At its meeting today, the FCC voted to require that television stations maintain most of their public inspection files online, in a database to be created by the FCC (see the FCC’s Public Notice here).  While the details about this obligation have not yet been released, from the comments at the FCC meeting, much is already evident.   All TV stations will have to post their files to an online server to be maintained by the FCC.  Proposals for new obligations to post information about sponsorship identification and shared services agreements have been dropped, at least for now.  Most documents not already online at the FCC will need to be uploaded within 6 months of the rule becoming effective.  And, in the most controversial action, broadcaster’s political files will need to be posted to the new online database, though in a process that is to be phased in over time.

The political file obligation will apply at first only to affiliates of the Top 4 TV networks in the Top 50 markets.  And only new information for the political file will need to be posted.  Information in the file before the effective date of the order apparently will not need to be posted online, at least not initially.  The requirement for posting the political file online will be reviewed in a proceeding to begin one year after the effective date of the new rules.  As stations outside the Top 50 markets, and other stations in those large markets, will not need to comply with the political file obligations until July 2014, the FCC will be able to reexamine the impact of the disclosure obligations before the compliance obligation for the political file expands to all stations. 

Continue Reading FCC Votes to Require Online Public File for TV Stations – Rejects Compromise for Political File

The FCC has adopted a Notice of Proposed Rulemaking suggesting, with significant limitations, a liberalization of its rules that prohibit noncommercial broadcasters from raising funds for an entity other than the station itself if the fundraising suspends or alters normal programming of the station. As we’ve written before, the FCC prohibits noncommercial broadcasters from raising funds for charities and other non-profit organizations through telethons or other special programming.  The prohibition has been in place for some time, and was reaffirmed by the FCC’s orders in the early 1980s which established the basic rules that still today govern most noncommercial fundraising and sales activities. 

The prohibition on third-party fundraising reflected the Commission’s concern that educational stations are "licensed to provide a noncommercial broadcast service, not to serve as a fund-raising operation for other entities by broadcasting material that is akin to regular advertising."  Doing too much fundraising for these third parties, in the Commission’s view when the rule was adopted, would distract stations from their principal mission of service to the public.   While the Communications Act was changed in the early 1980s to allow noncommercial broadcasters to accept paid promotional spots for nonprofit groups, the FCC did not change the rule on third-party fundraising that disrupts normal programming.  In the NPRM just adopted, the Commission recites that they still believe the justification for the rule to be true, even though noncommercial stations can now run what is essentially paid advertising for nonprofit organizations, as long as those spots are incorporated into the normal programming of the stations. What the Commission now proposes is a limited degree of liberalization of the third-party fundraising prohibition, subject to many conditions set forth below.

Continue Reading FCC Proposes to Liberalize Rules Against Noncommercial Stations Fundraising For Third-Party Non-Profit Groups

As we wrote last month, the Commission has asked for public comment on whether an Internet delivered video programming service can qualify under the FCC rules and the Communications Act to be treated as a multichannel video programming distributor (an "MVPD").  While the FCC has in the past determined that an MVPD needs to have facilities associated with its programming service (like a cable or satellite delivered system), it asks if that is indeed required under the definitions in the Act.  If the FCC were to determine that Internet video services were to qualify, all sorts of issues would arise – including whether these video services can get access to cable network programming and even whether they have to observe must carry and retransmission consent obligations of broadcasters.  The potential importance of this issue was the talk of the NAB Convention (see this article in TV NewsCheck) and, because of its potential importance to broadcasters, the NAB requested more time to respond to the request for comments.  The FCC partially granted that request – extending the comment deadline to May 14.  Replies are now due on June 13.

In three proposed fines issued in the last few weeks, the FCC proposed $10,000 fines for the failure of stations to have all of their required Quarterly Issues Programs Lists in their public files.  In one case, the deficiency was discovered by an FCC inspector, filing random reports missing from 2007-2009.  In two others (here involving a noncommercial station and here), the missing reports were reported by the stations in their renewal applications, and the missing reports also just covered parts of the renewal cycle.  All three cases resulted in the $10,000 fine.  What began as a $3000 fine in the last renewal cycle has escalated over the last 8 years to become the violation of the broadcast rules that seemingly carries the biggest fine – even though the public file is rarely if ever visited by the public.  As we’ve written before, it would seem to us that there are plenty of more serious issues that should demand closer attention by the FCC (and bigger fines), yet the public file seems to be the one that has attracted the Commission’s attention most often, and with the biggest fines.  Obviously, with the attention over online public files that will only intensify with the expected FCC decision on that issue this Friday, this issue does not seem to be going away anytime soon.  

For more information about the required contents of the Public File, see our advisory here.  For our last advisory on the Quarterly Issues Programs lists which stations should have placed in their public file on or before April 10, see our advisory here.   

Update – 4/24/12, 4:00 PM – Two more $10,000 fines for missing Quarterly Issues Programs lists were issued today, both for violations voluntarily revealed at license renewal time, reinforcing the "new normal."  See the FCC decisions here and here. 

In the last few weeks, I’ve twice had the occasion to summarize the legal issues facing broadcasters, and it amazes me at how many issue there are and, how quickly the issues are changing. On April 12, I did an update on these issue to the Oklahoma Association of Broadcasters at their annual convention – the PowerPoint slides for which are available here.  The week before, we prepared a summary of the issues facing TV broadcasters that was published in TV NewsCheck, here.  It’s just over two weeks later, and already the issues that we highlighted have changed.  Since we we wrote the TV NewsCheck article, a new issue for television broadcasters has arisen as to the definition of an MVPD – an issue that could have ramifications on all sorts of issues – including rules concerning must carry and retransmission consent.  In recent weeks, the FCC has also revised its EAS rules to allow text-to-speech systems to read the alerts that come in from FEMA, the National Weather Service and other authorities.  And the FCC meeting that will be held later this week  will deal with many issues of importance to commercial broadcasters – including spectrum sharing (the first step in the Commission’s plan to clear some of the TV band so that it can be repurposed for wireless users) and the online public inspection file.  Also on the agenda is a noncommercial item that will look at broadcast stations raising finds for third parties.  That topic is an interesting one – coming only a short period after one US Court of Appeals Circuit suggested that Federal prohibitions on noncommercial radio stations accepting ads from political and issue advertisers were unconstitutional.

In discussing issues with the Oklahoma Broadcasters, there were still many questions about the FCC requirement for a nondiscrimination certification in commercial station’s advertising contracts (see our summary of this issue here and here).  Also a hot topic, particularly in light of the discussion of the online public file, was the question of what needs to go in the public file, and how long it needs to be retained (see our Checklist for the Public Inspection File, here).  The rules for on-air contests, and the required on-air disclosures of the rules for such contests, were also much discussed (see our summaries here and here).  And, of course, with the November election looming, questions about broadcasters’ political obligations were on the minds of many (see our Guide to Political Broadcasting, here).  Many, many issues face broadcasters – and these presentations only touch the surface. 

The conversion of EAS alerts from text to speech by broadcast stations and cable systems, through systems contained in the stations and systems EAS equipment, was prohibited in the FCC’s Fifth Report and Order (summarized here) implementing the rules for the technology for the Common Alerting Protocol – the Internet-based alert system that must be activated by stations and systems by June 30.  After objections to the text-to-speech prohibition raised by the Federal Emergency Management Administration and many other broadcast and technical groups, the FCC reviewed and eliminated that restriction in an Order released late last week.  That order will be effective immediately on its publication in the Federal Register, allowing participants in EAS to use text-to-speech if they want to – not making it mandatory, but also not prohibiting its use as had the Fifth Report and Order.

FEMA and the other parties that complained to the Commission suggested that the prohibition on text-to-speech technologies would actually result in less information about certain alerts being conveyed to the public.  The Commission was concerned that automatic text-to-speech conversion could result in inaccurate or misleading information being conveyed to the public from a system that it concluded was not yet perfect.  The objecting parties disputed that any glitches were serious enough to mandate the prohibition against the use of such systems.  For instance, broadcasters and others in Washington State already are using a text-to-speech system.  The objecting parties also pointed out that the technology was such that warnings sent using the CAP system without audio already attached might actually cut warnings broadcast on stations short before the public knew the basis of the alert, and even if they didn’t, the 90 character limit imposed on textual warnings broadcast through the current SAME system would be insufficient to provide the kinds of information possible through text-to-speech systems.  Even National Weather Service alerts are to be formatted in a way so as to use text-to-speech capabilities.  Thus, prohibiting the use of text-to-speech might impede the delivery of such warnings

Given these objections, the FCC revoked its prohibition on the use of text-to-speech systems in EAS, making such use optional for broadcasters.  The rule was adopted to become effective immediately upon publication in the Federal Register, so that all stations that have to comply with CAP will be able to use text-to-speech systems, if they so desire, by the June 30 implementation deadline.

The Librarian of Congress today announced the appointment of a new Chief Judge for the Copyright Royalty Board.  The new Chief Judge will be Suzanne Barnett, a superior court judge of King County in Seattle, Washington.  This is the first new judge on the three-judge CRB since the judges were first appointed in January 2006, soon after Congress first created the CRB. 

The law governing the Copyright Royalty Board requires that the three judges have different experience.  One must have a background in Copyright law, a position filled by Judge William Roberts.  A second must have a background in economics.  That is the position filled by Judge Stanley C. Wisniewski.  Each Judge is appointed for a six-year term, with the terms staggered so that one seat is subject to reappointment every two years.  The Chief Judge is required to be someone with "at least five years of experience in adjudications, arbitrations, or court trials."  The press release issued by the Librarian of Congress stated that Judge Barnett "hears cases of all types and presides over both jury and non-jury trials. Barnett "has served on all the King County calendars – civil, criminal, family, and juvenile – and at all three superior court locations."  Prior to her appointment to the Bench, she was an attorney in private practice for 16 years.

Continue Reading Librarian of Congress Appoints New Chief Judge of Copyright Royalty Board

The Communications Act’s ban on noncommercial broadcast stations running political and issue advertising was struck down as unconstitutional by the US Court of Appeals for the Ninth Circuit.  While the Court upheld the prohibition on commercial advertising for products and services, the majority of the Court felt that the ban on political advertising could not be justified.  Bob Corn-Revere of Davis Wright Tremaine’s DC office, who is quite experienced in First Amendment litigation and is a frequent speaker and author on these issues, offers this summary of the constitutional issues raised by this case:

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A divided panel of the U.S. Court of Appeals for the Ninth Circuit held that Communications Act provisions that ban political and issue advertising on public broadcasting stations violate the First Amendment.  The court left intact another provision that prohibits commercial advertising on public stations.  The majority opinion in Minority Television Project, Inc. v. FCC, written by Judge Carlos Bea, reasoned that Congress lacked substantial evidence that the ban on political and issue advertising set forth in 47 U.S.C. § 399b was necessary to serve the government’s purpose of preserving the mission and quality of public broadcasting, and that the statute was not narrowly tailored.  At the same time, the court held that allowing commercial advertising would undermine the purpose of public broadcasting to provide educational and niche programming.

Synthesizing three decades of First Amendment case law, Judge Bea wrote that Congress must have substantial evidence to justify a content-based speech restriction “at the time of the statute’s enactment.”  The evidence must show “that the speech banned by a statute poses a greater threat to the government’s purported interest than the speech permitted by the statute.”  The decision principally relied on FCC v. League of Women Voters, a 1984 Supreme Court case that struck down a similar Communications Act prohibition on editorializing by public broadcast stations.  Judge Bea’s opinion also relied on a 1993 commercial speech case, Cincinnati v. Discovery Network, for “[a]dditional instruction on what narrow tailoring requires.  That case invalidated a municipal ordinance that imposed differential regulation on newsboxes, depending on whether they contained commercial or noncommercial matter.

Continue Reading Court of Appeals Strikes Down Communications Act Ban on Political and Issue Advertising on Noncommercial Broadcasting Stations – Analyzing the Issues

Broadcasters are not the only ones with FCC-regulated EEO obligations.  Cable system operators and other MVPDs have similar FCC EEO obligations, requiring wide dissemination of information about job openings and the maintenance of public file information.  In a decision released today, the FCC proposed a $11,000 fine to an MVPD for failing to widely disseminate information about all of its job openings, for failing to keep a public file with the required information about its recruitment efforts, and for not self-assessing its program in a manner in which these issues were discovered and corrected.

This MVPD had only 3 job openings in the period covered by the FCC audit that led to the proposed fine.  For two openings, the company simply relied on its website to advertise for new employees.  For the third, it used Craig’s List.  The FCC, reiterating the position that it has taken with broadcasters (see our article here), said that online recruiting and recruiting through the station’s own internal sources are not enough.  Recruiting efforts need to include other sources designed to reach all of the significant groups in the system’s area.  When working with our broadcast and MVPD clients to design an effective EEO plan, we suggest using efforts like notices to community groups, outreach to educational institutions, the use of employment agencies, and publication in a widely read local newspaper (a relic, perhaps, of 2003 when these rules were first adopted) to achieve the required broad outreach to community groups expected by the FCC.  This case serves as yet another reminder of the seriousness with which the FCC takes its EEO rules.  See our article here for more information about the FCC’s EEO obligations. 

The broadcast and music trade press brought news of a settlement between music companies and digital media services regrading digital music royalties.  Some press reports jumped to the conclusion that the decision had something to do with the royalty rates that Internet radio companies pay SoundExchange for streaming their music on the Internet.  Others expressed disappointment that it did not seem to address that issue at all.  In fact, the reason that the settlement had nothing to do with webcasting was because it was a settlement of a Copyright Royalty Board proceeding involving a totally different right – essentially the right to reproduce a the musical work, i.e. the words and music to a song – not any public performance right that is involved in Internet radio streaming.

As we have written before (including the last time a similar settlement was announced), webcasters pay their royalties principally under Section 114 of the Copyright Act, which sets up a "statutory license" requiring that all copyright holders in a "sound recording" (a recording of a song by a particular artist) make their songs available for public performance to any digital music service that meets certain criteria – including principally that their service is a non-interactive one, where listeners cannot pick the particular song that they want to hear.  In exchange for this right, digital music services pay a fee set by the Copyright Royalty Board.  These fees cover liabilities for music use in a process where a service generates a product that goes from the service to many people, much like radio does in the traditional world, without making any sort of lasting digital copy that would be akin, in the physical world, to a CD or record.  The settlement that was just announced deals with rights that like those paid, in the physical world, by a record company to a music publisher for using a musical composition in a record or CD that the record company is recording with a particular artist, not with the public performance right.

Continue Reading Music Royalty Settlement Announced on Mechanical Royalties – Not A Decision on Webcasting Rates