We summarized the provisions of Section 230 of the Communications Decency Act on Monday, looking at the application of the law that the President has sought to change through the Executive Order released last week.  Today, it’s time to look at what the Executive Order purports to do and what practical effects it might have on media companies, including broadcasters.  As we noted in our first article, the reach of Section 230 is broad enough that any company with an online presence where content is created and posted by someone other than the site owner is protected by Section 230 – so that would include the online properties of almost every media company has.

The Executive Order has four distinct action items directed to different parts of the government.  The first, which has perhaps received the most publicity in the broadcast world, is the President’s direction that the Department of Commerce, acting through its National Telecommunications and Information Administration (NTIA – the Executive Branch office principally responsible for telecommunications policy), file a petition for rulemaking at the FCC.  This petition would ask that the FCC review Section 230 to determine if the protections afforded by the law are really as broad as they have been interpreted by the courts.  The Executive Order suggests that the FCC should review whether the ability granted by the law for an online platform to curate content posted by others – the “Good Samaritan” provisions that we wrote about on Monday – could trigger a loss of protections from civil liability for third-party content if sites exercise the curation rights in a manner that is not deemed to be in “good faith”.  The Executive Order directs this inquiry even though the protections for hosting online content are in a separate subsection of the law from the language granting the ability to curate content, and the protections from liability for third-party content contain no good faith language.  The Order suggests that the FCC should find that there would not be “good faith” if the reasons given for the curation actions were “pretextual,” if there was no notice and right to be heard by the party whose content is curated, and if the curation is contrary to the service’s terms of use.  The Order suggests that the FCC should adopt rules to clarify these issues.
Continue Reading Looking at the President’s Executive Order on Online Media – Part 2, What Real Risk Does It Pose for Media Companies?

When the President issues an Executive Order asking for examination of Section 230 of the Communications Decency Act, which permitted the growth of so many Internet companies, broadcasters and other media companies ask what effect the action may have on their operations.  On an initial reading, the impact of the order is very uncertain, as much of it simply calls on other government agencies to review the actions of online platforms.  But, given its focus on “online platforms” subject to the immunity from liability afforded by Section 230, and given the broad reach of Section 230 protections as interpreted by the Courts to cover any website or web platform that hosts content produced by others, the ultimate implications of any change in policy affecting these protections could be profound.  A change in policy could affect not only the huge online platforms that it appears to target, but even media companies that allow public comments on their stories, contests that call for the posting of content developed by third parties to be judged for purposes of awarding prizes, or the sites of content aggregators who post content developed by others (e.g. podcast hosting platforms).

Today, we will look at what Section 230 is, and the practical implications of the loss of its protections would have for online services.  The implications include the potential for even greater censorship by these platforms of what is being posted online – seemingly the opposite of the intent of the Executive Order triggered by the perceived limitations imposed on tweets of the President and on the social media posts of other conservative commentators.   In a later post, we’ll look at some of the other provisions of the Executive Order, and the actions that it is asks other government agencies (including the FCC and the FTC) to take. 
Continue Reading The President’s Executive Order on Online Media – What Does Section 230 of the Communications Decency Act Provide?

Music licensing issues are always confusing.  At the request of streaming service provider Live365 which hosted World Audio Day as a virtual substitute for our all getting together at last month’s cancelled NAB Convention in Las Vegas, I participated in a discussion of those issues, trying to provide the basics as to who gets paid

The judge presiding over the royalty litigation between BMI and the Radio Music Licensing Committee (RMLC) approved the settlement between these parties by an order released on March 23.  At the same time, the judge approved an order keeping the specifics of the approved settlement confidential for 30 days while the settlement is being implemented

As Washington reacts to the coronavirus, there are certainly regulatory implications to broadcasters and other media companies.  The FCC Thursday announced that its headquarters is closed to visitors and that its employees should begin to telework.  Many FCC employees regularly took advantage of telework options before the current situation, so it can be expected that many routine application processing activities (particularly those involving electronically filed applications) should be able to proceed with relatively minimal delays.  What remains to be seen is the ability of the FCC to handle more complex matters that often involve meetings with stakeholders and among FCC staff before decisions are made.  While these too can be handled electronically and telephonically, the speed of FCC actions may well be slower than normal as technological issues are worked out and as the FCC may be called on to address telecommunications matters related to combatting the virus.

The FCC’s Audio Division, on Friday, released a Public Notice describing some special processes it will use in light of the teleworking policy.  First, college and university stations can rely on the FCC rules that exempt these stations from the FCC’s minimum operating schedule during recess periods without the need for a special temporary authority.  The current college shutdowns will be treated as recess periods.
Continue Reading Washington Reacts to the Virus – FCC Closed to Visitors and Its Employees Told to Telework; Audio Division Issues Guidance for Radio Regulatory Filings, and Copyright Office Postpones Webcasting Royalty Trial

The FCC yesterday released a Public Notice calling for public comment on the state of the communications marketplace so that it can prepare a report to Congress – a report that is required every even-numbered year.  The Notice calls for comments on the state of competition in various sectors of the communications industry – including for audio and video.  The inclusion of audio in this report is relatively new – being included for the first time two years ago (see our article here).  Comments in this proceeding are due on April 13, with replies due May 13.

The Audio Competition Report prepared two years ago was very important in informing the FCC as to the state of competition in that segment of the market.  Comments filed with the Commission on the report were incorporated in the record of the FCC’s Quadrennial Review Notice of Proposed Rulemaking which entertained the possibility of changes in the ownership rules for broadcast radio in light of the substantial competition that comes from digital audio sources (see our article here on the Quadrennial Review NPRM).  Whether this year’s report will be as crucial is unknown, as the Third Circuit Court of Appeals decision on the FCC’s 2017 ownership rule changes have, for now, put all broadcast ownership changes on hold while the FCC (and the Department of Justice) decide whether to appeal that case to the Supreme Court or to attempt to answer the Third Circuit’s concerns that the FCC had not sufficiently addressed the impact of changes in its ownership rules on minority ownership (see our articles here and here).  While these decisions are being made, it appears that all ownership changes are on hold.
Continue Reading FCC Seeks Comments on the State of the Communications Marketplace – Including for Audio and Video

Global Music Rights, the relatively new performing rights organization that signed a number of composers of popular songs away from ASCAP and BMI in order to seek higher music royalties for the public performance of their works on radio stations and other media platforms (see our articles here and here), lost one round in its litigation with the Radio Music License Committee in RMLC’s attempt to bring GMR under some sort of rate review under the antitrust laws.  RMLC has alleged that GMR, by combining multiple artists in a single essentially take-it-or-leave-it package, is able to charge rates well above what any artists could receive on its own, thus violating the antitrust laws (see our articles here and here).  This is a theory like the one which lead to an arbitration with SESAC dramatically lowering royalty rates the radio industry pays to that organization (see our articles here and here).  In a decision released Friday, the Judge presiding over RMLC’s case rejected GMR’s arguments that the suit should be dismissed without a trial.   The Judge, in a short three-page opinion, said that viewed in their most favorable light to RMLC (which is the standard used in deciding on such motions), the facts alleged by RMLC were enough to support the claims it made in the lawsuit, so the case will go to trial.

But this is not necessarily a great victory, as the Judge notes that it remains to be seen whether, when the full facts are introduced at the trial and challenged by GMR, these facts will in fact be enough to sustain the claims of RMLC.  A similar finding was made in GMR’s countersuit – arguing that RMLC formed an illegal buyer’s cartel in violation of the antitrust laws by trying to negotiate royalty rates for most commercial radio operators (see our article here on that countersuit).  The Court rejected RMLC’s argument that the GMR suit should be dismissed, finding that there were enough facts raised to potentially support GMR’s claims, though also warning that it remained to be seen if, once the facts were presented and challenged at trial, whether they indeed would sustain GMR’s claims.
Continue Reading Litigation Continues as Court Rejects GMR Motion to Dismiss RMLC Lawsuit – and RMLC’s Request to Dismiss GMR Claims

Most years, at some point in January, we look into our crystal ball and try to see some of the legal and regulatory issues likely to face broadcasters.  We already provided a calendar of the routine regulatory filings that are due this year (see our Broadcaster’s Regulatory Calendar).  But not on that calendar are the policy issues that will affect the regulatory landscape in the coming year, and into the future.  This year, the biggest issue will no doubt be the November election.  Obviously, broadcasters must deal with the many day-to-day issues that arise in an election year including the rates to be charged political candidates, the access to airtime afforded to those candidates, and the challenges associated with the content of issue advertising that non-candidate groups seek to transmit to the public.  The election in November will also result in a President being inaugurated in just less than a year – which could signal a continuation of the current policies at the FCC or potentially send the Commission in a far different direction.  With the time that the election campaigns will demand from Congress, and its current attention to the impeachment, Congress is unlikely to have time to tackle much broadcast legislation this year.

The broadcast performance royalty is one of those issues likely on hold this year.  While it was recently re-introduced in Congress (see our article here), it is a struggle for any copyright legislation to get through Congress and, in a year like the upcoming one, moving a bill like the controversial performance royalty likely will likely not be high on the priorities of Congressional leaders.  This issue will not go away – it will be back in future Congresses – so broadcasters still need to consider a long-term strategy to deal with the issue (see, for instance, our article here on one such strategy that also helps resolve some of the music royalty issues we mention later in this article).
Continue Reading Looking Ahead to the Rest of 2020 – Potential Legal and Regulatory Issues For the Remainder of the Year

Last week, FCC Commissioner Michael O’Rielly was in the news for sending a letter to the major record labels asking for information about their practices in paying broadcast stations for airing the label’s music.  The letter follows correspondence last year between the Commissioner and the RIAA (the Recording Industry’s trade group) asking for similar information, which the RIAA claimed that it did not have.  This process began after a Rolling Stone magazine article suggested that “payola” was still a common practice in the broadcast industry.  These actions, and the press reports that followed, raise a couple of interesting questions including what the FCC rules are on payola, and how broadcast practices compare to those of online companies.

The Communications Act prohibits the practice of “payola” by requiring, in Section 317, that when any content is aired on a station in exchange for anything of value, the station must disclose that “consideration” has been paid by the person or entity that pays for the consideration.  Thus, “payola” arises when a broadcast station employee or contractor receives or is promised anything of value in return for putting any content on the air, and that payment is not disclosed to the public.  Payola usually occurs when someone makes a gift or payment to a person involved in station programming (i.e., station employees, program producers, program suppliers) in exchange for favorable on-air exposure of a product or service.  While the term “payola” is most often associated with the receipt by a station announcer or music director of money, trips or other value for playing songs on the station, the same prohibition applies whenever any station programming personnel receive anything of value in exchange for airing any content where a sponsorship identification is not broadcast.  For examples of fines for airing programming for which consideration was received without acknowledging the receipt of valuable consideration, outside the context of music, see our articles here, here and here
Continue Reading FCC Commissioner Asks Record Labels for Information About Payola Practices – What are the FCC Rules?  How Do These Practices Compare to Online Music Providers?

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.
Continue Reading While You Were on Vacation….Looking at FCC Regulatory Actions over the Holidays and Deadlines for January