In a Federal Register notice published today, the Copyright Royalty Board announced cost-of-living increases in the statutory royalties paid by webcasters for the public performance of sound recordings.  These are the royalties paid to SoundExchange by those making noninteractive digital transmissions of sound recordings.  This included broadcasters who simulcast their over-the-air programming on the internet or through mobile apps (or through other digital means including smart speakers like Alexa, see our article here).  The CRB notice sets out the computations that the Board used to determine the amount of the cost-of-living increase.  Those computations led to a royalty rate for 2023 of $.0024 per performance for services that do not charge a subscription fee.  For subscription services, the rate will be $.0030 per performance.  A performance is one song played to one listener – so for one song paid to four listeners one time each, a webcaster pays about a penny.

Given the rate of inflation in the general economy, it is perhaps no surprise that the rates for 2023 represent a substantial increase from the royalties paid last year, and from those that were in place in 2021, the first year of the current 5-year royalty period.  As we wrote here, when the CRB decided on the rates for 2021-2025, the nonsubscription rate was $.0021 per performance.  But the CRB provided for cost of living increases.  That led to rates in 2022 for commercial webcasters, including broadcasters streaming their programming on the internet, of $.0022 per performance for a nonsubscription transmission and $.0028 per performance for a subscription transmission (see our article here mentioning the 2022 increase). Continue Reading Copyright Royalty Board Announces Cost-of-Living Increase for 2023 Webcasting Royalties – Including Royalties for Broadcasters Who Simulcast Their Programming Online

Until recently, to many in the industry, HD radio seemed to be an afterthought – maybe useful in feeding analog translators, but otherwise not very accessible to the public.  But there is now more and more interest in HD radio given the increased inclusion of receivers for this digital service as standard equipment in a majority of new cars.  This means that consumers have ready access to programming on digital FM subchannels that the technology allows, plus the digital sound quality that HD radio provides and the auxiliary data services that can be conveyed along with the audio programming.  This week, the FCC’s Media Bureau issued a Public Notice asking for comments on two technical proposals to enhance service to the public while minimizing interference that the service might otherwise cause to nearby adjacent-channel stations.

Comments are sought on a proposal by the National Association of Broadcasters and Xperi, Inc. (which acquired iBiquity, the company that developed the HD Radio technology) seeking adoption of an updated formula for computing the power level of the “sidebands” on which the HD service resides. The request also asks that the proposal be combined with a 2019 request that FM stations be allowed to operate an HD service with “asymmetric sidebands” without having to seek experimental authority.  What do these requests mean and why might they be important? Continue Reading FCC Seeks Comments on HD Radio Technical Standards – Could a Power Increase for Digital FM Radio Be Coming?

Even with the holidays upon us, regulation never stops.  There are numerous regulatory dates in December to which broadcasters need to pay heed to avoid having the FCC play Grinch for missing some important deadline.

December 1 is the deadline for license renewal applications for television stations (full power, Class A, LPTV and TV translators) licensed to communities in Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont.  Renewal applications must be accompanied by FCC Form 2100, Schedule 396 Broadcast EEO Program Report (except for 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.

December 1 is also the deadline by which radio and television station employment units with five or more full-time employees licensed to communities in Alabama, Colorado, Connecticut, Georgia, Maine, Massachusetts, Minnesota, Montana, New Hampshire, North Dakota, Rhode Island, South Dakota, and Vermont must upload Annual EEO Public File Reports to station online public inspection files (also, the FCC has issued an extension that permits stations in Florida that suffered the effects of Hurricane Ian to upload their Annual EEO Public File Reports by December 12).  This annual EEO report covers hiring and employment outreach activities for the prior year.  A link to the uploaded report must also be included on the home page of a station’s website, if it has a website. Continue Reading December Regulatory Dates for Broadcasters – License Renewals, EEO Reports, Rulemaking Comments on Foreign Government Programming and EAS, and More

For the last few years at this time of the year, we’ve departed from our usual coverage of legal and policy issues to talk about something else – broadcasters giving back.  With Giving Tuesday upon us, we wanted to urge our readers to consider ways to give back to our industry.  I guess it is now a tradition, so we’ll do it again this year and suggest some of the many ways we can express our thanks to the industry in which we work.  Broadcasters have long been known for their service to their communities, service benefitting individuals and groups across the country.  While broadcasters are always giving back to their communities and should be celebrated for that, those of us who make our living in some aspect of the industry should recognize that there are plenty of ways for us to give back as well – both to those associated with the industry who have fallen on hard times, and to those who need assistance in obtaining education and training to enter the media industry we so appreciate.

During the last two years when normal routines have been upended, those of us who have remained healthy and employed are truly blessed. We should all be thankful for jobs, friends, and good fortune. But we should also ourselves give back where possible.  In the broadcast industry itself, there are many groups doing good work.

One that bears mention is the Broadcasters Foundation of America, which provides relief to broadcasters and former broadcasters who have, for one reason or another, fallen on hard times – whether that be for health reasons or because of some other disaster that has affected their lives. The Foundation deserves your consideration. More about the Foundation and its service, and ways to contribute, can be found at their website, here. Continue Reading Giving Tuesday – How We Can Give Back to the Broadcast Industry

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 Notice of Proposed Rulemaking (“NPRM”) looking to enhance the security of the Emergency Alert System (“EAS”) and Wireless Emergency Alerts (“WEA”) was published in the Federal Register this week.  That publication sets the deadlines for public comment as December 23, 2022, for comments and January 23, 2023, for replies.  The FCC seeks comment on, among other things, whether to require EAS Participants (including broadcasters) to report to the FCC incidents of unauthorized access to EAS equipment within 72 hours of when the participant knew or should have known that the incident occurred, and whether EAS Participants (including broadcasters) should be required to submit an annual cybersecurity certification that demonstrates how the participant identifies the cyber risks that it faces, the controls it uses to mitigate those risks, and how it ensures that these controls are applied effectively.  We wrote more extensively about this proceeding on our Broadcast Law Blog.
  • The FCC’s Wireless Telecommunications Bureau and Office of Engineering and Technology jointly issued an Order granting an extension of the comment and reply comment deadlines for the FCC’s Notice of Inquiry on how to encourage more efficient and intensive use of the 12.7-13.25 GHz band.  Licensed services in the 12.7 GHz band which might be affected by any changes in the use of this spectrum include satellite communications and mobile TV pickup operations. Comments are now due December 12, 2022, and reply comments are now due January 10, 2023.  For background on this proceeding, see our notes about previous steps in this proceeding in our articles here and here.
  • In a decision regarding the sale of radio stations by Univision Radio to Latino Media Network, the Audio Division of the FCC’s Media Bureau discussed the FCC’s longstanding prohibition on the seller of a broadcast station retaining a “reversionary interest” in the station it is selling.  In this case, FCC staff found that the intent of the buyer to enter into a Local Marketing Agreement by which the seller would program some of the stations after closing was not a reversionary interest, because the buyer was free to make post-closing programming decisions for the stations by retaining ultimate control over the programming and station operations, including whether or not to enter into the LMA.  Had the LMA been a condition of the sale required by the seller, or had it served as partial consideration to the seller for the sale, the FCC suggested that it would have violated the prohibition against revisionary interests.  For further information about this case and the FCC’s prohibition on reversionary interests, and the impact that this prohibition has on broadcast financing, see our article here.
  • A list of proposed changes in the city of license of a number of broadcast stations was published in the Federal Register, setting the date for the filing of any objections to these proposed changes.  The proposed changes listed in the publication are: KOLT(AM), from Terrytown, NE, to Lexington, NE; WWLX(AM), from Lawrenceburg, TN, to Loretto, TN; KRXR(AM), from Gooding, ID, to Filer, ID; KABV(FM), from Premont, TX, to Ben Bolt, TX; KAMZ(FM), from Tahoka, TX, to Ropesville, TX; KQXZ(FM), from Richland Springs, TX, to Adamsville, TX; WKIH(FM), from Vidalia, GA, to Twin City, GA; KSZX(FM), from Santa Anna, TX, to Menard, Tx; and KTCY(FM), from Menard, TX, to Wall, TX.  Comments on these proposals are due to be filed at the FCC by January 27, 2023.

 

In a decision this week on the sale of radio stations by Univision Radio to Latino Media Network, the Audio Division of the FCC’s Media Bureau discussed the FCC’s longstanding prohibition on the seller of a broadcast station retaining a “reversionary interest” in the station it is selling.  In this case, FCC staff found that the intent of the buyer to enter into a Local Marketing Agreement by which the seller would program some of the stations after closing was not a reversionary interest, because the buyer was free to make programming decision for the stations as long as it retained ultimate control over that programming and station operations.  Had the LMA been a condition of the sale, or had it served as partial consideration for the sale, the FCC suggested that it would have violated the prohibition against revisionary interests. But as the seller did not make the LMA a condition of the sale, the post-closing decision to enter into an LMA was a programming decision under the control of the buyer and thus was not deemed to be a prohibited reversionary interest.  No matter what the holding of this case, a more fundamental question arises – what is a reversionary interest and why is it prohibited?

In reviewing our blog when writing this article, we noted that in the almost 17 years we have been publishing, we don’t seem to have ever referred specifically to the question of reversionary or retained interests in a broadcast station.  It is an issue that does not come up often, but it is related to another issue that we have written about before – the prohibition on a lender taking a security interest in a broadcast license (see, for instance, our two part article on security interests in broadcast licenses, here and here).  The prohibition on the right of reversion or retained interest in a broadcast license is set out in Section 73.1150 of the FCC rules, which states:

(a) In transferring a broadcast station, the licensee may retain no right of reversion of the license, no right to reassignment of the license in the future, and may not reserve the right to use the facilities of the station for any period whatsoever.

(b) No license, renewal of license, assignment of license or transfer of control of a corporate licensee will be granted or authorized if there is a contract, arrangement or understanding, express or implied, pursuant to which, as consideration or partial consideration for the assignment or transfer, such rights, as stated in paragraph (a) of this section, are retained.

The prohibition against the right of reversion, and the prohibition against a lender taking a security interest directly in a license, were both adopted by the FCC to implement Communications Act requirements that state that a broadcast license does not convey an ownership interest in the spectrum being used, but instead only confers on the license holder a right to use the spectrum that does not extend “beyond the terms, conditions, and periods of the license.”  In adopting the prohibitions against a reversionary interest, and the prohibitions on taking a security interest in a license, the FCC believed that these interests would imply an ownership interest in the license akin to the ownership interest that one might hold in other forms of property that can be subject to leases, mortgages, and other security interests.  Thus, the restrictions were imposed over half a century ago.  But, since being implemented, the FCC has from time to time questioned whether these restrictions really were necessary. Continue Reading FCC Decision Discusses Prohibition on Retaining Reversionary Interests in Broadcast Licenses After Sale – What Is a Reversionary Interest and Why Is It Prohibited? 

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 November 17, the FCC’s Second Notice of Proposed Rulemaking (“Second NPRM”) on foreign government sponsored programming was published in the Federal Register.  The Second NPRM seeks comment on proposals to enhance the FCC’s requirements that each broadcaster verify whether any program time that it sells to third parties (or any pre-produced programming that it receives for free) does not come from a “foreign government entity,” i.e., a foreign government or one of its agents.  The Federal Register publication sets the comment dates for the Second NPRM – with initial comments due December 19, 2022, and reply comments due by January 3, 2023.  In the Second NPRM, the FCC proposes, among other things, that a licensee certify that it has informed any buyer of program time of the foreign sponsorship identification rules and obtained, or sought to obtain, a certification from the program buyer stating, with standardized language proposed by the FCC, whether the buyer is or is not a “foreign governmental entity.” The FCC also proposes to require that all of those certifications be included in a station’s online public inspection file.  For further background on this proceeding and its implications for broadcasters, see our articles here and here.
  • At the November 17 regular monthly open meeting of the FCC, the Commissioners unanimously adopted a Report and Order to update its rules to identify Nielsen’s monthly Local TV Station Information Report (“Local TV Report”) as the new publication for determining a television station’s designated market area (“DMA”) for satellite and cable carriage purposes, in place of the Nielsen Annual Station Index and Household Estimates currently referenced in the rules.  Also, in response to concerns raised by Commissioner Simington, the Commission committed to monitoring the broadcast audience measurement market.  It encouraged stakeholders to keep the FCC apprised of changes in that market.  For further background about this proceeding, see our article here.
  • The FCC’s Media Bureau announced that the FCC’s new FM broadcast directional antenna verification rules went into effect on November 10, 2022.  These new rules allow for FM and LPFM directional antenna pattern proofing by computer modeling performed by the directional antenna’s manufacturer.  Under the old rules, an FM or LPFM directional antenna’s performance measured relative field pattern had to be verified using either a full-scale mockup or a scale model on a test range or in an anechoic chamber.  The rule change brings the FM rules in line with those for AM and DTV directional antennas.
  • In a speech at the National Association of Farm Broadcasters, Commissioner Simington proposed that the FCC renew its efforts to help AM radio. Among his proposals were a revamping of FCC regulatory fees to ease the burden on broadcasters, encouragement of auto manufacturers to retain or include AM in new cars, and FCC study of AM receiver standards.  He also suggested that the FCC once again look at the potential for activating FM chips in mobile devices.  Watch to see if these ideas proceed at the FCC.
  •  In two recent speeches to Washington groups, including one delivered last week to the Media Institute, Commissioner Geoffrey Starks talked about the opportunities presented by ATSC 3.0, NextGen TV.  In both speeches he cautioned that, while the technology offers many benefits, there are concerns that its capabilities to interact with internet technologies could impinge on consumer privacy.  He suggested that the FCC should review whether privacy rules need to be adopted to govern the use of any consumer information gathered through this new technology.
  • Last week, Sen. Ed Markey (D-MA) and Rep. Anna Eshoo (D-CA) introduced the Communications, Video, and Technology Accessibility Act of 2022 (“CVTAA”)(a press release summarizes the goals).  Among the proposals in the legislation is the extension of closed captioning obligations and the requirement for audio description of video programming to online video providers.  The legislation would also require the FCC to review the rules it has on the quality of closed captioning. While it is late in the legislative session and this proposal is unlikely to advance before the end of this Congress, look for these concepts to reemerge in the new session of Congress that begins in January.

A recent FCC staff decision dismissing an application for a new noncommercial educational (NCE) FM station on technical grounds highlighted a rarely used section of the FCC rules, Section 73.561(b).  That section provides that, when an NCE FM station does not regularly operate for at least 12 hours per day, another noncommercial entity can file an application proposing to use the frequency during the hours that the station is not operating and, if the existing licensee and the new applicant cannot agree on a shared operating schedule, the new applicant can ask the FCC to force the shared-time operation (for more on the recent case, see our summary in our weekly update of broadcast regulatory actions for last week).

The rule states that the FCC will typically only force a time share operation when an application asking for share-time authority is on file during the pendency of the existing station’s license renewal application.  As most radio license renewals have already been granted during the recent three-year cycle for radio license renewals that ended earlier this year, most NCE stations do not face a real risk of a forced share-time operation until the next renewal cycle starts in 2027.  But an application seeking frequency sharing can be filed at any time in situations where an NCE FM station does not regularly operate for at least 12 hours per day, forcing negotiations about a shared time operation, and no doubt increasing scrutiny on the station during its next renewal.  Thus, such NCE stations should review their operating schedules now and think about ways to minimize the risk of a forced share-time operation. Continue Reading Reminder to Noncommercial FM Stations – Operating Less Than 12 Hours a Day Can Bring Forced Time-Share Requirement

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 effective date of a recently adopted FCC Report and Order aimed at making emergency alerts delivered over television and radio stations more informative and easier to understand by the public, particularly people with disabilities, was set when the order was published in the Federal Register. Among other changes, the updated rules require broadcasters, cable systems, and other Emergency Alert System participants to transmit the Internet-based version of emergency alerts (i.e., those transmitted through the internet based Integrated Public Alert and Warning System, “IPAWS,” using the Common Alerting Protocol or “CAP”) when the station receives alerts from both IPAWS and from the traditional over-the-air “daisy chain” system.  The Report and Order was published in the Federal Register on November 10, 2022, meaning that the rules are effective on December 12, 2022, and broadcasters are required to update their systems to comply with the requirements imposed in the new rules within one year, by December 12, 2023.  For more details on these new rules and on other proposed changes in EAS requirements for broadcasters, see the article on our Broadcast Law Blog, here.
  • The FCC’s Media Bureau dismissed an application for a new noncommercial educational FM station due to prohibited contour overlap with a second-adjacent channel NCE station.  The applicant had requested, and the Bureau denied, a “Raleigh waiver,” which allows an NCE station to receive – not cause – a small amount of interfering contour overlap from second- or third-adjacent stations, provided that the public interest benefit of increased NCE service heavily outweighs the potential for interference that may occur in the overlap area.  However, Raleigh waivers are not available to applicants for new NCE stations, being accepted only with applications seeking changes in an existing NCE station.  The Bureau therefore found that the applicant was ineligible for a Raleigh waiver and dismissed the application.
    • This case is also instructive in that the application was filed for a “share-time” facility. Under a rarely used section of the FCC rules, Section 73.561(b), when an NCE FM station does not regularly operate for at least 12 hours per day, another noncommercial licensee can file an application to use the frequency during the hours that the station is not operating and, if the existing licensee and the new applicant cannot agree on a shared operating schedule, the new applicant can ask the FCC to force the shared-time operation.  While, because of the technical defect, the applicant attempting to force the share-time operation was dismissed here, it should serve as a reminder to NCE stations everywhere that, if they do not operate for 12 hours every day, they stand a risk of having to share their frequency with another broadcaster.  However, the FCC will only force a share-time operation during the pendency of the existing station’s license renewal so this risk likely will not arise for the vast majority of stations until the next license renewal cycle which begins in 2027.
  • The FCC issued three notices proposing significant fines for pirate radio operations.  The FCC continues to aggressively police pirate radio stations, issuing notices warning the alleged violator that it could be subject to a fine of up to $2,149,551 if such illegal operations continued.  These notices were again directed at the owners of the properties from which the pirates were operating.  See the three notices here, here, and here.  For more information on the 2020 law that authorized large fines and actions against landowners, see our article here.
  • The FCC issued two notices to parties who had been the high bidders in auctions for new commercial FM stations but failed to pay the amounts that they bid.  Under the FCC rules for broadcast auctions, if a successful bidder fails to pay the amount that it bid, the bidder will be liable to the federal government for the difference between what it bid in the auction and any lesser amount paid by a winning bidder when the channel is reauctioned in a subsequent auction.  In the two cases released this week, here and here, the FCC seeks to collect several hundred thousand dollars from each of the defaulting bidders.

At each of the last two of the FCC’s recent regular monthly open meetings, the Commission addressed EAS issues that affect broadcasters. In one case, it adopted new rules that will, among other things, require that broadcasters use on-air the “IPAWS” internet-delivered emergency message in the CAP format, if the broadcaster receives the alert in both the CAP and traditional over-the-air formats.  The second action starts a rulemaking to look at imposing on broadcasters an obligation to secure their EAS systems from hacking and other electronic intrusions – and to regularly report to the FCC about what they are doing in connection with such security measures.  Let’s look in a little more depth at these actions (which we have previously briefly summarized in our weekly updates, here and here).

At its September 29 open meeting, the FCC adopted a Report and Order with the announced intention of making emergency alerts delivered over television and radio stations more informative and easier to understand by the public, particularly people with disabilities. The updated rules require broadcasters, cable systems, and other Emergency Alert System participants to transmit the Internet-based version of alerts when available (those transmitted through the internet based Integrated Public Alert and Warning System, “IPAWS,” using the Common Alerting Protocol or “CAP” protocol)  rather than transmitting the legacy over-the-air “daisy chain” version of alerts which often contain less information or have lower quality than that of CAP-delivered alerts.  As noted by the FCC, the CAP format allows for more information, including video clips (for TV), augmented warning information, and even foreign-language versions of alerts to be transmitted – information not available from alerts that are transmitted over-the-air. Continue Reading FCC Looks at EAS Rules – Requires That Broadcast Alerts Default to CAP, and Seeks Comments on Securing the System