Noncommercial Broadcasting

Last week, the FCC issued a Public Notice announcing an August 11, 2021 nationwide EAS test, with a backup date of August 25 if there are conditions that prevent the test from occurring on the initial date.  The test is scheduled for 2:20 PM EDT.  For broadcasters, this test will be conducted using the

The Copyright Royalty Board (CRB) on Friday released the rates and terms for webcasting royalties for 2021-2025, and the rates are going up.  While the full decision explaining the reasoning for the rate increases will not be released to the public until the parties to the case have the opportunity to seek redaction of private business information, the rates and terms themselves were released and can be found here.  These new rules apply to all noninteractive webcasters including broadcasters who are simulcasting their over-the-air signals on the Internet.  As detailed below, both the per-performance and annual minimum fees will be increasing for both commercial and nonprofit webcasters.

The per-performance royalty increases to $.0021 for non-subscription streams, up from the current $.0018.  For subscription streams, the fee increases to $.0026 per performance from $.0023.  A performance is one song played to one listener.  So, if a streaming service plays one song that is heard by 100 listeners, that is 100 performances.
Continue Reading Webcasting Royalties Going Up – Copyright Royalty Board Releases Rates and Terms for 2021-2025

Here are some of the regulatory developments of significance to broadcasters from the last week, with links to where you can go to find more information as to how these actions may affect your operations.

  • The Copyright Royalty Board (CRB) released its long-awaited decision on streaming royalties for 2021-2025, finding that the rates applicable to

The Copyright Royalty Board decision on the rates to be paid in the next 5 years by webcasters, including broadcasters who simulcast their programming on the internet, to SoundExchange for the digital public performance of sound recordings is supposed to be released by June 14.  These royalties are collected by SoundExchange from noninteractive webcasters (see our articles here, here and here on the difference between interactive and non-interactive webcasters) and are distributed to the artists who perform on recordings and to the copyright holders of those recordings – usually the record labels.  The CRB sets these rates in 5-year increments.  The rates at issue in the current proceeding are for 2021-2025.  As we wrote here and here, these rates would normally have been determined before the end of the last rate period at the end of 2020 but, as the trial to determine the rates was postponed by the pandemic, the CRB has been given to June 14 to announce the new royalties, presumably to be made retroactive to January 1.

The proposals made in this proceeding vary widely.  SoundExchange and its associated record labels are arguing that the rates should substantially increase, from their current level of $.0018 per performance (per song per listener – see our article here) for nonsubscription streams to rates of $.0028 per performance for 2021, with cost of living increases each succeeding year.  For subscription webcasting, SoundExchange proposes that the rates increase from $.0024 to $.0031.  In these cases, each party makes arguments as to what a willing buyer and willing seller would pay in a marketplace transaction for such rights.  The parties introduce expert witnesses to testify as to what that rate would be, usually by looking at other similar marketplace transactions.  To arrive at its proposed rates, SoundExchange introduced experts who looked at the market price for the use of music by interactive services.  These prices are set by direct negotiations.  From those prices, the experts attempted to calculate an appropriate adjustment to remove the value of the interactivity to determine the rates that a noninteractive service would pay.  This proposed increase in royalties was, of course, countered by representatives of the services who will pay the royalties to SoundExchange.
Continue Reading Copyright Royalty Board Decision on Webcasting Royalties Expected by June 14 – What Will the Streaming Rates for 2021-2025 Be?

Here are some of the regulatory developments of significance to broadcasters from the last week, with links to where you can go to find more information as to how these actions may affect your operations.

  • At the FCC’s regular monthly Open Meeting, the Commissioners voted to adopt new rules mandating sponsorship identification of foreign government-provided

As we highlighted yesterday in our weekly summary of regulatory issues for broadcasters, last week saw a letter from Congresswoman Anna Eshoo to the FCC asking for the FCC to review the enforcement of the rules established by the CALM Act, which prohibits loud commercials on TV stations.  The letter cites news reports of thousands of complaints annually to the FCC since the rule’s adoption in 2012 without there ever having been an enforcement action against a station for any violation.  When the CALM Act was passed by Congress, there were many industry questions about how that law could be enforced, as there are many subjective judgments in assessing whether a commercial is louder than the program into which it is inserted (see our article here).  But, ultimately, the FCC adopted rules that were based on industry standards and most parties seemed to believe that they were workable (see our article here about the adoption of those rules).  Like many FCC rules, the CALM Act rules are complaint-driven, and even the article cited by Congresswoman Eshoo recognized the difficulty in assessing the merits of any complaint.

Nevertheless, with this letter and the publicity that it has received in the broadcast trade press, TV stations should carefully review their compliance with the CALM Act rules, as this publicity could signal that the FCC will turn its attention to this issue in the coming months.  In fact, with a Commission that is currently evenly divided between Democrats and Republicans until the vacant seat on the Commission is filled, enforcement of existing FCC rules may well be one place where the current Commission will turn its attention while more controversial (and potentially partisan) rule changes await FCC action.
Continue Reading Congressional Letter to FCC on CALM Act Violations Puts Focus on FCC Enforcement Issues

Here are some of the regulatory developments from 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.

  • The National Association of Broadcasters this week announced that its CEO, Gordon Smith, will be stepping down at the end

At the end of last week, the FCC released several orders clarifying the rules for upcoming windows where construction permits for new FM channels will be made available to parties interested in starting new radio stations, and a few AM construction permits will also be auctioned off.  The Public Notice released on Thursday for commercial operators set the important filing dates and procedural rules for the July auction of 136 FM permits, as well as 4 AM permits in the St. Louis area that are available after an AM licensee whose license was challenged at renewal time surrendered the licenses for these AM stations (see the list of available channels here).  The FCC also issued a Public Notice setting a freeze on changes to other FM stations during the initial filing window, to stabilize the FCC’s database for parties interested in these new FM channels.  Also on Thursday, the FCC issued a draft order on the number of applications for which applicants will be able to apply in an upcoming reserved-band FM (channels below 92 on the FM band) filing window for noncommercial educational stations (NCE stations).

First, let’s look at the noncommercial draft order that is expected to be adopted at the FCC’s regular monthly Open Meeting on April 22 unless changes are made between now and then.  That order, about which we wrote here, asked whether the FCC should adopt a limit of 10 applications in the upcoming window for new noncommercial FMs or for major changes in existing stations.  While there were parties that requested that the limit be higher (particularly in rural areas where the likely demand will not be as great), and other parties expressed a belief that the limit should be lower (particularly as there will be few open channels in larger markets), the draft order suggests that the FCC will stick with the limit of 10 applications.  The FCC’s intent in adopting an application cap is to reduce processing backlogs and limit the number of situations where applicants will file applications that are mutually exclusive (i.e. where both cannot be granted without creating prohibited interference), while still allowing applicants to provide new noncommercial services throughout the country.  According to the draft order, the 10-application limit used in previous NCE windows still makes sense as a happy medium between the competing desires for expanded or narrower limits.
Continue Reading FCC Clarifies Upcoming Windows for Construction Permits for New Commercial and Noncommercial FM Stations (and a Few AMs Too)

Here are some of the regulatory developments of significance to broadcasters from the last week, with links to where you can go to find more information as to how these actions may affect your operations.

  • The Supreme Court this week announced its decision in Federal Communications Commission v. Prometheus Radio Project, the broadcast ownership