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In the last few weeks, a Democratic Senator and a Republican FCC Commissioner have both expressed support for the future of AM radio.  This is not a new topic, being the subject of speculation for at least the last 20 years as FM listening caught up to and surpassed the older service’s audience.  But, when considering worldwide trends, a real question arises as to whether this inquiry is too narrow, and whether the FCC should not be taking more steps to insure the continuation of a free, local broadcast service.

In the last decade, the FCC has considered and, in many cases adopted, various proposals to revitalize the AM service – including providing FM translators for AM stations (see our articles here and here) and permitting all-digital AM operations (see our article here).  Other proposals, including one for across-the-board power increases for AM stations (see our article here) and another to lessen the interference protection enjoyed by high powered “clear channel” AMs, which would allow lower power local AM stations to increase nighttime power (see our article here), have not been adopted.  What new issues are being raised by these recent expressions of support from DC regulators?
Continue Reading Washington Worries About AM Radio – Senator Markey and Commissioner Simington Weigh in on the Future of the Service While Overseas There are Thoughts of Ending Broadcasting Altogether

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

  • The FCC has sent an e-mail, apparently to all broadcasters, regarding the cybersecurity of broadcast stations that use the DASDEC

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All media companies, including broadcasters, webcasters, podcasters and others, need to consider carefully their advertising production after the big penalties imposed on Google and iHeart for broadcast commercials where local DJs promoted the Pixel 4 phone.  Promotions included statements that clearly implied that the announcers had used the phone, including statements that it was “my favorite camera” and “I’ve been taking studio-like photos” with the phone.  But, according to the announcements of the settlement with the Federal Trade Commission and seven state attorneys general (see the FTC press release and blog article), the announcers had not in fact used the phone.  Google will pay the states penalties  of $9 million, and iHeart will pay about $400,000 (see example of the state Court filings on the settlement, this one for Massachusetts, for Google and iHeart).  Each will enter into consent orders with the FTC (Google order here and iHeart here) requiring 10-year recordkeeping and compliance plans to train employees, maintain records of advertising with endorsements, and reports to be filed periodically with the FTC.

The mission of the FTC is to protect the public from deceptive or unfair business practices and from unfair methods of competition.  In that role, the FTC regulates deceptive advertising practices.  Over a decade ago, we highlighted the FTC’s update of its policies on “testimonial and endorsement advertising” that made clear that the FTC required that any sort of “celebrity” (interpreted broadly) endorser had to have a basis for the claims that they were making in their pitches for a product.  This notice also made clear that any statements made about the experience in using a product had to be accurate and, when making claims about the performance of a product, the endorser had to accurately state performance that users can expect to obtain when they use the product.  Just using a “your results may vary” disclaimer was not enough.  In the 2009 proceeding, the FTC emphasized the applicability of these standards to online promotions, requiring disclosures for not only traditional advertising but also for social media influencers and others who are paid to promote products through online channels.  Such payments (or any other valuable consideration the influencer receives) must be disclosed when pitching a product.
Continue Reading Big FTC Penalties on Google and iHeart for Deceptive Endorsements in Broadcast Commercials Mandate Care in Crafting Your Local Advertising

On Wednesday, the House Judiciary Committee will be holding a “mark-up session” (see this notice of the session) where they will be considering the American Music Fairness Act which proposes to impose a sound recording performance royalty on over-the-air broadcasting.  This would be a royalty paid to SoundExchange to benefit the recording artist and copyright holder (usually the record company) and would be in addition to the royalties already paid to composers and publishing companies through royalties paid to ASCAP, BMI, SESAC and GMR.  A mark-up session considers amendments to the bill and could lead to the committee’s approval of the bill.  If approved by the Committee, the bill would still need to be approved by the full House of Representatives and the Senate (and signed by the President) before it became law.  With the current session of Congress coming to a close at the end of the month, the proposed legislation would need to start over in the Congress.  Thus, unless the bill is tacked on to some must-pass legislation in this “lame duck” session of Congress, any action this week by the committee will likely simply be a marker for action in the new year.

The NAB has already issued a statement about the session, pointing out that a majority of the House members have signed on to the Local Radio Freedom Act stating that they will not vote for this legislation.  The statement also reiterates the NAB’s interest in working on a “mutually beneficial solution” to the issue of the broadcast performance royalty (an interest in a possible solution we wrote about here).  Nevertheless, with this issue back on the table, even if only in a symbolic way, we thought that we should re-post our summary of the American Music Fairness Act and the issues that it raises that we wrote last year, when the legislation was first introduced.
Continue Reading House of Representatives Judiciary Committee to Consider American Music Fairness Act Proposing Sound Recording Performance Royalty on Over-the-Air Broadcasting

Last week, the Federal Election Commission (FEC) adopted new disclaimer requirements for internet-based political advertising, including the identification of the ad sponsor.  This decision resolves many of the issues that have been debated at the FEC for over a decade as to what internet content is considered a “public communication” that requires a disclosure of the sponsor of the content – and just what the disclosure should reveal.  We wrote about a 2018 rulemaking soliciting comment on these issues that was just part of the process that led to the vote taken last week.  While the FEC had generally acknowledged that online political ads should have some sponsorship identification, it is only now that the FEC has adopted detailed requirements for this identification.  As discussed below, the proceeding requires disclosures when a sponsor pays an online platform to transmit the political message.  However, the FEC postponed for another day consideration as to whether the disclaimers would be required when the sponsor pays others to promote or widely disseminate the message to platforms that are not paid (e.g., where people are paid by a sponsor to post political messages on social media sites).  These rule changes will impact most media companies with websites and mobile apps, as well as the nationwide streaming services now developing ad supported platforms.

Specifically, the FEC adopted a proposal that would amend its rules to require a disclaimer on those “communications placed for a fee on another person’s website, digital device, application, or advertising platform.”   The FEC also issued a Supplemental Notice of Proposed Rulemaking seeking public comment as to whether disclaimers should be required for political communications where the platform itself may not have been paid, but where the sponsor of the communication paid others to promote or otherwise broaden the dissemination of the communication.
Continue Reading Federal Election Commission Adopts New Rules for Sponsorship Disclaimers for Online Political Advertising – And to Consider Rules for Political Marketing Through Social Media Influencers 

In a very busy week, here are some of the regulatory developments of significance to broadcasters from the past week, with links to where you can go to find more information as to how these actions may affect your operations.

  • The Federal Trade Commission and seven state Attorneys General announced a settlement with Google LLC and iHeart Media, Inc. over allegations that iHeart radio stations aired thousands of deceptive endorsements for Google Pixel 4 phones by radio personalities who had never used the phone.  The FTC’s complaint alleges that in 2019, Google hired iHeart and 11 other radio broadcast companies to have their on-air personalities record and broadcast endorsements of the Pixel 4 phone, but did not provide the on-air personalities with the phone that they were endorsing.  Google provided scripts for the on-air personalities to record, which included lines such as “It’s my favorite phone camera out there” and “I’ve been taking studio-like photos of everything,” despite these DJs never having used the phone.  The deceptive endorsements aired over 28,000 times across ten major markets from October 2019 to March 2020.  As part of the settlement, subject to approval by the courts, Google will pay approximately $9 million and iHeart will pay approximately $400,000 to the states that were part of the agreement.  The settlement also imposes substantial paperwork and administrative burdens by requiring both companies to submit annual compliance reports for a period of years (10 years in the case of iHeart), and create and retain financial and other records (in the case of iHeart, the records must be created for a period of ten years and retained for five years).
    • This case is a reminder that stations must ensure that their on-air talent have at least some familiarity with any product they endorse, particularly where on-air scripts suggest that they have actually used the product.  Stations should not assume that talent know the relevant rules – they more likely will just read whatever is handed to them without understanding the potential legal risk for the station, which, as demonstrated in this case, could be significant.

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Continue Reading This Week in Regulation for Broadcasters: November 26 to December 2 , 2022

In a Federal Register notice published today, the Copyright Royalty Board announced cost-of-living increases in the statutory royalties paid by webcasters for the public performance of sound recordings.  These are the royalties paid to SoundExchange by those making noninteractive digital transmissions of sound recordings.  This included broadcasters who simulcast their over-the-air programming on the internet or through mobile apps (or through other digital means including smart speakers like Alexa, see our article here).  The CRB notice sets out the computations that the Board used to determine the amount of the cost-of-living increase.  Those computations led to a royalty rate for 2023 of $.0024 per performance for services that do not charge a subscription fee.  For subscription services, the rate will be $.0030 per performance.  A performance is one song played to one listener – so for one song paid to four listeners one time each, a webcaster pays about a penny.

Given the rate of inflation in the general economy, it is perhaps no surprise that the rates for 2023 represent a substantial increase from the royalties paid last year, and from those that were in place in 2021, the first year of the current 5-year royalty period.  As we wrote here, when the CRB decided on the rates for 2021-2025, the nonsubscription rate was $.0021 per performance.  But the CRB provided for cost of living increases.  That led to rates in 2022 for commercial webcasters, including broadcasters streaming their programming on the internet, of $.0022 per performance for a nonsubscription transmission and $.0028 per performance for a subscription transmission (see our article here mentioning the 2022 increase). …
Continue Reading Copyright Royalty Board Announces Cost-of-Living Increase for 2023 Webcasting Royalties – Including Royalties for Broadcasters Who Simulcast Their Programming Online

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

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Any media platform that accepts ads for political races and ballot issues in Washington State is aware of the state’s detailed rules that govern all forms of political advertising.  Digital platforms, in particular, are concerned by state rules that require the platforms to maintain and make available to the public not only the information…

There is but a week to go before the mid-term elections, and political ads blanket the airwaves across the country.  From discussions that I have had with many attorneys, broadcasters and other campaign observers, the ads this year have been particularly aggressive.  Some publications have even suggested that, in the waning days of the campaign, the ads may become even worse as desperate campaigns look for some last-minute claim that could turn the tide in an election.  In this rush to election day, broadcasters need to be on the alert for allegations that an attack ad from a non-candidate group is false or defamatory, because in certain instances, the ad could result in a claim against the broadcaster.

As we have written before, broadcasters (and local cable companies) are forbidden from censoring the message of a candidate (see, for instance, our articles here and here).  Section 315 of the Communications Act forbids a broadcaster or a local cable operator from censoring a candidate ad.  Because broadcasters cannot censor candidate ads, the Supreme Court has ruled that broadcasters are immune from any liability for the content of those ads.  (Note that this protection applies only to broadcasters and local cable companies – the no censorship rule does not apply to online distribution – see our articles here and here – so other considerations need to be considered when dealing with online political ads).  But some have taken that to mean that broadcasters have no fear of liability for any political ad.  As I explained in a recent interview with a Detroit television station, that is not true – broadcasters do theoretically have the potential for liability if they run an ad from a non-candidate group either knowing that ad to be false, or by continuing to run a false ad after being put on notice that the ad was false and ignoring that notice (see also this article about this distinction between candidate and non-candidate ads, and how the media’s coverage of campaigns can overlook these distinctions).  In 2020, President Trump’s campaign brought a lawsuit against a Wisconsin television station alleging that a PAC ad run on the station was false and defamatory (see our articles here and here on that suit).  In this election cycle, there are press reports of a lawsuit by Senate candidate Evan McMullin against a political party’s campaign committee and three local TV station owners for running an ad that had allegedly edited remarks by McMullin to make it seem like he said all Republicans were racist (see articles here and here).  Even Roy Moore, the defeated Senate candidate from several years ago in Alabama, successfully pursued a defamation suit against the sponsor of an ad that Moore claimed falsely accused him of improper conduct (this decision was not against a broadcaster, but instead against the ad’s sponsor, see report here).…

Continue Reading With A Week to Go Before the Midterm Elections, Watch for Last Minute Unfounded Attack Ads – The Potential Liability of Stations for False Claims in Ads from PACs, Parties and Other Noncandidate Groups