On Thursday, we wrote about the FCC’s release of its order setting the amounts for the Annual Regulatory Fees paid by all of those regulated by the FCC. Those fees are due by September 25. On Friday, the FCC released a Fact Sheet detailing the fees for broadcast and other licensees regulated by the Media Bureau and how those fees should be paid. As we noted in our article last week, fees are due for stations based on the FCC authorization they held on October 1, 2017 – so even stations whose licenses have been surrendered (e.g. through the incentive auction or construction permits for new stations that were never built and expired) must pay fees on the authorizations in effect on October 1, 2017. The FCC also notes that expanded band AM stations, that have previously been exempt from fees as they are part of a paired license with stations in the core AM band, now have to pay fees independently from their paired station.

The Fact Sheet also sets out the fees owed by radio stations based on the population they serve, and for TV stations based on the size of the DMA in which they are located. The Fact Sheet links to this sheet for more information about how to access the FCC’s calculation of the specific amount owed for each of a licensee’s stations. The Fact Sheet also sets out details of the payment process, and notes that those licensees whose total fees are $1000 or less are exempt from any payment obligations as their fees are considered “de minimis.” Licensees who are in this de minimis category don’t even need to report that fact to the FCC – the Commission should be able to recognize that status on its own. Carefully read this information provided by the FCC, and submit your fees when ready – just be sure to do it before the September 25 deadline to avoid the substantial penalties for late payments.

Just when you thought that it might be safe to stop watching your email and prepare to enjoy the long weekend, the FCC comes along and reminds you that there is work ahead in September. As we warned in our summary of the regulatory dates for broadcasters in September, the FCC announced the deadline for filing annual regulatory fees – they will be due by 11:59 pm ET on September 25, 2018.  A copy of the FCC order announcing the amounts of the new fees is available here.  The filing date is available on the FCC’s website.  Fee information is provided in Appendix C of the decision, which begins on Page 18 of order.  In the past, the Media Bureau has followed up with a Public Notice and Filing Guide specifically addressing fees to be paid by broadcasters.  Expect to see that in the next few days.

The Order also announces in Paragraph 14 of the decision that the method calculating TV regulatory fees will be changing beginning next year. It will be moving to a system for setting fees more like that used in radio by assessing fees for full-power broadcast TV stations based on the population covered by the station’s contour, instead of by the station’s DMA.  Beginning in 2019, the FCC plans to adopt a fee based on an average of the current DMA methodology and the population covered by a full-power broadcast TV station’s contour.  Thereafter, in 2020, the FCC will assess regulatory fees for full-power broadcast TV stations based solely on the population covered by the station’s contour. But for this year, the FCC detailed the procedures for payment that are much the same as last year. Continue Reading Annual Regulatory Fees Due September 25 – Expect Changes in TV Fees Starting Next Year

The FCC yesterday issued a Declaratory Ruling approving the acquisition of an FM radio station in upstate New York by a company that is 100% controlled by two individuals, neither of whom is a US citizen. One is a UK citizen, the second a citizen of Poland. These individuals have lived in the US for three years. As the Foreign Investment Review Staff at the Department of Justice indicated to the FCC that it had no objection to the sale after coordinating with other Executive Branch agencies, the FCC concluded that the public interest favored this foreign investment to insure continuity in the operation of the radio station.

This is the third case where the FCC has approved ownership of US broadcast stations by a company 100% owned by foreign citizens (see our articles here and here on earlier cases). In each of these cases, the acquisitions have been by individual investors of smaller, privately-owned stations. In 2016, the FCC issued a ruling providing greater opportunity for more foreign investment in public companies (see our article here), but large public companies have been slow to take advantage of this liberalized regulatory regime. We have seen companies including Univision obtain approval for non-controlling foreign interests, but as of this point, we have not seen a situation where a public company has sought approval for majority foreign ownership. Even under the FCC’s liberalized rules, there still need to be specific foreign investors identified and approved by the Executive Branch agencies involved in homeland security issues before they can take control of any company. So the process is not a wide-open invitation for any foreign owner to come into the US and buy a broadcast company. But in the 5 years since the FCC first made clear that they would allow foreign ownership above 25% of a company controlling a broadcast station (see our article here), significant foreign investment in US broadcast stations has occurred, and we expect the trend to continue.

Yesterday, we wrote about the regulatory dates coming up for broadcasters in September.  Even though that was an extensive list, we realized later that we left a few off.  So here are a few more issues to consider in September.  Plus, the FCC yesterday reminded repacked TV stations of all of the requirements for TV stations involved in the repacking of the TV band following the Incentive Auction which, as we noted in our post yesterday, formally begins this month.

One date that we overlooked was the effective date for a general increase in FCC application fees – those fees that commercial broadcasters pay every time they file an application for a construction permit, approval of a purchase or sale of a station, a license renewal, an STA or many other requests for FCC action.  As we wrote here, the FCC recently announced that the fees were going up to reflect inflation.  Last week, the FCC issued a Public Notice announcing that those new fees are effective on September 4.  So commercial stations filing applications on September 4 or afterward need to remember to pay the new fees, or risk having their applications returned. Continue Reading More September Regulatory Dates – Effective Date of New Application Fees, Filing Deadline for TV Shared Services Agreements, Lowest Unit Rate For September Election and Reminder on Repacking Requirements

While September is one of those months with neither EEO reports nor Quarterly Issues Programs or Children’s Television Reports, that does not mean that there are no regulatory matters of importance to broadcasters. Quite the contrary – as there are many deadlines to which broadcasters should be paying attention. The one regulatory obligation that in recent years has come to regularly fall in September is the requirement for commercial broadcasters to pay their regulatory fees – the fees that they pay to the US Treasury to reimburse the government for the costs of the FCC’s operations. We don’t know the specific window for filing those fees yet, nor do we know the exact amount of the fees. But we do know that the FCC will require that the fees be paid before the October 1 start of the next fiscal year, so be on the alert for the announcement of the filing deadline which should be released any day now.

September 20 brings the next Nationwide Test of the EAS system, and the obligations to submit information about that test to the FCC. As we have written before (here and here), the first of those forms, ETRS Form One, providing basic information about each station’s EAS status is due today, August 27. Form Two is due the day of the test – reporting as to whether or not the alert was received and transmitted. More detailed information about a station’s participation in the test is due by November 5 with the filing of ETRS Form Three. Also on the EAS front, comments are due by September 10 on the FCC’s proposal to require stations to report on any false or inaccurate EAS reports originated from their stations. See our articles here and here. Continue Reading September Regulatory Dates for Broadcasters – Annual Regulatory Fees; Nationwide EAS Test; Comment Dates on FM Translator Interference, Audio Competition, Children’s Television Requirements, and Reimbursement for LPTV and FM Repacking Costs; and More

In Monday’s Federal Register, publication is scheduled for the FCC’s Notice of Proposed Rulemaking on reimbursing LPTV stations, TV translators and FM radio stations (both full-power and FM translator stations) for costs they incur because of the TV incentive auction and the resulting repacking of the TV spectrum. The publication in the Federal Register means that comments on the FCC proposals are due September 26, and reply comments on October 26.

The FCC’s Notice of Proposed Rulemaking proposes reimbursing the costs of LPTV stations and TV translators (including Digital Replacement Translators) for moving to new channels. These channel moves were required either because of the contraction of the TV band after the auction (requiring that TV channels above 37 be cleared of TV users so that the upper channels can be repurposed for wireless users) or because these secondary stations operate on channels on which full power stations were relocated as the FCC shuffled channels to fit all remaining full-power and Class A stations into the smaller TV band. Radio stations operations may be disrupted by the repacking principally when those stations operate on a tower used by TV stations. Radio stations either may have to relocate their antennas, either permanently or temporarily, to another tower (or elsewhere on the existing tower) to accommodate the installation of a new TV antenna or other work on the TV stations on the tower. What does the FCC propose? Continue Reading Comments Due September 26 on FCC Proposals for LPTV, TV Translator and FM Reimbursement of Costs Incurred By Incentive Auction Repacking – What Are the Issues to be Addressed?

In recent weeks, I’ve written about my presentation at the Podcast Movement Convention on legal issues for broadcasters who are thinking about podcasting, and followed up with an article warning any company with employees or contractors creating podcasts or other digital media projects to be sure to clarify who owns the content that is created. Recently, there has been litigation about another issue – the individuals featured in podcasts suing the producer for unauthorized uses of the interviews recorded for use in the podcast, under theories including the invasion of privacy or violation of the rights of publicity of the interviewees.

One lawsuit receiving significant publicity (see for instance the detailed articles here and here) is from the family of the individual who became the main focus of the popular podcast S-Town. The podcast focused much of its attention on the life of an individual who was not an elected official or any other sort of public figure. As the individual died before the podcast’s release, the family sued on his behalf, arguing that the podcast violated his rights of publicity. Various states grant individuals rights of publicity to exploit their names, likeness, or stories – essentially barring others from exploiting that person without his or her permission. Other state laws grant individuals a right of privacy to keep private facts private. While the details and exceptions to these rights differ from state to state, they generally do not restrict bona fide news stories about public figures or reporting on other matters that are in the public interest. Most broadcasters, covering news events, don’t routinely run up against the restrictions set out in these laws. But podcasts and various other reality programming may be more lifestyle-oriented, and may detail private facts about individuals who are not in the news, leading to issues like these. Getting a release from the subject of an interview waiving any such rights, and otherwise giving the producer the rights to exploit the recordings that are made, can help to reduce the risk that these laws may otherwise pose. Plus, there are other reasons that a release may be helpful. Continue Reading More Podcast Legal Issues – Getting Releases From Interview Subjects

The state of the audio industry will no doubt be a crucial consideration in the next Quadrennial Review of the FCC’s ownership rules, expected to start late this year or early next. But, before that Review begins, the FCC has been tasked by Congress to write a report on the state of competition in the audio marketplace. In order to gather information for that report to Congress, the FCC is seeking public comment on the state of the industry, asking questions about the state of completion for listeners and advertisers – questions which we summarized here. A summary of the request for comments on the “Status of Competition in the Marketplace for Delivery of Audio Programming” was published in the Federal Register today, setting the comment deadline for September 24, 2018, with reply comments due by October 9.

With this report being prepared just as the FCC is beginning to consider what issues to tackle in the Quadrennial Review, we cannot help but believe that the FCC’s findings won’t be taken into consideration in the Quadrennial Review. The initial document to be released in the Quadrennial Review will be a Notice of Proposed Rulemaking putting forth the FCC’s initial take on whether any of its ownership rules are no longer in the public interest and therefore need to be modified or eliminated. The radio rules have not been subject to any changes in a dozen years, when the FCC switched from using a contour methodology to using Nielsen Audio (then Arbitron) data to compute the number of stations in a rated market. The number of stations any party is able to own in any market has remained unchanged since 1996, though audio competition has clearly grown (see our article here). The facts gathered in this report, while meant for consumption by Congress in its consideration of various legislative matters, will also be the FCC’s most thorough look at the marketplace in which radio competes in 20 years and will likely inform the FCC’s judgement as to whether the radio ownership rules should be amended (see our article here summarizing the NAB’s proposal for changing the rules). Thus, broadcast companies interested in changes in the radio ownership rules should be thinking about providing information to the FCC about the state of competition in the audio marketplace by the September 24 deadline.

Two years ago, a District Court Judge, in a case brought against a broadcaster alleging that the broadcaster owed money under California state law for playing pre-1972 sound recordings, dismissed the suit finding that the broadcaster was playing digitized versions of those songs, created after 1972, which were covered under Federal copyright law (we wrote about that decision here). Yesterday, the US Court of Appeals for the Ninth Circuit issued its decision reversing the District Court’s opinion and sending the case back to the District Court for additional hearings. The Court of Appeals concluded, for several reasons, that there was likely insufficient creativity in the remastering of the pre-1972 sound recordings to make them new post-1972 copyrighted works and that, even if they were creative enough to merit copyright protection as a derivative work, that did not end the discussion, as portions of the original pre-1972 work were included in any new work and those portions themselves had to be licensed. The decision looks like a simple premise that digitization is no magic bullet to defeat pre-1972 sound recording claims, but there is much to unpack in this seemingly straightforward decision.

First, we need to provide a little background on the litigation over pre-1972 sound recordings. Federal law did not recognize a copyright in sound recordings until 1972. So while the underlying musical composition in a song was protected under Federal law, a recording by a particular band or singer was not. When these recordings were federalized, the Copyright Act explicitly left all rights regarding pre-1972 sound recordings in the hands of state law until 2067. For over 40 years, that quirk in copyright law did not seem to have much relevance, though some US digital music services did not pay royalties to SoundExchange for digital performances of those recordings as they were not covered by Section 114 of the Copyright Act (the section creating the statutory royalty for sound recordings). About 5 years ago, the singers Flo and Eddie (formerly of the 1960s band the Turtles) started bringing lawsuits throughout the country alleging that they were owed performance royalties under state law for these pre-1972 recordings from both digital and analog services (see our article here when the first suit was filed). In most states, those suits have been dismissed with courts finding that state law did not provide for a performance right in these pre-1972 recordings (see our articles about decisions in New York, Florida and Georgia reaching that conclusion). The issue in California, however, is still open. For a deeper dive into these issues, see our article here. Continue Reading Court of Appeals Finds That Digital Remasters of Pre-1972 Sound Recordings Likely Do Not Result in New Copyrighted Work That Would Bring These Songs under Federal Law – Reversing District Court Decision

Last week, the FCC released a Consent Decree where a broadcast company admitted to certain unauthorized transfers of several stations, even though actual control of the stations, for the most part, did not change. Stock of the company was transferred into a trust by the company’s shareholder without FCC approval, even though the shareholder continued to control the station until his death approximately a decade later. For this transfer, and another occasioned by the voting of the trust’s stock by his children after his death, the company agreed to pay $8,000 to the government and enter into a compliance plan to assure that no similar transfers occur in the future.

This decision and two similar Consent Decrees entered into by public companies in recent months for, without prior FCC approval, moving station licenses among wholly-owned subsidiaries as part of corporate reorganizations (see decisions here and here), remind broadcasters that, if they are making any change in their ownership where the chain of control changes, even if actual control remains the same, they still need prior FCC approval. So putting controlling stock into a trust that the majority shareholder votes instead of holding it outright, or eliminating one company in a corporate ownership chain, or moving a license from one subsidiary company to another (or directly into the parent company), all require FCC approval before the change is made. These organizational changes, where control continues to reside in the same hands both before and after the change, are filed on an FCC Form 316 and can usually be approved by the FCC very quickly. While these changes may seem (and may in fact be) inconsequential in assessing who owns a broadcast company, the FCC (in broadcasting) still requires prior approval for such a change. Not securing that approval first may well, as in these recent cases, cost you in the long run through FCC fines, legal expenses, and the costs of instituting and administering a consent decree.