Paying regulatory fees is a part of the yearly calendar for broadcasters and other entities that do business before the FCC. These fees are usually due in August or September, to be paid before the start of the FCC’s fiscal year on October 1. And each year, about this time, the FCC puts out a Notice of Proposed Rulemaking (NPRM), asking about its system for collecting royalties and what changes should be made before fee collection begins in a few months. That order came out yesterday. It resolves some issues left over from last year (deciding, for instance, to assess fees for Direct Broadcast Satellite television providers), and asks many questions – including some about broadcasters. For broadcasters, questions include whether the FCC should adjust the relative percentages of its collections from radio and TV (a question that could pit broadcasters against each other) and whether changes should be made in allocation of fees within a service, adjusting the rates currently paid by different classes of radio and TV stations. The FCC also asks whether it should adopt rules that allow stations in economically depressed areas to get relief from regulatory fees. The fees proposed for broadcasters for this year are set out at the end of this article. Comments on the FCC proposals are due on June 22, and replies by July 6.

Regulatory fees (or “reg fees” to most folks in the communications world) are assessed to recapture from those being regulated the costs of that regulation. To figure out what each regulated commercial entity must pay, the FCC has to try to allocate its budget among the various services that it regulates, based on how many of its employees spend their time regulating a particular industry (based on Full Time Employees – or “FTEs” – an FTE being a person working full-time at the FCC, or, for instance, two half-time employees who together count as a single FTE). So the FCC each year has to go through a complex analysis of the work that it does, and try to allocate the time spent by each of its employees on particular regulated services. As these NPRMs on reg fees make clear, this can be a very difficult process, as there will obviously be some employees who spend time on projects that cut across service lines – e.g. those in the International Bureau who negotiate with foreign governments may benefit broadcasters in some negotiations, and wireline or wireless companies in others. Or the Enforcement Bureau, the Office of the General Counsel and the Commissioner’s staffs may handle a diversity of matters covering all sorts of services. The allocations that are arrived at can be interesting and debatable – and have little to do with the economics of the industries involved or their revenue base. Continue Reading FCC Asks for Comments on Regulatory Fees for 2015 – Lots of Questions about Broadcast Fees

One million dollars is still a big fine, even though the FCC has been handing out fines for that amount, or more, many times in recent months. But fines rarely hit these levels for broadcasters. But, yesterday, the FCC issued such a fine – hitting iHeart Media with a $1 Million fine as part of a Consent Decree imposed for the inappropriate use of EAS tones in the Bobby Bones syndicated radio program. The program was being run on 82 stations across the country. According to the FCC’s order approving the Consent Decree and imposing the associated fine and compliance plan, the broadcast of those tones triggered EAS alerts across several states – principally at stations and cable systems that had not activated the ability of the EAS system to recognize the date of an alert (the program rebroadcast the FCC’s first national EAS test, a test that was conducted almost 3 years before the Bones broadcast).

As with many other recent cases where the FCC has imposed heavy fines on broadcasters and cable programmers for use of EAS tones in entertainment broadcasts (see our articles here, here, here, and here tracing the history of the FCC’s escalating penalties for this kind of violation over the last few years), the FCC sees these matters as threats to public health and safety, as the public could react adversely to these EAS alerts that were not tied to real emergencies (or be desensitized by repeated false alerts to the importance of real alerts). The FCC’s News Release announcing the adoption of the Consent Decree makes exactly this point – the misuse of EAS alerts are threats to the public safety. Continue Reading FCC Fines iHeart Media $1,000,000 for Broadcasting EAS Alert Tones When there was No Emergency – What the Big Fine Says to Broadcasters

Last week, the FCC formally announced its receipt of a proposal from REC Networks to raise the maximum power for LPFM stations from 100 watts to 250 watts, to give them equivalent power levels with FM translator stations. REC suggests that these higher power levels are necessary to allow LPFM stations to overcome the effects of multipath in their coverage areas, and to provide sufficient building penetration in more urban areas. The proposal (which is available here) also suggests other changes to the rules that apply to LPFM stations, including those dealing with interference protections between LPFM stations and FM translators, and the rules allowing the use of the FM translators by LPFM stations. The FCC notice is only an announcement that the proposal has been received. While comments can be filed within 30 days as to whether or not the FCC should move further to consider the issues raised in the Petition, any ultimate action should require that the FCC issue a formal Notice of Proposed Rulemaking to solicit comments on the specific proposals that the Commission deems potentially worthy of consideration.

Nevertheless, even though this is but a request for preliminary comments, broadcasters may want to consider commenting within the 30 days provided by the Commission as to whether or not this proposal should move forward. The proposals put forward in REC’s Petition are very detailed, and it provided significant backing information in support of its requests. The 250 watt proposal has many nuances – proposing that these upgrades be allowed, at least initially, only for already authorized LPFM stations as minor changes to their existing facilities. And the proposal would not expand the “buffer zones” adopted by the Commission when it first authorized LPFM stations – establishing mileage separation requirements between LPFM and full-power FM stations designed to protect the full-power station beyond its normally protected contour. REC suggests that, in most cases, the buffer zone provides too much protection to full-power stations, and that even at 250 watts, there should still be sufficient protection to full-power stations. Continue Reading Preliminary Comments Sought by FCC on Proposal to Increase LPFM Power to 250 Watts and to Modify LPFM Translator Rules

A bill introduced in the House of Representatives last week proposes that the FCC be required to amend its sponsorship identification rules to require not just the name of the sponsor of an ad addressing “a controversial issue of public importance,” but also the names of any “significant donors” to the sponsor. This bill is meant to address the perceived problem that PACs and other interest groups are buying advertising time on broadcast stations and cable systems to influence the political process, and all the public hears is some innocuous sounding organizational name – “the Campaign for a Better America” or some similar name that does not convey who is actually behind the ad. Clearly, given the acronym for the bill (Keeping Our Campaigns Honest Act or the “KOCH Act“), the sponsors have some particular targets in mind.

This issue came up at Congressional hearings on FCC reform with Chairman Wheeler yesterday. According to press reports, he was urged to move on this proposal through FCC action, even if Congress does not mandate such action through adoption of the Act. In fact, as we wrote here, the FCC has already been asked by the Campaign Legal Center, Common Cause and the Sunlight Foundation to rule that this is currently required by FCC rules where the sponsoring organization has a single donor, or where one donor has contributed so much of the money to the organization that the organization is effectively the alter ego of the donor. This issue is not new legislatively, either, as Congress has considered bills in previous sessions, including the DISCLOSE Act (which we wrote about here and here).  But these bills have never been adopted.  All these bills have been a response to the Citizens United Supreme Court decision (see our article here about the impact of that case on FCC policies). These issues are sure to be debated more and more as parties and PACs gear up for the 2016 election and questions of influence over the campaign process become more and more part of the election narrative and debate. So watch where the FCC goes on this issue in the coming months.

May is one of those months where there are no routine, recurring FCC regulatory filing deadlines – no EEO reports or Quarterly Issues Programs lists, no Children’s Television Programming Reports or noncommercial station ownership report deadlines. But, as with any month, that does not mean that there are no dates of concern for broadcasters – as there are certain compliance deadlines and other important dates of which broadcasters need to be aware in the upcoming month. Here is our summary of some of the dates that broadcasters should be watching in the upcoming month.

The only thing approaching a routine regulatory date of note is the obligation of TV stations in Delaware and Pennsylvania to air the third and fourth of their required six post-filing announcements of the filing of their renewal applications – the last of the renewal applications for either radio or TV that were filed in this renewal cycle. The next routine license renewal filing window will be when radio renewals being again in June of 2019 – with the filing of radio license renewals by stations in Maryland, Virginia, West Virginia and DC. However, as we have written before, EEO Mid-Term reports are due from larger radio station groups in these 3 states and in DC on June 1 of this year. So radio station employment units (commonly controlled station groups serving the same area and having at least one common employee) with 11 or more full-time (30 hours per week) employees should be preparing to file those reports on FCC Form 397 by June 1. Continue Reading May Regulatory Dates for Broadcasters – Including EEO Mid-Term Reports, FM Auction, Emergency Communications Compliance, TV Market Modification Comments, Class A TV Digital Conversion Deadline and More

The Copyright Royalty Board has begun the hearing phase of its proceeding to set the royalties to be paid by webcasters (or noninteractive digital music services) for public performances of sound recordings for the years 2016-2020. These are the royalties paid by Internet radio companies to SoundExchange, allowing them to play any recorded music legally released in the United States since 1972 (see our article here about issues regarding pre-1972 sound recordings), as long as the digital service pays the royalties set by the Board and observes other rules set by the Copyright Act. This proceeding began in January 2014, when the CRB asked for petitions to participate in the proceeding. After those petitions, parties had time to engage in settlement discussions before filing “written direct cases” last October – written witness statements setting out the rates proposed by each party and the justifications for those rates (see our summary of the parties initial proposals here). Since that time, the parties have been engaged in discovery, producing mountains of documents relevant to the claims made, and conducting depositions of a number of witnesses. This week, the case moved into its trial phase.

On Monday, the parties still participating in the proceeding presented to the 3 CRB judges their opening statements where their attorneys summarized what they hope to prove over the next 5 weeks of trial. During the trial, the parties will formally introduce their written statements (available on the CRB website, here, with sensitive business information redacted), which have been amended based on facts uncovered during the discovery that was conducted, and their written rebuttal testimony – testimony that was provided to the CRB in February to rebut the initial written cases (available on the CRB website, here, with sensitive business information redacted). Such rebuttal testimony has itself been subject to the discovery process. There can be various objections to the written evidence presented – including questions of hearsay or relevance to the proceeding. For virtually all of the written statements, the individual who provided that testimony will be present at the hearing to introduce that testimony, and each witness will be subject to cross examination by the other parties. As is evident by the number of exhibits that have been submitted, there will be dozens of witnesses to be heard – from renowned economists and other experts, to record label and digital music company executives, to broadcasters large and small.  Continue Reading Copyright Royalty Board Begins Hearings on Webcasting Royalty Rates for 2016-2020 – When Will We See a Decision?

The FCC today released a Public Notice announcing that they are suspending the September digital conversion deadline for LPTV stations.  Given the upcoming incentive auction, it seems clear that it makes no sense to force an LPTV station to go digital, when it could be knocked off the air or forced to change channels a few months later as these stations are afforded no protection in the incentive auction and TV spectrum repacking process.  As we wrote here, the FCC is considering a proceeding proposing rules for dealing with LPTV stations after the incentive auction. That proceeding included the question of whether to extend the digital conversion deadline. Apparently, given the imminent deadline, the FCC decided to suspend the deadline before the remainder of the issues about LPTV had been resolved

Note, however, that the FCC makes clear that the May 29 date remains in place as the deadline for Class A stations to be operating digitally in order to get protection for those facilities in the upcoming incentive auction. We wrote about that deadline here. The FCC also notes that, even if a Class A station does not meet the May 29 deadline, and is not protected in the auction, it still must be operating digitally by September 1 – the extension announced today is only for LPTV stations.

We have written in the past about the concerns that broadcasters face about the unauthorized use of photos on station websites. Some broadcasters have had problems when they found that photos posted on their websites were posted without permission of the copyright holder – and representatives of the copyright holder contacted the stations with demands for significant compensation. We reminded broadcasters that everything that you find on the Internet cannot be appropriated for your own uses – that copyrighted material retains copyright protections even when it is made available on the Internet. It appears that this is not an isolated problem, as the Copyright Office has just announced the commencement of a study to determine how best to protect the copyrights of photographers and those who produce other digital images. In this digital age, when photos and other images can be copied and reproduced digitally, distributed on websites and through other digital means, often stripping out any embedded information about the copyright owner, problems in copyright enforcement are common. The Copyright Office seeks information both from copyright owners and from users of such images on how to best protect copyrights, while at the same time making it possible for users to obtain clearances for photos that they want to use.

This issue for broadcasters actually cuts both ways, as broadcasters themselves create photos and other images it their news coverage, and in connection with other station activities and events. They don’t want these images exploited by competitors and other media sources without permission. So legal clarity could be a good thing, as it will not only to help broadcasters clear rights to use photos and other images online and in their over-the-air broadcasts, but it will also help them to protect the images that their employees create in the course of their broadcast employment. What does the Copyright Office ask? Continue Reading Copyright Office Starts New Study on Enforcing Copyrights on Photos and Other Visual Images in a Digital World

The FCC has finalized the rules for its auction for about 130 new FM channels to be auctioned in July. The Order setting the rules for the auction is available here, and the list of channels to be sold, and the opening minimum bid for each such channel, is available here. The minimum bids also constitute the “upfront payments” which must be made before the auction in order to be able to bid on the channels in which you may be interested. We wrote about these channels here, when the FCC first proposed the auction. As can be seen by reviewing the list, while there are channels across the country, the greatest number of available channels, by far, is in Texas. As we noted when we first wrote about this auction, many of the channels cover small communities in rural areas, and some are leftovers that went unsold in previous auctions. But in every auction there are a few channels that may prove to have some value, so we expect that there will again be interest in many of those on the list. Such interest must be expressed through the filing of “short-form” Form 175 applications by May 28. The actual auction will begin on July 23.

The FCC also announced a freeze on the filing of FM construction permit applications for changes in existing stations from May 18 through May 28 to stabilize the FCC’s engineering database during the period when applicants will be filing their applications. As auction applicants can specify in their short-form applications transmitter sites to be protected, a minor change application by an existing station could end up mutually exclusive with a transmitter site specified by an auction applicant, meaning that the existing station could end up in the auction. To avoid that, the FCC has frozen minor change applications during the filing window. Continue Reading FCC Sets Final Rules For Auction of New FM Stations – Applications Due By May 28, Filing Freeze on FM Minor Changes from May 18 through May 28