April 2014

Last week, the Copyright Royalty Board published in the Federal Register its decision on Internet radio royalties for 2011-2015.  The question that I received many times since the publication last week is “huh, didn’t we already see that decision a long time ago?”  Indeed we did – the original decision setting the rates was reached in December 2010 (which we wrote about here and here).  But, as many will remember, there was also an intervening decision finding that the CRB had been unconstitutionally established.  The Court remedied the unconstitutionality by changing the law’s provisions dealing with the ability of the Librarian of Congress to remove the Judges, and sent the decision back to the CRB to redo the 2010 decision.  The redo is the result that was released last week.  While the new decision did not change the rates for webcasters, it did contain some new analysis that presents some interesting insights into the Judge’s thought processes that may be relevant to webcasters who will be affected by the recently started proceeding to determine rates for 2016-2020.  As the three Judges on the CRB have all arrived on the CRB since the 2010 decision, this rewritten decision provides some insight as to how they are approaching the new proceeding. 

By the time the decision declaring the unconstitutionality of the “old” CRB was reached, the only party left fighting the decision was Intercollegiate Broadcasting Systems, a group of college broadcasters.  All of the commercial broadcasters had either settled their royalty disputes, or dropped out of the proceeding (see our summary of the rates entered into by parties as part of the Webcasters Settlement Acts).  Thus, no commercial webcasters participated in the remanded proceeding before the CRB.  The CRB noted the lack of any challenge to the commercial rates, and given that they were not challenged, and that they fell in a zone of reasonableness, they were adopted.  But, in determining that the rates were in the zone of reasonableness, the CRB did not just pay lip service to reviewing the prior decision, but it instead did a full review of that decision.  And, some of the discussion that they offered may arise again in the new proceeding.…
Continue Reading Copyright Royalty Board Reissues Decision on Internet Radio Royalties for 2011-2015 – Same Rates But New Analysis

Some quick items to update some of our recent articles.  The FCC has granted extensions of time to comment in two rulemaking proceedings, and released its tentative agenda for its next open meeting where it will adopt an initial order in the incentive auction proceeding.  That’s the proceeding that we most recently wrote about…

It’s political season, and somewhere, some on-air broadcast air personality is making the decision that they really want to change careers – and run for political office.  We’ve written about what a broadcaster needs to do when that decision is made by one of their personalities, but I guess not every broadcaster reads this blog, as a story in the Salem (Oregon) Statesman Journal from last week shows that there is still some confusion about what the rule provides.  So it is time for a little refresher on the issues that arise when an on-air personality runs for political office. 

We wrote about the issue last year, when a Chicago-area on-air talk show host decided to run for local office.  Then, we noted that the requirement that a station provide equal opportunities to a candidate who is opposing the on-air personality kicks in as soon as you have a legally qualified candidate – one who has filed the necessary paperwork to run for an office. The application of the equal opportunities rule (or “equal time” as some refer to it) is not limited to the 45 days before a primary or the 60 days before a general election (those windows apply only to the application of the lowest unit charges that have to be made available to candidates), and equal opportunites applies to state and local as well as Federal candidates. Once a candidate is qualified, even outside of the “political window”, equal opportunities apply. …
Continue Reading Equal Opportunities Issues that Arise When a Broadcast On-Air Personality Runs for Political Office

The Supreme Court heard the oral arguments in the Aereo case yesterday, it has received all the briefs, and now we all just wait for a decision – to probably be released late in June before the Court’s summer recess.  The transcript of yesterday’s oral argument has been released and is available here.  It makes for interesting reading, as the questions from the Court seemed to be dubious of Aereo’s claims that it can retransmit the signal of a broadcast television station over the Internet, to the public for a fee, without the consent of or any payment to the stations.  While dubious about the Aereo service, the Court was also concerned about the potential impact of any decision against Aereo on cloud services and even on other distributors of media content.  Lots of issues came up during the course of the argument, and it will be very interesting to see how the Court resolves these in its final decision.  Keep reading, and I’ll make my prediction. 

While Court arguments can never be relied on to predict the decision, they can at least provide insight into the questions that the Justices are considering.  One question that recurred throughout the argument was raised by Justice Sotomayor in the first question that was asked – why wasn’t Aereo a cable system under Copyright law, as it retransmits television programming to consumers for a fee?  Counsel for both parties contended that it was not a cable system, though neither gave an entirely satisfactory reason for that position.  The definition of a cable system in Section 111 of the Copyright Act, which governs the compulsory license granted to cable systems to retransmit over-the-air TV stations and all of the content that they broadcast, defines a “cable system” as:

a facility…that in whole or in part receives signals transmitted or broadcast by one or more television stations licensed by the Federal Communications Commission, and makes secondary transmissions of such signals by wires, cables, microwave or other communications channels to subscribing members of the public who pay for such service.

As the Justices said, this sure looks like what Aereo is doing.  As we have written before, the FCC is looking at whether an IP based video-programming service should be classified as a cable system.  It might well have been easier for the attorney representing the broadcasters to concede that Aereo was very much like a cable system, as if it was so classified, it would have proved the argument that they broadcasters were trying to make – that its retransmission of television programming was a public performance that required the permission of the broadcaster.…
Continue Reading Supreme Court Hears Oral Argument in the Aereo Case – A Summary of the Issues and a Prediction

The incentive auction by which the FCC will try to get some television stations to surrender their spectrum so that it can be sold to wireless broadband users is moving forward.  A vote on the general rules to implement the auction and to repack the television band are expected to be held at the Commission’s May 15 meeting.  We are now beginning to get a look at what the FCC is thinking, based on a post on the FCC’s blog on Friday by Chairman Wheeler, and a fact sheet released later that day (which does not appear to be available on the FCC website).  While not terribly detailed, the documents at least show that the Commission is planning a quick transition – looking for the repacking to be complete within 39 months from the end of the incentive auction – and perhaps sooner for some stations.

The blog post again reiterates the Chairman’s belief that the Incentive Auction process poses:

a once-in-a-lifetime opportunity to expand the benefits of mobile wireless coverage and competition to consumers across the Nation – particularly consumers in rural areas – offering more choices of wireless providers, lower prices, and higher quality mobile services

The post also suggests that TV stations, by agreeing to share television spectrum with another station in their market so that they can give up a channel to the auction have another “once in a lifetime” opportunity to get money from the government to pursue new business opportunities in new technologies, while still providing some broadcast service.  This is much the same message that the Chairman conveyed at the NAB Convention in Las Vegas a few weeks ago.  But for stations that do not take him up on his invitation to sell their spectrum, what is likely to happen?…
Continue Reading FCC Gives a Peek at Some Details for the Incentive Auction – What’s Up for TV Stations?

This blog usually covers legal and policy issues, not product reviews.  And this article will at least try to relate policy decisions to a product review, but mostly it’s to share a cool new feature on my phone.  To explain, I am one of those holdouts still using a Blackberry.  In dealing with new media clients, I almost feel like I have to make excuses for still using a Blackberry, but as an attorney who travels frequently and writes many emails from the road, the physical keyboard really makes a difference – at least to me.  I can at least say that I did upgrade to the Q10 last year – the Blackberry that has the physical keyboard, but also has a new faster operating system that relies much more on touch commands for everything but the actual typing.  This week, I received what I consider a gift from Blackberry, as I’m also a big radio fan.  While I listen to Internet radio and use digital music services, I also still really enjoy listening to over-the-air radio.  This week, my Blackberry Q10 received an upgrade to its operating system and, with that upgrade, the phone’s FM chip was activated.  Now, my ATT phone gets over-the-air radio – becoming the modern equivalent to the transistor radio – a radio in my pocket at all times.  Of course, being a lawyer, the whole question of activating FM chips in mobile phones brings up policy issues, as it has been in and out of many policy arguments over the last few years.

First, a qualification must be made for international readers of this blog.  The question of an active FM chip in a mobile phone is an issue in the US, but not in many other countries of the world, where FM reception on mobile phones has been standard for many years.  In the US, that has not been the case.  While the chips are built into most phones, they are not activated.  Some suggest that the chips are not activated because the carriers want to encourage data usage through the use of online audio, but the carriers simply say that there is no consumer demand for the activation of the feature.  No matter what the reason, the chip has not been activated in most US phones, and thus policy issues from time to time arise as to whether it’s activation should be mandated or encouraged by government action.…
Continue Reading Activating the FM Chip in Mobile Phones – As Blackberry Steps Up, a Policy and Product Review

The text of the FCC’s decision on the attribution of Joint Sales Agreements for multiple ownership purposes, and the termination of the 2010 Quadrennial Review of the ownership rules and the start of the 2014 Quadrennial Review, has now been released by the FCC.  In a slim 211 pages of text, plus another 24 pages of concurring and dissenting opinions, there is more than enough for broadcasters, lawyers and regulators to digest for weeks.  The Order addresses in detail the matters that had already been made public – the attribution of TV JSAs, the further examination of TV shared Services Agreements, and tentative decisions to not fundamentally change any of the Commission’s other ownership rules (with the possible exception of a favorable inclination to look at elimination of the radio-newspaper cross-ownership)(see our summary here).  But there are many details to be examined as to how the Commission reached the decisions that it did and the nuances of the decisions that were made (e.g. the waiver policy that would allow some JSAs to remain in place – the Commission’s decision does not provide much detail – essentially saying that they will grant waivers to deserving JSAs that serve the public interest, but providing little detailed guidance as to what would make a good waiver case, except to say that temporary or short-term waivers were better than long-term ones, and that ones where there was little sharing of other services are better than ones where there is more sharing).  We will cover all of these areas in more detail over the next few days.

But there were some interesting and less expected nuggets that popped out in a first read of the Order, and have not been much covered elsewhere.  For TV, these include the tentative decision to replace the TV Grade B contour with the digital Noise Limited Service Contour for determining whether an individual or entity can own two TV stations in the same market.  Instead of allowing ownership where the Grade B contours do not overlap, the Commission proposes to allow that ownership where the NLSC do not overlap, and to grandfather any combinations that would be affected by this rule change.  Similar small but significant issues were also raised for radio.…
Continue Reading The Text of the FCC’s Order on JSAs and Other Broadcast Ownership Issues is Released – Part One, Hidden Nuggets on TV and Radio Market Definitions

With so much going on at the FCC and in connection with other topics that we consider, I’m sometimes late getting to all of the issues that arise, and sometimes never mention some of them.  But there is one interesting and important proceeding that the Commission has recently resuscitated and is worthy of mention – the proposal to mandate multilingual emergency alerts by broadcast stations – even when the station broadcasting in a language other than English is knocked off the air by some local emergency.  The proposal would require that all primary EAS stations broadcast national alerts in both English and Spanish, and that state EAS plans should designate stations to provide emergency information in other languages where there are significant populations that have a primary language other than English or Spanish.  Not only that, but English language stations in these areas are proposed to have to play a back-up role, ready to step in and provide emergency information in one of these languages should the primary station serving a particular non-English speaking population be forced off the air.  Comments on this proposal are due on April 28, and replies by May 12.

This is not a new proposal, having first been raised by MMTC (the Minority Media Telecommunications Council) in 2005 after there was a perceived failure to get information to minority populations in the area of Hurricane Katrina.  In recent filings, MMTC has suggested that broadcasters need to work together with local authorities to develop a plan that communicates each party’s responsibility based on likely contingencies. Specifically, MMTC stated, “Such a plan could be modeled after the current EAS structure that could include a ‘designated hitter’ approach to identify which stations would step in to broadcast multilingual information if the original non-English speaking station was knocked off air in the wake of a disaster.” What are the potential issues with such an approach? …
Continue Reading FCC Requests Comments on Proposal to Require Multilingual EAS Alerts – Comments Due April 28

In discussing music royalties, the controversy that usually makes the news is the dispute between music services and copyright holders – with services arguing that the royalties are too high and rightsholders contending that they are underpaid. The introduction of the Songwriters Equity Act in Congress earlier this year seems to point toward a new area of dispute – one between the various rightsholders themselves.  This issue was one that was much discussed on a panel that I moderated last week at the RAIN Summit West (audio of that panel is available here).  What is this conflict?

The Songwriters Equity Act, while not explicit in identifying the controversy, does point to the dispute. As we have written many times before, in any piece of recorded music, there are two copyrights – the sound recording copyright (also known as the “master recording,” the recording of a particular song by a particular artist, rights usually held by the record label), and the right to the musical work (or “musical composition,” the words and music to a song, usually held by a publishing company).  The proposed legislation suggests that the amount of the royalties for the public performance of sound recordings can be taken into account in setting the royalties that are payable to songwriters for the public performance of the songs that they have written.  This would amend Section 114(i) of the Copyright Act, which currently prohibits the consideration of the sound recording royalty in determining the rates to be paid for the public performance of musical works.  The proposed legislation would also substitute the “willing buyer, willing seller” standard for the 801(b) standard in setting rates under Section 115 of the Copyright Act, the mechanical royalty (see our discussion of the difference between these standards, here).  While this does not sound like a big deal, it may have a significant impact.…
Continue Reading Raising the Royalties for Musical Works? A Discussion of the Potential Dispute between Music Rights Holders over the Value of Their Rights

The FCC is now taking comments on the proposal to do away with the syndicated exclusivity and network nonduplication protection rules.  The Further Notice of Proposed Rulemaking, about which we wrote here, was published in the Federal Register today, giving interested parties until May 12 to file their initial comments, and…