It’s election season, and for the 60 days before any general election, broadcast stations are required to charge political candidates the “lowest unit rate” for comparable advertising time that runs on their stations. That means that, for each class of advertising time on any particular station, the candidate can only be charged the lowest rate at which any spots was sold to a commercial advertiser for that class of time during the particular period in which the candidate’s spots will run. That 60 day period begins tomorrow, so broadcasters should be ready to provide the candidates with these discounted rates for the next 60 days.

As we have written before, e.g. here and here, these rates apply to both Federal, state and local candidates. While state and local candidates have no right of access to broadcast stations (meaning that stations do not need to sell to these candidates, and that stations can restrict their purchases of advertising time to particular dayparts), once the decision to sell time to a state or local candidate is made, then pretty much all of the other political rules, including those dealing with the Lowest Unit Charges for advertising time, must be observed.

It is also important to remember that only legally qualified candidates have the right to lowest unit rates. PACs and other issue advertisers do not get access to these rates, even if they are buying advertising time to address some issue or candidate who will be appearing on the November 8th ballot.

For candidates, the rates provide a real benefit, as they get the ability to buy advertising spots at significant discounts. For instance, they get the benefit of all volume discounts even without buying in volume. The broadcaster is also supposed to explain to the candidate all of the terms and conditions that could affect the candidate’s buying decisions. Candidates also don’t have to contend with buying spots of different classes in packages, but instead stations must break down the value of different classes of spots that are included in any package, and consider those values in assessing the lowest unit rates for each class of time – and the candidate need only buy those classes of time that he or she wants to buy. For more about how to treat the rates in package plans, see our post here.

In setting the lowest unit rates on a station, it must be remembered that virtually no station will have just one lowest unit rate. Almost every station will have several – if not dozens of lowest unit rates – one lowest unit rate for each class of time. Even on the smallest radio station, there are probably several different classes of spots. For instance, there will be different rates for spots that run in morning drive and spots that run in the middle of the night. Each of these time periods with differing rates is a class of time that has its own lowest unit rate. On television stations, there are often classes based not only on daypart, but on the individual program. Similarly, if a station sells different rotations, each rotation on the station is its own class, with its own lowest unit rates (e.g. a 6 AM to Noon rotation is a different class than a 6 AM to 6 PM rotation, and both are a different class from a 24 hour rotator – and each can have its own lowest unit rate). Even in the same time period, there can be preemptible and non-preemptible time, each forming a different class with its own lowest unit rate. Any class of spots that run in a unique time period, with a unique rotation or having different rights attached to it (e.g. different levels of preemptibility, different make-good rights, etc.), will have a different lowest unit rate.

There are a myriad of other issues involving lowest unit charges that come up each election season. We have written about some of those issues in previous articles, for instance those that can be found here and here. Many of these issues are also covered in our Political Broadcasting Guide, here. With the rates kicking in tomorrow, don’t forget your political broadcasting obligations!

The FCC today released a series of public notices setting September 27 as the deadline for the filing of Annual Regulatory fees.  We wrote here about the FCC Order setting the amount of those fees, and reminding TV stations, even ones looking to surrender their licenses in the incentive auction, that they must still pay those fees by the upcoming deadline.  These notices also announced that the fee filing system is now up and operating, so fees can be paid at any time.  Finally, the notices talk about some of the details of the fee filing process, covering who is eligible and how exemptions from fee obligations can be obtained.

One of the Public Notices sets out instructions for requests for waivers and deferrals of the fee obligations.  Any party thinking about filing such a request needs to carefully follow the instructions and fully document the reasons for the waiver, as the failure to fully follow the rules will result in penalties and interest.  In fact, to avoid the potential for penalties and interest, the FCC suggests paying the fee and asking for a refund, rather than asking for a deferral and waiver of the fee obligations.  Continue Reading Regulatory Fees Due By September 27 – Fee Filing Guides and Instructions for Waivers or Deferrals Released by FCC

The Federal Aviation Administration’s (“FAA’s”) recently established rules to allow the commercial operation of small unmanned aircraft systems (“sUAS”) – more commonly known as “drones” – took effect on Monday, August 29, 2016.  We previously wrote about these rules (and the opportunities and risks they present for broadcasters) here and here.  For those eager to get their newsgathering drones off the ground, here are a few things to keep in mind:

Certification.  Under the new rule, all operations must be conducted by, or under the supervision of, a person who holds a “remote pilot certificate.”  The least resource-intensive way to achieve this certification is for licensed pilots (with up-to-date flight reviews) to take a free online training course.  Novice flyers without a pilot’s license are required to pass an aeronautical knowledge test and also meet certain age and security clearance requirements.  Luckily, there are resources available (here and here) to usher you through the process. Continue Reading Reminder that Broadcasters May Now Leverage the FAA’s Small Drone Rules

Right as everyone was set to enjoy the last glimmer of summer over the long weekend, the FCC issued its Report and Order on the regulatory fees for 2016.  The FCC adopted all the fees for broadcast stations as proposed in its Notice of Proposed Rulemaking (about which we wrote about here) with some adjustments to the regulatory fees on radio and television broadcasters, based on type and class of service and on the population served.  No date has yet been set, though, for when these fees will be die this month.

The fees for all categories of broadcasters are as follows:

FY 2016 RADIO STATION REGULATORY FEES
Population

Served

 AM Class A AM Class B AM Class C AM Class D FM Classes

A, B1 & C3

 FM Classes

B, C, C0, C1 & C2
<=25,000 $990 $715 $620 $685 $1,075 $1,250
25,001 – 75,000 $1,475 $1,075 $925 $1,025 $1,625 $1,850
75,001 – 150,000 $2,200 $1,600 $1,375 $1,525 $2,400 $2,750
150,001 – 500,000 $3,300 $2,375 $2,075 $2,275 $3,600 $4,125
500,001 – 1,200,000 $5,500 $3,975 $3,450 $3,800 $6,000 $6,875
1,200,001 – 3,000,00 $8,250 $5,950 $5,175 $5,700 $9,000 $10,300
3,000,001 – 6,000,00 $11,000 $7,950 $6,900 $7,600 $12,000 $13,750
>6,000,000 $13,750 $9,950 $8,625 $9,500 $15,000 $17,175

 

Fee Category

 

 Annual Regulatory Fee

(U.S. $s)
AM Radio Construction Permits 620
FM Radio Construction Permits 1,075
Digital TV (47 CFR part 73) VHF and UHF Commercial
              Markets 1-10 60,675
              Markets 11-25 45,675
              Markets 26-50 30,525
              Markets 51-100 15,200
              Remaining Markets 5,000
              Construction Permits 5,000
Satellite Television Stations  (All Markets) 1,750
Low Power TV, Class A TV, TV/FM Translators & Boosters (47 CFR part 74) 455

The Commission noted that, with the Incentive Auction underway, all broadcast television licensees must still pay FY 2016 regulatory fees if they held a license or construction permit as of October 1, 2015, as well as for payment of FY 2017 regulatory fees if they continue to hold their license or construction permit as of October 1, 2016.  It cautioned licensees to pay their regulatory fees in order to avoid delay of payments resulting from the Incentive Auction.

The FCC will release a Public Notice setting the filing deadline.  We expect it to come out any day.  As the fees need to be paid before the start of the FCC’s new fiscal year on October 1, expect that those fees will be due at some point before the end of September.

Incentive Auction Stage 2 to Begin September 13 – FCC Proposal to Clear 114 MHz

Given Tuesday’s declaration by the FCC that Stage 1 of the TV incentive auction did not meet its clearing target (in that enough was not bid in the forward auction to cover the amount needed to compensate television stations for surrendering their spectrum plus the costs of the auction itself), it is now on to Stage 2.  The FCC yesterday issued a new Public Notice announcing that the second stage of the reverse auction will begin on September 13, 2016.  In this second stage, the FCC will try to clear 114 MHz of spectrum, instead of the 126 MHz that was the clearing target in Stage 1.  If the auction is successful in clearing 114 MHz, that means that channels 31 and below will remain in the TV band.

Yesterday’s public notice gives other information about the procedures to be used in Stage 2, and the band plan for the forward portion of the stage.  It also announces that an online tutorial will be available for TV broadcasters who are participating in the auction beginning September 1, on the auction website.  TV stations that were provisionally winning bidders in Stage 1 (meaning that their offer to go off the air or move to a VHF channel was accepted) will be able, according to the public notice, to determine the status of that provisional acceptance starting on September 7 by logging into the auction electronic system with their SecurID tokens that they used to place bids in Stage 1. Continue Reading Incentive Auction Stage 2 to Begin September 13 – FCC Proposal to Clear 114 MHz

While most broadcasters are awaiting word of when the FCC’s annual regulatory fees will be due (an announcement that should be coming any day now as regulatory fees will be paid in September by all commercial broadcasters to offset the cost of being regulated), the FCC announced yesterday that its application fees are going up effective today.  These application fees are paid with most FCC applications – including applications for the purchase and sale of broadcast stations, applications for new and modified station technical facilities, for special temporary authority (in most cases), with license renewal applications and even with Biennial Ownership Reports (to be filed by commercial stations in December 2017).  Application fees are increased from time to time to reflect increases in the cost of living index.  The most recent application fee increase, announced in July (see this Order setting all of the new fees), will be effective today.  An application fee filing guide for media services was made available on the FCC website today.  So remember to pay the new fees when filing an application starting on the effective date, as the failure to do so may delay the processing of your new applications.

In the last few minutes, the FCC has released its order on the Quadrennial Review of its multiple ownership rules, about which we wrote last week. The decision is available here, and includes dissenting opinions from the two Republican commissioners and a concurring statement from Commissioner Clyburn. In total, the text is 199 pages long, and seemingly changes little in the current rules. We’ll have more reactions here shortly, but if you are interested in discovering the details of the Commission’s action, you have some reading ahead of you!

While this summer has perhaps not brought the big headlines in trade press about copyright issues involving broadcasters – particularly in the area of music rights – there still are many issues that are active. I addressed some of those issues in a presentation earlier this month at the Texas Association of Broadcasters Annual Convention. I did my presentation in conjunction with a representative of SoundExchange, where he covered the nuts and bolts of the obligations of broadcasters and webcasters to file royalties for the noninteractive digital performance of sound recordings (e.g. webcasting and Internet radio). While the rates for 2016-2020 are on appeal (see our articles here, here and here), these rates are effective pending appeal and webcasters need to be paying under them. In the Texas presentation, I covered some of the many other copyright issues that are on the horizon, many of which we have written about in the pages of this blog. The slides from my presentation are available here. They provide an outline of many of the pending matters.

The presentation covered the controversy about the Department of Justice decision on the ASCAP and BMI consent decrees, about which I wrote about here. That controversy continues, as the PROs seek judicial or legislative relief from the new DOJ requirement for 100 per cent licensing of split works (see my article for an explanation of what that means). In the interim, the radio industry is negotiating new royalties with both of these organizations, as the current license agreements expire at the end of this year (see our article here). Continue Reading What’s Up With Music Rights for Broadcasters and Webcasters? – A Presentation on Pending Issues

Rules regarding the processing FM applications – particularly those involving upgrade applications that require the forced change of the channel on which another station is operating – can be very complicated.   In a decision released the week before last, the FCC looked at all sorts of issues that can be raised by one of these applications – including clarifying the timing of the required reimbursement for the costs of the station that is being forced to change channels, the timing of required channel changes, and the ability of an applicant to file an upgrade while a license application is pending for initially constructed facilities of a station. For any radio operator contemplating an upgrade involving coordination of channel changes with other stations, this decision is worth a read.

The issue of reimbursement of the costs of a forced channel change is one that comes up in numerous upgrade applications. A station that wants to upgrade its facilities can ask the FCC to change the channel of another FM station to clear room on the dial for that upgrade – and that other station can be moved on the FM dial even if it does not want to change its channel. The FCC will order the other station to change channels as long as the upgrade proponent is able to find another channel for that station which is technically feasible at that station’s current transmitter site and is fully-spaced under the FCC rules governing required mileage separations between FM stations. Unless there is a unique issue about the channel to which the forced station is being moved, there are very few objections that can be raised to one of these involuntary channel changes. However, the station that is upgrading has an obligation to reimburse the changing station for all of the costs of the forced relocation. Continue Reading FCC’s Audio Division Case Clarifies Processing Rules for FM Upgrades and Forced Channel Changes