Only two weeks ago, we were writing about the FCC’s consideration of TV Joint Sales and Shared Service Agreements (or “side-car arrangements” as some have called them) as being an issue that was just being reviewed at the FCC by the new Chairman and his staff.  Now, according to press reports (including this one), the exploration has quickly moved much further – so far that we apparently will see FCC action in the very near future on these very controversial subjects.  The rumors suggest that the FCC is ready to resolve many of the issues in the current Quadrennial Review of its multiple ownership rules (see our summary of the issues initially raised in that proceeding here) at its March open meeting. According to these rumors, the FCC will prohibit Joint Sales Agreements for television stations in situations where the two stations involved cannot be commonly owned under the FCC’s multiple ownership rules, and at the same time do nothing to relax the broadcast- newspaper cross-ownership restrictions.  This is much the same result on JSAs that was rumored in December 2012, but a harsher result on the cross-ownership issue than the previous FCC Chair was rumored to be ready to take.  In 2012, the proceeding was put on hold to take more comments on the effect of a change in the cross-interest policy on minority ownership (see our article here), and it has sat there since.  This week’s rumors suggest that, as part of the same action (or through a simultaneous action), the FCC will ask about the public interest benefits and harms of Shared Services Agreements in the TV industry.

For investors in television companies and the general public, these rumored actions raise many questions.  How can the FCC take such a decision on the JSA/SSA issue when such agreements have become an integral part of the TV business over the last few years?  What is the difference between a JSA and an SSA?  How can the FCC not recognize that newspapers are in difficult economic times, and some degree of consolidation may well help these economics?  Does the FCC recognize that the media landscape in broadcasting has changed dramatically in the last few years? Continue Reading TV Shared Service and Joint Sales Agreements Back in the News – Is the FCC Poised to Act Soon, and To Also Reject Relaxation of Broadcast-Newspaper Cross-Ownership?

50 years ago the Beatles invaded America, stacking up Number 1 hit records by the dozens, and creating music that, even today, remains incredibly popular with many Americans.  But go to many of the interactive or on-demand music services, like Spotify, and search for Beatles music, and what will you find?   Mostly cover tunes by sound-alike bands rather than the original hits.  But yet, on services where you can’t designate your next song, like Pandora, you can hear the original songs.  Why the difference?

As we wrote two years ago, when the Beatles first announced that their catalog would be licensed to iTunes as the first interactive service to get access to their music, such services need to get licenses from the copyright holder of the sound recordings (or “master recording” – a song as recorded by a particular artist) in order to play those songs. By contrast, the non-interactive services operate under a statutory license, where a digital music service pays a royalty set by the Copyright Royalty Board (or a negotiated rate agreed to in lieu of litigation before the CRB see our article here about the various rates that are currently available to webcasters, and our article here about the start of a new proceeding to determine what those rates will be from 2016-2020). If the service pays that royalty, and observes the requirements of the license (like the “performance complement” that limits the number of songs from the same artist that can be played in a given time period, the prior promotion of the playing of a song, and certain other matters – see our article on the performance complement here) – they can play any legally available sound recording available in the US, and the sound recording copyright holder can’t object.

Continue Reading It’s the 50th Anniversary of the Beatles Arrival in the US – Why Are Their Songs Still Missing on Some On-Demand Music Services?

On Friday, the FCC announced an extension of the deadline by which reply comments are to be filed in the proceeding to look at ways in which to revitalize AM radio.  Almost 150 comments were filed in the FCC’s proceeding to look at ways to revitalize the AM band.  Because of the volume of the filings, the Association of Federal Communications Consulting Engineers asked for more time to analyze these comments and prepare a reply pleading.  AFCCE is the association for engineers who work with broadcasters on technical matters, and they needed more time to thoroughly analyze all of the comments and discuss positions with their members.  As the principal issues raised by this proceeding were technical ones (see our summary of many of those proposals here), the FCC agreed to extend the reply date until March 20.

In addition to the specific technical proposals made in the FCC’s Notice of Proposed Rulemaking in this proceeding, the FCC also proposed opening an FM translator window for AM stations, a proposal that has received much interest from broadcasters.  However, it may be difficult to deliver enough translators to serve all the AMs that want one – especially in larger markets where the spectrum is already congested, with most of the room for new translators taken up by applicants in the recent LPFM window.  The NPRM also asked for other ideas, and an all-digital AM service was mentioned in several comments – though such a proposal would take another rulemaking to implement.  A number of parties have suggested various ways to improve the AM service that may also need to be the subject of subsequent proceedings.  So look for this attempt to breathe life back into the AM service to be exploring issues for quite some time.  But, for now, interested parties should get their reply comments in by the March 20 deadline.

In a decision released yesterday, the FCC proposed to fine a station and gave it a short-term license renewal as the station could not demonstrate that it had served the needs and interests of its community.  Why?  Because the station had been silent for much of the renewal term – only turning on for a short time every now and then – enough to avoid having its license cancelled for being silent for more than a year.  Several years ago, Congress amended the Communications Act to add Section 312(g) requiring that the FCC cancel a station’s license if it has been silent for more than a year, unless the station can demonstrate some overriding public interest reason for leniency (a showing that, as we wrote here, is difficult to make). 

To avoid the ultimate sanction of having a license cancelled, many stations facing economic issues or other long-term problems with transmitter sites or other matters, will find a way to turn their stations back on the air for a day or two to avoid being off the air for more than a year.  As long as programming is run on the station during that on-air period, the FCC has thus far allowed the stations to continue in this mode.  But, in this license renewal cycle, broadcasters were for the first time required to specify if their stations had been of the air for more than 30 days at any point in the license term.  In yesterday’s decision, the FCC makes clear that a station that spent a significant amount of time off the air may face a sanction – here, the grant of the license renewal for only 2 years rather than the normal 8 year period.  If a station is off the air for more than half the renewal term, it looks like an even more serious sanction may be in the works. Continue Reading Radio Station Being Silent Too Long Brings FCC Sanction – How Long Can a Broadcast Station Be off the Air Before It Causes Trouble at License Renewal Time?

Last night’s Super Bowl didn’t offer much in the way of excitement on the field, as the game was seemingly over by the end of the first half.  But, for the last decade, the half-time show itself may offer some anxiety to the stations carrying the game.  10 years ago, Janet Jackson had her infamous Super Bowl wardrobe malfunction incident which started a firestorm at the FCC for the next several years, as it ignited  many calls to more aggressively regulate indecency on the airwaves.  As a result of the incident, a number of fines were meted out for this program and to many others that aired soon thereafter.  But, in reality, what the incident did was to highlight just how difficult it is for the FCC to enforce any sort of indecency rules, as the issue raised at that time continue to be debated at the FCC right up to the present day.

As we have written before, the FCC policy that was applied to the Janet Jackson incident is one that is still in a state of limbo, as the FCC has issued a request for public comment on whether it should limit its enforcement to cases where there are egregious violations of the indecency policy rather than those that last a fraction of a second, as was the case in the Janet Jackson Super Bowl incident.  This need for reexamination arose after the Supreme Court decided that the FCC’s crackdown on any indecency, even “fleeting expletives”, was not adequately explained as it departed from prior FCC policy that understood that, on occasion, mistakes happen.  As long as the error causing something arguable indecent to be broadcast wasn’t repeated or planned, there would be no substantial penalty.  But even the common sense reform which essentially stepped back to the prior policy of recognizing that mistakes happen gave rise to many protests that the FCC should not back down on its tough indecency enforcement.  Continue Reading Ten Years After Janet Jackson’s Super Bowl Clothing Malfunction, FCC Indecency Rules Remain in Limbo

TV Shared Services Agreements have been one of the targets of public interest groups since the start of the current Quadrennial Review of the FCC’s multiple ownership rules (see our articles here, here, here and here).  Public interest groups, in their zeal to stop any media consolidation (including newspaper/broadcast cross-ownership – even if that prohibition ends up outliving the newspaper itself, see our article here), have seen Shared Services Agreements as end-arounds on the FCC’s in-market television ownership caps, even though such deals may be necessary to preserve competitive, quality TV stations in smaller television markets.  Certain cable operators have also opposed these combinations (sometimes called “sidecar” arrangements), fearing that they will give TV station operators more power in retransmission consent negotiations.  There has recently been a flurry of activity, leaving the status of these deals somewhat confused under the review of the new FCC Chairman.

Before Christmas, two transactions involving shared services agreements were approved over objections.  While these transactions were approved, there was a lengthy analysis of the SSAs involved  in the decision approving Gannett’s acquisition of Belo.  In that discussion, the Commission’s staff carefully reviewed the attributes of the SSAs proposed as part of the transaction, and found them within the precedent established in prior transactions.  This included making sure that the licensee of the station receiving the services retained at least 70% of the proceeds from the sales of advertising time on the station, and that the party providing services programmed no more than 15% of the time on the other station.  But, in a paragraph that many thought was just a statement that Commission always retains the right to review transactions that are consistent with precedent, the Commission stated:

That is why applicants and interested parties should not forget that our public interest mandate encompasses giving careful attention to the economic effects of, and incentives created by, a proposed transaction taken as a whole and its consistency with the Commission’s policies under the Act, including our policies in favor of competition, diversity, and localism

But was this simply a statement of the obvious, or did it mean more? Continue Reading What’s Up With TV Shared Services Agreements?

We recently wrote about FCC issues that will be facing broadcasters in this new year.  While broadcasters will no doubt be busy keeping track of what the FCC is up to, they also need to have their eyes on other government agencies, as there are numerous issues that may come from Congress and the other regulatory agencies in DC that could affect their bottom lines.  So, with a watchful eye on the FCC for the issues we wrote about earlier in the month, what other issues should broadcasters be watching for from all of the other regulatory power centers in DC? 

While this is an election year, and that makes many big pieces of legislation unlikely, the discussions that occur in 2014 on these issues may pave the way for action late in the year, or in 2015 after the new Congress is in place and before the Presidential election in 2016 commands everyone’s attention.  Here are some of the issues of interest to broadcasters likely to be on the DC agenda in 2014: Continue Reading What’s Up in Washington For Broadcasters in 2014? — Part 2, Issues beyond the FCC Including Ad Taxes, Music Royalties, Privacy Reforms, and More

It’s that time again when broadcasters and advertisers need to watch their commercials and promotions to avoid improper uses of trademarked phrases – with the Super Bowl only weeks away, the Winter Olympics to follow soon thereafter and March Madness to follow closely after that.  Already, Stephen Colbert is making jokes about not using the Olympic rings in promotional announcements (see the first segment of last night’s show), so you know that the issue is arising at media outlets across the country.  As we do every year when the Super Bowl and March Madness roll around (and every other year at Olympics time), we remind broadcasters to scrutinize their advertising and promotions to avoid anything that appears to imply a tie in with any of these events – especially where the protected name of the event is used in the ad or promotion itself. (See past articles here and here). 

The Super Bowl and March Madness are both trademarked terms, and violations of the trademarks have been vigorously prosecuted by the NFL and the NCAA, respectively.  The US Olympic committee has gone one better, getting specific statutory protections in the US for the use of the term the Olympics and the interlocking rings that symbolize the games.  Sponsors of these events pay big bucks for the privilege of being associated with the events, and the organizations putting on the events rely on the money from these sponsors to fund their operations.  So they go out of their way to protect their trademarks.  I wrote the summer before last about my own experiences at the London Summer Olympics, where even the trademarks on the plumbing fixtures at the Olympic sites were obscured where the manufacturers had not obtained Olympics sponsorships.  So there are obviously limits on what can and cannot be said about these marks.  What are those limits? Continue Reading Super Bowl, the Olympics and March Madness – Watch Your Advertising and Promotions for Unauthorized Uses of Trademarked Phrases

The Supreme Court on Friday announced that is has decided to review the decision of a US Appeals Court in New York finding that the Aereo service of retransmitting over the Internet the signals of local television stations, without permission from or payment to those stations, was legal.  We wrote about the Second Circuit Court of Appeals decision in the Aereo case here.  The Supreme Court’s decision to hear the case, which may signal that the case will be decided before the Court adjourns its term in June, was supported not only by the television stations who had sought to block the Aereo service and the program suppliers to those television stations (including many of the sports leagues), but also by Aereo itself.  As Aereo and its copycat service FilmOn X were being sued in every jurisdiction where they started to do business, the desire to get a quick and final resolution of the legality of their services is a natural one.  This is especially true as the Courts have been reaching different decisions, as demonstrated by the two cases decided only a month apart, one in Boston finding Aereo to be legal, and one in DC finding FilmOn X to be infringing on the copyrights of the TV stations who brought the lawsuit.  So what issues will the Supreme Court be deciding?

One newspaper editorial, from the Los Angeles Times, has suggested that this is a Betamax case for the 21st century.  The Betamax case, officially known as Sony Corp. v Universal City Studios, was the case that declared the VCR to be legal, and found that its original manufacturer, Sony, was not contributorily infringing on the copyrights held by Universal and other studios that brought the case.  But that comparison really does not hold up, as the Betamax decision was premised on several findings that simply cannot be made here.  First, the Court in the Betamax case found that the VCR was not in and of itself an infringing service, as it had substantial legal uses.  In fact, there was testimony in the record that many copyright holders actually were not opposed to the use of a Betamax to copy their programs for time shifting and other purposes.  In the Aereo cases, copyright holders are for the most part universally opposed to the service and, other than retransmitting copyrighted programs without consent, there does not appear to be another use for the service. Continue Reading Supreme Court Decides to Review Aereo – Why This is Not the New Betamax Case

A new month in a new year, and a number of new regulatory dates are upon us for broadcasters – and important dates for webcasters also fall in this month.  So now that the holidays are quickly becoming just a foggy memory, it is time to sharply focus on those regulatory obligations that you have to avoid legal issues as the year moves forward.  January 10 brings one deadline for all broadcast stations – it is a date by which your Quarterly Issues Programs lists, setting out the most important issues that faced your community in the last quarter of 2013 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.

Full power TV and Class A TV stations by January 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. Continue Reading January Regulatory Dates for Broadcasters and Webcasters – Children’s Television Reports, Quarterly Issues Programs List, Webcaster Elections and Minimum Fees, the Return of Lowest Unit Rates and More!