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In the last day or two, some broadcast trade press reports may have given the impression that the FCC’s new online public file rules for radio may now be “effective,” suggesting that Top 50 market stations with 5 or more full-time employees need to start uploading their new political documents into the file (the first…

March appears to be another busy month on the FCC’s regulatory calendar.  While March is one of those months where there is not the usual assortment of EEO public file reports, quarterly issues programs lists or children’s television reports and noncommercial ownership report obligations (see our Broadcasters’ Regulatory Calendar here for some of these dates), it is a month with many other significant regulatory dates.  For instance, this month brings the scheduled start of the TV incentive auction as stations make binding commitments as top whether they will accept the FCC’s opening bids in the reverse auction.  It also brings deadlines for comments in a number of other proceedings that may affect broadcasters, including the FCC’s proceeding on AM radio revitalization and the Copyright Office’s look at the safe harbor for user-generated content.  In addition to comment periods, the lowest unit rate periods that apply during the 45 days before a Presidential primary are in effect in many states, plus March brings other deadlines including those for the first filing date for monthly SoundExchange Reports of Use under the new Internet radio royalty rates.  All make for a month where broadcasters need to watch regulatory developments very closely.

So let’s start with the incentive auction.  As we wrote just a few days ago, March 29 is the deadline for TV broadcasters to make a binding commitment to accept the FCC’s initial offer to buy their spectrum.  TV broadcasters who filed applications to participate in the Incentive Auction back in January were merely leaving the door open to their participation.  The March 29 deadline is the real legally binding commitment to surrender their spectrum at the price that the FCC has offered for their stations.  To make sure that broadcasters understand what they are doing, and how to make their commitments, as we wrote in our article, the FCC has set up an online tutorial on the system and will be holding a workshop about the process.  So if you have a TV station interested in taking advantage of the FCC’s offer to buy out your frequency, this is the month that the commitment needs to be made.
Continue Reading March Regulatory Dates for Broadcasters – Including Incentive Auction Commitments, New Webcasting Royalties, and Comments on AM Revitalization and Copyright Safe Harbor for User-Generated Content

The text of the Copyright Royalty Board decision on Internet Radio Royalties for 2016-2020 was released last Friday. While it is 203 pages long, the basis for the decision is relatively simple. As required by the Copyright Act, the Copyright Royalty Judges looked at all of the evidence presented to determine what rate a willing buyer and a willing seller would agree to in a marketplace transaction. In looking at that evidence, they decided that the best evidence for that rate was two deals actually done in the marketplace – one deal between Pandora and the independent record label organization Merlin and another between iHeartRadio and Warner Music. As these were deals for the very rates to be decided by the Judges – the rates for the public performance of sound recordings by noninteractive streaming companies – the Judges determined that these two deals best evidenced the value put on streaming royalties by actual players in the marketplace. Looking at the per song per listener rates specified in those deals, and making a few adjustments based on other consideration included in the deals (particularly in the iHeart deal), the Judges arrived at a per song per listener rate for each deal, and determined that they set the bounds of the reasonable rates for nonsubscription webcasting. Taking into account that approximately 2/3 of the music played by webcasters is from major labels like Warner as opposed to that from the independent labels such as those that were part of the Merlin group, the Judges gave the rates from the iHeart deal greater weight in determining where within the zone of reasonableness the rates should fall. Thus, the Board determined that the rate for nonsubscription, noninteractive services should be $.0017 per performance (i.e. per song per listener). This is the rate that they published back in December (about which we wrote here).

While the basis for the decision seems relatively simple, the process to get to that decision was not – and it took 203 pages for the Judges to discuss all of the issues that they weighed in coming to their conclusions. While some of those pages were dedicated to discussions of the rates for noncommercial webcasters and the terms of the payments to be made by webcasters (topics we will try to cover in a later post), the bulk of the decision was a discussion of how the Judges weighed the arguments of the parties in the case in reaching their conclusion. While no summary can cover all of the issues that went into this consideration, some of the issues covered in this decision are discussed below.
Continue Reading Looking at the Decision of the Copyright Royalty Board on Internet Radio Royalties for Commercial Webcasters – What are the Issues that the Judges Considered?

In Washington DC this week, many in the communications world are commemorating the 20th anniversary of the passage of the Telecommunications Act of 1996. Five years ago, we noted the changes that the Act made in the broadcast regulatory world – changes that are still being debated 20 years later. To show how little things change, I thought that I would republish the article that I wrote 5 years ago. There, I talked about some of the changes made in 1996 in the broadcast ownership rules that were still being debated in 2011, and suggested that they might be resolved by the review of the multiple ownership rules that was then about to begin. Of course, that didn’t happen (see our article here about the FCC’s decision to push most of the ownership decisions into the current Quadrennial Review of those rules. So we can again make the same claim – that perhaps some of these issues will be resolved by the current ownership rule review that is supposed to be decided this summer (though that date may well slip – see our predictions for the FCC’s actions on broadcast issues for this year, here).

Our article from 5 years ago also talked about calls then being made by one FCC Commissioner to roll back some of the 1996 reforms lengthening the license term for broadcasters. Those calls seem to have gone unheard so perhaps that one issue may have been resolved – at least for the time being.  It also discussed the proposals for the repurposing of the TV spectrum for wireless uses, which has led to the Incentive Auction that the FCC is about to conduct. 

But other issues remain on the table.  So here is a look back at what I wrote 5 years ago on the 15th anniversary of the Act:

On February 8, 1996, the Telecommunications Act of 1996 was signed into law by President Bill Clinton.  While the Act had significant impact throughout the communications industry, the impact on broadcasters was profound, and is still being debated.  The Act made changes for broadcasters in several major areas:

  • Lengthened license renewals to 8 years for both radio and TV, and eliminated the “comparative renewal”
  • For radio, eliminated all national caps on the number of radio stations in which one party could have an attributable interest and increased to 8 stations the number one party could own in the largest radio markets
  • For television, raised national ownership caps to having stations that reached no more than 35% of the national audience, with no limits on the number of stations that could be owned as long as their reach was under that cap.
  • Allocated spectrum that resulted in the DTV transition

Obviously, the DTV spectrum began the profound changes in the way television is broadcast, and led to the current debate as to whether over-the-air television should be further cut back in order to promote wireless broadband (see our recent post on the FCC’s current proceeding on this issue).  While the other changes have now been in effect for 15 years, the debate over these provisions continue.  Some argue that the renewal and ownership modifications have created too much consolidation in the broadcast media and lessened the broadcaster’s commitment to serving the public interest.  Others argue that, in the current media world, these changes don’t go far enough. Broadcasters are under attack from many directions, as new competitors fight for local audiences (often with minimally regulated multi-channel platforms, such as those delivered over the Internet) and others attack broadcasters principal financial support – their advertising revenue. Even local advertising dollars, traditionally fought over by broadcasters and newspapers (with some competition from billboards, direct mail and local cable), is now under assault from services such as Groupon and Living Social, and from other new media competitors of all sorts.  With the debated continuing on these issues in the current day, it might be worth a few looking back at the 1996 changes for broadcasters, and their impact on the current broadcast policy debate.
Continue Reading On Its 20th Anniversary, Looking Back at How the Telecommunications Act of 1996 Changed the Broadcast Regulatory Landscape

Last week, we wrote about the FCC’s decision to require that radio stations move their public inspection files online.  Commercial stations with 5 or more full-time employees that are located in Top 50 markets need to make the transition to the online file later this year once the FCC gets its new rules approved by the Office of Management and Budget following a Paperwork Reduction Act review.  Other radio stations will need to come into compliance, unless they get a waiver of the new rules, by March 1, 2018.  Our initial article about the decision was based on the FCC’s press release on the decision and comments made at the FCC meeting at which the obligation was adopted.  The FCC has now released the full-text of the decision (available here) and that order contains many new nuggets of information about the new obligations about which stations need to be aware.

The text of the decision does a good job of summarizing the obligations of radio broadcaster’s current public inspection file obligations (as well as those of the other entities that were also addressed by the new rule – cable systems, DBS operators, and Sirius XM for their satellite radio service).  For each of these services, the FCC addressed a number of issues.  Some of the radio questions addressed by the order include those set forth below.
Continue Reading FCC Releases Order on Online Public Inspection File – Answering Questions about Compliance with Radio’s New Obligations

The FCC today adopted rules to require that the public inspection files of radio stations (and of cable television systems and operators of satellite radio and television companies) to put their public inspection files online.  While, thus far, the FCC has only released a public notice summarizing its decision and not the full text explaining its reasoning, what is clear is that the new rule will go in to effect later this year for commercial radio stations with 5 or more full-time employees which are located in the Top 50 markets.  Other radio stations will have two years to come into compliance with the new requirements.

The rules, like the TV rules adopted several years ago (see our Q and A about the TV online file requirements, here), require that stations upload their files into an FCC-maintained database that will display the contents of each station’s file to the public.  According to today’s public notice, political broadcasting material only needs to be uploaded on a going forward basis upon the effective date of the new rules (i.e. only new documents created after the effective date of the new rules needs to be uploaded – existing documents would be maintained in the station’s paper file until the two-year retention period for political documents has expired).  It appears that all other documents not already in FCC databases will need to be fully uploaded by licensees within 6 months of the effective date of the new rules.  The documents that will need to be uploaded within that 6 months would include Quarterly Issues Programs Lists and the Annual EEO Public Inspection file report back to the beginning of the station’s current license term – documents not normally filed with the FCC.  Ownership Reports, FCC applications and similar documents filed with the FCC will be automatically uploaded to the station’s public file by the FCC’s own systems. 
Continue Reading FCC Adopts Online Public File Requirements for Radio, Satellite and Cable – To be Effective for Large Market Radio Later This Year

It’s that time of the year when we need to dust off the crystal ball and make predictions about the legal issues that will impact the business of broadcasters in 2016.  While we try to look ahead to identify the issues that are on the agenda of the FCC and other government agencies, there are always surprises as the regulators come up with issues that we did not anticipate. With this being an election year, issues may arise as regulators look to make a political point, or as Commissioners look to establish a legacy before the end of their terms in office.  And you can count on there being issues that arise that were unanticipated at the beginning of the year.

But, we’ll nevertheless give it a try – trying to guess the issues that we will likely be covering this year.  We’ll start today with issues likely to be considered by the FCC, and we’ll write later about issues that may arise on Capitol Hill and elsewhere in the maze of government agencies and courts who deal with broadcast issues.  In addition, watch these pages for our calendar of regulatory deadlines for broadcasters in the next few days.

So here are some issues that are on the table at the FCC.  While the TV incentive auction may well suck up much of the attention, especially in the first half of the year, there are many other issues to consider.  We’ll start below with issues affecting all stations, and then move on to TV and radio issues in separate sections below. 
Continue Reading What Washington Has in Store for Broadcasters in 2016 – Looking at the Legal Issues that the FCC Will Be Considering in the New Year

Last week, we noted that an order acting on the FCC’s proposal to adopt a requirement for an online public file for radio, cable and satellite had been prepared and was circulating among the FCC commissioners for their review.  Yesterday, in a post on the FCC’s blog, the FCC Chairman confirmed that the decision…

In tomorrow’s Federal Register, the Copyright Royalty Board will announce the commencement of three new proceedings to set music royalties for the 2018-2022 five-year period – each involving a different music right. The Board will begin a proceeding dealing with the digital public performances of sound recordings by satellite radio and “pre-existing subscription services” – the royalty that Sirius XM pays to record labels and performing artists for its performance of their songs on their satellite service, and the rates that cable radio pays for those same uses (see the draft notice here). Our summary of the last proceeding for satellite radio and pre-existing subscription services can be found here. Sirius XM was also a participant in the recent webcasting case, but only for its streaming service.  The statutory royalties at issue here are set by Sections 112 and 114 of the Copyright Act, the same sections that govern the webcasting royalty.

The second proceeding deals with the “mechanical royalty” or the making and distribution of “phonorecords.” That is the proceeding to establish what publishers and songwriters receive when there is a reproduction of their song. Traditionally, that was the royalty paid by a record company to the publisher or songwriter when a “cover version” of a song was made – a flat fee per copy of the song (whether a physical record or CD or a digital download). In recent years, the proceeding has expanded to include royalties paid by on-demand streaming services for their use of music. This is the royalty that has recently been much in the news in connection with the David Lowry lawsuit against Spotify. The CRB pre-publication version of that order is here (and our articles discussing the last decision on that royalty are here and here). This is one proceeding where the record labels and the digital music services are actually more or less on the same side – litigating against the publishing companies and songwriters over how much is paid for the use of the words and music of a particular song.  This proceeding is under Section 115 of the Copyright Act. 
Continue Reading Copyright Royalty Board Set to Begin 3 New Royalty Proceedings – Mechanical Royalty, Sirius XM Satellite Royalty, and Noncommercial Broadcasting Over-the-Air Royalties

While January starts off with some regulatory deadlines that apply to all broadcasters – Quarterly Issues Programs lists must be placed in a station’s public file by the 10th of January – there are many other dates that come due this month, dates to which broadcasters need to pay careful attention. For TV stations, they need to file at the FCC by January 11 (as the 10th is a Sunday) Children’s Television Reports, listing all of the programming that they broadcast in the previous quarter addressing the educational and informational needs of children. Records showing a TV station’s compliance with the commercial limits in children’s television should also be placed in the station’s public file.  As we have written, missing Quarterly Issues Programs lists (see our articles here and here) and Children’s Television Reports (and even late Children’s Television Reports) provided the basis for most of the fines during the last renewal cycle (see, for instance, our article here) – even for missing reports from early in the renewal cycle and, for the Children’s Reports, even where the reports were filed (repeatedly) only a few days late. So it is important to meet the obligations imposed by these regular filing deadlines.

Starting on the first day of this new year, there are a host of other obligations and deadlines that arise. On January 1, TV stations need to be captioning clips of video programming that they make available on their websites or in their mobile apps, if those clips came from programming that was captioned when shown on TV. For more on that obligation, see our article on the new online captioning requirements here.
Continue Reading January Regulatory Dates for Broadcasters – Quarterly Issues Programs Lists and Children’s Television Reports, Incentive Auction, FM Translators for AM Stations, Webcasting Fees, LUR Windows and More