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David Oxenford

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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.

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On Friday, the FCC showed released two decisions – both dealing with a handful of inadvertent violations of the Commission’s rules on advertising directed to children. In one case, a licensee admitted in its license renewal application 4 violations of the rules and was fined $8,000. In another, the licensee admitted 8 violations, received no fine at all, instead being only admonished for its errors. Why the difference?

The FCC justified the difference in treatment based on the nature of the violations.  In reality, the station that did not receive any fine actually broadcast more commercial material in excess of the limits on the amount of advertising permitted in children’s program than did the station that was fined. The reason – “program length commercials.” These are instances where, in a commercial message, a character from the surrounding program appears. In that situation, the FCC considers the entire program as a commercial, and thus the violation is considered much more serious than a mere overage in the time limits on commercial material in children’s programs. The station that received the fine had 3 program length commercials, while the station that was not fined simply ran more commercial matter than permitted by the rules – and did not have any program length commercials. But are these distinctions really justified?Continue Reading Plan Your Inadvertent Errors Carefully – A Fine for Children’s Television Violations May be at Stake

Every day, on almost every television channel, it seems as if you can find a presidential candidate making an appearance – and it’s not just on the Sunday morning political interview programs.  Last week, it was Hillary Clinton on the David Letterman Show (where her husband is scheduled to appear this week).  In the last two weeks, both Barack Obama and John McCain have made the pilgrimage to talk with John Stewart on the Daily Show.  Mike Huckabee seems to be a fixture on the Colbert Report.  And at the end of last week, TNT reportedly stated that, candidacy or not, it would continue to run episodes of Law and Order featuring Fred Thompson.  With all of these appearances of candidates on television, one might wonder if the FCC’s Equal Opportunities (a/k/a the "Equal Time") rules FCC have been repealed.  In fact, it appears that all of these appearances are within exemptions to, or are otherwise not covered by, the Equal Opportunities Doctrine of the FCC. 

That doctrine requires a broadcaster or, in some instances, a cable system, to provide equal opportunities to competing candidates to appear on the air.  In the most common situation, if one candidate buys commercial time on a broadcast station, the station must treat other candidates in the same race equally, and allow them to buy equal amounts of time on the station at equivalent rates to those paid by the first candidate.  In a candidate is given free time, all his or her opponents are entitled to the same amount of free time, if they request it within seven days of the first candidate’s appearance.  However, the statute provides many exemptions, and all of these recent appearances appear to fall within these exemptions.  Continue Reading Barack Obama and the Daily Show, Hillary Clinton and David Letterman, Fred Thompson and Law and Order – What About Equal Time?

With summer and the August Congressional recess drawing to a close, will consideration of the Internet Radio controversy over royalties be on the agenda when the September legislative session begins?  In recent weeks, there has been a settlement between the Digital Media Association (DiMA), representing the largest webcasters, and SoundExchange on the issue of the minimum royalty fee – agreeing that the $500 per channel minimum fee imposed by the Copyright Royalty Board ("CRB"), which might have by itself driven many webcasters like Pandora or Live 365 out of business had it not been resolved, would be capped at $50,000.  SoundExchange has also extended a unilateral offer to small commercial webcasters allowing them to continue to pay a percentage of revenue royalty of 10-12% for use of the music produced by SoundExchange members – but limiting the offer to webcasters with under $1.2 million in annual revenue, and requiring that any webcaster with over 5,000,000 tuning hours in any month to pay at the CRB rates for all listening in excess of that limit.  We wrote about that deal, and some of the concerns that larger small webcasters have, here.  These adjustments to the CRB rates may resolve some issues for some webcasters, but they leave open many other issues as set forth below – but will these tweaks to the CRB decision be enough to take the Congressional heat, in the form of the Internet Radio Equality Act, off of SoundExchange?

What issues remain?  There are still many.  These include:

  • The issues of the larger independent webcasters who may currently fit under the Small Webcaster Settlement ("SWSA") Act caps – but may well go over those caps before 2010, and could not afford to pay royalties at the CRB-mandated rates if they exceed the SWSA limits.
  • The CRB mandated rates are themselves problematic for virtually all commercial webcasters – and DiMA made clear that the settlement of the minimum fee issue was the first step in resolving the issues that preclude a vibrant webcasting industry under the CRB rates (see the DiMA press release on the settlement, here)
  • Noncommercial webcasters have not announced any settlement with SoundExchange – even though many expressed concerns over the fees for large noncommercial webcasters  which will, by the end of the royalty period, increase about 9 times over the rates that they had been paying (and more for larger NPR affiliates), and over recordkeeping and reporting requirements.
  • Broadcasters who stream their over-the-air signal over the Internet have not been involved in any of the tweaks to the CRB decision, nor has SoundExchange responded to the NAB’s settlement offer made in June (according to the clock on the NAB homepage, the NAB settlement offer has been outstanding without response for 84 days at the time this post is being written). 

Continue Reading Congress to Return – Will Internet Radio Royalties Be on Its Agenda

Yesterday, SoundExchange sent to many small webcasters an agreement that would allow many to continue to operate under the terms of the Small Webcaster Settlement Act as crafted back in 2002, with modifications that would limit the size of the audience that would be covered by the percentage of revenue royalties that a small webcaster would pay. A press release from SoundExchange about the offer can be found on their website by clicking on the "News" tab.  This is a unilateral offer by SoundExchange, and does not reflect an agreement with the Small Commercial Webcasters (the “SCWs”) who participated in the Copyright Royalty Board proceeding to set the rates for 2006-2010 and who are currently appealing the CRB decision to the US Court of Appeals (see our notes on the appeal, here). The SoundExchange offer, while it may suffice for some small operators who do not expect their businesses to grow beyond the limits set out in the SWSA (and who only play music from SoundExchange artists – see the limitations described below), still does not address many of the major issues that the SCWs raised when SoundExchange first made a similar proposal in May, and should not be viewed by Congress or the public as a resolution of the controversy over the webcasting royalties set out by the CRB decision (see our summary of the CRB decision here).

The proposal of SoundExchange simply turns their offer made in May, summarized here, into a formal proposal.  It does not address the criticisms leveled against the offer when first made in May, that the monetary limits on a small webcaster do not permit small webcasters to grow their businesses – artificially condemning them to be forever small, at best minimally profitable operations, in essence little more than hobbies. The provisions of the Small Webcasters Settlement Act were appropriate in 2002 when they were adopted to cover streaming for the period from 1998 through 2005, as the small webcasters were just beginning to grow their businesses in a period when streaming technologies were still new to the public and when these companies were still exploring ways to make money from their operations. Now that the public has begun to use streaming technologies on a regular basis, these companies are looking to grow their businesses into real businesses that can be competitive in the vastly expanding media marketplace. The rates and terms proposed by SoundExchange simply do not permit that to occur. Continue Reading Another Offer From SoundExchange – Still Not a Solution

On Friday, in a number of publications, a story was carried questioning the claims made by the NAB that the broadcast performance royalty being sought by the music industry could amount to 10-35% of the revenue of the radio industry.  A post on the Wired Listening Post blog seemed to have started the story.  This is the royalty which would be paid to the copyright holders in the sound recording – and would be in addition to the royalties paid to ASCAP, BMI and SESAC for the composers of music (see our post on the topic, here and here) .  Wired quoted a spokesman for the Music First Coalition (the music industry coalition seeking the performance royalty) claiming that the NAB’s claims are overstated – and that any broadcast royalty to be paid to sound recording copyright holders would be similar to those paid in Europe for the use of sound recordings, and similar to the amounts currently paid to ASCAP, BMI and SESAC for the use of the musical compositions, in the range of 3-5% of revenues. Only the Radio and Internet Newsletter seemed to question this statement.  From looking at the history of SoundExchange’s claims made in other royalty proceedings, the questions raised by RAIN seem entirely justified.  SoundExchange has consistently argued in connection with all of the other on-going royalty proceedings that the sound recording royalty is far more valuable than the composition royalty – asking for a royalty over 6 times the amount of the composition royalty – 30% of gross revenues.  How can Music First now contend that the royalty will be only a few percent of revenue, when their representaives have consistently requested royalties many multiples of that amount?

At the House Judiciary Committee hearing on the broadcast performance royalty (see our post, here), when committee members asked how much the royalty would be, Marybeth Peters, the Register of Copyrights, suggested that it could a simple matter of applying the "willing buyer, willing seller" criteria of Section 114 of the Copyright Act to broadcasting.  That standard is exactly the same one that led to the current Internet radio royalties which have been so controversial (see our coverage here).  In that proceeding, SoundExchange had asked for royalties of the greater of the per performance royalty that the Copyright Royalty Board imposed or 30% of gross revenue.  While the Copyright Royalty Board did not adopt a percentage of revenue royalty because they feared that it was too difficult to compute for services that had multiple revenue streams, most observers have estimated that the pe performance royalty exceeds 100% of revenue of the small commercial webcasters, and are close to 100% of revenue even for the Internet radio services provided by the major Internet content companies.  In making their offer of a "special deal" to Small Commercial Webcasters on May 23, with royalties between 10 and 12% of gross revenue, SoundExchange specifically stated that it thought that the 10-12% rate was "a below-market rate to subsidize small webcasters … to help small operators get a stronger foothold" in developing their businesses.  While 10% is suggested to be a "below market" rate in an immature industry still struggling to find a business model, the Music First Coalition now suggests that a royalty less than half that amount is what they would request for broadcast radio.Continue Reading Broadcast Performance Royalty – Getting Fooled Again?

In its Public Notice setting out the rules governing the upcoming filing window for applicants seeking new noncommercial FM stations or major changes in existing stations, which we wrote about here, the FCC has put applicants on notice of the many requirements that must be met in order to have an application considered in the upcoming process.  This is the first opportunity in this century for the filing of applications for new noncommercial FM stations. In order to participate, all applicants must make sure that they follow the rules set out by the Commission.  Applications will be due in a filing window that will open on October 12 and close on October 19.

Fundamentally, the FCC’s Public Notice reminds interested parties that, to be eligible, an applicant must be a noncommercial entity – a nonprofit corporation or a governmental organization.  Individual applicants or profit-making entities cannot participate.  As eligibility to participate and the comparative qualifications of all applicants are assessed at the time of filing, applicants need to assure their nonprofit status is in order before the upcoming filing window.

The Commission also sets out a number of other requirement for the applications that may be filed during the window. Applications submitted during the window will be filed electronically on FCC Form 340, and must contain very specific technical descriptions of the service they plan. The proposal must specify facilities that don’t interfere with other existing stations or pending “cut-off” noncommercial applications. The applicant must have received reasonable assurance of the availability of its proposed transmitter site (i.e. a legally binding contract is not necessary, but a commitment from the site owner that the site will be available and an idea of the terms on which that availability is premised must be obtained). Continue Reading Details on the Noncommercial Filing Window

In July, the FCC released a Notice of Proposed Rulemaking suggesting specific requirements for publicizing the digital television transition and the February 2009 deadline for broadcast stations to convert from analog to digital operations.  We wrote about some of the Commission’s specific proposals, including the possibility of mandating public service announcements on television stations, here. …

The FCC late today released its long-awaited Notice of Proposed Rulemaking proposing to allow FM translators to rebroadcast the signal of AM stations – and potentially to originate programming during those nighttime hours when a daytime-only AM station is not permitted to operate.  The proposal is to permit AM stations to operate FM translators in an area that is the lesser of a circle 25 miles from their transmitter site or within their 2 mv/m daytime service contour.  In proposing the changes in its rules, the Commission raised a number of questions on which it seeks public comment.   These include the following:

  • Is allowing the rebroadcast of AM stations on FM translators in the public interest?  What would its impact be on other stations including AM and FM stations, as well as LPFM stations?
  • How many translators should each AM station be permitted?
  • Should daytime-only AM stations be allowed to originate programming on an FM translator during hours when they have no programming to rebroadcast?
  • Should the FCC permit AM stations to begin operating translators all at once – or should the use of these translators be phased in – perhaps permitting daytimers or stations with minimal nighttime power to operate translators first for some transitional period.
  • Should there be a restriction on an AM station’s use of an FM translator if the AM is co-owned with an FM station in the same market?
  • Can an AM station "broker" time on a translator to provide the type of service proposed in this proceeding?

In addition to these operational issues, the FCC poses a few technical issues about these operations.  These include:

  • Should any extension beyond the 2 mv/m contour be permitted?  If so, how much and in what circumstances?
  • How should the 2 mv/m contour be calculated – using standard FCC predictions, or allowing the measurement of the actual reach of that signal?
  • Should the 25 mile zone be extended to 35 miles in Zone II (essentially the less populated areas of the country)?

Comments on the Notice will be due 60 days after publication in the Federal Register, with replies due 30 days later.Continue Reading FCC Finally Releases Notice of Proposed Rulemaking to Allow FM Translators to Rebroadcast AM Stations

Two weeks ago, we wrote about the FCC’s proposal for the auction of the 700 MHz band – the portions of the spectrum that will be reclaimed from television operators after the digital transition.  These channels will be used to provide some form of wireless broadband service. The Commission made its decision on the use of this spectrum last week, reserving at least some of the spectrum for “open access” uses – where the provider will not be able to restrict the devices that can access the network, nor limit or block services that run on the network, as long as the devices and services do not cause damage to the network.  In theory, this will encourage the creation of numerous new devices and services to capitalize on the open wireless network being provided.  While the Commission has not released the full test of this decision yet, a memo from our firm, describing some of the decisions announced at the FCC open meeting and in the subsequent public notice, can be found here.

Whether the provisions that the Commission adopted will be sufficient to entice some of the Internet “content” companies, like Google, to bid, remains to be seen. But this “beachfront spectrum” will no doubt introduce some exciting new uses as it begins to come into operation in the next few years – providing more people more wireless access to mobile content – and more competition to those traditional wireless industries that many consumers have forgotten are both wireless and mobile – those provided by traditional broadcasters.  Continue Reading 700 MHz Reclaimed TV Spectrum Auction Rules Adopted – A Preview