Discussion of FCC, copyright, advertising and other legal issues of importance to radio and television broadcasters and other media companies
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 Copyright Royalty Board yesterday published in the Federal Register the proposed rates for the public performance of musical compositions by noncommercial broadcasters for the period 2023 through 2027. The rates reflect settlements between ASCAP, BMI, SESAC and GMR with various organizations representing noncommercial broadcasters. The Corporation for Public Broadcasting agreed to one set of rates paid to cover NPR and PBS affiliates. The NRB (the religious broadcasters’ organization) has a Noncommercial Music License Committee that agreed to another set of rates that apply to non-NPR radio stations not owned by colleges and universities, setting out rates that these noncommercial stations pay to each of these rights collection agencies. For these radio stations, the rates are based on the population served by each noncommercial station. College and university-owned stations can take advantage of a third set of rates, based primarily on the number of students in the school with which the station is affiliated. Comments and objections, if any, to these proposed rates are due on or before February 27, 2023.
Commercial broadcasters have royalty rates that are to be paid to these performing rights organizations (or “PROs”) set not through the Copyright Royalty Board but instead through varying processes. ASCAP and BMI are subject to antitrust consent decrees (see our articles here and here on arguments about those decrees). The decrees provide that, if the PRO cannot reach an agreement with representatives of the commercial radio industry (usually the Radio Music License Committee – see our article on RMLC here – although commercial religious broadcasters also negotiate rates with these entities through the NRB), a US District Court judge in New York will hold a trial, acting as a “rate court” to determine the amount for reasonable rates. ASCAP and BMI are currently negotiating with the RMLC on new rates for commercial broadcasters. SESAC is also subject to antitrust settlements with both the RMLC and the TV Music License Committee. If SESAC and the committees cannot reach agreements, an arbitration panel sets the rates (see our articles here and here on radio rates set as a result of this process). After prolonged litigation with GMR to have their rates reviewed in some manner, the RMLC last year dropped its lawsuit seeking that relief and GMR now has no oversight as to the rates it charges (see our article on the GMR license that resulted). Noncommercial broadcasting, however, under Section 118 of the Copyright Act, has its PRO obligations set by the Copyright Royalty Board and, like this year, the result is almost always a settlement between the parties (even though, theoretically, the Board could hold hearings to set the rates if the parties had not agreed to the rates). …
Royalties paid for the use of music by broadcasters and digital media companies, and other issues about music rights, can be an incredibly dense subject, with nuances that can be overlooked. I participated in a CLE webinar earlier this week, sponsored by the Federal Communications Bar Association, where we tried to demystify some of the issues in music licensing (see description here). I moderated a panel on the Hot Topics in Music Licensing, talking about the broadcast performance royalty, the appeal of the webcasting royalty decision, issues about the proliferation of performing rights organizations seeking royalties for the public performance of musical compositions, and more theoretical issues about the entire process of clearing music for use by broadcasters and other businesses. To highlight some of the issues, and some of the tensions in the world of music royalties, I put together the attached article. Hopefully, it provides some context on the relationship between some of these hot topics, and gives some food for thought as to how these issues can be addressed.
As 2023 begins, our “Hot Topics” panel will look at some of the current legal and policy issues in music licensing that may be relevant to the communications industry. Most of the issues we will discuss are ones that have been debated, in one form or another, in copyright circles for decades. But, as copyright can be so complicated with many stakeholders with differing interests, the chances of any final resolution to any of these issues may well be small. This article is meant to put some of those debates in context, as many of the specific issues, in one way or another, are intertwined.
The issue that likely will be the most contentious this year (and has been for decades) is the continuing effort of the recording industry to establish a public performance right in sound recordings that would apply to non-digital performances. For over 25 years, recording artists and the record labels (which usually hold the copyrights to popular recordings) have had a right to a performance royalty for digital performances. Broadcasters who stream an online simulcast of their programming, along with webcasters and others who make non-interactive digital transmissions, must pay a performance royalty, generally to SoundExchange. The rates to be paid are set by the Copyright Royalty Board. But in the US, over-the-air broadcasters, restaurants, bars, clubs, retail establishments, and others who publicly perform music pay only for the performance of the musical compositions (the “musical work”), not for the performance of the song as recorded by a particular artist (the “sound recording”). That has been a point of contention for a century, almost from the moment when recorded music first appeared, but the issue has become particularly heated in the last two decades, once the sound recording public performance right was established after being mandated by copyright legislation in the late 1990s.…
Continue Reading An Overview of the Hot Policy Topics in Music Licensing
Here are some of the regulatory developments of significance to broadcasters from the past two weeks, with links to where you can go to find more information as to how these actions may affect your operations.
With the holidays upon us and the end of the year fast approaching, the FCC took care of one piece of business required by statute as it released a Public Notice announcing the start of the 2022 Quadrennial Review of the FCC’s ownership rules. The FCC is required, once every four years, to review their local ownership rules to see if they remain in the public interest. The Notice starts the review required for this year even though the 2018 review remains pending with seemingly little likelihood of any action as long as the FCC remains politically divided (currently two Republicans and two Democrats with one open seat).
So, unless the 2018 review is decided and finds that some existing rule is no longer in the public interest and abolishes it, the just announced new review (the “Quad,” as those in DC communications regulatory circles call it) will look at the same issues as the last one did. Ownership rules governing the limits on radio ownership in each market, largely unchanged since they were first adopted in 1996, are probably the issue that could potentially affect the largest number of broadcasters (see our articles here and here on proposals for change in the radio ownership rules). Also under review will be issues including the Dual Network Rule, which prohibits combinations of two of the Top 4 TV networks, and a possible clarification of the Top 4 rule on local TV ownership. The Top 4 rule generally prohibits combinations of two of the Top 4 rated TV stations in any television market. In 2017, the FCC voted to allow parties to seek a waiver of that prohibition. Such waiver requests are evaluated on a case-by-case basis. The proposal raised in the 2018 proceeding was to adopt some bright line tests as to when waivers would be permitted (e.g., allowing combinations of the two lowest rated stations if their audience share did not equal that of the first or second ranked station in the market). …
Continue Reading FCC Starts 2022 Quadrennial Review Before the 2018 Review is Complete – Time for Another Look at Radio and TV Local Ownership Rules
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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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.
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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
