As we wrote last week, the FCC recently admonished two major broadcasters, each of which had a station group which had not complied with the FCC’s EEO rules. In both cases, the FCC would have issued fines instead of the admonishments had it not been for renewal applications that were granted between the time of the
David Oxenford On NAB Panel on Internet Radio Royalties and the Broadcast Performance Royalty
David Oxenford spoke at the NAB Convention in Las Vegas on a panel titled "Coping with Copyright: From Performance Tax to Internet Streaming" dealing with dealing with Internet radio music royalties and the broadcast performance royalty. The panel was held on April 15. Handouts included DWT’s memo "Copyright Royalty Board Releases Music Royalties for Internet Radio
FCC’s Acts to Increase Diversity in Media Ownership – Part 2, The Proposals for Future Actions – Channel 6 for FM, AM Expanded Band, Definition of Designated Entity, Must Carry for Class A TV and Others
We recently wrote about the Federal Communications Commission’s actions in their Diversity docket, designed to promote new entrants into the ranks of broadcast station owners. In addition to the rules adopted in the proceeding, the FCC is seeking comment on a number of other ideas – some to restrict the definition of the Designated Entities that are eligible to take advantage of these rules, others to expand the universe of media outlets available to potential broadcast owners – including proposals to expand the FM band onto TV channels 5 and 6, and proposals to allow certain AM stations, which were to be returned to the FCC after their owners received construction permits for expanded band stations, to retain those stations or transfer them to Designated Entities. The proposals, on which public comment is being sought, are summarized below.
Definition of Designated Entity. The first issue raised by the Commission deals with whether the class of applicants entitled to Designated Entity status and entitled to take advantage of the Commission’s diversity initiatives should be restricted. One proposal is to restrict the Designated Entity status to companies controlled by racial minorities. The Commission expressed skepticism about that proposal, noting that the courts had throw out several versions of the FCC’s EEO rules, finding that there was insufficient justification offered by the FCC to constitutionally justify raced-based preferences. The Commission asked that proponents of such preferences provide a “compelling” showing of needed, as necessary for a constitutional justification for governmental race-based discrimination.Continue Reading FCC’s Acts to Increase Diversity in Media Ownership – Part 2, The Proposals for Future Actions – Channel 6 for FM, AM Expanded Band, Definition of Designated Entity, Must Carry for Class A TV and Others
FCC Rules on Consumer Education to Go Into Effect on Monday – Broadcast and Cable Systems Should Be Ready to Start Compliance Efforts Immediately
The FCC today released a Public Notice stating that their DTV Consumer Education rules will go into effect on Monday, March 31, when they are published in the Federal Register. Thus, broadcast television stations need to immediately be prepared to start complying with these rules. These rules require that broadasters pick from a set of three plans setting out very specific consumer education activities. Under Option 1, the option which originated from the FCC, PSAs about the transition would need to start running immediately – 4 spots a day on Monday, and 8 a day on Tuesday, April 1. We expect that most stations will follow Option 2 – the NAB plan – as it provides more flexibility. But even under the NAB plan, you will need to be running at least 16 30-second PSAs and 16 crawls, all providing information about the transition, during the coming week. Noncommercial stations also have a third option. For specific information on the requirements, see our memo on the requirements of the new rules, or review the full Commission order, here.
On April 10, stations will also need to file the new Form 388 for the first time. On this form, stations will need to specify which of the Options they are selecting (an irrevocable option). Stations will also need to detail the consumer education education efforts that they have engaged in over the previous quarter – which obviously would have been voluntary efforts prior to the effective date of the new rules on Monday.
Continue Reading FCC Rules on Consumer Education to Go Into Effect on Monday – Broadcast and Cable Systems Should Be Ready to Start Compliance Efforts Immediately
SoundExchange to Audit Internet Radio Royalty Payments of Last.FM – What is the Value of Music?
Under the compulsory license for the use of sound recordings – the license which allows Internet radio services to use all legally recorded sound recordings by paying a royalty set by the Copyright Royalty Board – the designated collection agency can, once each year, audit a licensee to assess its compliance with the royalty requirements. Under the law, when the collective decides to audit a company, it must notify the Copyright Royalty Board, who then gives public notice of the fact that an audit is to take place. The Copyright Royalty Board has just announced that SoundExchange has decided to audit Last.FM. Based on a number of public statements, SoundExchange has been citing Last.FM as an example of problems with royalties – contending that Last.FM had paid royalties of only a couple of thousand dollars a year, under the Small Webcasters Settlement Act, just before selling out to CBS for over $200 million. Given SoundExchange’s tough talk about Last.FM, this notice of an audit is not surprising. SoundExchange’s focus on this company illustrates the difficulty of valuing music use, and the different perceptions of music users and copyright holders as to what that value should be.
In past years, SoundExchange has audited a number of webcasters – usually large webcasters. As SoundExchange must bear the cost of the audit unless a significant underpayment is discovered, it is unlikely that more than a few companies will be audited each year. However, as SoundExchange has made such a big deal of Last.FM, with witnesses on performance royalty issues mentioning it at Congressional hearings, and representatives mentioning it on various industry conferences (including SoundExchange President John Simson’s reference to the company on a panel on which we jointly appeared at Canadian Music Week earlier this month), many expected that an audit would be forthcoming.Continue Reading SoundExchange to Audit Internet Radio Royalty Payments of Last.FM – What is the Value of Music?
What a Difference A Renewal Makes – FCC Admonishes Two Broadcasters for EEO Violations, Fines Would Have Followed if Renewals Had Not Recently Been Granted
In two decisions released this week by the FCC, here and here, two large broadcast group owners were admonished for failures to comply with the FCC’s EEO rules. In both cases, failures to widely disseminate information about job openings in one market were discovered by the FCC in the course of random EEO audits that selected these stations for review. In both cases, the Commission determined that the violations were serious, and imposed reporting conditions (essentially subjecting the stations to an FCC audit of their EEO annual public file reports every year for the next 3 years). And in each case, the FCC would have fined the stations for their violations, but the Commission moved too slow, as in both cases, license renewals were granted between the time of the violations and the EEO audit. Under provisions of the Communications Act, the Commission cannot fine a station for action that occurred during a prior renewal term – so the grant of the renewals cut off the possibility of a fine in these cases.
These actions highlight the importance of complying with the Commission’s EEO rules, which we have summarized in our EEO Guide, here. In particular, in both cases, the station groups had not widely disseminated information about job openings, as required by the rules. Wide dissemination requires the use of recruitment sources designed to reach all groups within a community to allow their members to learn about the job openings at the station. The Commission’s aim is to bring into the broadcast workforce employees representing diverse groups within a community rather than hiring all their employees from traditional broadcast sources. In these cases, the stations had used only corporate websites, on-air announcements, and word of mouth recruiting. No outside sources, or sources reasonably likely to reach the entire community, were used by the broadcasters, hence the admonition and the reporting conditions. Continue Reading What a Difference A Renewal Makes – FCC Admonishes Two Broadcasters for EEO Violations, Fines Would Have Followed if Renewals Had Not Recently Been Granted
NCE Applications Must Protect Channel 6 TV Stations Until the End of the Digital Television Transition
Channel 6 of the television band is immediately adjacent to the lower end of the FM band. Noncommercial FM radio stations, located at the lower end of the FM band (88.1 FM to 91.9), have the potential to interfere with television stations on that channel. Thus, FCC rules require that noncommercial FM stations protect
On-Air Broadcast Stations Employees Who Run for Elective Office – Equal Time for Local Candidates
In the last few weeks, I’ve received several calls from broadcasters about on-air employees who have decided to run for local political office, and the equal time obligations that these decisions can create. Initially, it is important to remember that equal opportunities apply to state and local candidates, as well as Federal candidates. And the rules apply as soon as the candidate is legally qualified, even if the spot airs outside the "political windows" used for lowest unit rate purposes (45 days before a primary and 60 days before the general election). For more information about how the rules apply, see our Political Broadcasting Guide. In one very recent example of the application of these rules, a situation in Columbia, Missouri has been reported in local newspaper stories concerning a radio station morning show host who decided to run for the local elective hospital board. To avoid having to give equal time to the host’s political opponents, the station decided to take the employee off the air. This was but one option open to the station, as set forth in the article, quoting the head of the Missouri Broadcasters Association, who accurately set out several other choices that the station could have taken.
These choices for the station faced with an on-air host who runs for office include:
- Obtain waivers from the opponents of the station employee allowing the employee to continue to do his job, perhaps with conditions such as forbidding any discussions of the political race.
- Allow the candidate to continue to broadcast in exchange for a negotiated amount of air time for the opponents
- Provide equal time to the opposing candidates equal to the amount of time that the host’s voice was heard on the air (if the opponents request it within 7 days of the host being on the air)
- Take the host off the air during the election
Other situations have also arisen concerning non-employees, running for office, who may work for another local station, for ad agencies, or for advertisers, but whose voice or picture appears on spots that run on a station.Continue Reading On-Air Broadcast Stations Employees Who Run for Elective Office – Equal Time for Local Candidates
I-Pod Radio, Internet in Cars and More Broadcast Stations Than Ever – Why Can’t the Marketplace Decide?
In the early 1980s, the FCC deregulated many of the very detailed programing rules that governed broadcasters, based on the theory that the marketplace would assure that broadcasters provided programming of interest to their local community. The FCC looked at the marketplace, and decided that broadcasters either had to program to the needs of their community, or risk the loss of their audience to competitors. Now, the FCC is proposing to bring back many of these rules with a vengeance (see our post on the FCC’s current efforts) – imposing rules even more detailed than those that were abolished over a quarter century ago. A look at this week’s news raises the question of why now – when there are more media choices than ever (and when, particularly in the radio industry, revenues with which to meet such requirements are shrinking) – the FCC cannot rely on the marketplace to assure service to the public. When marketplace forces require that broadcasters use their most important asset – their localism – to compete against all the new competition, the FCC is now looking to require that broadcasters meet their public interest obligations in a very specific, cookie cutter, government-mandated fashion. Some of the announcements made this week highlight the extent of the competition that broadcasters now face.
On the most basic level, there are simply far more stations than there ever were. According to an FCC Report published in 1980, there were 4559 commercial AM stations, 3155 commercial FM stations, and 1038 noncommercial FM stations. While the number of AM stations had not increased substantially by the end of 2007 (4776), the number of commercial FM stations has doubled to 6309, and the number of noncommercial FMs has increased even more substantially, to 2892. TV shows a similar increase in service – from 746 commercial and 267 noncommercial stations in 1980 to 1379 commercial stations and 380 noncommercial stations. In addition, thousand of LPTV stations have been created, and over 800 LPFM stations – services that didn’t even exist in 1980. Clearly, the over-the-air competition is far greater than when the FCC initiated its deregulation efforts.Continue Reading I-Pod Radio, Internet in Cars and More Broadcast Stations Than Ever – Why Can’t the Marketplace Decide?
Move That Studio? – Amend the STL Authorization
In two decisions (here and here) released last week, the FCC fined broadcasters $3200 and $2400 after inspections of the stations revealed that the licenses for their Studio Transmitter Link ("STL") did not list the proper location for these stations. In both cases, it appeared that the stations had changed their studio