Noncommercial webcasters are often forgotten in the discussion of the current proceeding to set Internet radio sound recording royalties. But, along with the royalties for commercial webcasters (we wrote about the proposed commercial rates here), the current Copyright Royalty Board proceeding will also set the rates for noncommercial webcasters.  Various proposals for noncommercial royalties have been submitted to the Judges.  In fact, one proposed settlement agreement between SoundExchange and CBI (a group that represents college radio stations) has been submitted to the Judges, and last week that proposed settlement was published in the Federal Register, with a request for comments by November 26.  There are other proposals for noncommercial rates that were submitted by other parties, and we talk about those below. 

Setting rates for noncommercial webcasters is not easy.  Colleges and other schools, public radio and religious organizations usually are not motivated by the kinds of commercial considerations that give rise to evidence submitted under the “willing buyer willing seller” standard applicable to all CRB webcasting royalty decisions.  Thus, the noncommercial rates are often set as an afterthought.  In fact, perhaps because noncommercial rates have been such an afterthought, it has been these rates that have led to the greatest number of appellate issues for the CRB.  The decision on noncommercial rates from the 2006 proceeding was just issued by the Judges after an appellate court remand.  In that decision, the Board upheld the decision from the 2006 case setting the minimum fee for noncommercial broadcasters at $500 for the 2006-2010 proceeding – a decision reached after a remand of the case from the Court of Appeals to the Board following an appeal by IBS, another group of noncommercial broadcasters associated with colleges and other schools.  But let’s look at the proposals for the upcoming case, and compare them to the rates currently in effect. Continue Reading Noncommercial Webcasters Royalty Rate Proposals for 2016-2020

Since our note Friday about November regulatory dates for broadcasters, it’s become clear that the FCC will be acting on two more matters of interest to broadcasters – particularly radio broadcasters though each have some implications for TV as well.  First, as we hinted at the end of our article on Friday (the rumors that we had heard having now been confirmed), Chairman Wheeler has circulated a draft Notice of Proposed Rulemaking on the expansion of the online public file to radio (as well as cable and satellite).  And, secondly, the FCC has announced that, at its open meeting on November 21, it will open a rulemaking to modernize the disclosure rules for on-air contests conducted by broadcasters – rules which have resulted in FCC fines over the last few years.

The fact that the online public file proposal for radio has now matured into a Notice of Proposed Rulemaking is confirmed by the FCC’s list of Items on Circulation (basically, draft orders that the Commissioners currently have in front of them for review and voting), which now lists that item near the top of its list.  See the list of Items on Circulation, here: http://www.fcc.gov/fcc-items-circulation.  While most folks in radio knew that the day would come when their public files might be required to go online, the speed with which the FCC now seems to be acting is what is most surprising, as it was only a bit over two months ago that the FCC took comments on whether or not to even consider that proposal (see our article here).  But, with lightning speed, the order appears to be moving forward.  How fast will it be implemented? Continue Reading Formal Proceedings to Begin to Revise Rules for Broadcasters’ On-Air Contests and Expand the Online Public File Obligations to Radio, Cable and Satellite

The month of November is one of those rare months on the FCC calendar when there are few routine regulatory filing deadlines for broadcasters.  In odd years, we would have Biennial Ownership Reports but, being an even year, we can wait until 2015 for that obligation for commercial broadcasters.  There is a new November 28 deadline, about which we wrote here, for TV stations with Joint Sales Agreements with other stations in their markets to file such agreements with the FCC.  While we are getting to the end of the current license renewal cycle, there are still some obligations of television stations for the airing of renewal pre or post filing announcements.  Commercial and Noncommercial Full-Power and Class A Television Stations in Alaska, Hawaii, Oregon, Washington, American Samoa, Guam, the Mariana Islands, and Saipan need to air License Renewal Post-Filing Announcements on the first and sixteenth of the month, while television stations in Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont need to air their pre-filing announcements in anticipation of the filing of their license renewal applications on December 1. 

November brings a few other dates of note for broadcasters.  With the end of the political window for lowest unit rates on Election Day, broadcasters have a few last minute issues to remember.  If they sell ads on Election Day, those ads must be sold at lowest unit rates.  If they have opened their stations to take new advertising or changes in copy for any commercial client in the past year, they must be ready to take similar steps for federal candidates over this last weekend before the election.  Even if they never accommodate a commercial advertiser over the weekend, they may still need to provide weekend access to accommodate last minute equal opportunities requests.  Continue Reading November Regulatory Dates for Broadcasters – The End of the Political Window, Incentive Auction and Online Video Clip Comments and More

The FCC announced two significant policy initiatives by Blog post in the last week – perhaps recognizing that the Internet provides a better way of packaging a message about policy directions than an unpredictable news conference.  The two decisions announced this week by Blog post were (1) the Chairman announcing that he has directed that a Notice of Proposed Rulemaking be circulated among the other Commissioners to treat Over-the-Top TV providers (“OTT” providers, usually those that provide service over the Internet) of linear programming as MVPDs – meaning that they would be treated, for regulatory purposes, in much the same way as cable and satellite TV services, and (2) an announcement by the head of the incentive auction task force that the auction by which some of the broadcast TV spectrum will be purchased from TV users and resold to wireless carriers for broadband wireless uses will be postponed from its expected date in the summer of 2015 until early 2016.  We will write about the postponement of the auction later.  But what does the MVPD proposal mean?

The MVPD issue is one that we last wrote about here.  At the urging of some OTT providers, apparently including Aereo, the FCC has been urged to treat these providers, when they provide “linear” programming (programming that is provided at set times on a set schedule, in the manner of broadcast TV or cable programming, as opposed to the on-demand programming of a Netflix or Hulu), in the same fashion as cable and satellite.  The Chairman, in his blog post, announces his support for an FCC proceeding to review that proposal, apparently looking to use linear Internet programmers as a new competitive force against cable and satellite TV.  By treating these services as MVPDs, they could get access to over-the-air TV programming (if they can negotiate retransmission consent agreements with the TV stations) and equal access to programming provided by vertically integrated cable programmers (those programmers that have attributable ownership from cable system operators).  But, obviously, there are some big “ifs” here. Continue Reading FCC Policy by Blog Post – Over-the-Top Internet-Delivered Television Programming Providers May be Treated as MVPDs, a Reaction to Aereo?

As we wrote in early April, the FCC has determined that TV Joint Sales Agreements, by which the owner of one TV station in a market sells more than 15% of the advertising time on another station in the same market, are “attributable interests” under the multiple ownership rules.  That means that a station can only have a JSA with a station in the same market if it can own that station under the rules limiting the ownership of TV stations in one market.  The FCC gave stations involved in existing JSAs two years to undo current agreements, and the decision is on appeal by the NAB and other affected broadcasters.  Nevertheless, the filing requirement has now passed review by the Office of Management and Budget under the Paperwork Reduction Act, and the FCC this week announced that the obligation to submit existing JSAs to the Commission (and to either make them available in each station’s public file or include them in the list of contracts in the file that can be provided upon request) will be effective November 28.

To implement that obligation, and the obligation to submit new JSAs to the FCC within 30 days (and presumably there will be few new JSAs as it will be rare when one station will want to do a JSA with another station in its market if they can actually own that station), the FCC yesterday released a “Small Entity Compliance Guide” to this obligation.  These Guides are required by legislation intended to aid Small Businesses by making compliance obligations clear.  While the Guide does not disclose anything unexpected, it does make clear that the JSAs must also be reported on Forms 2100 (the new construction permit application for TV stations), Forms 314 and 315 (assignment and transfer application forms), and on the Form 323 (the FCC ownership report form).  Licensees should be aware of those obligations.

SESAC is the one major performing rights organization whose rates have not, until now, been subject to judicial review as part of an antitrust consent decree.  Perhaps because of that fact, broadcast stations have often complained about the rates they charge for the music that they license, as there is currently no cap on what SESAC can charge, and there is no requirement that SESAC treat all similar licensees in the same way.  In fact, because of this dissatisfaction, both the TV and Radio Music License Committees have filed antitrust suits against SESAC seeking relief from the rates they charge.  In a settlement announced this past week, the Television Music Licensing Committee has entered into a settlement by which SESAC will pay the TVMLC $58.5 million and agree that, over the next 20 years, SESAC will negotiate license agreements with TVMLC.  Under the agreement, if rates can’t be reached as a result of negotiations, SESAC and the TVMLC would submit to an arbitration process to arrive at the appropriate rates.  The full settlement can be found on the TVMLC website, here. 

Under the terms of the settlement, commercial TV stations (except for those owned by Univision, which appear to have opted out of the class of stations covered by the TVMLC settlement) will have their SESAC obligations covered for the rest of this year and next, including website SESAC music use and use in digital multichannel programming.  In 2015, TVMLC will negotiate with SESAC over rates for the period from 2016-2019.  If no rates are agreed to by the parties, an arbitration panel will set the rates.  The same process will continue for 4 year periods through 2035, as long as ASCAP and BMI are also subject to either rate court or arbitration review of the rates charged by those organizations.  While the Department of Justice is reviewing the ASCAP and BMI consent decrees that require rate court review of royalty rates charged by these groups (see our article here), it appears that they are not asking for an end to all rate review.  Instead, they are asking that the review be done by an arbitration panel, not the US District Court that currently reviews such rates.  So it would appear likely that the “out” in the deal would not give SESAC an escape from this agreement to be bound by arbitration any time soon. Continue Reading TV Music Licensing Committee Settles Antitrust Action with SESAC over Music Licensing Rates and Terms – Radio Watches and Wonders if It Can Get a Similar Deal

Just a month ago, the FCC denied complaints alleging that Washington DC  TV stations had not adequately identified the true sponsor of political ads sponsored by a political action committee.  When that decision came down – denied on procedural grounds by the Commission – we warned that it opened the door to more complaints in the current election cycle.  Sure enough, a new complaint has been filed against one of the same DC stations, contending that in the current election cycle, it should have gone beyond the sponsorship identification of the PAC itself as the sponsor of the ad, and instead identified the sponsor as the individual who contributed the majority of the PAC’s funding. 

The complaint, filed by the Campaign Legal Center, Common Cause and the Sunlight Foundation, the same DC public interest groups that filed the previous complaints, alleges that WJLA-TV failed in identifying the true sponsor of ads by the Next Gen Climate Action Committee as Tom Steyer, the individual who they allege (based on FEC disclosures) provided the majority of the funding for the PAC.  In last month’s decision, the FCC rejected a similar petition about the same PAC, deciding not to pursue the complaint as the station was not directly put on notice of the allegations raised in the complaints before the ads ran.  In the new petition, the petitioners don’t allege that they made any contact with the station to alert the station about their new complaints.  Instead, the complaint alleges that the TV station should have known about the issues because it is the same PAC that was named in last year’s complaint, and the station should have known about the petitioners allegations that the sponsorship tag is incorrect.  But is there a real issue here? Continue Reading Another FCC Complaint about the True Sponsor of a PAC Political Ad – What’s a Station to Do?

The FCC has extended the comment deadline for ideas about the draft form that the FCC plans to use to determine the amount of reimbursement to be paid to individual TV broadcasters for changes in channels caused by the television spectrum repacking after the incentive auction (by which portions of the TV spectrum will be purchased from existing television stations and repurposed for wireless broadband use).  We wrote about the proposed form here.  The new comment deadline is November 26.  This form will be important as broadcasters will use it to submit their claims for the recovery of any costs that they will incur as a result of the repacking. After the incentive auction, TV stations that do not give up their stations will be “repacked” into a smaller TV band.  The costs for those stations to change their technical facilities so as to be able to operate on new channels in the smaller TV band will be paid in advance by the FCC (out of some of the proceeds of the auction).  But the stations will need to file claims for those costs, in advance, on the proposed new form.  So stations need to make sure that the new form covers all of the expenses that will likely be incurred in the post-auction repacking.  So look at that form, and get your comments in by the new deadline if you see any likely costs that the FCC overlooked.

The proposals for the royalty rates to be paid by webcasters to SoundExchange for the public performance of sound recordings for 2016-2020 are now on file with the Copyright Royalty Board, and they represent two differing perspectives on the state of the industry and how much Internet radio companies can and should pay to record companies and recording artists.  As we wrote many months ago, the CRB initiated its proceeding to set these royalties back in January, and earlier this month, participating parties, including internet music services and SoundExchange, were required to file their “direct case exhibits” – written witness statements setting out the arguments to justify the proposals of each side, and their proposed royalty rates.  These direct cases (with certain confidential information redacted) are now available on the CRB website. So what are the parties proposing?

SoundExchange provided expert testimony and exhibits from record company executives to contend that there are many new entrants into the streaming industry and that the industry is healthy and growing.  Looking at deals that have been done in the marketplace, including deals for “interactive streaming” (deals negotiated directly between services and copyright holders, and not subject to CRB oversight and review – see our article here), SoundExchange suggests that the royalties should increase from their current rate of $.0023 per performance (e.g. per song per listener).  Their rate proposal is to go from $.0025 in 2016 to $.0029 in 2020. But, in a new wrinkle, they propose that the CRB should adopt a new “greater of” formulation, suggesting that all commercial Internet radio services should pay the greater of the suggested per performance royalty or 55% of revenue related to their streaming.  This greater of formulation is partially justified by SoundExchange based on their witnesses claim that such “greater of’ formulations are common in interactive streaming agreements. Continue Reading Webcasting Rate Proposals for 2016-2020 Now Public – What Will The Copyright Royalty Board Be Considering in Setting Royalty Rates for Internet Radio?

Late last week, the FCC advanced a number of proposals on how it will deal with LPTV stations and TV translators after the incentive auction and the repacking of the TV spectrum into whatever channels are left after part of the TV band is repurposed for wireless uses.  The Notice of Proposed Rulemaking raises a number of issues, including the potential for delaying the mandatory digital transition for LPTV stations and translators that continue to operate in analog.  The FCC also suggested a post-auction window for LPTV and translator stations to file for displacement channels if there current operations are no longer possible after the repacking of the TV band.  It also addressed the potential for LPTVs on Channel 6 being able to transmit, post-digital transition, an analog audio channel so that “Franken FMs” (“radio stations” received on FM radio receivers on 87.7 that really are the audio portion of the LPTV’s programming), can continue. 

Comments on these proposals will be due 30 days after publication of the Notice in the Federal Register, with reply comments 15 days thereafter.  Presumably, as the incentive auction is fast approaching, as is the current deadline for mandatory September 1, 2015 digital conversion of these stations (which we wrote about here when the deadline was adopted), the FCC will act quickly on the proposals that have been made.  So just what are the proposals on which the FCC is asking for comment? Continue Reading FCC Proposals for Preserving LPTV and TV Translator Service after the Incentive Auction, Plus Proposals for Preservation of the Franken FM and an End to Analog Tuner Requirements