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?

FEMA (the Federal Emergency Management Agency) has notified the FCC that it will be conducting the next nationwide test of the EAS system on September 27, 2017 (with a back-up date of October 4, 2017 – in the event potential real emergencies make the earlier date one that could cause confusion). The FCC has updated its reporting system for stations to provide information about the success of the test (recently releasing these instructions to remind stations to create user names in the system), and should be better able to track station’s participation in the test. Thus, to make sure that you can report a successful test, this is a good time for stations to insure that they are monitoring the correct EAS sources as required by their state EAS plan, that they have their online EAS CAPS alert systems functional, and that they are properly receiving, conducting and logging their weekly and monthly tests.

The consequences of not having a properly functioning EAS system were highlighted by a proposed fine announced last week – suggesting a $66,000 fine against an Alaskan noncommercial FM station for a variety of violations. Emphasized in the FCC’s order were the EAS failures of the station, including its failure to have an EAS Handbook at the control point for the station, the failure to monitor the correct EAS sources and the transmission of alerts meant to be sent by another station in a different EAS operational area. The fines proposed by the FCC covered other violations as well including the failure to post the station’s license at its control point, the failure to maintain station technical logs, not having the required main studio staffing, not designating in writing a chief operator for the station, and not responding to FCC inquiries about these deficiencies. Obviously, the entire $66,000 proposed fine was not all EAS related, but the EAS deficiencies did merit special attention in the press release issued by the FCC about the fine, and seemed to have triggered the investigation that led to the discovery of the other perceived problems in station operation. This proposed fine highlights the need for stations to maintain a properly functioning EAS system, especially in light of the upcoming national test.

Earlier this week, we wrote about some of the upcoming dates for broadcasters in the TV incentive auction process – particularly those dealing with the repacking process. Developments continue, with the FCC yesterday issuing a Public Notice announcing that stations that relinquished their spectrum in the incentive auction will be receiving their payouts from the proceeds of the auction – with such payouts beginning immediately as they can be processed by the Treasury Department. The Public Notice also details the process for these stations to cease operating on their current channels. It includes an attachment (here) setting out the deadlines for stations receiving payouts to abandon their current channel – either to go off the air, to commence a channel sharing arrangement with another station or to move to a VHF channel. The stations going off the air are to cease operations by October 25, 2017 and those entering into channel sharing arrangements have a deadline to abandon their current channels by January 23, 2018 (though both dates can be extended in certain situations). Channel sharing stations have until November 24, 2017 to file construction permit applications to modify their facilities to specify the details of the sharing. Look to the Public Notice for more details of these deadlines.

For those stations not selling their spectrum but being repacked to accommodate the smaller TV band following the incentive auction, yesterday brought news that New Jersey Congressman Frank Pallone introduced a bill in Congress, the Viewer Protection Act of 2017, seeking to increase the availability of funds to reimburse the costs incurred by TV stations being repacked following the incentive auction (as well as MVPDs who need to make changes in their facilities to accommodate the repacking of the TV stations). The bill would also, for the first time, make radio stations whose operations are disrupted by the repacking eligible for reimbursement of any reasonable relocation costs incurred because of the repacking. Even LPTV stations and TV translators displaced by the repacking of full-service stations could be eligible for reimbursement of their expenses. An additional $1 billion is authorized to supplement, if necessary, the $1.75 billion already authorized to reimburse repacked TV stations and MVPDs for their costs incurred as a result of the changes in TV station channels brought on by the changes in the TV band following the incentive auction. Funds are also provided for consumer education. Obviously, this is just the proposal of one Congressman that still needs to be adopted by the House and Senate before it becomes law, but it is certainly a step welcomed by many broadcasters since last week’s announcement that the claimed reimbursements exceeded the available reimbursement funds.

As the repacking of the TV band proceeds after the Incentive Auction, the FCC has issued some guidance as to what comes next for TV stations. Obviously, in the near future, TV stations that agreed to surrender their spectrum in the auction will get notice from the FCC to expect their payments from the proceeds collected from the wireless companies that purchased the repackaged surrendered TV spectrum. For stations that are remaining in operation, who last week were required to file construction permit applications for their repacking to the smaller TV band, and their estimates of the expenses that they will incur in the repacking process, the FCC published an article on its blog, here, setting out what is next. The article notes that 25 stations will be filing soon in a new window for stations that either cannot construct on the channels that they were assigned by the FCC, or need expanded facilities to replicate their existing coverage. After that window, there will be another window when the remaining repacked stations can file to maximize their facilities on their new channels. Following those two windows, there will be a window for LPTV stations and TV translators who were displaced by the auction to file for new channels (see our post on that window here).

The other big question is the funds necessary for repacking. The FCC issued a news release last week, here, indicating that the total amount that TV stations and MVPDs estimated that they will need to deal with the repacking is $2,115,328,744.33 – significantly over the $1.75 billion allocated by Congress to reimburse these entities for the repacking. While last week’s FCC blog post notes that the initial estimates will be subject to FCC review and some costs may be disallowed, there is some speculation that Congress will intervene to increase the allowable reimbursement. Commissioner O’Rielly issued a statement, here, urging such action, noting that “no broadcaster or MVPD, nor their viewers or listeners, should be harmed by the repack process.” Continue Reading What’s Next for TV Stations Repacked as a Result of the Incentive Auction? – Recent Flurry of FCC Announcements

The FCC yesterday released an online tutorial for the upcoming windows for filing for FM translators for AM stations. The first window will run from July 26 until 6 pm ET on August 2, where Class C and D AM stations that did not receive a translator in last year’s 250-mile waiver windows can file for a new FM translator to rebroadcast their AM station. We wrote about that window here. The tutorial references various FCC filing guides to assist applicants in filing their applications. The Public Notice announcing the Tutorial also makes clear that, if an applicant has a pending application to acquire an AM station during the window, the proposed assignee can file the application for the new translator, presumably to be granted upon the acquisition of the station (as these translators are tied to the AM on a permanent basis). The current owner of the station and the proposed buyer cannot both file – only one application per station will be permitted. AM stations planning to take advantage of this window should be well into the process of preparing their applications for the window that opens in less than 2 weeks.

Yesterday, the FCC issued a Public Notice declaring the proposed acquisition of the Tribune television stations by Sinclair Broadcast Group a “permit-but-disclose” proceeding. This is not an unusual occurrence in a large broadcast combination where policy issues may be considered. This simply allows the parties to the transaction, and any other party who files comments on the matter, to have discussions with FCC Commissioners and other FCC decision makers about the matter, as long as a description of substance of the discussion is reduced to writing and filed in the docket of the proceeding so that all other participants have notice of what is being said.

This acquisition will, of course, be one where the FCC’s recent decision (summarized here) about the UHF discount will come into play, particularly as there are parties currently appealing that decision (see our article on the appeal here). The FCC’s Public Notice also notes that Sinclair has highlighted situations where the acquisition does not comply with the current FCC local TV ownership rules where divestitures will be required, but notes that Sinclair has stated that it may amend the application should those local rules change while the application is still pending (see our article on proposals to change the local ownership rules pending as part of the reconsideration of last year’s ownership decision). No doubt, with even TV personalities like John Oliver offering commentary on this proceeding, we will be hearing much more about this acquisition before it is completed.

One of the lesser highlighted concerns of the repacking of the TV band into channels 36 and below following the recent incentive auction has been the impact of the repacking on radio stations. As TV stations need to shuffle channels to fit into the smaller TV band as the upper TV channels are repurposed for wireless uses, there will be many situations where there will be tower climbers and other tower work to accomplish the required TV channel changes. While this work is being done, radio stations that share the TV towers may need to reduce power or even cease operations to create a safe environment for the tower climbers. The NAB this week released a list of radio stations that share towers with repacked TV stations and thus could be affected by this upcoming construction. If they have not already done so, radio stations on this list need to coordinate with the local TV station and start planning as to how to best accommodate the repacking work while not unduly disrupting the radio station’s operations during this process that may well strain industry technical resources.

At its April meeting, the FCC voted to allow noncommercial stations not affiliated with NPR or CPB to raise funds for third-party nonprofit organizations, even where such fundraising appeals interrupted normal programming, as long as the licensee did not devote more than 1% of its yearly airtime to such appeals. We wrote here about the decision before it was adopted. The decision adopting the rule change was published in the Federal Register on May 5, 2017, with an effective date of July 5, but for the new rules that need approval from the Office of Management and Budget under the Paperwork Reduction Act. So the change in the rules allowing noncommercial stations to raise funds for third party non-profit organizations is now in effect.

The provisions still under OMB review deal with the on-air disclosures that the FCC required for such third-party fundraising appeals and the public file documentation of such appeals. The on-air disclosures require that the station tell its audience during any fundraising appeal that the money is going to a third-party, not to the station. Whether or not the new rules are in effect, it would seem that any station making an appeal for money for some other nonprofit group would make such a disclosure, for legal and public relations reasons. The public file disclosures under review by the OMB require information about:

• the date, time, and duration of the fundraiser;
• the type of fundraising activity;
• the name of the non-profit organization benefitted by the fundraiser;
• a brief description of the specific cause or project, if any, supported by the fundraiser;
• and, to the extent that the station participated in tallying or receiving any funds for the non-profit group, an approximation of the total funds raised

While the obligation to include this information in the public file is not yet effective, it is likely that at some point this requirement will be approved, so stations ready to take advantage of the new fundraising flexibility should retain this information.

Today, the order eliminating the requirement that broadcasters maintain in a paper public inspection file copies of letters and emails to their stations about station operations becomes effective. While the FCC abolished the requirement back in January, one of the first deregulatory actions of the new Chairman (see our article on that decision here), the decision did not become effective until the publication of that decision in the Federal Register, which occurred today (here). The delay was caused by the review of the decision by the Office of Management and Budget to ensure that it was consistent with the Paperwork Reduction Act – seemingly a self-evident proposition, but one that takes time nevertheless.

For all TV stations and many radio stations that have already converted to the online public file, this effective date will remove the last paper remnant of the public inspection file. For radio stations that have not yet converted to the online public file (smaller clusters in big markets and stations in small markets do not need to convert until March 1 of 2018, see our article here), the paper file will linger on – for some stations who do not upload past political documents (only new political documents need to be uploaded to the online public file), the last remnants of the paper file could linger for two years from the date of the creation of the last political file document that is created before a station’s conversion to the online public file. As the FCC has asked if conversion to the online public file needs to be a pre-condition to taking advantage of any elimination or relaxation of the main studio rule (a proposal on which comments are due on July 3, see our articles here and here), this impending rule change might provide a further incentive to a quick conversion to the online file. In any event, the FCC’s January decision abolishing the obligation to maintain letters from the public in a station’s public file is now, at long last, effective.

July is a big month on the Washington regulatory scene for broadcasters. There are, of course, the routine quarterly regulatory obligations. For all stations, commercial and noncommercial, Quarterly Issues Programs Lists, summarizing the most important issues facing a broadcaster’s community, and the programs that were broadcast in the prior quarter to address those issues, must be in a station’s public file (the online public file for all TV stations and for radio stations that have already converted to the online file) by July 10. These are the only required records documenting a station’s service to its community, so do not forget to complete these reports and to timely place them in your public file.

Children’s Television Reports documenting the educational and informational programing broadcast by TV stations to meet their obligation to program at least three hours a week of such programming for each program stream are due to be filed at the FCC by July 10. Also, TV stations must place into their public file documentation showing that they have met the advertising limits imposed on commercials during children’s programming. Continue Reading July Regulatory Dates for Broadcasters – Quarterly Issues Programs and Children’s Television Reports, Comment Dates on Main Studio Rule Elimination and Modernization of Media Regulation, Incentive Auction CP Filing Deadline, Effective Date for Captioning Clips of Live and Near-Live Programming, and Window for FM Translators for AM Stations