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An Alabama radio station recently received a notice about the new royalty rates that are payable to ReSound, the Canadian equivalent of SoundExchange, a collective set up to receive from webcasters royalties for the public performance of sound recordings and to distribute those royalties to the copyright holders (usually the labels) and the artists who recorded the songs, according to a story in today’s issue of Tom Taylor Now (a radio industry newsletter).  Tom asked me why would a radio station in Alabama get this notice – shouldn’t their payments to SoundExchange take care of the royalties that they owe for their streaming?  In fact, webcasters receiving these notices do need to consider their practices.

The general principle in the Internet world is that a webcaster is liable for paying music royalties for listeners where the listener is located – not where the transmitting entity may be located.  The same principle applies to rights to video and other content made available through the Internet – which is why your US HBO Go or Netflix subscription may not work the next time you visit London or Tokyo and try to watch a movie on your computer in your hotel room.  Rights are usually granted country by country (or sometimes by region), but in many cases rights granted in one country don’t give the Internet service acquiring those rights permission to circulate the content worldwide.  Thus, many large webcasters block their streams outside the US – notably webcasters like Pandora, who pulled their non-US streams back in 2007 (see our article here that we wrote when they took that action, which reminds me how long I have been writing this blog!). 
Continue Reading Why is a US Radio Station Getting a Notice about Webcasting Royalties in Canada? – Why Webcasters Geo-Block Their Streams to Avoid International Music Royalties

Could a change in the FCC treatment of Internet delivered video services be in the works – and how would that affect services like Aereo?  There were a number of published articles last week that suggested that the FCC was considering extending the definition of a Multichannel video programming distributor (MVPD) to over-the-top video providers or, as they are apparently being referred to, as Online Video Distributors (OVD) who provide linear programming like a cable or satellite company (as opposed to an on-demand provider like NetFlix).  While Chairman Wheeler at a press conference following last week’s open FCC meeting reportedly stated that the issue was “kicking around” implying that no decisions had been made, the FCC did announce that it was making a long-outstanding proceeding to look at this issue into a “permit but disclose” proceeding, meaning that parties can lobby the FCC on the issue as long as they file statements for the record disclosing the substance of their conversations with decision-makers.  What does all this mean?

If the Commission were to consider OVDs to be MVPDs, they would presumably be covered by all of the rules that apply to cable and satellite – including provisions that allow equal access to cable network programming in which the cable companies have a financial interest, and would also be subject to the must carry-retransmission consent regime that is applicable to other MVPDs, requiring MVPDs to negotiate with (and in many cases pay) TV stations to carry their programming.  The open proceeding to consider OVDs as MVPDs was started by a company called Sky Angel that focused on family-friendly programming.  The service initially delivered its programming by satellite, but migrated it to the Internet, at which time they wanted access to cable programming including Animal Planet.  When access to that programming was denied, they complained to the FCC.  The FCC staff initially denied the complaint, determining that MVPDs had to be “facility based,” meaning that they had to own the actual facilities that delivered the programming to the consumer.  The full Commission over two  years ago asked for public comment on whether this decision was correct – we wrote about that request for comment here and here – and the proceeding has essentially sat at the FCC ever since, until it began to get some renewed interest in connection with the Aereo case.
Continue Reading Will FCC Extend MVPD Rules to Online Video Providers – Including Retransmission Consent Fees and Program Access Rules?

With regulatory fees behind us, October brings a number of the routine quarterly regulatory filing dates.  October 10 for all broadcast stations, commercial and noncommercial, is the date by which your Quarterly Issues Programs lists, setting out the most important issues that faced your community in the last quarter and the programs that you broadcast to address those issues, need to be placed in the physical public inspection file of radio stations, and the online public file of TV broadcasters.  As missing and incomplete Quarterly lists have led to more fines in the recent license renewal violation than any other matter, and as the FCC staffers have been reviewing some of the TV station lists that are now posted in the online public inspection files of station, completing these forms on a timely basis remains very important. 

Full power TV and Class A TV stations by October 10 also need to have filed with the FCC their FCC Form 398 Children’s Television Reports, addressing the educational and informational programming directed to children that they broadcast.  Also, by that same date, they need to upload to their online public files records showing compliance with the limits on commercials during programming directed to children.  Children’s television reports have trailed right behind the Quarterly Issues Programs lists as the source of fines at license renewal time – so be sure that these are completed and filed on a timely basis as well. 
Continue Reading October Regulatory Dates for Broadcasters – Quarterly Issues Programs Lists and Children’s Television Reports, New Form for TV CP Applications, Comments on Captioning of Video Clips and Incentive Auction Reimbursement Form and More!

As the summer of copyright comes to an end, the music licensing issues which arose causing me to repeatedly write about this extremely contentious season in copyright law are by no means finished (see the most recent of our Summer of Copyright articles here).  In fact, on the first full day of autumn, we received a very interesting decision out of a US District Court in California on the lawsuit brought by Flo and Eddie against Sirius XM, finding that the music service improperly failed to pay royalties for the public performance of pre-1972 sound recordings from the duo’s former band, the Turtles (a copy of the decision can be found in this Billboard article).  As we have written before, Flo and Eddie brought suit against Sirius XM, arguing that the service needs to get permission to make public performances of these recordings and, by not doing so, it violated their California state law copyrights. 

Pre-1972 sound recordings first registered in the US are not covered by Federal law, so the current mechanism for Sirius XM to pay for the digital public performance of sound recordings (paying a royalty, set by the Copyright Royalty Board, to SoundExchange) does not exist.  To the surprise of many (including this author) the Court concluded that there is in fact a public performance right in pre-1972 sound recordings under California state law, and went on to conclude that Sirius XM violated its obligations under the law to pay for the use of music.  This decision, on a summary decision motion, may quite well be appealed.  The issue is also before many other courts, both in California and elsewhere.  But this decision is certainly worth review, as it could have an impact not only on digital services, but also on any other company that publicly performs such recordings – including other digital music services, bars and restaurants, stadiums, and potentially even broadcasters.
Continue Reading Court Rules in Favor of Flo & Eddie in California Suit Against Sirius XM for Public Performance of Pre-1972 Sound Recordings – What Does This Decision Mean for Broadcasters, Digital Media Companies and Other Music Users?

The Commission has set the date for comments on it Further Notice of Proposed Rulemaking on certain aspects of the captioning of Online Video clips.  We recently summarized the FCC action setting up compliance deadlines for the captioning of video clips taken from programs that are shown on TV with captions, and then repurposed for online use.  While the Commission has already established the obligations for TV broadcasters to take these clips and caption them when shown online on the broadcaster’s own website or through its own app, there are still certain areas to which the rules have not yet been extended on which comments are sought. The Comment deadline is October 6, with replies due November 3 (see the full text of the FCC decision here, and the Federal Register publication of the comment dates here).  What is being considered?

Basically, questions are asked about three areas. The first is whether to require that clips be captioned when they are shown on third-party websites.  The current rules require that full programs shown on TV and repurposed to the Internet be captioned when shown on third-party sites, but the new rules for clips were not immediately extended that far, as the Commission seeks comments on the costs and difficulties that might exist in such an extension.
Continue Reading Comment Dates Set for Rulemaking on the Required Captioning of Online Video Clips – What is Being Considered?

As we wrote in our previous articles on the music licensing issues being considered during this summer of copyright (here, here and here), one of the concerns driving many of the proposed reforms is the current demand of songwriters and publishing companies for a larger share of the music royalty pie.  In licensing the public performance of musical compositions, ASCAP and BMI represent the vast majority of songwriters, with SESAC representing far fewer writers (together ASCAP, BMI and SESAC are referred to as the “PROs,” the performing rights organizations).  ASCAP and BMI, having such a significant representation of musical compositions, have for over 50 years been subject to antitrust Consent Decrees that limit their operations and oversee the rates that they set for the use of their music.  Among the many requirements under the consent decree are those that obligate ASCAP and BMI to license all users of music who are similarly situated under the same rates and standards, and the oversight of a “rate court” to determine whether rates are reasonable whenever either of the PROs can’t agree on the amount of those rates with a class of music users.  In June, the US Department of Justice asked for public comment on several aspects of the consent decrees, and whether modifications of the decrees were called for.  Comments on the DOJ notice are due today.  Why was this proceeding started, and what is the DOJ looking at?

In two recent hearings examining music licensing, the motivations for ASCAP and BMI to seek changes in the consent decrees were discussed.  The first proceeding was a Copyright Office roundtable held in Nashville in June, in which I was a participant.  There, representatives of ASCAP discussed potential changes to the laws dealing with music licensing. The second was at the two part House Judiciary Committee hearing on music licensing held in late June.  ASCAP and BMI representatives in these forums suggested that there were several objectives in their seeking these reforms, and several specific changes that were requested in the Consent Decrees.  These include the following:

  • Replacing the rate court judges who determine rates when ASCAP or BMI don’t reach an agreement with a company that uses music (currently US Federal District Court Judges in the Southern District of NY) with an arbitration panel.
  • Instead of setting “reasonable rates” as required under the current consent decrees, the PROs request that a new standard be used to set rates – the willing buyer willing seller standard currently used in setting Internet radio sound recording performance royalty rates.
  • Allow publishers to withdraw some of their compositions from the PROs for licensing to certain classes of companies – specifically to withdraw so that the publishers can negotiate with digital media companies at rates that are not overseen by a rate court, while still leaving those same compositions with the PROs to collect from business establishment services (retail businesses that use “background” music) and potentially over the air radio stations – companies where there are lots of licensees who pay small amounts, making it difficult for anyone but a large, well-established company like ASCAP or BMI to pursue
  • Allow ASCAP and BMI to do more than simply license the public performance rights to music services – most likely allow them to provide reproduction and synch rights to the music that they license.
  • To impose interim royalties on any service that asks to be licensed, until an appropriate rate for that service can be set

What prompted this desire to change the consent decrees, and what will the DOJ be doing with the information it collects?
Continue Reading The Summer of Copyright Part 4 – The Department of Justice Reviews the ASCAP and BMI Consent Decrees – What Should Broadcasters and Music Services Know?

Extensions of time were just announced in two proceedings affecting music licensing – one a Copyright Office proceeding studying music licensing generally, and another a Copyright Royalty Board proceeding on webcasting recordkeeping.  Only a week after announcing that it would take another round of comments on its music licensing study, the Copyright Office announced an …

The FCC on Friday voted to extend its rule about captioning TV video repurposed to the Internet so as to cover not only full television programs, but also clips of those programs.  While the rules already require that TV programming that is captioned when broadcast to be captioned when retransmitted in full over the Internet, the new rules, to be phased in as described below, require that clips of TV programs that were broadcast with captions also be captioned when repurposed for online use.  In addition to adopting the rules for phasing in this new requirement, the Commission also asked several questions in a Further Notice of Proposed Rulemaking, asking some technical questions about the rules that it already adopted, and also whether to expand the requirements to other services and to programming that mixes both programming excepted from TV and programming that is original to the Internet.   

While the full text of the FCC’s decision has not yet been released, from the discussion at the FCC meeting and from its Public Notice about the rules, the outlines of the newly imposed obligations seem fairly clear.  The rules adopted for video clips, and the timeline for the implementation of these rules, are as follows: 

  • January 1, 2016 – captioning for “straight lift” clips, which are defined as a single excerpt of a program that had been captioned when first shown on TV, with the same video and audio as had been broadcast.
  • January 1, 2017 – captioning for video montages – which are collections of clips from different broadcasts, where all had been captioned when broadcast.  
  • July 1, 2017 – captioning for clips of time-sensitive (i.e., live or near-live) programming.  There will be a “grace period” between TV airing and required online captioning of 12 hours for live programming and eight hours for near-live programming.  (The staff confirmed during the post-meeting press conference that once the grace period expires, the posted clip must be captioned; if an earlier, non-captioned version was posted, it must be replaced.)

The Commission discussed that there would be some potential for waivers of these rules for small market stations, but the details of the standards that would apply were not detailed.  Also, there are some limitations on the obligations for posting of video clips that do not apply to the captioning obligations for full-length programs.  Those limitations are discussed below. 
Continue Reading FCC Adopts New Obligations to Caption Online Video Clips of TV Programs

The Supreme Court decision in the Aereo case seemed to be the end of the line for the service that was retransmitting television stations signals without consent, as it found that the broadcasters were entitled to an injunction to force Aereo to cease the public performance of their signals without consent.  In fact, Aereo itself seemed to think so too, shutting off its service soon after the decision.  But in a move that was surprising to some, Aereo has apparently not thrown in the towel, and it is now back in Court with a two-pronged argument as to why its service is still viable (see its letter to the Court here).  First, it argues that, as the Supreme Court seemed to think that Aereo acted like a cable system and should be treated in the same manner as a cable system for purposes of determining whether its retransmission of a television stations signal was a public performance, it might as well be treated like a cable system for all purposes, and thus it should be entitled to carry the signals of TV stations pursuant to the statutory license granted to cable systems by Section 111 of the Copyright Act.  Second, it argues that, even if it does not qualify for treatment as a cable system, it should nevertheless be able to retransmit television signals – just not in real time, as the Aereo contends that the Court decision only prevented simultaneous and near simultaneous retransmissions of the television stations’ signals.  Offering once again a fearless prediction – I doubt these arguments will help Aereo any more than did their arguments before the Supreme Court.

Admittedly, their argument that they qualify as a cable system under the Copyright Act has some appeal.  In fact, as we noted in our summary of the oral argument before the Supreme Court, the Justices even asked why the company did not qualify as a cable company.  Section 111 of the Copyright Act defines a cable system as follows:

A “cable system” is a facility, located in any State, territory, trust territory, or possession of the United States, that in whole or in part receives signals transmitted or programs broadcast by one or more television broadcast stations licensed by the Federal Communications Commission, and makes secondary transmissions of such signals or programs by wires, cables, microwave, or other communications channels to subscribing members of the public who pay for such service.

That language is seemingly broad, covering not just what most of us think as a cable system (one that uses wires to transmit TV programming to the customer), as it talks expansively of “other communications channels” to deliver programming.  Of course, when satellite TV started, they were unsure of their status under this definition, and ended up getting a whole new section of the act to determine their ability to retransmit local TV signals to their subscribers.  But even if this section can be read expansively to cover Aereo, what does that get them?
Continue Reading Not Dead Yet – Aereo Tries To Reinvent Itself By Arguing that it is a Cable System Entitled to Carry Television Stations Pursuant to the Statutory License

The House of Representatives Judiciary Committee last week finished its second hearing on music licensing (written witness statements and a link to the webcast can be found here).  Congressional hearings usually are not in-depth proceedings looking to establish detailed facts as done in a hearing in a court proceeding.  Instead, they are formalized proceedings where parties get to make their canned statements setting out positions on issues.  Congressional representatives themselves make statements setting out their positions on the issues, and ask pointed questions to selected witnesses to reinforce those positions.  Minds are rarely changed, and the truly undecided are rarely illuminated on the issues.  But the hearings do serve to set out the issues that are going to be considered by the Committee in ultimately crafting legislation.  And last week’s hearing did just that – highlighting the issues likely to be considered in legislation promised by the Committee Chair, Representative Goodlatte, who promised an omnibus bill on music licensing, dubbed the “Music Bus,” to address the many issues on the table.

Note that any bill that is ultimately introduced will address many seemingly minor issues – details of process and procedure that don’t make the headlines.  But the big issues are the ones that will cause the most industry argument before the lawyers work out the details.  It’s also important to note that it is very late in the legislative calendar right now, with the Senate not putting the same emphasis on copyright issues as it the House.  With elections coming up in the Fall, and scheduled upcoming summer recess, Congress has much must-pass legislation that will fill up their legislative days before the next Congress is sworn in in January.  The start of a new Congress means that all legislation will have a fresh start.  Thus, any Omnibus bill that is introduced this year will most likely not become law, but instead will set the agenda for discussions for next year in the new Congress.  Certainly, there may be more limited bills that sponsors may try to get stuck on other legislation that must move before the end of the Congressional session, so interested parties will remain vigilant during the final days of this session of Congress.  But what are the issues that are on the table for inclusion in any Music Bus?
Continue Reading The Summer of Copyright, Part 2 – The House Judiciary Committee Plans Omnibus Music Licensing Bill – The “Music Bus”