The Copyright Royalty Board today published a Federal Register notice announcing that SoundExchange was auditing a number of broadcasters and other webcasters to assess their compliance with the statutory music licenses provided by Sections 112 and 114 of the Copyright Act for the public performance of sound recordings and ephemeral copies made in the digital transmission process by commercial webcasters. A separate notice to audit the company Music Choice, which also provides a digital music service usually delivered with cable or satellite television services, was also issued to audit their compliance both on webcasting and on their subscription music service which is subject to separate royalty rules set out in a different part of the same section of the Copyright Act and set through a different Copyright Royalty Board proceeding. A third audit notice has gone out to a company called Rockbot, a Business Establishment Service whose royalties are exclusively paid under Section 112 of the statute (see our article here about the CRB-set royalties for these services that provide music played in various food and retail establishments and other businesses).

SoundExchange may conduct an audit of any licensee operating under the statutory licenses for which it collects royalties.  Such audits cover the prior three calendar years in order to verify that the correct royalty payments have been made. The decision to audit a company is not necessarily any indication that SoundExchange considers something amiss with that company’s royalty payments – instead they audit a cross-section of services each year (see our past articles about audits covering the spectrum of digital music companies audited by SoundExchange here, herehere and here).  Audits are conducted by outside accounting firms who, after they review the books and records of the company being audited, issue a report to SoundExchange about their findings.  The company being audited has the right to review the report before it is issued and suggest corrections or identify errors.  The reports are then provided to SoundExchange and, if they show an underpayment, it can collect any unpaid royalties, with interest.  While, by statute, the notice of the royalty must be published in the Federal Register, the results of the audit and any subsequent resolution usually are not made public.
Continue Reading Copyright Royalty Board Announces SoundExchange Audits of Royalty Payments for Webcasters (Including Broadcast Simulcasts) and Other Digital Music Services

Last week, Chairman Pai gave a speech to the Media Institute in Washington, talking about his deregulatory accomplishments during his tenure as FCC Chairman.  Central to his speech was the suggestion that the broadcast ownership rules no longer made sense, as they regulate an incredibly small piece of the media landscape, while digital competitors, who are commanding a greater and greater share of the market for audience and advertising dollars, are essentially unregulated.  Not only are they unregulated, but the digital services that compete with broadcasting are owned and financed by companies who are the giants of the US economy.  In his speech, he noted that the company with the most broadcast TV ownership is dwarfed in market capitalization by the companies offering competing video services.

While the Chairman’s speech concentrated on television, mentioning radio only in passing, we note that many of these same issues are even more at play in the audio entertainment marketplace.  When the Chairman two months ago offered remarks on the hundredth anniversary of the first commercial radio station in the US, he recognized that radio has played a fundamental role in the communications world over the last century.  But that role faces more and more challenges, perhaps exaggerated by the pandemic when in many markets listeners are spending less time in cars where so much radio listening takes place.  There are many challenges to over-the-air radio as new sources of audio entertainment that sound and function similarly are more and more accessible to the public and more and more popular with listeners.  Over-the-air radio is already less a distinct industry than a part of the overall audio entertainment marketplace competing with streaming services, podcasts, satellite radio and other audio media.  These changes in listening habits are coupled with a change in the advertising marketplace, as the digital media giants now take over 50% of the local advertising market that was once the province of radio, television and newspapers.
Continue Reading Outgoing FCC Chairman Pai Calls for Modernization of Media Ownership Rules – Audio Competition Issues for the New FCC To Consider  

The Senate this week confirmed Nathan Simington for the seat on the FCC currently held by Michael O’Rielly.  It is expected that Mr. Simington will be sworn in as a new Commissioner later this week, allowing Commissioner O’Rielly to serve through tomorrow’s FCC open meeting where he will likely give his farewell comments to the FCC and communications audience.  Commissioner O’Rielly has generally been a friend to broadcasters, championing many causes for the industry, including changes to the Children’s Television rules and fighting pirate radio.  Broadcasters will certainly miss his voice at the FCC.

Commissioner Simington comes to the FCC with a relatively low-profile background.  He has been a lawyer for less than a decade, and his communications background appears to be limited to serving as an in-house lawyer for a wireless service company and working at the NTIA (the administration within the Commerce Department charged with developing communications policy for the administration and oversight over government spectrum).  At NTIA, he worked to some degree on the administration’s proposals for the FCC to interpret provisions of Section 230 of the Communications Decency Act (see our posts here and here) – proposals currently under review by the Commission.  His outlook as a Republican appointee seems to generally be a deregulatory one, though his specific thoughts about broadcast regulation have not been set out in any detail.
Continue Reading New FCC Commissioner Nathan Simington on the Way

Here are some of the regulatory developments of 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.  Also, we include a look at actions to watch in the week ahead.

  • FCC Chairman Ajit Pai announced his intention

Here are some of the regulatory developments of 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.

  • On November 12, the notice was published in the Federal Register of the lifting of the filing freeze for certain

November is one of those few months with no routine FCC filing obligations (no renewals, reports, fees or other regularly scheduled deadlines.  While that might seem to suggest that you can take time that you normally devote to regulatory actions to begin your holiday preparations even in this most unusual year, there are still many issues to consider, and you can also use this month to plan for complying with deadlines that fall in December.

While there are no significant comment dates on broadcast matters yet set in November, look for dates to be set in the FCC’s proceeding to determine whether there should be a limit on the number of applications that one party can file in the upcoming window for the filing of applications for new noncommercial, reserved band FM stations.  See our article here on the FCC’s request for comments in this proceeding.
Continue Reading November Regulatory Dates for Broadcasters: Rulemaking Comments, Hearings on Diversity and a New Commissioner, an FCC Open Meeting and More

Here are some of the regulatory developments of 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 FCC’s International Bureau released a Public Notice on its review of the requests for “lump sum reimbursement requests” for

Here are some of the regulatory developments of 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 FCC set the comment dates for its proposal for changing the cost to file various broadcast applications. The new

The use of music has long been an issue for those looking to provide music-oriented podcasts to the public.  As we have written before (see, for example, our articles here and here), clearing rights to use music in podcasts is not as simple as signing up with ASCAP, BMI and SESAC (or even adding GMR or SoundExchange to the mix).  These organizations simply cover public performance rights for music when, as our prior articles make clear, podcasts require additional rights to use music in ways not fully covered by the licenses that are offered by these organizations.  The rights to the use both the underlying musical composition and the actual recording of that composition by a band or singer must be obtained on an individual basis from the copyright holders.  That can often mean a search for both the publisher and record company who usually own those copyright in the musical composition and the sound recording, respectively.  This can often be a difficult search, especially if there are multiple songwriters of a composition (and hence multiple publishing companies which likely own the copyrights) or where the rights to the songs have been assigned over time from their original owners.  Plus, as we have written before, there is no easily accessible universal database yet in existence that provides up-to-date and complete records of who owns those copyrights.  All this combines to make the clearance of music for use in podcasts an arduous process – and almost prohibitive for any small podcaster who wants to use more than one or two pieces of music in connection with their show.

In an article in the radio industry newsletter Inside Radio this week, it appears that at least two music-oriented podcasts have attracted the attention of the music industry, receiving demands from the RIAA which has led to their ceasing of operations.  It appears that these cases demonstrate both the difficulty of clearing music for podcasts, and perhaps that, as podcasting is growing in attention, the legal issues associated with the use of music in those podcasts is coming to the forefront of the attention of the music industry.
Continue Reading Music in Podcasts – As Podcasts Shut Down Following Infringement Notices, Looking at the Required Music Rights

Here are some of the regulatory and legal actions and developments of 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.

  • Political advertising will continue to blanket the airwaves for the next month and a half and