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

The FCC has just announced another of its regular EEO audits, though this time it’s just for cable and satellite television systems, which also have EEO obligations (see the FCC Public Notice and list of affected systems here). The FCC will audit 5% of all broadcasters and cable companies each year to assess their EEO compliance, so be prepared in case you are next. Broadcasters were last audited in June (radio stations only), so don’t be surprised to see another group of broadcasters required to submit their information for FCC scrutiny before the end of the year. 

This audit also serves to remind broadcasters of their obligation to annually prepare and file an EEO Public File Report, detailing information about hires made and employment recruiting sources used in the prior year, as well as on the “supplemental efforts” that they have engaged in to educate their communities about opportunities in broadcast employment. Station employment units in Alaska, Florida, Hawaii, Iowa, Missouri, Oregon, Washington, American Samoa, Guam, the Mariana Islands, Puerto Rico, Saipan, and the Virgin Islands should have placed these reports in their public file by October 1.  Stations in Alabama, Colorado, Connecticut, Georgia, Massachusetts, Maine, Minnesota, Montana, New Hampshire, North Dakota, Rhode Island, South Dakota and Vermont need to have their reports in their public file, and on their website, by December 1.  Our Broadcast Regulatory Calendar here, has dates for EEO reporting obligations for other states.

An Alabama radio station recently received a notice about the new royalty rates that are payable to ReSound, the Canadian equivalent of SoundExchange, a collective set up to receive from webcasters royalties for the public performance of sound recordings and to distribute those royalties to the copyright holders (usually the labels) and the artists who recorded the songs, according to a story in today’s issue of Tom Taylor Now (a radio industry newsletter).  Tom asked me why would a radio station in Alabama get this notice – shouldn’t their payments to SoundExchange take care of the royalties that they owe for their streaming?  In fact, webcasters receiving these notices do need to consider their practices.

The general principle in the Internet world is that a webcaster is liable for paying music royalties for listeners where the listener is located – not where the transmitting entity may be located.  The same principle applies to rights to video and other content made available through the Internet – which is why your US HBO Go or Netflix subscription may not work the next time you visit London or Tokyo and try to watch a movie on your computer in your hotel room.  Rights are usually granted country by country (or sometimes by region), but in many cases rights granted in one country don’t give the Internet service acquiring those rights permission to circulate the content worldwide.  Thus, many large webcasters block their streams outside the US – notably webcasters like Pandora, who pulled their non-US streams back in 2007 (see our article here that we wrote when they took that action, which reminds me how long I have been writing this blog!).  Continue Reading Why is a US Radio Station Getting a Notice about Webcasting Royalties in Canada? – Why Webcasters Geo-Block Their Streams to Avoid International Music Royalties

As we move into the final weeks of the election season, and races heat up, there are always issues about attack ads and what a station needs to do when they receive a “take-down” notice from a candidate who is being attacked. We recently wrote about candidate ads, and the “no censorship” provision of Section 315 of the Communications Act. Broadcasters can’t censor a “use” by a political candidate (a candidate ad that features his or her recognizable voice or image and is purchased by his or her authorized campaign committee), and thus the broadcaster is not liable for the content of the candidate’s ad. So no matter what the candidate may say – the broadcaster runs the ad as is. However, ads from third parties (PACs, SuperPACs, labor unions, right to life groups and other advocacy organizations) are different. The “no censorship” provisions of the political rules don’t apply, so broadcasters are free to accept or reject third party ads based on the content of the ads.

This question arises all the time. A station runs a third-party ad, and the politician who is being attacked by the ad will contact the station – or have their lawyer contact the station – demanding that the station pull the ad for its alleged untruthfulness. Sometimes that request has some vague (or sometimes not so vague) threat of a legal action against the station if it continues to run the ad. Unlike candidate ads (where the station cannot censor the ad and thus the station must reject all requests to pull a candidate ad, and can continue to run the ad without liability), the station makes a choice when it runs a third-party ad. Ads that are not run by the candidate’s official campaign committee (or by a political party with explicit authority and coordinated with the candidate), can be rejected based on their content – or for any other reason that the station may have – or for no reason at all.  Because stations make a decision as to whether or not they are going to run a third-party ad, they theoretically have liability if the ad is untrue and the station continues to run the ad when it has been challenged by a candidate or another party attacked in the ad. Continue Reading What’s a Broadcaster to Do When a Candidate Complains About the Truth of an Attack Ad? – Dealing with Ads from Non-Candidate, Third-Party Organizations

Could a change in the FCC treatment of Internet delivered video services be in the works – and how would that affect services like Aereo?  There were a number of published articles last week that suggested that the FCC was considering extending the definition of a Multichannel video programming distributor (MVPD) to over-the-top video providers or, as they are apparently being referred to, as Online Video Distributors (OVD) who provide linear programming like a cable or satellite company (as opposed to an on-demand provider like NetFlix).  While Chairman Wheeler at a press conference following last week’s open FCC meeting reportedly stated that the issue was “kicking around” implying that no decisions had been made, the FCC did announce that it was making a long-outstanding proceeding to look at this issue into a “permit but disclose” proceeding, meaning that parties can lobby the FCC on the issue as long as they file statements for the record disclosing the substance of their conversations with decision-makers.  What does all this mean?

If the Commission were to consider OVDs to be MVPDs, they would presumably be covered by all of the rules that apply to cable and satellite – including provisions that allow equal access to cable network programming in which the cable companies have a financial interest, and would also be subject to the must carry-retransmission consent regime that is applicable to other MVPDs, requiring MVPDs to negotiate with (and in many cases pay) TV stations to carry their programming.  The open proceeding to consider OVDs as MVPDs was started by a company called Sky Angel that focused on family-friendly programming.  The service initially delivered its programming by satellite, but migrated it to the Internet, at which time they wanted access to cable programming including Animal Planet.  When access to that programming was denied, they complained to the FCC.  The FCC staff initially denied the complaint, determining that MVPDs had to be “facility based,” meaning that they had to own the actual facilities that delivered the programming to the consumer.  The full Commission over two  years ago asked for public comment on whether this decision was correct – we wrote about that request for comment here and here – and the proceeding has essentially sat at the FCC ever since, until it began to get some renewed interest in connection with the Aereo case. Continue Reading Will FCC Extend MVPD Rules to Online Video Providers – Including Retransmission Consent Fees and Program Access Rules?

With regulatory fees behind us, October brings a number of the routine quarterly regulatory filing dates.  October 10 for all broadcast stations, commercial and noncommercial, is the date by which your Quarterly Issues Programs lists, setting out the most important issues that faced your community in the last quarter and the programs that you broadcast to address those issues, need to be placed in the physical public inspection file of radio stations, and the online public file of TV broadcasters.  As missing and incomplete Quarterly lists have led to more fines in the recent license renewal violation than any other matter, and as the FCC staffers have been reviewing some of the TV station lists that are now posted in the online public inspection files of station, completing these forms on a timely basis remains very important. 

Full power TV and Class A TV stations by October 10 also need to have filed with the FCC their FCC Form 398 Children’s Television Reports, addressing the educational and informational programming directed to children that they broadcast.  Also, by that same date, they need to upload to their online public files records showing compliance with the limits on commercials during programming directed to children.  Children’s television reports have trailed right behind the Quarterly Issues Programs lists as the source of fines at license renewal time – so be sure that these are completed and filed on a timely basis as well.  Continue Reading October Regulatory Dates for Broadcasters – Quarterly Issues Programs Lists and Children’s Television Reports, New Form for TV CP Applications, Comments on Captioning of Video Clips and Incentive Auction Reimbursement Form and More!

There are more and more signs that the FCC is moving forward aggressively with its “incentive auction” to purchase TV stations so that their licenses can be cancelled and their spectrum sold to and reused by wireless companies for wireless broadband purposes.  In two significant actions this week, the FCC gave broadcasters a first peek at the anticipated value of their stations in an incentive auction, and also clarified the interference standard that will be used by the FCC when they “repack” the stations that do not sell their licenses into a smaller post-auction TV band.  This Declaratory Ruling clarification seems to be addressed to answering some of the questions raised by the NAB in its appeal of the incentive auction order, about which we wrote here (an appeal which has been combined with a separate appeal of the incentive auction order by Sinclair Broadcasting).  But, to most television operators, the more interesting of the two actions is the report issued by the FCC suggesting the values that licensees in the various TV markets might get if they surrender their TV licenses in the incentive auction.

The Report was prepared by an investment banking firm retained by the Commission.  It sets out the procedures for the auction, and how the bidding will work. The report also contains an IRS letter suggesting the tax treatment that would be accorded licensees for incentive auction payments in various scenarios (e.g. a pure surrender of the license, or a surrender of a license as part of a channel sharing agreement, or a decision to move a station from UHF to VHF in exchange for FCC compensation).  But what most broadcasters were most interested in was the chart of projected maximum and median payments to full-power and Class A stations in each of the television markets across the country.  Those projected payments ranged from Los Angeles, where the FCC projected that the maximum that could be paid to a broadcaster for surrendering their license could be as much as $570,000,000, with the median value of a surrendered license being $340,000,000, to much smaller markets where the value, in the smallest television market of Glendive, Montana and in several smaller Alaska markets, where the FCC did not foresee any payments to TV broadcasters for surrendering their licenses. Continue Reading TV Incentive Auction Moves Forward – FCC Estimates the Value of TV Stations and Clarifies the Interference Standard for Stations Who Remain After the Auction