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An intense national conversation on racial justice and equity has been thrust upon the country by the events of the last week.  While our focus here on this blog is narrow, it is certainly worth looking at some of the issues that are within our broadcast world that are relevant to this conversation.  In recent days, for instance, FCC Commissioner Geoffrey Starks promoted more diversity in broadcast ownership, and an article in Radio Ink by the President of the National Association of Black Owned Broadcasters called for a revival of the minority tax certificate – a program ended decades ago over concerns about its cost to the government.  The tax certificate offers perhaps the most meaningful route to the goals sought by the Commissioner and is worth examination as, since its abolition so many years ago, its revival has been discussed so many times that it has become almost a cliché, with many not really understanding what it did and why it was effective.

The minority tax certificate was a program designed to provide broadcasters with an economic incentive to sell their stations to minority owners.  Rather than directly subsidizing the potential owners, the certificate instead gave a tax break to sellers that incentivized them to sell to the minority-owned business even if there were multiple bidders for their properties.  If the seller sold to a minority-owned business, the seller could take the proceeds from the sale and roll those proceeds over into a new media property without recognizing the taxable gain from the sale.  Unlike the typical like-kind exchange where the roll-over into a new property has to proceed within a few months of the sale, the tax certificate treated the sale as an involuntary sale (like the sale of a property because of a government’s exercise of eminent domain) under Section 1033 of the tax code, giving the seller several years to roll the proceeds over into a new purchase.  At that point, the new property would have the same tax basis as the old – meaning that no gain would be recognized until the sale of the new property.  This spurred many sales to minority companies by broadcasters looking not to get out of the business, but instead looking to realign their holdings or to move up into larger markets.  Several hundred radio and TV stations were purchased under this program in the last 20 years of the program’s existence.  Why was this seemingly successful program abandoned?…
Continue Reading Understanding the Minority Tax Certificate and its Potential for Promoting Diversity in Broadcast Ownership

LPTV and TV translator licensees and applicants saw two notices from the FCC yesterday dealing with fall-out from the FCC’s incentive auction and the subsequent repacking of TV stations into a smaller part of the broadcast spectrum.  The first notice announced a settlement window that runs through July 31 for applicants for new or modified LPTV stations or translators that had filed for new channels or new technical facilities because use of their old channels were preempted by the repacking – either because those channels were no longer part of the TV band or because the channels were to be used by some full-power station that was itself repacked.  These applications have been pending since an LPTV/TV translator filing window in 2009, and were allowed to amend their applications to address issues caused by the repacking earlier this year.  As, in some cases, more than one applicant applied for the same new channel in the same area, those applicants whose displacement applications ended up being mutually exclusive can file to make engineering changes to their applications (including, if no other solutions are possible, changing channels yet again) or to reach other settlements (including channel sharing) to resolve their conflicts.  So if your displacement application was on the list of mutually exclusive applications, look to see if you can resolve your issues and file for the necessary FCC approvals by the July 31 deadline.

In addition, LPTV stations and TV translators using channels 38, 44, 45 and 46 were reminded by the FCC in another Public Notice that they need to vacate these channels by July 13.  The FCC notes that this is a hard deadline that cannot be waived – so stations operating on these channels must either move to a new channel (getting FCC approval for such a move if they have not already received such approval) or cease operations (and ask for authority to remain silent until they have been able to move to another channel) by the July 31 deadline so that the spectrum is freed up as part of its being repurposed for wireless uses. …
Continue Reading LPTV and TV Translators – Settlement Window for Mutually Exclusive Applications and Reminder on Deadline for Vacating Certain Channels

Here are some of the regulatory and legal actions of the last week—and some obligations for the week ahead—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 comment cycle was set in the FCC’s annual regulatory fee proceeding. On or before June 12, the Commission wants to hear from interested parties about the fees that it proposes to impose on the companies that it regulates – including broadcasters.  The FCC proposes to complete the implementation of its change to computing fees for television stations based on population served rather than on the market in which they operate, a move it began last year (see our Broadcast Law Blog article here on the FCC decision last year to initiate the change in the way TV fees are allocated).  The FCC also asks for ideas about how the Commission can extend fee relief to stations suffering COVID-19-related financial hardship.  Reply comments are due on or before June 29.  (Notice of Proposed Rulemaking)
  • FCC Chairman Ajit Pai and Chris Krebs, director of the U.S. Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency, wrote to the nation’s governors asking them to, among other things, declare radio and TV broadcasters as essential to COVID-19 response efforts and to afford broadcasters all appropriate resources and access. (News Release)
  • In a good reminder to broadcasters that transactions involving the sale or transfer of control of a broadcast station must be authorized in advance by the FCC, the Media Bureau entered into a consent decree with two companies that sold an FM station and FM translator without getting approval from the Commission. The parties mistakenly believed filing license renewal applications that reflected the assignment was sufficient approval.  The consent decree includes an $8,000 penalty.  (Consent Decree).  See this article on past cases where the FCC has warned that even transactions among related companies that change the legal form of ownership of a broadcast station without changing the ultimate control need prior FCC approval.
  • The Commission granted approval to Cumulus Media, Inc. to exceed the Commission’s twenty-five percent foreign ownership threshold. The Commission will allow Cumulus to have up to 100 percent aggregate foreign investment in the company, although additional approvals will be needed if any previously unnamed foreign entity acquires 5% or more of the company or if any foreign entity desires to acquire control.  (Declaratory Ruling).  This decision shows the process that the FCC must go through to approve foreign ownership above the 25% threshold and the analysis needed to issue such approvals.  See our articles here and here about the evolving FCC policy in this area.
  • President Trump signed an executive order that seeks to, among other things, address online censorship and rollback certain protections afforded to online platforms, which include social media sites like Twitter, Facebook, Instagram, and YouTube, but which also protect any site that hosts content created by users – which could include the Internet platforms of many broadcasters. Under federal law, Section 230 of the Communications Decency Act, these online platforms generally enjoy legal immunity for what users post on their platforms.  The President directed the Department of Commerce to ask the FCC to open a rulemaking to review this immunity and asked the FTC to review whether platforms were adhering to their terms of use when commenting on or limiting third-party content.  Other government entities, including state attorneys general and the Department of Justice, were also asked to review online platforms.  For his part, FCC Chairman Ajit Pai said “This debate is an important one. The Federal Communications Commission will carefully review any petition for rulemaking filed by the Department of Commerce.”  (Executive Order).  Watch for an article on the Broadcast Law Blog this coming week on implications of this order for broadcasters and other media companies.
  • Anyone looking to hand deliver documents to the FCC needs to learn a new address, and it is not, as you might expect, the address of the FCC’s future headquarters. Deliveries by hand must now be brought to 9050 Junction Drive, Annapolis Junction, MD 20701.  The address change is to enhance security screening and is part of winding down operations at the current 12th Street headquarters.  (Order)

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Continue Reading This Week at the FCC for Broadcasters: May 23, 2020 to May 29, 2020

With many people now entering their third month of complying with stay-at-home orders and social distancing and summer being right around the corner, it would be easy for broadcasters to look past their regulatory obligations to focus on the day when they can ramp up operations and profits.  As you can read below, however, June is a busy month with important obligations for many stations.

June brings the start of summer and the start of the license renewal cycle for television stations.  By June 1, full-power TV, Class A TV, TV translator, and LPTV stations in DC, Maryland, Virginia, and West Virginia and full-power AM and FM stations and LPFM and FM translators in Michigan and Ohio must file their license renewal applications. Those stations should already be close to completing their renewal applications, looking to file them on or before the June 1 deadline.  See our article here on the FCC’s announcement of the newly-revised procedures for filing TV license renewal applications.  On June 1 and again on June 16, stations filing renewals need to broadcast their post-filing announcements informing their audiences of the filing of the renewal application.…
Continue Reading June 2020 Regulatory Dates for Broadcasters: License Renewals, EEO Reports, Broadcast Internet Consideration, and Comments on Significant Viewing, DTS, White Spaces, Regulatory Fees, and Video Description

Here are some of the FCC regulatory and legal actions 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 released the agenda for its June 9 Open Meeting announcing that it will consider an

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The FCC currently requires what they now call “video description” by commercial television broadcast stations that are affiliated with one of the top four commercial television broadcast networks (ABC, CBS, Fox, and NBC) and located in the top 60 television markets.  Video description is also required of MVPDs with 50,000 or more subscribers passing through content of the Top 5 cable networks.  TV stations subject to the rules are required to provide on a subchannel audio descriptions of at least 50 hours of video programming per calendar quarter during prime time or on children’s programming, as well as an additional 37.5 hours of video-described programming per calendar quarter at any time between 6 a.m. and midnight.  These descriptions are provided by the networks and passed through by the local station affiliates to allow the blind and visually impaired people to follow the action in video programming on their TVs.

In a Notice of Proposed Rulemaking adopted in April, the FCC proposes to expand the video description requirements to network-affiliated stations in television markets 61 through 100 starting January 1, 2021, followed by an additional 10 TV markets each year for the next four years.  This proposal was just published in the Federal Register, setting a deadline for the filing of comments of June 22, 2020, with reply comments due by July 6, 2020.…
Continue Reading Comments Dates Set on Proposals to Expand Video Description Requirements of TV Stations and MVPDs

The transition to ATSC 3.0, the next generation of television transmission, is underway as authorized by the Commission in 2017 (see our post here and our posts here, here and here on subsequent actions making that order effective and allowing TV stations to file to convert to the new standard).  This week, the FCC released a draft of an item to be considered at its June open meeting dealing with lingering legal issues about the services to be provided by television stations that are part of this transition.  The item to be considered, if adopted in June, will take two actions.  First, it will issue a declaratory ruling that the leasing of auxiliary and supplementary spectrum capacity on digital television stations for non-broadcast uses does not trigger the application of the FCC’s multiple ownership rules, which limit the number of stations that one entity can own or program in any given TV market.  Secondly, the item will issue a Notice of Proposed Rulemaking to address what regulatory changes, if any, are needed to govern the types of non-broadcast content that will be provided by stations operating with this next generation television transmission standard.

The declaratory ruling addresses concerns that the use of broadcast television spectrum by various companies or consortia that plan to use that spectrum for all sorts of non-broadcast applications could trigger violations of the FCC’s ownership rules.  Those rules limit one owner from owning (or providing more than 15% of the broadcast programming to) more than two television stations in a given TV market (and only one station in some smaller markets).  When stations convert to ATSC 3.0, there are plans to offer a plethora of non-broadcast services, which the FCC describes in its draft decision as “Broadcast Internet” services.  These services could include sending updates to smart dashboards in automobiles and in other Internet of Things smart devices, updating utility meters, providing telehealth and emergency communications information, distributing smart agriculture applications, or distributing popular pay-video programming to user’s devices.  In many cases, to provide these applications, one company or consortium would seek to lease the ancillary and supplementary capacity of multiple stations in a market to assure that content was distributed as broadly as possible.  The fear was that such users leasing capacity on multiple stations could be deemed to have an “attributable interest” in such stations for multiple ownership purposes or simply for purposes of having to be reported on ownership reports and other broadcast applications. …
Continue Reading FCC to Consider Exemption of TV Broadcast Internet Services from Broadcast Ownership Rules and Regulations for ATSC 3.0 Non-Broadcast Services

When a broadcaster files certain types of applications with the FCC, the public must be informed.  Last week, the FCC issued an Order which will change the rules regarding the public notice that must be given – consolidating what was a confusing process with different language and timing for notice about different types of applications into one providing standardized disclosures and scheduling for all public notices.  The decision (once it becomes effective) will eliminate obligations for the newspaper publication that was required for some public notices and also ended the obligation of broadcasters to give a “pre-filing public notice” before the submission of a license renewal application.  It will also require the inclusion of an “FCC Applications” link on the homepage of each commercial station’s website, whether or not they have any applications pending.  Let’s look at some of the changes adopted in last week’s Order.

First, the FCC did not change the requirements as to what applications require notice to the public.  Public notice is required for applications for new stations and major technical changes, for assignments (sales) or transfers of station licenses (except for pro forma changes where there is no real change in control over the station), for license renewal applications, minor change technical applications that involve a city-of-license change, and certain applications involving international broadcast stations or the export of programming to foreign stations to be rebroadcast back into the US.  Notice of designation for hearing of any application is also required.  We will concentrate here on the more common applications for changes to US stations, sale and license renewals. …
Continue Reading Looking at Changes to the FCC’s Public Notice Requirements for Broadcast Applications

Here are some of the regulatory and legal actions in 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.

  • In connection with the Commission’s required monthly Open Meeting which was held last week, the FCC adopted two items of importance to broadcasters, which we previewed in last week’s update.
    • The first item adopted new rules implementing streamlined and standardized public notice obligations associated with various broadcast applications. The revised rules abolish requirements for printed notices in local newspapers and pre-filing announcements for license renewal.  (News Release)  (Second Report and Order).  The effective date of these changes will be announced later, although in a separate Order, the FCC immediately waived the requirement for license renewal pre-filing announcements for all future renewal windows.   The requirements for license renewal post-filing announcements are unchanged
    • The second item proposed for public comment the amounts of the annual regulatory fees to be paid in September by broadcasters and other FCC-regulated communications entities.  In addition to asking for comments on the allocation of the fees to be paid, the FCC asks if it can do anything to assist those who pay the fees in light of the current pandemic.  While the FCC is required by Congress to collect the regulatory fees, it asks if there are actions it can take while still complying with its statutory obligations, e.g. by allowing some companies to pay their fees over a greater period of time.  The FCC also completed the transition of TV fees to a system based on population in a station’s service area instead of the size of the market in which the station operates.  It also reduced the fees to be paid by certain VHF television broadcasters.  The comment period for the proposed 2020 regulatory fees will be set after the notice is published in the Federal Register.  (Report and Order and Notice of Proposed Rulemaking).

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Continue Reading This Week at the FCC: May 9, 2020 to May 15, 2020

The FCC’s proposal to expand the use of Distributed Transmission Systems by television stations operating with the new ATSC 3.0 transmission system was published in the Federal Register today (here). That publication announces that the comment deadlines on the FCC’s DTS Notice of Proposed Rulemaking are due by Friday, June 12, 2020, and reply comments will be due by Monday, July 13, 2020.  While we mentioned this proposal in passing when discussing a proposal to allow FM stations to use boosters to provide an FM version of a distributed transmission system, we have not written in detail about this proposal.  With the comment deadline now set, let’s look at some of the questions asked in the rulemaking proposal.

First, it is worth explaining the concept of a distributed transmission system (sometimes referred to as a “single frequency network” as it uses multiple stations on the same frequency to reach its audience).  Traditionally, television stations have operated with a single high-power transmitter from a location central to their coverage area.  Thus, viewers close to the transmitter get the strongest signal, and that signal dissipates the further that a viewer gets from that central transmitter site.  Station signals are protected from interference to a certain contour where it is assumed that the majority of viewers will be able to receive over-the-air an acceptable signal most of the time.  But even at the edge of these protected contours, the FCC’s projections assume that many viewers will not be able to receive an acceptable signal at all times.  Distributed transmission systems are already in use by television stations in certain markets to fill in holes in station coverage – and have been particularly useful in markets with irregular terrain where mountains or other obstructions preclude one centrally located transmitter from reaching audiences far from the transmitter site.  Locating a second transmitter on the same frequency behind the terrain obstruction allows better reception for viewers who might otherwise not receive an acceptable over-the-air signal. However, currently, the DTS transmitters cannot extend the noise-limited protected contour of a station “more than a minimal amount” beyond that which the TV station would be predicted to have from a single centrally-located transmitter site.  The NPRM in this proceeding, based on a petition filed by the NAB and America’s Public Television Stations (see our article here on the Petition for Rulemaking filed by these groups), looks to allow for wider use of DTS.…
Continue Reading Comments Due June 12 on Proposal to Expand the Use of Distributed Transmission Systems by TV Stations Operating with ATSC 3.0 Transmission Systems – What is Being Asked?