Discussion of FCC, copyright, advertising and other legal issues of importance to radio and television broadcasters and other media companies
Principal Editor: David O’Connor
Here are some of the regulatory and legal actions of the last week of significance to broadcasters, with links to where you can go to find more information as to how these actions may affect your operations.
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A decision was expected in December on the royalties to be paid by broadcasters and other digital media companies who stream their non-interactive audio programming on the Internet. As we wrote at the beginning of the pandemic, the Copyright Royalty Board, which hears the arguments about the royalties to be paid to SoundExchange in a trial-type administrative hearing, had to postpone the hearing that was initially slated to begin in March. That hearing will now begin later this month. Because of the delays in the hearing caused by the pandemic, Congress authorized the Copyright Office to extend various statutory deadlines. This week, the Copyright Office announced that the December deadline for a decision on webcasting royalties has been pushed until April 15, 2021.
This does not mean that the royalties themselves will not go into effect on January 1. The current CRB proceeding is to determine the rates that will be in effect for 2021 through 2025. The proceeding began early in 2019 (see our posts here and here). The January 1 effective date for the new royalties remains in place, so any decision released later in 2021 will be retroactive. In January, webcasters and other internet radio operators will pay the royalties currently in place, and there will be some mechanism for a true up of the amounts due once the decision becomes effective. That is not unusual in the music royalty world. Just a few months ago, the Radio Music License Committee reached an agreement with BMI on royalties that was retroactive several years. The Copyright Royalty Board decisions themselves, even if released to the parties in December, are often not final until the next year as the public version of any CRB decision usually takes time to release, and the parties have time after a decision is released to seek edits to the decision. The Copyright Office itself also reviews the CRB decision for legal errors. Even after that, the decision can be appealed to the Courts, so the ultimate resolution may be unknown for years – yet parties conduct their business while waiting to see if any adjustments to fees already paid may be due at some later time.
Continue Reading Copyright Office Extends Until April Date by Which Decision on SoundExchange Royalties for 2021-2025 Must be Released
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 Radio Music License Committee yesterday told members that Global Music Rights (“GMR”), the performing rights organization that began a few years ago to collect royalties for the public performance of songs written by a select number of popular songwriters (including Bruce Springsteen, members of the Eagles, Pharrell Williams and others who have withdrawn from ASCAP and BMI) has agreed to extend its interim license for commercial radio stations until March 31, 2021. The notice says that GMR will be contacting stations that signed the previous extension (through March 31 of this year) to extend the interim license for another year on the same terms now in place. If you don’t hear from GMR by March 15, the RMLC suggests that you reach out to GMR directly (do not contact RMLC as they cannot help) to inquire about this extension.
As we have written before (see our articles here, here and here), GMR and the RMLC are in protracted litigation over whether or not the rates set by GMR should be subject to some sort of antitrust review, as are the rates set by ASCAP, BMI and even SESAC (see our article here on the SESAC rates). GMR has counterclaimed, arguing that RMLC is a “buyer’s cartel” in violation of the antitrust laws. Earlier this year, the lawsuits were consolidated in a court in California, where litigation is ongoing (see our article here about the transfer). In our most recent article about the litigation, we noted that the court rejected motions from each party asking that the other’s claims be dismissed. Thus, unless there is a settlement, the case will go to trial. The decision to extend the interim license for a year, instead of the six-month period in previous extensions, may indicate that GMR at least expects that the litigation will continue.
Continue Reading Another Interim License Extension Offered by GMR to Radio Broadcasters – This Time for a Full Year – An Indication of the Status of the Litigation With RMLC?
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
BMI and the Radio Music License Committee announced a settlement of their rate court litigation over the royalties that commercial radio will pay for the public performance of musical compositions licensed by BMI. While we have not yet seen the agreement, the press release already raises one issue likely to sew confusion in the broadcast industry – the extent to which the agreement allows the use of music in podcasts. While the press release says that the BMI license includes the use of music in podcasts, radio stations should not assume that means that they can start to play popular music in their podcasts without obtaining the rights to that music directly from rightsholders. They cannot, as BMI controls only a portion of the rights necessary to use music in podcasts and, without obtaining the remaining rights to that music, a podcaster using the music with only a BMI license is looking for a copyright infringement claim.
So why doesn’t the license from BMI fully cover the use of music in a podcast? As we have pointed out before, a broadcaster or other media company that has performance licenses from ASCAP, BMI, SESAC and even GMR does not get the right to podcast music – nor do the SoundExchange royalty payments cover podcasts. These organizations all collect for the public performance of music. While podcasts may require a performance license (see our article here about how Alexa and other smart speakers are making the need for such licenses more apparent as more and more podcast listening is occurring through streaming rather than downloads), they also require rights to the reproduction and distribution of the copyrighted songs and the right to make derivative works – all additional rights given to copyright owners under the Copyright Act. These additional rights are not covered by the public performance licenses from ASCAP, BMI, SESAC, GMR and SoundExchange, nor are the rights to use the “sound recording” or “master” in the podcast. What is the difference between these rights?
Continue Reading BMI Settlement of Royalty Battle with RMLC to Include Music in Podcasts? – Not So Fast….
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
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
