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It is the beginning of another year – and a time to look ahead to look ahead at what broadcasters should expect from Washington in the coming year.  With so many issues on the table, we’ll divide the issues into two parts – talking about FCC issues today, and issues from Capitol Hill and elsewhere in Washington’s alphabet soup of regulatory agencies in the near future.  In addition, watch these pages for our calendar of regulatory deadlines for broadcasters in the next few days.

Each January, we publish a list of issues for the coming year, and it is not always the case that these issues make it to the top of various piles (literal or figurative) that sit in various offices at the FCC.  As set forth below, there are a number of FCC proceedings that remain open, and could be resolved this year.  But just as often, a good number of these issues sit unresolved to be included, once again, on our list of issues for next year.  While some issues are almost guaranteed to be considered, others are a crap shoot as to whether they will in fact bubble up to the top of the FCC’s long list of pending items. So this list should not be seen as a definitive list of what will be considered by the FCC this year, but instead as an alert as to what might be coming your way this year. Issues unique to radio and TV, and those that could affect the broadcast industry generally, are addressed below.
Continue Reading What’s Up in Washington For Broadcasters in 2014? — Part 1, FCC Issues

Sometimes the FCC decisions come out in a flurry, often with little nuggets of importance in each one.  Rather than trying to write about each one, we’ll from time to time, just try to highlight those nuggets for your consideration.  At the end of last week, three decisions came out with just such nuggets – all dealing with different issues.  The first case involved the issue of divestiture trusts – trusts set up to hold broadcast assets when a buyer of broadcast properties, usually in connection with the acquisition of a broadcast group, needs to divest some stations so that the buyer remains in compliance with the multiple ownership rules (usually in radio where the attribution of LMAs and JSAs make impossible divestitures like those used in television, to parties with no connection to the buyer but operating with a Shared Services or Joint Sales agreement).  In the past, the FCC has not put any limit on how long the stations could remain in a divestiture trust, with some stations spending 5 or 6 years (or longer) in such trusts before they are finally sold.  This case involved an acquisition of a large number of radio stations by Townsquare Media from Cumulus.  Here, the Commission established a two year limit on period of time that the trust could hold the stations placed in its care.  Thus, the trustee needs to divest of those stations within that period.  We would not be surprised to see that limit imposed on any trusts created in the future – perhaps even on some longstanding trusts still in place when they are subject to renewal applications, where such trusts have been challenged from time to time.

In TV, often stations that cannot be owned by a broadcaster who is buying another station in the same market consistent with the multiple ownership rules are not sold through a trust, but instead they are sometime bought by an independent party who can support the station through some sort of Joint Sales or Shared Services Agreements with the buyer.  In one of those cases, the continuation of an existing Shared Services Agreement was challenged in connection with the sale of the brokering station held by Young Broadcasting to Media General.  The FCC again (as they have in many cases before, see for instance our article here), held that the sale was permissible and that the SSA could continue after the sale.  The brokering station did supply news to the brokered station, but it was under 15% of the program time, and thus not attributable.  The brokered station continued to have a financial incentive to operate the station successfully, keeping 70% of the cash flow of the station.  And the mere fact that the owner of the brokering station guaranteed the debt of the brokered station did not make that interest attributable to the broker.  Note, however, that the Commission did question the staffing of the brokered station but, as that station was not being transferred as part of the sale before the FCC, the Commission said that they would review that issue in connection with the license renewal of the brokered station.  Shared Service Agreements are also under consideration in the current Quadrennial review of the FCC’s multiple ownership rules (see our stories here and here ).  So some of these issues may be revisited again in the not too distant future, when the new FCC Chair decides to complete that review.
Continue Reading Odds and Ends – Divestiture Trusts, Shared Services Agreements and Determinations of Significantly Viewed Stations

The battle over services that record and stream over-the-air TV without compensation to TV broadcasters has become even more confusing, with a US District Court judge in Boston denying an injunction to stop the Aereo service in Massachusetts in a suit brought by Hearst Corporation, which owns a local TV station. This decision comes on the heels of a decision the decision by the US District Court in Washington DC finding that Aereo-like service FilmOn X was violating the copyrights of TV stations by operating a similar service in the DC area (see our discussion of that decision here). Joining decisions in NY favoring the streaming services (a decision we initially wrote about here), and one is California favoring broadcasters, the decision appears to be headed to an ultimate resolution before the Supreme Court to reflect these conflicting points of view. In fact, TV broadcasters have already announced the likelihood of their filing a Supreme Court petition asking the Court to resolve the matter. 

Of course, the decisions outside of NY have been by District Courts, not US Appeals Courts. All except the NY decision are subject to review by the US Court of Appeals in the Circuits in which these District Courts lie. It is possible that the appeals could come out differently than the decisions by the District Courts, and either increase or decrease the likelihood of Supreme Court review, depending on whether the other appellate courts rule for Aereo or FilmOn X (decreasing the likelihood of Supreme Court review if the Circuits agree on the outcome) or against it (increasing the likelihood of review as the Court would be faced with conflicts among the circuits which is a usual ground for Supreme Court review). The Boston decision, while not as comprehensive as some of the other decisions on the topic, does raise some interesting issues that will no doubt be considered on appeal.Continue Reading The Courts Continue To Split on Streaming TV Services – As Boston Court Denies TV Broadcasters Request for an Injunction Against Aereo

We’ve written extensively about copyright issues for audio services, but the big copyright decision that recently made headlines is a TV issue, though one that could have an impact on audio as well. That was the Second Circuit decision in the Aereo case – upholding a lower court decision allowing a company to retransmit over-the-air TV signals to consumers over the Internet – without any royalties to the TV broadcasters or television program producers. The decision looked at the issue of what defines a “public performance” that would require the consent of the copyright owner. The Court found that there is no public performance of television programming where the service is set up so that the programming is streamed to the viewer individually, at their demand, rather than transmitted all at once to multiple consumers – as by a cable system or a  satellite television service. The decision is a controversial one – decided by a 2 to 1 vote with the dissenting judge issuing a strong dissent arguing that the Aereo service was nothing more than a “sham” designed to evade the royalty obligations or copyright permissions that would be necessary if the service were deemed a cable system or other type of multichannel video provider. What does this decision really mean for television stations, and could it have broader implications for the reuse of all sorts of broadcast content on the Internet?

The decision focused on the question of whether the Aereo service “publicly performs” the programming that it sends to its subscribers. Under the Copyright Act, a copyright owner has a bundle of rights which it has the exclusive ability to exploit. This includes the right to copy the copyrighted work, to distribute it, to make a “derivative work” (a work that uses the copyrighted material and changes it in some way – like putting new words to the melody of a copyrighted song), and the right to publicly perform it. The definition of a public performance includes any transmission or retransmission of a performance to multiple individuals at the same time or at different times. This language was added to the Copyright Act at the time of the advent of cable television, to make clear that services like cable, that take an existing performance (like that of a broadcast television station) and then further transmit it to other people (even people who could theoretically pick up the original performance) were themselves making a public performance that needed the consent of the copyright holder or a government-imposed statutory license (which allows the performance as long as the party making the performance pays the copyright holder an amount set by the government). From a cursory look, it would appear that Aereo is retransmitting the signal of the TV station to all of its customers. Why, then, did the Court rule that no public performance was involved?Continue Reading Aereo Court Decision Permits Internet Streaming of TV Programs Without Royalties – Undermining the Public Performance Right?

Every year, about this time, I dust off the crystal ball to offer a look at the year ahead to see what Washington has in store for broadcasters. This year, like many in the recent past, Washington will consider important issues for both radio and TV, as well as issues affecting the growing on-line presence of broadcasters. The FCC, Congress, and other government agencies are never afraid to provide their views on what the industry should be doing but, unlike other members of the broadcasters’ audience, they can force broadcasters to pay attention to their views by way of new laws and regulations. And there is never a shortage of ideas from Washington as to how broadcasters should act. Some of the issues discussed below are perennials, coming back over and over again on my yearly list (often without resolution), while others are unique to this coming year.

Last week, we published a calendar of regulatory deadlines for broadcasters.  This article looks ahead, providing a preview of what other changes might be coming for broadcasters this year – but these are delivered with no guarantees that the issues listed will in fact bubble up to the top of the FCC’s long list of pending items, or that they will be resolved when we predict. But at least this gives you some warning of what might be coming your way this year. Issues unique to radio and TV, and those that could affect the broadcast industry generally, are addressed below.

General Broadcast Issues

 

There are numerous issues before the FCC that affect both radio and television broadcasters, some of which have been pending for many years and are ripe for resolution, while others are raised in proceedings that are just beginning. These include:

 

Multiple Ownership Rules Review: The FCC is very close to resolving its Quadrennial review of its multiple ownership proceeding, officially begun in 2011 with a Notice of Proposed Rulemaking. The rumors were that the FCC was ready to issue an order at the end of 2012 relaxing the rules against the cross-ownership of broadcast stations and newspapers, as well as the radio-television cross-interest prohibitions, while leaving most other rules in place. TV Joint Sales Agreements were also rumored to be part of the FCC’s considerations – perhaps making some or all of these agreements attributable. But even these modest changes in the rules are now on hold, while parties submit comments on the impact of any relaxation of the ownership rules on minority ownership. Still, we would expect that some decision on changes to the ownership rules should be expected at some point this year – probably early in the year. Continue Reading Gazing Into the Crystal Ball – What Washington Has In Store For Broadcasters in 2013

As we wrote last month, the Commission has asked for public comment on whether an Internet delivered video programming service can qualify under the FCC rules and the Communications Act to be treated as a multichannel video programming distributor (an "MVPD").  While the FCC has in the past determined that an MVPD needs to have…

As technology changes, the definitions in the FCC rules don’t always keep up.  In a public notice released last Friday, the FCC asked for public comment on what its definition of an "MVPD" – Multichannel Video Programming Distributor – means for purposes of its program access rules. These rules limit exclusive contracts for certain programming that…

Just a reminder that by October 1, Television stations must once again make their triennial carriage elections.  By that date, TV stations must notify the local cable systems and satellite carriers in their market in writing as to whether the station intends to be carried pursuant to must-carry or a retransmission consent agreement for the…

The FCC just issued a Report to Congress concerning the access of television viewers to in-state television stations.  This report was requested by Congress as part of STELA (the Satellite Television Extension and Localism Act), which extended the compulsory license for direct to home satellite television operators (DISH and DirecTV) – a license which gives them copyright clearances to retransmit all the programming transmitted by the broadcast television stations that they make available as part of their service packages.  Congress also requested a Report from the Copyright Office on the need for the compulsory license – a report also issued this week, which we will write about in another article.  The issue of access to in-state television stations has been a controversial issue, as several Congressmen have sought (and in a few cases actually received) legislative authority for cable providers to carry out-of-market television stations on cable systems serving areas in one state that are part of television markets where the television stations come from a different state.  The report refers to these areas as "orphan counties."  Once legislative authority was granted in one state, many other bills popped up in Congress trying for the same relief in their state – causing concern that the existing television markets (or Designated Market Areas or "DMAs", designated by the Nielsen Company) might be undermined.  To see what impact such changes would have, Congress requested this report from the FCC.

The report for the most part does not make recommendations, but instead simply provides information about the service provided to US television viewers, the potential options for bringing an in-state service to all viewers, and the issues that such proposals would raise. Perhaps the most interesting fact revealed by the report is that 99.98% of all US television households already have access to an in-state television station, either over-the-air or through a Multichannel Video Programming Distributor (e.g. cable or satellite TV system), so this is a very isolated issue.  However,when the FCC sought comments on the issues discussed in the report, a number of individuals in particular DMAs responded about situations where they could not get access to in-state television stations and asked that something be done.  The report assesses the implications of any action that could be taken.Continue Reading FCC Issues Report to Congress on Access to In-State Television Programming

In December, the Commercial Advertisement Loudness Mitigation (“CALM”) Act was adopted by Congress and signed by the President, addressing consumer complaints about television commercials that seem louder than the program content that they accompanied. As we wrote in our summary of the Act when it was adopted, Congress has long received many complaints about loud commercials and decided to act, even though many industry groups were concerned about the ability to design an effective system to deal with the contrasts that sometimes exist between the quiet dialogue that might precede a commercial break and the commercial advertisement itself. Nevertheless, Congress adopted the CALM Act, and instructed the FCC to adopt implementing rules within a year. This past week, the FCC released its Notice of Proposed Rulemaking, looking to adopt rules to implement the statute for over-the-air television broadcast stations, cable systems, satellite, and other multichannel video programming providers. In its NPRM, the FCC asks many questions trying to clarify the details of CALM Act implementation.

The NPRM raises a broad array of implementation issues, ranging from deciding exactly which broadcast stations and which MVPDs are subject to its terms, to the establishment of safe harbors for technical compliance. As discussed in more detail below, the Commission also asks whether stations and systems can shift the burden for compliance with these rules to program suppliers, such as broadcast and cable networks, and whether contractual means of guaranteeing compliance (such as indemnification provisions in contracts between networks and affiliates) are sufficient to ensure compliance by these program providers. Questions about how MVPDs deal with retransmission of broadcast programs, and who is responsible for noncompliant broadcast programming, are also asked. Finally, the FCC suggests processes for consumer complaints and the grant of waivers to stations and systems that cannot quickly comply with the new rules.Continue Reading FCC Seeks Comments on Implementation of CALM Act Regulating Loud Commercials on Broadcast and Cable Television