The FCC’s Media Bureau gave a long-awaited Christmas present to many of the country’s AM stations, releasing a Public Notice announcing the filing dates for the translator modification application filing windows for AM stations.  These are the windows authorized by the Commission as part of its AM Revitalization proceeding (see our article here for more about the FCC decision to open these windows).  In these windows, the FCC will allow an AM licensee to buy or arrange to program an FM translator and move it up to 250 miles to a location from which it can be used to rebroadcast an AM station.  In making such a site move, the applicant can also change the translator’s channel to specify operations on any vacant frequency in the area where the AM station wants to operate that translator that will not cause interference to existing broadcasters.  However, applications will only be accepted to move translators or translator construction permits in the commercial part of the FM band, 92.1 MHz (Channel 221) and above.

Initially, there will be two windows.  The first window will open January 29, 2016 and close at 11:59 pm (EDT) on July 28, 2016.  This window can be used by Class C and Class D AM stations to seek to move an FM translator for use by those stations.

The second window will open on July 29, 2016 and close at 5:59 pm (EDT) on October 31, 2016.  Any AM station can file an application during that window.  Continue Reading Window to Open January 29 for Applications to Move FM Translators Up to 250 Miles to Rebroadcast AM Stations

While many broadcasters’ thoughts are on holiday celebrations, the political process leading to the 2016 elections marches on. Last week, Bobby Baker, the head of the FCC’s Office of Political Programming and I conducted a webinar for broadcasters in 16 states on the legal issues that need to be considered in connection with the upcoming political season. The slides from that presentation are available here.

The week before last, I wrote about some of the issues that broadcasters should already be considering in connection with the 2016 election. With Lowest Unit Charge windows either open or to open this month in Iowa and New Hampshire, and windows opening in South Carolina and Nevada in the first week in January, stations need to be paying attention to their political obligations. Even though political windows are not yet open in other states, stations in these other states nevertheless need to pay attention to their political obligations. As I explained in the webinar, those windows apply only to Lowest Unit Rates. All other political obligations, including reasonable access for Federal candidates, equal opportunities, and the no censorship provisions of the rules apply once you have legally qualified candidates – not just during political windows. See our article here and here on that subject. Continue Reading Understanding a Broadcaster’s Political Broadcasting Obligations Under FCC Rules – A Webinar Outlining the Requirements

Earlier today, Triton Digital’s President for Market Development John Rosso and I discussed the new webcasting royalty rates adopted last week by the Copyright Royalty Board to cover the sound recording performance royalty for 2016-2020.  You can listen to that conversation discussing the basics of that decision here.  John and I discuss what rights the royalty covers, which services can rely on the royalty for their music rights, some of the requirements of the royalty, and the rates themselves. Further information about the decision is available in our article summarizing the CRB’s decision as to the rates and terms that was released last week, here, and the next steps in the process were outlined in our article here.  In the next few weeks, as the CRB’s decision explaining its reasoning is made public, we’ll provide a summary, and highlight new issues as they arise as interested parties review and digest the new rates.

One important point that we discussed in the webcast this afternoon, and which bears repeating, is that these royalties do apply to broadcaster simulcasts.  For some reason, I have seen trade press reports which indicate that they do not, and I have had questions from broadcasters implying the same thing.  Broadcasters who stream music on the Internet, even a full simulcast of their over-the-air broadcasts, should be paying SoundExchange now for the public performance of the sound recordings that they stream.  They will continue to do so, at a lower rate, when these new rates become effective in January.  As we explained in our article last week, simulcasters have been paying at the rate of $.0025 per performance in 2015, and for advertising-supported simulcasts, that rate will fall to $.0017 in 2016.

Watch for more on the CRB royalties as issues develop over the next few weeks.

In a consent decree released earlier this week, the FCC fined the parties to a LMA for an FM radio station in Colorado $8000 because the FCC believed that the programmer paid too many of the licensee’s expenses directly. According to the decision, the programmer paid certain debts of the licensee directly, including the licensee’s obligations on its tower lease, and the cost of its telephone line to the main studio. These issues came to light as the programmer filed to acquire the station from the licensee, whose station it had programmed for over a decade.

What does this tell parties to an LMA? Don’t have the programmer pay expenses of the licensee directly. The FCC requires that the licensee maintain control over its station. Some of the ways that this control is demonstrated is by having the licensee continue to provide the transmission plant for the station, and to maintain employees at the main studio and continue to have a phone line to those employees. The licensee should continue to write a check for those expenses, even if the money that fills the bank account for that check is paid to the licensee by the programmer. Failing to meet these obligations is viewed by the FCC as an unauthorized transfer of control of the station.  This decision is consistent with past Commission decisions on these kinds of agreements (see, for instance, this case which we discussed 5 years ago). It is the FCC’s view that the licensee must continue that direct legal relationship with those that provide these services by paying them for their services – so it should write the check, not the programmer.

As one of the many legislative changes that made their way into the Congressional Omnibus Spending Bill set to be voted out of Congress this week and signed by the President to keep the government operating for the next year, there is a provision authorizing TV stations to continue through September 30, 2025 operating with Joint Sales Agreements that were in place prior to the FCC action last year to order the termination of such agreement (see our article here). Without this legislation, those JSAs would have had to have been terminated by next December (see our article here about the extension of the divestiture date in the STELAR legislation).  The provision says that no party to such an agreement shall be in violation of the FCC’s ownership rules if they continue to operate with the JSA in place. The new legislation says that, with respect to such grandfathered agreements, the rules that were in effect the day prior to the FCC’s ruling will remain in effect. How this will affect the transfer of stations that are involved in such agreements remains to be seen. But for those TV broadcasters who have these agreements and continue to operate their stations, for the foreseeable future, their JSAs can remain in place.

The Copyright Royalty Board yesterday announced on its website the royalty rates that webcasters will pay to SoundExchange for the use of sound recordings in their digital transmissions over the Internet and to mobile devices in the period from 2016-2020.  For commercial webcasters, the CRB set $.0017 as the per performance (i.e. the rate paid per song, per listener) rate for nonsubscription streaming, and $.0022 per performance for subscription streaming.  For most webcasters, including broadcasters, this represents a drop of approximately 1/3 in the rates paid – perhaps the first time in any CRB proceeding that rates decreased as the result of a CRB decision.  The rates and terms adopted by the CRB for this statutory license can be found here.

For Pureplay webcasters, like Pandora, the nonsubscription rates represent a modest increase from the $.0014 rate that they were paying in 2015 pursuant to the Pureplay Agreement negotiated under the Webcaster Settlement Act almost 8 years ago (see our article here).  For the subscription services offered by these companies, the rate actually decreases from the $.0025 rate that they had been paying. There is also no provision for a percentage of revenue. The Pureplay Agreement had required that services pay the higher of the per performance rate or 25% of the webcaster’s gross revenues from all sources, limiting their growth outside of webcasting, and preventing companies with substantial other business interests from entering the Internet radio market and relying on the Pureplay rates. That percentage of revenue overhang has been eliminated.  For a summary of the rates that had been in effect for all of the different classes of webcasters, see our article here. Continue Reading CRB Announces Webcasting Royalty Rates for 2016-2020 – Lower Rates for Broadcasters Who Stream, Minimal Change for Pureplay Webcasters

It seems like every streaming company, and every financial analyst and reporter covering the media beat has been breathlessly awaiting the release of the Copyright Royalty Board’s decision on Internet Radio Royalties that will apply to noninteractive streaming companies during the years 2016-2020.  Many have been predicting a decision for days.  But, in a public notice released today and available on the CRB website, the CRB announced that the that the decision will be released on Wednesday.  While the CRB will make the rates available on their website on Wednesday, the full decision will only go, initially, to the Librarian of Congress which oversees the administrative aspect of the CRB and reviews its decisions for legal errors, and to counsel involved in the case. Counsel will have an opportunity to review the decision to suggest that portions of the decision containing confidential business information be redacted from the public version of the decision, a version that will be released at some point in the future.  So the streaming world will know by Wednesday what they will be paying in the upcoming 5-year period, barring any post-decision changes through appeals, direct licenses, or other processes.

To clarify, this decision only apples to noninteractive streaming companies – webcasters or Internet radio – where the listener cannot select the next song to be played.  It does not apply to digital music companies where parties can play individual tracks on demand, or where they can save music into playlists where the songs can be replayed in the same order repeatedly.  Those paying these “statutory royalties” must adhere to certain restrictions as to how often a particular song will be played, but get the rights to play any song legally released in the United States.  See our article here as to why Adele could refuse to make her songs available to services like Spotify, while Pandora and other Internet radio companies could play those songs.  And these royalties apply only to streams that are directed to US residents, which is why many webcasters, including Pandora, are not available in much of the world.  See our article here on determining where royalties are paid for digital content.  Even though limited to these particular digital music services, the decision remains very important.  What happens when the decision is released, and what is next? Continue Reading Waiting for the Copyright Royalty Board Decision on Internet Radio Royalty Rates – Decision To Be Announced on Wednesday

The Sunlight Foundation, along with Common Cause and the Campaign Legal Center, have filed with the FCC complaints against 18 TV stations claiming that these stations violated the FCC’s sponsorship identification rules by not identifying former New York City mayor Michael Bloomberg as the true sponsor of issue ads bought by the Independence USA political action committee.  The complaint (available on the Foundation’s website as part of a press release on the action) alleges that stations have an obligation to look behind the named organizational sponsor to identify Mr. Bloomberg as the true sponsor of these ads, as he has provided all of the organization’s funding and directs its actions.  These same organizations filed a similar set of complaints last year, some also targeting Mr. Bloomberg and the PAC with which he is associated, complaints which, for the most part, remain pending at the FCC (see our article here).

These complaints are very similar to the ones filed in 2014, arguing that where a PAC is 100% financed by a single individual, the individual should be identified on the air as the sponsor, not the PAC itself.  The petitioners claim that, by not identifying Mr. Bloomberg as the true sponsor, the public is deceived as to who is behind the ads.  This is despite the fact that, in the required sponsorship disclosure statements filed in the stations’ public files, Mr. Bloomberg is identified, as required by the rules, as the Chairman of the PAC and as one of its two officers.  Apparently, this required disclosure is deemed insufficient by these groups.  But what will the FCC think? Continue Reading More Complaints Filed Against TV Stations for Allegedly Not Disclosing the True Sponsor of PAC Ad on Political Issues

The FCC this week issued a Public Notice announcing that the FAA has issued a new Advisory for the marking and lighting of new or altered communications towers – highlighting one change that towers above 350 feet above ground will need to have flashing lights, rather than “L-810 steady burning side lights” which were determined to be a hazard to birds.  In addition, towers that are between 151 and 349 feet will need to have flashing lights rather than steady burning ones starting September 2016.  The FCC’s advisory also notes that the FAA has urged existing tower owners to move to comply with these new standards as well.  Existing tower owners who do decide to change to the new standards need to get FAA approval first for the change, and then register their lighting change with their Antenna Survey Registration with the FCC.  One more issue to consider if you are planning a new communications tower or changes to one that you already have.

The US District Court in Washington DC last week decided that FilmOn X could not rely on the compulsory license of Section 111 of the Copyright Act to retransmit the signal of over-the-air television stations to consumers over the Internet. The compulsory license allows a system to rebroadcast copyrighted material without getting express permission from the copyright holder, as long as the service files the rules set out by the statutory provisions that create the license. The DC Court’s decision was the exact opposite of a decision reached in July by a California court which found that FilmOn did fit within the definition of a cable system as set out by the Copyright Act (see our summary of that decision here). Why the difference in opinions over exactly the same system?

Both Courts focused on the language of Section 111 which defines a cable system as follows:

A “cable system” is a facility, located in any State, territory, trust territory, or possession of the United States, that in whole or in part receives signals transmitted or programs broadcast by one or more television broadcast stations licensed by the Federal Communications Commission, and makes secondary transmissions of such signals or programs by wires, cables, microwave, or other communications channels to subscribing members of the public who pay for such service. For purposes of determining the royalty fee under subsection (d)(1), two or more cable systems in contiguous communities under common ownership or control or operating from one headend shall be considered as one system.

Even though both courts looked to this same definition, they reach different conclusions – the principal difference being one over the requirement that, to be a cable system, the company must make “secondary transmissions of such signals or programs by wires, cables, microwave, or other communications channels.” The California court had looked at this definition, and determined that Internet retransmissions of TV programs were in fact secondary transmissions (a secondary transmission being a retransmission of the broadcast) by “wires, cables, microwave or other communications channels” – concluding essentially that the Internet was a communications channel. The DC Court, in contrast, did a far more searching analysis of this statutory language, and found that Internet transmissions don’t qualify as cable systems under this definition. Continue Reading DC Court Finds FilmOn X Internet TV Service is Not a Cable System and Cannot Rely on Statutory License to Retransmit Over-the-Air TV Signals