Public Interest Obligations/Localism

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

  • In a speech to the Media Institute, FCC Commissioner Starks spoke of the importance of diversity in media ownership and

Here are some of the regulatory developments from 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 National Association of Broadcasters this week announced that its CEO, Gordon Smith, will be stepping down at the end

The broadcast trade press is full today with the news that NAB CEO Gordon Smith will be stepping back from that position at the end of the year, to be replaced by current COO (and former head of Government Relations) Curtis LeGeyt.  As many will remember, Smith took over the organization over a decade ago during a turbulent time for the industry.  At the time, TV stations faced increasing calls for other uses of the broadcast spectrum, and radio stations faced a possible performance royalty on their over-the-air broadcasts of sound recordings.  Since then, through all sorts of issues, there has been a general consensus in the industry that its leadership was in capable hands and meeting the issues as they arose.

But many issues remain for broadcasters – some of them ones that have never gone away completely.  The sound recording performance royalty for over-the-air broadcasting remains an issue, as do other music licensing issues calling for changes to the way that songwriters and composers are compensated, generally calling for higher payments or different compensation systems (see our articles here on the GMR controversy and here on the review of music industry antitrust consent decrees).  TV stations, while having gone through the incentive auction giving up significant parts of the TV broadcast spectrum, still face demands by wireless operators and others hungry for more spectrum to provide the many in-demand services necessary to meet the need for faster mobile services (see our articles here on C-Band redeployment and here on requests for a set aside of TV spectrum for unlicensed wireless users).  But competition from digital services may well be the biggest current issue facing broadcasters.
Continue Reading With a Change at the Top at the NAB as CEO Gordon Smith Plans His Departure – What are the Regulatory Issues That are Facing Broadcasters?

The United States Supreme Court yesterday released its decision upholding the FCC’s 2017 changes to its ownership rules in the FCC v Prometheus Radio Project case (see our summary here).  Those rules had been put on hold in 2019 by a decision by the Third Circuit Court of Appeals which held that the FCC had to develop a more detailed record on the impact of rule changes on minority ownership before making any such changes (see our summary of that decision here).  The Supreme Court did not issue a sweeping decision evaluating the competitive landscape for the broadcast industry, nor was it expected to.  Instead, the Court decision was a narrow legal one, looking at whether the decision of the FCC was entitled to traditional judicial deference to expert administrative agencies.

The Supreme Court was reviewing the legal question of whether the FCC’s 2017 review of diversity was adequately justified.  In 2017, the FCC determined that that no substantial impact on diversity was proven by any party who filed comments in the media ownership proceeding and, to the extent that there was an impact, the benefits of making broadcast companies stronger competitors in today’s media marketplace outweighed that impact.  The Third Circuit would have had the FCC conduct a sweeping historical analysis of the impact of past instances where the ownership rules were relaxed to see the impact on minority ownership so that the FCC could judge the likely impact of new changes to the rules.  The Supreme Court found that the FCC had no obligation to conduct its own studies into that issue and, based on the evidence before the FCC, its decision to relax the rules was not an arbitrary one.  Thus, it was entitled to the deference given to decisions of expert regulatory agencies (see our article here on the deference given to administrative agency decisions).  In essence, this was a narrow decision based on principles of administrative law to which all nine Justices, liberal and conservative, could agree.
Continue Reading Supreme Court Reinstates 2017 FCC Changes to Broadcast Ownership Rules Including the End to Newspaper-Broadcast Cross-Ownership Ban – But Radio Changes Yet to Come

Noncommercial radio stations ignoring their FCC public file obligations should be expecting to enter into consent decrees at license renewal time obligating them to take formal steps to monitor compliance and submit information to the FCC on any issues that arise.  In the last few weeks, we have seen at least four such decrees announced by the FCC (e.g. here, here, and here) imposing such obligations in exchange for the grant of pending renewal applications.  In each consent decree, the FCC notes the hardships imposed by the pandemic, presumably suggesting that, had these been more ordinary times, the licensees would have faced steeper penalties.

The consent decrees themselves resemble the consent decrees entered into between the FCC and commercial broadcasters who have not adequately maintained the documents required to be in the political file that is part of each commercial station’s public inspection file (see our articles here and here).  The four recent consent decrees with the noncommercial broadcasters require that they take the following actions:

  • They must appoint a Compliance Officer – a senior manager who will report to the “Chief Executive Officer” or equivalent of the licensee. The Compliance Officer is responsible for making sure that the licensee observes all public file obligations and all terms of the consent decree.
  • Within 30 days, the licensee must adopt a Compliance Plan that includes:
    • A written Compliance Manual explaining all requirements of the public file rules and is distributed to all employees who deal with any aspect of the rules.
    • A training program must be conducted for all employees on their obligations under the public file rules.
  • A year after the effective date of the Consent Decree, the licensee must submit a Compliance Report to the FCC certifying its compliance with the rules and how it complied.
  • If in any instance, the licensee does not comply with the rules, it must report any instance of noncompliance to the FCC within 10 days of its discovery.

As we noted here in the case of a commercial broadcaster who did not comply with the terms of a consent decree, noncompliance can bring big penalties.
Continue Reading Noncommercial Stations – Don’t Forget Your Public File Obligations – The FCC is Watching!

After so much turmoil in the last year, radio stations may be inclined to blow off some steam this year with some big April Fools” Day stunt.  But because of the continuing issues with the pandemic and social tensions throughout the country, a prank that may seem funny to some could trigger concerns with others.  As we do every year about this time, we need to play our role as attorneys and ruin any fun that you may be planning by repeating our reminder that broadcasters need to be careful with any on-air pranks, jokes or other on-air bits prepared especially for the day.  While a little fun is OK, remember that the FCC does have a rule against on-air hoaxes.  Issues under this rule can arise at any time, but a broadcaster’s temptation to go over the line is probably highest on April 1.

The FCC’s rule against broadcast hoaxes, Section 73.1217, prevents stations from running any information about a “crime or catastrophe” on the air, if the broadcaster (1) knows the information to be false, (2) it is reasonably foreseeable that the broadcast of the material will cause substantial public harm and (3) public harm is in fact caused.  Public harm is defined as “direct and actual damage to property or to the health or safety of the general public, or diversion of law enforcement or other public health and safety authorities from their duties.”  If you air a program that fits within this definition and causes a public harm, you should expect to be fined by the FCC.
Continue Reading Plan April Fools’ Day On-Air Stunts With Care – Remember the FCC Hoax Rule

A few weeks ago, the news was abuzz with the controversy over an Australian law that would make social media companies and even search engines pay for their making available content originating with traditional media outlets.  While the controversy was hot, there were articles in many general interest publications asking whether that model could work outside Australia – and perhaps whether such a bill could even be adopted in the US.  What has received far less notice in the popular press was a US version of that bill that was recently introduced in Congress to address some of the same issues.  The Journalism Competition and Preservation Act of 2021 was not introduced in response to the Australian law, but instead it is an idea that pre-dated the overseas action.  Versions of the US bill have been introduced in prior sessions of Congress, though it never before gained much attention.  But this year’s version has been introduced in both the House and the Senate, has already been the subject of a Congressional committee hearing, and has gained support (including from the National Association of Broadcasters and even the tech company Microsoft).

The intent of these bills, and other similar legislation considered across the world, is to open a new revenue stream for traditional media outlets which cover local news – outlets that have been hit hard by the online media revolution over the last 25 years.  As we have noted in other contexts (see for instance our articles here and here), as huge digital media platforms have developed in this century, these platforms have taken away over half the local advertising revenue in virtually all media markets – revenues that had supported local journalism.  The perception is that this has been done without significantly adding to the coverage of local issues and events in these markets.  We certainly have seen the economics of the newspaper industry severely impacted, with many if not most newspapers cutting staff and local coverage, and even how often the papers are published.  Broadcasting, too, has felt the impact.  Many legislators across the globe have come to the conclusion that these digital platforms attract audiences by featuring content created by the traditional media sources that have been so impacted by online operations.  To preserve and support original news sources, various ways in which the content creators can be compensated for the use of their works, such as the legislation in the US and Australia, are being explored.  We thought it worth looking at proposed legislation in the US and comparing it to the more extensive legislation introduced in Australia, and to highlight some of the issues that may arise in connection with such regulatory proposals.
Continue Reading Making the Tech Giants Pay to Use Traditional Media News Content – Looking at the Legislative Issues

After a long winter, spring has finally arrived and has brought with it more daylight and warmer temperatures—two occurrences that do not necessarily pair well with keeping up with broadcast regulatory dates and deadlines.  Here are some of the important dates coming in April.  Be sure to consult with your FCC counsel on all other important dates applicable to your own operations.

On or before April 1, radio stations in Texas (including LPFM stations) and television stations in Indiana, Kentucky, and Tennessee must file their license renewal applications through the FCC’s Licensing and Management System (LMS).  Those stations must also file with the FCC a Broadcast EEO Program Report (Form 2100, Schedule 396).

Both radio and TV stations in the states listed above with April 1 renewal filing deadlines, as well as radio and TV stations in Delaware and Pennsylvania, if they are part of a station employment unit with 5 or more full-time employees (an employment unit is a station or a group of commonly controlled stations in the same market that share at least one employee), by April 1 must upload to their public file and post a link on their station website to their Annual EEO Public Inspection Report covering their hiring and employment outreach activities for the twelve months from April 1, 2020 to March 31, 2021.
Continue Reading April Regulatory Dates for Broadcasters: License Renewal, Issues/Programs Lists, EEO, Webcasting Royalties and More

Last week, the FCC issued a hearing designation order, sending to an Administrative Law Judge the question of whether an AM station’s license renewal application should be granted.  The hearing seeks to gather evidence as to whether the renewal should be granted despite the station’s record, under its current licensee, where it was operating for only 36% of the time that the licensee owned the station prior to the renewal being filed, and for only 2 days in the 9 months in 2020 after the renewal was filed.  During much of the period that the station was operating, it operated at less than full power (according to the FCC, often without receiving an STA for that low power operation).

Because of these prolonged periods of silence, the FCC asks whether the licensee was really serving the public interest.  For example, if a station is not operating, it cannot cover local issues or broadcast EAS warnings.  Over the last several years, there have been several cases where the FCC has designated for hearing or revoked licenses of stations with records of non-operation for extended periods during a license renewal term, finding that broadcasters cannot warehouse spectrum.  See our articles here and here about some recent examples.  If a broadcast channel is not used by a licensee, these hearings are held to determine if the public interest might not be better served by taking the channel from its current licensee and awarding it to some other party who will make use of it.
Continue Reading FCC Hearing Designation Order Reminds Broadcasters that Long Periods Where They are Not Operating May Lead to License Renewal Problems

In recent months, we have seen concerted attempts to reign in digital and social media from all along the political spectrum – from Washington, in the states and even internationally.  We thought that we would look at some of those efforts and their motivations today.  We will look at many of these issues in more detail in future articles.

Towards the end of last year, the Trump Administration sought to strip social media platforms of Section 230 protections because of their alleged bias against conservative speakers (see our articles here and here).  A similar perception seems to underlie the recently proposed Florida legislation that seems to create for social media a policy similar to the equal opportunities (or “equal time”) policy that applies to broadcasters – a social media service cannot “de-platform” a political candidate if it allows the opposing candidate access to that platform.  That proposed legislation also has announced goals of requiring clear rules for access and editing of political views on such sites.  A press release about that legislation is here, though the actual text does not yet seem to be available for review.
Continue Reading Everyone Seems to Want to Regulate Online Media – But Can They?  Setting the Stage- Looking at the Range of Regulatory Proposals