The President has nominated Thomas Wheeler as the next FCC Chairman, to become effective after confirmation by the US Senate. What does this mean for broadcasters? As we have said before, one never really knows what issues will drive a Chairman’s agenda. For this Chair, some issues are clear – like dealing with the incentive auction to reclaim some TV spectrum for wireless use, which is inevitably marching forward. Other issues are forced on the FCC – like dealing with the indecency issues still pending after Supreme Court remand, or the multiple ownership quadrennial review still pending at the Commission while waiting for the MMTC study on the effects of media cross ownership on the ability of minorities and other new entrants to get into broadcast ownership. And some are issues that for one reason or another capture the interest or attention or concern of the FCC Chair. Usually, these issues don’t become clear until after the Chairman assumes his position, but that has not stopped many in Washington from speculating what the new Chairman will do once he is confirmed.

Interestingly, the speculation ranges the gamut, from Free Press fearing that he will be too friendly to big business because of his past service as the head of two trade associations – NCTA (the cable television industry trade association) and CTIA (the wireless industry association), to the statement of Republican leaders of the House Energy and Commerce Committee, fearing that he will impose too many regulations on these same big business organizations. In short, the perspective on the nomination seems to be based, at least in part, on the initial perspective of those who muse about what it means.

Continue Reading The President Nominates Tom Wheeler to Chair the FCC – What Will It Mean for Broadcasters?

In odd years like 2013, most broadcasting stations don’t think about the FCC’s political broadcasting rules. But they should – both for special elections to fill open seats in Congress, and for state and local political offices. This week, the news has been full of stories about next week’s special election for Congress in South Carolina, pitting former South Carolina governor Mark Sanford against Elizabeth Colbert Busch, the sister of TV host Stephen Colbert. Obviously, for a Federal election like that for the Congressional seat they are competing to fill, broadcast stations serving the district they are seeking to serve need to offer candidates the full panoply of candidate rights – including reasonable access, lowest unit rates, and equal opportunities. But in other parts of the country, as well, there are all sorts of political races taking place in this off year and, as we have written before, most of the political rules apply to these state and local electoral races as well as to the few Federal elections that are taking place to fill open Congressional seats.

Candidates for state and local elections are entitled to virtually all of the political broadcasting rights of Federal candidates – with one exception, the right of reasonable access which is reserved solely for Federal candidates. That means that only Federal candidates have the right to demand access to all classes and dayparts of advertising time that a broadcast station has to sell. As we wrote in our summary of reasonable access, here, that does not mean that candidates can demand as much time as they want, only that stations must sell them a reasonable amount of advertising during the various classes of advertising time sold on the station. For state and local candidates, on the other hand, stations don’t need to sell the candidates any advertising time at all. But, if they do, the other political rules apply. 

Continue Reading Reminder – Most FCC Political Rules Apply to Off-Year Elections for State and Local Offices

Two weeks ago, comments were filed in the Commission’s proceeding examining whether to adopt a more relaxed view of the foreign ownership provisions of the Communications Act (see our article about that proceeding here). While the Communications Act limits foreign ownership in communications licensees to 20% (or 25% of a licensee holding company), the Act also allows the Commission to allow greater foreign ownership if it would not adversely affect the public interest. In areas other than broadcasting, the Commission has routinely allowed ownership of more than 25% of a communications licensee, but the limit has been strictly enforced in the broadcasting world. Many of the comments filed in response to the Commission’s request made exactly that point – that in a multimedia world, why should a wireless company or a cable programmer be allowed to be foreign owned, while a competing broadcaster can’t have foreign investors holding more than 25% of its equity?  In what is perhaps a telling indication of where the FCC is going, the statements of three FCC Commissioners, in connection with a recent FCC decision to further streamline the approval process for alien ownership in excess of the 25% limitations in FCC-regulated areas other than broadcasting, suggested that the relaxation of the limits should also be extended to broadcasting.

Two weeks ago, in relaxing rules on the investment of non-US companies and individuals in common carrier licensees and those in certain other non-broadcast services, the Commission vastly simplified the reporting and approval process for alien ownership in excess of the statutory limits. The Commission already had in place a policy of reviewing potential foreign ownership in non-broadcast companies where, through a petition for declaratory ruling, a company could seek FCC approval for ownership, and even control, of these entities by non-US citizens or companies. In the recent proceeding, the FCC made such investment even easier, in very general terms easing certain reporting requirements for alien ownership where the interest of a specific alien investor was less than 5% (10 % in some instances), and also allowing an alien individual or group, once approved, to increase ownership without further approval (if the interest is a minority ownership interest, to 49%, and if it was controlling, to 100%), as long as the interest in possibly doing so is revealed in the original request for approval. Allowing investments by affiliates of the foreign owner, and allowing the company that is approved to seek additional licenses, all without additional approvals, was also allowed in many instances. All these changes were allowed subject to the FCC’s right to reexamine any holdings if specific issues were raised.  But what was most interesting to those in the broadcasting industry were the statements of three of the Commissioners praising these relaxations, and the hopes that the examination of applying these reforms in the broadcast world would move forward quickly.

Continue Reading A Change in the FCC’s Broadcast Foreign Ownership Rules In the Near Future?

Fines for broadcast station tower owners who fail to maintain the required lighting on their tower are not unusual. But in a decision last week, the FCC made clear that, even if the licensee of a broadcast station is not the tower owner, it still has the responsibility for dealing with tower lights that are out, even if the tower owner does not. The failure of the licensee to maintain the tower lights, and other related issues, resulted in an $11,000 fine issued by the FCC.

The case was unusual in that the broadcast licensee, and the company from which it bought the station, were arguing over who owned the tower – not contending that the each owned the tower, but instead each pointing to the other as the one with the responsibility for the maintenance of the tower. The former owner of the station maintained ownership of the underlying land, but claimed that the tower was conveyed to the new station owner. The licensee claimed that the tower was still owned by the former owner, and that former owner should be responsible for the tower lights. The FCC reviewed the contract between the two parties, seemed to conclude that the licensee had in fact acquired the tower, but said that the final determination on that issue was one for local courts, not the FCC.  But even if the licensee did not own the tower, it still had the responsibility for the tower as licensees have the responsibility to insure that the tower lighting requirements in their licenses are met. This obligation is set out in Section 17.6 of the Commission’s rules and in various policy statements.  Thus, no matter who owned the tower, the licensee was still subject to the fine for the lights not being operational.

Continue Reading $11,000 Fine for Broadcast Station Tower Light Outage – FCC Emphasizes the Responsibility of Licensee To Maintain Lights if Tower Owner Does Not

This week, the Chairman of the US House of Representatives Judiciary Committee issued a press release stating that he intends that the Committee do a thorough reexamination of the Copyright Act, noting that new technologies stemming from digital media have upset many settled expectations in Copyright Law, and confused many issues. That this release was issued in the same week as a decision of New York’s Supreme Court, Appellate Division, First Department, on the obscure issue of pre-1972 sound recordings is perhaps appropriate, as this decision demonstrates how an obscure provision of the copyright act can have a fundamental effect on the functioning of many online media outlets – including essentially any outlet that allows user-generated content with audio. The Court’s ruling, which conflicts with a Federal Court’s decision on the same question, would essentially remove the safe harbor protection for sites that allow for the posting of user generated content – where that content contains any pre-1972 sound recordings which don’t fall within the protections of the Copyright Act. Let’s explore this decision and its ramifications in a little more depth.

As we have written before, an Internet service that allows users to post content to that service is exempt from any liability for that content under two statutes. The Digital Millennium Copyright Act insulates the service from any claims of copyright infringement contained in any of the user generated content, if the service has met several standards. These standards include the obligations for the service to take down the infringing material if given proper notice from the copyright holder. The Service cannot encourage the infringement or profit directly from the infringement itself, and it must register a contact person with the Copyright Office so that the copyright owner knows who to contact to provide the notice of the takedown. While the exact meaning of some of these provisions is subject to some debate (including debate in recent cases, including one that Viacom has been prosecuting against YouTube that we may address in a subsequent post), the general concept is well-established.

Continue Reading How a NY State Court Decision on Pre-1972 Sound Recordings Clouds the Safe Harbor Protections of Websites Featuring User Generated Content

At the NAB Radio Show in Dallas in September, FCC Commissioner Pai promised that the FCC would take action to revitalize the AM band (see our story here). For years, AM has suffered a gradual erosion in listening, as interference on the band has increased – not necessarily from other AM stations, but instead from background noise that is now part of the environment in most urban areas. This interference is caused by everything from fluorescent lights to plasma TV screens to various other electronic devices that are prevalent in the modern world. At the NAB Show in Las Vegas the week before last, Commissioner Pai reprised his discussion of AM improvements, this time moderating a panel of experts to discuss the potential remedies to the problems faced by the AM radio service. So just what remedies may be possible?

The panel set out several possible solutions to AM interference issues, all of which have potential downsides or problems. These include the following:

  • — More FM translators for AM stations
  • — Blanket power increases for all AM stations
  • — A reduction in skywave protection
  • — The adoption of a cellular architecture for AM stations
  • — All-digital operation for AM stations

Let’s look at each of these options below.

Continue Reading Saving AM Radio – What is the FCC Considering?

In a decision granting the license renewal of a noncommercial radio station, the FCC’s Media Bureau addressed a number of interesting issues – including the requirements for noncommercial underwriting announcements, whether PSAs meet a station’s public service obligations, and the ability of stations to run cigarette ads in historical radio programs from early radio days. These issues all came up in a decision to renew the station’s license despite a petition from a former manager alleging that the station had violated a number of Commission rules or policies – a petition raising all of these issues.

The $3000 fine that the FCC proposes to levy on the station was for what the FCC found to be improper underwriting announcements. Two different issues were found to violate FCC standards – one fairly straightforward, one less so. The relatively easy issue was whether the underwriting announcement by a musical group stating that it was voted “Canada’s #1 bluegrass band” made a qualitative claim. The station argued that the #1 claim was simply a statement of fact based on the vote in Canada. The FCC, not surprisingly,  found that the “#1” label, no matter how it was derived, was a qualitative claim and thus prohibited as part of an underwriting acknowledgment on a noncommercial station.   Such announcements cannot be commercial in nature – meaning that they cannot contain a call to action, price information or qualitative claims about the products or services offered by the sponsor.  See articles that we have previously written on underwriting issues: here and here and here, as well as a presentation on that issue that is discussed here.

Continue Reading $3000 Fine Against Noncommercial Station for Underwriting Violations – With Discussion of PSAs as Public Interest Programming and Cigarette Ads in Classic Radio Program

We recently wrote about the FCC’s request for comments on how to enforce its indecency policy, and how to deal with the backlog of hundreds of thousands of complaints pending at the FCC. The FCC has now set the dates for comments in this proceeding – with initial comments due on or before May 20, 2013. Reply comments may be filed on or before June 18, 2013.

As we wrote in our article two weeks ago, the FCC is asking for comments on whether it should formally adopt a probation on “fleeting expletives” (though, according to an article published over the weekend, even the FCC’s Chairman recognizes that there are circumstances where some of those expletives are justified as, according to an FCC Tweet, he agreed that the use of an expletive by a Boston Red Sox player after the events of last week was understandable). The question of the constitutionality of the indecency policy was not addressed in the request for comments – but certainly seem to call for consideration as part of any decision as to where the rules go in the future. So sharpen your pencils, and get your comments in by May 20. 

We’ve written extensively about copyright issues for audio services, but the big copyright decision that recently made headlines is a TV issue, though one that could have an impact on audio as well. That was the Second Circuit decision in the Aereo case – upholding a lower court decision allowing a company to retransmit over-the-air TV signals to consumers over the Internet – without any royalties to the TV broadcasters or television program producers. The decision looked at the issue of what defines a “public performance” that would require the consent of the copyright owner. The Court found that there is no public performance of television programming where the service is set up so that the programming is streamed to the viewer individually, at their demand, rather than transmitted all at once to multiple consumers – as by a cable system or a  satellite television service. The decision is a controversial one – decided by a 2 to 1 vote with the dissenting judge issuing a strong dissent arguing that the Aereo service was nothing more than a “sham” designed to evade the royalty obligations or copyright permissions that would be necessary if the service were deemed a cable system or other type of multichannel video provider. What does this decision really mean for television stations, and could it have broader implications for the reuse of all sorts of broadcast content on the Internet?

The decision focused on the question of whether the Aereo service “publicly performs” the programming that it sends to its subscribers. Under the Copyright Act, a copyright owner has a bundle of rights which it has the exclusive ability to exploit. This includes the right to copy the copyrighted work, to distribute it, to make a “derivative work” (a work that uses the copyrighted material and changes it in some way – like putting new words to the melody of a copyrighted song), and the right to publicly perform it. The definition of a public performance includes any transmission or retransmission of a performance to multiple individuals at the same time or at different times. This language was added to the Copyright Act at the time of the advent of cable television, to make clear that services like cable, that take an existing performance (like that of a broadcast television station) and then further transmit it to other people (even people who could theoretically pick up the original performance) were themselves making a public performance that needed the consent of the copyright holder or a government-imposed statutory license (which allows the performance as long as the party making the performance pays the copyright holder an amount set by the government). From a cursory look, it would appear that Aereo is retransmitting the signal of the TV station to all of its customers. Why, then, did the Court rule that no public performance was involved?

Continue Reading Aereo Court Decision Permits Internet Streaming of TV Programs Without Royalties – Undermining the Public Performance Right?

Almost a year and a half ago, the FCC held its first ever test of the EAS system designed to alert the country in the event of a nationwide emergency. On Friday, the FCC’s Public Safety and Homeland Security Bureau issued a report on the results of the test. While there have been many articles in the trade press reporting on some of the findings of the Bureau, few have focused on one footnote indicating that many EAS participants – including some broadcasters and cable systems – never bothered to file their reports as to the results of their participation in the tests. The Bureau notes that the identity of these broadcasters will be turned over the FCC’s Enforcement Bureau for further action – potentially fines for their failures to report on the results of the test (we warned that this might be a consequence of the failure to file a report of the results of the test in our article here).  Broadcasters should watch for further action from the Enforcement Bureau at some point in the future.

The Report indicated that approximately 83% of all broadcasters who reported to the FCC had received the test. However, the FCC received reports from only about 13,787 stations.  According to the FCC’s tabulation of the number of broadcast stations in the US, as released in another FCC report last week, there are approximately 15,256 radio stations and 1781 TV stations in the United States. This could mean that there are a substantial number of broadcast stations that did not report the results of the nationwide test. The Commission apparently did not try to determine if the results achieved by those nonresponsive stations were different than the results of those who reported to the FCC.  One might assume that these stations, which somehow missed all the warnings about the need to file with the FCC the results of the tests, probably also missed instructions about how to comply with the EAS rules and thus were probably less likely to have fully operating EAS systems. So there is concern that the report may even understate the shortcomings of the nationwide test.

Continue Reading FCC Issues Report on Nationwide EAS Test And Refers to the Enforcement Bureau Stations That Did Not Submit the Results of the Test – Could Fines Follow?