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.
- Payola on broadcast stations suddenly was in the news this past week. Early in the week, Senator Marsha Blackburn (R-TN) sent Chairman Carr a letter requesting that the FCC ban radio stations from asking musicians to play “free radio shows” (including “listener appreciation shows” or “charitable concert events”) in exchange for more airplay on stations or by threatening them with less airtime if they don’t participate. Blackburn claimed that this practice constitutes payola (payment for airtime without disclosing to the audience that the broadcast was sponsored) in violation of federal law and the FCC’s sponsorship identification rules. Carr responded by asking the FCC’s Enforcement Bureau to examine the issue, which resulted in the Bureau quickly releasing an Enforcement Advisory warning stations and their employees that they can be fined up to $10,000, imprisoned for up to one year, or both, for compelling or accepting unreported free or reduced fee performances by musicians in exchange for more favorable airplay. The Advisory also talked about other actions that stations should be taking to ensure that they do not face payola issues. Stations may also be subject to FCC fines for payola violations. Look for more on these actions on our Broadcast Law Blog early this coming week.
- The U.S. Court of Appeals for the Fifth Circuit heard oral argument on the legal challenge to the FCC’s reinstatement of the FCC Form 395-B (a recording of the oral argument can be found here). In February 2024, the FCC reinstated the Form 395-B, which requires that broadcasters yearly prepare a report for a station’s online public file classifying all of its employees by race, gender, and employment position (see our article here about that decision). The decision is being challenged by several broadcasters who argue that requirement to prepare and file the form is unconstitutional for reasons including that it unlawfully pressures broadcasters to engage in race- and sex-conscious employment practices (see our discussion here and here). At the argument, the FCC conceded (as did the DOJ the week before in a letter we noted in our last weekly update) that the inclusion in the form of a “non-binary” gender category could no longer be defended based on President Trump’s Executive Order that the federal government will recognize only two genders. Questions were also raised at oral argument as to whether the FCC would reverse the remaining requirements imposed by the Form 395-B’s reinstatement following President Trump’s Executive Order suspending federal DEI initiatives, but the FCC nevertheless defended the FCC’s reinstatement of the form (other than the nonbinary provision). After oral argument, the FCC filed a letter with the Court stating that the agency could not reverse the form’s reinstatement because the current FCC Commissioners were deadlocked on the issue. It is now up to the Court to decide whether the data collection requirements should be upheld (though it is also possible that, between now and when the Court rules, the reinstatement could be revisited by the FCC by ruling on pending petitions for reconsideration when a new FCC Commissioner is seated).
- The U.S. Copyright Office initiated a Notice of Inquiry requesting public comment on issues related to the performing rights organizations (PROs). The Copyright Office notes that performance rights in musical compositions have for over 80 years been licensed by three PROs – ASCAP, BMI, and SESAC. Yet, since 2013, three new PROs have begun (GMR, PRO Music, and AllTrack), and Congress has received complaints that businesses using music have been confused by demands for royalty payments from these new organizations, accompanied by threats of lawsuits if royalties are not paid. The Copyright Office also noted the impact of “fractional licensing,” where multiple composers represented by different PROs collaborate to write a song, giving each a fractional interest in that song –requiring a music user to have rights from all of the PROs having any interest in the song in order to perform it. The Copyright Office asked for comment on a number of issues including whether the proliferation of PROs has increased the financial and administrative costs of music users, and whether the increased number of PROs has affected the distribution of the royalties to songwriters and copyright holders. The results of the inquiry will be compiled into a report to Congress on whether any legislative action is necessary.
- The FCC released a draft of a Notice of Proposed Rulemaking proposing a review of the rules adopted to implement the Commercial Advertisement Loudness Mitigation Act of 2010 (CALM Act), which was intended to protect viewers from excessively loud TV commercials. This draft will be considered at the FCC’s next regular monthly open meeting on February 27. If the NPRM is adopted, based on thousands of viewer complaints received about the continuing loudness of TV commercials, the FCC will be seeking comment on whether the FCC should update or change its CALM Act regulations – including whether to extend the rules to cover commercials on streaming services and other online platforms.
- The FCC announced a public comment period on the reinstated Center for American Rights’ complaint against a CBS-owned TV station alleging news distortion in its broadcast of a “60 Minutes” interview with former Vice President Harris. Comments and reply comments on the complaint are due March 7 and March 24, respectively. CAR’s complaint was dismissed as one of the FCC’s last major actions under former FCC Chairwoman Rosenworcel, but was reinstated one week later under FCC Chairman Carr (see our notes of these action here and here). In response to the FCC’s request, this week CBS provided the FCC with an unedited transcript and video of the 60 Minutes interview, which both CBS and the FCC made public. The FCC also released additional video of the interview that was posted on YouTube. The FCC stated that it wanted to open the proceeding to public participation given the value of transparency and the degree of public interest in the matter. FCC Commissioner Gomez objected, stating that the FCC should end its investigation because interview’s transcript and video did not demonstrate any FCC rule violation, that further inquiry risked politicizing the FCC’s processes, and that the public statements about the process undermined trust in the Commission’s impartiality (see her statement here). President Trump, on the other hand, demanded that CBS be stripped of its broadcast licenses due to the 60 Minutes broadcast, suggesting that it was “the biggest Broadcasting SCANDAL in History” (caps in the original Truth Social post).
- Chairman Carr released a statement supporting the Senate Commerce, Science, and Transportation Committee’s passage of the AM for Every Vehicle Act. Carr stated that ensuring that AM radios remain in new vehicles, the bill will “help keep this linchpin of our emergency response system in place and also ensure that Americans can continue to access relevant news, information, and entertainment programming.” As we discussed this week on our Blog, the bill requires that automobile manufacturers keep AM radio on the car dashboard. This bill has much the same language as the version introduced in Congress last year – which was never passed despite broad bipartisan support. Following this week’s committee approval, the bill now proceeds to the full Senate for a vote. This week, Congressmen Bilirakis (R-FL) and Pallone (D-NJ) also reintroduced the bill in the House of Representatives.
- Congresswoman Majorie Taylor Greene (R-GA), Chairwoman of the House Subcommittee on Delivering on Government Efficiency (DOGE), sent letters to NPR and PBS requesting that their CEOs testify next month before the subcommittee regarding whether Congress should stop funding the networks due to alleged political bias in their programming. In scheduling the hearing, Greene pointed to investigatory topics including claims that NPR decided not to report on the Hunter Biden laptop story, allegations of systemic liberal bias at the network, and PBS’ reporting last month implying that Elon Musk gave a fascist salute at President Trump’s inaugural celebrations. Greene stated her view that NPR and PBS political bias undermines public trust, and the networks’ reporting should serve the entire public since they receive federal funding.
- The FCC’s Media Bureau entered into a Consent Decree with a San Francisco, California noncommercial TV station after finding that the station filed its license renewal application late, uploaded Quarterly/Issues Programs Lists to its Online Public Inspection File late, and incorrectly certified in its renewal application that it timely complied with its OPIF obligations. The Consent Decree requires that the station pay a $25,000 penalty and enter into a compliance plan to ensure that future FCC rule violations do not occur.
- The Media Bureau and Office of Managing Director issued an Order to Pay or to Show Cause against two FM stations located in Yoakum and Halletsville, Texas proposing to revoke the stations’ licenses unless, within 60 days, the stations pay their delinquent regulatory fees and interest, administrative costs, and penalties, or show that the debts are not owed or should be waived or deferred. The Yoakum station has an unpaid regulatory fee debt totaling $8,774.02 for fiscal years 2017, 2018, 2019, 2020, 2021, 2022, and 2024. The Hallettsville station has an unpaid regulatory fee debt totaling $7,912.83 for fiscal years 2017, 2018, 2019, 2021, 2022, and 2024.
- The Media Bureau released a Public Notice identifying two mutually exclusive applications (applications that cannot all be granted consistent with the FCC’s technical rules) filed in the December 2024 NCE TV filing window. Unopposed applications were filed for eight other channels available in that window. The two mutually exclusive applicants have until March 24, 2025 to settle their mutual exclusivity via a technical resolution or settlement agreement.
- The Media Bureau took three other actions on pending LPFM and NCE construction permit applications:
- The Bureau affirmed its grant of an Indiana NCE FM construction permit application over an objection filed by a mutually exclusive applicant alleging that, in the points system analysis used to decide among mutually exclusive applications for new NCE FM stations, the FCC incorrectly denied it diversity of ownership points (a credit awarded when an applicant has interests in no other stations in the proposed station’s service area). The Bureau found that the objector could not claim the diversity credit (and thus could not be the mutually exclusive application group’s tentative selectee) because it did not provide supporting documents required to support the claim for a preference, and because it had incorrectly certified that no party to its application had any attributable interests in any other broadcast station (when one did).
- The Bureau dismissed an Ohio LPFM construction permit application for applicant’s failure to obtain reasonable assurance of the availability of the site specified in the application, a defect not curable by amendment under the procedures governing the processing of applications in the LPFM window. Due to the application’s dismissal, the Bureau granted its mutually exclusive application.
- The Bureau also reversed its dismissal of a Texas LPFM construction permit application for failing to comply with the LPFM minimum distance separation requirements for protecting co-channel FM translators. The Bureau rejected the applicant’s argument that it should accept its alternative spacing methodology, but it gave the applicant 30 days to amend its application to use the methodology prescribed by staff informal guidance.
On our Broadcast Law Blog, we discussed the National Music Publishers Association’s announcement that it had sent Spotify a take-down notice asking Spotify to remove “thousands of unlicensed uses of NMPA members’ works” from Spotify-hosted podcasts, and how that action highlights the perils of music use in podcasts and reinforces the need for easy, reasonable music licensing. We also discussed last week’s reintroduction in Congress of the American Music Fairness Act, which proposes requiring broadcasters to pay performing artists and copyright holders (usually their record companies) royalties for over-the-air broadcasting of sound recordings (in addition to the royalties paid to the PROs for the performance of musical compositions).