As we wrote here, the FCC has requested comments on a petition for reconsideration of the elimination of the UHF discount – which had counted UHF stations as reaching only half of their market in assessing an owner’s compliance with the National Ownership Rules for TV.  These rules limit an attributable owner from having an interest in TV stations that reach more than 39% of the national television audience.  Given that the deadlines that had initially been published by the Commission fell during the holidays, the FCC has extended the time to file comments.  Comments are now due on January 10, with replies on January 23.

As we wrote in our previous article on the reconsideration petition, this may be the first opportunity for the new Republican-controlled FCC to reconsider an ownership decision made earlier this year – a decision to which the two Republican commissioners dissented.  So the industry will be watching to see what the new Commission does as an indication of how it will deal with many of the rules adopted by the Democratic-controlled FCC, and how quickly it will act as an indication of what an interim Republican chairman is willing to tackle before a permanent chairman is nominated and approved by the Senate.

It’s the holiday season, and many of us are turning our thoughts to celebrating with friends and family. It is also high season for shopping, which means the airwaves, social media, websites and print pages are full of opportunities to buy, sell, and advertise. Whether you consider that to be a feature or a bug, this is the time to be especially vigilant about doing advertising right. In this post we present a few considerations to keep in mind to avoid starting 2017 with unwanted attention from the Federal Trade Commission (FTC), the Federal Communications Commission (FCC) or other regulators.

  1. Weight-loss and other health claims. The most popular New Year’s resolutions are to “stay fit and healthy” and “lose weight.” Weight-loss products and services have long been a favorite target of the FTC, and the FTC has asked for help from broadcasters and publishers to help spot false health claims before they are aired or published. (And, as the FTC notes, purveyors of false advertising claims take advantage of the good will that broadcasters and publishers have with consumers.) The FTC is just as interested in going after false health claims online and in the app marketplace. We can expect the FTC to resolve to keep watching this space in 2017.
  2. Endorsements and testimonials. Since time immemorial advertisers have recognized the power of a good word from a respected – or at least well-known – personality. But such praise has to reflect the honest opinion of the endorser, and any unexpected “material connection” – whether it is money, free merchandise, an early look at a new video game, or even the expectation of some kind of payment in the future – has to be clearly and conspicuously disclosed to consumers. Would consumers expect that Trinket the Elf who appears on the air to praise the quality of Santa’s toys is also employed by Santa? Maybe. To be on the safe side, make sure the connection is clear in any video, audio, social media, or other content that conveys Trinket’s praise.
  3. Native advertising and sponsored content. Ensuring that the format of advertising does not deceive consumers is just as important as making sure that an ad’s claims, testimonials, and other elements are true and not misleading. Over the past few years the FTC has taken a keen interest in “native” advertising, meaning ad formats that may deceive consumers because they are difficult to distinguish from editorial content. After issuing enforcement guidance in December 2015, the FTC announced an action against Lord & Taylor, alleging that the retailer paid an online fashion magazine to run an article, which Lord & Taylor reviewed and approved, that featured a picture of the dress that Lord & Taylor wanted to promote. The FCC’s sponsorship identification rules likewise insure “transparency” so that consumers are not misled as to who is trying to persuade them about a commercial product. These rules require that a sponsor be identified when a station receives valuable consideration for the airing of a program broadcast to the public. As we have written about here and here, simply providing a recorded program unduly promoting a commercial product has been found to be sufficient to trigger the FCC’s sponsorship identification rules.
  4. Use of Trademarks in Hashtags. Use of hashtags (words or phrases preceded by a pound (#) sign) has quickly become a popular social media trend and can be a great way to promote products and services online. While they are largely meant to serve as a functional tool to facilitate searches and to categorize information and conversations on social media, they can also open the door to potential legal issues. While the law in this emerging area remains unsettled, at least one court has found that use of a competitor’s trademark in a hashtag could result in trademark infringement. Likewise, use of your own registered trademark in a hashtag could present challenges when it comes to policing the mark. Hashtags are intended to generate online buzz, with the goal of having as many people as possible use them. But what if consumers use the hashtags improperly or inappropriately?   If you are planning to create a hashtag campaign, either for your own stations or on behalf of advertisers, be sure to think through their costs and benefits.
  5. Marketing to children. Children are at the center of many holiday celebrations, so it’s no surprise that advertisers want to reach them (and their parents). But advertising to children deserves some extra caution. First, if you have an app or website that is directed toward children under the age of 13, or if you knowingly collect information online from the under-13 set, then the Children’s Online Privacy Protection Act (COPPA) probably applies to you. The rules for handling children’s information under COPPA are much stricter than they are for the online advertising in general, beginning with a requirement to obtain verifiable parental consent before collecting any personal information from children. Second, children’s advertising is evolving with the marketplace in general to include greater use of social media and user-generated video platforms. This means that the need for careful handling of endorsements and native advertising applies to ads designed for children, too. Although the FTC has yet to bring an enforcement action based on native ads or undisclosed endorsements in ads that target children, the FTC has received public complaints (see here and here) urging the agency to do just that.
  6.  Music in commercials. As we’ve about here and here, contrary to what some stations might think, a station’s ASCAP, BMI and SESAC royalties do not give them the right to use popular music in their station productions – or in their commercials. Nor do they give you rights to use music in video productions used repeatedly on a station, or on a station’s website.  Broadcasters should take care to ensure that they’ve got the appropriate licenses in hand before producing a spot that includes a holiday jingle

Businesses want to put their best foot forward during the holiday season. We hope these tips will help you step into 2017 with the confidence that you have consigned any marketing legal pitfalls to the return bin.

Last week, the full FCC issued a decision upholding the license renewal grant of a Pacifica-owned radio station in New York. A listener was complaining that the station broadcast favorable statements about an individual who had shot a police officer. The FCC first noted that the listener had not provided details of the statement, but further stated that the FCC is not allowed to censor the content selected by broadcasters to air on their stations. Specifically, the FCC said: “A licensee has broad discretion — based on its right to free speech7 — to choose, in good faith, the programming it believes serves the needs and interests of its community of license.” The FCC is bound by the First Amendment to not judge the subject-matter content of what broadcasters broadcast. Instead, it regulates structurally, in a content-neutral manner through rules like the multiple ownership requirements, to avoid second-guessing the decisions of broadcasters as to what is said on the air.

The interplay between the First Amendment and FCC rules has been the seen in the handling of many issues by the FCC. We’ve written about it in the context of the abolition of the Fairness Doctrine, and when the FCC in 2014 officially abolished the last vestige of that doctrine – the Zapple Doctrine. We’ve also written (here and here) about that in connection with calls for the FCC to ban attack ads which can sometimes make over-the-top claims about political candidates – the truth or falsity of which broadcasters are sometimes required to determine when the attacked candidate challenges those ads and threatens to sue the station that is running them. Why doesn’t the FCC make those determinations? Because we don’t want the government deciding what can and cannot be run on the air. There are of course libel laws that can be used to crack down on false statements – even those in political ads – but standards for finding liability against public officials and other public figures are set high to block those laws from being used to suppress valuable debate on the issues (see our article here ). Continue Reading License Renewal Shows FCC Does Not Regulate Content – Implications for Calls to Regulate Fake News?

The FCC yesterday issued a Public Notice of the filing of a Petition for Rulemaking asking the FCC to declare that a broadcaster, by using its own airwaves and online sources to publicize job openings at its station, satisfies the requirement that a broadcaster widely disseminate information about job openings to members of all groups within its likely recruiting area. In 2002, when the FCC adopted its current EEO rules, it determined that online recruiting would not widely disseminate information about job openings in the way that a local newspaper would given the digital divide that the FCC thought existed at that time. But, the FCC said that it would later revisit that decision as circumstances change. The petition suggests that circumstances have indeed changed in the 14 years since the rules were adopted, that online recruiting is how people now find and apply for new jobs, and that it is time that the FCC recognize that fact and allow online recruiting to satisfy the obligation that a broadcaster give its community notice of job openings. Comments are due January 30, and replies on February 14.

The FCC has up to this point actively enforced its prohibition on station’s relying solely on its own airwaves and online sources for recruiting purposes, fining stations who meet their wide dissemination obligations solely by relying on such sources (see our articles about such cases here and here). But some at the FCC itself have recognized that this position no longer makes sense – including Commissioner O’Rielly who, in a blog post we wrote about here, suggested that broadcast recruiting in today’s world is appropriately done online, and that the FCC’s rules should reflect that fact. As set out in the Petition, Julius Genachowski, then-chairman of the FCC, recognized in a speech that: “In today’s world, you need broadband to find a job and apply for a job, because companies increasingly require online applications.” The petition notes that the FCC has recognized that the Internet is fine for public files and contest rules, so shouldn’t it also be found to be sufficient to get out the word about job openings? Continue Reading Should Online Recruiting Satisfy the FCC’s EEO Requirements for Wide Dissemination of Job Openings? – Comments Requested on Petition Saying that it Does

ASCAP and the Radio Music License Committee (RMLC) announced yesterday that they have reached an agreement for the period 2017-2021, setting the performance royalties that commercial broadcasters will pay for the use of music written by composers who are represented by ASCAP. The press release issued yesterday discloses little about the details of the agreement. These will no doubt be available when the final agreement is reached and released to broadcasters.

As we wrote here, this is but one of the many performing rights organizations with which RMLC must deal this year. While it has reached an agreement with ASCAP, it also is working to try to reach an agreement with BMI, whose current agreement with the radio industry also expires at the end of this year. As we wrote here, RMLC is also currently in an arbitration proceeding with SESAC, which has resulted in numerous broadcasters receiving demands for the production of documents as part of the discovery process in that proceeding. Finally, as we detailed in our articles here and here, RMLC also is dealing with a new performing rights organization, GMR, which represents a small number of songwriters who have withdrawn their songs from ASCAP and BMI and approached broadcasters to seek a performance royalty. The litigation to compel GMR to arbitrate rates like SESAC, and GMR’s responding suit alleging that it is RMLC that is violating the antitrust laws acting as a “buying cartel,” are in their early stages – though trade press reports indicate that settlement discussions between the parties are ongoing.

So, commercial broadcasters affiliated with RMLC now know that one royalty negotiation has been settled, and we’ll be watching to see where the other three end up.

After months of speculation, Chairman Wheeler today announced that he will step down from the FCC on Inauguration Day. Together with the Senate not confirming the renomination of Commissioner Rosenworcel (as the Senate is effectively on recess and not expected to return before the end of the term, her renomination will almost certainly not be approved in this session of Congress, meaning that she must step down when the Congress adjourns on January 3), that leaves three Commissioners on the FCC. Two are the current Republican commissioners – Pai and O’Rielly – and Democratic Commissioner Mignon Clyburn. What will that mean for broadcasters?

First, it is expected that one of the two Republicans will be named as Acting Chairman to set the agenda for the first few months of the Trump administration, until a permanent Chair is announced (and confirmed by the Senate, if that Chair is not one of the two current Republicans). These commissioners have been vocal in their dissents on several big issues for broadcasters – including the repeal of the UHF discount (about which we wrote earlier this week) and on other issues dealing with the ownership of television stations – including the decision to not repeal the newspaper-broadcast cross-ownership rules, and the decision to reinstate the FCC’s ban on Joint Sales Agreements in TV unless they are done between stations that can be co-owned. We already speculated about these issues being on the Republican agenda soon after the election. What other issues are likely to be considered? Continue Reading And Then There Were Three – Chairman Wheeler to Step Down on Inauguration Day Leaving a Republican-Controlled FCC – What’s It Mean for Broadcasters?

Almost every week, we write about some legal issue that arises in digital and social media – many times talking about the traditional media company that did something that they shouldn’t have done in the online world, and ended up with some legal issues as a result. Two weeks ago, I conducted a webinar, hosted by the Michigan Association of Broadcasters and co-sponsored by over 20 other state broadcast associations, where I tried to highlight some of the many legal issues that can be traps for the unwary. Issues we discussed included copyright and trademark issues, a reminder about the FTC sponsorship identification rules for online media, FCC captioning obligations, privacy implications, as well as discussions about the patent issues that have arisen with the use of software and hardware that makes the digital transmission of content possible. Slides from that presentation are available here and, for the full webinar, a YouTube video of the entire presentation is available below which can be reviewed when you have some spare time over this upcoming holiday or at any other time that you want to catch up on your legal obligations.

Some of the specific issues that we talked about are familiar to readers of this blog. We discussed the many issues with taking photographs and other content found on the Internet and repurposing them to your own website without getting permission from the content’s creator (see our articles here and here). Similar issues have arisen when TV stations have taken YouTube videos and played them on their TV stations without getting permission from the creator. Music issues arise all the time, especially in producing online videos and creating digital content like podcasts, as your usual music licenses from ASCAP, BMI, SESAC, GMR and SoundExchange don’t cover the reproduction and distribution rights involved when content is copied or downloaded rather than live-streamed (see our article here). The presentation also cautioned companies to be careful about trying to rely on “fair use” as there are no hard and fast rules on when a use of copyrighted materials without permission is in fact fair (see our articles here and here on that subject).

Similarly, there are many other potential pitfalls for digital media companies. We’ve written about some of the FTC rules on requiring sponsorship identification on sponsored digital content – even tweets and Facebook posts (see our articles here and here). Plus, there are always issues about privacy and security of personal information that sites collect – and particularly strict rules for content directed to children. And, as many stations found out when a company asserted patent infringement claims about digital music storage systems used by most radio stations (see our articles here and here), patent issues can also arise in connection with any companies use of digital media. Continue Reading Legal Issues in Digital and Social Media – Identifying the Landmines for Broadcasters and Other Media Companies – A Video Webinar

As David Oxenford has previously commented, even in states where marijuana has been legalized, broadcasters should be cautious about accepting advertising for marijuana or related paraphilia.  Specifically, decisions by the FDA and the Department of Justice have done little to cut through the smoke shrouding the issue.  Now, perhaps the last United States agency that one might expect to have anything to say has weighed in as well, but the haze remains thick.

Specifically, the US Patent and Trademark Office is not viewed as a policy-making agency, charged with making decisions about what activities or behavior are permissible or impermissable.  Rather, it determines whether trademarks qualify for federal protection through registration, considering issues such as the distinctiveness of a mark and whether it is confusingly similar to a previously registered mark.  As we have discussed in our Trademark Basics for Broadcasters series and our follow-up free webinar, although the various factors seem cut and dried, there is often a great amount of subjectivity and discretion that goes into evaluating each factor. Continue Reading Accepting Advertising for Marijuana or Marijuana Paraphernalia:  The Trademark Office Rules on a Related Issue that Provides More Reason For Caution

While several parties went to Court to challenge the FCC’s decision ending the UHF discount, one broadcaster decided instead to ask for reconsideration. That petition for reconsideration has now been published in the Federal Register, giving interested parties until December 27 to comment, and other parties until January 6 to reply to any comments that are filed. This reconsideration petition may give a new Republican-led FCC its first opportunity to revisit the FCC’s multiple ownership rules which have been the subject of several petitions for reconsideration, as we suggested might happen in our review (here) of the impact on communications law of the election of Donald Trump as the new President.

The UHF discount counted only half the audience reached by UHF stations in assessing an owner’s compliance with the 39% national cap on audience. The FCC ended that discount in September (see our summary here), finding that in a digital world, UHF channels were no longer inferior to VHF ones. Given that most TV stations are operating on the UHF band after the digital conversion, the FCC determined that the discount was not justified in the current television marketplace. A number of TV groups argued with that determination, contending that, in today’s media market, there was no reason to impose what was in effect a tightening of the national ownership cap. The elimination of the discount capped acquisitions by several TV groups, and actually put a few over the 39% limit. In addition, broadcasters have argued that the discount was in effect when Congress adopted the 39% cap, so any change would need to be authorized by Congress. While other parties have filed an appeal with the US Court of Appeals, it is likely that the Court will defer to the FCC and allow it to reconsider the abolition of the UHF discount (which the two Republican Commissioners opposed when it was adopted). Continue Reading Reconsideration of FCC Order on UHF Discount Published in the Federal Register – Starts Clock on Comments and Consideration of the Multiple Ownership Rules by a Republican-Led FCC

As expected, and as we wrote last week, the FCC announced Friday that the reverse auction phase of Stage 4 of the Incentive Auction will begin tomorrow, December 12, 2016. The FCC also, as expected, confirmed that the clearing target will be 84 MHz, meaning that the FCC will be looking to clear TV channels above Channel 37. Television operators looking to surrender channels to the FCC, to be repackaged and resold to wireless users for wireless broadband purposes, will be bidding in multiple rounds each workday through and including December 23, with a break during the week between Christmas and New Year’s Day, recommencing on January 3. Full details of this Stage of the Incentive Auction are available in the FCC Public Notice, here. Obviously, after the completion of this stage of the reverse auction, there will be another stage of the forward auction at a time to be announced.

The FCC reminded TV operators that prohibited communications rule, about which we wrote here, remain in effect. That means, among other things, that any station that filed an application to participate in the auction last January, even if the FCC has informed them that their station is no longer needed in the auction, cannot share any information about the status of their auction participation.