Public Interest Obligations/Localism

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At its open meeting earlier this week, the FCC adopted a Notice of Proposed Rulemaking proposing changes to the public file rules for both broadcasters and cable systems. For commercial broadcasters, the FCC proposed to eliminate the requirement that they include in their public file copies of letters and emails to the station concerning station operations. For cable systems, the FCC proposed to eliminate the obligation to include in their file documents disclosing the location of their headend. What do these proposals mean for broadcasters?

Most of the broadcaster focus has been on the proposal to delete the obligation that commercial broadcasters keep a correspondence folder in their public inspection file for letters and emails from the public commenting on the operation of the station (the requirement has never applied to noncommercial broadcasters). Those files are supposed to contain, in a physical file at their main studio, all of the correspondence that stations receive from viewers or listeners (allowing broadcasters to omit correspondence that listeners asked to be kept private, and correspondence that contains offensive material). For TV stations that have already converted to an online public file for all of their other public file documents, and for radio stations who will soon be doing so (see our posts here and here on the upcoming obligation of radio to convert to an online public file), these letters will be the only remnant of the public file that must still be maintained at the main studio. The FCC tentatively concluded that the obligation to keep these letters and emails was no longer necessary.
Continue Reading FCC Proposes to Eliminate Public File Obligations – No More Letters from the Public for Broadcasters, No Cable Headend Information for Cable Systems?

In an FCC decision fining a TV station $10,000 for failing to include 15 Quarterly Issues Programs lists in its public inspection file, the FCC refused to reduce the proposed liability based on an intervening “long-form” transfer of control followed by a short-form assignment of license of the station. Thus, even though the station was no longer controlled by the same individuals who controlled the station at the time of the violation, and even though the licensee company was different, the fine still applied.

The Media Bureau decision looked at precedent that has held that a transfer of control of a station, even a “long-form” application on FCC Form 315 that is subject to public notice and a 30 day waiting period during which the public can comment on the change in control of the licensee, does not excuse the licensee for violations of the FCC’s rules that occurred prior to the transfer. We wrote about a similar holding in another case last year. The FCC’s view is that, when you are buying the stock of a company, you acquire not only the assets of the company but also its obligations, including any potential FCC violations. This is different from an assignment of license filed on a Form 314 (also a “long-form” application subject to a 30-day public comment period) – where a buyer just buys the assets through a new company and does not assume the liabilities – a difference that the FCC has recognized in these cases. In the decision reached today, the licensee attempted to exploit that different treatment – but the FCC rejected the distinction.
Continue Reading Fine for Missing Quarterly Issues Programs List Not Excused by Intervening Transfer of Control of TV Station – Buy Assets Not Stock to Avoid Assuming Prior Owner’s FCC Liabilities

The FCC today issued a Public Notice that the obligation will begin on June 24 to start uploading documents to the online public file for radio stations in the Top 50 markets .   For Top 50 market commercial radio stations that are part of employment units with 5 or more full-time employees, the June 24 date will mark the start of their obligation to upload materials to the online public file.  New public file documents (including political file documents) created on or after that date are to be placed in the online public file.  These stations will have 6 months from the effective date (until December 24, 2016) to upload to the online public file existing documents that are already in their paper public file.    This would include documents like EEO Public Inspection File Reports and Quarterly Issues Programs Lists. Pre-effective date political file documents need not be uploaded. Letters from the public also do not need to be uploaded (see our article here about the FCC’s proposal to entirely do away with the requirement that letters be kept). We wrote more extensively about the obligations for the radio online public inspection file here.

TV, too, needs to pay attention to this notice.  The Public Notice announces that the online public file will be moving to a new database.  Effective on June 24, TV licensees will need to use this new database too – what the FCC calls the “OPIF” (for expanded online public inspection file) as opposed to the old “BPIF” (“broadcast public inspection file”).  The FCC suggests that the new OPIF database will allow for easier uploads – including the ability to upload a single document into multiple stations’ files at the same time.  It will also have a more user-friendly interface, and will work better with other online systems like Dropbox and Box.  This database moves these files off the FCC server and onto a cloud-based storage system.  Stations can already try out the new system here. 
Continue Reading FCC Announces June 24 Effective Date for Radio Online Public Inspection File and New System for TV Stations Online File, Plus a Reminder to Upload JSAs

Yesterday, the FCC announced its agenda for its May open meeting to be held on May 25. Among the items on the agenda is a proposal to adopt a Notice of Proposed Rulemaking looking to abolish the obligation that broadcasters maintain in their public files copies of letters and emails from the general public about station operations. These letters are the last vestige of the physical public file for TV broadcasters who several years ago migrated the rest of their public file to an online system maintained by the FCC (see our summary of the TV online public file obligations here). The letters from the public were deemed too sensitive to put online, as they could reveal private information about the writers of those letters. Thus TV stations must still maintain a paper file at their main studio. Radio broadcasters too will soon be moving their public files online. In the order adopting the requirement for an online public file for radio (see our summary here), the FCC proposed that the same paper system for letters from the public be maintained. However, it did note that there were calls to abandon entirely the requirement to maintain these letters in a separate file, and promised to initiate this rulemaking to look at that issue.

Commissioner O’Rielly has been a major proponent of that change, tying the issue to one of the security of broadcast stations and personnel. In his concurring statement to the Online Public File order, he noted that the abolition of the requirement that broadcasters maintain these letters from the public would eliminate the need for many broadcasters to open their stations to all comers who enter on the pretext of inspecting the public file. In a blog post, he noted the need for security at broadcast stations. The recent events at Sinclair’s Baltimore TV station, where an individual with emotional or mental issues triggered a police shoot-out at the station, and last year’s tragedy involving the Roanoke TV crew, highlighted the very real threats to safety that broadcasters face every day. Minimizing these threats by removing one pretext for people to enter broadcast studios unchallenged is an important consideration in these deliberations.
Continue Reading FCC To Consider Abolition of Requirement that Broadcasters Maintain Letters From the Public in their Public Files – Moving Toward the End of the Physical Public File?

April brings the whole panoply of routine regulatory dates – from the need to prepare EEO Public File and Noncommercial Ownership Reports in some states, to Quarterly Issues Programs lists for all full-power broadcast stations and Quarterly Children’s Television Programming Reports for all TV stations.  So let’s look at some of the specific dates that broadcasters need to remember this coming month.

On the first of the month, EEO Public Inspection File Reports should be placed in the Public Inspection files of all stations in employment units with five or more full-time employees in the following states: Delaware, Indiana, Kentucky, Pennsylvania, Tennessee and Texas.  In addition, EEO Mid-Term Reports on FCC Form 397 need to be submitted to the FCC by radio stations that are part of employment units of 11 or more full-time employees in Kentucky, Tennessee and Indiana.  For more on the EEO Mid Term Report, see our article here.
Continue Reading April Regulatory Dates for Broadcasters – Quarterly Issues Programs Lists and Children’s Television Reports and Much More

How far can a court go in ordering broadcasters to comply with the terms of a contract?  By trying to get a court to enforce a contract signed with a broadcaster, is the suing party infringing on a licensee’s control over its broadcast station license? These questions are addressed in a letter that the FCC released this week, sent to a federal district court in connection with a dispute between two big TV companies over the termination of a Joint Sales Agreement between TV stations in Georgia.  In the case, Media General is seeking to enforce a JSA against a TV station in Augusta that had been owned by Schurz Communications, which was recently acquired by Gray Television.  As a condition of the sale of Schurz to Gray, to obtain FCC approval, the parties agreed to terminate the Augusta JSA.  Media General sued, and on February 26 it obtained an injunction from a Georgia state court barring Gray from operating the station or selling the station’s spectrum in the upcoming incentive auction.  The FCC’s letter states that it believes that the courts cannot order the relief that Media General seeks without infringing on the licensee’s rights to control the station.

While there have been procedural developments in the underlying dispute dealing with the court that will hear the case, it is the substance of the FCC’s letter that is important.  The FCC’s conclusion was based on two findings.  First, it found that Media General could not enforce the JSA because its termination was a requirement of the FCC in connection with the sale of Schurz – so a court cannot order the station to violate the FCC’s own order.  But more fundamentally, the FCC determined that Media General’s efforts infringed on the obligation under Section 310 of the Communications Act that the licensee (now Gray) maintain control over its station unless the FCC has approved a transfer of that control.  In the FCC’s eyes, control includes control over the programming of the station – which would be infringed by the JSA.  It also includes control over the ultimate disposition of the station, which would be infringed by any order forbidding its participation in the incentive auction.  According to the FCC, an element of control of a station is being able to decide whether or not to sell it.  While the FCC acknowledged that Gray and/or Shurz might be liable to Media General for monetary damages and penalties for any breach of the contract provisions, Media General could not get a court to make the station comply with these alleged obligations.  This is not the first time that the FCC has made such a pronouncement.
Continue Reading FCC Says No to Court’s Enforcement of Contractual Rights that Limit Broadcast Licensee’s Control Rights – What Does this Mean for Broadcast Contracts? 

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…

Broadcasters, like other federally regulated industries, continue to be leery about advertising for marijuana, even in states where cannabis dispensaries have been legalized for medical or even recreational use.  This week, the NY Times ran an article about companies trying to provide ways for dispensaries to use electronic payment systems, as federally regulated banks and credit card companies often refuse to deal with these businesses.  This is despite guidance given by the Department of Justice to banks about how to handle funds coming from such organizations.  Where the federal regulator (the FCC) has provided no advice whatsoever, broadcasters as regulated entities need to be very restrained in their desires to run ads for these dispensaries that appear to be legal under state laws.

Broadcasters are of course Federal licensees, and marijuana is still a controlled substance, illegal for sale to the public under Federal law.  While the current administration in Washington has said that enforcing marijuana laws against those who comply with state law is not an enforcement priority, it gave that advice provided a cannabis business observes very strict guidelines.  Strict Federal laws against any sale of marijuana remain on the books, and any search of the DOJ website provides numerous examples of legal actions brought against companies and individuals that don’t fit within those guidelines.  Plus, all it takes is a change in enforcement priorities by the Federal government and even dispensaries that are legal under state law can be closed by Federal actions.  And even if the priorities don’t change, the Department of Justice suggestions to Federal prosecutors don’t stop individual prosecutors from taking actions, especially if the cannabis-related business is found to have violated some other law or if it is acting outside of the strict limits that the DOJ set out in suggesting prosecutorial restraint.  Promoting a business that is not legal under Federal law is dangerous. 
Continue Reading The Murky State of Rules on Broadcast Advertising of Marijuana Products in States Which Have Legalized its Sale or Use

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