October 2011

While the off-year elections of 2011 are not yet history, the Lowest Unit Rate period for the 2012 Presidential election will soon be upon many stations in the early primary and caucus states.  Last week, Bobby Baker, the head of the FCC’s Office of Political Programming, and I conducted a webinar for 13 state broadcast associations to provide a refresher on the political broadcasting obligations of broadcasters.  The webinar covered all the basics of the political broadcasting rules – including reasonable access, equal opportunities, lowest unit rates, the public file and sponsorship ID obligations, and the issues of potential liability of broadcasters for political advertising not bought by candidates but by PACs, unions and other interest groups. PowerPoint slides from the presentation are available here, and the video of the presentation can be accessed here by members of the state associations that were involved.  Additional information about the FCC’s political broadcasting rules can be found in our Davis Wright Tremaine Guide to Political Broadcasting.

One particular issue came up in the webinar that warrants additional discussion and clarification. Rate issues are always the most difficult to explain, and the questions concerning package rates are among the most confusing.  The FCC has said that stations cannot force a candidate to purchase a package of spots containing multiple ads of different classes.  Instead, stations must break up the price of packages into their constituent spots and, if the package spots are running during a Lowest Unit Charge period (45 days before a primary or Presidential caucus or 60 days before a general election), determine if the spots in that package affect the lowest unit rates of the classes of time represented by advertising spots contained in the package.  For instance, if you sell a package of 10 morning drive spots with a bonus of 2 overnight spots on your radio station for $100, you need to break up the package price and allocate it to the spots from the two classes of time in the package – the morning drive and the overnight spots. So some of that $100 package price gets applied to the 10 morning drive spots (say, for example, $96) and the rest (for example, $4) is assigned as the value of the 2 overnight spots.  Thus, in this package using this allocation, the unit rate for morning drive spots would be $9.60, and the unit rate for overnights would be $2.  You then take these rates, and see if you have sold spots for these classes of advertising time at lower rates.  If so, the package has no effect on your LUR.  If not, the spots in the package may reduce the LUR for one or both classes of time.  In such cases, the determination of which classes’ LUC will be lowered may be affected by the allocation of the package price that you make.Continue Reading A Webinar Refresher on the FCC’s Political Broadcasting Rules – Computing Lowest Unit Rates in Spots Sold as Part of Advertising Packages

The battle over the reclamation of television spectrum for wireless broadband rages on, and some in the television industry fear that the future of over-the-air television may be sacrificed to Congressional attempts to reduce the Federal deficit. The current Congressional “Super Committee” that is attempting to find billions of dollars in spending reductions to lower the Federal deficit is reportedly considering “finding” potentially 20 billion dollars or more from the proceeds of an auction of spectrum reclaimed from television broadcasters. Various Congressional proposals have been submitted for the committee’s consideration, essentially to authorize the FCC to conduct “incentive auctions” to reclaim some TV spectrum. But, the National Association of Broadcasters and others have claimed that broadcast television service to a number of markets, particularly those in areas near the Canadian border and in urban, densely populated northeast corridor between Boston and Washington, will be particularly hard hit – imperiling the continued existence of free over-the-air service to some markets, including Detroit. In other markets, broadcasters fear there will be a lessening of the protections from interference that stations currently enjoy, or a repacking of the spectrum that will put stations on new and potentially inferior channels, without reimbursement of the costs of relocation.

The proposal for the reclamation of television spectrum was first advanced in the Commission’s Broadband Report, where the FCC committee that drafted the report suggested that as much as 120 MHz of television spectrum  be reclaimed for use for wireless broadband – 20 television channels from 32 to 51 on the TV dial.  With tablets and smartphone usage growing quickly, and the ever-increasing demands for wireless spectrum to deliver video, audio and other rich internet content, the Commission fears a spectrum shortage – especially in certain urban markets. As over-the-air viewing rates have been falling over the last two decades as more people sign up with multichannel carriers, the Report suggested that the TV band could be shrunk, with some of the spectrum being redistributed to wireless. TV stations could be incentivized to surrender their spectrum for wireless use or to share channels, an option that the proponents of reclamation claim is very feasible, as digital technologies now allow one television channel to rebroadcast multiple streams of programming.

Television broadcasters have fought back, claiming that, while the digital transition does allow for more channels in the same spectrum, they are just now rolling out new uses of that spectrum – including new programming streams and, soon, mobile video targeted to smartphones and other digital devices. An article in one newspaper  last week reviews some of the new ways for over-the-air TV viewers to get access to additional video programming to augment over-the-air programs, allowing some consumers to “cut the cord” – eliminating their multichannel video subscriptions. Some studies have suggested that such cord-cutting opportunities, combined with the recent economic turmoil, has actually increased the amount of over-the-air television viewing in the last few years, reversing or slowing the trend of decreasing broadcast TV viewership.Continue Reading Reclaiming Over-the-Air TV Spectrum for Wireless Broadband Use – What Will the Budget Super Committee Decide?

The tenuous legal status of marijuana advertising on broadcast stations just got a little more tenuous as a Federal prosecutor in Southern California has reportedly indicated an intent to prosecute radio and TV stations, as well as newspapers and magazines, that advertise medical marijuana clinics.  As we have written before, advertising such clinics was…

Broadcast stations must charge political candidates the lowest unit rate that they charge any commercial advertiser for a comparable advertising spot during the 45 days before a primary and the 60 days before a general election.  Broadcasters need to remember that this applies to state and local races, as well as Federal campaigns, so those…

Online public files, detailed reports about virtually every program aired on a television station as to its source and whether it addressed various types of perceived community interests, and other paperwork requirements that would have required most television stations to hire a new employee just to deal with the burden, were all part of mandatory television public interest reporting requirements adopted by the FCC back in 2007 (see our articles here and here on these reports on FCC Form 355).  Similar obligations were also proposed for radio but never adopted.  The TV "enhanced disclosure" rules have never been implemented, however, and were apparently never even submitted to the Office of Management and Budget  for approval of their compliance with the Paperwork Reduction Act.  The numerous petitions for reconsideration filed against these rules are on the tentative agenda for the next FCC meeting, to be held on October 27.  Not only is the disposition of these petitions on the agenda, but a proposal for a further proceeding to look at new requirements for an online public file, to be hosted by the FCC, is to be considered at the same time.  What can broadcasters expect to happen?

In the Future of Media Report issued by the Commission earlier this year (actually renamed the Report on the Information Needs of Communities), the FCC study group recommended abolishing these 2007 rules, and terminating the proceeding looking at imposing them on radio (see our summary here).  The Report seemed to recognize that the reports were far too burdensome on licensees, and were not reasonably related to the current FCC rules on programming.  In essence, the reports required the collection of lots of information, without any regulatory purpose for the information collected.  In light of these findings, and the 4 year delay in implementing the rules already adopted, it seems safe to conclude that the 2007 rules are probably on their way out.  But the accompanying notice suggesting that the FCC will begin a new rulemaking to look at the online public inspection files, to be hosted by the FCC, raises questions about what will replace the 2007 rules.Continue Reading TV Public Interest Obligations and Online Public Inspection File on Agenda for Next FCC Meeting

The end of September marks the close of the Third Quarter of 2011, which brings two quarterly filing obligations for broadcast stations.  The first obligation is that by October 10 all radio and television stations, both commercial and noncommercial, must prepare and place in their public inspection file Quarterly Issues Programs Lists reporting on the important…

The FCC Form 323 is now available for filing by all commercial broadcasters.  The Form must be submitted by December 1 of this year.  In 2009, the FCC adopted the requirement for a biennial ownership report for all commercial stations, to be filed by November 1 every other year, with information accurate as of October 1.  In 2009…