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 American Music Fairness Act, proposing to enact a sound recording performance royalty for over-the-air broadcasters, was introduced in in both the House and Senate this past week.  Last year, a similar bill was approved by the House Judiciary Committee but did not advance further before the last Congress adjourned, requiring it to be reintroduced in the new Congress that began in January. SoundExchange issued a press release supporting the new bill, while the NAB issued a statement opposing it and urging the record labels to negotiate with the NAB to try to reach a compromise.  We wrote about last year’s version of the bill on our Broadcast Law Blog when it was being considered by the Judiciary Committee.
  • The NAB submitted a filing urging the FCC to complete its 2018 quadrennial review of the broadcast ownership rules by the end of the first quarter of 2023.  NAB also urged the FCC to toll the 2022 quadrennial review (including the upcoming March comment deadlines) until the 2018 review is completed.  The 2018 review, among other issues, proposed to revise the local radio ownership rules, to review the dual network rule, and to consider an objective formula for considering any proposal for the combination of two Top 4 television stations in any market. The Public Notice beginning the 2022 review essentially asks for an update of the 2018 record.  For more on the 2018 review and the 2022 notice, see our article here. It is unclear at this time when or how the FCC will handle the NAB’s request.
    • Related to the ownership review, the FCC released a Public Notice announcing the agenda for the Communications Equity and Diversity Council (CEDC)’s “Expanding Digital and Media Ownership opportunities for Women and Minorities,” symposium on February 7, 2023, from 9:30 am to 4:45 pm, ET. The CEDC is an advisory council of the FCC. The goal of the symposium is to explore the challenges as well as possible solutions for increasing ownership opportunities for women and people of color in all facets of media – TV, radio, cable, and streaming.
  • Notwithstanding “a long history of rule violations” and a third-party objection, the FCC’s Media Bureau renewed the license of a noncommercial educational (NCE) FM station, conditioned on the licensee’s continued compliance with a September 2020 consent decree with the Bureau.  After a probationary period under a new Board of Directors, and the licensee having taken steps to resolve complaints of “blanketing interference,” the Bureau renewed the license subject to future FCC oversight of the resolution of additional interference complaints and the licensee’s maintaining an accurate public file.  Blanketing interference, which led to the objection to the renewal, is interference to RF devices owned by consumers in the area within an FM station’s 115 dbu contour.  Within one year of starting operations with any new facility, broadcasters must resolve all complaints of blanketing interference (with certain limited exceptions).  This includes the broadcaster having to buy a consumer new equipment if the interference cannot otherwise be resolved.  After one year of operations, the station must still assist consumers in resolving such complaints, though the station no longer has financial responsibility.    
  • In another decision dealing with NCE stations and interference, the Bureau weighed the application of one NCE station to increase its facilities even though the proposal would increase existing areas where the station caused interference to another station, and increase the areas where the upgrading station would receive interference within its protected contour from the other station.  The FCC has a policy of granting a so-called “Raleigh waiver” to allow an NCE station to increase facilities and receive interference where the received interference is from second- or third- adjacent channel stations, is in a small area (an area less than 10% of the proposed service area), and where the benefit of increased NCE service heavily outweighs the predicted interferenceIn this case, as the received interference was proposed to occur in less than 5% of the applicant’s proposed new service area, the Bureau found that the Raleigh standard was met.The application would also cause increased interference to the other station, but the FCC found that the small area of possible new interference to the other station was insignificant, particularly as the other station had itself been allowed many years ago to increase facilities by accepting the interference that it receives from the station now proposing to upgrade, so a small increase in that area of interference should not be prohibited. 
  • The FCC’s Enforcement Bureau issued a Notice of Violation to an FM translator for purportedly violating the FCC’s rules that (1) prohibit FM boosters and translators from operating during extended periods when signals of the primary station are not being retransmitted, and (2) require that station employees maintain station logs.  The station’s licensee was given 20 days to respond to the Notice.
  • The Media Bureau issued a Declaratory Ruling permitting Spanish Broadcasting System, Inc. (SBS) to exceed the 25% benchmark for foreign equity investment set out in section 310(b)(4) of the Communications Act.  The FCC is permitted to allow foreign entities to own more than 25% of the equity of the parent company of an FCC licensee if that ownership would not harm the public interest.  That evaluation is made by looking at factors including whether there are any national security concerns about the proposed foreign ownership.  Here, proposed ownership by foreign investors of up to 49.99% of SBS’s equity was found not to harm the public interest, as the company would still be controlled by a US citizen and the investments by funds organized in foreign countries but controlled by US and Canadian entities were found by executive agencies to not pose any security risk. For more information on the FCC’s process of approving foreign investment in companies owning US broadcast stations, see our articles here and here.
  • The Media Bureau issued a Public Notice setting comment dates as to whether, in determining if specific closed captioning display settings are readily accessible, the FCC should consider the following factors: proximity, discoverability, previewability, and consistency and persistence.  Comments are due March 3, and reply comments are due March 20.  The request for comments is an offshoot of the FCC’s ongoing rulemaking on requiring manufacturers of video displays, including television sets, to make closed captioning display settings readily accessible to individuals who are deaf and hard of hearing. 

The Indiana Broadcasters Association recently asked me five questions to highlight the requirements of the FCC’s EEO rules.  As these questions are applicable to all broadcasters, we are posting my response here. My answers are below.

Beyond the general requirement that all broadcasters (and all other businesses) avoid discrimination in hiring, promotion, and all other employment practices, the FCC imposes additional obligations on radio and TV stations that are part of “employment units” with 5 or more full-time employees.  An employment unit is defined as a station or commonly controlled cluster of stations serving the same general geographic area that share at least one employee.  Full-time employees, for FCC purposes, are employees who work at least 30 hours per week. 

1.  Generally, what are the basics of the FCC’s Equal Employment Opportunity requirements?

For broadcasters, the FCC rules set out a three-prong EEO outreach program designed to facilitate the hiring of those not already in the broadcast industry.  The program encourages hiring outreach to alert all members of a community about job openings at a broadcast station, and to educate and inform the community about broadcast employment.

The first prong requires broadcasters to “widely disseminate” information about virtually all full-time job openings at a station. The wide dissemination requirement obligates the broadcaster to provide information about all openings for full-time jobs at its stations in such a way so as to reach members of all groups within its community. 

In the past, broadcasters were required to use more traditional recruitment sources for dissemination of information about job openings, sending notices of vacancies to local community groups, employment agencies, educational institutions, and newspapers to solicit candidates for virtually all open positions at any station. Under an FCC ruling about 5 years ago, while the FCC encourages the use of multiple recruitment sources, a broadcaster can use online recruitment sources as their sole means of meeting their obligation to widely disseminate information about job openings as long as the broadcaster reasonably believes that the online source or sources that it uses are sufficient to reach members of the diverse groups represented in its community.  The broadcaster must self-assess the success of its dissemination and, if they are not getting diverse candidates from the recruitment sources that they use for each job vacancy, they need to consider expanding the scope of their outreach efforts in order to reach diverse candidates.

The second prong of the FCC’s EEO rules requires that broadcasters notify any community group about job openings at the station if the community group specifically asks to be notified of such openings. Stations need to provide such notifications to community groups that ask, and to publicize through on-air announcements or through other means reasonably designed to reach the groups within the station’s community, the fact that community groups can request that they be included on the list of groups getting notifications.

The third prong of the EEO program for broadcasters is the obligation to do “non-vacancy specific outreach.”   The FCC has provided a menu of options for efforts that stations can undertake to educate their community about the jobs available at broadcast stations and the training necessary to fill those jobs, as well as the training of employees and others to assume new responsibilities at broadcast stations. These menu options include activities such as internship and mentorship programs, speaking before community groups about job openings, providing scholarships for those interested in broadcasting, working with educational institutions to educate their students about broadcast jobs, setting up training programs to prepare existing employees to assume new responsibilities, EEO training for management, and similar programs.  Depending on market size and the nature of the activity, stations need to have their employees meaningfully participate in numerous menu options in every two-year period, even if they have no job openings in these periods.

 2. Does the FCC require wide dissemination of information about openings for part-time employees?

While the FCC does not require wide dissemination of information about openings for part-time employees, there are advantages to broadcasters who do go through the outreach process for such openings.  If a broadcaster widely disseminates information about part-time job openings before filling such a position, if the person hired proves to be a capable employee that the broadcaster wants to hire on a permanent, full-time basis, they can do so without any further recruiting efforts.  If the broadcaster did not widely disseminate information about the job opening before hiring the part-timer, before promoting them to a full-time position, they must widely disseminate information about the full-time position to see if anyone with better qualifications applies. 

3.  Should a station participate in State Association-sponsored Career Fairs to bolster EEO outreach credit? 

Yes. As noted above, stations need to do non-vacancy specific outreach efforts to inform members of their communities about broadcast jobs, whether or not they have specific jobs to fill. One of the menu options available to meet that obligation is attendance at job fairs by management-level employees who are involved in the hiring process. If station employees attend 4 job fairs in a two-year period, they get one credit toward meeting their obligations (smaller stations need 2 credits in each two-year period measured from their license renewal filing date to meet their non-vacancy specific outreach requirements, larger stations in larger markets need 4 credits in a two-year period).

4.  When does the FCC review station EEO practices? 

The FCC reviews the EEO practices of broadcast stations on a regular basis.  Each year, employment units with 5 or more full-time employees must upload to the FCC-hosted online public file of each station within their unit an Annual EEO Public Inspection File Report.  This report details each full-time job opening filled in the prior year, with information about the recruitment sources used to fill the positions, and which sources resulted in candidates who were interviewed for the open positions, as well as the recruitment source of the person who was hired.  The annual report also must summarize the non-vacancy specific menu options in which employees of the station participated during the year. This report must be uploaded by the anniversary of the due date for a station’s license renewal application.

The FCC can ask for further information about employment practices at a station if they receive any complaints about the station’s EEO performance.  For television stations and larger radio groups, they routinely review the Annual Public File Reports of all stations in a state at the mid-point of the license renewal cycle (April 2024 for Indiana radio, and April 2025 for Indiana TV).  The FCC also conducts annual audits of 5% of all broadcast stations, reviewing not only the public file information, but also asking for documentation that supports the EEO efforts specified in the annual reports.  Finally, the FCC reviews EEO performance of stations when it reviews the station’s license renewal application.

5.  Do you see any additional EEO-related changes on the horizon?

The FCC began a proceeding about 5 years ago to review its EEO rules to determine if there should be changes to make them more effective.  The FCC did not propose any specific changes in its rules, instead asking for general comments on what could be done to make the rules more effective.  The comments ranged from those urging fewer specific obligations on broadcasters with more emphasis on those who violate general employment discrimination principles applicable to all businesses, to those seeking more specific goals for station recruiting efforts.  Likely, further public comments will be required before the FCC adopts any specific proposal advanced in that proceeding.

The FCC is also contemplating the return of the FCC Form 395-B, an annual employment report detailing the gender and the race or ethnicity of all station employees and classifying these employees by the job function that they fulfill at the station (e.g., management, on-air, sales, engineering, or clerical).  The filing of this report was suspended over 20 years ago when a court found its use was discriminatory, as the FCC was penalizing stations that did not meet specific racial or gender quotas in their workforce.  The FCC wants to bring back the form to track employment practices in the broadcast industry but is struggling with privacy concerns and with how to collect the employment data without violating the court’s mandate against using the information for enforcement purposes.

*         *         *

This is just an outline of the FCC’s EEO rules.  For each of the obligations described above, there are many details and nuances impossible to cover in this limited format. Interpretations of these rules also change over time.  More information is available in the slides of a presentation that I did recently for the Pennsylvania Association of Broadcasters, available here.  But even those slides are just a summary of the obligations.  Broadcasters should always consult with their own attorneys and advisors for the latest information on EEO rules from the FCC, and on the requirements that are applicable to all businesses through state and federal law.

There are normally a host of regulatory obligations at the beginning of February, but because of technical issues with the FCC’s online public file and LMS systems, many February 1 dates, as well as some January regulatory deadlines, have been extended to late February.

Due to technical problems that affected FCC filings throughout the month of January, the FCC last week issued a Public Notice extending the deadlines for all filings in the FCC’s LMS or online public file systems that were due in late January and early February.  The new deadline for these filings is February 28, 2023.  This new deadline applies to TV license renewal applications (including the associated Equal Employment Opportunity Report (Form 2100, Schedule 396)) for television stations, LPTV stations, TV translators and Class A stations in New York and New Jersey (which had been due February 1); Annual Children’s Programming Reports (which had been due on January 30); and EEO Public File Reports for broadcast employment units with 5 or more full-time employees in Arkansas, Kansas, Louisiana, Mississippi, Nebraska, New Jersey, New York, and Oklahoma (reports that normally would have had to have been uploaded to a station’s public file by February 1).  Quarterly Issues Programs lists for all broadcast stations had been due to be uploaded to the public file by January 10, but that date was initially extended until January 31, and the deadline has now been further extended to February 28 by last week’s Public Notice. Note that the Public Notice is broad, stating that any public file document due to be uploaded or any FCC application to be filed through LMS must be filed by February 28.  Notwithstanding the extension, licensees should not wait until the last minute to upload documents, as the intermittent problems that have plagued the systems could persist for some time and make meeting even the extended deadline problematic, especially if you wait for the last minute to try to file.  For more details about the extension and about other technical issues with the FCC’s filing systems, see the article we recently published on this subject. 

February 28 is the deadline by which EAS participants must file their EAS Test Reporting System (ETRS) Form One.  Filing instructions are provided in the Public Notice issued by the FCC earlier this month (see also our articles here and here).  All EAS Participants – including Low Power FM stations (LPFM), Class D non-commercial educational FM stations, and EAS Participants that are silent pursuant to a grant of Special Temporary Authority – are required to register and file in ETRS, with the following exceptions:  Analog and digital low power television (LPTV) stations that operate as television broadcast translator stations, FM broadcast booster stations and FM translator stations that entirely rebroadcast the programming of other local FM broadcast stations, and analog and digital broadcast stations that operate as satellites or repeaters of a hub station (or common studio or control point if there is no hub station) and rebroadcast 100 percent of the programming of the hub station (or common studio or control point) are not required to register and file in ETRS.  Carefully read the Public Notice and the form to make sure that all necessary information is properly uploaded.

Continue Reading February Regulatory Dates for Broadcasters – Renewal Applications, EEO Reports, Quarterly Issues Programs Lists, Children’s Programming Reports, Copyright Fees for Webcasters, ETRS Form One, and More

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 issued a Public Notice extending the deadlines for all filings in the FCC’s LMS or online public file systems.  The new deadline is February 28, 2023.  The extension was necessitated by widespread technical issues throughout the month of January with the FCC’s LMS and online public file systems.  The February 28 deadline applies to TV license renewal applications in New York and New Jersey, Annual Children’s Programming Reports, Quarterly Issues Programs lists for all broadcast stations (the deadline for which was already extended once before), and EEO Public File Reports for broadcast employment units with 5 or more full-time employees in Arkansas, Kansas, Louisiana, Mississippi, Nebraska, New Jersey, New York, and Oklahoma.  Notwithstanding the extension, licensees should not wait until the last minute to upload documents, as there may still be residual issues with the system for some time.  For more details about the extension and about other technical issues with the FCC’s filing systems, see the article we recently published on our Broadcast Law Blog.  
  • The FCC issued a Notice of Apparent Liability (NAL) proposing a penalty of $504,000 against Fox Corporation and related entities for apparently violating Section 11.45(a) of the FCC’s rules, which prohibits false or deceptive emergency alert system (EAS) codes or EAS Attention Signals.  According to the NAL, on November 28, 2021, Fox transmitted a three second excerpt of the EAS Tones during a Fox National Football League broadcast in a short comedic promotional segment for an upcoming game.  The segment was run on its 18 owned-and-operated stations, on 190 network affiliated stations, on Fox Sports Radio (reaching nearly 15 million listeners on iHeartRadio and FOXSportsRadio.com), and on the “Fox Sports on XM” channel carried nationwide on the Sirius XM satellite digital audio radio service.  The FCC applied an $8,000 base penalty multiplied by 18 (i.e., the number of Fox owned-and-operated stations involved) to arrive at a total base penalty of $144,000, with an upward adjustment to $504,000 due to the audience reach of the Fox stations, the fact that the creation and transmission of the segment involved self-promotion by Fox for the purposes of economic gain, and as Fox is an experienced broadcaster well aware of the FCC rules.  While the FCC also found Fox responsible for transmitting the segment to its affiliates nationwide in violation of the rule, the FCC did not fine Fox as a programming network because the one-year statute of limitations period applicable to non-broadcasters had expired.
  • The FCC’s Audio Division released a Public Notice informing broadcasters that 2020 census data is now available and should be used for all technical applications when computing areas and populations served by any proposal.  The Notice also describes the Census Bureau’s new list of Urbanized Areas, relevant to FCC applications including those that involve an analysis of the Commission’s Rural Radio policy
  • The Copyright Royalty Board published in the Federal Register the proposed rates for the public performance of musical compositions by noncommercial broadcasters for the period 2023 through 2027.  The rates reflect settlements between ASCAP, BMI, SESAC and GMR with various organizations representing noncommercial broadcasters, including the Corporation for Public Broadcasting and the NRB (the religious broadcasters’ organization which has a noncommercial licensing committee).  The decision also includes rates for noncommercial stations licensed to colleges, universities, and other schools.  Comments and objections, if any, to these proposed rates are due on or before February 27, 2023.  More information about the rates and the CRB proceeding is available in this article we published on our Blog.
  • In 2018, the FDA announced that it would be adopting rules for CBD health claims and the inclusion of CBD in ingestible products.  The FDA this week announced that it has been unable to reach a decision, as it was not in a position to approve CBD as a food additive or health supplement, suggesting that Congress should address these issues.  Broadcasters should consult with counsel before running CBD advertising that makes health-related claims, or ads for ingestible CBD products.
  • Several decisions were issued in connection with applications filed in the 2021 noncommercial FM window.
    • The Bureau rescinded its selection of the winning applicant for an NCE FM station at Dasher, Georgia, after considering a petition to deny that it did not review before the winning applicant was selected.  The Bureau had mistakenly relied on the applicant’s original population coverage analysis submitted in its application in finding the applicant to be preferred in a “fair distribution” analysis, overlooking an amended analysis submitted later.  After considering the amended analysis, the Bureau found that the winner’s coverage proposal exceeded that of the remaining competing applicant by less than the 5,000 people necessary for a decisive preference.  Accordingly, the Bureau referred the two applications to the full FCC for evaluation under its point system analysis.
    • The Bureau also rescinded the tentative selection of an applicant for a new NCE FM station at Shiner, Texas, finding that the applicant lacked reasonable assurance of the availability of its tower site when it filed its application. An NCE applicant is required to specify in its application the name of the person contacted about the site, the person’s telephone number, and the person’s authority to give permission (i.e., are they an owner, agent, or authorized representative).  The applicant instead submitted information regarding an individual employed by a tower company unrelated to the actual tower owner, and never amended its application to correct the error or to provide information that it had received permission from the tower owner.
    • The FCC issued a Memorandum Opinion and Order tentatively selecting winning applicants from 34 groups of mutually exclusive NCE FM applications using its points analysis.  The decision is a good primer on how the FCC’s point system works and what the FCC considers when performing the points analysis.
  • The Bureau entered into a consent decree with a student-run NCE FM station to resolve the station’s acknowledged violation of the FCC’s rules relating to timely filing of renewal applications and maintenance of an online public inspection file.  As this was a first-time paperwork violation by a student-run station, it fell within the policy treating such violations leniently, so the consent decree required a penalty payment to the United States Treasury in the amount of only $500 and implemented a comprehensive plan to ensure future compliance by the station with the FCC’s online public inspection file and application filing obligations.
  • The FCC’s Wireless Telecommunications Bureau issued updated instructions to the tower industry for considering as part of an applicant’s environmental review the potential effects that proposed facilities could have in the northern long-eared bat’s (Myotis septentrionalis) range.  The U.S. Fish and Wildlife Service’s new rule on the subject will go into effect on March 31, 2023.  The most recent Public Notice on these items is available here.
  • The FCC’s Media Bureau issued a Public Notice requesting comment on a proposal that would require the FCC to consider proximity, discoverability, previewability, consistency, and persistence when determining whether closed captioning display settings are readily accessible.  The Public Notice is an offshoot of the FCC’s ongoing rulemaking on requiring manufacturers of video displays, including television sets, to make closed captioning display settings readily accessible to individuals who are deaf and hard of hearing.  Comments and reply comments will be due 30 and 45 days, respectively, from the date on which the Public Notice is published in the Federal Register.

The FCC yesterday issued a Public Notice, extending the deadlines for all filings that were due to be made next week in the FCC’s LMS or online public file systems.  The new deadline is February 28, 2023.  While we don’t usually post articles on this blog on Saturday, given that there may be broadcasters around the country hunched over their computers trying to make FCC filings due next week, we thought that we would make an exception today and send this alert.

This extension gives more time to broadcasters to upload many applications and reports that are due to be filed next week.  This includes license renewals that were due to be filed by February 1 by television stations, LPTV stations, TV translators, and Class A stations in New York and New Jersey.  For all commercial TV stations in the country, the Annual Children’s Programming Reports which were due January 30 are now due by February 28.  Quarterly Issues Programs lists for all broadcast stations, which originally were due to be uploaded to station public files by January 10 and then by January 31 per a prior FCC extension, must now be uploaded by February 28.  EEO Public File Reports for broadcast employment units with 5 or more full-time employees in Arkansas, Kansas, Louisiana, Mississippi, Nebraska, New Jersey, New York, and Oklahoma were due to be uploaded to the online public file by February 1 – and that deadline too will be extended to February 28.  The Public Notice is broad, saying any public file document due to be upload or any FCC application to be filed through LMS are extended until February 28.  If you have any FCC deadline coming up, check with your attorney to see if it is covered by this extension.  Remember that this applies only to applications and reports to be filed through the FCC’s LMS and online public file systems. 

Continue Reading FCC Extends End of January Deadlines for LMS and Online Public File Documents Due to Filing System Technical Issues 

The Copyright Royalty Board yesterday published in the Federal Register the proposed rates for the public performance of musical compositions by noncommercial broadcasters for the period 2023 through 2027.  The rates reflect settlements between ASCAP, BMI, SESAC and GMR with various organizations representing noncommercial broadcasters. The Corporation for Public Broadcasting agreed to one set of rates paid to cover NPR and PBS affiliates. The NRB (the religious broadcasters’ organization) has a Noncommercial Music License Committee that agreed to another set of rates that apply to non-NPR radio stations not owned by colleges and universities, setting out rates that these noncommercial stations pay to each of these rights collection agencies. For these radio stations, the rates are based on the population served by each noncommercial station. College and university-owned stations can take advantage of a third set of rates, based primarily on the number of students in the school with which the station is affiliated.  Comments and objections, if any, to these proposed rates are due on or before February 27, 2023.

Commercial broadcasters have royalty rates that are to be paid to these performing rights organizations (or “PROs”) set not through the Copyright Royalty Board but instead through varying processes.  ASCAP and BMI are subject to antitrust consent decrees (see our articles here and here on arguments about those decrees).  The decrees provide that, if the PRO cannot reach an agreement with representatives of the commercial radio industry (usually the Radio Music License Committee – see our article on RMLC here – although commercial religious broadcasters also negotiate rates with these entities through the NRB), a US District Court judge in New York will hold a trial, acting as a “rate court” to determine the amount for reasonable rates.  ASCAP and BMI are currently negotiating with the RMLC on new rates for commercial broadcasters.  SESAC is also subject to antitrust settlements with both the RMLC and the TV Music License Committee.  If SESAC and the committees cannot reach agreements, an arbitration panel sets the rates (see our articles here and here on radio rates set as a result of this process).  After prolonged litigation with GMR to have their rates reviewed in some manner, the RMLC last year dropped its lawsuit seeking that relief and GMR now has no oversight as to the rates it charges (see our article on the GMR license that resulted).  Noncommercial broadcasting, however, under Section 118 of the Copyright Act, has its PRO obligations set by the Copyright Royalty Board and, like this year, the result is almost always a settlement between the parties (even though, theoretically, the Board could hold hearings to set the rates if the parties had not agreed to the rates). 

Continue Reading CRB Releases Proposed ASCAP, BMI, SESAC and GMR Rates for Noncommercial Broadcasters

Royalties paid for the use of music by broadcasters and digital media companies, and other issues about music rights, can be an incredibly dense subject, with nuances that can be overlooked.  I participated in a CLE webinar earlier this week, sponsored by the Federal Communications Bar Association, where we tried to demystify some of the issues in music licensing (see description here).  I moderated a panel on the Hot Topics in Music Licensing, talking about the broadcast performance royalty, the appeal of the webcasting royalty decision, issues about the proliferation of performing rights organizations seeking royalties for the public performance of musical compositions, and more theoretical issues about the entire process of clearing music for use by broadcasters and other businesses.  To highlight some of the issues, and some of the tensions in the world of music royalties, I put together the attached article.  Hopefully, it provides some context on the relationship between some of these hot topics, and gives some food for thought as to how these issues can be addressed. 

As 2023 begins, our “Hot Topics” panel will look at some of the current legal and policy issues in music licensing that may be relevant to the communications industry.  Most of the issues we will discuss are ones that have been debated, in one form or another, in copyright circles for decades.  But, as copyright can be so complicated with many stakeholders with differing interests, the chances of any final resolution to any of these issues may well be small.  This article is meant to put some of those debates in context, as many of the specific issues, in one way or another, are intertwined. 

The issue that likely will be the most contentious this year (and has been for decades) is the continuing effort of the recording industry to establish a public performance right in sound recordings that would apply to non-digital performances.  For over 25 years, recording artists and the record labels (which usually hold the copyrights to popular recordings) have had a right to a performance royalty for digital performances.  Broadcasters who stream an online simulcast of their programming, along with webcasters and others who make non-interactive digital transmissions, must pay a performance royalty, generally to SoundExchange.  The rates to be paid are set by the Copyright Royalty Board.  But in the US, over-the-air broadcasters, restaurants, bars, clubs, retail establishments, and others who publicly perform music pay only for the performance of the musical compositions (the “musical work”), not for the performance of the song as recorded by a particular artist (the “sound recording”).  That has been a point of contention for a century, almost from the moment when recorded music first appeared, but the issue has become particularly heated in the last two decades, once the sound recording public performance right was established after being mandated by copyright legislation in the late 1990s.

Continue Reading  An Overview of the Hot Policy Topics in Music Licensing

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 Federal Trade Commission’s proposal to ban noncompete clauses in employment agreements was published in the Federal Register, setting a comment deadline of March 20, 2023.  The proposal is a broad one, proposing to prohibit any agreement that has the same effect as a noncompete agreement, including broad nondisclosure agreements that would preclude a worker from working in their field at a new company, or contract clauses that require an employee to repay a company for training costs if the employee leaves the company.  The proposed rule would apply not just to employees of a company, but also to independent contractors, interns, and others performing work for a company. 
  • The FCC’s Media Bureau issued a Public Notice announcing that the comment dates for the FCC’s 2022 Quadrennial Review of the broadcast ownership rules were set by the publication of the announcement of the review in the Federal Register.  As we reported last week when the Federal Register publication occurred, comments are due March 3, 2023, with reply comments due by March 20, 2023.  For more about the issues in this proceeding, see our article here on our Broadcast Law Blog. 
  • The Media Bureau granted an application for a construction permit for a new noncommercial education (NCE) FM station at Spencer, Iowa, providing a new wrinkle in the policies for processing mutually exclusive applications in noncommercial FM filing windows.  The Bureau allowed the Spencer applicant to file a technical amendment to eliminate its application’s mutual exclusivity with all of the other mutually exclusive applications, rendering its application grantable.  The new wrinkle was that the amendment was filed after one of the other applicants in the group of mutually exclusive applications had already been tentatively selected by the Bureau for a grant following a comparative analysis.  The Bureau found that granting the amended Spencer application would not violate the FCC’s policy of granting only one application per mutually exclusive group as there was nothing in the FCC’s rules or its NCE FM processing procedures that prohibits an applicant from filing a technical amendment to eliminate its mutual exclusivities before, or after, the Bureau or the FCC conducts a comparative analysis. The Bureau did find that a second amendment to increase power to take advantage of the dismissal of another application that was not selected as the comparative winner was improper as, in prior cases, the FCC has not allowed applicants to take advantage of the involuntary dismissal of other conflicting applications in an MX group.
  • The Bureau also issued a Memorandum Opinion and Order and Notice of Apparent Liability for Forfeiture in which it proposes to fine a low power television (“LPTV”) station $6,500 and issue it a two-year license renewal for failing to timely file an application for a license to cover the construction of facilities authorized by its digital construction permit, and thereby engaging in unauthorized operation for over two years after its construction permit expired.  License applications certifying to the FCC that the new facilities were constructed according to the specifications in the construction permit must be filed when construction is complete.  As applicants before the FCC are responsible for ensuring that their actions are consistent with FCC rules, the Bureau did not excuse the violations even though the station claimed that its failure to timely file for a license to cover was inadvertent and its actions (or lack thereof) were taken at the advice of its engineering consultant.  Although the FCC’s policies establish a base fine amount of $3,000 for the failure to file a required form, and a base fine amount of $10,000 for construction and operation without a valid authorization, the Bureau reduced the proposed fine to $6,500 because the station was an LPTV station and thus providing a secondary service.  The short-term renewal was issued to give the FCC the opportunity to sooner review the licensee’s future performance not only because of the failure to timely file the license application, but also because the Bureau found the licensee was slow to respond to FCC requests for information and often inaccurate in its FCC filings.
  • The FCC issued its Sixth Report on Ownership of Broadcast Stations, based on FCC Form 323 and Form 323-E ownership data as of October 1, 2021.  This report provides a detailed review of the ownership interests in commercial and noncommercial broadcast stations (specifically full power television, Class A television, low power television, AM radio and FM radio) by gender, race, and ethnicity. 
  • The FCC released a Public Notice announcing that it will host a symposium on “Expanding Digital and Media Ownership Opportunities for Women and Minorities” on Tuesday, February 7.  The FCC states that the symposium will feature panels discussing the competitive challenges facing minorities in media and tech, best practices for cultivating the next generation of diverse media leaders, and tax and other incentives to support diverse owners.  Symposium participants will include media companies, entrepreneurs, research and thought leaders, advertising and marketing experts, and media/tech training program representatives. 

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 Tuesday, January 17, the Public Notice that initiates the 2022 quadrennial review of the FCC’s media ownership rules is to be published in the Federal Register.  As a reminder, the Public Notice seeks comment on (i) the Local Radio Ownership, Local Television Ownership, and Dual Network Rules; (ii) the public interest impact of the FCC’s media ownership rules, including changing market conditions; and (iii) the effects of the media ownership rules on the ownership of broadcast stations by minorities and women.  The Federal Register publication sets the comment dates for the proceeding.  Comments and reply comments will be due March 3 and March 20, respectively.   For more background on this proceeding, see our article here.
  • The Commission also released a study of Television Station Ownership Diversity conducted by an FCC staff economist.  The information provided in that study may be referenced by the FCC in its evaluation of the ownership rules.  The study found that, in the last ten years, there has been a decrease in the number of female-, Asian-, and American Indian/Alaska Native-owned stations and an increase in Black/African-American- and Hispanic/Latino-owned stations.  It found that most minority-owned station were in smaller markets, but that there was no disparity in their advertising sales compared to stations owned by white men in the same markets.  It also found, perhaps unsurprisingly, that most of the biggest billing, large market stations were held by public company with few attributable owners given the broad ownership of such companies. 
  • The FCC’s Media Bureau continues to make UHF-for-VHF channel substitutions to facilitate better technical service in local markets.  This past week the FCC substituted Channel 36 for Channel 10 at Norwell, Massachusetts, and Channel 30 for Channel 5 at Memphis, Tennessee.  In the Memphis case, the Commission found that, although there was some predicted loss of service by the channel change, the loss area was already well covered by other broadcast stations, and the licensee had also purchased LPTV stations to provide its programming to the vast majority of the loss area.  The FCC also proposed a noncommercial VHF-for-VHF substitution at Roanoke, Virginia, i.e. noncommercial Channel 13 for noncommercial Channel 3, on the theory that allowing the requesting station to move to a high-VHF channel would address viewer complaints about the quality of the station’s signal and thus improve the viewability of the station’s PBS programming.  While the Bureau noted that the proposal would cause over 64,000 persons to lose access to the station’s signal, it states that only 94 of those viewers would lose all access to all PBS programming as other PBS stations service most of the loss area. 
  • The FCC released a Public Notice providing the total number of broadcast stations licensed as of December 31, 2022. That notice continues to show a drop in the number of AM stations compared with the Public Notice released 6 months ago, with a smaller increase in the number of FM stations.  Compared to 6 months ago, there are slightly more commercial UHF stations, but slightly fewer commercial VHF stations. 
  • On our Broadcast Law Blog, we published an article linking to our Broadcasters’ Regulatory Calendar, setting out many of the routine regulatory dates that broadcasters should keep in mind in 2023. These include routine public file uploads of Quarterly Issues Programs Lists and EEO Public File Reports, as well as matters less routine, like the December 1 deadline for Biennial Ownership Reports and this year’s must-carry/retransmission consent elections.

2023 has begun – and everyone is speculating as to what the New Year will bring.  Last week, we published an article looking at some of the regulatory issues that the FCC will potentially deal with this year.  But some regulatory dates are already on the calendar, and broadcasters need to be aware of the obligations that they impose.  So, each year, at about this time, we put together a look at the regulatory dates ahead for broadcasters.  This year is no different – and we offer for your review our Broadcasters’ Regulatory Calendar for 2023.  While this calendar should not be viewed as an exhaustive list of every regulatory date that your station will face, it highlights many of the most important dates for broadcasters in the coming year – including dates for EEO Public Inspection File ReportsQuarterly Issues Programs listschildren’s television obligations, annual fee obligations, retransmission consent/must-carry elections, the Biennial Ownership Report due later this year, and much more.

There seem to be fewer dates highlighted than on last year’s calendar.  That’s because there are two sets of deadlines that are not as significant this year.  With the license renewal cycle almost at its end, the calendar just contains information about license renewals for the 4 states (New York, New Jersey, Pennsylvania, and Delaware) whose television stations have license renewal applications due in the last two renewal cycles (February 1 deadlines for New York and New Jersey TV stations, and April 1 for stations in the other two states). 

Continue Reading Broadcasters’ Calendar – A Look Ahead to the Regulatory Dates for 2023