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The FCC appears poised to decide what to do with its proposals for an online public inspection file for radio stations, and for cable and satellite TV systems. The FCC’s list of “Items on Circulation” (orders that have been written and are being considered for approval by the FCC Commissioners) indicates that the decision…

In Friday’s Federal Register, the FCC published a summary of the Commission’s Notice of Proposed Rulemaking looking to revise its policies regarding the ownership of broadcast stations by non-US citizens setting the date for comments on its proposal of December 21, with Reply Comments being due by January 20.  The FCC two years ago issued a Declaratory Ruling confirming that it would allow broadcasters to have foreign ownership (in a licensee’s parent company) of greater than 25%, overturning what was widely viewed as the Commission’s prior reluctance to approve that degree of foreign ownership of broadcast stations (see our article here for a summary of the FCC’s 2013 action).  But that decision left many unanswered questions, as the Commission decided to proceed on a case-by-case basis in reviewing any requests for approval under the new rules.  When it took almost two years for Pandora to get approval for its acquisition of a broadcast station, almost a year in processing a request under the 2013 ruling (see our article here on the filing of the Pandora petition), when Pandora did not even think that it exceeded the 25% foreign-ownership threshold but it could not prove its compliance based on the FCC’s 40 year old rules setting out the procedures used to assess the foreign ownership of broadcast stations, it was clear that some changes had to be made.  So, in approving the Pandora deal in May, the FCC said that it would conduct a further review of its rules regarding foreign ownership, a commitment that it moves to fulfill by the issuance of this Notice of Proposed Rulemaking.

The NPRM suggests that the FCC will use for broadcasting, with some modifications, the procedures that it uses in assessing foreign ownership of non-broadcast FCC licensees.  While there are many details and nuances in its proposals, the FCC will still need a Petition for Declaratory Ruling to approve foreign ownership above 25% of a parent company of a broadcast licensee (foreign ownership of the licensee itself is flatly prohibited if it exceeds 20%). But it now proposes to adopt the non-broadcast presumptions that, when the FCC approves a foreign owner of more than 5% of a corporation, that approved owner can go up to 49% ownership without further FCC approval.  Similarly, if a foreign owner is approved in a control position, that owner would be able go to 100% without further approval.  But, on a practical level, perhaps more important was the FCC proposals about the mechanics of tracking foreign ownership.
Continue Reading FCC Sets Comment Dates on Proposal to Relax Restrictions on Foreign Ownership in Companies Holding US Broadcast Station Licenses – What Is the FCC Proposing?

November is another of those months with no regular filing obligations – no EEO public file and Mid-Term reports, no noncommercial ownership reports, and no quarterly issues programs lists or children’s television reports. EEO public file reports and noncommercial station ownership reports, being tied to renewal dates, will be back in December. See our Broadcaster’s Calendar, here, for information about the states where stations have such obligations. For all commercial radio and TV stations, November also means that they should be completing their Biennial Ownership Reports, which are due on December 2 (extended from the November 1 due date by FCC action noted, see our article here). Those reports submit a snapshot of broadcast station ownership as of October 1, so they can be filed at any time in November.

The end of November also brings the effective date of the requirement that TV stations convert the text of their emergency alerts run in entertainment programs (like weather alerts) into speech, with that audio to be broadcast on the station’s SAP channel. See our articles here and here on that requirement.
Continue Reading November Regulatory Dates for Broadcasters – Incentive Auction and Biennial Ownership Report Preparation, Reg Fee Comments, Music Issues, Text to Speech Emergency Information and More

The FCC requires each full-power broadcast station, commercial and noncommercial, to maintain a public inspection file.  Even though this is a longstanding FCC requirement, there are always questions about what goes into the file, and how long those materials must be retained.  The week before last, I conducted a webinar for about 20 state broadcast associations on the FCC’s public file requirements for broadcast stations.  The slides from that presentation, outlining the requirements for the file, and the required retention period for many of the documents that make up that file, are available here.

While many broadcasters wonder if the public file is really worth the time that it takes to maintain given the nonexistent traffic to view that file at most stations, the FCC has continued to insist on its importance – fining or otherwise sanctioning stations for missing or late filed documents.  See, for instance, this case admonishing a TV station for failing to get all of its documents into its online public file in a timely fashion (an admonishment is the equivalent of putting a demerit in the station’s permanent record that could be considered as a prior violation in assessing fines if the FCC finds the station in violation for some other offence).  Particularly at license renewal time, a complete public file can be crucial, as missing documents lead to big fines (see, for instance, our articles here and here), and failure to disclose those missing documents can lead to even more harsh penalties (see our article here).  So maintaining an accurate and complete public file is important.  Quarterly issues programs lists are often the most overlooked requirement.
Continue Reading The Care and Feeding of the Broadcast Public Inspection File – Requirements and Retention Periods, A Presentation on the Issues

This week, many radio stations received a letter from SESAC, asking the stations to renew their last SESAC agreement for three years at a rate 5% lower than the rate at which they are currently paying. Sounds like a deal? But is there a catch? The SESAC letter makes clear that, by renewing the current agreement and accepting the discount, the station is agreeing that it will not be a part of any attempt by the Radio Music License Committee (“RMLC”) to negotiate a rate with SESAC. The SESAC letter has drawn a strong response from the RMLC in a letter dated today, signed by Ed Christian from Saga Communications, the Chairman of RMLC, suggesting that stations not sign the SESAC renewal requests. What is this all about?

As we wrote several months ago, SESAC and the RMLC recently settled antitrust litigation where the RMLC argued that SESAC violated the antitrust laws by charging monopoly pricing for the multiple musical compositions that it bundled together for licensing purposes, and making it virtually impossible for stations to avoid paying these royalties as SESAC did not reveal its entire catalog, and licensed music that was almost impossible to avoid playing (like the jingles in some McDonalds commercials). SESAC agreed to settle the litigation – agreeing to negotiate industry-wide deals with the RMLC, and, if such deals could not be reached through voluntary negotiations, to have its rates set by an arbitration panel. SESAC has never before had its rates subject to oversight as, unlike ASCAP and BMI, SESAC is a for-profit company and is not subject to an antitrust consent decree that includes rate review by a US District Court. Many thought that the RMLC agreement with SESAC would result in a moderation of the SESAC rates. Many broadcasters considered SESAC rates to be too high relative to the fees paid for the much larger ASCAP and BMI catalogs given the limited catalog of music that SESAC licenses. So if SESAC agreed to negotiate rates with the RMLC, why is it now writing letters suggesting that stations not participate in the RMLC negotiations?
Continue Reading Dueling Letters about SESAC Radio Station Royalties – What’s A Station to Do?

Today, the FCC published notice in the Federal Register of the adoption of the new simplified rules for publicizing the material rules for contests conducted by broadcasters. This publication was for purposes of review by the Office of Management and Budget under the Paperwork Reduction Act, a review necessary before any new rules requiring…

October is one of those months where the regulatory stars align, when not only do broadcasters in many states have EEO Public File report obligations, but also Quarterly Issues Programs Lists need to be placed in the public files of all commercial and noncommercial stations, and Quarterly Children’s Television Reports need to be filed at the FCC and placed in the public files of television stations.  On top of these routine obligations, there are a number of actions likely to be taken by the FCC that may affect many segments of the broadcast industry.  So let’s look at some of the specifics.

First, by October 1, EEO public file reports should be placed in the public file of stations with 5 or more full-time employees, if those stations are located in the following states and territories: Alaska, Florida, Hawaii, Iowa, Missouri, Oregon, Washington, American Samoa, Guam, the Mariana Islands, Puerto Rico, Saipan, and the Virgin Islands.  In addition to those obligations, radio stations that are part of employment units with 11 or more full-time employees and are located in the states of Florida, Puerto Rico, and the Virgin Islands must prepare and file with the FCC EEO Mid-Term Reports on FCC Form 397, submitting specifics of their employment practices in the last two years (through the submission of their Public File reports) as well as some additional information.  The Mid-Term report for those stations are due by October 1.  More information about these EEO obligations can be found in our article here.
Continue Reading October Regulatory Dates for Broadcasters – Many Routine Filings for All Broadcasters, Incentive Auction Actions, and More

The FCC’s Media Bureau this week released a decision denying the license applications of five new FM stations, and cancelling the construction permits for those stations. While the principal reasons for the denial of the license applications was the failure of the applicant to complete the applications correctly after the several deadlines imposed by…

The FCC yesterday agreed to modernize its contest rules, allowing broadcasters to publicize the material terms of a contest that is conducted by a station through posting those rules on an Internet website, rather than requiring that the material rules be read on the air often enough so that a listener is likely to have heard them. The FCC’s order does impose obligations that the website location be announced on the air and that the site be accessible to everyone, but the changes, once they go into effect, will be a relief to many broadcasters who have had so much trouble in recent years with the current rules requiring on-air disclosure of a contest’s material terms (see, for instance, the many fines that have been issued to broadcasters for violations of these rules, about which we wrote here, here and here).

When these new rules go into effect (after approval by the Office and Management and Budget after a Paperwork Reduction Act review – an exercise that the FCC must go through for all new rules with any paperwork requirements even though it would seem to be a formality here where the rules clearly work to reduce the burden on broadcasters), a broadcaster will be able to satisfy the requirement to disclose the material rules of a contest either by continuing the old practice of reading the material rules on the air, or by posting those rules to an accessible website, and publicizing the Internet location of those rules on the air. The website hosting the rules can either be the station website or some other site, but the rules state that the site must be available to everyone who visits it without having to register to use the site or to pay any sort of fee to access the site. The on-air announcement about the website does not need to give the exact URL of the page on which the rules can be found, as long as the announcement is specific enough so that a listener will be able to find the rules (e.g. by saying something like “go to the K-100 website, k100.com, and click on the ‘contest’ tab”). The FCC also makes clear that, if a station is sending its audience to the station’s homepage to find the contest rules, that there should be a tab, link or other clearly identified location on the homepage to make clear where listeners should go to find the contest rules.
Continue Reading FCC Revises Broadcast Contest Rules – Allows Disclosure of Material Rules on the Internet