In many states, we are in election season for local offices, which has resulted in a question that has come up repeatedly in the last few weeks about local candidates – usually running for state or municipal offices – who appear in advertisements for local businesses that they own or manage. Often times, these individuals will appear in their business’ ads outside of election season, and don’t want to stop appearing in those ads during their bid for elective office. We wrote about this question in an article published two years ago and again a bit more than a year ago.  But, as the question continues to come up, it is worth revisiting the subject. What is a station to do when a local advertiser decides to run for office?

While we have many times written about what happens when a broadcast station’s on-air employee runs for office (see, for instance, our articles here, here and here), we have addressed the question less often about the advertiser who is also a candidate. If a candidate’s recognizable voice or, for TV, image appears on a broadcast station in any “positive” way, whether it is political in nature or not, it is considered a “use” by the political candidate.  What is a “positive” use?  Basically, it is any appearance that is not negative to the candidate (i.e., it is not in an ad attacking that candidate).  To be a positive “use” by the advertising candidate, the appearance must also be outside of an exempt program (in other words, outside of a news or news interview program which, as we wrote here, is a very broad category of programming exempt from the equal time rules).. “Uses” can arise well outside the political sphere, so Arnold Schwarzenegger movies were pulled from TV when he was running for office, as were any re-runs of The Apprentice and The Celebrity Apprentice featuring Donald Trump.  An appearance by a candidate in a commercial for his or her local business is similarly a positive “use” which needs to be included in a station’s political file (providing all the information about the sponsor, schedule and price of the ad, as you would for any pure political buy). But that does not necessarily mean that a station needs to pull the ad from the air.
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Once upon a time, August was a quiet month in Washington, when everyone went on vacation. Sure, there are plenty of vacations that will happen this coming month, but it seems that regulatory activity no longer takes a break. For example, August 1 is the due date for the filing with the FCC of license renewals for all radio stations (including translators and LPFM stations) in North and South Carolina, and the filing of associated EEO forms for all full power radio stations in those states. With the renewal filing comes the obligation that these stations start airing, on August 1 and August 16, their post-filing announcements informing the public about the submission of the license renewal applications. Radio stations in Maryland, Virginia, West Virginia and the District of Columbia, who filed their renewals on or before June 2, also need to keep running their post-filing announcements on these same dates. Radio stations in Florida, Puerto Rico and the Virgin Islands, who are in the next license renewal group with their renewal applications to be filed by October 1, need to start broadcasting their pre-filing announcements this month, also to run on the 1st and 16th of the month. See our post here on pre-filing announcements.

Commercial and noncommercial full power and Class A Television Stations and AM and FM radio stations in California, Illinois, North Carolina, South Carolina, and Wisconsin that are part of an employment unit with five or more full-time employees must place their annual EEO public inspection file reports in their online public file. Links to those reports should also be placed on the home pages of these station’s websites, if they have a website. The effectiveness of these EEO public file reports, and the EEO programs of which they are a part, are being reviewed by the FCC in a proceeding started by a Notice of Proposed Rulemaking about which we wrote here. Comments on this notice asking for suggestions about how to make the EEO rules more effective are due August 21, with reply comments due by September 5.
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The Department of Justice’s Antitrust Division yesterday announced that it was starting a review of the ASCAP and BMI antitrust consent decrees that govern the United States’ two largest performing rights organizations for musical compositions (referred to as the “musical work”). The DOJ’s announcement of the initiation of the examination of the consent decrees poses a series of questions to which it invites interested parties – including users, songwriters, publishers and other interested parties – to file comments on the decrees, detailing which provisions are good and bad and, more broadly, whether there is a continuing need for the decrees at all. Comments are due on July 10.

This re-examination of the decrees has been rumored for many months. Back in March, we wrote about those rumors and the role that Congress may play in adopting replacement rules should the DOJ decide to fundamentally change the current provisions of the consent decrees. The DOJ itself just recently looked at the consent decrees, starting a review only 5 years ago with questions very similar to those it posed yesterday (see our post here on the initiation of the last review 5 years ago). That review ended with the DOJ deciding that only one issue needed attention, whether the decrees permitted “fractional licensing” of a song. We wrote about that complex issue here. That issue deals with whether, when a PRO gives a user a license to play a song, that user can perform the song without permission from other PROs when the song was co-written by songwriters who are members of different PROs. The DOJ suggested that permission from one PRO gave the user rights to the entire song, an interpretation of the decrees that was ultimately rejected by the rate courts reviewing the decrees (see our article here).   So, effectively, the multi-year review of the consent decrees that was just concluded led nowhere. But apparently the DOJ feels that it is time to do it all again. To fully understand the questions being asked, let’s look at what the consent decrees are, and why they are in place.
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Looking for a brief explanation of the online public inspection file and Quarterly Issues Programs List, and how they will be viewed in connection with the upcoming license renewal cycle – including the potential fines for violations of the rules? The Indiana Broadcasters has just released this video of me discussing those issues available

The FCC routinely, at the request of Congress, does a study of the Video Marketplace. That study is submitted to Congress so that Congress can use it as a factual basis for any legislative issues that may come up dealing with the TV marketplace. The FCC has not previously done this sort of routine study of the audio marketplace. However, in recent legislation, Congress included a requirement that the FCC, in the last quarter of every even numbered year, provide such a report. Yesterday, the FCC released a Public Notice asking a number of questions about the marketplace, to which they seek information to be included in the report.

The questions asked include:

  • The identification of players in the audio marketplace, and a description of their business models and competitive strategies
  • The trends in service offerings and consumer behavior
  • Whether or not there is competition between the players in the marketplace
  • Ratings, revenue and subscriber information about players in the market
  • Information about investment in the market, and the deployment of new technologies
  • Information about what is needed for entry into the market
  • Information as to who has recently entered the market, and who has exited it
  • Regulatory barriers to entry and competition in the marketplace

The FCC is looking for data from 2016 and 2017, as well as any new information that is available from this year.  What will this data be used for?
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By now, you have probably heard that the European Union (EU) has a new data protection law on the books, the General Data Protection Regulation (GDPR) – but what are the new rules, and how might they apply to broadcasters? Below we address these and other commonly asked questions about the GDPR.

What is the GDPR? The GDPR is a new European privacy law that, as of May 25, 2018, generally governs how organizations – including those EU-based and many that are not – collect, use, disclose, or otherwise “process” personal information. While some limited exceptions exist (e.g., businesses with fewer than 250 employees are exempt from some requirements), the GDPR imposes an array of obligations on companies subject to it.

Who does the GDPR apply to? The GDPR clearly applies to companies established in the EU that collect personal information about individuals in the EU, but it also claims a broad extraterritorial reach. Indeed, it can apply to organizations, including broadcasters, without an EU presence. For instance, it can apply to broadcasters who collect or use data to provide services like streaming TV or radio to individuals in the EU. It also can apply to broadcasters who use website cookies and other online tracking mechanisms to “monitor” individuals in the EU (e.g., profiling for behavioral advertising). That said, it remains to be seen whether regulators will enforce the GDPR against companies that for the most part are not serving EU citizens and do not have EU operations, but may occasionally and unknowingly acquire data of an individual in the EU or an EU citizen in the United States.
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In 10 days, we’ll mark the 12th anniversary of my first post welcoming readers to this Blog.  I’d like to thank all of you who read the blog, and the many of you who have had nice words to say about its contents over the years.  In the dozen years that the blog has been active, our audience has grown dramatically.  In fact, I’m amazed by all the different groups of readers – broadcasters and employees of digital media companies, attorneys and members of the financial community, journalists, regulators and many students and educators. Because of all the encouragement that I have received from readers, I keep going, hopefully providing you all with some valuable information along the way.

I want to thank those who have supported me in being able to bring this blog to you.  My old firm, Davis Wright Tremaine LLP helped me get this started (and graciously allowed me to take the blog with me when I moved to my current firm six years ago).  My current firm, Wilkinson Barker Knauer LLP, has also been very supportive, and I particularly want to thank several attorneys at the firm (especially David O’Connor and Kelly Donohue) who help catch, on short notice, my typos and slips in analysis for articles that I usually get around to finishing shortly before my publication deadline.  Also, a number of other attorneys at the firm including Mitch Stabbe, Aaron Burstein, Bob Kirk and Josh Bercu have contributed articles, and I hope that they will continue with their valuable contributions in the future.  Thanks, also, to my friendly competitors at the other law firms that have taken up publishing blogs on communications and media legal issues since I launched mine – you all do a great job with your own take on the issues, and you inspire me to try to keep up with you all. 
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On Monday, the US Supreme Court issued an opinion striking down a Federal law (the Professional and Amateur Sports Protection Act or “PASPA”) which prohibited state legislatures from taking any action to legalize betting on sports. PASPA also contained a restriction on advertising sports betting. The state of New Jersey challenged that law, arguing that it improperly limited the authority of state legislatures to act. The Supreme Court agreed, and invalidated the entire Act, including the restriction on advertising sports betting. Some trade press articles have suggested that this signals a boom for broadcasters and other ad-supported media companies as companies rush to start advertising legal sports betting now that the prohibition is gone. While in the long run that may be true, and there may be immediate benefits to stations in certain states, there are numerous caveats for broadcasters to consider before they recognize an advertising boom from sports betting companies.

The entire decision was not based on any analysis of whether or not betting on sports is a good thing, but instead it was a decision based exclusively on a question of state’s rights. The Supreme Court determined that Congress cannot tell state legislatures what they can and cannot do. While Congress may have the authority to ban or otherwise regulate sports betting, if they wanted to regulate it, they should have done so directly. Instead, as the law prohibited state legislatures from taking action to legalize sports betting and other actions predicated on that limitation on states rights, the Supreme Court determined that this was an exercise of authority that Congress does not have – Congress can’t tell state legislatures what to do. Based on the Court’s analysis that all parts of the act were premised on this ban on state legislative actions, the entire law was struck down. That means that there is no blanket federal ban on sports betting, and it leaves each state to regulate as it may wish. For companies ready to take bets on sporting events, and media companies who want to take advertising from sports betting companies, in most cases they need to wait for the states to make decisions on how to proceed.
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This week’s political primaries in Texas are but the first of many more election contests that will occur between now and November. Already, we are receiving client calls about the political rules, how they should be applied, and what stations should be considering in anticipation of the upcoming elections. I’ve discussed the general FCC issues to be considered by broadcasters in many different ways. In January, I conducted a webinar for two state broadcast associations on these issues, following a similar webinar that I conducted with the head of the FCC’s office of political programming back in November for about 20 additional state associations. The slides from the most recent webinar are available here. Our firm also has available a Guide to Political Broadcasting, here, that provides information about many topics that come up in this area every year. But, with the election still months away, and in many states primaries that don’t occur until the summer, are there issues that broadcasters should be considering today?

Yes – there are many such issues that broadcasters should be considering immediately. As we wrote here prior to the last Presidential election, it is important to start planning early for an election. As that article details, and as set out in our Political Broadcasting guide, there is much planning for lowest unit rates that needs to take place now – before the actual windows (45 days before the primary and 60 days before the general election) in which those rates apply. Stations are likely selling advertising schedules that will run during the windows later this year, and they are putting together advertising packages that will be offered to commercial advertisers during the window. Consideration needs to be given now as to how that advertising will be treated to avoid unwanted lowest unit rate implications during the window.
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