Last week, the FCC entered into a consent decree with the operator of a low power TV station, where the broadcaster admitted to violating FCC rules by selling advertising packages that included guaranteed appearances of the advertiser on a local news and information program, without any notice to viewers that the programming was sponsored.  The decree imposed a 5-year compliance plan on the licensee, requiring the training of employees on sponsorship identification requirements of the FCC rules, the adoption of plans to ensure that the issue does not arise again, and the reporting to the FCC of any similar issues that arise in the future.  In addition, the licensee had to pay a $60,000 penalty – and the language of the decree suggests that this fine would have been significantly larger had the licensee been able to pay more (as it was, the licensee is allowed to pay off the penalty in $1000 per month increments). This penalty should not be a surprise, as the conduct raises significant sponsorship identification issues, as well as a host of issues under the FCC’s political broadcasting rules.

Having paid appearances in local programming without a sponsorship identification has in the past been a source of FCC concern – and has resulted in big penalties where a sponsor is not disclosed to the public.  For instance, we wrote here about a fine of more than $13 million imposed on Sinclair Broadcasting for running feature stories about a local cancer institute that had been promised to the institute as part of a paid advertising package, without disclosing the payment on-air.  Any time a broadcaster receives anything of value in exchange for saying something on the air, the broadcaster needs to disclose that consideration and who provided it.  Even program suppliers need to disclose that they have been paid when they have been paid to say something on the air.  For more information, see, for example our article here where a TV political commentator was required to disclose that he was being paid to support certain political positions, and our article here on requiring program syndicators to make clear when programming they provide has been sponsored.  The FCC’s recent rules about the disclosure of foreign government-sponsored programming (see our articles here and here) also require that broadcasters assure that any buyer of program time on the station has not itself been paid by a foreign government or their agent to say something in their programming. Continue Reading $60,000 Fine on LPTV Station For Political Broadcasting and Sponsorship Identification Issues with Ad Packages Containing News Program Appearances

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 released a consent decree, including the payment of a $60,000 penalty, with an LPTV station operator to resolve sponsorship identification issues, including those associated with political ad sales. FCC staff alleged that the LPTV station was airing paid-for appearances by legally qualified candidates in what appeared to be a local news program without disclosing that the candidates had actually paid to be in the news segments.  The Bureau found that the station was offering candidates the opportunity to purchase an “All-in-One” advertising package for $1,500 which explicitly included advertising spots and a personal live interview in the news program.  In addition, the station had accepted money from several commercial entities in exchange for interviewing their spokespersons on the news program, again without the required sponsorship ID.  Along with paying a $60,000 civil penalty, the station operator admitted in the consent decree that it violated the FCC’s sponsorship identification rules and agreed to implement a five-year compliance plan with regular reporting requirements.  The Consent Decree noted that the $60,000 financial penalty was determined taking into account the licensee’s ability to pay, suggesting that it would have been higher for a more profitable station.  Look for more on this decision on our Broadcast Law Blog this coming week.
  • The FCC’s Enforcement Bureau issued a Forfeiture Order imposing a $25,000 fine against a Florida LPFM licensee for failing to comply with the terms of its license, failing to make its station available for inspection, and EAS violations.  The Bureau found that the licensee operated its station at the wrong power level, with the wrong antenna from the wrong location, failed to make the station available for inspection, and failed to maintain required EAS equipment.  Among other things, the station was operating with an effective radiated power (“ERP”) of 177 watts (instead of the authorized 20 watts), and with a two-bay antenna (instead of a single-bay antenna), ultimately resulting in an ERP that was 8.88 times the authorized power level and far in excess of the 100-watt maximum for LPFM stations.  The licensee did not contest the Bureau’s findings but requested a reduction or rescission of the proposed penalty.  The Bureau denied that request.
  • As we are now in hurricane season, the FCC released its annual Public Notice reminding television broadcasters of the importance of emergency information broadcast on the station being accessible to viewers who are visually or hearing impaired. See our summary of the issues covered by this reminder here.
  • The FCC’s decision, making clear that Class D educational FM stations with “instructional programming” are exempt from the obligation to prepare and retain Quarterly Issues Programs Lists, was published in the Federal Register this week. We noted that decision in a prior weekly update here. The publication sets the effective date of the rule change as September 12, 2022, though that date has little real effect as the rule change merely codifies existing FCC policy.

 

 

FCC staff earlier this week released a Public Notice reminding TV stations and other video programming providers, including cable and satellite television providers, of their obligation to make emergency information accessible for all viewers.  With a few tweaks, the reminder is very similar to what the FCC has issued in past years.  Here is what we wrote about that notice in the past, equally applicable to the one released this week:

The FCC provides examples of the kinds of emergencies that the rules are intended to cover – which for the first time this year includes pandemics.  Other examples of the emergencies that these obligations would apply to include “tornadoes, hurricanes, floods, tidal waves, earthquakes, icing conditions, heavy snows, widespread fires, discharge of toxic gases, widespread power failures, industrial explosions, civil disorders, school closings and changes in school bus schedules resulting from such conditions, and warnings and watches of impending changes in weather.”  The details that must be conveyed to the entire audience include “specific details regarding the areas that will be affected by the emergency, evacuation orders, detailed descriptions of areas to be evacuated, specific evacuation routes, approved shelters or the way to take shelter in one’s home, instructions on how to secure personal property, road closures, and how to obtain relief assistance.”  The obligations are intended to cover not just the area where the emergency is occurring, but also in adjacent areas that may be affected by the effects of the emergency – and the obligations extend not just to the immediate time of the emergency but also to information about dealing with its aftermath.  What do these rules require? Continue Reading FCC Issues Annual Reminder on the Need for Accessibility of Emergency Information from Video Providers

Last week, both the FCC and FEMA issued notices to broadcasters, cable and other EAS participants that there was a vulnerability in the EAS technologies that could make those systems subject to hacking, potentially allowing bad actors to send out messages to the public using the alerting system (see FCC notice here and FEMA notice here).  As we wrote in our weekly update this past weekend, these federal agencies urge EAS participants to update their EAS devices with the latest software and security patches, change default passwords, make sure that their systems are behind a firewall, and review audit logs regularly to make sure that there has been no unauthorized access. The FEMA notice indicates that the security issue will become public at a tech conference in Las Vegas later this week, so it urges all EAS participants to move quickly to secure their systems.

This is not the first time that broadcasters have discovered that their security systems can be hacked.  In 2013, we wrote about another intrusion into EAS, where hackers were able to take over the EAS alerting capacity of some TV stations to broadcast a warning of an alleged impending zombie attack. The FCC earlier this year warned of security concerns, fearing international tensions could result in the hacking of US broadcast stations (see our article here).  There was even an incident about 5 years ago, where hackers were able to exploit a security flaw in certain stations studio-transmitter links that were connected to the internet, where hackers were able to gain access to stations transmitter controls and to broadcast content from an internet programming stream that was not appropriate for over-the-air content.  These instances all highlight the need for broadcasters to be vigilant in protecting their over-the-air programming from unauthorized access in today’s world where there are always those looking to exploit security flaws to show their technical skill, or to do far worse.  And remember, the FCC now requires EAS participants to alert the FCC within 24 hours of transmitting a false EAS alert to the public (see our post here).  So assess your EAS systems now to mitigate any security concerns.

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.

  • Both the Federal Emergency Management Agency (FEMA) and the FCC released public notices, available here and here, alerting broadcasters and cable companies that they recently became aware of certain vulnerabilities in EAS encoder/decoder devices which, if not updated to most recent software versions, could allow an intruder to issue unauthorized EAS alerts. Broadcasters are urged to update their EAS devices with the latest software and security patches, change default passwords, make sure that their systems are behind a firewall, and review audit logs regularly to make sure that there has been no unauthorized access.
  • The FCC issued a Public Notice reminding FM broadcasters, LPTV and TV translator operators, and MVPDs, of the September 6, 2022 deadline to submit all remaining invoices to the TV Broadcaster Relocation Fund. This fund is to reimburse these entities for costs incurred because of the television incentive auction. The FCC also asked that entities initiate close-out procedures as soon as possible and reminded parties receiving reimbursement to keep all receipts for ten (10) years as the FCC can audit the claims for reimbursement at any time during that period.
  • The Media Bureau entered into a consent decree, including a $25,000 monetary penalty and a compliance plan, with a Trust which controlled multiple companies that owned radio stations. The FCC faulted the Trust for not seeking permission for almost 10 months for the involuntary transfer of control caused by the death of the controlling shareholder.  The consent decree made clear that a broadcaster is to file a transfer of control application within 30 days of the death of a controlling principal.  The broadcaster also did not seek Special Temporary Authority for a translator that had been silent for seven months.
  • The FCC issued an order selecting the winners in 27 groups of mutually exclusive noncommercial applications from the 2021 window for filing applications for new noncommercial FM stations in the reserved band. An FCC summary of the points earned by each applicant in the 27 groups is available here.  This is the first order applying to the 2021 applications the FCC’s points system for choosing among mutually exclusive applicants.  We wrote on our Broadcast Law Blog more about the point system for choosing between mutually exclusive noncommercial applicants here and here.
  • The FCC’s Media Bureau entered into two consent decrees, here and here, with noncommercial licensees over public file rule violations at their radio stations. The Bureau granted these stations’ renewal applications without any monetary penalties but imposed significant regular reporting requirements so the FCC can monitor their continued compliance.  The decrees also required a training program for the stations’ staffs, and compliance plans to ensure that violations do not occur in the future.  These decisions show how seriously the FCC takes compliance with all requirements for the online public inspection file.

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.

  • A bill was introduced in the US Senate proposing to prohibit any FCC or criminal action against a broadcaster who ran ads for a cannabis business legal in the state in which the station is licensed. We wrote, on our Broadcast Law Blog, about the three different legislative efforts now underway to lift any prohibitions on broadcasters running these ads from businesses in states where marijuana has been legalized.
  • Federal Register publication of the FCC’s Notice of Proposed Rulemaking to modify the Nielsen reports that are specified in the FCC’s rules to determine what a station’s local market is for cable and satellite carriage purposes occurred this week. As the Nielsen report currently specified in the rules is being phased out, another Nielsen report is proposed to be substituted in these rules.  Comments are due on this proposal on August 29, with reply comments due by September 26.  FCC Public Notice of these filing dates was published this week.
  • The FCC’s Video Division issued a Memorandum Opinion and Order and Notice of Apparent Liability to an LPTV station in Reno, Nevada for failing to file a license application following the completion of the construction of new facilities and for operating without authorization. The station claimed to have started operating in digital in 2016 on its old analog channel, even though it had a construction permit to operate on another channel.  In 2021, it modified its construction permit for retroactive approval to make its “flash-cut” to digital on its existing channel, but then failed to file a covering license for those digital operations until a 2022 inquiry from the FCC staff as to the status of the station. A fine of $6500 is proposed.  We noted a similar case two weeks ago.  It appears that the Commission is contacting LPTV stations that have not shown that they are operating in digital to see if their licenses are still valid.  The FCC is apparently discovering stations that converted before last year’s deadline for the digital conversion but did not, after completing the conversion, file the required paperwork seeking a license.  With very limited exceptions, all broadcast stations need to get FCC approval before making changes to their transmission facilities, and then file an application for a license to cover after they complete construction demonstrating to the FCC that construction was completed as authorized.
  • In a Second Order on Reconsideration, the FCC upheld a decision allowing the holder of a construction permit for a new FM station to change city of license from a community in the Longview, Washington Urbanized Area (UA) to one outside that UA. This case discussed the UA Service Presumption (UASP), which is a part of the FCC’s Rural Radio policy.  The UASP considers a station licensed to any city in an urbanized area, or one that can provide city-grade service from any fully spaced transmitter site to 50% of the urbanized area, to be licensed to the urbanized area unless a showing can be made rebutting the presumption.  The presumption would be rebutted by a showing that the community really is independent of the UA and has its own needs for a broadcast radio service. The presumption is important in applying the criteria of Section 307(b) which seeks to make a preferential distribution of broadcast services among the states and communities by giving a preference to proposals for a first local service to a community.  A community considered to be in a UA gets no preference because the application of the UASP means that all other stations in the UA are deemed to serve that community.  A station outside the UA (except when the community is an extremely small “quiet village”) gets a preference if there are no other stations licensed to that community (see our article here for more information about this preference and how the UASP affects it). In this case, the applicant moving out of the UA could do so without removing the only broadcast service to its community because, applying the UASP, the other stations in the Longwood market were deemed to meet the needs of the community.  The challenger objecting to this move argued that the initial community was independent from the rest of the Longwood UA and had its own local needs for a broadcast service that should be met by the station’s continued service to that initial community.  The FCC found that the challenger’s pleadings did not rebut the application of the UASP by providing enough evidence of the independence of the initial community from the rest of the UA, so moving the station to a new community without a local service and located outside the UA was a preferred arrangement of allotments.  The FCC provided a detailed analysis of the factors that can go into rebutting the UASP and the evidentiary burdens that proponents and challengers to such a showing must provide. The case is worth reading if you are contemplating a city of license change.
  • The Federal Trade Commission published in the Federal Register its request for comments on its revised guide to The Use of Endorsements and Testimonials in Advertising. Any media company creating commercials using celebrities or experts designed to promote commercial goods and services should be familiar with the guide and should review the FTC’s proposed changes.  Comments on the proposed changes are due by September 26.
  • On Friday, we published our monthly article highlighting regulatory dates and deadlines for the coming month. August Regulatory Dates for Broadcasters is now available.
  • With the final political primaries occurring in August and early September, and as advertising is already heating up for the November election, we published an article on the Political File requirements for federal and state “issue” ads, i.e., those ads not bought by candidates or their authorized campaign committees. The article talks about the more detailed public file obligations required for a federal issue than for ads about state and local issues.

 

With the end of summer upon us, we begin to look forward to the regulatory issues that will face broadcasters as we barrel toward the end of the year.  One date on many broadcaster’s minds is the date by which the annual regulatory fees will be due to be paid.  While the payment date is almost certainly going to be sometime in September, look for an FCC decision on the amount of those fees at some point in late August.  As we wrote in last week’s summary of regulatory actions (and in many before), the amount that broadcasters will pay remains a matter of dispute, so watch for the resolution of that dispute by September, as fees must be paid before the October 1 start of the FCC’s next fiscal year.

But many other dates of importance to broadcasters will occur well before the resolution of the regulatory fee issue.  August 1 is the deadline for full power television, Class A television, LPTV, and TV translator license renewal applications for stations in California.  As we have previously advised,  renewal applications must be accompanied by FCC Form 2100, Schedule 396 Broadcast EEO Program Report (except for LPFMs and TV translators).  Stations filing for renewal of their license should make sure that all documents required to be uploaded to the station’s online public file are complete and were uploaded on time.  Note that your Broadcast EEO Program Report must include two years of Annual EEO Public File Reports for FCC review, unless your employment unit employs fewer than five full-time employees.  Be sure to read the instructions for the license renewal application and consult with your advisors if you have questions, especially if you have noticed any discrepancies in your online public file or political file.  Issues with the public file have already led to fines imposed on TV broadcasters during this renewal cycle. Continue Reading August Regulatory Dates for Broadcasters:  Regulatory Fees, EEO Reports, Many Rulemaking Comment Dates, and More

As more and more states revise their laws to decriminalize or legalize marijuana use (for medical and recreational purposes), and more and more cannabis businesses in those states begin operations, broadcasters have been looking to provide their advertising services to these new companies.  But, as we’ve written before (see, for instance, our articles here and here) , marijuana is still illegal under federal law, as is the use of the radio airwaves to aide in its distribution.  Because broadcasters are federal licensees, there is a heightened concern that those federal licenses could be jeopardized if broadcasters start accepting such advertising.  In the last few weeks, however, there have been some legislative moves on Capitol Hill proposing to remove some of those concerns – but all such efforts have a way to go before broadcasters should consider changing their approach to such ads.

The bill that would seemingly have the potential to lift those restrictions is the Cannabis Administration and Opportunity Act, a draft bill that would remove marijuana from Schedule I, which is the list of drugs that are prohibited for all purposes under federal law (see draft text here and summaries here and here).  While Senate Majority Leader Schumer had indicated that this bill might be considered by the Senate soon, there are many questions as to whether there are sufficient votes to pass the measure, whether there would be enough time to get House approval before the end of the Congressional term, and even whether the President would agree to sign the legislation if passed. Looking at the text, you realize that it is not a simple piece of legislation, as it would change many aspects of government policy to accommodate the proposed change in status of marijuana under federal law.  Even if it were to become law, its effect on the advertising of marijuana may not be immediate. Continue Reading Looking at Legislative Proposals that Would Allow Broadcasters to Accept Marijuana Advertising

Recently, I’ve received many calls from broadcasters about the FCC public file obligations for issue ads (those ads not bought by legally qualified candidates or their authorized committees) – particularly concerning the different treatment between issue ads dealing with federal candidates or federal matters, and those dealing with state and local matters.  There was much controversy about the public file requirements for federal issue ads over the last two years – resulting in an FCC clarification that we wrote about here and here, making clear that the public file obligation for federal issue ads include the requirement that a station’s public file disclosures include a list of all of the federal candidates and issues mentioned in the ad.  The FCC also imposed an affirmative obligation on the broadcaster to confirm with the federal issue advertiser that it does not have multiple executive officers or directors if the advertiser only provides one individual’s name.  These obligations are in addition to the requirement that stations upload to their public file, within one business day of when an order for a federal issue ad is received, information about the order, including the price to be paid for the ads and the schedule that the buyer is requesting.  Whether or not the order for ads addressing a federal issue is accepted by the station also must be uploaded to the public file.

There are different requirements for state and local issue ads, about which we wrote last year here.  Issue ads that do not deal with federal issues do not trigger any obligation to upload information about the price and schedule of an ad to a station’s online public file.  Nor do state and local issue ads trigger the obligation to list every candidate and issue mentioned in the ad.  But they do still require the public file identification of the sponsor of the ad, and the executive officers or directors of the sponsor when the sponsor is not an individual.  Thus, ads dealing with state and local matters – like state ballot issues, or local zoning controversies, or even ads that attack or support state or local candidates (when those ads are not bought by a candidate-authorized committee and do not address any federal issue) – only require the identification of the ad sponsor and its officers or directors in a document uploaded to the station’s political file.  Why the difference? Continue Reading Why Federal and State Issue Ads Have Different Broadcast Public File Requirements

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.

  • July 18, 2022 was the reply comment deadline for the FCC’s Notice of Proposed Rulemaking on the its proposed regulatory fees for fiscal year 2022. The NAB Reply argued that broadcasters are proposed to pay too much, and contends that certain FCC operational costs have been misallocated to broadcasters for regulatory activities that do not involve them (the reg fees are allocated to reimburse the FCC for the costs of regulating each industry that the FCC oversees).  The NAB recognized that, as the fees need to be set soon so that they can be paid before the October 1 start of the next fiscal year, the FCC may not be able to broaden the base of payors to include currently unlicensed entities that benefit from FCC regulation, fees on broadcasters should be limited to an increase of no more than 5% rather than the 13% increase proposed for radio.  The FCC budget, which the fees are to reimburse, only increased by 2.1%.  As might be expected, representatives of other segments of the communications industry argued that their portion of the fees should not be increased.  Expect an FCC decision setting the final amounts for the fees in late August or very early September.
  • The FCC’s Enforcement Bureau issued a Notice of Violation (NOV) to an FM station in Georgia for operating an FM booster without FCC authorization – and without even applying for one. The NOV directs the station to file within 20 days a written explanation of its violations and what it has done to cure the problem.  The NOV cautions that the Enforcement Bureau could take further action against the station in the future, including assessment of a fine.  The Bureau also issued a similar NOV to an FM station in Florida for operating from a location not authorized by its Special Temporary Authority (STA), using an antenna not authorized by the STA. Remember, if you plan to change the transmission facilities with which your station operates, in the vast majority of cases, you will need the FCC’s prior approval to do so.
  • The FCC’s Audio Division issued a short-term renewal of one year (as opposed to a full term of eight years) to a group of Texas FM stations, each of which was alleged to have been silent for 25% of its license term and over 40% of the period covered by the renewal application plus the time that the renewal was under consideration. This again reminds broadcasters of the seriousness with which the Audio Division is treating stations that have been silent for extended periods.  See the July 19 entry on our Broadcast Law Blog for further discussion of the FCC’s developing practices in dealing with stations that are not continuously operating.
  • The FCC continues to aggressively police pirate radio stations, issuing five notices of illegal operation on July 18. In each case, the FCC warned the alleged violator that it could be subject to a fine of up to $2.1 million if such illegal operations continued.  These notices were again directed at the owners of the properties from which the pirates were operating.  See a sample notice here.
  • The FCC’s Audio Division rejected a request for the grant of an application from last year’s window for new Noncommercial Educational (NCE) reserved-band FM stations. The applicant requesting the grant was not preferred in a May decision awarding a construction permit to another mutually exclusive (MX) applicant based on its proposed superior technical coverage. After that decision, the applicant in this case amended its application and contended that, as the amendment removed any conflict with the winning applicant, its application should also be granted.  The FCC rejected that contention, as its rules only allow grant of one application out of any group of MX NCE applicants.  In its rulemaking setting the rules for deciding between MX NCE applications, it specifically rejected a proposal to allow “secondary grants” from within any MX group, fearing that allowing such grants would be administratively difficult and might result in the grant of technically inferior applications.  Without compelling reasons, which the Division did not see in this case, this policy will not be waived.
  • A new Chief Judge was appointed to the Copyright Royalty Board (CRB). The CRB sets certain music royalties and allocates certain fees collected by the Copyright Office.   For instance, the CRB sets the fees radio broadcasters pay to SoundExchange for streaming their signals on the Internet.  It also decides on the distribution of the distant signal royalties paid by cable and satellite for importing non-local television stations and the fees paid to ASCAP, BMI, SESAC and GMR by noncommercial broadcasters.  We wrote on our blog about the many other proceedings relevant to media companies in which the CRB is involved.