FCC Denies LPFM Advocate’s Petition for Reconsideration of Changes in Rules for Location of FM Translators for AM Stations – Not a Resolution of Informal Objections Against Translator Applications

By David Oxenford on May 24, 2018 Posted in AM Radio, FM Translators and LPFM

Earlier this week, the full FCC issued a decision denying a Petition for Reconsideration of the FCC’s 2017 decision to relax the rules on the permissible locations of FM translators for AM stations, allowing them to locate anywhere within the greater of the AM station’s 2 mv/m contour or a circle with a 25 mile radius from the AM station’s transmitter site. The rule had previously required that translators be located within the lesser of those two limiting factors. See our summary of that decision here. As we wrote here and here, Prometheus Radio Project, an LPFM advocacy group, had petitioned for reconsideration of that rule change and asked for a stay of its effect, arguing that the change would impact the area in which LPFM stations could locate their stations if a need to change transmitter sites arose. Prometheus also raised procedural objections about the way in which the order was adopted. In this week’s decision, the FCC rejected the Petition for Reconsideration, finding that it was properly adopted, and that Prometheus had not demonstrated that the change in the area in which translators could be located would have a significant impact on LPFM site availability. The Commission came to the same conclusion that we did in our articles on the Prometheus petition, that the change in the area to locate did not necessarily have an impact on LPFM site availability – as translators could just as well move further from LPFM sites as they could move closer.

This decision was one that addressed pleadings filed back in 2017. Several broadcast trade press articles suggested that this decision was one resolving an Informal Objection filed last week by Prometheus and other LPFM advocacy groups against almost a thousand pending translator applications – both applications filed in the latest FM translator window for AM stations and other minor change applications filed by existing translator operators. While that Informal Objection raised many of the same arguments that had been raised in the 2017 Petition for Reconsideration (and in fact cited to the pendency of that Petition as one of the reasons to deny the pending translator applications), it is a different pleading that has not yet been resolved by the FCC. As the issues are similar, one would expect a similar result – but broadcasters who received the Informal Objection should not start celebrating yet. This week’s decision was certainly good news – but it has not resolved all the issues raised by the LPFM advocates.

Copyright Royalty Board Announces Proposed New SoundExchange Royalties for Business Establishment Services

By David Oxenford on May 22, 2018 Posted in Intellectual Property, Music Rights

While Copyright Royalty Board decisions on royalties for webcasters, Sirius XM and mechanical royalties get most of the attention, the CRB also sets rates paid by “business establishment services” for the “ephemeral copies” made in their music businesses. Business establishment services are the companies that provide music to businesses to play in retail stores, restaurants and other commercial establishments. These services have come a long way from the elevator music that once was so derided – and now set the mood in all sorts of businesses with formats as varied as the commercial businesses themselves. While the rates paid by these services pay for music rights is a little off-topic for this blog, these rates are a bit unusual, so they are worth mentioning. The Copyright Royalty Board just announced a proposed settlement between the services that were participating in the CRB case and SoundExchange which will raise the rates gradually from the current 12.5% of revenue to 13.5% over the next 5 years, with a minimum annual fee of $20,000, up from $10,000. These rates, which apply to any company that does not negotiate direct royalties with the sound recording copyright holders, go into effect in 2019 and will be in place through 2023. Comments on these proposed rates are due June 18, though CRB rules limit the consideration of comments from those who were not participants in the proceeding.

We have written about the rates paid by these services before (see for instance our articles here, here and here). What makes them unusual is that the royalties are not paid to SoundExchange for the public performance of sound recordings, as are the royalties paid by other digital music services including webcasters (here and here) or Sirius XM. That is because, in adopting Section 114 of the Copyright Act, Congress did not want to impose on businesses a new performance right, as there is no general public performance right in sound recordings in the United States. Businesses and other services that do not digitally transmit performances of audio recordings have no obligation to pay copyright holders in the sound recordings (usually the record companies) or artists for the public performance of music. Users do, however, pay fees for the public performance of the underlying composition through ASCAP, BMI and SESAC and GMR. As we wrote here, the Register of Copyrights has suggested that a general public performance right in sound recordings be paid in the United States. But that would impose new fees on all businesses that use recorded music in the US, from stadiums playing “We Will Rock You” at the appropriate point in a big game, to DJs spinning their discs in nightclubs, to the trendy tunes playing in the hip clothing retail stores, to over-the-air radio. This proposal is therefore very controversial. So, if they are not paying public performance fees, why do background music services have to pay SoundExchange? Continue Reading

Supreme Court Strikes Down Law against Sports Betting – But Broadcasters Need to Proceed with Caution

By David Oxenford on May 19, 2018 Posted in Advertising Issues, Uncategorized

On Monday, the US Supreme Court issued an opinion striking down a Federal law (the Professional and Amateur Sports Protection Act or “PASPA”) which prohibited state legislatures from taking any action to legalize betting on sports. PASPA also contained a restriction on advertising sports betting. The state of New Jersey challenged that law, arguing that it improperly limited the authority of state legislatures to act. The Supreme Court agreed, and invalidated the entire Act, including the restriction on advertising sports betting. Some trade press articles have suggested that this signals a boom for broadcasters and other ad-supported media companies as companies rush to start advertising legal sports betting now that the prohibition is gone. While in the long run that may be true, and there may be immediate benefits to stations in certain states, there are numerous caveats for broadcasters to consider before they recognize an advertising boom from sports betting companies.

The entire decision was not based on any analysis of whether or not betting on sports is a good thing, but instead it was a decision based exclusively on a question of state’s rights. The Supreme Court determined that Congress cannot tell state legislatures what they can and cannot do. While Congress may have the authority to ban or otherwise regulate sports betting, if they wanted to regulate it, they should have done so directly. Instead, as the law prohibited state legislatures from taking action to legalize sports betting and other actions predicated on that limitation on states rights, the Supreme Court determined that this was an exercise of authority that Congress does not have – Congress can’t tell state legislatures what to do. Based on the Court’s analysis that all parts of the act were premised on this ban on state legislative actions, the entire law was struck down. That means that there is no blanket federal ban on sports betting, and it leaves each state to regulate as it may wish. For companies ready to take bets on sporting events, and media companies who want to take advertising from sports betting companies, in most cases they need to wait for the states to make decisions on how to proceed. Continue Reading

Another Pirate Radio Equipment Seizure, as Bill to Increase Pirate Radio Penalties Introduced in Congress

By David Oxenford on May 16, 2018 Posted in FCC Fines, FM Radio, FM Translators and LPFM, General FCC

Yesterday, the FCC announced that it had seized the equipment of another pirate radio operator, this time one who was operating from a high-rise in Manhattan. The pirate was operating an unauthorized FM radio station from a New York apartment building. As we recently wrote in connection with another seizure of the equipment of a pirate operator in the Boston area, such seizures are not easy to accomplish – as it takes far more than an FCC inspector knocking on a door and walking out with the unauthorized equipment. Instead, the FCC needs to convince the local US attorney to get a warrant for the seizure, and the US Marshalls need to actually conduct the seizure. Much coordination is needed, so the FCC’s recent actions demonstrate the priority that the FCC is placing on stamping out these unauthorized operations.

What may also be of assistance to these efforts is legislative changes authorizing steeper fines for pirates and giving more direct authority to the FCC to take action against those who assist pirates in their operations. In our article about the Boston equipment seizure, we also summarized a draft PIRATE Act that has been circulating in Congress. That bill has now been officially introduced in Congress, and referred to the house Energy and Commerce Committee for consideration. FCC Commissioner O’Rielly issued a statement applauding the action. The text of the bill as introduced is not yet available (but should be available shortly here – a discussion draft is available here but may have changed since this draft was initially circulated). We will be watching to see if this bill proceeds in the current legislative session.

Moving Broadcast Political Advertising Rules to the Online World – NY State Adopts a New Law While Congress Considers Online Political Advertising Disclosures, and the FEC Considers Enhanced Online Sponsorship Identification

By David Oxenford on May 14, 2018 Posted in Internet Radio, Internet Video, On Line Media, Payola and Sponsorship Identification, Political Broadcasting, Website Issues

With high profile primaries in numerous states and similar elections last week, and more coming over the next few months in preparation for the November election, broadcasters are dealing with the legal issues that arise with on-air advertising that either promotes or attacks candidates and which addresses other important matters that will be decided in the election – including ballot issues in a number of states. While we have addressed many of the legal questions that arise with on-air political advertising in other posts on this blog and elsewhere (see, for instance, our Political Broadcasting Guide here and these slides from my recent presentation on the FCC political advertising rules for the Washington State Association of Broadcasters), we thought that it was worth discussing some of the efforts that are underway to bring FCC-like regulation to the world of online political advertising.

Thus far, the FCC has tended to stay out of the online political broadcasting world. As we wrote a decade ago, other than having to give some consideration to the value of online advertising thrown into a package with over-the-air ads, the FCC avoids regulation of ad sales on websites and advertising delivered solely through other digital media platforms. So a broadcaster who sells stand-alone online ads to political candidates or issue advertisers need not worry about questions of lowest unit rates, reasonable access, or the political file. Continue Reading

FCC Opens Rulemaking Proceedings on the Processing of Interference Complaints for FM Translators and Eliminating the Posting of Licenses at Broadcast Control Points

By David Oxenford on May 11, 2018 Posted in AM Radio, FM Radio, FM Translators and LPFM, General FCC, Television

At yesterday’s FCC open meeting, the Commission commenced two proceedings of interest to broadcasters. The first deals with the processing of complaints of interference caused by new FM translators. The second proposes to eliminate the need for the posting of station licenses and other FCC authorizations at the control points of broadcast stations. Comments dates in each proceeding will be computed from the publication of these orders in the Federal Register, which will occur at some point in the future.

In each case, the FCC essentially adopted without significant revision the draft notices that were released several weeks ago. The Notice of Proposed Rulemaking (available here) on translator interference standards sets out proposals for the minimum number of listeners who would have to complain before an interference complaint would be processed, and suggests limiting complaints of interference to those that arise within the 54 dbu contour of the primary station complaining about the interference. We wrote in more detail about the FCC’s proposals in our summary of the draft notice, here. Continue Reading

Senate to Hold Hearing on May 15 on Music Modernization Act

By David Oxenford on May 11, 2018 Posted in Intellectual Property, Internet Radio, Music Rights, On Line Media

The week before last, we summarized the provisions of the Music Modernization Act as passed by the House of Representatives. The Senate is now poised to take up this legislation in a hearing scheduled by the Senate Judiciary Committee for next Tuesday, May 15. The legislation proposes, among other things, to set up a SoundExchange-like collective for the collection and payment of mechanical royalties due under Section 115 of the Copyright Act and to create a digital public performance right in pre-1972 sound recordings (ending some of the litigation that has arisen in recent years on that issue). Our summary provides more details on these issues and highlights some of the other issues addressed by this bill.

The consideration of the bill by the Judiciary Committee is the next step to the bill becoming a law. The hearing will feature representatives of several groups directly affected by the legislation – including David Israelite, the CEO of the National Music Publishers Association (NMPA represents publishing companies that usually hold the copyrights to musical compositions); Chris Harrison, the CEO of the Digital Media Association (DiMA represents digital music services like Spotify, Pandora and Apple Music); and Mitch Glazier, the President of the Recording Industry Association of America (RIAA represents the major record labels who usually own the copyrights to the sound recordings – the compositions as recorded by particular performers). Members of DiMA and the RIAA pay mechanical royalties. Members of NMPA collect those royalties. Thus, these groups are directly affected by the Music Modernization Act. Songwriters and performers, including Motown legend Smokey Robinson, will also testify at the hearing. A full list of the participants can be found on the Judiciary Committee’s website, where video of the hearing will also be available next week. Continue Reading

License Renewal Cycle Starts in a Year – Crackdown on Silent Stations and Online Public File Signal Warnings to Broadcasters

By David Oxenford on May 8, 2018 Posted in AM Radio, FM Radio, License Renewal, Programming Regulations, Public Interest Obligations/Localism, Television

Starting June 1, 2019, just over a year from now, the next broadcast license renewal cycle will begin. By that date, radio stations in DC, Maryland, Virginia and West Virginia must file their renewal applications. Every other month for the next 3 years will bring the filing of radio license renewals in another set of states. And television stations will begin their renewal cycle a year later (June 1, 2020). The FCC’s schedule for radio license renewals can be found here and here. For TV stations, the schedule of renewal filings by state is in the same – just one year later than for radio. Every eight years, broadcast stations have to seek the renewal of their licenses by the FCC by demonstrating their continuing qualifications to be a licensee, including showing that they have not had a history of FCC violations and that they have otherwise served the public interest.

We have already written several times about how, with all broadcasters – both radio and TV – now required to have an online public file, it is important for stations to make sure that those files are complete and are kept up to date on a regular basis (see our articles here, here and here). Given that the contents of the online public file can be viewed by anyone, anywhere, just by launching an Internet browser, we would expect more complaints about incomplete files, and more scrutiny by the FCC of the contents of files that rarely were subject to FCC review in the past. FCC staffers can review public file compliance from their offices or homes, and do not have to rely on the rare field inspection to discover a violation. Thus, stations should be reviewing the contents of their files now to be sure that they are ready for the scrutiny that they will receive in the upcoming renewal cycle. But that is not the only issue about which stations need to be concerned, as illustrated by a decision released by the FCC yesterday, deciding to hold an evidentiary hearing as to whether the license renewal of a broadcast station that had been silent much of the last license renewal term should be granted. Continue Reading

Legal Issues for the Broadcaster in Digital and Social Media Advertising

By David Oxenford on May 3, 2018 Posted in Advertising Issues, Children's Programming and Advertising, Digital Radio, Internet Radio, Internet Video, On Line Media, Payola and Sponsorship Identification, Privacy, Website Issues

Last week, Aaron Burstein of our law firm and I conducted a webinar for several state broadcast associations on legal issues in digital and social media advertising. As broadcasters become more active in the digital world, whether it be through social media platforms like Facebook and Twitter, or by posting their content online through their own websites, through platforms like YouTube, or by streaming their content directly to the consumer, commercial broadcasters need a way to monetize their efforts. So advertising follows the broadcaster into these new platforms. In providing these advertising opportunities, broadcasters need to think of the ground rules that they may not have considered in depth before – including restrictions on certain types of advertising imposed by the terms of use of social media platforms like Facebook and YouTube; or oversight by government agencies like the FTC on issues including the disclosure of sponsors, the statements made by celebrity endorsers, privacy and security of data, or advertising directed to children. We covered these issues and many others in our presentation, the slides for which are available here.

This presentation forms a good companion to my broader presentation on digital and social media issues for broadcasters, a link to which can be found here. Today’s broadcaster is no longer subject to just the rules of the FCC, but must be aware of regulation from many other government agencies as the broadcaster’s content becomes available not just on the air, but on the many other platforms that virtually all broadcasters use today.