In a recent state court decision, a King County judge in Washington State concluded that Facebook violated state political disclosure rules by not publicly providing information about the sale of political ads relating to state elections and ballot issues, as required by state law.  While there does not yet appear to be a written decision in the case, according to trade press the judge’s ruling rejected motions by Facebook parent Meta to have the law declared unconstitutional and to have penalties asserted by the State attorney general thrown out (see attorney general’s statement here).  We have written much on this blog about FCC regulations relating to political advertising and have noted how those rules do not apply to online platforms.  This case is but one example of how state laws are filling in some of the gaps in the regulation of political advertising.

As we wrote several years ago, the Federal Election Commission has only general rules requiring that paid online political advertising for federal offices have some identification of the sponsors of the advertising.  The FEC in 2018 started a rulemaking proceeding to determine if the “stand by your ad” certifications required in most federal broadcast and cable candidate advertising (the requirement which obligates the federal candidate to say “I’m X and I approved this message”) should carry over into the online world.  That proceeding has never been resolved – likely held up both because of the difficulty of resolving sensitive political issues at the FEC, and because of the inherent difficulty of adopting one-size-fits-all disclosure obligations for online media, where ads can range from TV-style videos to short tweets and textual messages to images displayed in virtual reality worlds.  Carrying over broadcast-style regulation to these diverse platforms is a tricky fit. Continue Reading As More Political Advertising Moves Online, State Laws Provide the Regulatory Framework for Disclosures and Recordkeeping

We kicked off our summary of last week’s regulatory actions for broadcasters with the news of several millions of dollars in fines imposed on over 100 television stations for apparent “program-length commercials” in children’s programming.  Last week’s Notice of Apparent Liability, a unanimous decision by all four FCC Commissioners, stemmed from a Hot Wheels Super Ultimate Garage ad that was aired a total of 11 times during a Team Hot Wheels TV program which ran 8 times during November and December of 2018.  The same programming was provided by Sinclair Broadcast Group to both commonly owned stations and stations owned by other companies.  Two years ago, the same program was the subject of a $20,000 fine on a station in Baltimore, apparently when the issue was first discovered and reported to the FCC (see our article about that fine here).  Given the number of stations on which the proposed fines were imposed last week, and the number of issues discussed in the Notice, we thought that we should give the Notice a more extensive look.

First, it is worth discussing the FCC’s concerns with what they term “program-length commercials.”  The Commission has, for almost 30 years, had a policy against “program-length commercials” – programs that feature characters who are also featured in a commercial that runs during the program.  The FCC has been concerned that children may not perceive the difference between a program and a commercial that runs in that program if both feature the same characters.  The entire program can be perceived as a commercial for the product.  If the whole program is perceived as promoting the product, then the program would exceed the commercial limits in children’s programming as set by Congress and incorporated in Section 73.670 of the rules – 10.5 minutes per hour on weekends and 12 minutes per hour on weekdays. Continue Reading A Closer Look at Multi-Million Dollar Proposed Fines for Program-Length Commercials in Children’s Television

Here are some of the regulatory developments of significance to broadcasters from the past week, with links to where you can go to find more information as to how these actions may affect your operations.

  • The FCC’s Media Bureau issued a Notice of Apparent Liability proposing to fine licensees of over 100 television stations for exceeding the limits on commercialization in programming directed to children of ages 12 or under.  The FCC found that these stations aired “program length commercials” by running ads for Hot Wheels toys during a Hot Wheels program, which under FCC precedent makes the entire program into a commercial. Fines ranged from $20,000 for single station licensees up to $2,652,000 to Sinclair Broadcasting for running these commercials on 83 stations.  The licensees have 30 days to pay the proposed fines or to file a written statement either disputing the fine or seeking a reduction in the proposed amount.
  • The FCC issued an Order that denied a request for review of a Media Bureau decision rejecting an objection to the grant of a construction permit for a new FM translator to rebroadcast an AM station.  The objection argued that the FCC’s windows that authorized new FM translators for AM stations violated the Local Community Radio Act of 2010 (LCRA) by awarding construction permits for new FM translators without considering their effect on the potential for new LPFM stations. The Commission upheld the Bureau’s conclusion that the LCRA did not require that each new translator application be required to demonstrate that it did not preclude LPFM opportunities.  Instead, efforts by the FCC to limit translator applications, and a prior LPFM window, provided adequate LPFM opportunities.  Similar objections have been rejected by the FCC in the past (see our Broadcast Law Blog article on this issue).
  • The FCC’s request for comment on the methodology that it uses to allocate its employees to determine regulatory fees was published in the Federal Register, setting the dates for the comments. This proceeding is important as the allocation of FCC employees determines the regulatory fees paid by each industry regulated by the FCC.  The fees are set to reimburse the government for the costs FCC operations, allocated by the percentage of FCC employees whose time is spent regulating a particular industry.  The proceeding raises issues as to how FCC’s employees who perform functions that are not industry specific should be allocated to specific fee payers, including broadcasters.  Comments are due October 26, with reply comments due November 25, 2022.
  • The Commission issued a Public Notice announcing the dates for comments and replies on the FCC’s proposals for updating its rules for LPTV and TV translators.  These comments are on the FCC’s Order and Sixth Notice of Proposed Rulemaking (on which we previously reported) to delete or revise analog rules for LPTV and television translator stations that no longer have any practical effect or that are otherwise obsolete or irrelevant after the transition of these stations to digital operation.  Comments are due on October 24, and reply comments are due November 7, 2022.
  • The FCC’s Video Division issued a Forfeiture Order reducing a proposed fine on an LPTV station licensee that had constructed its station and commenced operations without filing until after its construction permit for the station had already expired an application for license to inform the FCC of the completion of construction.  The Division agreed to reduce the proposed fine from $6500 to $1300 based on the licensee’s ability to pay. The Division looked at precedent as to when fines are excessive, stating that fines should not exceed 8% of a licensee’s gross revenue and should normally not exceed approximately 5% of revenues, or lower when a licensee is losing money.  The $1300 fine was about 5% of the licensee’s revenue.
  • The Commission issued a Public Notice imposing a 180-day freeze on applications in the 12.7-13.25 GHz band.  This includes applications for new earth stations and applications for new stations or modifications to fixed or mobile BAS (broadcast auxiliary) stations to operate in the 12.7 GHz band.  The freeze was imposed while the Commission considers changes in the band to make more effective uses of this spectrum. There are limited exceptions to the freeze, including one for changes to broadcast auxiliary stations that can be shown to have no effect on reimbursement costs for any future user of any cleared spectrum.
  • In response to Hurricane Fiona and its impact on Puerto Rico, the FCC issued a Public Notice extending to September 30 the due date for Puerto Rico stations to file their 2022 regulatory fees.  All other stations still must pay their fees by September 28, 2022.  Another Public Notice gives Puerto Rico stations until November 14 to upload their Quarterly Issues Programs Lists for the third quarter of 2022 to their online public inspection file (for all other stations, those reports should be uploaded by October 11 as the normal October 10 deadline is a Sunday).
  • The Senate Judiciary Committee passed the Journalism Competition and Preservation Act designed to allow news creators, including broadcasters, to negotiate jointly without antitrust concerns with big Tech Platforms over the rates and terms by which those platforms use the news creators’ content.  A summary of the bill that was passed is available on Senator Klobuchar’s website.  To become law, the bill still must be passed by the full Senate and the House of Representatives before the current session of Congress ends in January.

 

As we wrote in several of our recent weekly summaries of regulatory issues for broadcasters, the FCC released a Public Notice the week before last announcing that regulatory fees must be submitted by 11:59 PM Eastern Time on September 28. This public notice set the deadline for the payment of fees established in the FCC’s Report and Order released just before Labor Day, which resolved objections to the higher fees that had been proposed for broadcasters by reducing those proposed fees somewhat (while still raising broadcaster’s fees on average about 8% over fees paid in prior years).  Since the Public Notice setting the fee payment deadline, the FCC has been busy issuing numerous notices, providing guides, and launching web pages with information about the fees and the procedures for paying those fees.

A notice that should be reviewed by all broadcasters owing fees is one issued on Friday when the FCC released another Public Notice setting the specifics for payment of the fees.  This notice details the payment process and requires that all payments be made through the FCC’s CORES database.  The notice also states that payments can only be made by credit cards, VISA or Mastercard debit cards, ACH transfers or wire transfers.  No cash or checks will be accepted. Continue Reading More on FCC Regulatory Fees Due on September 28 – Public Notices on Payment Procedures, Deadlines, Amounts, and Waivers

Here are some of the regulatory developments of significance to broadcasters from the past week, with links to where you can go to find more information as to how these actions may affect your operations.

  • The FCC released additional public notices in connection with the upcoming September 28 deadline for submission of annual regulatory fees. Specifically, the FCC issued a Public Notice setting out the procedures for paying the fees. The Notice addressed matters including the required use of the CORES system and the permissible methods of payment.  The FCC also announced that broadcast licensees can look up their Fiscal Year (FY) 2022 regulatory fee amounts by logging onto the FCC’s website at http://fccfees.com and clicking on the “View Fee Information and Exempt Status for any Broadcast Property” link. In some instances, it may be necessary to clear your browser before logging onto the website. After clicking on this link, licensees will be able to view their fee amounts, fee codes, facility identification numbers, and other information pertinent to the filing of their FY 2022 regulatory fees.  Another Public Notice announced that, as it did for FY2020 and FY2021, it is streamlining and easing its processes through which fee payors suffering pandemic-related financial hardship may request and obtain waiver, deferral and installment payment relief for FY 2022 regulatory fees.  Further details about this process, the required showings, and the evidence that must be submitted when requesting relief are provided in the Public Notice.  The FCC also issued a Fact Sheet providing information about those entities, including noncommercial broadcasters, that are exempt from payment of regulatory fees.
  • The FCC’s Media Bureau issued a decision in which it determined whether certain expenses were reimbursable to an FM station moved to a new channel to facilitate the upgrade of another station. To make it possible to upgrade a station, one licensee can force another station to change channels if it reimburses the station that is forced to move for the reasonable expenses of the move, and as long as the new channel is technically equivalent and can work at the station’s current transmitter site.  Noting that the station seeking reimbursement bears the burden of proving whether an expense is legitimate and prudent, and whether its cost is reasonable, the Bureau conducted a detailed analysis of the extent to which the station in question’s engineering and equipment expenses, legal fees, printing expenses, promotional expenses (including those for promoting the station’s new frequency), and miscellaneous expenses.  For further details on how the Bureau resolved these matters, see the Bureau’s decision available here.
  • The Media Bureau issued a reminder that, as required under the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (“NDAA”), United States-based foreign media outlets providing video programming must submit by October 12 their next semi-annual report disclosing their relationships with their foreign principals, including a description of the legal structure of such relationships and any funding the outlets receive from their foreign principals.  The reminder sets out who is covered by this requirement and the specific means to be used by such outlets to provide these reports.
  • The FCC’s Media Bureau issued an Order granting the license renewal of an FM station is Arizona for only one year, instead of the normal eight year period, because the station had been silent for extended periods. The Bureau found that the station was silent for 27% of its license term and 33% of its extended term (the license term plus the period after the license expired while the renewal was pending).  This is another case where the Bureau has concluded that it needs a shorter term to assess whether the station will continue to operate and serve the public, which it cannot do when silent.  For more on the Media Bureau’s emerging policy on renewals for stations that had been silent for extended periods, see our article
  • In a major First Amendment decision, the 5th Circuit Court of Appeals upheld a Texas law forbidding large social media platforms from censoring speech based on the viewpoints of the individuals posting on the site. The Court determined, among other things, that regulating censorship is not subject to the same First Amendment protections as regulating speech and that Texas was justified in concluding the platforms were “common carriers” required to allow all people to access their services without discrimination.  This decision seems to contradict that of the 11th Circuit finding a similar Florida statute to be unconstitutional (which we mentioned in a prior weekly summary here). These contradictory holdings may well lead to the Supreme Court resolving the extent to which states can regulate the content moderation policies of tech platforms.
  • On our Broadcast Law Blog, we wrote about the bill introduced in Congress by Senator Rand Paul to eliminate the FCC’s multiple ownership rules that limit the number of broadcast stations that one company can own in any market. This bill would also require that, in any antitrust review of a broadcast merger, the reviewing authority recognize that tech companies provide many of the same services as broadcasters and are increasingly becoming competitors with broadcasters, and that the impact of any broadcast merger be assessed in the broader media marketplace, rather than in isolation by looking solely at broadcasting as a stand-alone market that is immune from broader marketplace competition.

Kentucky Senator Rand Paul has introduced a bill to repeal all broadcast ownership limitations including the radio and television local ownership rules (see the draft bill, the Local News and Broadcast Media Preservation Act, here, and the Senator’s press release, here).  As we have noted before (see, for instance, our article here), the FCC is currently considering changes to the radio ownership rules but the proposals, first advanced in late 2018, remain stalled in the current FCC seemingly because of its current political deadlock with two Republicans and two Democrats.  The current pending proposal at the FCC (see our summary here) is also considering allowing combinations of two of the top 4 TV stations in a market based on certain defined parameters (such combinations being allowed now only when justified based on an ill-defined case by case public interest analysis).  The Paul legislation would essentially pre-empt this review by abolishing the FCC’s ownership rules.  Of course, being introduced so late in the Congressional session with no other declared political support, the bill has little chance of becoming law in this session of Congress.

The Paul legislation is designed to allow broadcasters to compete with big tech companies that have seriously eroded the advertising and audience shares of broadcast stations over the last decade (see our article here).  According to Paul’s press release, his bill “would give local broadcasters and newspapers much-needed relief from outdated government restrictions that are currently threatening their ability to succeed in an evolving media environment.”  As the broadcast media is the only media subject to such ownership restrictions, many have argued that, for a truly level playing field in today’s media landscape, a significant relaxation of the rules is warranted. Continue Reading Senator Rand Paul Introduces Bill to Repeal Broadcast Ownership Limits and Allow Joint Negotiations with Big Tech Companies

With so much focus on the upcoming regulatory fee deadline, broadcasters may well overlook another more imminent deadline – Thursday, September 15 is the deadline for broadcasters to have assured themselves that no buyer of program time on their stations is a foreign government or an agent of a foreign government.  As we wrote here, the NAB successfully obtained a court decision eliminating the obligation for broadcasters to verify that no buyer of program time is listed in the Department of Justice’s Foreign Agents Registration Act database or on the FCC’s database of foreign government video programmers.  However, the underlying obligation of licensees to obtain certifications from buyers of program time on their stations confirming that they are not a foreign government, or an agent of a foreign government, remains in place.

New agreements for the sale of program time should have, since March 15, contained representations from the program buyer that they are not a foreign government or a representative of a foreign government, and that no foreign government has paid the programmer to produce the programs or to place it on broadcast stations.  Programming provided to the station for free with the expectation that it will be broadcast should also be confirmed as not coming from a foreign government or an agent of a foreign government.  By this Thursday (September 15), stations need to verify that the providers of programming under agreements that were in existence before March 15 are not foreign governments or their agents. Continue Reading Don’t Forget September 15 Deadline For Broadcasters to Assure That Buyers of Program Time Are Not Foreign Governments or Their Agents

Here are some of the regulatory developments of significance to broadcasters from the past week, with links to where you can go to find more information as to how these actions may affect your operations.

  • The FCC announced that regulatory fees must be submitted by 11:59 PM Eastern Time on September 28. In addition, the Media Bureau’s guide to fee filing for broadcasters was released and is available here (the Bureau also separately issued a listing of TV stations by call sign, identifying their population count and fee amount). Note that the FCC’s fee look-up database for radio does not reflect the exempt status of some noncommercial stations – particularly those that do not operate in the reserved FM band. Noncommercial licensees with stations that do not show their exempt status should discuss with their FCC counsel how to correct that information to properly reflect their exempt status.  There are significant penalties for late payment, so it is a good idea to file before the September 28 deadline to avoid any last-minute issues that, if they result in a fee being late, can result in a 25% late fee penalty.
  • The FCC has released a draft Notice of Proposed Rulemaking (NPRM), available here, proposing to update the FCC’s rules for full power TV and Class A TV stations. The draft NPRM, which is tentatively on the FCC’s agenda for the September 29, 2022 monthly open meeting, indicates that a review and update of these rules is necessary due to the digital transition, the incentive auction repack, current technology, and changes in Commission practices.  Assuming the FCC adopts the NPRM as scheduled, it will seek comment on, among other things, whether to eliminate rules that relate to analog operating requirements, and to similarly eliminate language in rules to remove references to digital television or DTV service; whether to delete outdated rules that are no longer valid given changes in Commission-adopted policy, such as the elimination of the comparative hearing process to award and renew broadcast licenses; and whether to make other updates to the Commission’s rules.  Comment dates will be announced when the final version of the NPRM is released (probably on or shortly after September 29).
  • FCC Chairwoman Rosenworcel has circulated a Notice of Proposed Rulemaking (“NPRM”) to bolster the security of the nation’s public alert and warning systems, the Emergency Alert System (“EAS”) and Wireless Emergency Alerts (“WEA”). If adopted by a vote of the full Commission, the NPRM would seek comment on, among other things, ways to improve the operational readiness of the EAS, including the amount of time that broadcasters, cable providers, and other EAS participants may operate before repairing defective EAS equipment; requiring EAS participants to report compromises of their EAS equipment; and requiring EAS participants to employ sufficient security measures to ensure the confidentiality, integrity, and availability of their respective alerting systems and to annually certify to having a cybersecurity risk management plan in place.
  • The decision of the United States Court of Appeals for the D.C. Circuit in NAB v. FCC became effective on September 6, meaning that the requirement that broadcasters check Justice Department and FCC websites to verify the foreign governmental entity status of lessees of their airtime is no longer in effect. The FCC still has the option of petitioning by October 11, 2022 the Supreme Court to review the D.C. Circuit decision.  For more details about this case, see our Broadcast Law Blog here. The requirement that broadcasters receive a verification directly from program suppliers that they are not representatives of foreign governments remains in place.  Broadcasters should have written verification by September 15 from all parties buying program time on broadcast stations (or supplying programming for free) certifying that they are not representatives of foreign governments, and that have not been paid by foreign governments to supply their programming to a station.

 

Here are some of the regulatory developments of significance to broadcasters from the past week, with links to where you can go to find more information as to how these actions may affect your operations.

  • On September 2, the FCC released a Report and Order (“R&O”) and Notice of Inquiry adopting the regulatory fee schedule for fiscal year 2022 and seeking comment on issues related to the FCC’s allocation of indirect “full time equivalents” for its employees. Allocation of the FCC’s employees is important because the number of its employees allocated to particular tasks is used as the basis for allocating regulatory fees among the various industries regulated by the FCC.  The R&O largely adopts the proposals from the FCC’s Notice of Proposed Rulemaking  (“NPRM”) released on June 2, 2022 but, notably for radio broadcasters, fees will increase by 7-8% compared to the 12-13% increase proposed in the NPRM.  And for full power TV broadcasters, the R&O adopts a factor of .84 of one cent ($.008430) per person served compared to the .88 of one cent proposed in the NPRM.  The R&O declined to adopt other broadcaster-specific relief proposals from the National Association of Broadcasters and others, rejecting proposals including one to raise the de minimis threshold above $1,000 and another to exempt broadcasters from the costs associated with the FCC’s broadband data mapping work.  The regulatory fees adopted in the R&O will be due in late September 2022 on a date to be announced in a soon-to-be-released public notice.
  • On August 31, the FCC’s Media Bureau entered into two consent decrees in connection with its review of the renewal applications of a group of commonly owned FM stations in California. In the first consent decree,  five of the six stations conceded that they failed to timely place issues and program lists in their online public inspection files.  The Bureau granted the stations’ renewal applications but required that the licensee adopt a comprehensive Compliance Plan to prevent future violations of the FCC’s public file rule.  For the same reason, the Bureau entered into a similar separate consent decree consent decree with the sixth station, but also denied an informal objection against the station’s renewal application.  The objection alleged that the station had been off the air for 18 months, which would have required the cancellation of the license (required for stations silent for more than a year without a rarely granted public interest exception).  The Bureau found that there was insufficient evidence to support this allegation, and instead relied on the station’s certification that it had remained on the air for the requisite period of time.
  • On our Broadcast Law Blog, we published our monthly look ahead at the regulatory dates and deadlines for broadcasters in September, including the deadlines for filing for reimbursement of expenses incurred because of the TV incentive auction by radio, LPTV and TV translator stations and the date by which broadcasters are required to have received assurances from all buyers of program time that they are not foreign governments or agents of such governments.

As summer begins to wind down, just like the rest of the world, the FCC and other government agencies seem to pick up speed on long delayed actions.  Broadcasters can anticipate increased regulatory activity in the coming months.  For September, there are a few dates to which all broadcasters should pay attention, and a few that will be of relevance to a more limited group.  As always, pay attention to these dates, and be prepared to address any other important deadlines that we may have overlooked, or which are unique to your station.

All commercial broadcasters will need to pay attention to actions which will likely come in rapid fire in the next two weeks, setting the deadlines for payment of the Annual Regulatory Fees that must be paid before the October 1 start of the next fiscal year for the FCC.  Look for an Order very soon deciding on the final amounts for those fees.  That Order will be quickly followed by a Public Notice setting the payment dates and procedures.  Then watch for fact sheets from each of the Bureaus at the FCC.  The Media Bureau fact sheet will cover the fees to be paid by broadcasters.  Be ready to pay those fees by the announced September deadline, as the failure to pay on time brings steep penalties. Continue Reading September Regulatory Dates for Broadcasters:  Reg Fees, Foreign Government Program Certifications, Final Chance to Claim Reimbursement for Repacking Expenses, Comments on ATSC 3.0 and FTC Advertising Inquiry, and More