In recent weeks, we saw press reports on a recommendation from the Attorney General to loosen federal restrictions on marijuana – reclassifying it by moving it off Schedule I (an illegal controlled substance with no medical uses and a high degree of potential abuse) to Schedule III, where many other drugs, including some requiring a prescription, are listed.  No official announcement about any reclassification action has been released, and even when it is, there are apparently other administrative steps that need to occur before any re-scheduling is final.  So, there are many regulatory hurdles still to come.

While a rescheduling to Schedule III may have an impact on research and marijuana’s medical uses, broadcasters need to continue to take a very cautious approach to marijuana advertising while the details of any possible change are worked out and likely even after any re-scheduling as, even as a Schedule III drug, advertising may still be restricted under federal law.

Continue Reading Don’t Start Counting Marijuana Advertising Dollars Yet – Cautions Despite Possible Changes in Its Federal Classification

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

  • The FTC announced that it will hold a 45-minute webinar on May 14 at 11:00 a.m. ET to provide an overview of its final rule banning noncompete agreements.  As we discussed in our update last week, the FTC banned the use of noncompete provisions in employment agreements (and clauses that act like noncompetes by limiting employee mobility) except in connection with the sale of a business.  The webinar is free and open to the public to provide information about compliance with the new rule.  The FTC requests that participants submit questions ahead of the webinar, by emailing them asknoncompete@ftc.gov.  A link to the webinar will be available on the FTC’s website on the day of the event, and a recording of the webinar will later be made available on the site.  The FTC has also posted a Business and Small Entity Compliance Guide about the new rule.
  • On Capitol Hill, there were a number of actions potentially impacting broadcasters:
    • The House Subcommittee on Innovation, Data, and Commerce held a hearing titled “Draft Legislation to Preserve Americans’ Access to AM Radio.”  At the hearing, the subcommittee considered the proposed AM for Every Vehicle Act, which requires that automobile manufacturers retain AM radio in the car dashboard.  As we recently discussed on our Broadcast Law Blog, while this Act has garnered much support on Capitol Hill, there have been concerns regarding mandates on the car industry to protect the AM technology that some see as outdated.  The hearing included testimonies from witnesses representing radio manufacturers, carmakers, broadcasters, and the Navajo nation.  A recording of the hearing can be found here, a copy of the hearing can be found here, and the witnesses’ written testimony can be found here, here, here, and here.  This week, press reports indicated that there are 250 sponsors of the bill in the House (well more than a majority), and a 60-sponsor supermajority in the Senate– making the bill filibuster-proof.  The bill, however, must be brought to the floor of each chamber for a vote before President Biden can sign it into law.  No dates for such votes have been set. 
    • The Senate Subcommittee on Intellectual Property held a hearing titled “The NO FAKES Act: Protecting Americans from Unauthorized Digital Replicas.”  At the hearing, the subcommittee considered a draft of the Nurture Originals, Foster Art, and Keep Entertainment Safe (“NO FAKES”) Act, which seeks to protect actors, musicians, and other performers’ likenesses from unauthorized replicas that are generated using artificial intelligence.  The hearing featured testimony from record labels, entertainment industry associations, and academia.  Further information on the hearing, including video and testimony, is available here
    • The House Subcommittee on Oversight and Investigations announced that it will hold a hearing on May 8 at 10:00 a.m. ET titled “Examining Accusations of Ideological Bias at NPR, a Taxpayer Funded News Entity.”  At the hearing, the subcommittee members will question NPR’s President and CEO, Katherine Maher, regarding concerns over NPR’s lack of diversity in the viewpoints of its staff and in its coverage of issues.  The hearing will be live streamed and available here.
  • When will broadcasters have to file the FCC Form 395B report – classifying their employees into job categories and reporting on their race, ethnicity, and gender?  Activity this week related to the FCC’s February Report and Order (see our article here) voting to reinstate the Form could affect the answer to that question:
    • The FCC announced that the Order will become effective on June 3.  However, compliance will not be required until the Office of Management and Budget (OMB) completes its review of the form to be used for the reports.  The FCC’s Media Bureau will issue a public notice announcing the deadline when the OMB review is complete.  Once that happens, broadcasters would need to file each year by September 30.
    • However, two petitions for reconsideration (see here and here) were filed by Catholic broadcasting groups asking the FCC to revisit its reinstatement of the Form.  The petitioners oppose the FCC’s inclusion of a non-binary option for the Form’s gender identity reporting category arguing, among other things, that this option violates their First Amendment religious freedoms by compelling speech about a gender option in which they do not believe.  One petitioner requests that the FCC suspend broadcasters’ obligation to comply with the gender identity reporting requirement while the matter remains pending.  Instead of asking the FCC to review its own action reinstating the Form, the National Religious Broadcasters (NRB) association and one of its members, American Family Association, filed a petition for review with the US Court of Appeals, seeking to have the Court overturn the FCC’s action (see the NRB Press Release).  Other court appeals may follow. 
  • The FCC’s Media Bureau affirmed its dismissals of three LPFM construction permit applications due to the applicants’ failure to comply with the FCC’s rules governing new LPFM station applications:
    • The Bureau affirmed its dismissal of an Alabama LPFM construction permit application because the proposed coordinates for its transmitter site were such that the applicant was not local as required by the rules (neither its headquarters nor the residence of 75% of its board members were within required radius of its proposed station’s transmitter site – 10 miles in the Top 50 markets, 20 mile outside those markets).  The Bureau rejected the applicant’s request to correct what it claimed was a clerical error in the coordinates, explaining that the qualification requirements must be met based on the information in an applicant’s “Tech Box” portion of its initial application, and the failure to meet those requirements cannot be corrected after the application filing deadline.
    • The Bureau affirmed its dismissals of a Washington and a Pennsylvania LPFM construction permit applications for their failures to meet the minimum distance spacing requirements necessary for protecting nearby FM and LPFM stations, rejecting each applicant’s arguments for reinstatement of their applications because the LPFM application procedures clearly state that initial applications failing to show compliance with the FCC’s channel spacing requirements are to be dismissed without an opportunity to amend.  In the Pennsylvania decision, the Bureau again made clear that it relies on the technical parameters submitted in the “Tech Box” portion of the initial application – not on information set out elsewhere in the application or otherwise “widely known.”
  • The FCC’s Media Bureau released a Notice of Proposed Rulemaking asking for comments on an applicant’s petition for rulemaking proposing the substitution of Channel 285C1 for vacant Channel 235C1 at Canadian, Texas to allow its station KPQP, Panhandle, Texas to move from Channel 291C3 to Channel 235C3.  Comments and reply comments in response to the petition will be due June 24 and July 9, respectively.

On our Broadcast Law Blog, we took a look at the upcoming regulatory deadlines affecting broadcasters in May, including comment deadlines on a number of emergency communications proposals, the effective dates of the FCC’s zonecasting order allowing the origination of limited amounts of programming by FM booters, and the opening of several windows for Lowest Unit Rates required to be charged for ad time bought by political candidates in upcoming elections. 

While May is one of those months that does not have any routine, scheduled FCC filing deadlines, there are still a number of regulatory dates and deadlines for broadcasters that are worthy of note.  As detailed below, this includes comment deadlines in several FCC rulemaking proceedings, a response deadline for broadcasters caught in the first random EEO audit of 2024, and the effective date of the FCC’s order allowing FM boosters to originate limited amounts of programming (when interested parties can file for experimental authority to begin such programming).  As always, remember to keep in touch with your legal and regulatory advisors to make sure that you don’t overlook any other regulatory deadlines we may have missed here or ones that are specific to your station.

May 6 is the deadline for radio and television stations listed in the EEO audit notice released by the FCC’s Enforcement Bureau last month to upload their audit responses to their online public inspection files.  The FCC randomly audits approximately 5% of all broadcast stations each year regarding their EEO compliance.  Audited stations and their station employment units – which are commonly owned stations serving the same area – must provide to the FCC their last two years of EEO Annual Public File Reports and documentation demonstrating that the stations did everything that is required under the FCC’s EEO rules.  See our article here for more detail on EEO audits and how seriously the FCC takes broadcasters’ EEO obligations.

Continue Reading May Regulatory Dates for Broadcasters – EEO Audit Responses, Comment Deadlines on Emergency Broadcasting Matters, Effective Date for Zonecasting with FM Boosters, LUC Windows, and More

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

  • Perhaps the biggest regulatory news of the past week came not from the FCC, but instead from the Federal Trade Commission.  The FTC, in a 570-page order, adopted rules that ban the use of noncompete provisions in employment agreements (and clauses that act like noncompetes to limit employee mobility) in virtually all instances except when the promise of a noncompete is by a seller in connection with their sale of a business. The rules apply to anyone working for a company, including interns and independent contractors. Beginning at page 367 of its order, the FTC rejected arguments that contracts with broadcast on-air talent should be exempt from the ban, suggesting that companies have other ways to protect their investment in employees other than through noncompete agreements.  While applauded by labor and employee-rights organizations, the action has been condemned by many business groups who, in some cases have already challenged the FTC’s authority to adopt such a sweeping decision impacting so many aspects of the economy based solely on the FTC’s authority to prohibit unfair methods of competition.  Unless stayed by the FTC or by a Court, the rule will go into effect 120 days after it is published in the Federal Register. 
  • In a ruling that may impact many “side-car” companies that buy TV stations and enter into agreements with other broadcast companies that cannot own the station because of FCC ownership rules, the FCC’s Media Bureau granted an application proposing the assignment of TV station WADL, Mount Clemens, Michigan to Mission Broadcasting, a company closely related to Nexstar Media, Inc.  However, the grant came with many conditions that may well undermine Mission’s plans for the station.  Objections were filed against the application alleging that Nexstar will have de facto control of WADL or will exercise control of the station’s retransmission consent rights to the detriment of video programming distributors and consumers.  While the Bureau permitted Mission to acquire WADL, it imposed a number of conditions to limit Nexstar’s control, including prohibiting Nexstar from financing WADL’s acquisition (it cannot even provide a loan guarantee), it cannot have an option to acquire WADL in the future, Mission must keep at least 70% of all of WADL’s advertising revenue, and Nexstar cannot provide more than 15% of WADL’s programming (even though the station was going to be a CW affiliate, and CW is owned by Nexstar). 
  • The Media Bureau entered into a Consent Decree with a New York noncommercial educational (NCE) FM station to resolve an investigation into its compliance with the FCC’s underwriting and sponsorship identification rules.  Petitions challenging the station’s license renewal alleged that, during station fundraising activities, its on-air hosts (or their guests) were allowed to promote their own products and services – efforts which entailed repeatedly mentioning the price of the promoted product or service and excessively complimenting or praising the promoted item, with the station getting a portion of the proceeds to fund its operations.  While the objections acknowledged that NCE stations can give away premiums to donors, those premiums are usually pre-purchased by the station at a flat fee, and don’t involve the station in revenue sharing promotions that benefit commercial companies.  This conduct seemingly led to the reference in the Consent Decree that the station impermissibly promoted for-profit products and services in spots that contained comparative and qualitative descriptions, pricing information, calls to action, and other inducements to buy, all prohibited by the NCE rules.  The Decree imposed a short-term license renewal, required payment of a $25,000 civil penalty and a compliance plan to ensure future compliance with FCC rules.   
  • The FCC’s Office of Economics and Analytics issued the FCC’s biannual call for comments on the State of Competition in the Communications Marketplace.  The FCC seeks comments on a list of questions about competition in the video and audio marketplaces, including the impact of digital competitors on radio and TV stations and the role that regulation plays in the competitive landscape.  The FCC uses these comments to prepare a report to Congress on competition issues and sometimes references the reports in proceedings dealing with competition, including FCC proceedings dealing with its ownership rules. Comments are due June 6 and reply comments are due July 8. 
  • The FCC’s Public Safety and Homeland Security Bureau extended the comment deadlines for the FCC’s January Notice of Proposed Rulemaking proposing to require TV and radio stations to file reports regarding station operational outages in the FCC’s Network Outage Reporting System (NORS) database and on their operating status during disasters in the FCC’s Disaster Information Reporting System (DIRS) database. Reporting by broadcasters is now optional, but the FCC asks in this proceeding if that obligation should be mandatory.  Comments and reply comments are now due May 13 and June 12, respectively. 
  • As the result of the FCC’s sweep of the Boston area (and other parts of Massachusetts) for pirate radio activities, the FCC proposed to fine seven Massachusetts pirate radio operators.  The PIRATE Act requires such sweeps in markets with substantial pirate radio activity and authorized fines (recently adjusted for inflation) of up to $119,555 per day and a maximum of $2,391,097.  The pirate radio operators have 30 days to pay either pay their fines or to object to the FCC’s proposed action.  The FCC proposed the following fines against each pirate radio operator: a $120,000 fine for broadcasting on 101.9 FM in Boston, MA, a $20,000 fine for broadcasting on 87.9 FM in Hyannis, MA, a $40,000 fine for broadcasting on 102.1 FM in Brockton, MA, a $40,000 fine for broadcasting on 93.1 FM in Cotuit, MA, a $40,000 fine for broadcasting on 96.5 FM in Brockton, MA (which involved 2 pirate operators), and a $597,775 fine for broadcasting on 89.3 FM in Mattapan, MA and on 105.3 FM in Brockton and Randolph, MA.
  • The FCC’s Media Bureau granted several assignment applications related to Cumulus Media’s debt restructuring, conditioned on the suspension of a foreign investor’s voting rights and involvement in Cumulus’ management until the Bureau completed its review of a this new investor. In 2020, the FCC approved Cumulus’ petition to exceed the 25% limit on foreign investment set out in Section 310(b)(4) of the Communications Act – provided that Cumulus would in the future request specific approval for any new foreign investor proposing to hold more than a 5% voting or equity interest.  In January 2024, a Singaporean investor filed a report with the U.S. Securities and Exchange Commission (SEC) stating that it had interests in Cumulus exceeding the 5% threshold.  Cumulus then filed a petition seeking FCC approval of this new foreign investor, stating that it did not solicit the non-compliant foreign investment and was unaware of it until the SEC report was filed.  Because Cumulus was not responsible for the foreign investment and the current applications were unrelated to the qualifications of this investor, the Bureau waived its normal process of approving all foreign investors first and issued the conditional grant.
  • The Bureau affirmed its dismissal of an Oregon FM station’s license renewal application pursuant to Section 312(g) of the Communications Act, which states that a station’s license will be automatically cancelled if the station that has not operated as authorized for a full year, unless the FCC finds that there are public interest factors warranting the preservation of the license.  Here, the station operated from an unauthorized location for over a year, leading to the cancellation.  The Bureau rejected the licensee’s claim that no authority was necessary as its move of its antenna from one site to another was less than one second different in geographical coordinates, concluding that a move of less than three seconds does not require a construction permit only when it involves a coordinate correction, and even then, the move requires FCC approval in a license application after the move. Neither a construction permit nor a license application was filed by this licensee.  The Bureau also dismissed the station’s argument that it was exempt from requesting authority to move to a new transmission facility as the antenna at the new site was mounted in a tree, and thus did not require construction of a new tower.  The Bureau dismissed the station’s argument as baseless, noting that placing a station’s antenna in a tree required prior FCC authorization just as placement of a station’s antenna on a tower because the FCC needs to know the precise location of any station’s transmission facilities to ensure adequate interference protection to other stations and the safety of air navigation.  Finally, the Bureau rejected the station’s argument that its license should be reinstated since it provided a second, noncommercial service within a Tribal area because the FCC does not recognize such service as providing an exception to Section 312(g). 
  • The Bureau proposed a $3,000 fine against a Class A TV station operated by a well-known Massachusetts noncommercial operator for failing to timely upload one quarterly issues/programs list and six children’s programming reports to its online public inspection file.  These documents were uploaded between one day and over one year late. The operator argued that the late-filed quarterly issues programs list should be excused as it acquired the station only two weeks before the end of the quarter, and it has to wait for program information from the prior owner.  The FCC faulted the licensee for not having timely uploaded information for the portion of the quarter in which it did hold the license. 
  • The Media Bureau took several actions concerning LPFM stations:
    • The Bureau dismissed two Texas LPFM construction permit applications (see here and here) because the applicants failed to demonstrate that they were nonprofit organizations eligible to be LPFM licensees finding that the organizational document provided by each applicant did not demonstrate that it was been filed and accepted by a state as a valid nonprofit organization. 
    • The Bureau affirmed its dismissals of LPFM construction permit applications in Washington and Wisconsin because the applicants failed to meet the co-channel and/or second-adjacent channel spacing requirements for protecting nearby full-power FM stations.  The Bureau rejected each applicant’s arguments for reinstatement of their applications because the LPFM application procedures clearly state that applications failing to comply with the co-channel and/or second-adjacent channel spacing requirements would be dismissed without an opportunity to amend.  In the Washington case, the Bureau noted that applicants relying on staff advice do so at their own risk.  In the Wisconsin decision, the Bureau noted that it relies on the technical parameters submitted in the “Tech Box” portion of the application – not parameters set out in any attached exhibit – and as the information in the applicant’s Tech Box did not show compliance with the spacing requirements, the application must be dismissed. 
  • In a very rare, if not unprecedented action, SGCI Holdings III LLC, the Standard General company that had sought to acquire the TEGNA television stations, and its managing member Soohyung Kim, filed a civil lawsuit against the FCC, Chairwoman Jessica Rosenworcel and Media Bureau Chief Holly Sauer personally, broadcast station owner Byron Allen and his company (an allegedly unsuccessful bidder for the TEGNA stations), and a number of other individuals and groups including parties who argued before the FCC against the approval of the transaction, alleging that they had conspired to cause the FCC to “pocket veto” the transaction by designating it for hearing (see our article here) for discriminatory reasons because Mr. Kim was not the “right type of minority.”  For more details, see press reports about the lawsuit here, here, here, here, and here (note that several have links to the complaint, and that several are subscription sites). 

On our Broadcast Law blog, we discussed the 11 states that had enacted state laws regulating the use of artificial intelligence (or “deep fakes” or “synthetic media”) in political advertising – with some states purporting to ban the use entirely, and most allowing it if it is labeled to disclose to the public that the images or voices that they are experiencing did not actually happen in the way that they are portrayed.  As noted in the article, there are concerns about some states imposing obligations on broadcasters to ensure that AI in political ads is properly labeled when broadcasters have no way to know if AI has in fact been used and, for candidate ads, the broadcaster cannot reject the ad because of the “no censorship provisions” of Section 315 of the Communications Act even if they know AI has been used.  Since we published the article, two additional states (New York and Florida) have enacted AI statutes.   

Artificial Intelligence was the talk of the NAB Convention last week.  Seemingly, not a session took place without some discussion of the impact of AI.  One area that we have written about many times is the impact of AI on political advertising.  Legislative consideration of that issue has exploded in the first quarter of 2024, as over 40 state legislatures considered bills to regulate the use of AI (or “deep fakes” or “synthetic media”) in political advertising – some purporting to ban the use entirely, with most allowing the use if it is labeled to disclose to the public that the images or voices that they are experiencing did not actually happen in the way that they are portrayed.  While over 40 states considered legislation in the first quarter, only 11 have thus far adopted laws covering AI in political ads, up from 5 in December when we reported on the legislation adopted in Michigan late last year.

The new states that have adopted legislation regulating AI in political ads in 2024 are Idaho, Indiana, New Mexico, Oregon, Utah, and Wisconsin.  These join Michigan, California, Texas, Minnesota, and Washington State which had adopted such legislation before the start of this year.  Broadcasters and other media companies need to carefully review all of these laws.  Each of these laws is unique – there is no standard legislation that has been adopted across multiple states.  Some have criminal penalties, while others simply imposing civil liability.  Media companies need to be aware of the specifics of each of these bills to assess their obligations under these new laws as we enter this election season where political actors seem to be getting more and more aggressive in their attacks on candidates and other political figures. 

Continue Reading 11 States Now Have Laws Limiting Artificial Intelligence, Deep Fakes, and Synthetic Media in Political Advertising – Looking at the Issues

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

  • The FCC announced several dates and deadlines in proceedings of importance to broadcasters:
    • The FCC announced that May 16 is the effective date of its decision authorizing limited program origination by FM booster stations.  This means that, beginning on May 16, a licensed FM station may seek experimental authority for up to a year (which can be renewed) to originate up to 3 minutes of programming per hour on an FM booster station.  The FCC also announced that comments are due May 16 on the FCC’s proposals for the final service and licensing rules for FM booster stations that originate programming.  Reply comments are due June 17.  See our Broadcast Law Blog article here for more details on this FCC decision.
    • The FCC announced that comments are due May 20 in response to its Notice of Proposed Rulemaking proposing a new Emergency Alert System (EAS) alert code for missing and endangered adults.  In the Notice, the FCC is seeking comment on whether to apply the new EAS alert code to individuals over the age of 17, missing adults with special needs, and missing adults who are endangered or who have been abducted or kidnapped.  Reply comments are due June 17. 
    • The FCC announced that April 19 is the effective date of its Report and Order requiring cable operators and direct broadcast satellite (DBS) providers to specify the “all-in” price for video programming in their promotional materials and on subscribers’ bills.  The “all-in” price includes all video programming charges, including those for broadcast retransmission consent, regional sports, and other programming.  Although the Order is effective, cable and DBS operators have until December 19, 2024 to comply with the new rules (or later if the Office of Management and Budget has not completed its review of the new rules by then).  Small cable operators (those with $47 million or less in annual receipts) will have until March 19, 2025 to comply with the “all-in” rule. 
  • The FCC released a Notice of Proposed Rulemaking (NPRM) seeking comments regarding the current state of the marketplace for diverse and independent video programming – including the obstacles faced by independent programmers (non-broadcast programmers that are not affiliated with either a multichannel video programming distributor (MVPD), broadcast network, or broadcast station licensee) in seeking carriage by MVPDs and online video distributors (OVDs).  In 2016, the FCC launched a proceeding to examine these questions, which it terminated in 2020 after it did not receive comments on the issues.  The FCC has now determined that it needs to revisit these issues after its 2020 Communications Marketplace Report identified concerns about marketplace obstacles faced by independent programmers.  To alleviate these concerns, the FCC proposes to prohibit certain contractual provisions in program carriage agreements between independent programmers and MVPDs -most favored nation provisions (terms that entitle MVPDs to more favorable contractual terms that a programmer has provided to another MVPD or OVD) and provisions that restrict alternative distribution methods including limiting a programmer from exhibiting its programming on OVDs.  While the FCC said that it is not aware of concerns about the effect of these contractual terms on programmers affiliated with a broadcast network or station licensee, it nevertheless seeks comment on whether its proposed ban should cover these entities as well.
  • The House Energy and Commerce Committee announced that the Subcommittee on Innovation, Data, and Commerce will hold a hearing on April 30 titled “Draft Legislation to Preserve Americans’ Access to AM Radio.”  At the hearing, the subcommittee will consider the proposed AM for Every Vehicle Act, which requires that automobile manufacturers retain AM radio in the car dashboard to prevent carmakers from removing AM (and potentially FM) from the car and replacing it with other entertainment options.  As we discussed on our Blog last week, while this Act has garnered much support on Capitol Hill, there has been a concern among some legislators as well as the Editorial Board of the Wall Street Journal about mandates on the car industry, particularly to protect the AM technology that some see as outdated.  The hearing will be live streamed here.
  •  The Senate Judiciary Committee’s Subcommittee on Privacy, Technology and the Law held a hearing on April 16 to discuss “AI: Election Deepfakes.”  State government officials and AI specialists talked about the potential for deepfakes to disrupt elections and steps that can be taken to minimize the threat they pose.  A video recording of the hearing, and witness statements, are available on the committee’s website, here
  • The FTC announced that it will hold an open meeting on April 23 to issue a final rule that would prohibit most employers from using noncompete clauses in employment agreements.  In January 2023, the FTC proposed to prohibit not only noncompete agreements but also any agreement that has the same effect as a noncompete agreement, including broad nondisclosure agreements that would preclude a worker from working in their field at a new company, or contract clauses that require an employee to repay a company for training costs if the employee leaves.  The proposed rule would apply not just to employees, but also to independent contractors, interns, and others performing work for a company.  The text of the final rule will not be made public until after the FTC vote at its April 23 meeting. 
  • The FCC’s Media Bureau released a Notice of Proposed Rulemaking asking for comments on a TV station’s petition for rulemaking that proposes the substitution of Channel 33 for Channel 13 at Jacksonville, Florida.  The petitioner is proposing the channel substitution due to the inferior quality of its VHF channel.  The petitioner notes that although the proposed move to Channel 33 by its station – an NBC affiliate – would result in a reduction in the number of viewers served, the proposed change would not result in the loss of NBC service because NBC service is provided by other NBC stations whose contours overlap those of the station.  The petition serves as another example of the superiority of UHF channels for the transmission of digital TV signals.

On our Broadcast Law Blog, we discussed the FCC’s regulations on how broadcasters conduct on-air contests, and the importance that the FCC places on stations abiding by the rules that they adopt to govern their contests, following the FCC Enforcement Bureau’s recent proposed fine on a California FM station for failing to deliver a winner’s prize in the time set by the contest rules.

Last week, the FCC’s Enforcement Bureau issued a Notice of Apparent Liability proposing an $8000 fine on a Los Angeles radio broadcaster that did not award a contest prize until over a year after the contest rules called for the prize to be delivered.  The contest rules called for the prize to be awarded within 30 days of a winner sending all required paperwork to the station.  As payments were made over a year after the end of the 30-day period provided by the contest rules, the Bureau concluded that the station had violated Section 73.1216 of the FCC rules which requires, among other contest rules, that a contest be conducted “fairly and substantially as represented to the public.”  The Bureau’s Notice cites to FCC precedent indicating that “timely fulfillment of the prize” is a material term in the contest rules which, when violated, represents a violation of the FCC rule.

The prize money that was awarded late was only $396, so some might think that a proposed fine of $8000 is excessive, though the Bureau indicates in a footnote that there were 98 prize winners in the same contest that did not timely receive their prizes.  The Bureau itself noted that the “base forfeiture” for a violation of the contest rules set out in the FCC’s schedule of fines is $4000.  But the proposed fine was adjusted upward in this case because the FCC perceived that, for a large company such as the licensee of this station, a $4000 fine might simply be seen as a cost of doing business, and not act as a sufficient deterrent against future bad conduct.  The FCC even noted that it had the power to fine the station for each day that the contest award was not made, which could have resulted in a fine of hundreds of thousands of dollars.

Continue Reading FCC Proposes $8000 Fine for Failure to Award $396 Prize Within Time Period Set Out in the Contest Rules

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

  • The debate over the AM for Every Vehicle Act intensified this week, with the Wall Street Journal’s Editorial Board publishing an article opposing Congressional action to require automobile manufacturers to include free over-the-air AM radio in every car.  The CEO of the National Religious Broadcasters responded in an article in Radio World magazine.  We summarized the arguments and offered more context on our Broadcast Law Blog, here
  • The FCC’s Enforcement Bureau proposed an $8,000 fine against a California radio station for failing to comply with the FCC’s contest rules.  The Bureau found that the radio station violated the rules of its contest by not delivering to a contest winner their $396 prize for over a year after the winner submitted all required paperwork.  The contest rules stated that a winner would receive their prize within 30 days of completing the paperwork.  The Bureau rejected the station’s argument that COVID-19 pandemic and a ransomware attack caused the problem as, under the rules, the prize should have been delivered no later than March 3, 2020 – before the pandemic lockdowns and before the attack occurred. 
  • The FCC’s Media Bureau granted Pinal County, Arizona’s request to modify the local markets of four Tucson, Arizona TV stations by adding the county.  Market modification allow broadcasters, satellite TV providers, and local governments to request changes to a TV station’s local market to reflect market realities for purposes of satellite carriage – enabling a station to expand its carriage rights.  The Tucson stations are assigned to the Tucson (Sierra Vista) DMA.  Pinal County – which is assigned to the Phoenix (Prescott) DMA – requested that it be assigned to the Tucson stations’ market.  The Bureau found that DISH and DIRECTV’s carriage of the Tucson stations in the county was technically feasible and weighed the five market modification factors used by the Bureau in deciding this kind of case.  The Bureau found that: (1) the stations had no historic satellite carriage in the county, which weighed against the proposed modification; (2) the stations provided local service to the county because their technical service contours reach much of the county and the stations provided extensive local programming for the county; (3) adding the county to the stations’ market would promote access to in-state broadcast signals since all of the stations’ signals originate in Arizona; (4) the stations were not uniquely qualified to serve the county due to the large number of Phoenix stations already carried there by satellite providers, but the Bureau assigned no weight to this factor as, while this factor can bolster a market modification request, the lack of unique service is not usually counted against a petitioner; and (5) there was no evidence of significant viewership of the stations in the county, but the Bureau only gave this factor limited weight – noting that it was rare to find any evidence of viewership in a satellite market modification petition, and in this case there was at least some local viewership, and likely more in parts of the county closer to Tucson.  The Bureau concluded that, on balance, there was a sufficient local relationship between the Tucson stations and Pinal County to grant the proposed modification.
  • Reply comments were filed this week in response to the FCC’s January Notice of Proposed Rulemaking proposing to prioritize the review of certain applications by a broadcast station providing at least three hours per week of local programming.  As we discussed here, the proposed prioritization policy is intended to incentivize stations to provide local programming – which a majority of the Commissioners suggested was necessary after the FCC’s 2017 elimination of the main studio rule (see our articles here and here).  NPR and NAB (here and here) state that the FCC’s proposal would do little to incentivize broadcasters to produce more local programming, and these commenters in addition to others (see here and here) encourage the FCC to do more to support broadcast localism such as refocusing its efforts on policies that enable broadcasters to compete in today’s hyper-competitive marketplace.  Other commenters (see here and here) disagreed on whether the three-hour local programming threshold is sufficient to encourage broadcasters to produce local programming.  Finally, one commenter stated that reinstating the main studio rule would be detrimental to rural communities and would tip the scale toward unprofitability – thereby leading to smaller, rural radio stations ceasing operations. 
  • The FCC’s Enforcement Bureau issued two Notices of Illegal Pirate Radio Broadcasting to landowners in Beacon, New York and San Francisco, California for allegedly allowing pirates to broadcast from their properties.  The Bureau warned the landowners that the FCC may issue fines of up to $2,391,097 under the PIRATE Radio Act if the FCC determines that the landowners continued to permit any individual or entity to engage in pirate radio broadcasting from their properties.
  • The FCC’s Media Bureau took two other actions against broadcasters for violations of the FCC’s rules:
    • The Bureau fined the licensee of an Alabama FM translator station $16,500 for failing to request FCC authorization for its continued use of temporary facilities for two years after an STA expired, and for operating the translator without proper FCC authorization during this period.  The licensee requested that the Bureau cancel or reduce the fine because the translator operated at a loss for two of the last three years and paying the proposed fine would threaten licensee’s ability to continue operating.  The Bureau rejected the financial hardship claim as a sale of the translator was pending and the fine constituted only a fraction of the sales price. 
    • The Bureau entered into a Consent Decree with the licensee of several North Dakota and Minnesota noncommercial TV stations which required payment of a $8,150 penalty.  The Consent Decree resolved an investigation into the licensee’s apparent failure to timely upload several of the stations’ Quarterly Issues/Programs Lists to their Online Public Inspection Files and to completely disclose the late-filed lists in the stations’ license renewal applications.  Under the Consent Decree, the licensee must also implement a compliance plan to ensure future compliance with the FCC’s rules. 
  • The FTC announced the winners of its Voice Cloning Challenge.  As we discussed here, the contest was intended to promote the development of ideas to protect from the misuse of AI-enabled voice cloning by having members of the public submit proposals for tools that can be used to prevent, monitor, and evaluate the malicious use of the technology.  There were three contest winners that will split a total of $35,000 in prize money: two small organizations focused on the development of devices and apps used for the detection of AI-enabled voice cloning, and a member of academia who developed a watermarking tool to identify voice cloning.  A fourth organization was recognized for its creation of technology that detects voice clones and audio deepfakes in real time.  The FTC noted the four winning submissions demonstrate the potential for developing multiple technologies that can mitigate the risks of AI-enabled voice cloning as there is no single solution to the problem.  The FTC also highlighted its other efforts to mitigate the harms of AI-enabled voice cloning, including proposing a comprehensive ban on impersonation fraud and affirming that the Telemarketing Sales Rule applies to AI-enabled scam calls.
  • The House Subcommittee on Communications and Technology held a hearing titled “Where Are We Now: Section 230 of the Communications Decency Act of 1996.”  The hearing examined the purpose of Section 230 and discussed what Congress can do to modernize the law.  As we discussed here and here, Section 230 of the Communications Act was designed to insulate online platforms from liability for content created by others that is hosted on their sites.  Section 230 immunity had long been considered essential to the success of the Internet, but more recently there have been concerns that the law has had unintended consequences, such as enabling terrorist activity, promoting the exploitation of minors, and allowing discrimination and harassment.  A recording of the hearing can be found here, and the hearing memo can be found here.

On our Broadcast Law Blog, we discussed the FCC’s decision to allow FM boosters to originate limited amounts of programming that is different from what is broadcast on the booster’s primary station. 

With broadcasters and those in associated industries ready to make their annual pilgrimage to Las Vegas for the NAB Convention, the Wall Street Journal decided to weigh in on an issue important to many radio broadcasters – the future of AM in the car.  One of the priorities for many AM broadcasters in the last year has been to push for legislation to require that automobile manufacturers retain AM radio in the car dashboard to stem what many see as a trend toward removing AM (and potentially other free over-the-air radio options) from the car and replacing it with other entertainment options.  The concerns of broadcasters have led to the introduction in Congress of the AM in Every Vehicle Act, which proposes to mandate that AM be required as a safety feature in all cars until it is determined that there is another, free, ubiquitous option to deliver emergency alerts to drivers.  See our articles here and here for more on the Act.

While this Act has garnered much support on Capitol Hill, there has been a concern among some legislators about requiring mandates on a car industry, particularly for a technology that many see as outdated and in decline (see the declining numbers of AM stations we noted in our last weekly update on regulatory news for broadcasters, citing the FCC’s latest report on the number of broadcast stations in the country).  The Journal Editorial Board article takes that same position, almost treating the attempts to keep AM radio in cars as a joke, arguing that it imposes additional unnecessary costs on car makers – costs that will be borne by all car buyers, even those who don’t need or use AM radio.  The article suggests that the emergency communications function is unnecessary as there are other alternatives to receive emergency alerts even in rural areas of the country.  The article asks if mandating AM in the home is next, and suggests that, without a mandate, car makers could use AM as a competitive feature to attract consumers to brands that maintain these radios in the car.

Continue Reading On the Eve of the NAB Convention, Wall Street Journal Editorial Board Article Opposes AM in Every Vehicle Act

Last week, the FCC approved a long-pending request by GeoBroadcast Solutions to allow FM boosters to originate limited amounts of programming that is different from what is broadcast on the booster’s primary station.  Boosters operate on the same channel as an FM broadcast station and have traditionally been used to fill in holes in an FM station’s coverage area where service that would otherwise be predicted to occur is blocked by terrain obstacles or some other impediment that prevents the main station from reaching a part of the station’s primary service area (in most cases a 60 dBu or 1 mv/m signal) predicted using the FCC’s standard coverage prediction methodology.  As boosters operate on the same channel as the main station, their use has always been limited because of fears of creating interference to the main station’s signal if not properly shielded by terrain or other obstacles.  The service approved last week – called “geocasting” or “zonecasting” – is supposed to allow boosters to originate limited amounts of programming different from the primary station and minimize interference not by terrain, but by other signal timing and coordination methodologies.  The proponent of the system claimed that this would minimize interference and allow stations to originate different commercials, news reports, or other geographically targeted programming in the different parts of a station’s service area to better compete with the geotargeting used by the digital media companies that are now competitors to radio.

Numerous broadcasters, and the NAB, had opposed this effort, as we noted in a recent article on the controversy.  Their fear was that no matter how good the synchronization of these boosters may be, there will still be the potential for some interference.  Just by putting more signals on the FM band in close proximity to each other, some interference naturally will result.  Objections were also raised about the economic impact of the proposals.  With more radio inventory addressing fewer people, there are fears that the implementation of this proposal could drive down radio advertising prices far below the rate now in place.  In addition, there are worries about the impact that geocasting could have in outlying smaller markets – as big market stations could use boosters in outlying parts of their service areas to target advertisers in these areas, taking advertising away from the full power stations serving those outlying communities.  The FCC’s order last week noted that the New Jersey broadcasters expressed particular concern, as New York and Philadelphia stations could use boosters to target advertisers who now buy advertising on New Jersey stations to reach local consumers because rates on the big city stations are cost prohibitive for reaching a targeted audience.  The fear is that these advertisers will now use the boosters of big city stations and abandon their local broadcasters, and that big stations will get bigger and more dominant, at the expense of the local stations doing local service to these outlying areas.

Continue Reading FCC Approves Origination of Programming on FM Boosters to Facilitate Geocasting – Targeting Different Ads or Programming to Different Parts of FM Station’s Service Area