Broadcast Performance Royalty

While many of us were trying to enjoy the holidays, the world of regulation kept right on moving, seemingly never taking time off.  So we thought that we ought to highlight some of the actions taken by the FCC in the last couple weeks and to also remind you of some of the upcoming January regulatory deadlines.

Before Christmas, we highlighted some of the regulatory dates for January – including the Quarterly Issues Programs Lists due to be placed in the online public file of all full-power stations by January 10.  Also on the list of dates in our post on January deadlines are the minimum SoundExchange fees due in January for most radio stations and other webcasters streaming programming on the Internet.  January also brings the deadline for Biennial Ownership Reports (postponed from their normal November 1 filing deadline).

In that summary of January regulatory dates, we had mentioned that the initial filing of the new Annual Children’s Television Programming Report would be due this month.  But, over the holiday week, the FCC extended that filing deadline for that report until March 30 to give broadcasters time to familiarize themselves with the new forms.  The FCC will be doing a webinar on the new form on January 23.  In addition, the FCC announced that many of the other changes in the children’s television rules that were awaiting review under the Paperwork Reduction Act had been approved and are now effective.  See our article here for more details.
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With many Americans using the holiday season to rest and recharge, broadcasters should do the same but not forget that January is a busy month for complying with several important regulatory deadlines for broadcast stations.  These include dates that regularly occur for broadcasters, as well as some unique to this month.  In fact, with the start of the lowest unit rate windows for primaries and caucuses in many states, January is a very busy regulatory month.  So don’t head off to Grandma’s house without making sure that you have all of your regulatory obligations under control.

One date applicable to all full-power stations is the requirement that, by Friday, January 10, 2020, all commercial and noncommercial radio and television stations must upload to their online public file their quarterly issues/programs list for the period covering October 1 – December 31, 2019.  The issues/programs list demonstrates the station’s “most significant treatment of community issues” during the three-month period covered by each quarterly report.  We wrote about the importance of these reports many times (see, for instance, our posts here and here).  With all public files now online, FCC staff, viewers or listeners, or anyone with an internet connection can easily look at your public file, see when you uploaded your Quarterly Report, and review the contents of it.  In the current renewal cycle, the FCC has issued two fines of $15,000 each to stations that did not bother with the preparation of these lists (see our posts here and here on those fines).  In past years, the FCC has shown a willingness to fine stations or hold up their license renewals or both (see here and here) over public file issues where there was some but not complete compliance with the obligations to retain these issues/programs lists for the entire renewal term.  For a short video on the basics of the quarterly issues/programs list and the online public inspection file, see here.
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In the last week, we have received many inquiries from radio stations that received a notice from attorneys for Global Music Rights (GMR) about document production in GMR’s litigation with the Radio Music License Committee (RMLC).  As we have written before (see, for instance, our articles here, here and here), RMLC and GMR have for several years been engaged in antitrust litigation.  RMLC is seeking to impose outside review on the rates that GMR can charge broadcasters for the public performance of the music written by the songwriters that they represent, while GMR argues that RMLC itself violates the antitrust laws by unifying competing broadcasters and preventing them from doing business with GMR.

The recent communications from GMR concern GMR’s obligation to produce documents to the RMLC’s attorneys in discovery in this litigation.  Because RMLC has not been directly involved in GMR’s dealings with radio stations over the interim license agreements (and because RMLC itself does not have copies of the interim licenses that stations entered into with GMR), RMLC’s lawyers asked GMR for the production of these licenses as part of their discovery.  Because the interim licenses contain some confidentiality language, GMR’s recent communications was to let stations know that they are planning to produce those licenses to the RMLC’s attorneys, subject to the Protective Orders that GMR attached to their messages.  These Protective Orders are designed to keep the information in those licenses out of the public record, to be reviewed only by a limited group of people including RMLC’s attorneys and expert witnesses. The GMR communications are asking broadcasters if they have objections to the production of these licenses to RMLC’s lawyers.     
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Late last month, the Ask Musicians For Music Act (the “AMFM Act”) was introduced in both the House and Senate. If enacted, the AMFM Act would impose on over-the-air broadcast radio stations a performance royalty for the use of sound recordings in their programming. This is yet another bill proposing that the current royalty that requires that digital music services pay royalties both for the use of musical compositions (as already paid by broadcasters) and the sound recording (currently paid by broadcasters only for the Internet streams of their programming) be extended to cover all over-the-air broadcasts by radio stations. Extending the sound recording performance royalty to over-the-air radio has been proposed many times before (see, for instance, our articles hereherehere and here), but this is the first time that the proposal has been advanced in the current session of Congress. Similar bills were introduced last session before the 2018 elections but were never brought to a vote in either the House or the Senate – see our post here.

As we’ve written before, the royalties that broadcasters pay to ASCAP, BMI, SESAC and even GMR are paid to the composers of music (and the copyright holders in the musical compositions, usually a publishing company). Sound recording royalties are paid to the performers (and the copyright holders in the performances, usually the record labels). These are the royalties that broadcasters pay to SoundExchange when they stream their programming on the Internet. Historically, in the US, broadcasters and other businesses who play sound recordings are not subject to a performance royalty for the use of those sound recordings (except for digital audio music services who do pay sound recording performance royalties in the US), though such royalties are paid in many other countries in the world. This bill proposes to make broadcasters pay for their over-the-air performances. Under the provisions of the bill, the Copyright Royalty Board would set these royalties along with those paid by digital audio services, and the royalties would be paid to SoundExchange.
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Global Music Rights (most commonly known as GMR), the newest of the major performing rights organizations (PROs) licensing public performances of musical compositions, filed a lawsuit against radio operator Entravision Communications earlier this month. The suit alleges that Entravision failed to pay GMR royalties for the public performance of hundreds of compositions written by GMR songwriters. According to the complaint, GMR sent Entravision several letters over the last few years, notifying Entravision that it was playing GMR music and asking that it enter into a license to play that music. When no license was signed or even requested after these multiple requests, the lawsuit was filed.

The suit seeks $150,000 for each copyrighted work that was allegedly infringed – the maximum set out by the Copyright Act for “statutory damages,” i.e. damages that can be collected even without providing evidence of actual harm caused by the alleged copyright infringement. While Courts have discretion to order far lower statutory damages than those being sought here, even the threat of such damages have been enough to put many of the original file-sharing music sites out of business. Of course, in this case, these damages are being sought not from some company that provides unlimited downloads of unlicensed music, but from a publicly traded radio company presumably already paying other performing rights organizations for the use of music.
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The Department of Justice’s Antitrust Division is, as we reported here and here, conducting a review of the consent decrees which govern ASCAP and BMI. Comments were filed in August, and those comments have now been posted to the Division’s website and are available for review here (they are organized alphabetically in groups

This week, the Radio Music License Committee issued a press release that states that Global Music Rights (“GMR”), the new performing rights organization that collects royalties for the public performance of songs written by a number of popular songwriters (including Bruce Springsteen, members of the Eagles, Pharrell Williams and others) has agreed to extend their

Once upon a time, August was a quiet month in Washington, when everyone went on vacation. Sure, there are plenty of vacations that will happen this coming month, but it seems that regulatory activity no longer takes a break. For example, August 1 is the due date for the filing with the FCC of license renewals for all radio stations (including translators and LPFM stations) in North and South Carolina, and the filing of associated EEO forms for all full power radio stations in those states. With the renewal filing comes the obligation that these stations start airing, on August 1 and August 16, their post-filing announcements informing the public about the submission of the license renewal applications. Radio stations in Maryland, Virginia, West Virginia and the District of Columbia, who filed their renewals on or before June 2, also need to keep running their post-filing announcements on these same dates. Radio stations in Florida, Puerto Rico and the Virgin Islands, who are in the next license renewal group with their renewal applications to be filed by October 1, need to start broadcasting their pre-filing announcements this month, also to run on the 1st and 16th of the month. See our post here on pre-filing announcements.

Commercial and noncommercial full power and Class A Television Stations and AM and FM radio stations in California, Illinois, North Carolina, South Carolina, and Wisconsin that are part of an employment unit with five or more full-time employees must place their annual EEO public inspection file reports in their online public file. Links to those reports should also be placed on the home pages of these station’s websites, if they have a website. The effectiveness of these EEO public file reports, and the EEO programs of which they are a part, are being reviewed by the FCC in a proceeding started by a Notice of Proposed Rulemaking about which we wrote here. Comments on this notice asking for suggestions about how to make the EEO rules more effective are due August 21, with reply comments due by September 5.
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In a very important proceeding we summarized here, the Department of Justice’s Antitrust Division is reviewing the antitrust consent decrees that govern ASCAP and BMI – the decrees that require that these performing rights organizations treat similarly situated licensees (and artists) in the same way and which allow a Court to review the reasonableness

The Department of Justice’s Antitrust Division yesterday announced that it was starting a review of the ASCAP and BMI antitrust consent decrees that govern the United States’ two largest performing rights organizations for musical compositions (referred to as the “musical work”). The DOJ’s announcement of the initiation of the examination of the consent decrees poses a series of questions to which it invites interested parties – including users, songwriters, publishers and other interested parties – to file comments on the decrees, detailing which provisions are good and bad and, more broadly, whether there is a continuing need for the decrees at all. Comments are due on July 10.

This re-examination of the decrees has been rumored for many months. Back in March, we wrote about those rumors and the role that Congress may play in adopting replacement rules should the DOJ decide to fundamentally change the current provisions of the consent decrees. The DOJ itself just recently looked at the consent decrees, starting a review only 5 years ago with questions very similar to those it posed yesterday (see our post here on the initiation of the last review 5 years ago). That review ended with the DOJ deciding that only one issue needed attention, whether the decrees permitted “fractional licensing” of a song. We wrote about that complex issue here. That issue deals with whether, when a PRO gives a user a license to play a song, that user can perform the song without permission from other PROs when the song was co-written by songwriters who are members of different PROs. The DOJ suggested that permission from one PRO gave the user rights to the entire song, an interpretation of the decrees that was ultimately rejected by the rate courts reviewing the decrees (see our article here).   So, effectively, the multi-year review of the consent decrees that was just concluded led nowhere. But apparently the DOJ feels that it is time to do it all again. To fully understand the questions being asked, let’s look at what the consent decrees are, and why they are in place.
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