The FCC today adopted rules to require that the public inspection files of radio stations (and of cable television systems and operators of satellite radio and television companies) to put their public inspection files online.  While, thus far, the FCC has only released a public notice summarizing its decision and not the full text explaining its reasoning, what is clear is that the new rule will go in to effect later this year for commercial radio stations with 5 or more full-time employees which are located in the Top 50 markets.  Other radio stations will have two years to come into compliance with the new requirements.

The rules, like the TV rules adopted several years ago (see our Q and A about the TV online file requirements, here), require that stations upload their files into an FCC-maintained database that will display the contents of each station’s file to the public.  According to today’s public notice, political broadcasting material only needs to be uploaded on a going forward basis upon the effective date of the new rules (i.e. only new documents created after the effective date of the new rules needs to be uploaded – existing documents would be maintained in the station’s paper file until the two-year retention period for political documents has expired).  It appears that all other documents not already in FCC databases will need to be fully uploaded by licensees within 6 months of the effective date of the new rules.  The documents that will need to be uploaded within that 6 months would include Quarterly Issues Programs Lists and the Annual EEO Public Inspection file report back to the beginning of the station’s current license term – documents not normally filed with the FCC.  Ownership Reports, FCC applications and similar documents filed with the FCC will be automatically uploaded to the station’s public file by the FCC’s own systems.  Continue Reading FCC Adopts Online Public File Requirements for Radio, Satellite and Cable – To be Effective for Large Market Radio Later This Year

In the last week, copyright audits have been in the news.  Several broadcasting publications noted the recent announcements by the Copyright Royalty Board that SoundExchange has decided to audit several companies that pay it royalties, including webcasters (including Pandora and a number of broadcasters in connection with their webcast operations), business establishments services (those who provide music for stores and other businesses – DMX and Muzak) and music services provided by cable and satellite video providers (e.g. DMX and Muzak).  It was also just announced in the Federal Register that the sports leagues plan to audit a number of MVPDs to determine if the MVPDs have been accurately paying the royalties owed the sports league for the sports programming on TV stations carried on certain satellite and cable systems.  What are these audits, and why are they being announced by publication in the Federal Register?

When media companies buy a piece of equipment, or a building in which to house their operations, they usually know in advance how much their purchase is going to cost, and in the vast majority of cases, they get a bill specifying the price.  Even the purchase of some programming is easily quantifiable – either as a fixed fee per month, or some barter arrangement or other set fee.

But, in many other licensing transactions, the fees are not as easily quantifiable.  For certain movie packages or other syndicated video programming, the number of times that a program is played is not necessarily clear in advance.  For music, it is even more complicated, as a digital music service never knows how much music it is going to use when it enters into a licensing agreement.  In the case of programming carried by an MVPD on a distant signal basis pursuant to the compulsory copyright licenses under Sections 111 and 119 of the Copyright Act, the MVPD in advance won’t know how many subscribers it will have or exactly what programming the stations that it carries will program.  So in all of these cases, the user of the copyrighted material does not get a bill.  Instead, the user has to tell the “seller” of the rights (or its representative) how much they owe.  Because the buyer is reporting how much they think that they owe, the rights organizations usually have the right, by contract or by law, to audit the user to decide if the user paid the right amount. Continue Reading SoundExchange Audits of Digital Music Companies and Sport Leagues Audits of MVPDs Published in the Federal Register – Understanding Audit Rights Under Statutory Licenses

With the Super Bowl fast approaching, broadcasters and other media companies are planning advertising and promotions around the big game.  Here is some advice to broadcasters from Mitchell Stabbe, a lawyer from my firm who has spent over 30 years counseling businesses on trademark issues, about legal cautions to consider in finalizing your plans:

In addition to the monies it receives annually for the right to broadcast the Super Bowl, the NFL receives more than $1 billion in income from licensing the use of the SUPER BOWL trademark and logo.  Not surprisingly, it is extremely aggressive in protecting its golden goose from anything it views as unauthorized efforts to trade off the goodwill associated with the game.  Accordingly, with the coin toss almost upon us, advertisers need to take special care before publishing ads or engaging in promotional activities that refer to the Super Bowl.  Broadcasters and media organizations have slightly greater latitude than other businesses, but still need to wary of engaging in activities that the NFL may view as trademark or copyright infringement.  (These risks also apply to the use of “Final Four” or “March Madness” in connection with the upcoming NCAA Basketball Tournament.)

Simply put, the NFL views any commercial activity that uses or refers to the Super Bowl to draw attention as a violation of its trademark rights.  Many of the activities challenged by the league undoubtedly deserve a yellow flag.  However, the NFL’s rule book defines trademark violations very broadly.  If anyone were willing to throw the red flag to challenge the league’s position, a review from the booth might reverse some of those calls.  But, unless you are ready to take on the NFL in that fight, proceed with caution.  Continue Reading As The Golden Super Bowl Approaches, Be Aware of The NFL’s Efforts to Protect Its Golden Goose from Unauthorized Ads and Promotions

At the beginning of each year, we publish our broadcaster’s calendar of important dates – setting out the many dates for which broadcasters should be on alert as this year progresses.  The Broadcasters Calendar for 2016 is available here.  The dates set out on the calendar include not only FCC filing deadlines and dates by which the FCC requires that certain documents be placed in a station’s public file, but also some special dates – like the FCC filing window for AM stations to move FM translators a great distance under a special waiver policy adopted in the AM revitalization proceeding.  Also on our list this year are lowest unit rate windows for the many primaries and elections that will be occurring this year, as well as certain other dates dealing with copyright matters, including dates to make payments to SoundExchange for Internet streaming royalties.  While these dates may change, and new ones may be added, this at least gives you a start in planning your regulatory obligations. And, remember, you should always talk to your own attorney to make sure what dates are important to you.

It’s that time of the year when we need to dust off the crystal ball and make predictions about the legal issues that will impact the business of broadcasters in 2016.  While we try to look ahead to identify the issues that are on the agenda of the FCC and other government agencies, there are always surprises as the regulators come up with issues that we did not anticipate. With this being an election year, issues may arise as regulators look to make a political point, or as Commissioners look to establish a legacy before the end of their terms in office.  And you can count on there being issues that arise that were unanticipated at the beginning of the year.

But, we’ll nevertheless give it a try – trying to guess the issues that we will likely be covering this year.  We’ll start today with issues likely to be considered by the FCC, and we’ll write later about issues that may arise on Capitol Hill and elsewhere in the maze of government agencies and courts who deal with broadcast issues.  In addition, watch these pages for our calendar of regulatory deadlines for broadcasters in the next few days.

So here are some issues that are on the table at the FCC.  While the TV incentive auction may well suck up much of the attention, especially in the first half of the year, there are many other issues to consider.  We’ll start below with issues affecting all stations, and then move on to TV and radio issues in separate sections below.  Continue Reading What Washington Has in Store for Broadcasters in 2016 – Looking at the Legal Issues that the FCC Will Be Considering in the New Year

The FCC yesterday released, and trumpeted, a Consent Decree reached with Cumulus Radio for a violation at one of its New Hampshire stations where full sponsorship identification announcements were not made on issue ads promoting an electric company’s construction project in New Hampshire.  In the Consent Decree, Cumulus agreed to pay a $540,000 penalty to the FCC for the violations of the rules – plus it agreed to institute a company-wide compliance program to make sure that similar violations did not occur in the future.  In connection with the fine, the FCC released a press release highlighting the fine and the importance of identifying the true sponsor of issue advertising.  Travis LeBlanc, Chief of the FCC’s Enforcement Bureau stated “While failure to disclose these identities generally misleads the public, it is particularly concerning when consumers are duped into supporting controversial environmental projects.”  This fine is yet another example of the enhanced enforcement of all FCC rules by the new Enforcement Bureau, enforcement that has been controversial both among those being regulated and even among the FCC Commissioners themselves.  What was behind this extreme penalty, which probably dwarfs the profits that this radio station will make for the next several decades?

According to the FCC’s Consent Decree, the Cumulus station broadcast 178 announcements promoting the Northern Pass Project, a proposed hydro-electric project involving the construction of 180 miles of power lines in Canada and New Hampshire.  While the actual texts of the announcements were not provided in the FCC decision, and apparently included several versions of the ad, all supported the approval of the Northern Pass project, but none included the language “paid for” or “sponsored by” Northern Pass Transmission LLC, the full name of the company that paid for the ads and was behind the project.  Cumulus claimed that the station’s employees believed that references in the ads to the Northern Pass project were sufficient to inform the public of who was behind the ads, the FCC says that is not enough – the full name of the sponsor, making clear that it was the sponsor of the ad, is required.  This is not the first time that the FCC has, in the context of the Consent Decree, imposed a big penalty for a lack of a full sponsorship identification on broadcast programming but, outside of the context of “payola” violations, this may well be the largest fine imposed on a radio station for this kind of violation. Continue Reading $540,000 FCC Penalty for Cumulus Station Missing Formal Sponsorship Identification on Issue Ad Campaign

Last week, we noted that an order acting on the FCC’s proposal to adopt a requirement for an online public file for radio, cable and satellite had been prepared and was circulating among the FCC commissioners for their review.  Yesterday, in a post on the FCC’s blog, the FCC Chairman confirmed that the decision would be made this month at the FCC meeting on January 28.  The Chairman’s article does not say much more – except that it would not substantively change the public file obligations – instead just moving them online.  While there are rumors of a phase-in of the obligation for radio stations to transition to the online file, the timing of that transition is not yet public.  But rumors persist that large market stations should expect that their obligation – including their political file obligation – will go into effect before November’s election.  So radio stations need to be on alert, and large market stations may need to be ready to implement this obligation in a matter of months.

In tomorrow’s Federal Register, the Copyright Royalty Board will announce the commencement of three new proceedings to set music royalties for the 2018-2022 five-year period – each involving a different music right. The Board will begin a proceeding dealing with the digital public performances of sound recordings by satellite radio and “pre-existing subscription services” – the royalty that Sirius XM pays to record labels and performing artists for its performance of their songs on their satellite service, and the rates that cable radio pays for those same uses (see the draft notice here). Our summary of the last proceeding for satellite radio and pre-existing subscription services can be found here. Sirius XM was also a participant in the recent webcasting case, but only for its streaming service.  The statutory royalties at issue here are set by Sections 112 and 114 of the Copyright Act, the same sections that govern the webcasting royalty.

The second proceeding deals with the “mechanical royalty” or the making and distribution of “phonorecords.” That is the proceeding to establish what publishers and songwriters receive when there is a reproduction of their song. Traditionally, that was the royalty paid by a record company to the publisher or songwriter when a “cover version” of a song was made – a flat fee per copy of the song (whether a physical record or CD or a digital download). In recent years, the proceeding has expanded to include royalties paid by on-demand streaming services for their use of music. This is the royalty that has recently been much in the news in connection with the David Lowry lawsuit against Spotify. The CRB pre-publication version of that order is here (and our articles discussing the last decision on that royalty are here and here). This is one proceeding where the record labels and the digital music services are actually more or less on the same side – litigating against the publishing companies and songwriters over how much is paid for the use of the words and music of a particular song.  This proceeding is under Section 115 of the Copyright Act.  Continue Reading Copyright Royalty Board Set to Begin 3 New Royalty Proceedings – Mechanical Royalty, Sirius XM Satellite Royalty, and Noncommercial Broadcasting Over-the-Air Royalties

The FCC appears poised to decide what to do with its proposals for an online public inspection file for radio stations, and for cable and satellite TV systems. The FCC’s list of “Items on Circulation” (orders that have been written and are being considered for approval by the FCC Commissioners) indicates that the decision has been written and was provided to the Commissioners for their consideration on December 21. That could mean that a decision on this matter is imminent. Items on circulation can be quickly approved, though if they are controversial, they may languish or even disappear. Though rare, there have been times that an order has been drafted and presented to the Commissioners for consideration, but it never sees the light of day.

As we wrote here and here, the FCC quickly moved this proposal from a Notice of Inquiry to a Notice of Proposed Rulemaking late last year, prompting some to think that the FCC’s intent was to get the order out so that it could be implemented in time for the 2016 elections (as one of the drivers of the proposal is online access to political ad buying information). That may still be the intent, though how quickly the FCC can provide the technology to host the thousands of radio stations that may be subject to any such rule may be a limitation (though the Commission did propose a phased-in approach, requiring larger stations to go online first, perhaps minimizing the Commission’s technical burden). Keep your eyes open, as an order on this matter is circulating among the Commissioners, so we may not have long until we see what they decide.

While January starts off with some regulatory deadlines that apply to all broadcasters – Quarterly Issues Programs lists must be placed in a station’s public file by the 10th of January – there are many other dates that come due this month, dates to which broadcasters need to pay careful attention. For TV stations, they need to file at the FCC by January 11 (as the 10th is a Sunday) Children’s Television Reports, listing all of the programming that they broadcast in the previous quarter addressing the educational and informational needs of children. Records showing a TV station’s compliance with the commercial limits in children’s television should also be placed in the station’s public file.  As we have written, missing Quarterly Issues Programs lists (see our articles here and here) and Children’s Television Reports (and even late Children’s Television Reports) provided the basis for most of the fines during the last renewal cycle (see, for instance, our article here) – even for missing reports from early in the renewal cycle and, for the Children’s Reports, even where the reports were filed (repeatedly) only a few days late. So it is important to meet the obligations imposed by these regular filing deadlines.

Starting on the first day of this new year, there are a host of other obligations and deadlines that arise. On January 1, TV stations need to be captioning clips of video programming that they make available on their websites or in their mobile apps, if those clips came from programming that was captioned when shown on TV. For more on that obligation, see our article on the new online captioning requirements here. Continue Reading January Regulatory Dates for Broadcasters – Quarterly Issues Programs Lists and Children’s Television Reports, Incentive Auction, FM Translators for AM Stations, Webcasting Fees, LUR Windows and More