FCC regulatory fees come around each year, and it seems like they always go up.  This year is no different, as the FCC has asked for comments on its proposed fees to be paid later this year (probably in September), and the proposed fees go up significantly for broadcasters.  The fees are meant to recoup the costs of the FCC’s regulation of the industries that it oversees.  Minimal changes are proposed due to the FCC’s refining of the roles that are played by some of its employees in regulating different types of communications services.  But this year, as the FCC’s lease for its headquarters building is expiring, its operational costs have to include not just the normal expenses of the FCC’s operations, but also the added expense of the probable relocation of the agency.  This one-time expense results in a major increase in the fees being charged.  While the increased fees are a one-time expense, there are certain to be complaints from broadcasters when they see the size of the increase in their fees to be paid this year.

Each year, the FCC goes through a familiar process – asking for comments on an essentially expedited basis so that the fees can be adopted and collected before the end of the government’s fiscal year – October 1.  This year is no different, and the week before last, the FCC asked for comments on the fees to be collected this year – with comments on the proposals due on June 20 and replies due on July 5.  Let’s look at some of the proposed changes. Continue Reading FCC Regulatory Fees for Broadcasters Proposed to Increase Significantly to Cover Cost of FCC Headquarters Move

While summer has just about arrived, FCC regulatory dates do not depart to the beach and leave the world behind.  Instead, there are a host of filing deadlines this month.  EEO Public Inspection file reports must, by June 1, be placed in the public inspection files of stations that are part of employment units with 5 or more full-time employees if the stations are located in the following states: Arizona, Idaho, Maryland, Michigan, Nevada, New Mexico, Ohio, Utah, Virginia, West Virginia, Wyoming, and the District of Columbia.  Radio stations in Michigan and Ohio that are part of employment units with 11 or more full-time employees need to also file an FCC Mid-Term EEO Report on FCC Form 397 (see our article on the Form 397 here).  TV stations with 5 or more employees also need to file that report if they are located in Maryland, Virginia, West Virginia or the District of Columbia.

There are regular dates, too, for noncommercial stations in certain states when licensees must file their Biennial Ownership Reports on FCC Form 323E.  While these reports will eventually be filed on December 1 of odd-numbered years, at the same time as Biennial Ownership Reports of commercial stations, at this point the new rules have not yet gone into effect (see our articles here and here).  Thus, by June 1, the licensees of noncommercial radio stations in Michigan and Ohio and noncommercial TV stations in Arizona, Idaho, Maryland, Nevada, New Mexico, Utah, Virginia, West Virginia, Wyoming, and the District of Columbia must file their Biennial Ownership Reports. Continue Reading June Regulatory Dates for Broadcasters – EEO and Noncommercial Ownership Reports, Incentive Auction, Radio Online Public File, and Comments on EAS and Regulatory Fees

At its open meeting earlier this week, the FCC adopted a Notice of Proposed Rulemaking proposing changes to the public file rules for both broadcasters and cable systems. For commercial broadcasters, the FCC proposed to eliminate the requirement that they include in their public file copies of letters and emails to the station concerning station operations. For cable systems, the FCC proposed to eliminate the obligation to include in their file documents disclosing the location of their headend. What do these proposals mean for broadcasters?

Most of the broadcaster focus has been on the proposal to delete the obligation that commercial broadcasters keep a correspondence folder in their public inspection file for letters and emails from the public commenting on the operation of the station (the requirement has never applied to noncommercial broadcasters). Those files are supposed to contain, in a physical file at their main studio, all of the correspondence that stations receive from viewers or listeners (allowing broadcasters to omit correspondence that listeners asked to be kept private, and correspondence that contains offensive material). For TV stations that have already converted to an online public file for all of their other public file documents, and for radio stations who will soon be doing so (see our posts here and here on the upcoming obligation of radio to convert to an online public file), these letters will be the only remnant of the public file that must still be maintained at the main studio. The FCC tentatively concluded that the obligation to keep these letters and emails was no longer necessary. Continue Reading FCC Proposes to Eliminate Public File Obligations – No More Letters from the Public for Broadcasters, No Cable Headend Information for Cable Systems?

The Third Circuit Court of Appeals yesterday issued an opinion faulting the FCC for not completing any required review of its broadcast ownership rules since the 2006 review was completed in 2007. These reviews of its ownership rules, now done as “Quadrennial Reviews” every four years, but previously required to be done biennially, have been the subject of much judicial review and delay in the past 9 years. Because of the delays in finalizing a review and addressing issues previously raised by the Court, yesterday’s decision ordered the FCC to meet with certain parties who brought the appeal to finalize a timetable for FCC review of the rules designed to promote minority ownership of broadcast stations. At the same time, the Court threw out the FCC’s 2014 decision determining that television Joint Sales Agreements were attributable interests (see our article here), which had essentially banned these agreements in most markets as the attribution of an interest in one station to the owner of another station in the same market would constitute a combination of stations not permitted under the local TV duopoly rules. The discussion in the decision also raised questions as to whether the FCC could justify the continued existence of the broadcast-newspaper cross-ownership rules given the radically changed state of the newspaper industry since these rules were adopted over 40 years ago.

While much has been made of the decision overturning the attribution of television Joint Sales Agreements, that part of the decision was actually a narrow one, and one which leaves the FCC in a position where it could reinstitute the attribution requirement when it completes its current review of the ownership rules. The Court looked at the 2014 decision determining that JSAs should be attributable, and concentrated on the dissenting opinion of Commissioner Pai. The Commissioner argued that the FCC’s decision making the interests attributable ignored record evidence that such combinations were in the public interest. The dissenting opinion said that some combinations were necessary, particularly in smaller television markets, to permit the profitable operations of weaker stations in these markets, and that the agreements otherwise contributed to the public interest by allowing stations that could not afford news and other beneficial programming to air such programming. The Commission dismissed those arguments, contending that they were really addressing questions as to whether more small market TV duopolies should be permitted. But, as the FCC did not address whether small market TV duopolies might be in the public interest, but instead deferred that decision until the next Quadrennial Review, the Court found (as Commissioner Pai had argued) that the FCC decision could not be justified. The FCC could not ban JSAs as not being in the public interest until they considered the arguments as to whether small market duopolies, which could permit many of the JSAs to continue even if attributable, were in the public interest. Continue Reading Appeals Court Tells FCC to Finalize Multiple Ownership Review, Throws Out TV JSA Attribution, and Questions Newspaper-Broadcast Cross-Ownership Ban

In an FCC decision fining a TV station $10,000 for failing to include 15 Quarterly Issues Programs lists in its public inspection file, the FCC refused to reduce the proposed liability based on an intervening “long-form” transfer of control followed by a short-form assignment of license of the station. Thus, even though the station was no longer controlled by the same individuals who controlled the station at the time of the violation, and even though the licensee company was different, the fine still applied.

The Media Bureau decision looked at precedent that has held that a transfer of control of a station, even a “long-form” application on FCC Form 315 that is subject to public notice and a 30 day waiting period during which the public can comment on the change in control of the licensee, does not excuse the licensee for violations of the FCC’s rules that occurred prior to the transfer. We wrote about a similar holding in another case last year. The FCC’s view is that, when you are buying the stock of a company, you acquire not only the assets of the company but also its obligations, including any potential FCC violations. This is different from an assignment of license filed on a Form 314 (also a “long-form” application subject to a 30-day public comment period) – where a buyer just buys the assets through a new company and does not assume the liabilities – a difference that the FCC has recognized in these cases. In the decision reached today, the licensee attempted to exploit that different treatment – but the FCC rejected the distinction. Continue Reading Fine for Missing Quarterly Issues Programs List Not Excused by Intervening Transfer of Control of TV Station – Buy Assets Not Stock to Avoid Assuming Prior Owner’s FCC Liabilities

Last week, we posted a reminder about the obligations for stations to provide equal opportunities for competing candidates to buy time on broadcast stations, and also talked about how the equal time provisions do not apply to bona fide news and news interview programs. Almost immediately, I received several questions about on-air employees who decide to run for political office, and how they are treated for purposes of the equal opportunities rule. Having an on-air employee who runs for political office – whether it is a federal, state or local office – does give rise for equal opportunities for competing candidates whenever that employee’s recognizable voice or picture appears on the air, even if the personality never mentions his or her candidacy on the air, and even if they appear in what is otherwise an exempt program (e.g. a newscaster who runs for office triggers equal time when he delivers the news even though a candidate’s appearance as a subject of that news program would be exempt). Stations need to take precautions to avoid the potential for owing significant amounts of free time to competing candidates, where those candidates can present any political message – if they request it within 7 days of the personality’s appearance on the air.

We have written about this issue many times before, including coverage of when well-known local or national personalities have contemplated runs for office – see our stories here, here and here. In 2010, we wrote an article that provided a discussion of this issue, which remains valid today. An edited version of that article is below. Continue Reading Equal Opportunities – What to Do With the On-Air Employee who Runs for Political Office

The FCC today issued a Public Notice that the obligation will begin on June 24 to start uploading documents to the online public file for radio stations in the Top 50 markets .   For Top 50 market commercial radio stations that are part of employment units with 5 or more full-time employees, the June 24 date will mark the start of their obligation to upload materials to the online public file.  New public file documents (including political file documents) created on or after that date are to be placed in the online public file.  These stations will have 6 months from the effective date (until December 24, 2016) to upload to the online public file existing documents that are already in their paper public file.    This would include documents like EEO Public Inspection File Reports and Quarterly Issues Programs Lists. Pre-effective date political file documents need not be uploaded. Letters from the public also do not need to be uploaded (see our article here about the FCC’s proposal to entirely do away with the requirement that letters be kept). We wrote more extensively about the obligations for the radio online public inspection file here.

TV, too, needs to pay attention to this notice.  The Public Notice announces that the online public file will be moving to a new database.  Effective on June 24, TV licensees will need to use this new database too – what the FCC calls the “OPIF” (for expanded online public inspection file) as opposed to the old “BPIF” (“broadcast public inspection file”).  The FCC suggests that the new OPIF database will allow for easier uploads – including the ability to upload a single document into multiple stations’ files at the same time.  It will also have a more user-friendly interface, and will work better with other online systems like Dropbox and Box.  This database moves these files off the FCC server and onto a cloud-based storage system.  Stations can already try out the new system here.  Continue Reading FCC Announces June 24 Effective Date for Radio Online Public Inspection File and New System for TV Stations Online File, Plus a Reminder to Upload JSAs

Yesterday, the FCC released a Public Notice setting out the agenda for the May 24 Workshop to explain the process of bidding in the reverse auction. The reverse auction is of course when broadcasters can bid to surrender their current channel to the FCC so that the FCC can repackage the surrendered spectrum and then sell it in the “Forward Auction” to wireless companies who plan to use it for wireless broadband and other uses (and the bidding among TV stations for the right to vacate their spectrum in exchange for compensation from the FCC begins May 31, see our post here). The May 24 Workshop to be held at the FCC’s offices in Washington will also be streamed live on the Internet and archived for future viewing. The workshop, to be held from 10 AM to 1 PM Eastern, will cover the process for bidding and will review the bidding software itself. Given the importance of getting it right in the auction process, as stations have their very existence at stake, it would seem that every auction participant will want to watch the Workshop.

The FCC also uses the Public Notice to remind broadcasters to look at the Online Tutorial on the bidding software which will be available online before the Workshop – so that the broadcaster will be generally familiar with the software before the Workshop begins. It also reminds broadcasters to take advantage of the auction system’s “preview period” from 10 AM on May 23 until 6 PM on May 24. During that preview period, qualified reverse auction bidders will get to see what the FCC will be offering them during the initial bidding rounds of the auction – providing the list of stations for which the authorized bidder may make bids in the “clock phase” once the auction starts on May 31; each station’s bidding status (e.g., whether it has been “frozen” meaning that the FCC has determined that in this auction stage it will need to clear the station in order to meet the spectrum clearing target and thus the bidder’s offer to sell its spectrum has been accepted, subject only to the success of the Forward Auction, or whether the station is no longer needed at all, or whether the bidder needs to keep bidding in subsequent rounds of the auction as the price falls, if the FCC has not yet determined that the station’s spectrum will be needed); the initial relinquishment option assigned to the station (e.g., whether the station is willing to go off the air or merely wants to change to a VHF channel); and, where applicable, the available bid options with associated vacancy ranges and next round clock price offers (e.g., if the station has not been frozen or determined to be unnecessary, the specific financial options that the FCC is offering to that bidder for each of its participating stations). Clearly, this information will be of crucial importance to every reverse auction participant in deciding what they will do when the bidding starts on May 31.

Finally, the FCC reminds broadcasters that the Mock Auction, where they can take the auction software for a test ride to make sure that they know what they are doing without any potential adverse consequences, will occur on May 25 and May 26 – individual stations should have been notified which Mock Auction they are eligible for in the Final Confidential Status letters that the FCC mailed to auction participants last week. The auction is a reality. If you are participating, take advantage of these educational opportunities so that you can be ready for the important decisions ahead.

After last week’s Indiana primary, it appears that the Republican Party will be nominating Donald Trump as their Presidential candidate. While Hillary Clinton’s defeat in that primary may mean that the primaries continue to have meaning on the Democratic side, with apologies to supporters of Senator Sanders among our readers, most political commentators seem to believe that the likely Presidential matchup will pit Mr. Trump against Secretary Clinton in what will no doubt be a fascinating political race. From this past weekend’s news reports, it appears that there will be no shortage of heat in that race right up until the November election. Plus, with an unorthodox Presidential candidate heading the Republican ballot, there is some speculation that down-ballot races – including those for seats in Congress – may include real contests in districts that were previously considered to be safe for one party or another. With this confusing political landscape, what legal issues can a broadcaster expect to face in the upcoming election season?

We will start our discussion today with issues that may arise under the equal opportunities rule (sometimes referred to as requiring “equal time”) that generally requires that a station provide equal opportunities for the use of its facilities to competing candidates for any political office. We have written about that issue many times, including our general article on the topic here. Also, this topic is covered in our handbook for stations on the political broadcasting rules, POLITICAL BROADCASTING – Questions and Answers on the FCC Rules and Policies for Candidate and Issue Advertising. But let’s look today at some of the particular equal time issues that may come up this year. Continue Reading With November’s Presidential Election Taking Shape – Likely Political Advertising Issues Ahead for Broadcasters – Looking at Equal Opportunities

E-Cigs and vape shops have become a new advertising category for many broadcast stations over the last few years. Unlike ads for cigarettes, little cigars, and smokeless (chewing) tobacco, which are effectively banned on broadcast stations, there are currently few Federal rules on e-cigs. Ads currently cannot make health claims about the product (so the ads cannot say that they are healthier than smoking cigarettes, nor can an ad even make the claim that e-cigs help users stop smoking). While some states have placed some additional restrictions on sales that carry over into advertising (e.g. age restrictions on sales), the Federal government, until this week, had passed on imposing more sweeping regulation on the industry.

In a “Final Rule” issued by the Food and Drug Administration yesterday (to be published in the Federal Register on Tuesday), a number of new requirements were adopted for tobacco products generally, and e-cigs were included in the FDA’s definition of tobacco products. So, too were cigars, pipe tobacco and tobacco used in water pipes or hookahs – tobacco products not covered by the over-the-air advertising ban that applies to cigarettes and smokeless tobacco. The new rules have a number of implications for the e-cig industry generally, including bans on sales to those under 18 and requirements that the FDA conduct “pre-market review” and approval of any new tobacco product introduced to the market in February 2007 or later. Of particular note for broadcasters are new requirements for health warnings in advertisements for all tobacco products, including e-cigs. Continue Reading New Federal Advertising Rules on E-Cigs and Other Tobacco Products Adopted – To Become Effective within Two Years