Earlier this month, the FCC announced another of its regular EEO audits, though this time it’s just for cable systems and other MVPDs who, like broadcasters, have EEO obligations. The FCC will audit 5% of all broadcasters and cable companies each year to assess their EEO compliance, so be prepared in case you are

In December, we wrote about a proceeding initiated by the Copyright Office to review the reporting obligations of cable and satellite television systems related to the statutory license that permits those systems to carry the programming of local television stations.  Systems must report information including revenue and subscriber information that allow royalties to be computed. 

In looking at today’s deregulatory FCC, one might think that the Commission would look to the intent of a rule, rather than focusing on the details of the language implementing that rule. But in the case of a San Francisco TV station asking to be carried on DISH’s satellite television system pursuant to the rule

It’s a new year, and a good time to reflect on where all the Washington issues for TV broadcasters stand at the moment, especially given the rapid pace of change since the new administration took over just about a year ago. While we try on this Blog to write about many of the DC issues

Recently, we wrote about a proceeding initiated by the Copyright Office to review the reporting obligations of cable and satellite television systems related to the statutory license that permits those systems to carry the programming of local television stations.  Systems must report information including revenue and subscriber information that allow royalties to be computed.  This

The Copyright Royalty Board issued a notice yesterday, here, that summarized its decision on the sound recording performance royalties for 2018-2022 to be paid by Satellite Radio and “Pre-existing Subscription Services” (“PSS”), essentially Music Choice for its music service usually packaged with cable television subscriptions. The terms associated with the new rates, embodied in the new rules adopted by the CRB, are available here. The CRB announcement states that the Sirius XM rates will be 15.5% of revenue, which represents an increase from the 11% they are paying currently. The terms for these rates set out a means by which Sirius XM can reduce the revenue subject to the royalty by directly licensing music or using pre-1972 sound recordings, the percentage of such songs being determined by determining their percentage of play on Sirius XM Internet radio channels that correspond directly to their satellite service.

By contrast, the rates for Music Choice (and any other similar PSS having been established prior to 1998 when the Digital Millennium Copyright Act was adopted that may still be in existence) decreased from 8.5% of revenue to 7.5%, the rate that had been in effect in 2012. Our article here describes the decision in 2012 setting the current royalty, and the article here summarizes the Court of Appeals decision upholding the 2012 CRB determination.
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Early this month, the Copyright Office released a Notice of Proposed Rulemaking dealing with two separate but related issues. First, it asks for comments on certain changes in the reporting that cable systems and satellite TV operators provide to the Copyright Office on the programming that they carry – information that is used to provide baseline information for the Copyright Royalty Board to use in its determinations on how the royalties paid by cable systems for the carriage of television stations are distributed to the programmers and content owners that provide programming to the stations.   While certainly the reporting of information used to distribute the royalties paid by cable and satellite for their compulsory license to carry the programming broadcast by TV stations is important, perhaps the more interesting portion of the Notice was the questions that it asked about the definition of a cable system – proposing to adopt the definition of cable systems that exclude Internet-based systems that has been reflected in recent court cases.

We have written about the issue of whether online platforms qualify for the compulsory license to carry television stations many times (see for instance our article here when the issue was first raised by Aereo), when services such as Aereo and FilmOn argued that they could carry television stations on their online platforms without specific consent from the stations as they qualified as cable systems.  These arguments have been consistently rejected by the Courts (see, for instance, our articles here and here) , most recently in the Spring when the 9th Circuit Court of Appeals overturned the one District Court decision that had found that the argument advanced by FilmOn had merit (see our summary of the Ninth Circuit decision here).  The Copyright Office proposes to adopt that definition.
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Last week, just before Thanksgiving, the FCC released the tentative agenda for its December meeting. From that agenda, it appears that the meeting will be an important one for broadcasters and other media companies. Already, the press has spent incredible amounts of time focusing on one item, referred to as “Restoring Internet Freedom” by the FCC, and “net neutrality” by many other observers. The FCC’s draft of the Order that they will be considering at their December meeting is available here.

The one pure broadcast item on the agenda is the Notice of Proposed Rulemaking, looking to determine if the FCC should amend the cap limiting one TV station owner to stations reaching no more than 39% of the national audience. The FCC asks a series of questions in its draft notice of proposed rulemaking, available here, including whether it has the power to change the cap, or if the power is exclusively that of Congress. The FCC promised to initiate this proceeding when it reinstated the UHF discount (see our articles here and here). In that proceeding, the FCC determined that the UHF discount should not have been abolished without a thorough examination of the national ownership cap – an examination that will be undertaken in this new proceeding if the NPRM is adopted at the December meeting.
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Summer is coming to an end, but the legal obligations never take a vacation, and September brings another list of regulatory deadlines for broadcasters. While the month is one of those without the usual list of EEO Public File obligations or quarterly FCC filing obligations, there still are a number of other regulatory deadlines for which broadcasters need to be prepared.

For commercial broadcasters, the September date that should be on everyone’s mind is the deadline for the payment of annual regulatory fees. As we wrote here, there is an FCC order circulating among the Commissioners that should be released any day, setting the amounts of the regulatory fees and the deadline for their payment. These fees will almost certainly be due in September, prior to the start of the government’s fiscal year on October 1. So stay alert for the announcement of the window for paying these “reg fees.”
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In a decision released this week, the 9th Circuit Court of Appeals overturned a District Court decision (about which we wrote here) that had found that a video service provided by Aereokiller was a “cable system” as defined by Section 111 of the Copyright Act. That decision had held that, as a cable system, Aereokiller was entitled to retransmit the programming broadcast by a television station under a statutory license, without specific permission from the copyright holders in that programming. The Court of Appeals, while finding that the wording of Section 111 was ambiguous, determined that the consistent position taken by the Copyright Office, finding that cable systems as defined by Section 111 had to be local services retransmitting TV programming, with some fixed facilities to a defined set of communities was determinative of the issue. The Copyright Office’s interpretation was given particular deference as Congress had been well-aware of this interpretation of the statute in other contexts, had in the past amended the Copyright Act to accommodate other new technologies that the Copyright Office found to be outside its definition of a cable system, and had taken no action to amend the statute to include Internet-based video transmission services.

The issue in the case is whether the broad definition of a cable system included in Section 111 would include an over-the-top system such as that offered by Aereokiller. The definition contained in Section 111 is:

A “cable system” is a facility, located in any State, territory, trust territory, or possession of the United States, that in whole or in part receives signals transmitted or programs broadcast by one or more television broadcast stations licensed by the Federal Communications Commission, and makes secondary transmissions of such signals or programs by wires, cables, microwave, or other communications channels to subscribing members of the public who pay for such service. For purposes of determining the royalty fee under subsection (d)(1), two or more cable systems in contiguous communities under common ownership or control or operating from one headend shall be considered as one system.

The question of whether this definition includes Internet-based video systems has been raised many times since the Supreme Court’s Aereo decision (about which we wrote here), which found that the retransmission of television signals by such systems were “public performances” that needed a license. After the Supreme Court’s determination in Aereo, which had language comparing these over-the-top systems to cable systems that need a statutory license to cover their public performances, these services argued that they were in fact cable systems entitled to rely on the Section 111 statutory license to cover their public performances of the TV station’s programming. These systems argued that they made “secondary retransmissions” of television signals “by wire, cables, microwave or other communications channels” – the Internet argued to be one of those other communications channels. While most courts have rejected this argument (see our articles here and here), a District Court in California was an exception, finding that the statutory language was broad enough to cover these Internet-based systems.
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