In at least 7 decisions released last week, the FCC fined TV stations between $3000 and $18,000 for failure to timely file Form 398 Children’s Television Reports – reporting on the programming broadcast by the stations to address the educational and informational needs of children. In these cases, the fines were not for failing to file the reports at all, but instead for the failure to timely file the reports. All but one of the cases involved Class A television stations, which, as we’ve written before, are being subject to very strict scrutiny as the FCC looks to find some willing to give up their protected status before the upcoming incentive auctions (Class A stations being protected from being bumped off the air by new users – but subject to all the rules applicable to full power stations). In each of the cases involving Class A stations, the FCC has offered to forget the fines for noncompliance, if the station gives up its Class A status and becomes an LPTV station, which has no protections.  If the station gives up its protected status, it will have no rights to receive compensation if it gives up its channel in the incentive auction, or if it is forced to change channels in the repacking of TV channels after that auction. 

These cases all stem from the FCC review of the license renewal of the station. With the obligation to file a Form 398 only two weeks away – the quarterly report being due on July 10 – TV stations, especially stations that have not yet filed their renewals, need to pay attention now to make sure that they don’t miss the upcoming deadline.  With public files now online, the FCC late-filing becomes more visible, and with the television renewal cycle in full swing, many TV stations are either now or soon to be under the scrutiny of the FCC. So meeting these obligations becomes important – as the failures can be costly. And, as set forth below, any time that there are multiple late filings – late by more than 10 days (which the FCC note that it might excuse as de minimis) – a fine is likely.

Continue Reading FCC Fines of Up to $18,000 Proposed for 7 TV Stations For Failure To Timely File Children’s Television Reports – The Big Renewal Issue for TV Stations?

In one week this month, Apple announced that it will get into Internet Radio, and Pandora, the biggest player in that space, announced that it will be buying a traditional, over-the-air radio station. What do these two big announcements say about the state of music royalties for digital music services? Apple’s struggles to get its service launched were well chronicled, as it was working to get an agreement for its new service from the record labels. What was less reported was its simultaneous negotiations with the music publishing community. Pandora’s radio station purchase, on the other hand, was admittedly a simple deal to take advantage of a blanket license available to all similarly situated companies owning radio stations. We’ll explain why these two deals were so different, and what impact the deals may have on other digital music services below.

The Apple deal is one negotiated with the copyright holders for the simple reason that the service that it is offering appears to be an interactive one, unlikely to be completely covered by any statutory (compulsory) or other blanket license. As we’ve written before, a statutory or compulsory license is one where the copyright holder, by law, cannot refuse to make available his or her copyrighted work. But, in return, the copyright holder receives a royalty set by the government – in the US, usually the Copyright Royalty Board. In the music world, the two most common compulsory licenses are the ones that allow webcasters and other digital music services to publicly perform sound recordings (the royalties paid by webcasters, satellite radio and digital cable radio companies to the record companies and artists), and the royalty that allows users (including record companies) to make reproductions of musical compositions in connection with the making of a sound recording, downloads, ringtones, and probably on-demand streaming services. This royalty is commonly referred to as the mechanical royalty, and is paid to songwriters and composers or their publishing companies. To qualify for these compulsory licenses, a company must follow certain rules. If they don’t, then they have to negotiate directly for the licenses from the copyright holder – which appears to be what Apple did.

Continue Reading Apple Announces an Internet Radio Offering and Pandora Buys a “Real” Radio Station – What Does It Mean for Music Royalties?

Sometimes, even though you have FCC authority for your operations, you can still run into issues that can cause you to have that authority pulled out from under your operations. In three cases decided this week, the FCC’s Audio Division interpreted a number of its procedural rules – in two cases leading to the cancellation of FM translator licenses and the silencing of operating translator stations. In one case, the FCC decided that a licensed and operating FM translator had been licensed in error, as it actually created interference to an existing full-power FM station in a populated area, even though the translator application had initially claimed that it would not. In the second case, a translator was forced to cease operations because of interference from a new full-power station. When it did not resume operations within a one-year period, the FCC found that its license was automatically forfeited because of the year’s silence – even though the station had resumed operations in the construction period specified in a construction permit authorizing the translator to operate on a new frequency. These cases make clear how important the FCC’s procedural rules can be – actually leading to what are effectively life or death decisions for the license of a broadcast station.

In the first case, a translator licensee had a construction permit application granted to move to a new transmitter site. After the permit was granted, the licensee of a full-power station filed a Petition for Reconsideration of the grant, arguing that the translator would in fact create interference in populated areas served by its station. Despite the protest, the permittee constructed the translator at the new site, started operations and filed a license to cover the new construction – which was granted by the FCC. In reviewing the evidence filed by the petitioner, the FCC determined that there would in fact be interference caused to the full-power station in inhabited areas, contrary to what had been claimed in the translator’s CP application.  Based on that finding, the FCC revoked the license and underlying CP for the translator. The FCC made clear that a permittee who constructs a station when there is an objection to the underlying CP does so at its own risk. Where, as here, the underlying objection is found to have merit, the mere fact that the permittee had the right to build the station does not give him any grounds to argue that the station should be permitted to continue to operate – rejecting claims by the translator operator that, as there were no complaints of real interference caused by its operation, it should be permitted to continue to operate. Where the translator had prohibited contour overlap with the protected full-power station, and where it was shown that the area in which that overlap occurred was populated (shown by a USGS Topographic map that showed structures in the area), the operation was not permitted to continue.

Continue Reading FCC Decisions Lead to Cancellation of Two FM Translator Licenses and Silencing of Operating Stations – Interference Issues and Time Limits on Being Off Air to Blame

Low Power FM potential applicants, start your engines. The FCC has announced the long-awaited window for the filing of applications for new LPFM stations. The window will last from October 15-October 29. During this period, nonprofit organizations and governmental organizations will have the opportunity to file for new stations on any FM channel anywhere in the country – as long as they don’t interfere with existing FM or FM translator stations (or channel 6 TV stations which operate on a channel adjacent to the FM band). The FCC has done a great job in processing the remainder of the applications from the 2003 FM translator window, announcing a settlement window for applicants in that proceeding that is open through July 22, to be followed by an auction. Substantially completing the processing of those translator applications has cleared the way for the upcoming LPFM window. 

Two FCC Commissioners issued statements hailing the upcoming window and the opportunities that it will present for encouraging more diversity in the media marketplace (see statements of Acting FCC Chair Clyburn and Commissioner Pai). A number of groups that have actively championed LPFM also applauded the opening of the window, some trumpeting plans for workshops across the country to help people prepare for the filing opportunities. We hope that expectations are not being unduly raised. Particularly in larger markets, as the FCC itself has recognized, there will be only very limited opportunities for LPFM applicants, as there is very limited spectrum in those markets not already occupied by FM stations or close enough to existing stations to create interference. As the LPFM rules require that new stations protect existing FM stations from interference on co-channels and first and second adjacent channels, in large markets, there will be little room for new LPFM stations.  Groups thinking about opportunities in those markets need to be prepared to face competition for the few channels that may be available and to be realistic – as there will be many places where no channels will be available to serve a particular part of a metropolitan area.

Continue Reading As FM Translator Settlement Window Continues, the FCC Announces LPFM Window in October – Factors for an LPFM Applicant to Consider

It looks like the FCC’s long-delayed multiple ownership proceeding won’t be decided this summer. The FCC has asked for public comment on the report submitted by the Minority Media and Telecommunications Council ("MMTC") addressing the likely impact on minority ownership of broadcast stations of allowing more media cross-ownership. Moths ago, the FCC delayed the resolution of the proceeding to allow for the submission of this report (see our article here). The issue of minority ownership, and the impact of any ownership deregulation has been one of the big obstacles to any decision in this proceeding. Relaxation of the newspaper/broadcast cross-ownership prohibitions have been proposed, and one might think that the preservation of newspapers might be of paramount importance to the FCC.  In fact, the Commission has been concerned about complaints from certain “public interest” groups who fear the impact that such combinations would have on the potential for more minority ownership. So this report was commissioned by MMTC, an organization dedicated to promoting minority ownership in all media. Now that the report has been submitted, the FCC needs to wait for public comment on its findings before any decisions in the ownership proceeding are made. Comments on the report are due on July 22, and Replies can be filed through August 6.

The FCC has already delayed the ownership proceeding at least once while taking comments on minority ownership issues. See our article from December, when the FCC asked for comments on the impact of cross-ownership on the prospects for minority ownership. The call for the December comments was initiated by the release of an FCC summary of minority ownership gleaned from FCC ownership report filings. In filings made in response to the FCC’s December comment deadline, some parties suggested that the findings of the FCC data revealed that minority ownership prospects were bleak, and that cross-ownership would make them bleaker, while others suggested just the opposite. Others contended that the two questions really were not related – that there were other reasons, like the lack of access to capital, that really explained the difficulties that all potential new media entrants have.  The release of the new study is quite likely to prompt a similar response, with comments likely to present a spectrum of opinions. 

Continue Reading FCC Seeks More Comments on the Effect of Newspaper-Broadcast Cross Ownership on Minority Ownership of Broadcast Stations

The Register of Copyrights, Maria Pallante, has made a series of speeches about the need to modernize Copyright, including offering testimony before Congress on the matter.  Her comments are but one sign that modernizing the Copyright Act has become the new catch-phrase in Washington. As the Courts have over the last few months wrestled with a host of copyright issues principally arising from digital media, boundaries that had carefully been set up by established copyright principles have been blurred – like the distinctions between a performance and a reproduction, or a public performance and one that is not.  These are distinctions that can have great importance as to who must be paid or whether any payment at all is due under current copyright laws – as in the Aereo case about which we wrote here. The call to modernize the Act is one looking for a copyright act that fits the realities of the 21st century. 

In recent months, Aereo is but one of many cases where the Courts have struggled with how to apply laws that were developed for the analog media, where boundaries are relatively clear, to the new digital world, where many copyright concepts don’t clearly fit reality. We’ve seen a number of cases interpreting the DMCA safe harbor provisions for user-generated content – including the NY State case about which we wrote here deciding Internet service providers were not excused from liability where pre-1972 sound recordings were included in user-generated content, as well as much more sweeping decisions upholding the protections of the safe harbor in broader applications, including protections extended to YouTube in its long-running dispute with Viacom. We’ve seen a decision determining that there is no right to resell digital copies – finding that the first sale doctrine (that says that consumers can resell physical goods that they buy without compensating the original creator) does not apply to digital goods. And outside the litigation sphere, we’ve seen innumerable stories about rights and royalties – from questions about Internet radio royalties like those that may apply to the new Apple streaming service, to disputes over the rights to video programs taken from one medium (like TV) and used in another (online or otherwise on-demand). 

In a speech last week to the World Creator’s Summit in Washington, DC, Register Pallante revisited the topic of Copyright reform, and laid out many of the issues that she felt needed to be addressed in any comprehensive reform that may occur. The list was long, and is bound to be controversial. She noted that the last comprehensive reform of the Act, in the 1990s leading to the Digital Millennium Copyright Act, was 20 years in the making – a delay that can’t occur now given the number of pressing issues. As she noted, the importance of copyright has never been greater to the average person. That, to me is very clear, as digital media has put so many more people in a position to be involved in copyright issues, as doing everything from creating a Facebook or Pinterest page to a YouTube video, or accessing a file on BitTorrent or any other sharing site, can immediately immerse an individual in a copyright dispute with consequences far greater than the improper use of a copy machine or cassette recorder would have had 20 or 30 years ago. So what does she propose to examine?

Continue Reading Register of Copyrights Maria Pallente Calls for Comprehensive Copyright Reform to Adapt to the Digital World – What Is Being Proposed?

The deadline for comments on the FCC’s indecency rules was extended until June 19, confirmed in a notice published in the Federal Register this past week. Given this extension, it is worth reviewing what the FCC proposed to do in this proceeding, as there is a significant amount of misinformation circulating in certain publications and in rumors floating around the Internet about the scope of the proceeding and the FCC’s intent in launching its inquiry. In preparation for a recent interview that I did with a talk show on a Midwestern radio station, I was pointed to articles that suggested that the FCC was proposing to allow swearing and nudity on broadcast television, and how that is eliciting tens of thousands of comments from the public (see, for instance the articles here and here). Some other articles and blog posts have gone further, making it sound like the FCC was looking to turn the broadcast airwaves into some sort of adult movie paradise, as if someone at the FCC had woken up one day and thought that such a relaxation of the rule would be a good idea.  While these claims make for interesting reading, the truth is much more boring, and demonstrate that the FCC has little choice but to ask for these comments.

As we wrote here, the FCC’s inquiry is initially limited – principally asking for comments on the FCC’s policy on fleeting expletives – those times, usually in a live broadcast, where a single profane word or phrase slips out onto the airwaves. The Commission also invited comments on other aspects of the rules but, other than the fleeting expletives (and a reference to fleeting, nonsexual nudity – like the bare butt that was the subject of the NYPD fine that caused the Commission much consternation in the Courts), that’s all that the Public Notice specifically addresses. While certainly more issues may arise, they arise in this context of dealing with these fleeting incidents, not as part of an attempt to turn broadcast TV into some X-rated video service.  And the issues are not being tackled as an attempt to corrupt public morality, but instead because the FCC has to clarify these rules after the Supreme Court found last summer that it had not adequately justified the more aggressive posture that it took on indecency in the last decade.

Continue Reading June 19 Comment Date on Indecency Policies – What the FCC is Not Proposing to Do, No Matter What the Internet May Say

While I was away for the last few weeks, there have been a number of actions important to broadcasters and other media companies that we’ll be covering in the next few days. For broadcasters, one annual notice that recently was released by the FCC is the proposal for this year’s annual regulatory fees which will be payable in August or September to reimburse the government for the cost of the FCC’s regulation of the industry.  Each year, prior to implementing the new fees, the FCC asks for comments on the fees to be paid by licensees – teeing up specific issues where procedures or allocations of fees for public comment before such changes are implemented. This year is no exception.  What is slightly different is that, instead of simply making its proposal for the fees to be paid by broadcasters, the FCC has instead proposed two different sets of rates, based on different ways of computing the costs of the regulation of broadcasters. 

Regulatory fees are based on the FCC’s costs of regulating its licensees and other companies subject to FCC jurisdiction. The allocation is based on the number of FCC employees who work on matters relating to that particular class of service. In the past, the FCC has had five categories of licensees – including one for broadcasters who are regulated by the Media Bureau. The FCC has proposed to reduce that number to four, reasoning that the work done by the International Bureau ("IB") benefits many different types of regulated entities, not just those satellite licensees directly regulated by that Bureau (e.g. the IB is responsible for actions including treaty negotiations and cross-border issues involving all kinds of licensees, including broadcasters). By eliminating the separate allocation for the IB, and reallocating their employees to other bureaus for fee purposes, the FCC suggests that a fairer allocation of fees will result.  Whether or not the FCC makes the proposed reallocation will most likely result in one of the possible fee schedules set forth below. 

Continue Reading FCC Proposes Annual Regulatory Fees – For Broadcasters, Fees Proposed to Increase, and FCC Proposes Future Change in UHF/VHF Fee Schedule

As is the case with most months, June brings a number of FCC deadlines for broadcasters, both standard regulatory filings and comment deadlines in important regulatory proceedings. The regular filing deadlines include license renewal applications due on June 3 (as June 1 is a Saturday) for Commercial and Noncommercial Full-Power and Class A Television Stations, TV Translators, and LPTV Stations in Ohio and Michigan; and Commercial and Noncommercial AM and FM Radio Stations, FM Translators, and LPFM Stations in Arizona, Idaho, Nevada. Noncommercial stations in the states with renewals also have to file their Biennial Ownership Reports, as do noncommercial radio stations in Maryland, Virginia, West Virginia, and the District of Columbia.

Renewal pre-filing announcements must begin on June 1 for Commercial and Noncommercial Full-Power and Class A Television Stations in Illinois and Wisconsin and for Commercial and Noncommercial AM and FM Radio Stations in California. Post-filing announcements for radio stations in Texas should continue on June 1 and 16, as well as for TV stations in Indiana, Kentucky and Tennessee.

In addition to these regular filings, broadcasters also have many other deadlines that are coming up either in the month, or soon thereafter. Broadcasters who were successful bidders in the recent FM auction have payment deadlines on June 12, and then have a July 24 deadline for the filing of "long-form" applications on FCC Form 301 specifying the technical facilities that they plan to build (see the FCC Public Notice here). Applicants for new FM translators left over from the 2003 filing window are now in a settlement window, with deadlines for settlements between competing applicants due on July 22 (see the FCC public notice here). 

Continue Reading June FCC Obligations for Broadcasters – Renewals, EEO, FM Translator and Auction Filings, and Comments on Regulatory Fees, Indecency, and Incentive Auction Band Plan

Fines against noncommercial stations may that are primarily student run may not be as harsh as they have been in the past under a ruling issued by the FCC’s Media Bureau earlier this week. The new policy came about as part of a consent decree entered into by an Iowa college-owned broadcaster whose student-run station had failed in its obligation to keep quarterly issues programs lists during most of the prior license renewal term, and also was late in meeting its obligations to file biennial ownership reports with the Commission. Instead of imposing what could have been as much as a $25,000 fine on the broadcaster, the FCC instead agreed to a consent decree by which the broadcaster contributed only $2500 to the government and agreed to certain ongoing obligations to insure its compliance with FCC rules going forward. The FCC also announced, as part of its decision in the case, that it would apply this policy of more leniency in other cases involving student-run stations in the future.  See, for instance, this decision from last year for evidence of how this policy marks a change in the FCC’s policy.

However, this new policy will apply in only very limited circumstances – only to noncommercial stations that are primarily student run. In the decision, the FCC recognized that these stations often had very limited budgets and also a high staff turnover as students graduated and new students took their place. As such, the potential for these kinds of errors increased, and yet the ability to pay for fines was small. In this case, the station involved had an annual budget of less than $7000. Were the Commission to impose big fines, these stations might be forced off the air, as the Commission noted a trend where many noncommercial student-run stations had been sold recently by colleges and universities – often leading to protests about the sales and inevitable format changes (see, for instance the decision we wrote about here).

Continue Reading FCC Adopts More Lenient Standards on Certain Fines to Student Run Noncommercial Broadcast Stations