Last week, Congressmen Ted Deutch (D-FL) and Darrell Issa (R-CA) introduced the American Music Fairness Act ( see their Press Release for more details) which would impose a new music royalty on over-the-air radio stations.  The royalty would be payable to SoundExchange for the public performance of sound recordings.  This means that the money collected would be paid to performing artists and record labels for the use of their recording of a song.  This new royalty would be in addition to the royalties paid by radio stations to composers and publishing companies through ASCAP, BMI, SESAC and GMR, which are paid for the performance of the musical composition – the words and music to a song. The new legislation is another in a string of similar bills introduced in Congress over the last decade.  See, for instance, our articles here, here, here and here on previous attempts to impose such a royalty.

Each time this idea is introduced, it has a slightly different angle.  In an attempt to rebut arguments that this royalty would impose an unreasonable financial burden on small broadcasters, the new bill proposes relatively low flat fees on small commercial and noncommercial radio stations, while the rates applicable to all other broadcasters would be determined by the Copyright Royalty Board – the same judges who recently released their decision to increase the royalties payable to SoundExchange by webcasters, including broadcasters for their internet simulcasts.  Under the bill, the CRB would review rates every 5 years, just as they do for webcasting royalty rates. Continue Reading New Legislation to Impose Sound Recording Performance Royalty on Over-the-Air Radio – What Does It Provide and What Would the Royalty Cost?

While summer has started and minds wander to vacation time, there are still many regulatory obligations to which a broadcaster must pay attention in July.  To help stay focused, we have written below about some of the important dates and deadlines applicable to broadcasters in July – and a reminder of what to be ready for when the calendar rolls over to August.

The one regular deadline applicable to all full-power and Class A TV broadcasters in July is the July 10 deadline for stations to upload to their online public file their Quarterly Issues Programs lists identifying the issues of importance to their community and the programs that they broadcast in the second quarter of the year that addressed those issues.  Prepare these lists carefully and accurately, as they are your only official records of how your station is serving the public and addressing the needs and interests of your community.  You need to first list the significant issues facing the station’s community in the second quarter.  Then, for each issue identified, you should list several programs that addressed the issue in some serious way.  For each program, the description should include the issue that the program addressed, the name of the program or segment that covered the issue, the date and time the program or segment aired, the duration of the coverage of the issue, and a narrative describing how the issue was treated.  Timely uploading of these lists to the station’s online public file is especially important during the ongoing license renewal cycle when FCC staff are looking closely at public file contents.  See our article here for more on this obligation. Continue Reading July Regulatory Dates for Broadcasters: Quarterly Issues/Programs Lists, The End of Analog TV, EAS Test Registration Requirement, Radio and TV Rulemakings, and More

Here are some of the regulatory developments of significance to broadcasters from the last week, with links to where you can go to find more information as to how these actions may affect your operations.

  • Congressmen Ted Deutch (D-FL) and Darrell Issa (R-CA) introduced the American Music Fairness Act which would impose a royalty payable to SoundExchange on over-the-air broadcasts by radio stations. The money collected would be paid to performing artists and record labels This new royalty would be in addition to the royalties paid by radio stations to composers and publishing companies through ASCAP, BMI, SESAC and GMR. While the proposal would impose relatively low flat fees on small commercial and noncommercial stations, those reduced fees disappear if the station has revenues of more than $1.5 million or if it is co-owned with stations with revenues of $10 million or more.  Other rates would be set by the Copyright Royalty Board. (Press Release)  The NAB has already stated its opposition to the bill, but the introduction of the bill is bound to spur debate on this issue.  Watch for more details about this legislative proposal in our Broadcast Law Blog this week.
  • The FCC’s International Bureau released its most recent list of earth stations operating in the C-Band. The updated list (see a PDF version here and an Excel version here) reflects a variety of changes to earth station registrations, including address or coordinate corrections, registration/licensee name changes due to sales or other transfers, and the removal of earth stations that were reportedly inactive and unresponsive to FCC inquiries about their status.  The list also identifies earth stations for which there is an accepted election for a lump sum payment to resolve interference issues that will be created by the clearing of parts of the C Band so that it can be used for wireless communications.  There is no indication when those lump sum payments will be made.  Review the list to make sure that any earth station that you operate is included and that all of the details of its operations are correct.  (Public Notice)
  • The Media Bureau reminded broadcast licensees that Biennial Ownership Reports are due again this year. Between October 1 and December 1, stations must file a biennial ownership report that details who owns, controls, and operates their broadcast station or stations.  (Public Notice)
  • In advance of the July 13 analog transmission cutoff for low power TV and translator stations, the FCC granted a request by the State of Alaska that allows the state to continue operating 15 analog translators for a limited time—until January 10, 2022. The state made a showing that conditions unique to Alaska make it extremely challenging to construct digital facilities and that people would lose over-the-air broadcast TV if the state did not receive an extension.  All other LPTV and TV translator stations still operating in analog must be prepared to end their transmissions July 13, the deadline for the transition of all remaining analog TV stations to digital.  More details on the circumstances of the Alaska request and extension are in the Order granting the request.
  • The FCC released the items to be considered at its regular monthly open meeting to be held on July 13. Just one broadcast item made it on the agenda – a proposal to clean up a few technical rules that apply to radio stations.  If adopted, the public will have the opportunity to submit comments on proposed changes to certain radio rules that the FCC considers outdated, redundant, or unnecessary.  Read the draft notice to see if any of the proposals affect your operations.  (Draft Notice of Proposed Rulemaking)

Watch the Broadcast Law Blog early next week for our monthly round-up of important regulatory dates and deadlines for broadcasters in the coming weeks.

Here are some of the regulatory developments of significance to broadcasters from the last week, with links to where you can go to find more information as to how these actions may affect your operations.

  • The FCC this week adopted revisions to certain EAS rules. Among other actions, the new rules (1) will change the name of Presidential alerts to “National Alerts” which can be originated not only by the President but also by the FEMA Director (and noted that these alerts need not be directed to the whole country but can also be sent regionally), (2) set out new requirements for State Emergency Communications Committees to require regular meetings and the filing and review by the FCC of state EAS plans (which will now be kept confidential for security reasons), and (3) allow reporting to the FCC of false EAS alerts not only by broadcasters themselves, but also by local, state and national officials (and encourages the reporting not just of alerts broadcast when there was no emergency, but also of emergency alerts broadcast in a location where they would not be relevant, e.g. an alert about a New York snowstorm broadcast on an Arizona station).  We wrote about some of these changes before they were adopted, here.
    • The FCC also opened a proceeding which seeks comment on several EAS changes suggested by FEMA, including whether to delete, redefine, or replace certain EAS codes that are no longer relevant or may cause confusion, and whether to update EAS to support “persistent” alerts that continue to be transmitted through EAS as long as an emergency that could lead to loss of life lasts. (News Release) (Order).  Separately, the FCC continues to consider whether to expand the requirement for EAS alerts to streaming services.
    • The 2021 version of the FCC’s Emergency Alert System Operating Handbook is now available, replacing the 2017 version.  FCC rules require that a copy of the Handbook be maintained by stations and be immediately available to staff responsible for authenticating messages and initiating actions. Download the Handbook, here. As part of the preparations for the upcoming August nationwide EAS test, the FCC has reminded stations of their obligation to download this new version of the Handbook.  See our article here for more on the upcoming test.
  • The FCC denied two petitions asking it to reconsider its 2020 order adopting changes to certain technical rules for low-power FM stations. The Order rejected a request to increase maximum LPFM power to 250 watts as well as requests to do away with the requirements for directional antenna proofs and that LPFM transmitters be type-accepted. (Order). The proposal for the 250-watt power increase has already been revived in a more recent proposal currently under review by the FCC.  See our article here.  Comments on that new proposal are due on June 21.
  • The FCC published its final rules on sponsorship identification requirements for foreign government-provided programming.  The new rules adopt specific disclosure requirements for broadcast programming that is sponsored, paid for, or provided by a foreign government or its representative pursuant to program “leasing agreements.” While this publication means that the rule changes will be effective next month, the changes will not be enforced until approved by the Office of Management and Budget after a Paperwork Reduction Act review, at which time a date for required compliance will be announced by the FCC.  (Federal Register).  These rules will have an impact on any broadcast station that sells any blocks of program time to third parties, as stations will be required to check the Foreign Agents Registration Act database maintained by the Department of Justice to be sure that every broker is not a representative of a foreign government – even if you know the broker, the database must be consulted.
  • There is a new program to address the Homework Gap through which schools and libraries can receive federal funds to buy equipment that allows students, teachers, and library users to receive broadband transmissions of educational content. Funding for equipment to receive educational content transmitted by public television station through datacasting may be available where there are no other broadband Internet options for delivery of that content.  The window for requesting funds opens for applications on June 29 for a 45-day period.  Though public TV stations apparently cannot themselves apply for funding, they may be able to partner with schools and libraries eligible for funding.  (News Release)  A June 25 webinar will explain the program.  Check with your counsel to determine if there may be opportunities for your station.

Last week, the FCC issued a Public Notice announcing an August 11, 2021 nationwide EAS test, with a backup date of August 25 if there are conditions that prevent the test from occurring on the initial date.  The test is scheduled for 2:20 PM EDT.  For broadcasters, this test will be conducted using the over-the-air “daisy-chain” system, where primary stations in various geographic areas initiate the test, and the message is passed from station to station based on monitoring assignments set out in each station’s statewide EAS plan.  Stations should be checking their EAS encoders and decoders now to be sure that all is working properly to transmit and receive this test.

The Public Notice reminds broadcasters to check all their EAS operations at their facilities before the upcoming test.  Specifically, the FCC suggests that each station should be doing the following:

  • Reviewing the EAS Operating Handbook for the actions to be taken by operators upon receipt of the test alert, and tailoring any actions as necessary that are specific to the EAS Participants’ facilities;
  • Reviewing their State EAS Plan for monitoring assignments and ensuring that EAS equipment is accurately configured to monitor those sources;
  • Ensuring that EAS equipment can receive and process the NPT code, the “six zeroes” national location code, and otherwise operate in compliance with the Commission rules;
  • Upgrading EAS equipment software and firmware to the most recent version;
  • Manually synchronizing EAS equipment clocks to the official time provided by the National Institute of Standards and Technology if an EAS Participant’s equipment does not automatically synchronize to an Internet time source; and
  • Reviewing their 2021 ETRS Form One filings to identify and make necessary updates to the information previously provided (see below for more information on ETRS).

The Notice also sets July 6, 2021 as the deadline for all stations to complete their “2021 ETRS Form One” setting out information about each station’s EAS decoders, encoders or combined units. ETRS is the system that reports on the results of the EAS tests. Test results will need to be filed on Form Two in ETRS on August 11 or 12, with more detailed information about the results of the test to be submitted in a Form Three by September 27, 2021. The FCC provides information as to accessing the ETRS system and suggests that stations start looking at Form One now to make sure that they can access the system and verify that the information is complete and accurate by the July 6 deadline. This public notice makes clear that now is the time for all stations to review their EAS equipment, and the ETRS Forms, to get ready for the nationwide test.

The Copyright Royalty Board (CRB) on Friday released the rates and terms for webcasting royalties for 2021-2025, and the rates are going up.  While the full decision explaining the reasoning for the rate increases will not be released to the public until the parties to the case have the opportunity to seek redaction of private business information, the rates and terms themselves were released and can be found here.  These new rules apply to all noninteractive webcasters including broadcasters who are simulcasting their over-the-air signals on the Internet.  As detailed below, both the per-performance and annual minimum fees will be increasing for both commercial and nonprofit webcasters.

The per-performance royalty increases to $.0021 for non-subscription streams, up from the current $.0018.  For subscription streams, the fee increases to $.0026 per performance from $.0023.  A performance is one song played to one listener.  So, if a streaming service plays one song that is heard by 100 listeners, that is 100 performances. Continue Reading Webcasting Royalties Going Up – Copyright Royalty Board Releases Rates and Terms for 2021-2025

Here are some of the regulatory developments of significance to broadcasters from the last week, with links to where you can go to find more information as to how these actions may affect your operations.

  • The Copyright Royalty Board (CRB) released its long-awaited decision on streaming royalties for 2021-2025, finding that the rates applicable to both broadcasters that simulcast their over-the-air signals on the internet and other non-interactive webcasters will go up. The per performance (per song, per listener) royalty rate increases to $.0021 for non-subscription streams, up from the current $.0018.  In another change, the minimum per-channel fee is going up to $1,000 for each channel that is streamed (from $500).  For each entity that is relying on this compulsory license, their maximum aggregate per-channel minimum fee is $100,000 (up from $50,000).  That means that, each January, a company relying on this license will have to pay $1,000 per channel that they stream up to the maximum $100,000.   These yearly up-front payments will be credited against actual usage fees, which are paid monthly.  Nonprofit webcasters will be subject to the same minimum per-channel fees.  However, a webcaster that is a nonprofit entity is permitted to stream on any channel up to 159,140 aggregate tuning hours per month for the yearly $1,000 minimum.  That permits a nonprofit webcaster to average approximately 200 simultaneous listeners on a channel before having to pay for streaming at the commercial per performance rate.  Webcasters who are affiliated with the Corporation for Public Broadcasting are not subject to these fees, as CPB has negotiated a separate blanket license that covers its affiliates.  Payments under these new rates will likely be retroactive to January 1 of this year.  (Rate Determination)   Look for more details on this decision on the Broadcast Law Blog on Monday.
  • Broadcasters can mark August 11 in pen on their calendars as the date of the next National EAS Test. After cancellation of last year’s test due to the pandemic, an FCC public notice this week confirmed the date and provided more details.  The test will be held on August 11, 2021, at 2:20 p.m. EDT, with a backup date of August 25, 2021.  Broadcasters are reminded to renew their information in the EAS Test Reporting System (ETRS) by July 6, 2021.  To test alerting capabilities in the event of a widespread internet failure, the test will be distributed to broadcast stations through the over-the-air “daisy chain” rather than through internet-based IPAWS.  Following the test, on August 11 or 12, stations must file in ETRS “day of test” information reporting on the success of the test at their station.  (Public Notice)
  • The last remnants of analog television will disappear in a month. The Media Bureau reminded analog low power TV and TV translator stations that they have until July 13, 2021 to complete their transition to digital operations.  Stations that have failed to either complete the transition to digital or to receive an extension to build their digital facilities will have their license cancelled.  (Public Notice).  The Media Bureau also released a list of LPTV and translator stations that have not applied for a digital construction permit.  Be sure to check the list for translators that may rebroadcast your station and, if one is on the list, apply immediately for a digital construction permit (a link to the list of those stations is provided in the Public Notice)
  • In one instance, the FCC decided to continue to allow a low power TV station on channel 6 to transmit an audio analog signal, even after next month’s LPTVs transition to digital, while the Commission continues its work on the rulemaking that would determine the fate of so-called Franken FMs (for more on the rulemaking, see our blog post here). In an action this week, the Video Division agreed to allow an LPTV to continue transmitting an analog audio signal as long as the station would also broadcast a digital ATSC 3.0 video and audio signal.  The station was given temporary authority to operate like this for six months, but the grant included numerous conditions including the requirement to file reports on any interference to other licensed users and any interference between the station’s video and audio services that in any way limits the coverage of its video signal.  The FCC also prohibited sale or technical modification of the station during the term of the STA. (Grant Letter).  Other operators of Franken FMs may want to pursue similar relief if they have not done so already.
  • In news about a broadcast competitor, Rep. Jerry Nadler (D-NY) and Rep. Hank Johnson (D-GA) sent a joint letter to Spotify requesting information about the promotional music royalty rates it offers where, in exchange for lowered royalties, songs would be played more frequently. The congressmen ask whether these promotional royalty rates set up a “race to the bottom” forcing lower royalties on artists, resulting in economic losses to these artists. Congressman Nadler chairs the House Judiciary Committee, which oversees music licensing issues and Congressman Johnson chairs the House Subcommittee on Courts, Intellectual Property, and the Internet.  Read more about the issues raised by this letter on our blog, here.

We are celebrating our birthday.  Last week marked 15 years since the first short articles were published on this blog, with an official welcome being posted once we decided that we really could find something to regularly write about – that welcome posted 15 years ago Friday.  Here we are, a decade and a half and almost 2,500 articles later, and there still is no shortage of topics to cover.

In the 15 years that the blog has been active, our audience has grown dramatically.  In fact, I’m amazed by all the different groups of readers – broadcasters and employees of digital media companies, attorneys and members of the financial community, journalists, regulators, and even students and teachers.  Because of all the encouragement that I have received, I’ve kept going, hopefully providing you all with some valuable information along the way.  If you are interested, I recently discussed the blog with the LexBlog’s This Week in Legal Blogging (the video can be accessed here), telling many stories about unusual interactions with readers of our articles. Continue Reading Celebrating 15 Years of the Broadcast Law Blog

The trade press in the last few days has been full of news about a letter of inquiry from two Congressmen to Spotify asking for details about Spotify’s promotional royalty rates where, in exchange for lowered royalties, songs to which these rates apply may be played more frequently, as Spotify factors in lower costs into its music selection algorithms.  The Congressional letter asks whether this promotional approach is already in operation, and if it will lead to a “race to the bottom” forcing lower royalties on artists, resulting in economic losses to these artists.  While the implication is that negotiation over royalty rates is a new phenomenon, in fact such negotiations are common in the digital music marketplace and, based on the way that Congress itself established the royalties for music services, they are inherent in that system.  In effect, this Congressional letter seems to be asking for Spotify to forego a private business transaction by which it lowers its costs of doing business through providing its business partners something that they want – more exposure for certain music.

Indeed, as we have written before, these negotiations over royalty rates are required to operate in the digital music marketplace.  Royalties paid to performers and record labels for the use of music by an interactive music service like Spotify are not set by governmental decision (there is no Copyright Royalty Board setting a default rate as there is for noninteractive music services – see our article here).  Instead, the rates are set by private business negotiations where there is a give-and-take between the parties over various considerations – including the promotional benefits when songs are featured on certain playlists provided by services like Spotify.  Certainly, there are counterweights to any downward pressure on all royalty rates, as listeners to an on-demand service like Spotify want to hear the hits.  So Spotify needs to pay for those hits to attract and retain its listeners.  In some cases, artists have determined that there is insufficient promotional value to the playing of their music on an interactive service and that no royalty would be enough to compensate them for perceived lost sales of their music when it is featured on an interactive service.  As we wrote here, these artists may deny an interactive service the use of all their music, or portions of their catalog.  In other cases, as in the instances that apparently gave rise to the Congressional letter, record companies or artists may feel that it is important that their music get exposure, so they will be willing to accept lower royalties in exchange for wider exposure to their music to consumers that such plays deliver.  In other cases, other promotional benefits may be given to the copyright holders for lower royalties (in fact, initially, the record companies received equity positions in Spotify, presumably to help convince them to make their music available at rates that Spotify thought it could afford).  Royalties in the interactive music marketplace are simply the result of a marketplace negotiation, as Congress intended when they adopted Section 114 of the Copyright Act providing for digital performance rights for sound recordings. Continue Reading Congress Asks Spotify for Information About Promotional Royalty Rates – Is This Much Ado About the Way the Interactive Music Marketplace is Designed to Work?

The Newspaper Broadcast Cross-Ownership Rule is Finally Dead – And More Ownership Rule Changes – Including for Radio – Are to be Considered

Last Friday, the FCC took two actions on broadcast ownership resulting from the recent Supreme Court decision (about which we wrote here) upholding changes to the ownership rules that the FCC adopted in 2017.  Those 2017 changes (summarized here) and any additional changes to the rules, including changes to the radio ownership rules that have not been substantially reviewed since 1996, have been held up by the 2019 decision of the Court of Appeals for the Third Circuit.  That Court reversed the FCC’s 2017 decision which had relaxed many ownership rules, notably including the abolition of the newspaper-broadcast cross-ownership rule and some of the local television ownership restrictions.

The Third Circuit found that the FCC had done an inadequate job of assessing the impact of the 2017 changes (and past ownership changes) on the diversity of broadcast ownership.  Until such a historical review could be conducted, all FCC ownership proceedings were put on hold.  This hold was finally lifted by the Supreme Court’s decision reversing the Third Circuit and reinstating the 2017 FCC decision.  On Friday, the FCC issued an Order that formally reinstated the rules that had been overturned by the Third Circuit and also took some tentative steps toward restarting its regular review of broadcast ownership rules, including the local radio ownership rules that were largely unaffected by the 2017 FCC rule changes.  The FCC issued a Public Notice that asked for an update on comments they filed on the 2018 Quadrennial Review of the ownership rules (see our article here) in 2019. Continue Reading FCC Implements Supreme Court Order Reinstating 2017 Ownership Rule Changes, and Asks for Updating of Record of 2018 Quadrennial Review