As you know by now, last week the U.S. Supreme Court found the FCC’s enforcement of its indecency policy unconstitutional in FCC v. Fox.  As Bob Corn-Revere and Ronnie London described in our Advisory , this case concerned the 2002 and 2003 Billboard Music Awards shows televised by Fox as well as a 2003 episode of NYPD Blue televised by ABC.  While the Supreme Court did NOT address the First Amendment issue of whether the FCC can constitutionally prohibit fleeting expletives and momentary nudity, it did find that the FCC’s enforcement of those policies with regard to these particular shows violated due process, because the networks had no advance notice of them.

As we noted more than a year ago, there are approximately 300 TV station renewal applications from the last renewal cycle still pending due to indecency complaints filed against them.  It is unclear how many of them relate to these particular shows, but to the extent any renewal applications have been held up due to complaints against these shows only, it should only be a matter of time before those renewal applications are granted.

Continue Reading What does the Supreme Court Indecency Decision Mean for the Long Pending License Renewal Applications?

Since the start of the FCC’s examination of its multiple ownership rules in anticipation of its Quadrennial Review of these rules, the question of TV shared services agreements has been one raised by public interest groups, suggesting that combinations of local TV stations for news or sales purposes are not in the public interest, as such combinations reduce competition in the local markets.  MVPDs have also suggested that these agreements are unfair in the negotiation of retransmission consent agreements.  Television broadcasters, on the other hand, have pointed to the economics of the television business, especially in smaller markets, where combinations of stations are considered necessary to preserve news operations (and in some cases, the operations of the stations themselves) in these markets.  The NY Times featured this issue on its front page, further indicating that this is an issue that is likely to be addressed in the FCC’s decision in its ownership review – expected later this year or in 2013.

The Times report talks about how some SSAs result in newscasts covering similar stories or using the same reports on multiple stations.  While some public interest advocates complain that duplicative news does not serve the public interest, the story also interviews station owners who make the very simple point that economics dictates what stations can do – that without these shared service agreements many stations that have news programs now would not have them at all without a shared services agreement being in place.  Clearly, the media marketplace is changing, and all of the traditional media simply cannot operate in the way that they have in the past, with all of the new forms of competition making changes inevitable (see, e.g. the recent news about the major daily newspaper in New Orleans going to a three times a week publication schedule).  After the FCC’s recent decision on shared services agreements in Hawaii (see our article here), and the front page publicity that the issue has received in the Times, we are bound to see this issue addressed in the FCC’s ownership proceeding whenever that is resolved (we’ve been predicting sometime after the November election – see our article summarizing the proceeding here), and perhaps in orders clarifying the obligations of parties in retransmission consent negotiations, also under consideration by the FCC. 

Does a broadcast station need to book a political ad buy for an agency purporting to be representing a candidate, but refusing to reveal who that candidate is? We’ve recently received this question from a number of broadcast stations in a number of states, as agencies seemingly are jockeying to tie up valuable commercial time in advance of what is likely to be a hotly contested election in November. This seems to be happening particularly with stations that have coverage areas that include parts of certain “swing states” in the Presidential election, or in states with crucial Congressional or Senatorial elections. It seems to us that, unless and until you know that there is a real candidate, there is no obligation for a station to book time for a hypothetical candidate or candidate to be named later.

Booking time for an unknown candidate raises numerous issues for a station. How can a station account for the sale of that time in its political file? If it doesn’t know who the candidate is, it can’t place the required information (which includes the candidate’s name) into the political file. Booking time for a political candidate gives rise to equal opportunities obligations, even outside the 45 and 60 days political windows. How can you determine to whom you owe equal time when the station itself doesn’t even know who the candidate is? And, if the agency even refuses to reveal if it is a Federal or state campaign for which it plans to buy time, making time available to an agency on behalf of an unknown candidate that turns out to be a state candidate may cause the station, through the application of equal opportunities, to have to sell time for a race to which it did not intend to provide access, or to open up dayparts to that state race when it did not intend to offer those dayparts to state candidates. In fact, without knowing the candidate, how can the station assess whether the candidate is legally qualified, or that the time is being purchased by an authorized candidate committee? 

Continue Reading What is a Broadcaster to Do When Approached by an Ad Agency Buying Time for an Undisclosed Political Candidate?

Last month, we wrote about the proposed settlement on "mechanical royalties" under Section 115 of the Copyright Act. These royalties are paid when "reproductions" are made of a musical composition.  In the analog world, these were most commonly paid by a record company to a music publisher for the rights to use a musical composition when one of its bands records the song controlled by the publisher. The recent settlement, entered into between the music publishers’ representatives, the recording industry, and a digital media industry association, covers everything from physical recordings, to digital downloads, ringtones, and other "digital phonorecord deliveries" made by on-demand and other digital music services.  The text of the settlement agreement, giving all of the details of the proposed rates for the various types of digital services, is now available for public review, as it has been published in the Federal Register as part of the request for comments by the Copyright Royalty Board.  Comments on these proposals are due on June 18.

The FCC last week proposed to fine a broadcaster for calling someone with their tape recorder running, with the intent to broadcast the taped conversation on the air.  According to the Notice of Apparent Liability issued by the FCC, the recording was stopped after the radio station announcers identified who they were, and the person who was called said that he did not want to be recorded.  What was taped was essentially the station employees calling the individual and saying hello, saying that they were from the radio station, telling the individual that he was being recorded, and the individual telling the employees to stop recording – which they immediately did.  The recording was ended before anything substantive was said, and it was never broadcast on the air. Nevertheless, the station was fined $2000 because these initial stages of the conversation were recorded with the intent to use the recording on the air.  According to the Commission, the FCC’s rules require that when a conversation is either broadcast on the air, or recorded for purposes of broadcast, the consent of the person being recorded must be obtained before the tape starts rolling. As with an over-the-air broadcast, if the tape is running when the person being called by the station says "hello,’ in the Commission’s view, the station has violated the rule – even if the tape is never used.

The station argued that this position makes the recording of telephone conversations not very entertaining, as the greetings and introductory comments in any call have to be done twice – once before the tape starts and a second time after approval for the recording has been obtained.  The FCC adopted this rule about 30 years ago, even though many states allow the recording of a telephone call as long as one party to the call consents to the recording.  Seemingly, the FCC’s rule even makes recording for news purposes by the station more cumbersome, as consent needs to be obtained before any recording is done (see the case we wrote about last year, where the Commission held that the taping of a call without permission, even in the context of the discussion of a public issue, was impermissible).  The fine was imposed in this case makes very clear that the Commission remains ready to enforce this rule whenever a complaint is filed. 

In recent days we have seen political action committees (PACs) claiming they are "prohibited" from running political ads in primary states due to "new rules" regarding "electioneering communications."  As explained below, these claims are incorrect.  What they are really doing is trying to avoid the need to reveal the identity of their contributors, following a US District Court decision in March.

Under Federal Election law, an "electioneering communication" is a broadcast, cable or satellite communication that refers to a clearly identified candidate for federal office within 30 days of a primary or 60 days of an election, targeted to 50,000 or more people in the state or district the candidate seeks to represent. For President and Vice Presidential candidates, an "electioneering communication" is one that can be received by 50,000 or more people within 30 days of a state primary or the nominating convention.

By federal statute, sponsors of "electioneering communications" must disclose the names and addresses of each donor who contributed $1000 or more to the sponsoring organization. This is is the provision that led to the US District Court decision at issue.

Continue Reading Some PACs Stop Running “Electioneering Communication” Ads to Avoid Reporting Requirements

The Radio Music Licensing Committee has announced a settlement with BMI over music royalties for the public performance of musical compositions for the period from 2010-2016.  Terms have not been announced, so we can’t provide the details, yet.  But as we wrote recently when the RMLC announced the terms of its agreement with ASCAP, we would assume that the terms would be somewhat similar to the ASCAP deal.  If no settlement had been reached with BMI, the case would have gone to a "rate court" in Federal District Court to see what the fair market value of the performance right was.  As analogous rates often form the basis for rate court determinations of fair market value, the settlement with ASCAP would no doubt have been an issue for BMI, as it would appear to set a benchmark rate for the public performance of musical compositions.  But, we will have to wait to see what the filings say before we can determine if, for sure, the rates will decrease relative to prior rates to the same extent that they did for ASCAP.

It is worth reflecting on how RMLC came to reach deals with ASCAP and BMI, and to explain why there is no reference to a SESAC deal.  I’ve already heard or seen several people suggesting that an agreement with SESAC may be next – when in fact that is not something that is imminent, as can be explained by the differences between ASCAP and BMI on one hand, and SESAC on the other.  ASCAP and BMI are both governed by anti-trust consent decrees that have been in place for over 50 years.  Under both decrees, these organizations have to enter into agreements to set royalties for all similarly-situated users of music in various categories of businesses – categories including radio, TV, websites, background music, restaurants, bars, hotels, performance venues and practically every other place where music is performed for the public.  If no agreement can be reached on a voluntary license, a “rate court” decides on the royalties. Essentially, that means that a US District Court in New York has a trial to set the rates.

Continue Reading Radio Music Licensing Committee Announces Settlement With BMI Following Settlement With ASCAP – Why SESAC is Not Included

In perhaps the most severe set of penalties that we have seen for public inspection file violations, the FCC released two sets of fines to stations that had self-reported, in their license renewal applications, that they did not have Quarterly Issues Programs lists in their public file for the entire 8 year license term.  As we recently wrote, $10,000 fines for missing Quarterly Issues Programs lists have become the new standard where a substantial number of the lists are missing.  Here, however, there were no timely filed lists at all in the public files for the stations in question – for an 8 year period. In one case, where the owner had both an AM and an FM stations, both were missing the Quarterly lists, the Commission proposed a fine of $20,000 ($10,000 for each station), and renewed the station licenses for only 4 years, not the normal 8 year license renewal term.  A similar fine was proposed for a college-owned noncommercial station, also missing the required Quarterly lists for the entire license period – and that station also received a 4 year license term. In each case, the licensee had indicated that it was doign some renewal-time recreation of missing Quarterly lists, but these efforts did not seem to result in any lessening of the penalties proposed by the FCC.  These fines and short-term license renewals show just how importantly the FCC treats these violations.

We do note, however, that where the missing lists are from but a few quarters, the FCC’s fine is somewhat reduced, witness a recent $4000 fine for lists missing for just over a year – where the violations were from the beginning of the license term rather than being of recent vintage.  But if you are missing list from some longer period of time – seemingly about 2 years – that $10,000 fine seems to kick in.  Check you files now to make sure that you don’t fall into the $10,000 trap.

FCC fines for violations of the FCC rules dealing with contests have been common in the last few years. Because of these fines, we recently conducted a webinar for the Kansas Association of Broadcasters, discussing the requirements of FCC rule Section 73.1216 which regulates the conduct of station-sponsored contests.  We also discussed what should be addressed in contest rules, issues with contests that advertisers themselves sponsor, and considerations that stations should undertake to avoid civil liability when conducting contests.  Other legal issues that should be considered in any contest or lottery promoted on a station were also covered.  The slides from our presentation, outlining the legal issues that we discussed, are available here.

What are some of the issues we discussed?  We recently wrote about fines of $22,000 for a station online contest, promoted on the air, without the station announcing all of the material rules on the air.   Even imprecise contest rules have brought fines of $4000, as did a contest not conducted according to the rules announced on the air.  Beyond these issues, broadcasters have to consider other legal liability that can arise for injuries to contestants – highlighted by the Sacramento case of a few years ago. Being careful in promoting third-party contests, like those conducted by advertisers, particularly compliance with lottery laws, is also important.  Observe the rules and be careful – as there are many potential traps for those who are not prepared. 

The over-the-air reception of television stations has taken on heightened awareness in recent years.  In the regulatory world, this prominence comes from the FCC’s consideration of taking back some of the broadcast spectrum for use by wireless broadband based at least partially on the Commission’s belief that broadcasters are not using that spectrum efficiently as many viewers,over the last few decades, receive their TV programming from satellite and cable providers.  At the same time, there have been more articles in the press and anecdotal stories about the new importance of over-the-air reception as people "cut the cord’, getting their video programming from some combination of over-the-air TV and the Internet.  Regardless of the truth of either perception, since the conversion to digital, issues about TV antennas have become more important as, in many places, an outdoor television antenna is necessary (or preferable) for decent over-the-air DTV reception.  One issue that many television broadcasters have overlooked is that of OTARD – the FCC rules on over-the-air reception devices.  As we wrote here, these rules have been interpreted to significantly limit the ability of landlords and local governments to adopt zoning rules or restrictive land-use policies forbidding outdoor TV antennas or small satellite dishes for the reception of video programming. This week, the FCC asked  if the restrictions on local authorities should also apply to common areas of housing complexes. 

The rules have traditionally been applied to restrict limitations on antennas and small dishes on property owned by the party wanting to make the installation, or property leased by that party and  even to common areas under the exclusive control of the lessee (like the portion of a driveway or parking area reserved for use by the tenant).  The FCC has allowed landlords and tenants associations to restrict the placement of OTARD devices in common areas not subject to tenant control.  But the FCC has not addressed whether local government authorities can restrict the location of antennas and dishes in these common areas.  The Satellite Broadcasting and Communications Association and DISH and DirecTV have asked the FCC to rule that, under OTARD rules, local authorities can’t pass laws restricting the location of TV antennas and small dishes in these common areas, reasoning that if the owners of the land don’t care, government should not be able to restrict the use of reception devices there, just as the government can’t restrict the installation of these reception devices on property under the control of a tenant or home owner.  This week, the FCC asked for comments whether the OTARD rules should apply to government restrictions over TV reception devices in these common areas.  Comment are due on June 7.  Reply Comments are due on June 22.