The next step in processing of the translators from the 2003 FM translator window is now upon us.  The FCC has asked for major market translator applications – those in the "Appendix A markets" (essentially the top 150 Arbitron markets and a few additional ones in which numerous translator applications were filed) and those within 39 km of the grid used in these markets to determine whether future LPFM stations would be available – to file "preclusion studies" in a window between April 1 and April 19.  A list of the applications that have to provide such showings can be found here.  A preclusion study is a showing that the grant of the proposed translator will not unduly impact LPFM opportunities in that market. The FCC public notice provides the methodology for making such showings as well.

This is one more step toward the clearing of the 2003 translator backlog.  Already, as we’ve written, 700 rural applications have been proposed for grant.  Next steps include the formal identification by the FCC of what applications are mutually exclusive with each other, and the opening of a settlement window.  Eventually, those applicants not being granted as "singletons" (ones not mutually exclusive with other applications), or as a result of the settlement window, will head to an auction.  And the FCC is still shooting for a window in which applications for new LPFM stations can be filed in October.  By then, most translators that will have to be protected by LPFM applicants should be identified by the processes that the FCC is going through now.  Stay tuned as this long-running saga goes through its final episodes in the next few months. 

 

Update, 3/18/2013 – The FCC just released another public notice detailing what it expects from Preclusion Studies. 

Both radio and TV broadcasters either have recently completed the license renewal process, or will be doing so in the next few years. Many broadcasters think that, once their broadcast licenses are renewed, so too are all of the other communications licenses that are operated in connection with their station. While that may be true for broadcast auxiliary licenses, like Studio Transmitter Links and Remote Pickups, there are other FCC authorizations that are not covered by the broadcast license renewal process, and are also not covered by the applications on FCC Forms 314 and 315 for the sale of a broadcast station. If a broadcaster does not pay attention to the expiration dates for these nonbroadcast licenses, or forgets to separately file an application for permission to assign these licenses during a sale of their broadcast station, a fine like the $18,000 fine that was just issued to a radio broadcaster who forgot that earth station licenses are different from a main broadcast license or a broadcast auxiliary license, may occur.

In this case, the broadcaster sold its radio station in 2003, including in a list of auxiliary licenses in its FCC application for the sale of the station, the call letters of the earth station. While the FCC granted the assignment application with the statement that the seller was authorized to assign the station and all authorized auxiliaries, the Commission makes clear in this order that the sale of an earth station is not a broadcast auxiliary, but instead needs a separate authorization from the FCC’s International Bureau before it can be sold. As that authorization was not granted, when the buyer took control of the station (and earth station), it operated that earth station without FCC approval for almost 10 years – without seeking a renewal of the license in 2006 – until the new licensee finally discovered the error and applied for an STA and new license to cover its operations. The FCC determined that the length of the violation required an upward adjustment of the normal $10,000 fine for operating an unlicensed station.

Continue Reading $18,000 FCC Fine for Operating Earth Station with Expired License Reminds Broadcasters That Not All of Their Licenses are Covered During the License Renewal or Assignment and Transfer Approval Process

In the digital world, it seems that everything is reinvented, and someone claims that they have a patent on that reinvention. In the last few weeks, we have seen news about patent claims asserted against radio broadcasters for their digital music storage systems, against public broadcasters for podcasts, and even against companies trying to comply with the FCC’s new guidelines for E-911 (emergency communications over wireless and VoIP networks) providers. These claims highlight that media companies and others in the communications industry have to be prepared for patent litigation almost as a cost of doing business – and need to consult with patent lawyers about strategies if they are faced with such claims, and consider the potential of concerted defenses with others similarly situated if the defense does not violate other laws (such as the antitrust laws). What claims have been raised recently?

Over the last two years, thousands of radio stations across the country have received letters claiming that their digital music storage systems violated a patent from a company called Mission Abstract Data. While the patents in question have a checkered history at the Patent Office – after being issued, they were reexamined and their basis questioned, with the Patent Office ultimately agreeing that the patents, as limited through the reexamination, were in fact valid. But that decision was itself challenged by equipment manufacturers whose music systems could infringe on the patent. That further reexamination is still underway.  Nevertheless, as that reexamination continues, the company that currently has rights to the patent, Digimedia, has sued four radio station owners in Texas claiming that they are violating these patents controlled by the company. These suits are in addition to a long-pending case against a number of large broadcasters, which has been stayed pending the outcome of the Patent Office reexamination (though the patent holder has asked that the stay be lifted – an argument to be considered later this month). Some observers have suggested that these new suits may be a precursor to other actions to try to convince reluctant broadcasters to take out a license rather than fight a lawsuit.

Continue Reading More Patent Issues for Media Companies – Mission Abstract Data Patent Asserted in Law Suits Against 4 Radio Broadcasters, and a New Patent Claim Raised Against Podcasters, Including Public Broadcasters

The FCC has fined a Boston radio station $4000 for airing misleading announcements on the radio station as to the nature of the prize to be awarded in a station contest. In addition to an interesting set of facts in this case, the FCC’s decision also reviews several other recent decisions in explaining why it came to the decision it did as to the amount of the proposed fine. 

In this case, the contest was promoted on the air as an opportunity to win a choice of three cars. The "Cool, Hot or Green" contest announcements never revealed on the air that the winner in fact did not receive the car, but instead only a two year lease on the car, and only if the winner passed a credit check. Nor did the on-air announcements mention that full contest rules were available on the station’s website. While the written rules on the website made clear that the prize was merely a lease of the car, as has been the case in many recent decisions (see our summaries here and here), the Commission faulted the licensee for not broadcasting an accurate disclosure of these rules on the air. While the licensee argued that this was but a minor ambiguity in the rules, the FCC, reviewing some recent decisions, disagreed.

Continue Reading $4000 FCC Fine for Radio Station’s Misleading Contest Announcements Provides Summary of Recent Decisions on Contest Rule Violations

The first EEO audit of 2013 was announced by the FCC today – hitting about 200 radio stations and about 85 TV stations this time around (the list of stations to be audited is here). The Commission has pledged to audit 5% of all broadcast stations and cable systems each year to assure their compliance with the Commission’s EEO rules – requiring wide dissemination of information about job openings and non-vacancy specific supplemental efforts to educate their communities about job opportunities in the media industry. The form audit letter was also released today by the FCC. Responses from the audited stations are due to be filed at the FCC by April 8.

While the FCC has slightly revised the audit request to cut down on the burden of compliance (by eliminating the need to produce a copy of every notice sent out to fill every job, allowing instead the filing of a representative copy of a job opening notice and a list of the sources to which it was sent), these audits still require substantial work. And if any station in your cluster is hit, all stations in that "station employment group" (a group of commonly owned stations serving the same area with at least one common employee) must respond. But, if a cluster has been audited in the last two years, the FCC may allow you to avoid responding to this audit – but you have to request such treatment if you are on this audit list. 

All stations should review the audit letter as it provides a good outline of the documents that stations should be retaining to demonstrate their compliance with the FCC’s EEO rules. For more information about compliance with the EEO rules, see our post about an EEO webinar held by the FCC to explain its EEO rules. You may also want to review the last set of fines for EEO violations, about which we wrote here.

Many of the thousands of FM translators that have been pending since 2003 may be approaching the finish line to be granted very soon. The FCC has issued a Public Notice announcing that over 700 applications are now ready to be granted. The applications that are identified on the list are "singletons", or applications that are not mutually exclusive with any other application.  Applicants who find their applications on the list need only file a "long-form" application on FCC Form 349 by March 28. A long form application provides full technical information about the applicant’s proposal, as well as some ownership information about the applicant. FCC officials have stated that, as long as the long-form application does not change the technical proposals set forth in the short-form applications submitted in 2003, the long form should be granted. Instructions for additional showings that need to be made if changes are made are available here. 

So what’s next for the 2003 applicants, and what opportunities are there for other radio broadcasters? The clear opportunity for broadcasters is that there are soon going to be about 700 new translators, with many more to come after the settlement window and auction. All of these applications were filed 10 years ago, some of them by parties whose interests may well have changed in that prolonged period of waiting. So there are bound to be at least some translators that will be granted and available for sale or some sort of programming arrangement. Once these 700 translators applications and the other applications from the 2003 window are processed, there will be no other new translators that are possible until the next time the FCC opens a translator filing window – which won’t happen for at least a year (and quite possibly well after that), until after the FCC first holds the promised LPFM window later this year (with an October target date) and processes the applications from that window. So now is the time for broadcasters to be reviewing the translator applications that are being granted from the 2003 window to see if there may be opportunities for the broadcaster to find a facility to retransmit an AM station or an HD-2 signal. 

Continue Reading FM Translator Processing Continues as FCC identifies Over 700 Applications that Can Be Granted – What’s Next for Translator Applicants? What Should Broadcasters Be Considering?

We wrote in December about the delays in the FCC’s proceeding to consider whether changes should be made to its multiple ownership rules. The December delays were to allow for public comment on ownership information obtained from broadcasters in their Form 323 Ownership Reports. Specifically, the public was asked to comment on the what the ownership information revealed about ownership of broadcast properties by members of minority groups, and whether proposed reforms in the ownership rules would affect minority ownership.  Comments from certain public interest groups suggested that any relaxation of the newspaper-broadcast cross-ownership rules or the rules limiting radio-TV cross-ownership would further adversely affect minority ownership, a position that seemingly made certain of the FCC Commissioners reluctant to approve any changes in the ownership rules. This week, the Commission announced another delay in any resolution of this proceeding as the MMTC (the Minority Media and Telecommunications Council) has commissioned a study of the impact of any further consolidation in media ownership on minority broadcast operators.

The study, to be conducted by the broadcast financial analysis firm BIA Kelsey, is supposed to be conducted quickly – in the next 60 days. It is also supposed to be peer reviewed to analyze its methodology and conclusions, and will probably be subject to further public comment at the FCC once it is filed in the record of the multiple ownership proceeding. So this means that there will be likely no decision as to changes in the ownership rules for at least 3 or 4 months – and perhaps longer.

Continue Reading Further Delay in Multiple Ownership Proceeding as the FCC Awaits New Study on the Impact on Minority Ownership of Any Relaxation of the Cross-Interest Rules

The limits on the ownership of broadcast stations by those who are not US citizens is being re-examined by the FCC according to a recent Public Notice. Under Section 310(b)(4) of the Communications Act, foreign ownership of a broadcast licensee is limited to 20% of the company’s stock, or no more than 25% of a parent company of the licensee. Over the years, there has been a significant body of precedent developed about applying these caps to other business organizations, including LLCs and Limited Partnerships.  But the caps remain in place, limiting foreign ownership.  While the statute gives the FCC discretion to allow greater amounts of "alien ownership", the FCC has not exercised that discretion for broadcast companies (though, for non-broadcast licenses, the FCC has many times found greater percentages of foreign ownership to be permissible). A coalition of broadcast groups last year filed a request asking that the FCC exercise the discretion provided under the Act, and consider on a case-by-case basis whether alien ownership combinations in excess of 25% should be permitted. The Commission has now asked for public comment on that proposal. Comments are due on April 15, with replies due on April 30.

Why is this important? Many broadcasters have pushed for revisions in the alien ownership limits for decades – seeing foreign investors as a potential source of capital to allow new companies to buy stations or existing companies to expand their holdings. Many minority advocacy groups, too, have thought that relaxation of the alien ownership rules would provide more sources of capital for minority owners to get into the broadcast game. Spanish language broadcasters, in particular, see broadcasters and other investors from other Spanish-speaking countries as being likely sources of new investors in broadcast companies or new buyers for US broadcast stations. 

Continue Reading FCC To Consider Allowing Alien Ownership of More Than 25% of Broadcast Licensees – Comments Due April 15

One of those stories on which I’ve been meaning to comment was the story from the week before last where trade press reports summarized a legal action being brought against a television station in Cleveland for having improperly used Arbitron information in connection with its efforts to sell local advertising time on Pandora, the Internet radio company. I don’t want to write about the merits of that proceeding (though it does highlight that stations need to avoid using Arbitron information without permission, as the company is aggressive in protecting what it perceives to be its intellectual property rights), but instead to ask a broader question about what such cross-selling indicates for the FCC’s ongoing analysis of the current media markets in connection with its review of the multiple ownership rules. The cross-selling between a traditional media company and a company like Pandora, which claims radio station-like ratings in many radio markets, or with any other new media company delivering audio or video, are outside of the FCC’s ownership prohibitions. Thus, traditional media companies, like the TV station involved in this case, can sell the new media company’s advertising, or theoretically even provide programming to the new media company, without any cross-interest implication. But a combination between a daily newspaper (no matter what its circulation) and a broadcast station is effectively prohibited under the FCC rules – even though the newspaper may have a smaller audience than the new media outlet in some markets.

As services like Pandora grow, claiming audiences for audio entertainment as large as many local radio stations, these companies could enter into agreements for cross-selling with traditional media companies, and could theoretically enter into arrangements for programming as well, with no restrictions short of those potentially imposed by antitrust laws. So a new media company can cross-sell with television stations (or newspapers, though according to an article last week, both Pandora’s partnerships with television stations and newspapers for joint sales are being phased out and replaced with their own sales forces), without any FCC regulation. A service like YouTube, serving up an amazing amount of video content each day, could enter into partnerships with daily newspapers or multiple radio station owners without triggering any of the cross-interest issues raised by a similar agreement with a television station. Any of these large scale Internet audio or video services could even buy radio or television properties without triggering any FCC concern at all. Yet, we are still arguing over whether the cross-ownership of a newspaper and broadcast station should be allowed. 

Continue Reading TV Station Sued by Arbitron for Using Ratings Data to Sell Local Pandora Ads – What Does This Say About the FCC’s Cross-Ownership Rules?

The FCC last week issued a Public Notice announcing the dismissal of approximately 3000 FM translator applications. This was as a result of its requirement that applicants from the 2003 FM Translator Window select no more than 70 total applications to prosecute (see our articles here and here), and no more than 3 in any Arbitron market where there were significant number of translator applications filed. Applications that did not meet these limits were dismissed.

The FCC is planning to move quickly on the remaining FM translator applications in hopes that they can complete the processing of the backlog of applications so that a window for the filing of new Low Power FM ("LPFM") applications can be opened before the end of this year. So what is the next step in processing these applications? The next significant step will be for the FCC to open a "settlement window" where the remaining applicants can talk to each other and try to reach agreements as to which applications should be granted before an auction. In most FCC auctions, discussions between competing applicants in the auction are strictly prohibited – and applicants who violate the "anti-collusion rules" can be severely punished. But, in authorizing auctions, Congress permitted limited settlement windows in cases involving "secondary" services like translators – leading to the need for a settlement window in connection with these translator applications. No discussion between competing applicants is supposed to occur outside of that window. So be patient but get prepared – as the time to talk to competing applicants in the settlement window should be coming soon.