should participate. 

The cable ownership item has also been hanging around for years, after previous attempts at rule changes were rejected by the courts.  Broadcast local ownership caps, including the rules that prohibit the common ownership of two television stations in the same market ("TV duopoly") unless there are eight independent television owners (and forbidding any combination of any of stations in the top 4 in audience ratings in a market), have also been thrown out by the Courts as being insufficiently justified, yet these rules were not mentioned in the Chairman's proposal as to the resolution of this proceeding.  See our memo here for a discussion of other broadcast ownership issues not discussed in the Chairman's proposals.  We will see if these issues are discussed in the final order in this adopted in this proceeding.

Finally, the Commission will consider an issue that only recently has jumped into play - the initiation of a proceeding to determine if the FCC's sponsorship identification rules are sufficient to deal with product placement in broadcast programming.  With the recent proliferation of TiVos and other digital video recorders ("DVRs"), some broadcast programmers have taken to including products in the body of programs so that they will still be seen even if the viewer fast-forwards through the true commercial message.  While we will not know the specifics of the FCC proposal until the meeting next week, we can expect that the Commission will want to consider tougher disclosure requirements to let the public know who is trying to persuade them to buy a product.

With all of these crucially important and very controversial items on the agenda, the meeting will be one worth watching.  And, with the Commission's recent track record of starting controversial meetings hours after their scheduled time (the last meeting starting after 9 PM), interested parties may want to bring a sleeping bag and some provisions in case the Commission again gets a late start on its work.

The examination of WWOR-TV's service to the residents of New Jersey may reflect the station's unique history.  Once licensed to New York City and part of the RKO broadcast group which had all of its FCC licenses challenged because of issues of candor stemming from some corporate wrongdoing engaged in by its parent company. While all of the company's other licenses ended up in other hands as a result of the renewal challenges, the WWOR license was saved by an act of Congress, agreeing to renew the license of any VHF television station that would move to a state that currently had no commercial VHF television service. As New Jersey had no VHF station, WWOR's move to New Jersey saved its license.

Now, however, the station's renewal has been challenged on various grounds, and the FCC will hold this unique hearing.  Will this be but the first of such hearings?  This is an issue for broadcasters to watch as the FCC weighs various proposals for ensuring localism through license renewal reform and other means.

The Chairman's statement makes much of the efforts of the Commission to promote new entrants into broadcast ownership, citing efforts to bring back a tax certificate for minority ownership, efforts to allow minority groups to acquire and construction unbuilt stations even if they may have expiring construction permits, and waiving Equity Debt Plus requirements (allowing more financing by companies that might be prohibited by the ownership rules from providing more than 1/3 of the financial backing to an applicant)(see our summary of some of the pending proposals to enhance minority ownership, here).   However, some of his other proposals actually make ownership by new entrants problematic.

On the radio side, requiring the manning of a studio 24 hours a day for stations operating full time may be an expense that a multi-station cluster in a large market would have no trouble handling.  However, the costs that the adoption of such a proposal would entail for a small, stand-alone station in a small market could be prohibitive.  The financial return in a small market from operating all night is slight, but stations continue such operations as a service to their listeners.  Years ago, when the FCC required manned main studios, many smaller stations would sign off in late evenings and overnight hours to avoid the costs of such operations.  Re-imposing a requirement that the station be manned whenever it is operated might bring back such limited service during overnight hours, or force smaller stations to consolidate so that the costs of overnight operations could be spread over multiple stations.  And to what end?  The rules already require that stations be controlled during all hours of operation.  With modern technology, the FCC recognized a decade ago when doing away with the requirement that studios be manned, control can be exerted without someone sitting at the studio, and can even originate programming without physically having someone present at the station.  And stations should be able to provide contact information to emergency officials so that they can respond to any overnight developments that might take place during unmanned hours. 

Communications with emergency officials is really the key - not whether the station has someone sitting at a studio.  The proposed new requirements seems to stem from the notorious "Minot" incident, when local authorities made claims that the largest cluster of radio stations in that community were not manned at night and could not respond to an emergency when a rail car carrying dangerous chemicals derailed creating a toxic cloud in parts of the city.  In fact, I have heard that general manager of those stations state that the stations were manned, and quickly had reporters covering the story, but that local officials simply did not know the how to activate their EAS system, and thus their phones were flooded by calls, which prevented them from reaching the station (which was in fact trying to call the police to obtain updated official information but prevented by the same overloaded phone system).  See Clear Channel's press release on the matter, here . 

The DMA (Designated Market Area - the area defined by the Nielsen ratings service as being the primary service area of a television station) issue is another concern to small market operators.  A number of Congressional bills started popping up early in the year, seeking to either permit or require cable and satellite operators to carry in-state television stations to all counties in a state, even if those counties fell within a DMA where the television service originated from stations in a different state.  While that sounds like a noble idea -giving viewers access to news from an in-state TV station - it caused major consternation among many stations who operate in markets straddling a state border.  Especially in small markets, many station operators felt that such a rule would only expand the power of large market stations that would be imported into the market, while cutting into audiences of the small market stations and making their existence more difficult.  Some of these stations felt that, in the long term, such rules might cause the disappearance of some small markets as the big-market stations gained statewide carriage.  The disappearance of small market stations would then cause a loss in real local news in exchange for some degree of state-wide news coverage.  Again, a seemingly simple idea that can cause many real world problems.

The FM translator issue while, again seeming like a simple issue, could cause many problems.  The FCC received thousands of applications for new FM translators when it opened a filing window in 2003.  While many hundred were processed and granted, in 2004 the FCC put a 6 month moratorium on further processing, while the Commissars considered the relationship of FM translators to LPFM stations.  That 6 month moratorium has now effectively been in place for over 3 years, with no end in sight.  While the Chairman's proposal to limit the number of applications that will be processed may seem like a good idea, it may well cause problems.  First, there are a number of applicants with many pending applications who spent considerable sums to file applications (including clients of our firm).  Is it fair to change the rules on these applicants in mid-stream, after these applications were filed in good faith?  And what will the impact of the limitation be - especially on the efforts to provide AM stations with FM translators?  With so many translator applications, if these were processed and granted, there would no doubt be a secondary market in excess construction permits that would allow AM stations to acquire FM translators for their use (which is being permitted on a temporary basis now, see our post here).  If these applications are dismissed or strictly limited, there will likely be a much more limited secondary market, and AM stations may well end up having to fight LPFM applicants for rights to use this spectrum.  With the potential of a preference for LPFM applicants, this could seriously curtail the ability of AM operators to obtain FM translators for their use.

All in all, this goes to show that there are no easy answers to the complex problems of the broadcast world.  The FCC's seeming interest in intervening in the markets to force the coverage of local issues, and to mandate what it perceives to be in the public interest, may well lead to significant unintended results that actually harm those efforts.  Watch these efforts closely.

While the Commission's direction on newspaper cross ownership seems clear, less certain is the final result on the issues of the local ownership of broadcast stations.  While some television stations have pushed for greater ability to combine the ownership of local television stations, especially in smaller markets where such combinations can now only be established through waivers based on severe financial hardship (which take a very long time to process) or through arrangements that stop short of complete ownership or even direct combination of programming (see our description of one such shared service agreement, here).  With the increased costs of digital operations and other business challenges, many small market stations have been hoping for some regulatory relief, though convincing the Commission to allow less ownership diversity in small markets is always a difficult sell - no matter how good the economic justifications. 

Following the Commission's 2003 multiple ownership decision, the only significant portion of the decision to become effective was the tightening of the radio ownership rules.  While there have been some calls to relax the local ownership rules for radio, these calls seems somewhat muted -especially when contrasted with the calls from newspaper owners to be allowed back into broadcasting, and even when compared with the pleas of small market television for more ability to combine operations.  But, in connection with recent transfers of control of several large radio companies, there are numerous radio stations held in trust, awaiting disposition.  These trusts were formed because, after the 2003 tightening of the rules, certain local radio clusters were no longer in compliance with the rules.  The transfers of control triggered a divestiture requirement.  Could companies look to relief from the divestiture requirements through these upcoming rule changes?  And could the outcome of the proposed XM-Sirius merger affect the decision on local radio ownership?  If the Department of Justice and the Commission allow the merger by finding that these companies are not forming a monopoly in the satellite radio market because they are instead part of a larger market for audio services, wouldn't radio also be part of that greater market, and wouldn't that call for allowing more consolidation?  If one company can own 300 channels in a market, why should another be restricted to 8 (or maybe 13 or 18 should one consider what would happen if FM multicasting in the new IBOC digital radio format becomes more prevalent)?

Already, the anti-consolidation forces are beginning to muster opposition to any rapid resolution of the proceeding.  According to yesterday's Broadcasting and Cable report, the Senate Commerce Committee promised a hearing on the plans to bring the case to a close, while at least two Senators (a Democrat and a Republican) have already written the FCC a letter asking for a delay in the proceeding.   The anti-consolidation forces are also rallying to stop the decision (see the Press Release from the Stop Big Media Coalition, here). 

With so many questions to be answered, and the opposition that is already forming, we will see if the December decision is a real target - or but a trial balloon floated to see if anyone was paying attention.