According to a recent article from the Des Moines Register, a station in Iowa recently fired two employees who, during what they thought was a break in programming, got into a heated, profanity-laden exchange which, luck would have it, ended up on the air as their mikes were live. Fearing an FCC fine, the
Two Court of Appeals Arguments on Sound Recording Music Royalty Rates – And the Real Question is Whether the Copyright Royalty Board is Constitutional
In the last 5 days, the US Court of Appeals in Washington, DC has held two oral arguments on appeals from decisions of the Copyright Royalty Board – one from the Board’s decision on Internet Radio Royalties and the other on the royalties applicable to satellite radio. The decisions were different in that, in the Internet Radio decision, the appellants (including the group known as the "Small Commercial Webcasters" that I represented in the case) challenged the Board’s decision, arguing that the rates that were arrived at were too high. In contrast, at the second argument, SoundExchange was the appellant, arguing that the Board’s decision set royalties for satellite radio that were too low. But, in both arguments, an overriding question was whether the Judges on the CRB were constitutionally appointed and thus whether any decisions of the Board had any validity. While the question was expected and specifically raised in the webcasting proceeding (see our post here when that issue was first raised), the discussion at the satellite radio argument was somewhat of a surprise, as the issue had not been raised by either party, and the Appeals Court judges were not even the same judges who had heard the Internet radio argument. Yet one of the Judges raised the issue, unprompted by any party, by asking if the Copyright Royalty Judges were properly appointed and indirectly asking if their decision would have any validity if the constitutional issue was found to exist.
Will the Court decide the constitutionality issue, and what would it mean? No one knows for sure. One of the issues raised by the Court in the Internet radio case was whether the issue had been raised in a timely fashion. In both cases, the possibility of requiring additional briefing on the issue was also raised by the Court, though no such briefing has been ordered – yet. Even if the Court was to find that the Board was not properly appointed, there are questions as to whether the existing decisions should nevertheless be allowed to stand, while blocking new decisions until a new appointment scheme is found. Alternatively, Congress might have to intervene to resolve the whole issue and, if it was to do that, would Congress simply ratify the current decision, or would there be new considerations that would affect any Congressional resolution? The issue raises many questions, and we’ll just have to wait to see what the resolution will be.Continue Reading Two Court of Appeals Arguments on Sound Recording Music Royalty Rates – And the Real Question is Whether the Copyright Royalty Board is Constitutional
FCC Launches New Round of EEO Audits – Highlights the Requirment for Posting Annual Report on Station’s Website
The FCC today released another Public Notice announcing the random audit of the EEO performance of a number of broadcast stations – listing both radio and television stations that have to respond, with stations spread throughout the country. The FCC has promised to annually audit 5% of all broadcast licensees to assess their compliance with the FCC’s EEO rules. These rules require the wide dissemination of information about job openings at their stations and "supplemental efforts" to educate their communities about employment opportunities at broadcast stations, even in the absence of employment openings. The FCC’s audit letter requires the submission of two years worth of the Annual Public File reports that stations prepare each year on the anniversary date of the filing of their license renewal applications. These reports are placed in the station’s public file and posted on their websites (if they have websites). The FCC’s public notice about this audit emphasizes the requirement for posting the Annual Report on a station’s website, perhaps confirming rumors that we have heard about the FCC’s staffers browsing station websites to look for these reports.
Stations are given until May 4 to complete the audit responses and submit them to the Commission. Note that information needs to be supplied not just for the station named on the list, but also for all other stations in the same "station employment unit," i.e. a group of stations under common control, that serve the same general geographic area, and which have at least one common employee. As recent audits have led to significant FCC fines (see our story here about fines issues just before the holidays), broadcasters who are listed on this audit list should take care in preparing their responses. The audit notice should also remind other licensees who are lucky enough to avoid having been selected for inclusion on this audit list to review their EEO programs for FCC compliance purposes, as they could very well find themselves not so fortunate when the next FCC audit is announced.Continue Reading FCC Launches New Round of EEO Audits – Highlights the Requirment for Posting Annual Report on Station’s Website
Details of the Broadcaster SoundExchange Settlement on Webcasting Royalties
We reported on the settlement under the Webcaster Settlement Act between the NAB and SoundExchange on Internet Radio Royalties. As provided in the Webcaster Settlement Act, that settlement has now been published in the Federal Register, and thus it is available for broadcasters who are streaming their signal on the Internet, or who are streaming other programming on the Internet, to claim coverage under that settlement. To do so, broadcasters who are already streaming must file a notice of Intent to Rely on this settlement, available here, with SoundExchange, by April 2, 2009 – thirty days after the Federal Register publication occurred. Broadcasters who are not now streaming, but who start in the future, must file the election notice within 30 days of the start of their streaming, or they will be bound by the rates established by the Copyright Royalty Board in their 2007 decision (see our post here). The publication sets out several other details of the settlement, set forth below.
The rates: The rates, which represent some savings under the CRB rate for the years between 2007 and 2011, are set forth below. These rates are "per performance", meaning that the rate is paid on a per song, per listener basis. If you play 10 songs in an hour, and each song is heard by 10 people, you have 100 performances. There are companies that provide services to track and report on performances. See our post, here, for details. There are also limited exceptions to the full "per performance" reporting, summarized below. The rates under this agreement are as follows:
2006 ……………………………….. $0.0008
2007 ……………………………….. 0.0011
2008 ……………………………….. 0.0014
2009 ……………………………….. 0.0015
2010 ……………………………….. 0.0016
2011 ……………………………….. 0.0017
2012 ……………………………….. 0.0020
2013 ……………………………….. 0.0022
2014 ……………………………….. 0.0023
2015 ……………………………….. 0.0025Continue Reading Details of the Broadcaster SoundExchange Settlement on Webcasting Royalties
FCC to Hold Auction for New FM Stations in September
The FCC has released a public notice asking for comment on the procedures that it plans to use for a new FM auction now scheduled to be held in September. The channels to be included in that auction, and the proposed minimum bids for those channels, can be found on a list released by the Commission, here. Parties who are interested in bidding for any of these channels will be able to submit short form applications indicating the channels in which they are interested at some point to be determined in the future – probably late Spring or early Summer, so that the FCC can process those applications and receive the necessary upfront payments from parties interested in the auction in time for the auction itself to begin in September. Thus, parties who are interested in any of these channels should start their due diligence process now, and determine which channels may be of interest, and which channels can actually be built in such a way as to cover areas that an applicant may want to serve, so that they can be ready to file their applications, probably in May or June.
Applications, when filed, will not need to specify a specific transmitter site but, once the auction is over, winning bidders will need to quickly identify and file complete applications containing specific transmitter sites for which they have reasonable assurance. Thus, they should begin preparations for the auction now. Applicants who have identified a site can specify that site in their applications to protect it from subsequent applications. Thus, FM broadcasters should also anticipate a freeze on the filing of any FM technical applications at some point in late Spring in anticipation of the auction, in order to give applicants a stable technical situation so that they can identify usable transmitter sites. Continue Reading FCC to Hold Auction for New FM Stations in September
Will the Newspaper-Broadcast Cross Ownership Rules Outlive the Newspaper?
At the end of last year, we wrote about the decision of the Detroit newspapers to go to a 3 day a week publication schedule, and asked the question that we had heard posed by a writer for one of the communications trade publications – "will the FCC rules limiting the cross-ownership of broadcast stations and daily newspapers outlive the newspaper itself." In the last few weeks, that question has become even more relevant. The FCC’s decision to relax the cross-ownership restrictions in December 2007 drew widespread condemnation from many big-media opponents, and even attempts to overturn the decision, even though its direct effect was limited to the nation’s largest markets. One now wonders whether, with the current economic condition of newspapers and broadcast stations, the rules should not be revisited, for purposes of further relaxing those rules, not tightening them.
In the last few weeks, we’ve seen a major newspaper in Denver stop its presses for the last time, and companies owning papers in many major markets, including Minneapolis, Philadelphia and New Haven, all declare bankruptcy. At the same time, papers in San Francisco and Seattle have warned that they may also shut down if there are not significant savings found or new buyers. Even venerable papers like the New York Times have been the subject of shut-down rumors, and the Wall Street Journal and other papers in the Rupert Murdoch empire have been said to be dragging down the profits of the News Corporation. Continue Reading Will the Newspaper-Broadcast Cross Ownership Rules Outlive the Newspaper?
Rallies on Capitol Hill on the Performance Royalty – Who Will Pay?
In the last two weeks, we have seen Capitol Hill rallies by the Free Radio Alliance, opposing what they term the “performance tax” on radio, and yesterday by the Music First Coalition, trying to persuade Congress to adopt a performance royalty on the use of sound recordings for the over-the-air signal of broadcast stations. We’ve written about the theories as to why a performance royalty on sound recordings should or should not be paid by broadcasters, but one question that now seems to be gaining more significance is the most practical of all questions – if a performance royalty is adopted, how would broadcasters pay for it?
The recording industry and some Congressional supporters have argued in the past that, if the royalty was adopted, stations could simply raise their advertising rates to get the money to pay for the royalty. While we’ve always questioned that assumption (as, if broadcasters could get more money for their advertising spots, why wouldn’t they be doing so now simply to maximize revenues?), that question is even harder to answer in today’s radio environment. With the current recession, radio is reporting sales declines of as much as 20% from the prior year. Layoffs are hitting stations in almost every market. In this environment, it is difficult to imagine how any significant royalty could be paid by broadcasters without eating into their fundamental ability to serve the public – and perhaps to threaten the very existence of many music-intensive stations. And the structure of the royalty, as proposed in the pending legislation, makes the question of affordability even harder to address.Continue Reading Rallies on Capitol Hill on the Performance Royalty – Who Will Pay?
FCC Application Filing Fees Did Not Go Up on February 18 – But Stay Tuned
The week before last, we wrote that FCC’s filing fees for applications submitted to the Commission would be going up on February 18, and included a link to the FCC Fee Filing Guide for the new fees. Well, shortly before the supposed effective date, the Filing Guide disappeared from the FCC website, and the new fees have not been
FCC Releases More Details of Delayed DTV Transition – No More DTV Conversions Until April?
The FCC late Friday released an Order and Notice of Proposed Rulemaking addressing a number of issues which arose as a result of the Congressional delay in the DTV transition deadline from February 17 until June 12. In many cases, the actions taken in the Order are ministerial – e.g. changing the expiration dates on digital construction permits from February to June. But there were also a number of substantive issues addressed by the order – including the public education requirements for the remainder of the transition and the potential for delaying any further terminations of analog service until at least April, and subjecting any planned termination of analog service before June 12 to additional scrutiny to determine if that termination would serve the public interest. This is despite what many have termed a relatively uneventful termination of analog service on February 17 by over 400 stations nationwide. Comments on this change in the transition procedures are to be filed on an expedited basis – within 5 days of the publication of this order in the Federal Register.
The delay of the early termination of service is likely to cause the most controversy, as Senate Republicans backed the transition delay only after specifically including in the legislation language that seemingly permitted such transitions under the rules that were in place at the time that the legislation was adopted (see our post here). This would seemingly have permitted stations to terminate analog service within 90 days of the June 12 deadline, provided they had given their listeners at least 30 days notice of their plans. A number of stations have started to provide that notice, planning a termination in March. But the Commission has tentatively concluded that it can amend the process for termination, and has set the date of March 17 for a notice to be filed at the FCC by all stations that want to terminate analog service before June 12. As the Commission plans to continue to require 30 days public notice of the termination, and as they won’t allow any termination decision to become official until the March 17 filing, the earliest a station can terminate analog service under this proposal (absent a technical issue or other extreme circumstance) would be April 16. Continue Reading FCC Releases More Details of Delayed DTV Transition – No More DTV Conversions Until April?
Broadcasters: Beware of the Disgruntled Former Employee
In a decision released this week, the FCC granted the application of an FM station for license renewal, denying petitions filed by two former employees who contended that the station had violated a number of FCC rules. After the FCC inspected the station and found only a few minor issues with the station’s public file