Here are some of the regulatory developments from the last week of significance to broadcasters, with links to where you can go to find more information as to how these actions may affect your operations.

  • The National Association of Broadcasters this week announced that its CEO, Gordon Smith, will be stepping down at the end of the year to be replaced by COO, and former head of Government Relations at the NAB, Curtis LeGeyt. We wrote here about some of the many legal and policy issues likely to be facing the NAB in the coming years.
  • The FCC continues to scrutinize public file compliance in connection with the filing of a license renewal application. After several noncommercial stations entered into consent decrees over non-compliance, commercial stations have started to receive consent decrees, as well.  In the latest example, a Tennessee station had not filed an ownership report since 2012 and had not uploaded any quarterly issues/programs lists to its public file.  The consent decree comes with the requirements to name a compliance officer, adopt a written plan that includes a compliance manual and mandatory training for employees, quickly report future public file violations to the FCC when they are discovered, and file periodic compliance reports with the Commission. (Consent Decree)  As all full-power stations, commercial and noncommercial, should have uploaded Quarterly Issues Programs Lists to their online public file by April 10, this reminder that the FCC is watching stations’ public files is very timely.
  • The FCC reminded full-power TV stations, Class A TV stations, LPTV and TV translator stations, FM radio stations, and multichannel video programming distributors (MVPDs) that filing deadlines begin in six months for the submission of all remaining invoices for reimbursement for the costs they incurred from the repacking of the TV band following the Incentive Auction. Full-power TV and Class A TV stations that were assigned to repack phases 1-5 have a final invoice submission deadline of October 8, 2021.  Full-power TV and Class A stations assigned to repack phases 6-10 have a deadline of March 22, 2022.  Low power TV stations, TV translators, FM radio stations, and MVPDs have a filing deadline of September 5, 2022.  See the Public Notice for more details on the close-out procedures.  We wrote more about this, here.
  • The FCC issued a Public Notice asking interested parties for comment on whether updates are necessary for the rules that are required to implement the Twenty-First Century Communications and Video Accessibility Act of 2010 (CVAA). The CVAA is responsible for such agency rules as audio description, accessible emergency information, and closed captioning of video delivered over Internet Protocol.  Comments are due by May 24 and reply comments are due by June 21.  (Public Notice)

Looking ahead to next week, the FCC by Wednesday, April 14 will post an online tutorial to help parties interested in participating in Auction 109, the upcoming auction of 136 FM construction permits and 4 AM construction permits that we wrote about here.  The tutorial will provide information about all aspects of the upcoming auction for the opportunity to construct new radio stations. There will also be a way to ask FCC staff questions about the auction.  Once posted, the tutorial will be accessible on the “Education” tab of the Auction 109 website at http://www.fcc.gov/auction/109 for on-demand viewing.

The Commission’s staff this week issued a Public Notice reminding broadcasters that  the reimbursement program for those broadcasters displaced by the repacking of the television band after the incentive auction is coming to an end.  The FCC reminded broadcasters eligible for reimbursement (including certain FM stations and LPTV licensees – see our article here ) that deadlines to submit invoices for reimbursement will start in six months.  By those deadlines, all remaining invoices for reimbursement from the TV Broadcaster Relocation Fund must be submitted to qualify for reimbursement.

While different deadlines apply to different categories of broadcasters eligible for reimbursement, the Commission “strongly encouraged” all broadcasters to submit all remaining invoices and initiate close-out procedures as early as possible.  The FCC notes in the Public Notice that payments up to the total amount of each entity’s allocation are available upon processing of documents reflecting reasonably incurred costs.  However, the FCC will not be able to make a final allocation up to the full amount of costs incurred until all or virtually all invoices for incurred costs are submitted, or at such time as the FCC can reasonably extrapolate that the total amounts available in the Relocation Fund will be sufficient to meet all of the costs that have to be covered under that program. Continue Reading Closing Out the Incentive Auction and TV Repack – FCC Reminds Broadcasters of End Dates for Submitting Invoices for Repacking Expenses

The broadcast trade press is full today with the news that NAB CEO Gordon Smith will be stepping back from that position at the end of the year, to be replaced by current COO (and former head of Government Relations) Curtis LeGeyt.  As many will remember, Smith took over the organization over a decade ago during a turbulent time for the industry.  At the time, TV stations faced increasing calls for other uses of the broadcast spectrum, and radio stations faced a possible performance royalty on their over-the-air broadcasts of sound recordings.  Since then, through all sorts of issues, there has been a general consensus in the industry that its leadership was in capable hands and meeting the issues as they arose.

But many issues remain for broadcasters – some of them ones that have never gone away completely.  The sound recording performance royalty for over-the-air broadcasting remains an issue, as do other music licensing issues calling for changes to the way that songwriters and composers are compensated, generally calling for higher payments or different compensation systems (see our articles here on the GMR controversy and here on the review of music industry antitrust consent decrees).  TV stations, while having gone through the incentive auction giving up significant parts of the TV broadcast spectrum, still face demands by wireless operators and others hungry for more spectrum to provide the many in-demand services necessary to meet the need for faster mobile services (see our articles here on C-Band redeployment and here on requests for a set aside of TV spectrum for unlicensed wireless users).  But competition from digital services may well be the biggest current issue facing broadcasters. Continue Reading With a Change at the Top at the NAB as CEO Gordon Smith Plans His Departure – What are the Regulatory Issues That are Facing Broadcasters?

At the end of last week, the FCC released several orders clarifying the rules for upcoming windows where construction permits for new FM channels will be made available to parties interested in starting new radio stations, and a few AM construction permits will also be auctioned off.  The Public Notice released on Thursday for commercial operators set the important filing dates and procedural rules for the July auction of 136 FM permits, as well as 4 AM permits in the St. Louis area that are available after an AM licensee whose license was challenged at renewal time surrendered the licenses for these AM stations (see the list of available channels here).  The FCC also issued a Public Notice setting a freeze on changes to other FM stations during the initial filing window, to stabilize the FCC’s database for parties interested in these new FM channels.  Also on Thursday, the FCC issued a draft order on the number of applications for which applicants will be able to apply in an upcoming reserved-band FM (channels below 92 on the FM band) filing window for noncommercial educational stations (NCE stations).

First, let’s look at the noncommercial draft order that is expected to be adopted at the FCC’s regular monthly Open Meeting on April 22 unless changes are made between now and then.  That order, about which we wrote here, asked whether the FCC should adopt a limit of 10 applications in the upcoming window for new noncommercial FMs or for major changes in existing stations.  While there were parties that requested that the limit be higher (particularly in rural areas where the likely demand will not be as great), and other parties expressed a belief that the limit should be lower (particularly as there will be few open channels in larger markets), the draft order suggests that the FCC will stick with the limit of 10 applications.  The FCC’s intent in adopting an application cap is to reduce processing backlogs and limit the number of situations where applicants will file applications that are mutually exclusive (i.e. where both cannot be granted without creating prohibited interference), while still allowing applicants to provide new noncommercial services throughout the country.  According to the draft order, the 10-application limit used in previous NCE windows still makes sense as a happy medium between the competing desires for expanded or narrower limits. Continue Reading FCC Clarifies Upcoming Windows for Construction Permits for New Commercial and Noncommercial FM Stations (and a Few AMs Too)

Here are some of the regulatory developments of significance to broadcasters from the last week, with links to where you can go to find more information as to how these actions may affect your operations.

  • The Supreme Court this week announced its decision in Federal Communications Commission v. Prometheus Radio Project, the broadcast ownership case that was argued before the Court in January. In a unanimous opinion, the Court sided with the FCC and with broadcasters and upheld the FCC’s 2017 ownership rule changes which eliminated the newspaper-broadcast cross ownership rule, the radio-television cross ownership rule, and the television “8-voices test” allowing combinations of two TV stations in any market where at least one of the stations is not one of the top-4 ranked stations.  Also gone is the blanket prohibition on combinations involving two top-4 TV stations in a market, which is replaced with a case-by-case analysis by the FCC.  Our discussion of the opinion is here and the full opinion is available here.
  • Comment and reply comment deadlines were set for the FCC’s proposal to update its Emergency Alert System (EAS) and Wireless Emergency Alerts system (WEA) rules, including enhancing the reporting requirements for false EAS alerts, and its inquiry into whether emergency alerts can be delivered through the internet, including through streaming services. Comments on the EAS/WEA proposal are due by April 20, 2021, and reply comments are due by May 4, 2021.  Comments on the delivery of alerts by internet are due by May 14, 2021, and reply comments are due by June 14, 2021.  We wrote about the proposal and inquiry, here.  (Federal Register)
  • The FCC released more details for its upcoming Auction 109, which will auction the rights to 136 FM construction permits and 4 AM construction permits, allowing winning bidders to start new radio stations in the listed communities. The auction itself is scheduled to begin on July 27, 2021 (a list of the permits to be auction is here, with opening bid amounts).  Interested applicants must submit “short-form” applications to participate in the auction during a window that runs between 12:00 p.m. Eastern on April 28 through 6:00 p.m. Eastern on May 11.  For more details, review the Public Notice and our article here.  A freeze on FM minor change applications will be in place during the filing window.
  • The Copyright Royalty Board was given another two months to complete its work setting the royalty rates to be paid in 2021-2025 to SoundExchangefor the public performance of sound recordings by webcasters, including broadcasters who simulcast their programming on the internet.  Instead of a decision in the next two weeks (which we anticipated in our summary of April regulatory dates for broadcasters), the CRB decision can now be expected by June 14.  We wrote about the extension and the ongoing proceeding, here.  (News Release)
  • There are two items of interest to broadcasters on the agenda announced this week for the FCC’s April 22 required monthly Open Meeting. Scheduled to be voted on are:
    • New rules for standardizing and formalizing sponsorship identification requirements for broadcast stations that accept foreign government-provided programming. (Draft Report and Order)
    • Adoption of a ten-application limit per applicant in the upcoming 2021 noncommercial educational radio filing window where nonprofit educational broadcasters will be able to file for construction permits to build new noncommercial stations in the reserved band (below 92 FM). (Public Notice)
  • Two items we covered on the blog this week are also worth noting, one of which is regulatory and one of which is legislative. We wrote about the recent spate of noncommercial educational stations entering into consent decrees with the FCC over public file noncompliance tied to their license renewal applications.  On the legislative side, we wrote about a congressional effort to provide an antitrust exemption for creators of news content to get together to negotiate collectively with tech companies for payments for the use of that content on social media and other digital platforms.

 

The United States Supreme Court yesterday released its decision upholding the FCC’s 2017 changes to its ownership rules in the FCC v Prometheus Radio Project case (see our summary here).  Those rules had been put on hold in 2019 by a decision by the Third Circuit Court of Appeals which held that the FCC had to develop a more detailed record on the impact of rule changes on minority ownership before making any such changes (see our summary of that decision here).  The Supreme Court did not issue a sweeping decision evaluating the competitive landscape for the broadcast industry, nor was it expected to.  Instead, the Court decision was a narrow legal one, looking at whether the decision of the FCC was entitled to traditional judicial deference to expert administrative agencies.

The Supreme Court was reviewing the legal question of whether the FCC’s 2017 review of diversity was adequately justified.  In 2017, the FCC determined that that no substantial impact on diversity was proven by any party who filed comments in the media ownership proceeding and, to the extent that there was an impact, the benefits of making broadcast companies stronger competitors in today’s media marketplace outweighed that impact.  The Third Circuit would have had the FCC conduct a sweeping historical analysis of the impact of past instances where the ownership rules were relaxed to see the impact on minority ownership so that the FCC could judge the likely impact of new changes to the rules.  The Supreme Court found that the FCC had no obligation to conduct its own studies into that issue and, based on the evidence before the FCC, its decision to relax the rules was not an arbitrary one.  Thus, it was entitled to the deference given to decisions of expert regulatory agencies (see our article here on the deference given to administrative agency decisions).  In essence, this was a narrow decision based on principles of administrative law to which all nine Justices, liberal and conservative, could agree. Continue Reading Supreme Court Reinstates 2017 FCC Changes to Broadcast Ownership Rules Including the End to Newspaper-Broadcast Cross-Ownership Ban – But Radio Changes Yet to Come

Noncommercial radio stations ignoring their FCC public file obligations should be expecting to enter into consent decrees at license renewal time obligating them to take formal steps to monitor compliance and submit information to the FCC on any issues that arise.  In the last few weeks, we have seen at least four such decrees announced by the FCC (e.g. here, here, and here) imposing such obligations in exchange for the grant of pending renewal applications.  In each consent decree, the FCC notes the hardships imposed by the pandemic, presumably suggesting that, had these been more ordinary times, the licensees would have faced steeper penalties.

The consent decrees themselves resemble the consent decrees entered into between the FCC and commercial broadcasters who have not adequately maintained the documents required to be in the political file that is part of each commercial station’s public inspection file (see our articles here and here).  The four recent consent decrees with the noncommercial broadcasters require that they take the following actions:

  • They must appoint a Compliance Officer – a senior manager who will report to the “Chief Executive Officer” or equivalent of the licensee. The Compliance Officer is responsible for making sure that the licensee observes all public file obligations and all terms of the consent decree.
  • Within 30 days, the licensee must adopt a Compliance Plan that includes:
    • A written Compliance Manual explaining all requirements of the public file rules and is distributed to all employees who deal with any aspect of the rules.
    • A training program must be conducted for all employees on their obligations under the public file rules.
  • A year after the effective date of the Consent Decree, the licensee must submit a Compliance Report to the FCC certifying its compliance with the rules and how it complied.
  • If in any instance, the licensee does not comply with the rules, it must report any instance of noncompliance to the FCC within 10 days of its discovery.

As we noted here in the case of a commercial broadcaster who did not comply with the terms of a consent decree, noncompliance can bring big penalties. Continue Reading Noncommercial Stations – Don’t Forget Your Public File Obligations – The FCC is Watching!

The Copyright Office this week granted a request from the Copyright Royalty Board for more time to decide on the royalties to be paid to SoundExchange for the public performance of sound recordings by webcasters, including broadcasters who simulcast their programming on the Internet.  As we wrote in July, the CRB decision on the webcasting royalties for 2021-2025 was initially to be rendered by the end of 2020 to be in place when the prior royalty term concluded at the end of 2020.  Because of COVID, the trial to determine the royalties was pushed from March back into August and September, with final arguments not being held until November.  Congress in its initial COVID relief bill authorized agencies to extend times to take certain actions – and the Copyright Office in July extended the time for the CRB webcasting decision to April 15.  Now, given the delays in the trial, the Copyright Royalty Judges asked for an additional two months – and were granted an extension until June 14.

Once decided, these royalties will be retroactive to January 1, 2021.  If the rates go up, as advocated by SoundExchange, webcasters will have to “true up” on their royalties and pay any increases back to the first of the year.  If broadcasters and other internet radio operators prevail in their arguments and the rates are lowered, then presumably these services would have credits toward future royalties based on any overpayment made at the old rates since January 1.  All companies providing a non-interactive internet music service should be watching for the CRB action to see what obligations they will have not only retroactive to the beginning of the year, but also going forward through the end of 2025, the end of the royalty period now being considered.

Earlier this month, the FCC proposed changes to its Emergency Alert System (EAS) rules and initiated an inquiry as to whether EAS should be expanded to require streaming services to carry local emergency alerts (see our article here on those proposals).  These proposals have now been published in the Federal Register, starting the public comment dates.  For broadcasters, the changes proposed in the FCC’s Notice of Proposed Rulemaking include mandatory yearly meetings of State Emergency Communications Committees with certifications to the FCC that these meetings occurred, and more robust reporting of false EAS alerts.  The Notice of Inquiry asked many questions about whether streaming services have the technical capability to provide EAS alerts and, if they do, which streaming services should be required to do so. The comments and reply comments on the Notice of Proposed Rulemaking will be due by April 20, 2021 and May 4, 2021, respectively and comments and reply comments on the Notice of Inquiry will be due by May 14, 2021 and June 14, 2021.

After so much turmoil in the last year, radio stations may be inclined to blow off some steam this year with some big April Fools” Day stunt.  But because of the continuing issues with the pandemic and social tensions throughout the country, a prank that may seem funny to some could trigger concerns with others.  As we do every year about this time, we need to play our role as attorneys and ruin any fun that you may be planning by repeating our reminder that broadcasters need to be careful with any on-air pranks, jokes or other on-air bits prepared especially for the day.  While a little fun is OK, remember that the FCC does have a rule against on-air hoaxes.  Issues under this rule can arise at any time, but a broadcaster’s temptation to go over the line is probably highest on April 1.

The FCC’s rule against broadcast hoaxes, Section 73.1217, prevents stations from running any information about a “crime or catastrophe” on the air, if the broadcaster (1) knows the information to be false, (2) it is reasonably foreseeable that the broadcast of the material will cause substantial public harm and (3) public harm is in fact caused.  Public harm is defined as “direct and actual damage to property or to the health or safety of the general public, or diversion of law enforcement or other public health and safety authorities from their duties.”  If you air a program that fits within this definition and causes a public harm, you should expect to be fined by the FCC. Continue Reading Plan April Fools’ Day On-Air Stunts With Care – Remember the FCC Hoax Rule