The Senate on Monday approved, after months of delay, the nominations as new FCC Commissioners of Democrat Jessica Rosenworcel and Republican Ajit Pai.  Once they are sworn in and assume their new jobs in the next few days, this will bring the FCC up to full strength with 5 seated Commissioners for the first time in a year.  Rosenworcel comes from having worked for the Senate Commerce Committee, which oversees FCC regulation.  She previously worked as a legal assistant to former Commissioner Copps at the FCC.  Pai has also worked on the Hill and at the FCC, so both have experience with issues before the Commission.

So what do these nominations mean for broadcasters?  Probably, not much in the immediate term.  With the two new Commissioners being added to the FCC, the balance of power remains in favor of the Democrats.  But, as we have seen over the years, most Commission decisions aren’t decided on a partisan basis – in fact most are unanimous.  In the recent past, there are a few decisions where the Commission has been somewhat divided, with Republican Robert McDowell tending to take a somewhat more deregulatory position, as in connection with the recent ruling on online public inspection files for TV stations.  But party affiliation is not necessarily a guide to a Commissioner’s positions, as many of the proposals for broadcast re-regulation first arose during the Republican administration of FCC Chairman Kevin Martin (see, for instance, the proposals for localism regulation and the original proposal for an online public file adopted in 2007). 

Continue Reading Two New FCC Commissioners Approved by the Senate – What Does It Mean for Broadcasters?

At this year’s NAB Convention, digital issues were much talked about.  In fact, the NAB held, for the first time, a day and a half session focusing on radio stations and their digital efforts, called the Digital Strategies Exchange.  I was on a panel called the Consultant’s Corner, and discussed legal issues that broadcasters may face as they move more and more into the digital world.  The PowerPoint slides that accompanied my presentation can be found here.

Digital issues for broadcasters go far beyond the streaming royalties for webcasting that we have written about so much in these pages.  Recent cases, like the one that we wrote about here, have imposed the FCC’s disclosure requirements on contests conducted on a station website that is even mentioned on-air.  Broadcasters need to be careful about protecting their branding, as putting a slogan or positioning statement on the Internet makes it available to people worldwide.  If a station has not been careful in picking its branding statement, the worldwide exposure can just be an alert of a potential infringement to a trademark or service mark owner. Using music online in ways other than webcasting can pose legal issues as we explained in our advisory here.  Sponsorship identification obligations like those that apply to broadcasters have been imposed on online media where companies are given any consideration for endorsements or testimonials (see our article here).  And allowing listeners to post videos or music or other content could potentially lead to liability for any copyright violations if a station does not register an agent with the Copyright Office to receive notices of infringement so that the station can take down infringing content (the Copyright Office’s instructions for doing so can be found by clicking here).  These are but a few of the issues covered in my presentation in Las Vegas.  As in any other business endeavor, make sure that you know the rules of the road to avoid the legal issues that might otherwise arise. 

The FCC just released its Notice of Proposed Rulemaking to establish the regulatory fees to be paid by each of the entities that it regulates. Each year, before the FCC collects its annual regulatory fees from broadcasters and other entities subject to its oversight, it asks for comments on the amount of those fees.  This year, as has been the case in most of the past few years, there are few changes proposed in this Notice, thought the Commission does promise to issue additional rulemakings later this year, looking to readjust fees to take into account changes in the communications industry since these fees were first imposed almost 20 years ago.  Look, for instance, for a change to be proposed in the relative fees for UHF and VHF stations, which still reflect the analog world where VHF stations were more valuable. 

But any fundamental changes in the fees won’t be effective until 2013.  Essentially, the NPRM proposes just minor changes in fees so that the FCC can collect its 2012 fees in September.  The NPRM basically makes very small adjustments in the fees for broadcast stations, which are based on population coverage, to include numbers based on 2010 census data.  The fees proposed for broadcasters are set out below.  Comments on these proposals are due on May 31, with replies on June 7.  The exact dates on which these fees will be collected will be announced after the conclusion of this rulemaking proceeding.

Continue Reading FCC Proposes Regulatory Fees for 2012

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.