Global Music Rights, commonly known as GMR, is the newest Performing Rights Organization (PRO) in the US music business, licensing public performance rights to musical compositions of songwriters as diverse as various members of the Eagles to Pharrell Williams to George Gershwin. As we wrote here, in December, they offered a temporary license to the radio industry to allow radio stations to play their music if the stations pay a royalty reportedly based on a percentage of what stations pay to ASCAP and BMI. That license, which was accepted by many radio stations, expires at the end of September. Many stations were concerned as to what would happen on October 1, and whether they could continue to play GMR music. This week, that question was answered when it was announced that GMR has offered to extend the license for another 6 months at the same rates stations are now paying.

While this extension may answer the question of what happens on October 1, it certainly does not resolve all GMR issues. It seems pretty clear that, unless there is a major breakthrough, GMR and the Radio Music License Committee (the organization that negotiates performance royalties for commercial radio operators) will not come to an agreement on rates before the end of September. As we wrote here, RMLC has sued GMR, asking that a court make them subject to an antitrust consent decree much like SESAC where rates, if they cannot be voluntarily negotiated, would be set through arbitration (see our article on the results of the recent RMLC-SESAC arbitration here). GMR has countersued (see our article here), and litigation continues as it may well for years absent a settlement. Continue Reading GMR Offers Commercial Radio 6 Month Extension of Interim License to Play Their Songs

Since the beginning of the year, the FCC has been acting with fewer than its full complement of Commissioners. Since the January departures of Chairman Wheeler and Commissioner Rosenworcel, the Commission has had three Commissioners – two Republicans (Chairman Pai and Commissioner O’Rielly) and one Democrat (Commissioner Clyburn). Last week, Congress confirmed the nominations of Democratic Commissioner Rosenworcel for her return to the FCC, as well as new Commissioner Brendan Carr, a Republican. With these two expected to be sworn in in the very near future, it will complete the full house of three Republicans and two Democrats. With the background of the new Commissioners, and the 3-2 Republican majority, is this a winning hand?

With this make-up of the FCC, the Commission will likely continue to proceed in the deregulatory fashion that we have seen so far this year.   Commissioner Rosenworcel is a known quantity, having served on the FCC for several years before her term ran out in January. While a Democrat, during her initial term as a Commissioner, her views reportedly departed from those of Chairman Wheeler in a few instances , modifying the outcome of some of his initiatives. New Commissioner Carr has been serving as the FCC’s General Counsel under Chairman Pai, and had previously worked as a legal advisor in Pai’s office. While his legal background has primarily been in non-broadcast areas, as General Counsel, his office was involved in several significant broadcast actions, including the recent defense of the reinstatement of the UHF discount against attempts by certain public interest groups to have the Court of Appeals impose a stay the effective date of the Commission’s action (see our article here). Of course, these positions are not necessarily indicative of his stances when he is acting as an independent Commissioner instead of acting in a role that was subject to the direction of the Commissioners. Only time will tell for sure how the new fully-staffed Commission will interact with each other, but the bets are that the general direction will not be changing. Continue Reading A Full House at the FCC as Two “New” Commissioners Confirmed

The FCC announced a Consent Decree with a New Jersey TV station where the licensee agreed to make a $17,500 payment to the US Treasury for failing to identify “core” educational and informational programming directed to children with the required “E/I” symbol on the programming itself. This programming was, according to the consent decree, run on the station’s multicast streams – stations having an obligation to run at least 3 hours of educational and informational programming on each of its program streams. The settlement payment also covered Commission findings that the station had not adequately and accurately reported these omissions in both its Quarterly Children’s Television Reports (Form 398) and in its license renewal application. The Commission also noted that the station had not adequately informed publishers of program guides about these educational and informational programs.

We’ve written about similar fines in the past (see, e.g., our articles here and here). But what this decision emphasizes is that the FCC is still in the enforcement business. Many broadcasters have heard about the deregulatory philosophy of the majority of the current FCC commissioners. In fact, in the Media Regulation Modernization Initiative (where reply comments are due today) some broadcasters have suggested changes in the children’s television obligations, especially in connection with digital multicast subchannels of TV stations. Why require, for instance, a 24-hour weather channel to broadcast children’s programming (or for that weather channel to trigger an obligation for another channel to carry 6 hours of educational and informational children’s programming as the broadcaster is allowed to shift the educational requirement of one subchannel to another of its channels) when so much educational and informational programming is available in the marketplace through MVPDs or online sources? While these issues have been raised in the last month, the FCC has obviously not taken action yet on the proposals. Until the rules are changed, broadcasters need to honor those rules, or face potential consequences like those reflected in this consent decree.

The FCC yesterday took what some may suggest is an unprecedented action to potentially deny the license renewal of an FM broadcast station that was silent for all but one day each year during its license renewal term. According to the Hearing Designation Order, the station operated one day each year to avoid forfeiting its license pursuant to Section 312(g) of the Communications Act (a provision we have written about here and here, which provides for the automatic cancellation of the license of a broadcast station that has been silent for more than one year). The order released yesterday points to a 20 year-old case as warning broadcasters that, if they do not operate for substantial portions of a license renewal term, they are in danger of losing their license. As the FCC points out, if the station is not operating, it cannot fulfill the obligation of a licensee to serve the public interest.

The hearing scheduled by the FCC will be a “hearing” in name only. As there are unlikely to be disputed facts, the FCC has adopted a simplified process of a paper hearing. The licensee of the station will need to submit all the records of station operations during the last renewal term, if such records exist (e.g. station logs, issues-programs lists, and EAS test reports), and a written statement of no more than 25 pages setting out why the license should be renewed. That evidence, along with any comments filed by any party that wants to intervene in the case, will be reviewed by the Commissioners themselves. No oral presentation will be made, and no administrative law judge will be involved in the review of the record compiled by this station. Hearings where the FCC proposed to revoke the license of a station have in the last four decades been held before an administrative law judge, usually with live witnesses. In commenting on this new procedure, Commissioner O’Rielly notes that cases before an administrative law judge can take years to resolve, and often end up being reviewed by the Commissioners themselves anyway, so this paper hearing before the Commission will be much more efficient. Continue Reading FCC To Hold Hearing to Determine Whether to Deny License Renewal of Radio Station that was Silent for Most of its License Term

The window for filing applications for new FM translators for Class C and D AM stations has now closed. According to a statement from FCC Chairman Pai, over 1000 AM stations took advantage of the filing window.  What’s next? The FCC will take these applications and determine which of them are mutually exclusive with some other application filed during the window that ended yesterday. Those that are not in conflict with any other application filed during the window will be asked to complete the Form 349 application (so far, applicants have filed only the “tech box” setting out the basics of their technical proposal). The completed Form 349s will be processed and, barring any issues, construction permits will be granted.

The FCC will also determine which applications are mutually exclusive. At some point, it will release a list of all mutually exclusive applications, and these applicants will be able to discuss resolving their conflicts by minor technical amendments to their applications (e.g. site changes, directional antennas, changes to a new channel within 3 channels of the channel they originally proposed in the tech box application). It is important that applicants not discuss possible resolution with other broadcasters in their market at this time, as this is theoretically an auction proceeding where there are rules against “prohibited communications” that are now in effect. It might seem silly that you can’t discuss a resolution of a conflict with a competitor now when, in a few weeks, the FCC will allow it (and in fact probably encourage it). But, by applying the auction rules to this filing window, these prohibitions are in effect and are taken seriously by the FCC until the settlement window opens. Continue Reading FM Translators for AM Stations – Now that the Filing Window is Done, What’s Next?

Earlier this week, the FCC announced the first of its post-auction filing windows for TV stations that are forced to abandon their current channels as a result of the repacking of the TV band after the broadcast incentive auction. As a result of the shrinking of the TV band, many TV stations were required to change channels so that all stations could fit into the smaller TV band. The first window, open from August 9 to September 8, is for a limited number of TV stations that fall into two classes: (1) 25 repacked stations that were granted a waiver of the July 12 filing deadline for applications for initial construction permits because the FCC agreed that those stations were unable to construct the facilities that the FCC assigned to them when they were repacked; and (2) any repacked station or any other station entitled to protection that is predicted to experience a loss of population served in excess of one percent as a result of the repacking process. More details of the requirements for this first window are in this week’s FCC announcement of the window.

There will be additional windows, about which we wrote here. The next window later this year will be for repacked stations that want to maximize their coverage on their new channel. The facilities that they were assigned in the repacking notice were meant to replicate their current service area, but on their new channels some stations may be able to increase power or coverage. A third window, opening probably in 2018, will be for LPTV and TV translators who are displaced by the repacking to find new channels on which to operate (see our articles here and here). Obviously, if any station can take advantage of possibilities offered by one of these windows, it should stay alert for these upcoming filing dates.

It was announced this week that SESAC’s royalties for radio for the period starting at the beginning of 2016 through the end of 2018 have been slashed – being reduced to less than half what they were in 2015.  This decision came out of an arbitration process that resulted from the settlement of an antitrust lawsuit that the Radio Music License Committee (RMLC) brought against SESAC (see our article here for a summary of the settlement).  Yet, despite the significant reduction in the royalties for radio operators, both sides declared victory (see RMLC press release here and press reports on SESAC’s reaction here).  Can both be right?  While the decision of the arbitrators is not public so we can’t know for sure the reasoning behind the result, it might be that there is something to each of these claims.

For radio, the victory is clear.  For commercial radio broadcasters, the royalties were significantly decreased, retroactive back to the beginning of 2016 year for stations that had elected to have RMLC represent them in this lawsuit.  Some stations had been enticed by an offer made by SESAC at the beginning of 2016 offering stations a new SESAC license at rates 5% less than they were in 2015 (see our article here).  Those stations may not qualify for the much greater royalty reduction available to the majority of commercial stations that opted into RMLC representation and are covered by the arbitration result.  The new SESAC royalties will also cover the use of SESAC music on broadcaster’s streaming platforms and HD broadcasts, uses for which broadcasters had previously had to pay SESAC separately.  Of course, stations still need to pay public performance royalties for musical compositions to ASCAP, BMI and, in many cases, GMR and public performance royalties for sound recordings, when streaming recorded music, to SoundExchange. Continue Reading SESAC Royalties for Commercial Radio Slashed By More Than Half – Both SESAC and RMLC Claim Victory in Arbitration

It’s almost August, and despite it being vacation time for many, there are still regulatory dates that must be addressed by the broadcast industry. Routine filing dates this coming month include the need for EEO Public Inspection File Reports to be included in station’s public inspection files (either the online files for all TV stations and those radio stations that have already converted, or in the paper files for those radio groups that have not yet made the switch) for stations that are part of employment units with five or more full-time employees in California, Illinois, North Carolina, South Carolina, and Wisconsin. Links to these reports must also be included on the home page of any stations in such employment units, whether or not the station’s complete public file is available online. For more about station’s ongoing EEO obligations see our article here. EEO Mid-Term Reports are due to be file with the FCC on August 1 by Radio Station Employment Units with 11 or more full-time employees in California and Television Employment Units with five or more full-time employees in Illinois and Wisconsin. For more on these Mid-Term reports, see our article here.

August also brings the date for Reply Comments in the Modernization of Media Regulation proceeding (see our articles here and here). Reply comments in that proceeding looking to amend or repeal broadcast regulations that no longer make sense in the modern media environment are due by August 4. Many media companies are also watching the Restoring Internet Freedom proceeding, looking at what some people refer to as the Open Internet or Net Neutrality issues, where reply comments are due August 16. Continue Reading August Regulatory Dates for Broadcasters – EEO, Translators, Media Regulation Modernization, EAS, Incentive Auction and More

We wrote earlier this week about the upcoming EAS Nationwide Test and the need for broadcasters to make sure that their EAS equipment is operating in compliance with all FCC rules. The FCC itself has now released its own Public Notice detailing the many things that broadcasters need to check at their facilities before the upcoming test, including the need to update their information in the ETRS EAS reporting system by August 28. The FCC also issued a new EAS Handbook detailing broadcaster’s EAS obligations.

The Public Notice notes that the EAS test will focus on the IPAWS internet-based system through which the common alerting protocol (“CAPS”) alert is sent – a system that was mandated a few years ago as an additional way for alerts to be conveyed to stations to supplement the traditional “daisy-chain” of alerts being passed from one broadcast station to another (see our articles here, here and here). The internet-based system will allow both English and Spanish versions of the Nationwide alert to be transmitted and will also provide text of the message that can be converted to a video crawl on TV screens.

The Public Notice provides a list of potential EAS issues that each station should review to make sure that their EAS systems are operating in compliance with the rules. The Notice also sets August 28, 2017 as the deadline for all stations to complete their “2017 ETRS Form One” setting out information about each station’s EAS decoders, encoders or combined units. ETRS is the system that reports on the results of the EAS tests. Test results will need to be filed on Form Two in ETRS on September 27 before midnight, with more detailed information about the results of the test to be submitted in a Form Three by November 13, 2017. The FCC warns stations to start looking at these forms now – particularly the one due on August 28 – to make sure that your information is updated and accurate and you are ready for the September test. As we suggested in our earlier post, this public notice makes clear that now is the time for all stations to review their EAS equipment, and the ETRS Forms, to get ready for the Nationwide Test.

The CLASSICS (Compensating Legacy Artists for their Songs, Service and Important Contributions to Society) Act was introduced in Congress last week to try to clear up some of the ongoing disputes over the public performance rights of pre-1972 sound recordings. Through litigation, certain copyright holders (including, most notably, Flo and Eddie of the 1960’s band The Turtles) have been seeking compensation from digital and analog music services for the public performance of pre-1972 sound recordings. These sound recordings are not covered by Federal law. As the obligation to pay SoundExchange only applies to recordings covered by Federal law, some digital services were not paying for the performance of these songs. The artists that have brought suit have contended that state laws did create an obligation to pay for the public performance of these recordings, even though there were no specific statutory provisions establishing those rights. Thus far, New York, Florida, Georgia and Illinois have found there to be no right of compensation under state laws (though some of these cases are on appeal). By contrast, California found that there was a right for compensation, though that case, too, is on appeal.

The CLASSICS Act looks to resolve these issues by pre-empting state lawsuits and establishing that services cannot play these recordings without either getting a direct license from the copyright holder to do so, or by paying SoundExchange royalties under the statutory license at the fees set by the Copyright Royalty Board. If a digital music service pays SoundExchange royalties and obeys the rules that apply to such royalties, it is not infringing on the rights of the copyright holder. It can also directly license these rights, but must pay half the license fee to SoundExchange to be distributed to the artists who performed on the recording (in the same manner that half the fees paid under the statutory license are distributed to the artists). Continue Reading CLASSICS Act Introduced to Provide Pre-1972 Sound Recording Public Performance Clarity – What Issues Does It Leave Unresolved?