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.
Last week, the FCC issued a Public Notice announcing an August 11, 2021 nationwide EAS test, with a backup date of August 25 if there are conditions that prevent the test from occurring on the initial date. The test is scheduled for 2:20 PM EDT. For broadcasters, this test will be conducted using the
The Copyright Royalty Board (CRB) on Friday released the rates and terms for webcasting royalties for 2021-2025, and the rates are going up. While the full decision explaining the reasoning for the rate increases will not be released to the public until the parties to the case have the opportunity to seek redaction of private business information, the rates and terms themselves were released and can be found here. These new rules apply to all noninteractive webcasters including broadcasters who are simulcasting their over-the-air signals on the Internet. As detailed below, both the per-performance and annual minimum fees will be increasing for both commercial and nonprofit webcasters.
The per-performance royalty increases to $.0021 for non-subscription streams, up from the current $.0018. For subscription streams, the fee increases to $.0026 per performance from $.0023. A performance is one song played to one listener. So, if a streaming service plays one song that is heard by 100 listeners, that is 100 performances.
Continue Reading Webcasting Royalties Going Up – Copyright Royalty Board Releases Rates and Terms for 2021-2025
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.
We are celebrating our birthday. Last week marked 15 years since the first short articles were published on this blog, with an official welcome being posted once we decided that we really could find something to regularly write about – that welcome posted 15 years ago Friday. Here we are, a decade and a half and almost 2,500 articles later, and there still is no shortage of topics to cover.
In the 15 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 even students and teachers. Because of all the encouragement that I have received, I’ve kept going, hopefully providing you all with some valuable information along the way. If you are interested, I recently discussed the blog with the LexBlog’s This Week in Legal Blogging (the video can be accessed here), telling many stories about unusual interactions with readers of our articles.
Continue Reading Celebrating 15 Years of the Broadcast Law Blog
The trade press in the last few days has been full of news about a letter of inquiry from two Congressmen to Spotify asking for details about Spotify’s promotional royalty rates where, in exchange for lowered royalties, songs to which these rates apply may be played more frequently, as Spotify factors in lower costs into its music selection algorithms. The Congressional letter asks whether this promotional approach is already in operation, and if it will lead to a “race to the bottom” forcing lower royalties on artists, resulting in economic losses to these artists. While the implication is that negotiation over royalty rates is a new phenomenon, in fact such negotiations are common in the digital music marketplace and, based on the way that Congress itself established the royalties for music services, they are inherent in that system. In effect, this Congressional letter seems to be asking for Spotify to forego a private business transaction by which it lowers its costs of doing business through providing its business partners something that they want – more exposure for certain music.
Indeed, as we have written before, these negotiations over royalty rates are required to operate in the digital music marketplace. Royalties paid to performers and record labels for the use of music by an interactive music service like Spotify are not set by governmental decision (there is no Copyright Royalty Board setting a default rate as there is for noninteractive music services – see our article here). Instead, the rates are set by private business negotiations where there is a give-and-take between the parties over various considerations – including the promotional benefits when songs are featured on certain playlists provided by services like Spotify. Certainly, there are counterweights to any downward pressure on all royalty rates, as listeners to an on-demand service like Spotify want to hear the hits. So Spotify needs to pay for those hits to attract and retain its listeners. In some cases, artists have determined that there is insufficient promotional value to the playing of their music on an interactive service and that no royalty would be enough to compensate them for perceived lost sales of their music when it is featured on an interactive service. As we wrote here, these artists may deny an interactive service the use of all their music, or portions of their catalog. In other cases, as in the instances that apparently gave rise to the Congressional letter, record companies or artists may feel that it is important that their music get exposure, so they will be willing to accept lower royalties in exchange for wider exposure to their music to consumers that such plays deliver. In other cases, other promotional benefits may be given to the copyright holders for lower royalties (in fact, initially, the record companies received equity positions in Spotify, presumably to help convince them to make their music available at rates that Spotify thought it could afford). Royalties in the interactive music marketplace are simply the result of a marketplace negotiation, as Congress intended when they adopted Section 114 of the Copyright Act providing for digital performance rights for sound recordings.
Continue Reading Congress Asks Spotify for Information About Promotional Royalty Rates – Is This Much Ado About the Way the Interactive Music Marketplace is Designed to Work?
The Newspaper Broadcast Cross-Ownership Rule is Finally Dead – And More Ownership Rule Changes – Including for Radio – Are to be Considered
Last Friday, the FCC took two actions on broadcast ownership resulting from the recent Supreme Court decision (about which we wrote here) upholding changes to the ownership rules that the FCC adopted in 2017. Those 2017 changes (summarized here) and any additional changes to the rules, including changes to the radio ownership rules that have not been substantially reviewed since 1996, have been held up by the 2019 decision of the Court of Appeals for the Third Circuit. That Court reversed the FCC’s 2017 decision which had relaxed many ownership rules, notably including the abolition of the newspaper-broadcast cross-ownership rule and some of the local television ownership restrictions.
The Third Circuit found that the FCC had done an inadequate job of assessing the impact of the 2017 changes (and past ownership changes) on the diversity of broadcast ownership. Until such a historical review could be conducted, all FCC ownership proceedings were put on hold. This hold was finally lifted by the Supreme Court’s decision reversing the Third Circuit and reinstating the 2017 FCC decision. On Friday, the FCC issued an Order that formally reinstated the rules that had been overturned by the Third Circuit and also took some tentative steps toward restarting its regular review of broadcast ownership rules, including the local radio ownership rules that were largely unaffected by the 2017 FCC rule changes. The FCC issued a Public Notice that asked for an update on comments they filed on the 2018 Quadrennial Review of the ownership rules (see our article here) in 2019.
Continue Reading FCC Implements Supreme Court Order Reinstating 2017 Ownership Rule Changes, and Asks for Updating of Record of 2018 Quadrennial Review
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.
According to press reports (see this story in Verge and this one in the Washington Post), Facebook will end its policy of not subjecting posts by elected officials to the same level of scrutiny by its Oversight Board that it applies to other users of its platform. Facebook’s announced policy has been that the newsworthiness of posts by politicians and elected officials was such that it outweighed Facebook’s uniform application of its Community Standards – though it did make exceptions for calls to violence and questions of election integrity, and where posts linked to other offending content. Just a year ago, there were calls for Facebook to take more aggressive steps to police misinformation on its platforms. These calls grew out of the debate over the need to revise Section 230 of the Communications Decency Act which insulates online platforms from liability for posts by unrelated parties on those platforms (see our article here on Section 230). Last year, we compared Facebook’s policy with the laws that apply to other communications platforms, including broadcasters and cable companies. In light of the potential change in Facebook’s policy, we thought it would be worth revisiting that analysis now. Here is what we wrote last year:
[In January 2020], 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.
Continue Reading Reports that Facebook Will End Policy of Not Censoring Politician’s Posts – How Other Communications Platforms are Regulated on Political Speech
Low Power FM is back in the news this week. As we noted a week ago in our summary of FCC regulatory actions, a Petition for Rulemaking has been filed by REC Networks asking that the maximum authorized power for LPFM stations be raised from 100 to 250 watts. The hope among LPFM advocates is that an increase in power will allow such stations to increase service in their communities. REC asks that this proposal be adopted based entirely on mileage separation rules (i.e., how far these stations would have to be spaced from other stations operating on the same or an adjacent channel), even while recognizing that, in some cases, the mileage separations could create interference to existing FM stations or FM translators. This is just an initial proposal asking the FCC to start a rulemaking to further consider this power increase. Comments on this proposal are due June 21, 2021.
In addition, in an article published last week, Acting FCC Chairwoman Rosenworcel set out the items to be considered on the agenda for the FCC’s June monthly open meeting. One of the items to be considered is a review of two petitions for reconsideration of the FCC’s 2020 Order which changed some of the technical rules for LPFM stations (see our article here). In announcing this draft reconsideration action, the Chairwoman stated that the resolution of these technical issues would bring the FCC one step closer to opening a window for the filing of applications for new LPFM stations. The last such window was in 2013. While no dates have been provided, in previous announcements, the FCC has indicated that this window would follow the noncommercial FM window that is scheduled for November of this year.
Continue Reading Low Power FM Back In Front of FCC – Another Proposal to Raise Power and Word of a New Filing Window
