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.
- FCC Chairwoman Rosenworcel announced a proposal which would require that all pay TV providers prominently display “all in” pricing on bills and in advertising so that consumers know what their monthly charges will be. The News Release about the proposal states that its aim is to eliminate “the misleading practice” of describing video programming costs, including retransmission consent fees paid to broadcast stations, as a tax, fee, or surcharge rather than as part of the price of the service. The News Release suggests that these practices make it difficult for a consumer to compare prices among competing video providers and can surprise consumers with unanticipated costs. The details of the proposal have not been made public but are circulating among the FCC Commissioners for their consideration.
- In a similar attempt to enforce billing transparency, the Federal Trade Commission (“FTC”) released a Notice of Proposed Rulemaking to amend the FTC’s existing “Negative Option Rule.” That rule addresses “negative options” used in marketing and sales that come in a variety of forms, which each contain a term or condition that allows a seller to interpret a customer’s silence, or failure to take an affirmative action, as acceptance of an offer to sell and charge for goods or services. Negative option marketing generally falls into four categories: (1) prenotification plans (the only ones currently covered by FTC rules – like “book of the month clubs,” where a product is regularly offered to a consumer and then shipped and charged unless the consumer affirmatively declines the offer), (2) continuity plans (where a product is routinely shipped and charged to a consumer until they say to stop – like bottled water delivery services), (3) automatic renewals (like magazine subscriptions or credit monitoring services where subscriptions automatically renew upon expiration), and (4) free trial marketing where a free or nominal price offer is made which automatically converts to a paid plan with recurring charges after a certain period if not cancelled. The proposal would amend the existing rule to: (i) expand its scope to cover all negative marketing practices and cover offers made in all media, including Internet, telephone, in-person, and printed material; (ii) require businesses to obtain consumers’ express informed consent before charging them for a good or service they subscribe to; (iii) require businesses to provide a simple cancellation mechanism to immediately halt any recurring charges; and (iv) require businesses to provide an annual reminder to consumers enrolled in negative option plans involving anything other than physical goods. Comments on the Proposed Rule will be due 60 days after it is published in the Federal Register.
- The FCC’s Media Bureau proposed to impose a $4,500 fine on the licensee of three Nevada television translator stations that without explanation filed its renewal applications nearly four months late. Ordinarily, the FCC’s rules require a fine of $3,000 per station for such a violation. The Bureau reduced the fine to $1,500 per station in recognition of the fact that translator stations only provide a secondary service, but also provide important “fill-in” service to areas that otherwise may be unable to receive over-the-air television signals. For similar reasons, the Bureau proposed to impose a $1,500 fine on a second Nevada television translator licensee (this time for only one station) and a $13,500 fine on a third Nevada television translator licensee (for nine stations) that each filed their renewal applications nearly four months late.
- The Media Bureau, jointly with the FCC’s Managing Director, issued an Order to Pay or to Show Cause to an FM station that had not fully paid its annual regulatory fees for 2010, 2012, 2013, 2014, 2015, 2016, 2018, 2020, 2021 and 2022. The Order directs the station to either provide the Bureau with evidence of full payment (or, alternatively, a showing as to why payment is inapplicable or should be waived or deferred) in 60 days or risk revocation of its license. While this is an extreme case, it is another reminder that the FCC takes unpaid regulatory fees seriously, and that licensees must ensure that such fees are paid in a timely manner.
- On our Broadcast Law Blog, we provided more information about the Request for Declaratory Ruling filed by the Florida Broadcasters Association, which we mentioned in last week’s summary of regulatory actions. This request asks the FCC to conclude that political advertising not sponsored by a candidate’s official campaign committee is not entitled to lowest unit rates during the 45 days before a primary and the 60 days before a general election, even if that advertising claims to be authorized or approved by the candidate.