Late Friday, the FCC denied the request of several broadcasters to extend the time to comment on the FCC proceeding looking at the requirement of “good faith” in retransmission consent negotiations, though it did extend the time for reply comments by two weeks. The FCC is reviewing the good faith requirement, to determine if
November Regulatory Dates for Broadcasters – Incentive Auction and Biennial Ownership Report Preparation, Reg Fee Comments, Music Issues, Text to Speech Emergency Information and More
November is another of those months with no regular filing obligations – no EEO public file and Mid-Term reports, no noncommercial ownership reports, and no quarterly issues programs lists or children’s television reports. EEO public file reports and noncommercial station ownership reports, being tied to renewal dates, will be back in December. See our Broadcaster’s Calendar, here, for information about the states where stations have such obligations. For all commercial radio and TV stations, November also means that they should be completing their Biennial Ownership Reports, which are due on December 2 (extended from the November 1 due date by FCC action noted, see our article here). Those reports submit a snapshot of broadcast station ownership as of October 1, so they can be filed at any time in November.
The end of November also brings the effective date of the requirement that TV stations convert the text of their emergency alerts run in entertainment programs (like weather alerts) into speech, with that audio to be broadcast on the station’s SAP channel. See our articles here and here on that requirement.
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The Care and Feeding of the Broadcast Public Inspection File – Requirements and Retention Periods, A Presentation on the Issues
The FCC requires each full-power broadcast station, commercial and noncommercial, to maintain a public inspection file. Even though this is a longstanding FCC requirement, there are always questions about what goes into the file, and how long those materials must be retained. The week before last, I conducted a webinar for about 20 state broadcast associations on the FCC’s public file requirements for broadcast stations. The slides from that presentation, outlining the requirements for the file, and the required retention period for many of the documents that make up that file, are available here.
While many broadcasters wonder if the public file is really worth the time that it takes to maintain given the nonexistent traffic to view that file at most stations, the FCC has continued to insist on its importance – fining or otherwise sanctioning stations for missing or late filed documents. See, for instance, this case admonishing a TV station for failing to get all of its documents into its online public file in a timely fashion (an admonishment is the equivalent of putting a demerit in the station’s permanent record that could be considered as a prior violation in assessing fines if the FCC finds the station in violation for some other offence). Particularly at license renewal time, a complete public file can be crucial, as missing documents lead to big fines (see, for instance, our articles here and here), and failure to disclose those missing documents can lead to even more harsh penalties (see our article here). So maintaining an accurate and complete public file is important. Quarterly issues programs lists are often the most overlooked requirement.
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Dueling Letters about SESAC Radio Station Royalties – What’s A Station to Do?
This week, many radio stations received a letter from SESAC, asking the stations to renew their last SESAC agreement for three years at a rate 5% lower than the rate at which they are currently paying. Sounds like a deal? But is there a catch? The SESAC letter makes clear that, by renewing the current agreement and accepting the discount, the station is agreeing that it will not be a part of any attempt by the Radio Music License Committee (“RMLC”) to negotiate a rate with SESAC. The SESAC letter has drawn a strong response from the RMLC in a letter dated today, signed by Ed Christian from Saga Communications, the Chairman of RMLC, suggesting that stations not sign the SESAC renewal requests. What is this all about?
As we wrote several months ago, SESAC and the RMLC recently settled antitrust litigation where the RMLC argued that SESAC violated the antitrust laws by charging monopoly pricing for the multiple musical compositions that it bundled together for licensing purposes, and making it virtually impossible for stations to avoid paying these royalties as SESAC did not reveal its entire catalog, and licensed music that was almost impossible to avoid playing (like the jingles in some McDonalds commercials). SESAC agreed to settle the litigation – agreeing to negotiate industry-wide deals with the RMLC, and, if such deals could not be reached through voluntary negotiations, to have its rates set by an arbitration panel. SESAC has never before had its rates subject to oversight as, unlike ASCAP and BMI, SESAC is a for-profit company and is not subject to an antitrust consent decree that includes rate review by a US District Court. Many thought that the RMLC agreement with SESAC would result in a moderation of the SESAC rates. Many broadcasters considered SESAC rates to be too high relative to the fees paid for the much larger ASCAP and BMI catalogs given the limited catalog of music that SESAC licenses. So if SESAC agreed to negotiate rates with the RMLC, why is it now writing letters suggesting that stations not participate in the RMLC negotiations?
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FCC Adopts AM Revitalization Order – Part 1 – The Upcoming Windows for AM Stations to Acquire FM Translators
On Friday, the FCC finally took action in its long-awaited AM revitalization rulemaking proceeding. Friday’s order came in three parts – one adopting certain changes to FCC technical FCC rules and also adopting procedures for AM stations to acquire FM translators, a second asking for comment on a series of additional proposals looking to further change certain AM rules, and a final section a more preliminary inquiry looking at longer term policy changes to the AM rules. While not providing everything some AM proponents may have wished for, the order does promise some immediate help for AM stations – including steps to, in the short-term, bring FM translators to many of the AM stations that feel these translators are necessary for their continued survival. Today, we’ll look at that aspect of the order – the proposals to make available FM translators to help AM stations.
As we have written (see our articles here and here), there was a major controversy at the FCC about whether or not to open a window, restricted to AM licensees, letting them file for new FM translators, or to instead provide a process where AM stations would need to buy existing translators to provide FM service for their stations. In Friday’s order, the FCC promised both. Initially, in 2016, it will open a two-part window during which it will waive its minor change rules so as to allow AM licensees to buy an FM translator authorization, and “move” that translator up to 250 miles from its present location, to its AM market to operate on any available FM channel in that market. Later in 2017, it will open a more traditional window for any AM that was not able to acquire a translator in 2016 where that AM will be able to file an application for a new FM translator. There are many details associated with each of these windows.
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The Incentive Auction Moves Forward – FCC Decisions Further Defining Channel Sharing, and Order Setting When Wireless Users “Commence Operations” Ending LPTV Operations
The FCC seems to almost daily be issuing orders in the incentive auction proceeding, looking to the filing of applications in December by TV stations ready to give up their spectrum to the FCC so that it can be repackaged and resold to wireless users. In the last two days, the Commission has issued orders further clarifying the channel sharing rules and defining when a wireless user of the newly repackaged spectrum “commences operations” requiring that LPTV stations and TV translators operating on frequencies that would cause interference to the wireless operators to cease operations.
On channel sharing, the FCC ruled on a few issues not addressed in earlier channel sharing orders, clarifying issues raised by these prior orders (see our articles on channel sharing agreements here and here) some of which will affect very few TV stations. For instance, it decided that TV stations which entered into channel sharing agreements in which both parties offer their spectrum for surrender can designate alternative channel sharing partners in the event that both stations to the initial sharing agreement are “frozen” in the incentive auction at the same time – meaning that both will be bought out by the FCC if the auction is a success in the round in which they are frozen. While it is commendable that the FCC is providing stations with this flexibility to designate a backup sharing partner in case their initial partner’s station is also bought out in the auction, it would seem that it is unlikely that many stations will put themselves in a position to take advantage of this provision, as most channel sharing agreements will require one station to retain a channel on which the partners in the agreement can operate post-auction. It would seem as if it will be the rare case where all parties to a channel sharing agreement will be subject to being bought out by the FCC at the same time. Probably much more important is the decision of the FCC to extend the dates by which stations that agree to channel sharing agreements must actually implement those agreements after the auction has concluded.
Continue Reading The Incentive Auction Moves Forward – FCC Decisions Further Defining Channel Sharing, and Order Setting When Wireless Users “Commence Operations” Ending LPTV Operations
New Accessibility Compliance Deadlines for TV Stations Coming Very Soon
TV stations have in the past few years been hit with many requirements for making their programming – especially emergency information – accessible to all people within their service areas. Two deadlines loom in the very short term that stations need to remember – the requirements for converting text based emergency information aired on their stations outside of news and EAS alerts (usually crawls dealing with issues such as severe weather alerts) into speech for airing on their SAP channels, and the requirement that any clips transmitted through IP technology (e.g. to computers or through apps) must contain captions if those clips were taken from programming that was broadcast with captions.
Some trade press reports have indicated that some TV stations are still having issues with the requirement that stations take emergency information broadcast outside of news programming and not in EAS alerts, and convert that information to speech to be broadcast on the station’s SAP channel (in some cases requiring that the station activate a SAP channel if they did not already have one). This rule is meant to cover information like weather alerts typically carried in crawls during entertainment programs. The rule was supposed to take effect in May, but was extended until November 30 when it appeared that most TV stations were not ready to meet the original deadline. We wrote about the requirements and the extension here and here. The extension also put on hold obligations to include school closing alerts on the SAP channel when it became clear that the time necessary to broadcast those alert on the SAP channel (and to do it twice, as required by the rules for the audio alerts on the SAP channels) would likely overwhelm the ability to carry any other information. The extension order also extended until November 2016 the obligation to aurally describe on the SAP channel any non-textual, graphical information conveyed by the station outside of news programs (e.g. weather radar images). But the general obligation to convert text to speech still goes into effect at the end of next month – so stations need to be ready.
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A Presentation to Explain the FCC’s EEO Rules, and Another EEO Audit
Last week, I conducted a webinar on the FCC’s EEO rules for 19 state broadcast associations, explaining the issues that broadcasters need to keep in mind to comply with those rules. The slides from my presentation are available here. On the same day, the FCC issued a Public Notice announcing another of their random EEO audits – this one limited to MVPD, principally cable systems, not broadcasters. But, as the FCC has promised to audit 5% of all broadcast stations every year, the MVPD audit notice only serves as a reminder to broadcasters to keep up their FCC outreach efforts and recordkeeping requirements to make sure that, if they are audited, they will pass with flying colors.
During my presentation, I had a series of questions about defining an employment unit for EEO purposes. A station employment unit is a group of commonly controlled stations serving a common geographic area having at least one employee in common. The number of employees in an employment unit is important for determining if a station has, for instance, 5 full-time (30 hours per week) employees making it subject to the FCC outreach efforts requirements (and, for TV stations, the requirement to file a Mid-Term EEO report). For radio groups, having 11 or more full-time employees in an employment unit makes them subject to the requirement to file with the FCC an EEO Mid-Term report. If the unit spans different states with different EEO public inspection file dates, the licensee should pick one of the dates and consistently apply it in the future (filing the consistently prepared reports on the deadlines for FCC filings for each station in the group). For stations newly acquired by an owners in its market, the buyer is responsible for the including the new station in the employment unit and reporting on the employment activities of the station from the date that the station is acquired.
Continue Reading A Presentation to Explain the FCC’s EEO Rules, and Another EEO Audit
Broadcast Incentive Auction Moves Forward – Specific Auction Procedures and Opening Bids Released, Applications to Participate Due By December 18
At the end of last week, the FCC took the expected steps of releasing its public notice setting out the specific procedures for broadcasters interested in participating in the incentive auction by selling their spectrum back to the FCC to be repurposed for wireless broadband, and a notice setting out the specific opening prices that each full-power and Class A TV station will be offered in the auction. These notices also set December 18 as the deadline for stations to submit a new Form 177, declaring if they are interested in participating in the auction. While the dollar numbers to buy out stations perhaps got the most attention, stations need to remember that they are only opening prices – prices which will fall in the reverse auction process until the FCC has only enough interest in stations selling their spectrum to meet its spectrum clearing target. But the release of the numbers and the deadline for participation highlights for many stations the need to focus on the realities of the auction and make their plans for participation (or non-participation) accordingly.
The incentive auction procedures public notice is one that broadcasters need to carefully review and, for those intending to offer their spectrum for sale, to have their economic advisors review as well. Not only does the notice provide information about forms to be completed and the specific steps to be taken by broadcasters to participate in the auction, but it also includes exhibits setting out the mathematical models used by the FCC to determine the descending prices to be offered to broadcasters as the auction continues and when the offers will be frozen (meaning that the FCC has accepted the station’s offer to vacate their current channel, subject to the success of the forward auction raising sufficient funds to pay out the amounts offered to the broadcasters). Exhibits setting out the formulas used to calculate interference between broadcasters remaining after the auction and wireless users are also included in exhibits to the notice. What are some of the other specific issues for broadcasters addressed in the notice?
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The Limits on FCC Leniency on Fines for Noncommercial Broadcast Stations
In a decision released last Friday, the FCC made clear how far it is willing to go in extending to noncommercial stations leniency for fines for violations of its rules. As we have written before, the FCC changed its policy in a case in which we were involved so as to mitigate harsh penalties for first-time paperwork violations when those violations were by student-run college radio stations. So, if a noncommercial student-run station is found to have missed several years of Quarterly Issues Programs Lists or failed to timely file Biennial Ownership Reports, instead of a fine that would exceed $10,000 had a commercial broadcaster committed the same violations, the noncommercial licensee will usually be able to reach a consent decree with the FCC, reducing the fine to something like $1000 or $1500, but also including a plan to ensure compliance in the future and a requirement for periodic reports to the FCC on the success of that plan. But the FCC made clear that this policy applied only to paperwork violations, and technical operations of the station would not be covered. In a decision released on Friday, the FCC demonstrated that for technical violations, and violations that go beyond your typical paperwork issues, those fines will be higher.
In Friday’s decision, the licensee of an Atlantic City noncommercial radio station filed its license application four years late, long after the station’s license had expired. Thus, for that period, it had been operating without a license. In addition, it had not prepared Quarterly Issues Programs Lists for the entire prior license term and the current one, did not file any Biennial Ownership Reports. Finally, the station had been operating with an antenna that was more than 2 meters below where its license said that it was supposed to be. While the FCC reached a settlement with the licensee, it broke out the “civil penalty” (i.e. a fine) paid by the licensee into two parts. For the missing ownership reports and Quarterly Issues Programs lists, a penalty of $1500 was imposed for violations that would probably have cost a commercial operator many multiples of that amount (see, e.g. our article here about a $10,000 fine for a commercial operator missing Quarterly Issues Programs Lists). But the FCC also asked for an additional $4750 for the late-filed license renewal and the antenna that was several feet below where it was supposed to be. While these might also be less than what a commercial broadcaster would pay for similar violations (see fines issued today, here, here and here, of $1500 each to three broadcasters who filed renewal applications late, but still within the period before their prior licenses had expired, noting that the typical fine for such a violation was $3000, but reducing that amount because of a clean record in the past or inability to pay a higher amount), they do demonstrate that the Commission’s willingness to negotiate minimal penalties for noncommercial broadcasters does have its limits.
Continue Reading The Limits on FCC Leniency on Fines for Noncommercial Broadcast Stations