Posted on April 11, 2010 by Brendan Holland

Power Boost for Digital FM Radio Stations Effective May 10th

The FCC's January 2010 Order authorizing FM radio stations to increase power on their hybrid digital radio operations was published in the Federal Register on Thursday establishing the effective date of the new rules as May 10th.  As we wrote earlier, the Commission's Order allows stations to increase from the current maximum permissible level of one percent of authorized analog effective radiated power (ERP) to a maximum of ten percent of authorized analog ERP.  So as of May 10, 2010, eligible FM stations may commence operations with FM digital operating power up to -14 dBc (that is, up to a 6 dB increase), consistent with the existing IBOC notification procedures and with no further authorization from the FCC.  Eligible stations may simply avail themselves of the voluntary power increase, but must notify the FCC electronically of the increased digital power within 10 days of commencement using the Digital Notification form via the Commission's Consolidated Database System (CDBS).

The exception to the ability to increase power is super-powered FM stations, which, regardless of their class, are limited to the higher of either the currently permitted -20 dBc level or 10 dB below the maximum analog power that would be authorized for the particular class of station, as adjusted for the station's antenna height above average terrain. The Audio Division's web site contains an FM Super-Powered Maximum Digital ERP Calculator available here to assist super-powered stations with determining the maximum permissible Digital ERP. Licensees of super-powered FM stations must file an application, in the form of an informal request, for any increase in the station's FM Digital ERP.  For power increases over 6 dB, licensees will be required to submit an application to the FCC, in the form of an informal request, for any increase in FM Digital ERP beyond 6 dB.  Licensees wishing to operate with an FM Digital ERP in excess of -14 dBc must make a calculation and determine the station's max permissible Digital ERP as detailed in paragraphs 17 through 20 in the Order, available here. 

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Posted on April 4, 2010 by David Oxenford

Ambiguous Contest Promotional Announcements and Slow Award of Prize Each Cost Radio Stations $4000 FCC Fine

In two decisions released in the last two weeks, the FCC fined two radio stations $4000 each for perceived violations of its contest rules.  The first decision was based on a perceived ambiguity in the contest rules that did not make clear in broadcasts and in written rules that there would be only one winner in a contest.  In the second, the FCC faulted the licensee for not giving the prize away within 30 days of the contest end.  Both cases demonstrate the seriousness with which the FCC seems to take contest rules, especially the need for disclosure of all material terms to listeners, both in over-the-air announcements (see our post here on the need to broadcast the material terms of a contest) and in the written rules governing the contest.  Seemingly, ambiguities will be construed against the licensee and any material parts of the contest, including when the prize will be delivered must be clear the contestants.

In the first case, The Commission found that the licensee had not made clear in its on-air announcements and in its written rules that there would be only one prize awarded in the contest.  When one closely reads the case, what seems to come through most clearly is that the Commission is expecting licensees to document carefully that they have clearly provided the material rules of the contest on the air, sufficiently so that a reasonable listener would be aware of those rules.  In this case, the licensee was unable to document how often its announcements providing the rules were broadcast, or to conclusively say if they had ever been broadcast at all.  The contest was to give away a garage full of prizes, so it would seem that the nature of the contest itself made clear that there was going to be only one winner.  But the Commission concluded that there were not enough unambiguous statements that there would be but a single winner - thus prompting the fine.

The FCC review in this case was prompted by a listener disappointed that he had not won a prize, accusing the station of not publicizing the rules of the contest, and of "fixing" the winner.  While the Commission found no evidence that the results of the contest were in any way improper, the complaint still seemed to trigger an extremely close review of the rules.  While the licensee could provide evidence that there were spots that implied that there would only be one winner, they could not say how often (or even if) these spots actually ran on the air.  In addition, while the rules of the contest said in one place that there would be one winner, in other places those rule implied that there would be more than one winner (seemingly, though, this language came from contest boilerplate, but was included in the rules for this contest causing the Commission to point to the ambiguity).

The second case, the licensee took about 7 months to give away a prize.  The FCC said that its policies require a prompt award of a prize and, as there was no disclosure before the contest that the prize would not be awarded quickly, the licensee violated FCC policy by the late delivery of the prize.  Beyond the caution for stations to remember to award prizes quickly, the case also had discussion of two terms contained in virtually every FCC case dealing with fines - "willful" and "repeated."  In the FCC's view, a violation is willful if the licensee knew what it was doing, even if it did not know that the conduct was illegal.  So here, even though the licensee did not know of the 30 day rule, the fact that it held the contest and delayed giving away the prize was enough to make the violation willful.  Similarly, the violation was repeated, as each day the violation continued is a new violation - making that conduct "repeated."  The FCC rejected arguments that these terms were not being used correctly by the licensee.

So what's it all mean?  Once again, these cases emphasize the need for licensees to exercise great care in conducting contest.  Make sure that the contest rules are well designed and specifically written with the contest that you are conducting in mind.  Boilerplate language in contest rules can get you in trouble.  And remember to cover all eventualities in the rules - including what would happen if the prize is unavailable or delayed.  Then publicize the principal rules on the air and follow them carefully. The FCC is obviously watching how  you conduct your contests - so do it right!
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Posted on March 28, 2010 by David Oxenford

Checklist for Commercial Broadcasters Public Inspection File - With License Renewals a Year Away, Make Sure that Your File is Complete

Incomplete public inspection files were the largest source of fines during the last license renewal cycle.  We wrote last week about two noncommercial broadcasters whose renewal applications filed many years ago have just now led to consent decrees and voluntary contributions to the US treasury in lieu of fines.  To help commercial broadcasters avoid these issues, we have prepared a Guide to the Basics of Public Inspection File Obligations for Commercial Radio and Television Broadcasters, discussing the rules that need to be followed with respect to the availability of the file to the public, its required contents, and the time period for the retention of documents kept in the file.  The Guide also has links to some of our other advisories that deal in more detail with the obligations to keep specific types of documents in the file - including political broadcasting documents, quarterly issues programs lists, EEO reports and children's television reports.  Read the guide, available here, review your operations and be prepared for the next renewal cycle.

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Posted on March 9, 2010 by David Oxenford

Proposed Broadcast Performance Royalty Back in the News - Where is It Going?

In one more indication that the Broadcast Performance Royalty (or "performance tax" as opponents of the legislation call it) is not dead yet is an article in yesterday's New York Times reviewing the issues at stake in the proceeding.  What was perhaps most interesting about that article was the fact that it appeared only one page away from an article about Internet Radio service Pandora, and a discussion of how that hugely popular service was almost driven out of business by music royalties set by the Copyright Royalty Board in their 2007 royalty decision.  The article about the broadcast performance royalty mentions that one of the difficulties in assessing the impact of the proposed royalty is that no one knows how much it will be, as it would be set by the Copyright Royalty Judges on the CRB.  Yet the Times makes no mention of the controversy over the previous decisions of the Board in the context of the Internet radio royalties, and how such royalties almost impacted services such as Pandora.  

How much would the proposed royalties on broadcasters be?  We have written before on that subject,here.  Under previous decisions using the "willing buyer, willing seller" royalty standard which is set out in the legislation that has passed House and Senate Judiciary committees dealing with this issue, the lowest royalty for the use of music in any case before the CRB has been 15% of gross revenues.  Even using a standard seemingly more favorable to the copyright user (the 801(b) standard that assesses more than the economic value of the music but also looks at the impact that the royalty would have on the stability of the industry on which it is imposed), the royalties have been in the vicinity of 7% of gross revenues for both satellite radio and digital cable radio, the two services that are subject to royalties set using the 801(b) standard.  This is more than broadcasters currently pay to ASCAP, BMI and SESAC - rates which are also currently the subject of proceedings to determine if these rates should be changed (see our posts here and here).   

In fact, several trade press articles today suggest that the NAB is at least talking to record company executives about a way to resolve the issue in a "revenue neutral" manner.  This would presumably mean that broadcasters would pay no more for music than they are currently paying - seemingly meaning that ASCAP, BMI and SESAC would have to take less than they are currently.  As the current broadcaster negotiations with ASCAP and BMI may well be headed toward a trial, this may be a difficult negotiation.  But, in the world of copyright law, the negotiations all seem difficult, as the users of copyrighted materials and the copyright owners quite often seem to have vastly different views on the value of copyrighted materials, and their relative contributions toward the value of that material.  In the broadcast debate, broadcasters contend that copyright owners would have less value in their copyrighted material without the promotional value conveyed by broadcast airplay, while the copyright owners contend that broadcasters could not profitably operate their stations without the use of the copyrighted music.  Music composers and publishers (represented by ASCAP, BMI and SESAC) also would argue with those who own the copyrights in the sound recordings (usually the record companies) about whether it is the song or the performance of that song that conveys more value.  These debates are not easy ones to resolve. 

We have also seen articles in trade publications that suggest that the broadcast performance royalty issue is dead for this Congressional session, given the other issues that Congress has to deal with, and the over 255 signatures in the House of Representatives on a resolution opposing the royalty.  But, as we have written before, there is still the fear that the bill could be added as a rider to some other piece of unrelated legislation that must pass Congress and against which some of the resolution's signers could not vote.  Clearly, given the Times article, and the continuing push given this issue by the Music First Coalition supporting the imposition of the royalty, broadcasters cannot sit back and assume that the issue is dead.  That was one reason why this was such an important issue on the agenda of broadcasters who visited Congress last week during the NAB's Leadership Conference in Washington, and behind ads that have run on stations over the last month bringing the issue to the attention of the public.  It is an issue that cannot be overlooked. 
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Posted on February 21, 2010 by David Oxenford

David Oxenford Conducts Seminar for Utah Broadcasters on Political Broadcasting, FCC EEO Rules and Other Legal Issues Facing Radio and Television Broadcasters

On February, 18, 2010, David Oxenford conducted a seminar for the Utah Broadcasters Association on legal issues that affect radio and television broadcasters.  First, David summarized the various broadcasting legal and policy issues pending before the FCC and Congress.  David's PowerPoint presentation is available here.  Broadcasters interested in Washington issues that may affect them this year may also want to read our blog post from early January where we presented our legal predictions for 2010.

David then conducted a refresher course on political broadcasting issues that may arise in this election year.  His PowerPoint on political issues for broadcasters can be viewed here.  Broadcasters wanting more information on the FCC's political broadcasting rules and policies should review the Davis Wright Tremaine Political Broadcasting Guide.  A discussion of the issues for broadcasters raised by the recent Citizen's United case is available here.

Finally, David discussed recent developments in enforcement of the FCC's EEO policies.  The PowerPoint used in this session can be seen here .  Our Advisory on EEO rules and policies is available here, with forms and recordkeeping suggestions attached to that memo.  Our most recent EEO Public Inspection File Report advisory, with a model report attached, is available here.  Finally, our description of one of the recent FCC fines for noncompliance with the EEO policies is available here. 

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Posted on February 9, 2010 by David Oxenford

$16,000 Fine For Recording Telephone Conversation for Broadcast Without Prior Permission - No Excuse Because Call Made By Independent Contractor, By Subsequent Approval, or By the First Amendment

Two FCC cases were released last week fining broadcasters for violations of the FCC rule against broadcasting a telephone call (or recording a call for broadcast purposes) without first obtaining the permission of the person at the other end of the call.  In one case, a licensee was fined $16,000 for phoning a woman, pretending to be a hospital calling with news that her husband had been in a motorcycle accident and had died.  The FCC refused to reduce or eliminate the fine because the call was made by an independent contractor, as the Commission found that the contractor had been hired to provide recorded "bits" for the station, and was thus not acting outside of any limits set by the licensee.  The decision also made clear that the violation occurs as soon as the person at the other end says "hello", if a recorder is running, even if the person being recorded subsequently consents to the broadcast of the call.

The size of the fine may seem surprising, but the Commission's staff found $16,000 to be appropriate due to the fact that the same licensee had just recently been fined for a similar offense.  In another case released the same day, the fine was "only" $4000.  Here, the call was made to airport officials in the context of asking these officials questions about a local controversy.  The licensee raised a host of defenses - all of which were rejected.  First, the FCC would not eliminate the fine based on the fact that the station employee making the call had immediately identified himself as being from the station.  The licensee argued that, as the caller had identified himself as being from the station, the recipients of the calls should have known that they were on the air, and had thus implicitly consented to being broadcast as they kept talking.  The FCC rejected this argument for two reasons.  As the call was immediately put on the air, the decision found that once the "hello" was broadcast without prior permission, the station had violated the rules.  Moreover, the exception in Section 73.1206 (the rule that bans the broadcast of phone calls without permission) that allows calls to be broadcast where the person on the call can reasonably be expected to know that the call will be broadcast applies only to situations where the caller "originates the call" to the station - calling the station to be put on a program (like a talk show) that they know or should anticipate will be broadcast. 

The station went on to argue that this rule was a violation of its First Amendment rights.  Where the station was covering a news story (not trying to produce some entertainment segment, as was the case with the larger fine described above), the licensee argued that some discretion should be exercised by the FCC before imposing a fine.  The decision found that the FCC had weighed the privacy rights of individuals not to be broadcast on the air versus the station's interest in covering the news in adopting its rules in this area, and thus found that there was no First Amendment issue.

When one looks at these cases together, it seems that the Commission's decisions go very far in restricting the use of recordings made for broadcast.  If newsgathering does not provide an exception to Section 73.1206, any sort of "undercover" investigation by a station which uses the telephones, where a recording of a telephone conversation is made and intended for later broadcast, could subject a licensee to FCC fines.  Whether the FCC would in fact go so far if a major news story was broken in this way remains to be seen.  But stations need to be careful. 

Note:  In any sort of newsgathering using the phones, regardless of FCC rules, be aware of state laws regarding the taping of telephone conversations.  Some states require that both parties consent before a call is taped ("two party consent" states), while others require only that one party to the call consent to the taping.  Thus, in any taping of a telephone call, beware of the law of your state, as the penalties for violations could present more problems than even the FCC rules described above. 
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Posted on January 29, 2010 by Brendan Holland

FCC Gives Digital FM Radio a Power Boost

This afternoon the Commission released an Order authorizing FM radio stations to increase power on their hybrid digital radio operations. This power increase is a welcome boost to HD radio operations and was eagerly awaited by many FM stations broadcasting in digital.  In a nutshell, the rule change allows stations to increase from the current maximum permissible level of one percent of authorized analog effective radiated power (ERP) to a maximum of ten percent of authorized analog ERP.  In raising the power permitted for digital radio operations, the Commission acknowledged that the current digital power levels are insufficient to replicate stations' analog coverage and that indoor and portable coverage are particularly diminished.  Building on proposals advocated by National Public Radio (NPR) and iBiquity, the Commission has provided for an immediate voluntary 6 dB increase in Digital ERP (except for super-powered FM stations, as discussed below).   In addition, stations will be allowed to seek authority for increases over 6 dB up to a maximum of 10 dB using an informal application process.

Once the Order becomes effective, eligible FM stations may commence operations with FM digital operating power up to -14 dBc (that is, up to a 6 dB increase), consistent with the existing IBOC notification procedures.  Stations availing themselves of the voluntary power increase must notify the FCC electronically of the increased digital power within 10 days of commencement using the Digital Notification form via the Commission's Consolidated Database System (CDBS).   The exception to this is super-powered FM stations, which, regardless of their class, are limited to the higher of either the currently permitted -20 dBc level or 10 dB below the maximum analog power that would be authorized for the particular class of station, as adjusted for the station's antenna height above average terrain.   The Audio Division's web site contains an FM Super-Powered Maximum Digital ERP Calculator available here to assist super-powered stations with determining the maximum permissible Digital ERP.  Licensees of super-powered FM stations must file an application, in the form of an informal request, for any increase in the station's FM Digital ERP. 

For power increases over 6 dB, licensees will be required to submit an application to the FCC, in the form of an informal request, for any increase in FM Digital ERP beyond 6 dB. Licensees wishing to operate with an FM Digital ERP in excess of -14 dBc must make a calculation and determine the station's max permissible Digital ERP as detailed in paragraphs 17 through 20 in the Order, available here.  

The revised rules will become effect 30 days after publication in the Federal Register, which will likely occur within a couple of weeks. There is a chance that the effective date of the new rules could be pushed back if the administrative review regarding the collection of data isn't completed before then, but that is not expected to be an issue here.  In any event, the Commission's Order states that stations can seek to commence operations with increased HD power of up to -14 dBc before the effective date of the new rules by filing a request for Special Temporary Authority (STA). So digital FM stations that are itching to increase their power ASAP should start working on a request for STA seeking to utilize increased power.

Finally, two additional notes, both dealing with the potential for interference. First, today's Order solidly rejected the suggestion by some commenters that Low Power FM (LPFM) stations were more likely to be affected by full power stations operating with increased FM Digital power and thus should be afforded greater protection from the blanket increase in Digital ERP.  Although the Commission in the past has seemed to be leaning towards affording LPFM stations greater protections (as we've discussed in previous posts), today's Order firmly states that "Analog LPFM... stations are secondary services, and as such, are not currently entitled to protection from existing full-service analog FM stations."  In rejecting the notion of special protections for LPFMs, the Commission stated that it viewed the protections sought by the commenters as a potentially "dramatic change in LPFM licensing rules and the relationship between LPFM and full-service stations."  In sum, "Licensees will not be required to take into account nearby LPFM stations in calculating permissible digital power levels in excess of -14 dBc."

Second, the Order adopts an explicit digital FM into analog FM interference resolution procedure for full-service FM stations.  If a full-service analog FM station is receiving verifiable listener complaints of interference within its protected contour from a digital FM station operating with a Digital ERP in excess of -20 dBc, the licensee of the affected analog FM station should contact the licensee of the digital station and the stations must work cooperatively to confirm the interference and to attempt to eliminate it using voluntary tiered FM Digital ERP reductions.  If the stations fail to reach an agreement on how to remediate the interference, then the affected analog FM station may file an interference complaint with the FCC's Media Bureau.  In order to file such a complaint, the affected analog FM station must have at least six reports of ongoing (not just transitory) objectionable interference and submit a map showing the location of the interference and details about the nature and extent of the problems.   

The Commission's Order notes that although there are approximately 1,500 radio stations operating in digital in the country today, notifications of new digital operations has been in decline for the past two years, meaning fewer stations have been commencing digital operations.  It will be interesting to see whether the increased power levels now permitted for digital radio will breath new life into HD FM radio operations. 
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