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David Oxenford represents broadcasting and digital media companies in connection with regulatory, transactional and intellectual property issues. He has represented broadcasters and webcasters before the Federal Communications Commission, the Copyright Royalty Board, courts and other government agencies for over 30 years.

Late Friday, the FCC issued an Order reinstating the FCC’s 2016 ownership rules, recognizing that the changes made in those rules in 2017 (see our post here) were no longer effective because the Third Circuit Court of Appeals had thrown out the 2017 decision. See our post here on the Third Circuit decision and our article here on the court’s denial of rehearing en banc.  While the FCC may still try to appeal the Third Circuit decision to the Supreme Court, the Third Circuit’s mandate has issued, meaning that its order is effective even if a Supreme Court appeal is filed.

Among the rule changes that have been rendered a nullity are the abolition of the broadcast-newspaper cross-ownership rule (once again reinforcing what we have written several times, that the rule may well outlive the daily newspaper) and the radio-television cross-ownership rule, the local TV ownership rule that had allowed combinations of two TV stations in the same market even if there were not 8 independent voices in the market after the combination, and changes to the FCC’s processing policy with respect to radio embedded markets.  These changes required the FCC to also issue two Public Notices dealing with these changes.
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With many Americans using the holiday season to rest and recharge, broadcasters should do the same but not forget that January is a busy month for complying with several important regulatory deadlines for broadcast stations.  These include dates that regularly occur for broadcasters, as well as some unique to this month.  In fact, with the start of the lowest unit rate windows for primaries and caucuses in many states, January is a very busy regulatory month.  So don’t head off to Grandma’s house without making sure that you have all of your regulatory obligations under control.

One date applicable to all full-power stations is the requirement that, by Friday, January 10, 2020, all commercial and noncommercial radio and television stations must upload to their online public file their quarterly issues/programs list for the period covering October 1 – December 31, 2019.  The issues/programs list demonstrates the station’s “most significant treatment of community issues” during the three-month period covered by each quarterly report.  We wrote about the importance of these reports many times (see, for instance, our posts here and here).  With all public files now online, FCC staff, viewers or listeners, or anyone with an internet connection can easily look at your public file, see when you uploaded your Quarterly Report, and review the contents of it.  In the current renewal cycle, the FCC has issued two fines of $15,000 each to stations that did not bother with the preparation of these lists (see our posts here and here on those fines).  In past years, the FCC has shown a willingness to fine stations or hold up their license renewals or both (see here and here) over public file issues where there was some but not complete compliance with the obligations to retain these issues/programs lists for the entire renewal term.  For a short video on the basics of the quarterly issues/programs list and the online public inspection file, see here.
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While political broadcasting never seems to be totally off the airwaves, the 2020 election season is about to click into high gear, with the window for lowest unit rates to begin on December 20 for advertising sales in connection with the January Iowa caucuses. That means that when broadcasters sell time to candidates for ads to run in Iowa, they must sell them at the lowest rate that they charge commercial advertisers for the same class of advertising time running during the same time period. For more on issues in computing lowest unit rates, see our articles here, here and here (this last article dealing with the issues of package plans and how to determine the rates applicable to spots in such plans), and our Political Broadcasting Guide, here.

The beginning of the LUR (or LUC for “lowest unit charge”) window in Iowa is but the first of a rapid many political windows that will be opening across the country as the presidential primaries move across the country. These windows open 45 days before the primary election (or caucus, in states where there is a caucus system that is open to the public for the selection of candidates) and 60 days before general elections. For the Presidential election, New Hampshire of course comes next, with their LUR window opening on December 28.   January will bring the opening of a slew of LUR windows for states with primaries and caucuses in late February and early March, including all of the Super Tuesday states. But it is important to remember that these are not the only LUR windows that broadcasters will have to observe in 2020.
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Last week, the FCC adopted an order making numerous changes to its processes for selecting winning applicants among mutually-exclusive applicants for new noncommercial broadcast stations, including noncommercial, reserved band full power FM stations and LPFMs. Applicants are “mutually exclusive” when their technical proposals are in conflict – meaning that if one is granted it would create interference to the other so that the other cannot also be allowed to operate. The changes adopted by the FCC, which we wrote about when first proposed here, affect not only the process of applying for new noncommercial stations and the system for resolving conflicts, but also address the holding period for new stations once construction permits are granted, and the length of permits for LPFM stations.

In cases involving mutually exclusive applications for new noncommercial stations, the FCC uses a “points system” to determine which of the mutually-exclusive applicants should have its application granted. The point system relies on paper hearings to determine which applicant has the most points, awarding preferences on factors such as whether they have fewer interests in other broadcast facilities, whether they are local organizations, and whether they are part of state-wide networks.
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On Friday, the FCC released a Public Notice setting out the rules for the auction for new FM channels, which will being in April. We wrote about that auction when it was first announced here. The Public Notice sets out the bidding process for the auction, and the dates for pre-auction filing deadlines necessary to participate in the auction. The notice also rejects several petitions asking that additional channels be added to the auction and one request for a deletion from the auction list. Thus, the channels to be sold in the auction remain the same as originally proposed. A list of the 130 available FM construction permits, with the minimum bid necessary for each of these channels, is available here.

The Public Notice sets out the following pre-auction dates and deadlines that those planning to participate in the auction must observe. These dates are as follows:

  • Auction Tutorial Available (via Internet) by January 22, 2020
  • Short-Form Application (FCC Form 175) Filing Window Opens January 29, 2020, 12:00 noon Eastern Time (ET)
  • Short-Form Application (FCC Form 175) Filing Window Deadline February 11, 2020, 6:00 p.m. ET
  • Upfront Payments (via wire transfer) March 20, 2020, 6:00 p.m. ET
  • Mock Auction April 24, 2020
  • Auction Bidding Begins April 28, 2020

The “short-form” is an application that anyone wishing to participate in the auction must file. This short-form application sets out the channels in which the applicant is interested and some basic information about the applicant. Specific site locations that an applicant wants to protect can also be listed in the short form. Upfront payments are required monetary deposits that must be made by auction participants in amounts sufficient to cover the minimum fees for the channels on which the applicant is interested in bidding. More details on the information required in the forms, and the mechanics of the auction, are set out in the Public Notice which should be carefully reviewed by parties interested in any of these construction permits authorizing the new stations. 
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The FCC yesterday issued Notices of Apparent Liability to two pirate radio operators that totaled over $600,000, the largest fines ever issued for those operating radio stations without an FCC-issued license.  Both operated in the Boston area.  One was fined $151,005 for operating one station (press release here, the full Notice of Apparent Liability is available here). The second was fined $453,015 for operating three transmitters in the area (press release here, the full NAL is available here).  The FCC noted that these were the maximum fines that they could impose for these violations under current law, and that the fines were the result of several years of investigations and warnings to the operators.

Commissioner O’Rielly, in a separate statement, noted that he wished that the FCC had the authority to impose even higher fines and to proceed more quickly against these operators than allowed under current FCC procedures.  The Commissioner noted that he would be working with Congress to try to get legislation passed to speed the process and raise the penalties against pirate operators. We wrote about one of those legislative proposals here that would impose fines of $100,000 a day up to $2 million against these pirates and speed the process necessary to impose these fines.  The legislation would also allow fines directly against landowners and others enabling the operations of these stations.
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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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We have written many times about the concerns regarding the marketing of CBD products on broadcast stations. As we wrote here, here, and here, the FDA and FTC have repeatedly warned makers of these products that they cannot make specific health claims about the products and cannot market products that are intended to be ingested. In a recent action, the FDA issued 15 warning letters to companies marketing CBD products – warning them about marketing both for edible products and for health claims (see the FDA press release here with links to all 15 warning letters). The FDA also released a Consumer Update warning consumers about many of the potential risks of CBD use and noting that, except for a single epilepsy drug, it has not approved any medical uses of these products.

These warning letters include a litany of advertising issues that the FDA found problematic, beyond the simple issues of advertising products to be ingested and making specific health claims. In several letters (including those here, here and here), the FDA suggested that even claims about CBD being good to relieve “aches and pains” or that it “reduces inflammation” exceeded the legal limits on marketing. Even claims that oils used for “skin conditions, spot pain management and sore joints,” qualified with the fact that the uses were “still being studied,” were noted as being concerns. Advertising about products aimed at children was noted as being particularly problematic as use by “vulnerable populations” is a real concern where no FDA-recognized research has established the safety of those products. Animal products were also recognized as a concern, as they also have not been approved as being safe and effective.
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With more and more stations relying on FM translators to provide local service, a decision released last week emphasizes the importance of following the rules about the operations of these stations.  In the decision, the FCC’s Audio Division proposed to issue a $2,000 fine for an FM translator owner that failed to advise the FCC

The audio from analog channel 6 TV stations can be heard on the FM dial at 87.7 – which is below the lowest official point on the standard FM band in the US (which ends at 88.1) but is nevertheless tunable on most FM radios. Over the last decade, many LPTV stations on channel 6, in markets where they had no other viable business model, turned to providing FM service through these stations. The FCC has for years inquired if these operations, often referred to as Franken FMs, should be permitted (see our articles here and here) but has never moved to stop it. Now, with the 2021 deadline for the conversion of LPTV stations to digital operation, LPTV operators have asked the FCC to bless the post-conversion operation of an analog audio signal embedded in the digital Channel 6 LPTV station transmissions so that these FM broadcast can continue, following up on a proceeding begun in 2014 (see our article here). This week, the FCC issued a Public Notice asking for additional comments as to whether these Franken FM operations should be allowed to continue, and if so what rules should govern them.

The release of this Public Notice came as somewhat of a surprise, as a similar question had recently been asked in an FCC proceeding looking primarily at LPFM rule changes, but also addressing issues about the relation of TV channel 6 to FM broadcasters (see our article here on that proceeding). In this week’s Public Notice, the FCC suggests that the LPFM proceeding is asking only whether the elimination of protections between channel 6 TV stations and noncommercial radio stations in the reserved band, as proposed in that proceeding, is compatible with the continued operation of these Franken FMs after the digital conversion deadline. It is the proceeding in which these additional comments are now being requested that will address how these stations will be regulated on a permanent basis in the future. To determine that future, this week’s Public Notice poses many specific questions about the continued operation of these Franken FMs.
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