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BMI and the Radio Music License Committee announced a settlement of their rate court litigation over the royalties that commercial radio will pay for the public performance of musical compositions licensed by BMI.  While we have not yet seen the agreement, the press release already raises one issue likely to sew confusion in the broadcast industry – the extent to which the agreement allows the use of music in podcasts.  While the press release says that the BMI license includes the use of music in podcasts, radio stations should not assume that means that they can start to play popular music in their podcasts without obtaining the rights to that music directly from rightsholders.  They cannot, as BMI controls only a portion of the rights necessary to use music in podcasts and, without obtaining the remaining rights to that music, a podcaster using the music with only a BMI license is looking for a copyright infringement claim.

So why doesn’t the license from BMI fully cover the use of music in a podcast?  As we have pointed out before, a broadcaster or other media company that has performance licenses from ASCAP, BMI, SESAC and even GMR does not get the right to podcast music – nor do the SoundExchange royalty payments cover podcasts. These organizations all collect for the public performance of music. While podcasts may require a performance license (see our article here about how Alexa and other smart speakers are making the need for such licenses more apparent as more and more podcast listening is occurring through streaming rather than downloads), they also require rights to the reproduction and distribution of the copyrighted songs and the right to make derivative works – all additional rights given to copyright owners under the Copyright Act. These additional rights are not covered by the public performance licenses from ASCAP, BMI, SESAC, GMR and SoundExchange, nor are the rights to use the “sound recording” or “master” in the podcast. What is the difference between these rights?…
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Last week, FCC Commissioner Michael O’Rielly was in the news for sending a letter to the major record labels asking for information about their practices in paying broadcast stations for airing the label’s music.  The letter follows correspondence last year between the Commissioner and the RIAA (the Recording Industry’s trade group) asking for similar information, which the RIAA claimed that it did not have.  This process began after a Rolling Stone magazine article suggested that “payola” was still a common practice in the broadcast industry.  These actions, and the press reports that followed, raise a couple of interesting questions including what the FCC rules are on payola, and how broadcast practices compare to those of online companies.

The Communications Act prohibits the practice of “payola” by requiring, in Section 317, that when any content is aired on a station in exchange for anything of value, the station must disclose that “consideration” has been paid by the person or entity that pays for the consideration.  Thus, “payola” arises when a broadcast station employee or contractor receives or is promised anything of value in return for putting any content on the air, and that payment is not disclosed to the public.  Payola usually occurs when someone makes a gift or payment to a person involved in station programming (i.e., station employees, program producers, program suppliers) in exchange for favorable on-air exposure of a product or service.  While the term “payola” is most often associated with the receipt by a station announcer or music director of money, trips or other value for playing songs on the station, the same prohibition applies whenever any station programming personnel receive anything of value in exchange for airing any content where a sponsorship identification is not broadcast.  For examples of fines for airing programming for which consideration was received without acknowledging the receipt of valuable consideration, outside the context of music, see our articles here, here and here. …
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This weekend, the New York Times ran an article seemingly critical of Facebook for not rejecting ads  from political candidates that contained false statements of fact.  We have already written that this policy of Facebook matches the policy that Congress has imposed on broadcast stations and local cable franchisees who sell time to political candidates – they cannot refuse an ad from a candidate’s authorized campaign committee based on its content – even if it is false or even defamatory (see our posts here and here for more on the FCC’s “no censorship” rule that applies to broadcasting and local cable systems).  As this Times article again raises this issue, we thought that we should again provide a brief recap of the rules that apply to broadcast and local cable political ad sales, and contrast these rules to those that currently apply to online advertising.

As stated above, broadcast stations and local cable systems cannot censor candidate ads – meaning that they cannot reject these ads based on their content.  Commercial broadcast stations cannot even adopt a policy that says that they will not accept ads from federal candidates, as there is a right of “reasonable access” (see our article here, and as applied here to fringe candidates) that compels broadcast stations to sell reasonable amounts of time to federal candidates who request it.  Contrast this to, for instance, Twitter, which decided to ban all candidate advertising on its platform (see our article here).  There is no right of reasonable access to broadcast stations for state and local candidates, though once a station decides to sell advertising time in a particular race, all other rules, including the “no censorship” rule, apply to these ads (see our article here).  Local cable systems are not required to sell ads to any political candidates but, like broadcasters with respect to state and local candidates, once a local cable system sells advertising time to candidates in a particular race, all other FCC political rules apply.  National cable networks (in contrast to the local systems themselves) have never been brought under the FCC’s political advertising rules for access, censorship or any other requirements – although from time to time there have been questions as to whether those rules should apply.  So cable networks, at the present time, are more like online advertising, where the FCC rules do not apply.…
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Late last week, the US Court of Appeals for the Fourth Circuit issued a decision in a case called Washington Post v. David J. McManus, upholding the ruling of the US District Court finding that the State of Maryland’s attempts to impose political advertising reporting obligations on online platforms to be an unconstitutional abridgment of these companies’ First Amendment rights.  The suit was brought by the Washington Post and several other companies owning newspapers with an online presence in the State.  Their arguments were supported by numerous other media organizations, including the NAB and NCTA.  The Maryland rules required that online advertising platforms post on their websites information about political ads within 48 hours of the purchase of those ads.  That information had to be maintained on the website for a year and kept for inspection by the Maryland Board of Elections for a year after the election was over.  The appeals court concluded that the obligation to reveal this information was forcing these platforms to speak, which the court found to be just as much against the First Amendment as telling them to not speak (e.g., preventing them from publishing).  As the court could find no compelling state interest in this obligation that could not be better met by less restrictive means, the law was declared unconstitutional.

The Maryland law required the following disclosures on the website of a platform that accepted political advertising:

  • the ad purchaser’s name and contact information;
  • the identity of the treasurer of the political committee or the individuals exercising control over the ad purchaser; and
  • the total amount paid for the ad.

In addition, the platform had to maintain the following information for a year after the election and make it available to the State authorities upon request:

  • the candidate or ballot issue to which the qualifying paid digital communication relates and whether the qualifying paid digital communication supports or opposes that candidate or ballot issue;
  • the dates and times that the qualifying paid digital communication was first disseminated and last disseminated;
  • a digital copy of the content of the qualifying paid digital communication;
  • an approximate description of the geographic locations where the qualifying paid digital communication was disseminated;
  • an approximate description of the audience that received or was targeted to receive the qualifying paid digital communication; and
  • the total number of impressions generated by the qualifying paid digital communication

The appeals court found that this “compelled speech” forced these platforms to “speak” when they otherwise might not want to – the “speaking” being the mandatory publication of information on their website.  The court also pointed to the potential of these rules to chill political speech, by compelling companies to reveal information about those who might otherwise not want to disclose that they are taking a position on a controversial issue or election.  The court found that anonymity in political speech was part of a long tradition in the US, and it could subject those buying the political ads to harassment.  Also, the added burden of collecting this information could cause platforms to reject political ads in favor of advertising where no such burden was imposed. …
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In recent weeks, Facebook has been criticized for adopting a policy of not censoring advertising and other content posted on its platforms by political candidates.  While Facebook apparently will review content whose veracity is challenged when posted by anyone else, it made an exception for posts by political candidates – and has received much heat from many of those candidates, including some who are currently in Congress.  In some cases, these criticisms have suggested that broadcasters have taken a different position and made content-based decisions on candidate ads.  In fact, Congress itself long ago imposed in Section 315(a) of the Communications Act a “no censorship” requirement on broadcasters for ads by federal, state, and local candidates.  Once a candidate is legally qualified and once a station decides to accept advertising for a political race, it cannot reject candidate ads based on their content.  And for Federal candidates, broadcasters must accept those ads once a political campaign has started, under the reasonable access rules that apply only to federal candidates.

In fact, as we wrote here, broadcasters are immune from any legal claims that may arise from the content of over-the-air candidate ads, based on Supreme Court decisions. Since broadcasters cannot censor ads placed by candidates, the Court has ruled, broadcasters cannot be held responsible for the content of those ads.  If a candidate’s ad is defamatory, or if it infringes on someone’s copyright, the aggrieved party has a remedy against the candidate who sponsored the ad, but that party has no remedy against the broadcaster.  (In contrast, when a broadcaster receives an ad from a non-candidate group that is claimed to be false, it can reject the ad based on its content, so it has potential liability if it does not pull the ad once it is aware of its falsity – see our article here for more information about what to do when confronted with issues about the truth of a third-party ad).  This immunity from liability for statements made in candidate ads absolves the broadcaster from having to referee the truth or falsity of political ads which, as is evident in today’s politically fragmented world, may well be perceived differently by different people.  So, even though Facebook is taking the same position in not censoring candidate ads as Congress has required broadcasters to take, should it be held to a different standard? …
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The FCC has once again started sending out email notices to broadcast stations that are not in compliance with their online public file obligations. This follows a set of notices sent in early December, where the FCC first warned specific stations that there were issues with their online public inspection files (see our article here). The new email notices seem to be sent to two classes of stations – those that have done nothing to their online public files, and those that have activated the files, but not uploaded their Quarterly Issues/Programs Lists to those files. Some of the new notices follow up on notices sent in December. Both sets of notices ask for reports to the FCC from the stations that received the notice of corrective actions that they have taken.

We have been warning of the FCC’s concern about incomplete or inactive online public files for some time, and the potential impact that noncompliance could have on license renewals, which start for radio stations in Maryland, Virginia, West Virginia, and the District of Columbia in June 2019, with pre-filing public announcements of those filings due to begin on April 1 (see our article here). The renewal obligation for radio moves across the country with stations in a few specific states filing every other month in this three-year renewal cycle (for more information see, for instance, our articles here and here). Clearly, this set of emails is a warning to stations that the FCC is watching their public files, and that compliance problems will bring issues, and probably fines, if the files are not complete by license renewal time. The emails that have been sent out do not target every station in noncompliance with the public file obligations – but instead seem to just be a sampling of those stations – so do not relax and assume compliance simply because you did not receive any contact from the FCC.…
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When is your website or app covered by the Children’s Online Privacy Protection Act (“COPPA”) and the FTC’s COPPA Rule?  Although there are gray areas under COPPA, one clear way to fall under this law is to know that you’re collecting information from children under the age of 13 online.  That’s part of what landed Musical.ly, now known as TikTok, in trouble with the FTC – including a record-setting COPPA fine of $5.7 million.  COPPA isn’t limited to the kinds of video social network apps that Musical.ly provides; broadcasters’ websites and apps may end up falling under COPPA.

According to the FTC’s complaint, Musical.ly knew that it was collecting information from children under 13 (COPPA doesn’t apply to anyone else) for several reasons.  For instance, press articles described the popularity of Musical.ly among under-13 users, the company received hundreds of complaints from parents trying to close their kids’ accounts, and the company itself provided guidance to parents regarding their children’s usage of the app. …
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We typically publish our article about upcoming regulatory dates before the beginning of each month, but this month, the looming FCC shutdown and determining its effect on filing deadlines pushed back our schedule. As we wrote on Friday, the effect of the shutdown is now becoming clear – and it has the potential to put on hold a number of the FCC deadlines, including the filing of Quarterly Children’s Television Reports due on January 10 and the uploading of Quarterly Issues Programs lists, due to be added to station’s public inspection files on January 10. The FCC-hosted public inspection file database is offline, so those Quarterly Issues Programs lists can’t be uploaded unless the budget impasse is resolved this week. Certifications as to the compliance of TV stations with the commercial limits in children’s television programs would also be added to the public file by January 10 – if it is available for use by then. While these and other dates mentioned below may be put on hold, there are deadlines that broadcasters need to pay attention to that are unaffected by the Washington budget debate.

We note that the FCC’s CDBS and LMS databases are up and operating, though most filings will be considered to be submitted the day that the FCC reopens. As the databases are up and operating, many applications can be electronically filed – so TV stations might as well timely upload their Children’s Television Reports on schedule by January 10, to avoid any slow uploading that may result from overloading of the FCC’s system as the FCC reopens. Other FCC deadlines are unaffected by the shutdown – most notably, as we wrote on Friday, those that related to the repacking of the TV band following the TV incentive auction. The FCC has money to keep its auction activities operating so staff are working to keep the repacking on track. Deadlines coming up for the repacking include a January 10th deadline for stations affected by the repacking to file their Form 387 Transition Progress Report. Auction deadlines proceed whether or not the FCC is otherwise open for business.…
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Can retweeting or sharing someone else’s content get you into trouble? Possibly, based on news reports of a recently filed lawsuit seeking damages for defamation from a cable TV host who retweeted a twitter photo suggesting that someone has made racially derogatory comments. This case seems similar to the one about which we wrote here…

By March 1 of 2018, all radio stations were to have activated their online public file. We wrote about how that activation should be done here, and answered other questions about the online public file for radio here. Yet, from my own review, and from what I have heard from engineers who…