Posted on September 14, 2009 by David Oxenford

FCC Says It Will Stay Out of Programming Decisions - On Same Day MusicFirst Petition Comments Were Due

Last week, the FCC released a decision denying objections to the sale of the NY Times-owned radio station in New York City - objections based on the fears of certain listeners that the sale would mean the loss of the station's classical music service.  In rejecting the petitions, the FCC relied on the long-standing policy of the FCC not to get into format questions, citing a thirty year old policy statement, upheld by a Supreme Court decision, which found that such review "would not benefit the public, would deter innovation, and would impose substantial administrative burdens on the Commission."  In other words, the Commission concluded some thirty years ago that it had no place in making programming decisions for broadcasters.  It is ironic that this decision was released on the same date as comments were due at the FCC on the MusicFirst petition arguing that broadcasters should be compelled to air specific content - commercials that advocate the adoption of a performance royalty and music from performers who supported the royalty. 

It appears from a review of the Commission's Electronic Comment Filing System that, while the FCC solicited comments on the MusicFirst petition, MusicFirst itself did not choose to file anything in response to that request.  A few musicians' groups did file comments, echoing the concerns originally raised by MusicFirst, but with very little specificity to support the implication that there was a nationwide conspiracy of broadcasters to boycott music from royalty supporters.  And, while most of the comments stated that they did not want to abridge the First Amendment rights of broadcasters, they nevertheless went on to say that broadcasters who did not air statements in support of the royalty should have sanctions imposed.  Maybe I'm missing something, but that sure seems to be an invitation to government compelled speech.   The NAB filed extensive comments addressing the First Amendment implications of the complaint. 

There is another irony in the premise of the MusicFirst complaint.  They complain that stations are not playing the music of musicians that support the performance royalty.  But one of the premises of  supporters of the royalty is that broadcasters should not be playing the music of performers without paying a royalty.  But when a few noncommercial stations even suggest that they are planning to stop playing this music, MusicFirst comes running to the FCC to complain that broadcasters are not doing the very thing that MusicFirst supposedly doesn't want - playing music without a royalty. 

The whole complaint seems to be a way to generate a few headlines to shine on the issue - an issue where broadcast interests already have almost 250 members of the House of Representatives on record as being opposed to the new royalty.  But perhaps the publicity has generated some response, as rumors are that further consideration of the bill in the Senate may be forthcoming soon.  So broadcasters concerned about a potential royalty cannot relax.
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Posted on August 10, 2009 by David Oxenford

FCC Asks for Comment on MusicFirst's Petition Against Broadcasters for On-Air Activities Opposing Radio Performance Royalty

The FCC today asked for public comments on the petition of the MusicFirst Coalition asking the Commission to take action against broadcast stations who did not fairly address on air the proposed sound recording public performance royalty for terrestrial radio.  The Petition, about which we wrote here, alleges, with very few specifics, that some radio stations have taken adverse actions against musical artists who have spoken out in support of the royalty, and also that stations have refused to run ads supporting the performance royalty while running their own ads opposing the royalty (opposing ads which MusicFirst claims contain false statements).  MusicFirst submits that these actions are contrary to the public interest.  The FCC has asked for comment on specific issues raised in the Petition.  Comments are to be filed by September 8, and Replies on September 23.  

The specific questions on which the FCC seeks comment are as follows:

(i)      whether and to what extent certain broadcasters are “targeting and threatening artists who have spoken out in favor of the PRA, including a refusal to air the music of such artists";

(ii)    the effects of radio broadcasters’ alleged refusal to air advertisements from MusicFIRST in support of the PRA;

(iii)   whether and to what extent broadcasters are engaging in a media campaign, coordinated by NAB, which disseminates falsities about the PRA; and

(iv) whether certain broadcasters have evaded the public file requirements by characterizing their on-air spots in opposition to the PRA as public service announcements.


 While we were concerned about the fact that the Commission is seeking these comments potentially indicating that the FCC might feel that the broadcaster has some obligation to address all sides of all controversial issues, implying that there is life in some vestige of the Fairness Doctrine, we were heartened by the FCC's acknowledgment of the First Amendment issues that the petition raises.  The Commission stated:

We recognize that substantial First Amendment interests are involved in the examination of speech of any kind, and it is not clear whether remedies are necessary or available to address the actions alleged by MusicFIRST.

 

In fact, the first three questions asked by the FCC all go to First Amendment issues that we raised in our prior post.  Do we want the FCC to be deciding what musical artists a station plays on the air?  If a broadcaster decides not to play an artist because of his or her position on gay marriage or gun control or foreign policy, do we want the FCC to intercede and judge the quality of the reason for denying airplay?

Do we want the FCC to decide the truth or falsity of advertising?  The FCC does not even get into that issue with broadcast candidate ads, yet MusicFirst is asking that the FCC make that judgment here.  Do we want the FCC making judgments, for example, on the truth of ads about the health care reform debate, which may very well have a direct effect on broadcasters bottom line? 

Do we want the FCC to decide what advertising a station takes?  Last week, the FCC's Media Bureau, in dismissing a Petition to Deny a broadcast station's license renewal, found that, other than in connection with political advertising by candidates, stations were free to set their own advertising rates and policies.  In that case, the FCC found that broadcasters did not need to treat obituaries as public service announcements, but were free to charge for those announcements.   Why should ads for a music royalty - a proposal that is an anathema to most radio broadcasters - be different than obituaries or any other advertising?  The broadcaster is not a common carrier, as the FCC has said many times including in Friday's case, and it is free to make decisions as to what it will air and what it will not.

The one remaining issue, the public file issue, seems to turn on the provisions of the Bipartisan Campaign Reform Act's requirements that certain issue advertising have the same public file requirements as political candidate ads (see our post here).  Specifically, Section 315 of the Communications Act requires that a station keep records of "a request to broadcast time" dealing with a Federal candidate or a Federal issue.  Where a broadcaster itself chooses to run a spot of its own opposing the Performance Royalty, there would seem to be no "request to purchase time" and thus no public file obligation.  On the other hand, if MusicFirst makes an actual request to purchase airtime on a specific station, the station should note in its public file whether or not the request was accepted.

We are also troubled by the lack of specificity in the MusicFirst petition.  Artists and stations involved are not named.  How can the Commission take action when there is no one to take action against?  Why are they even considering a petition that does not allege any specific wrongdoing but instead raises wrongdoing but does not identify any alleged wrongdoer?

We hope that this is just an attempt by the FCC to demonstrate the openness of its process on what is admittedly a controversial issue.  But we also hope that the First Amendment rights of broadcasters will be respected in the final decision.   
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Posted on June 21, 2009 by David Oxenford

MusicFirst's Complaint to the FCC: The First Amendment and the Performance Royalty

The MusicFirst coalition last week asked that the FCC investigate broadcast stations that allegedly cut back on playing the music of artists who back a broadcast performance royalty, and also those stations who have run spots on the air opposing the performance royalty without giving the supporters of the royalty an opportunity to respond.  While the NAB and many other observers have suggested that the filing is simply wrong on its facts, pointing for instance to the current chart-topping position of the Black Eyed Peas whose lead singer has been a vocal supporter of the royalty, it seems to me that there is an even more fundamental issue at stake here - the First Amendment rights of broadcasters.  What the petition is really saying is that the government should impose a requirement on broadcasters that they not speak out on an issue of fundamental importance to their industry.  The petition seems to argue that the rights of performers (and record labels) to seek money from broadcasters is of such importance that the First Amendment rights of broadcasters to speak out against that royalty should be abridged.

While the MusicFirst petition claims that it neither seeks to abridge the First Amendment rights of broadcasters nor to bring back the Fairness Doctrine, it is hard credit that claim.  After all, the petition goes directly to the heart of the broadcasters ability to speak out on the topic, and seems to want to mandate that broadcasters present the opposing side of the issue, the very purpose of the Fairness Doctrine.  As we've written, the Fairness Doctrine was abolished as an unconstitutional abridgment on the broadcaster's First Amendment rights 20 years ago.  As an outgrowth of this decision, FCC and Court decisions concluded that broadcasters have the right to editorialize on controversial issues, free of any obligation to present opposing viewpoints.  What is it that makes this case different?

The MusicFirst claim is that this case is different in that broadcasters have a self-interest in the topic.  Yet, seemingly, that argument goes too far, as a restriction on broadcasters editorializing on topics in which they have some interest could very well eviscerate the First Amendment rights that they have now had for so many years.  For instance, editorials on tax policy, health insurance, utility rate hikes, and even local bond issues may well have a direct impact on the broadcaster, but no one suggests that these topics are off limits.  Even an editorial supporting or opposing a political candidate, the heart of the editorial right for newspaper publishers and now enjoyed by broadcasters, could be seen as potentially having a financial impact on the broadcaster.  The MusicFirst petition does not address why these issues are somehow different from the performance rights issue, or why artists are entitled to more rights than supporters of positions that may be contrary to the broadcaster's position on other issues.

Moreover, it was clear even before the abolition of the Fairness Doctrine that broadcasters are not "common carriers," meaning that they do not have to accept every ad or message that anyone wants to put on their airwaves (Common carriers, like telephone companies, have to transmit every message that is given to them).  The broadcaster can serve as an editor or journalist, picking and choosing the message that it wants to convey to its listeners.  The only exception is for Federal political candidates, who have legislated a right of "reasonable access" - legislation that has not been challenged in the Courts in recent memory.  But regardless of the rights of political candidates, this exception is in no way relevant to the MusicFirst Coalition.

The MusicFirst petition also suggests that broadcasters may be improperly characterizing spots that they run against a performance royalty as Public Service Announcements ("PSAs").  Yet that also is not a relevant criticism, as the FCC did away with all of its mandatory program logging requirements back in the 1980s.  Thus, whether broadcasters characterize the announcements are PSAs, or Entertainment or News or anything else has no current significance for regulatory purposes.  Note that the localism rules adopted but not yet effective for TV, and those proposed for radio, would bring back the mandatory classification of broadcast programs and give the PSA classification regulatory significance if and when these proposed rules become effective.  But it is certainly not an objection at this point.

The PSA suggestion is tied into another claim that the radio broadcasters running these announcements may not be meeting their public file issues under the Bipartisan Campaign Reform Act ("BCRA") which requires that a broadcaster who runs advertising discussing "Federal issues" put information into their public files similar to that which is maintained for political candidates (see our post, here, for details on that requirement).  While we have advised our clients to comply with these rules, especially if anything of value has been provided to the station in connection with the ads (including scripts or pre-produced spots), where the station airs its own editorial message on the issue, the spots do not seem to fall into the BCRA requirements as they are not sponsored programming, which is essentially what those requirements address.

Ignoring other procedural and substantive issues in the petition (including its failure to name names - in most cases omitting information about the stations which supposedly engaged in the complained of conduct and of the artists who were discriminated against), the issue seems to boil down to a First Amendment issue.  No one would suggest that performers be required to allow broadcasters to attend their concerts to speak against the royalty, so why should broadcasters be compelled to give voice to a position to which they are fundamentally opposed?  We will see what the FCC does with the MusicFirst petition in coming months.  Given the recent statements of the proposed new Chair of the FCC at his confirmation hearing that he has no intention of reviving the Fairness Doctrine, the prospects are that this petition will be simply one more publicity volley in a protracted war over the broadcast performance royalty.
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