The government shutdown continues to create a confusing situation for government agencies faced with statutory obligations that are difficult to honor without a working federal bureaucracy. The FCC by law is required to hold a monthly public meeting but, when the bulk of its employees are furloughed, it is difficult to meaningfully adhere to that
Update: Call for Petitions to Participate in WEB V Proceeding on Webcasting Royalties for 2021-2025 Published in Federal Register: Petitions to Participate Due February 4
Last week, we noted that the Copyright Royalty Board had a notice on its website saying that, because of the government shutdown, it could not publish its notice soliciting petitions to participate in WEB V, the case to set webcasting royalties paid to SoundExchange by noninteractive webcasters (including broadcasters who simulcast their programming on the
Government Shutdown Delays Start of Webcasting Royalty Proceeding
Update – January 24, 2019 – the notice seeking petitions to participate has been published in the Federal Register, setting a filing deadline of February 4, 2019. See our article here for more details.
In our summary of January regulatory issues for broadcasters, we suggested that the Copyright Royalty Board this month might start
Copyright Royalty Board Final Decision on Rates for Business Establishment Services
In one of those year-end decisions that got lost in the holiday rush, in late November, the Copyright Royalty Board issued its final ruling on the rates to be paid to SoundExchange by “business establishment services” for the ephemeral copies of sound recordings when these music services transmit programming to their customers. We wrote about the CRB’s proposal to adopt these rules in May of last year, and our comments on the decision remain relevant to explaining this order. A slightly revised version of our May post follows.
While Copyright Royalty Board decisions on royalties for webcasters, Sirius XM and mechanical royalties get most of the attention, the CRB also sets rates paid by “business establishment services” for the “ephemeral copies” made in their music businesses. Business establishment services are the companies that provide music to businesses to play in retail stores, restaurants and other commercial establishments. These services have come a long way from the elevator music that once was so derided – and now set the mood in all sorts of businesses with formats as varied as the commercial businesses themselves. While the rates paid by these services pay for music rights is a little off-topic for this blog, these rates are a bit unusual, so they are worth mentioning. The Copyright Royalty Board in May announced a proposed settlement between the services that were participating in the CRB case and SoundExchange which will raise the rates gradually from the current 12.5% of revenue to 13.5% over the next 5 years, with a minimum annual fee of $20,000, up from $10,000. These rates, which apply to any company that does not negotiate direct royalties with the sound recording copyright holders, went into effect on January 1, 2019 and will be in place through 2023.
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FCC Releases Draft Order to Abolish FCC Form 397 Mid-Term EEO Report
Along with the draft NPRM we wrote about yesterday to consider changes to the FCC’s rules for granting new construction permits for noncommercial stations and LPFMs, the FCC last week issued another draft order to be considered at its January 30 meeting, assuming that the partial government shutdown has been resolved and the FCC has returned to normal operations. This draft order would adopt the FCC’s proposal advanced last year (see our article here) to abolish the filing of the FCC Form 397 Mid-Term EEO Report, as that form is no longer necessary as the information gathered by the form is now largely available in every broadcasters online public file – which the FCC can review at any time. As the information is already available, the draft order concludes that it is redundant to separately file that same information in a Form 397.
The Form 397 requires the filing of a licensee’s last two Annual EEO Public Inspection file reports. These are documents available in the online public file. The Form 397 also requires the name of person at the station who is in charge of EEO matters. The FCC says that this information is already generally available in the public file, both through an EEO Form 396 filed with the station’s last license renewal, and through the general station contact for questions about the website. The only information that would not be readily apparent from the online public file is whether or not the station is part of a station employment unit (a station or group of commonly owned stations serving the same general service area and sharing at least one common employee) subject to a Mid-Term EEO review. Any TV station who prepares an EEO Public Inspection File Report would be subject to a Mid-Term review as the law requires such review for all TV stations with 5 or more full-time employees – the same employee threshold at which a station must prepare a EEO Public Inspection File Report. But for radio, the Public Inspection File Report must be prepared if the employment unit has 5 or more full-time employees, while a Mid-Term Report is only triggered for radio if the employment unit has 11 or more full-time employees. To inform the FCC as to whether a station is still subject to Mid-Term review, the FCC will require, when a radio station uploads its Annual EEO Public Inspection file report, that it tell the FCC whether or not it is part of an employment unit with 11 or more full-time employees.
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FCC to Examine the Process for Awarding Construction Permits for New NCE and LPFM Stations – And Some of the Rules that Apply Once a New Noncommercial CP is Awarded
As we wrote on Friday, the government shutdown affects many aspects of FCC operations – and could affect the ability of the FCC to hold its regular monthly meeting, now scheduled for January 30. With the FCC likely shut down for most of this week, just before closing, the FCC released its agenda for the January 30 meeting (which would normally have been released this week – 3 weeks before the meeting). One interesting item on the agenda was a Notice of Proposed Rulemaking to change certain aspects of the criteria used to evaluate applicants for new noncommercial broadcast stations and LPFMs, and the operations of those new stations after a construction permit is issued. The draft NPRM is here. As with all draft items released with the agenda of an upcoming FCC meeting, the draft is subject to change before that meeting.
It appears that the NPRM was not prompted by any single group representing noncommercial broadcasters, but instead raises a number of issues and problems that have been raised before the FCC in comparative cases in the last decade, which use a “points system” process to determine which mutually-exclusive noncommercial applicant should have its application granted. The point system relies on paper hearings to determine which applicant has the most points, awarding applicants preferences on factors such as whether they have few other broadcast interests, whether they are local organizations, and whether they are part of state-wide networks. The NPRM also looks at the restrictions on what successful applicants can do, once they receive their construction permits to build new stations – including the length of LPFM CPs, the transferability of those CPs, and restrictions imposed on changes to certain NCE technical facilities after a CP grant.
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January Regulatory Dates for Broadcasters – The Shutdown Does Not Put Everything on Hold
We typically publish our article about upcoming regulatory dates before the beginning of each month, but this month, the looming FCC shutdown and determining its effect on filing deadlines pushed back our schedule. As we wrote on Friday, the effect of the shutdown is now becoming clear – and it has the potential to put on hold a number of the FCC deadlines, including the filing of Quarterly Children’s Television Reports due on January 10 and the uploading of Quarterly Issues Programs lists, due to be added to station’s public inspection files on January 10. The FCC-hosted public inspection file database is offline, so those Quarterly Issues Programs lists can’t be uploaded unless the budget impasse is resolved this week. Certifications as to the compliance of TV stations with the commercial limits in children’s television programs would also be added to the public file by January 10 – if it is available for use by then. While these and other dates mentioned below may be put on hold, there are deadlines that broadcasters need to pay attention to that are unaffected by the Washington budget debate.
We note that the FCC’s CDBS and LMS databases are up and operating, though most filings will be considered to be submitted the day that the FCC reopens. As the databases are up and operating, many applications can be electronically filed – so TV stations might as well timely upload their Children’s Television Reports on schedule by January 10, to avoid any slow uploading that may result from overloading of the FCC’s system as the FCC reopens. Other FCC deadlines are unaffected by the shutdown – most notably, as we wrote on Friday, those that related to the repacking of the TV band following the TV incentive auction. The FCC has money to keep its auction activities operating so staff are working to keep the repacking on track. Deadlines coming up for the repacking include a January 10th deadline for stations affected by the repacking to file their Form 387 Transition Progress Report. Auction deadlines proceed whether or not the FCC is otherwise open for business.
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FCC Shuts Down Because of Government Funding Impasse – What Does It Mean for Broadcasters?
Do you have a deal to buy a new station or a planned technical modification that needs FCC approval? Well, it looks like those plans may have to wait as the budget controversy in Washington has shut down the FCC. But what does the shut-down really mean for broadcasters? The FCC clarified some of the questions broadcasters have in a Public Notice released Wednesday.
Most applications will not be processed, though the FCC has made clear that it will have FCC staff members available to deal with issues related to the TV spectrum repacking that was caused by the incentive auction. So for those stations needing FCC approvals for actions relating to the repacking of the TV band, the FCC will be functioning. Unlike in past shutdowns (see, for instance, our article here), the FCC website will remain up and generally will be operating, and the CDBS and LMS databases used for most broadcast applications will continue to function (though without any sort of tech support if an applicant has problems). Certain other databases relevant to some aspects of broadcast operations (like the public complaint filing system, the International Bureau’s database used for filing earth station applications, and the tower registration database) will not be available. Perhaps most surprisingly, as the FCC does not specifically mention it in the Public Notice, the FCC has shuttered its Online Public Inspection File database for broadcasters. With that database not working, public file updates (including the Quarterly Issues Programs lists that are due to be added to the files by January 10, cannot be uploaded unless the government reopens. Note that, in the FCC’s orders adopting the online public inspection file obligations, stations are supposed to be able to provide access to their political files when the FCC system is offline (see our article here). While no access to the rest of the file is required, stations are supposed to be able to provide access to back-ups of the political file. Luckily, with few elections taking place at the moment, this should not generally be a widespread issue, but it could obviously become an issue should the shutdown persist.
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Playing Music in Bars and Restaurants – Cautions When Allowing Broadcast Stations to Play in Retail Outlets
Yesterday, I noted a news story about a bar that stopped hosting live music when it was hit with a lawsuit by BMI because it had not paid royalties for its use of music. The issue of music in bars and restaurants also came up in a continuing legal education seminar on music licensing that I moderated the week before last. Given that I have not written on this topic in some time, I thought that it was worth a reminder that retail outlets, including bars and restaurants, have to pay music royalties to ASCAP, BMI, SESAC and perhaps GMR for the performance of music in their venues, except if they fit within very detailed exceptions that allow for certain businesses to avoid those payments.
We wrote an article here that goes into detail on the exceptions. Basically, for very small businesses, their employees can use a single device of the type used in a home to play music. This exception was designed to allow businesses to allow their employees to have personal audio devices to entertain themselves. So that portable radio on the counter of the dry cleaner or at the secretary’s desk can play music without paying royalties. For larger businesses there is a different exception that allows them to avoid liability but only if they meet very specific rules.
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Time Magazine Awards Journalists in Harm’s Way Person of the Year Award – What Are You Doing to Keep Your Broadcast Employee’s Safe?
Yesterday, it was announced that Time Magazine had awarded its person of the year award to “the Guardians” – journalists around the world who risk their lives to bring us the news each day. Most broadcasters don’t think of their on-air personnel as facing the same risks as journalists in war zones or facing imprisonment