As the calendar flips to June, pandemic restrictions across the country continue to loosen, and we inch closer to summer.  Broadcasters could be forgiven for not having regulatory dates and deadlines on the top of their minds.  There are, however, many important dates and deadlines to keep track of during June – we provide details of some of them below.  As always, be sure to stay in touch with your FCC counsel for the dates and deadlines applicable to your operations.

Radio stations in ArizonaIdahoNevadaNew MexicoUtah, and Wyoming and television stations in Michigan and Ohio should be putting the final touches on their license renewal applications, which are due by June 1.  See our article, here, about preparing for license renewal.  These stations must also file with the FCC a Broadcast EEO Program Report (Form 2100, Schedule 396) and, if they are part of a station employment unit (a station or a group of commonly owned stations in the same market that share at least one employee) with 5 or more full-time employees, upload to their public file and post on their station website a link to their Annual EEO Public Inspection File report covering their hiring and employment outreach activities for the twelve months from June 1, 2020 to May 31, 2021.
Continue Reading June Regulatory Dates for Broadcasters: License Renewal and EEO Filings, Comments and Replies, Auction Upfront Payments, Streaming Rates Announcement, and More

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?

There can be no doubt that local newspapers have been significantly impacted over the last two decades by the ascent of the Internet.  And, as we have written before (see, for instance, our article here), digital media has also had a significant impact on the local revenues of broadcasters, who also have traditionally specialized in covering local events.  To study the effect of the decline in local news sources, legislation has been introduced in both the House and Senate to create a government committee to look at various aspects of this issue. The “Future of Local News Committee” would include individuals appointed by the majority and minority in the House and Senate, as well as individuals selected by the Corporation for Public Broadcasting, The National Endowment for the Humanities, and the US Agency for Global Media.  Each appointee is to be someone experienced in some aspect of local media.  The committee would have one year to deliver a report to Congress.

What would they study?  The legislation suggests that the committee would have broad investigatory powers to review how the change in local media has affected local communities.  The bill’s preface includes language stating that over 2000 newspapers have gone out of business since 2004, and that of the 6,700 remaining, 1000 could be classified as “ghost newspapers” whose staffs have been so reduced that they cannot effectively cover local events.  The bill also cites a Pew Research study that shows that local newsroom employees at newspapers, broadcast outlets and digital sources dropped 25% from 2008-2018.  Perhaps most startling is the statement that newspapers alone lost more than $35,000,000,000 in revenue between 2004 and 2018.  All these factors, and many others cited in the bill, are alleged to show that local media can no longer effectively cover local events.
Continue Reading Does Local News Need Government Assistance to Survive – Legislation Proposed to Set Up Commission to Study the Impact of Changes in Local Media on Local Communities  

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.

  • In a speech to the Media Institute, FCC Commissioner Starks spoke of the importance of diversity in media ownership and

Next week, I will be discussing regulatory issues for media companies with Eriq Gardner of the Hollywood Reporter (who covers legal issues on their must-read THR, Esq site) in a “Candid Conversation” hosted by Matrix Solutions (more information here, including a registration link).  The sponsor of this conversation consults on media advertising matters, so the content will likely be geared toward the impact of changes on the advertising industry.  While the conversation will cover structural media regulation issues, like broadcast ownership, the relationship between television and various multichannel video providers (both traditional, like cable and satellite television, and online), and similar matters, I think one of most interesting topics will be a discussion of the proposed regulation of tech platforms.  In thinking about that issue (about which we have written many times, including recent articles here and here), it occurs to me that such regulation could have a huge impact on the digital and social media giants that have arisen in the modern media world.

Much has been written, particularly in recent days, about the antitrust regulation to which these tech giants may be subject – with calls for action from both the political right and left (see, for instance, this article drawing parallels between the books recently written about this subject by Amy Klobuchar and Josh Hawley).  Even if such sweeping changes are not adopted, there are more targeted regulatory proposals that could have a direct impact on the advertising on these online platforms.  As we have noted before, advertising on online platforms is now estimated to constitute over 50% of the local advertising sales in virtually every geographic market.  Certainly, privacy regulation limiting the ability of companies to track users across various online platforms could affect such sales.  Less publicized has been the impact of Section 230 reform, which in at least one bill would exempt advertising from the protections afforded companies for the online content that they host.
Continue Reading Regulation of Online Platforms and the Effect on Advertising – Including Section 230 Reforms

Everyone knows that a fundamental principle of American democracy is the First Amendment – guaranteeing many freedoms to US citizens including freedom of the press and freedom of speech.  It is one of those concepts that underlies our society, but is often mentioned only in passing, and rarely considered in practice.  Few people – even broadcasters and other media companies – have cause to think about First Amendment principles in their day-to-day operations.  The concepts embodied by the First Amendment are almost a given – except when they are not.

In our politically polarized society, there are more and more arguments made about regulation of speech in various contexts – often made without significant consideration of those First Amendment principles.  On the broadcast side, we have seen Commissioner Carr react to two cases where the FCC has seemingly been called on to regulate the speech (or anticipated speech) of broadcasters.  One case involved a call to deny the sale of a broadcast station allegedly based on a perceived change in the political orientation of its programming from liberal to conservative (see the Carr statement here), and another calling for the FCC to investigate a TV station in Baltimore for allegedly being too focused on investigations into a local government official (see the Carr statement here and an NAB statement also weighing in on the controversy here).  While there may well be issues in each case that go beyond the question of the proposed speech of the broadcasters involved, the issue of whether the FCC can get involved in the regulation of political positions taken by broadcasters is one that is addressed both by the Communications Act and past FCC precedent.
Continue Reading The First Amendment’s Role in Broadcast and Online Regulation

Last week, the NY Times ran an interesting article, here, about how many old TV programs now available on streaming services are missing music that was featured on the original broadcast.  This was because when the music rights were initially purchased,  their use was limited to over-the-air broadcasts or was limited to a short period of time, with the producers never envisioning that the programs would be available through on-demand streaming services decades after they originally aired on over-the-air television.  While not mentioned in the article, for many radio broadcasters one of the series most missed on streaming services is the industry favorite WKRP in Cincinnati.  That series took forever to get to digital outlets, and still does not appear to be on any subscription streaming service, reportedly because of music rights issues.  This article and the issues that it highlights should be a warning not just to TV producers, but also to anyone planning to use music in audio or video productions – including podcasts and online videos – that clearing music rights is essential to insure that these productions can be fully exploited  not only when they are first made available, but also in the future if they are repurposed for other platforms.

We have written before (see, for example, our articles here and here) about the need to get permission from the copyright holders in both the musical work (or musical composition – the words and music to a song) and in the sound recording (or master recording – the song as recorded by a particular band or singer).  Just signing up with a performing rights organization (ASCAP, BMI, SESAC or GMR) is not enough because, while podcasts may involve the public performances of the musical works that these organizations license, they do not give rights to make the permanent fixed copies of those songs, synchronized with other audio in the podcast, that can be accessed and downloaded on demand.  These uses require the additional copyrights to reproduce and distribute music, and arguably to make derivative works, that can only be obtained from the copyright holder (see our article here describing why the PRO license itself does not give all rights needed to use music in podcasts).   Similarly, the rights to the sound recording must also be obtained from the copyright holder in the recording – and payments to SoundExchange do not cover the on-demand music uses involved in a podcast.  Thus, when the necessary rights are not obtained from the copyright holders, we have seen podcasts go silent after infringement claims are brought or threatened (see our article here).
Continue Reading Missing Music On Streamed TV Programs Highlights Rights Issues for Podcasters and Video Producers

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

The broadcast trade press is full today with the news that NAB CEO Gordon Smith will be stepping back from that position at the end of the year, to be replaced by current COO (and former head of Government Relations) Curtis LeGeyt.  As many will remember, Smith took over the organization over a decade ago during a turbulent time for the industry.  At the time, TV stations faced increasing calls for other uses of the broadcast spectrum, and radio stations faced a possible performance royalty on their over-the-air broadcasts of sound recordings.  Since then, through all sorts of issues, there has been a general consensus in the industry that its leadership was in capable hands and meeting the issues as they arose.

But many issues remain for broadcasters – some of them ones that have never gone away completely.  The sound recording performance royalty for over-the-air broadcasting remains an issue, as do other music licensing issues calling for changes to the way that songwriters and composers are compensated, generally calling for higher payments or different compensation systems (see our articles here on the GMR controversy and here on the review of music industry antitrust consent decrees).  TV stations, while having gone through the incentive auction giving up significant parts of the TV broadcast spectrum, still face demands by wireless operators and others hungry for more spectrum to provide the many in-demand services necessary to meet the need for faster mobile services (see our articles here on C-Band redeployment and here on requests for a set aside of TV spectrum for unlicensed wireless users).  But competition from digital services may well be the biggest current issue facing broadcasters.
Continue Reading With a Change at the Top at the NAB as CEO Gordon Smith Plans His Departure – What are the Regulatory Issues That are Facing Broadcasters?

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