Broadcast Law Blog

Broadcast Law Blog

Proposal for Class C4 Stations Coming From the FCC – What are the Considerations for Radio Broadcasters?

Posted in FM Radio

In a speech yesterday at the MMTC Ninth Annual Broadband and Social Justice Summit, Chairman Pai revealed that a Notice of Proposed Rulemaking to adopt a new Class C4 FM station, that would allow the increase in power of some Class A stations that meet new spacing requirements, had been drafted and was circulating at the FCC for consideration. So we should expect to see something soon. While some Class A stations are certainly in favor of getting more power to increase coverage and increase building penetration in area that they already cover, there are some who are more leery about the proposal. We wrote the following about some of those concerns in September 2016, when this idea was first discussed by then Commissioner Pai at an NAB Radio Show:

A Class C4 station would fit between Class A FM stations (limited to 6 kw ERP at 100 meters antenna height above average terrain) and a Class C3 (25 kw at 100 meters). The Class C4 station would be authorized with a power of up to 12 kw ERP. According to the Commissioner’s speech, this would allow for Class A stations to upgrade their facilities to better serve their communities. We wrote about this proposal when it was first released (here), presenting more details about the technical facilities that are involved in this proposal. While some broadcasters did initially support the proposal, others were less enthusiastic about the idea. Why are there issues with this proposal?

One of the biggest issues is simply the congestion of the FM band. The more stations that are shoehorned into the FM band, the more interference that is created. Many FM stations enjoy listenership beyond the coverage that is predicted by the FM spacing tables. Increasing power of existing Class A stations might well limit those areas of service enjoyed by some stations, and might also limit the ability of existing stations to upgrade to higher classes with more meaningful coverage increases.   It may also reduce flexibility of existing stations to change transmitter sites if something happens to the sites from which they currently operate.

But, today, the area where there is perhaps the most concern is the impact that the proposal, if implemented, could have on FM translators and LPFM stations.   Congestion in the FM band limits opportunities for new FM translators and LPFMs, and could even disrupt the operation of existing translators and LPFM stations. Upgrades by Class A stations to Class C4 could cause interference to the existing translators and LPFMs, perhaps requiring these secondary stations to have to change frequency (if other frequencies are available in their market). In the two years since comments were initially filed on the Class C4 proposal, the use of translators has only increased, particularly to rebroadcast AM stations. Obviously, any consideration of this proposal would have to look at the differences in the use of translators that have occurred since it was first advanced.

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The concerns expressed above have only multiplied since they were written, based on the thousands of translators that have been repurposed for AM uses in the recent filing windows. So, in evaluating this proposal, the Commission would be faced with the need to weigh the benefits of the upgrades that some stations could enjoy against the limits on translators and other FM upgrades that could be precluded.  We should see exactly what is being proposed shortly.

FCC to Randomly Inspect TV Stations Repacked by the Incentive Auction

Posted in Digital Television, Incentive Auctions/Broadband Report, Television

The FCC yesterday released a Public Notice indicating that they will be inspecting approximately 60 of the over 900 TV stations changing channels as a result of the incentive auction and the repacking of the TV spectrum that took place after that auction.  The FCC notice says that it is hiring contract employees who will conduct these inspections on a randomly selected set of stations to assess the equipment that they have on hand and will be replacing when moving to their new channel. The stations are seeking reimbursement from the FCC’s $1.75 billion pool of money set aside to reimburse stations for equipment that needs to be replaced to allow the stations to operate on their new channels.

The notice says that the FCC will be assessing the “existence and functionality” of the equipment for which reimbursement is sought.  The FCC seems to be saying that it will be making sure that stations really have the equipment that they are seeking to replace through reimbursement funds.  The “functionality” aspect may be an assessment as to whether that equipment really needs to be replaced, though the notice does not specifically make that statement.  The approximately 60 stations selected at random will be used as a statistical sample to assess the reliability of repacking estimates provided by stations to the FCC.  Nothing forecloses the FCC from conducting further audits in the future.  So if you have a TV station that has been repacked, and the FCC comes knocking, you will know what the inspection is all about.

The Super Bowl is Over – Let’s Talk About the Olympics and Trademarks

Posted in Advertising Issues, Intellectual Property, Programming Regulations, Trademark

Last month, we posted some updated guidelines about engaging in or accepting advertising or promotions that directly or indirectly allude to the Super Bowl without a license from the NFL.  “As Super Bowl Approaches, Advertisers Should Be Aware of The NFL’s Efforts to Protect Its Golden Goose – 2018 Update”  Now, that is behind us (for another year), it is just in time to think about these issues in the context of the Winter Olympics!

The guidance from last month’s blog addressed the following subjects:

  • Advertising that refers to the Super Bowl or other NFL trademarks;
  • Advertising that uses non-trademarked terms that will be understood by the public to refer to the Super Bowl;
  • Conducting or sponsoring events and parties for viewing the Super Bowl;
  • Sweepstakes or giveaways that use “Super Bowl” as part of its name or offer prizes that include game tickets;
  • Offering “special” coverage relating to the Super Bowl, accompanied by advertising;
  • Congratulatory advertising; and
  • Whether disclaimers will provide a defense to a claim.

The concepts advanced in that discussion apply equally to the Olympics, but the US Olympic Committee has a unique weapon in its arsenal, so there are additional considerations of which you should take note. Continue Reading

FCC Reaches Consent Decree with Noncommercial Broadcaster Imposing Largest Fine Ever Issued for Underwriting Violations – $115,000

Posted in Advertising Issues, FCC Fines, Noncommercial Broadcasting

Noncommercial broadcast stations are licensed to be just that – noncommercial. These stations can run “underwriting announcements” acknowledging commercial businesses that provide financial support to the stations, but such announcements must meet strict guidelines – including restrictions on “calls to action,” prohibitions on statements about prices or discounts, and requirements that no qualitative claim about the sponsor’s products or services can be made. From time to time, the FCC will fine or admonish noncommercial stations that run underwriting announcements that are too commercial. Yesterday, the FCC announced that its Enforcement Bureau had reached a Consent Decree (available here) with a noncommercial broadcaster who acknowledged having run underwriting announcements that had exceeded the bounds set by the rule. To settle the complaints about its announcements at stations in California and Arizona, the licensee agreed to pay the FCC a penalty of $115,000. According to the FCC Press Release on the matter, this was the highest penalty ever imposed on a noncommercial broadcaster for violations of the underwriting rules.

In addition to the fine, the licensee had to agree to a one-year moratorium on underwriting announcements from commercial entities. In addition, the licensee had to institute a compliance plan to educate its employees about the requirements of the FCC rules on underwriting, including a requirement that it create a training manual for use by its staff, and that it appoint a compliance officer to oversee compliance with the underwriting restrictions. For four years, the licensee needs to report to the FCC any instance where they violate the rules, and file a yearly report detailing their efforts to maintain compliance and certifying either that there have not been any violations of the rules or, if such a certification cannot be made, the details of any violations. Continue Reading

February Regulatory Dates for Broadcasters – Including EEO, Online Public File, Biennial Ownership Reports, ATSC 3.0 and FM Translator Comments, Effective Dates of Ownership Rule Changes

Posted in AM Radio, Digital Television, EEO Compliance/Diversity, FM Radio, FM Translators and LPFM, General FCC, Multiple Ownership Rules, Noncommercial Broadcasting, Television

We are already a full month into the New Year, and the regulatory issues for broadcasters keep on coming. February brings the usual requirements for Annual EEO Public File Reports, which should be placed into the public inspection files (those public files being online for TV stations, big clusters of radio stations in Top 50 markets, and for those other radio stations that have converted to the online public file in anticipation of next month’s deadline) of stations in Arkansas, Kansas, Louisiana, Mississippi, Nebraska, New Jersey, New York, and Oklahoma that are part of an Employment Unit with 5 or more full-time employees. Radio stations with 11 or more full-time employees in New Jersey and New York also must file with the FCC a Mid-Term EEO Report on Form 397 by the end of the day today. TV stations with 5 or more full-time employees in Kansas, Nebraska and Oklahoma also must file the Mid-Term Report.

As noted above, March 1 brings the deadline for all radio stations to convert to the online public file hosted by the FCC (see our article here for more details about this requirement). For those radio stations that have not yet completed their conversion, February is the month to be uploading those documents. As the FCC automatically uploads most of the applications and other FCC filings that need to be in the public file, the documents that will likely take the most time for the broadcaster to upload are Quarterly Issues Programs Lists and Annual EEO Public File Reports, documents not filed with the FCC on a regular basis. We have already heard reports that the FCC’s public file system is running slow at certain times of the day, probably because of the strain of so many people uploading documents. We expect that these issues will only get worse as the March 1 deadline approaches. So, if you are a procrastinator, get on this now, as time is getting short. Continue Reading

SoundExchange to Audit Records of Streaming by Alpha Media, Music Choice, and Google

Posted in Intellectual Property, Internet Radio, Music Rights

Last week, the Copyright Royalty Board published a Federal Register Notice announcing that SoundExchange was auditing broadcaster Alpha Media as well as Music Choice and Google to assess their compliance with the statutory music licenses provided by Sections 112 and 114 of the Copyright Act for the public performance of sound recordings and ephemeral copies made in the digital transmission process. From the notice, it appears that SoundExchange is auditing only the webcasting activities of these organizations. Music Choice also provides a music service usually delivered with cable or satellite television services; a service that is subject to separate royalty rules though part of the same section of the statute. Google is somewhat of a surprise as most people don’t think of it as providing a noninteractive webcasting service – the kind of service subject to the statutory royalty which SoundExchange collects – but it must be doing so for it to be audited.

SoundExchange may conduct an audit of a licensee for the prior three calendar years in order to verify royalty payments. While, by statute, the notice of the royalty must be published in the Federal Register, the results usually are not made public. The decision to audit a company is not necessarily any indication that SoundExchange considers something amiss with that company’s royalty payments – instead they audit a cross-section of services each year (see our past articles about audits covering the spectrum of digital music companies here, here and here). SoundExchange is not the only royalty collection group who can audit music companies – though its audits are different because announcements are published in the Federal Register. All of the other performing rights organizations (e.g. ASCAP, BMI and SESAC) can conduct audits from time to time. Audits are not limited to music, as television stations and other video companies can be audited to assess their compliance with program royalty obligations. We wrote more extensively about the royalty audit process here. So read our summary of the audit process, talk to your attorneys and accountants about the records you are keeping, and maintain those books and records to show that you have paid what you owed, as any company, big or small, could be the subject of a future audit to assess its compliance with its royalty obligations.

Copyright Royalty Board Decision Will Raise Royalties Paid to Songwriters and Publishers By Digital Music Services

Posted in Intellectual Property, Internet Radio, Music Rights

The amount paid to songwriters and publishing companies for the making of “phonorecords” will be going up after a Copyright Royalty Board decision just released to the parties to the case. A summary of the findings have been published on the CRB website, here. The new rules are available here. A full decision explaining the CRB reasoning will follow at some later date.

These royalties are not ones paid by broadcasters or non-interactive webcasters or internet radio stations. Instead, these are the royalties paid under Section 115 of the Copyright Act for the making of copies of musical compositions when making a sound recording (this would include the amount paid by a record label or performing artist to the composer of a song or the composer’s publishing company for the use of the composition in a CD or for a digital download) and, more importantly in today’s world, in connection with on-demand or interactive music services. While one might wonder if an on-demand stream really makes a reproduction of a composition when it is sent to a customer to enjoy, by tradition that has grown up over the last decade, these royalties are paid by these services (though, in one case, Spotify questioned whether they were legally required). Continue Reading

Comment Dates Set on National TV Ownership Caps – Can and Should the FCC Amend the 39% Audience Cap?

Posted in Multiple Ownership Rules, Public Interest Obligations/Localism, Television

At its December meeting, the FCC adopted a Notice of Proposed Rulemaking to review the national ownership cap for over-the-air television, which limits one owner from having attributable interests in television stations reaching more than 39% of the national audience. That Notice was published in the Federal Register on Friday, setting February 26 as the date for initial comments, and March 27 as the date for reply comments. When the FCC last year reinstated the UHF discount (see our article here), one of its justifications for the reinstatement was that the elimination of the discount could not be done without a full review of the national ownership rules – as the elimination of the discount could affect the video marketplace, and any potential adverse effects should be studied before abolishing the UHF discount (the discount counts each UHF station as reaching only one-half the audience of a VHF station). When the FCC reinstated the discount, the Commission promised to initiate this rulemaking proceeding.

The NPRM basically asks two fundamental questions – does the FCC have the authority to amend the cap, and if does, should it use that authority to make changes now? The initial question is based on the fact that the 39% limit is written into statute by Congress. Obviously, this is a fundamental question, and the usual political party divide over the interpretation of ownership rules is not fully in evidence here. Republican Commissioner O’Rielly indicated in his statement supporting the initiation of the proceeding that he believes the FCC does not have the power to change the cap – only Congress can do that, as Congress set the cap and did not provide explicit authority for the FCC to review or amend it. The two Democratic Commissioners also questioned that authority – so one of these three Commissioners would have to change their initial understanding of the law for any change to become effective, or Congress would have to step in. Continue Reading

Time for the FCC to Review Children’s Television Educational Programming Obligations of Broadcasters?  Commissioner O’Rielly Thinks So

Posted in Children's Programming and Advertising, FCC Fines, License Renewal, Programming Regulations

Last week, Commissioner O’Rielly published an article on the FCC blog, suggesting that one of the next steps in the FCC’s Modernization of Media Regulation initiative should be the review of the FCC rules setting obligations for television stations to air educational and informational programming directed to children.  Stations are required to air an average of 3 hours of educational and informational programming per programming stream, and there are a host of related obligations generally requiring that the programming be run at regular times and be at least 30 minutes in length.  The rules also limit the ability to count repeats of such programs and requires that this programming be advertised in local programming guides.  We have written about fines or warnings that the FCC has issued in many cases, including questioning whether programming classified as educational and informational really should have been classified in that manner, for failing to have an onscreen “E/I bug” labeling, for counting one-time programs to meet the requirement for 3 hours of regularly scheduled programs, the programming as educational, and for failing to publish information about these programs in local program guides.

The Commissioner raised the question of whether the obligation, adopted in the 1990mos (see the FCC order here) really continues to make sense in today’s media marketplace.  So much has changed in the last 23 years, including the explosion of different sources of educational programming for children – including cable, Internet and other sources.  No longer are TV stations the only sources of video programming – and, in a world where even Big Bird has moved to a cable platform, there is a real question as to whether over-the-air television stations are even the best platforms for the delivery of such programs.  With so many competing sources of children’s programming, the Commissioner asked whether there is really a need for each station to do 3 hours of such programming on each of its channels.  Certainly, there have been questions of whether quality programming can be produced to meet the obligations for each channel and subchannel, when the new program sources are splintering the potential audience for any such programs.  The Commissioner also suggests that the current rules limit creativity in programming – forcing broadcasters to spend money on 30-minute on-air programs and not on other potential ways of meeting the needs of children, e.g. through short-form programs or online information. Continue Reading

Public Interest Groups Ask for Ownership Rule Changes to be Put on Hold and Special Master to Be Appointed to Oversee FCC Review

Posted in EEO Compliance/Diversity, Multiple Ownership Rules, Television

As we wrote last week, Prometheus Radio Project and the Media Mobilizing Project have filed an appeal of the FCC’s November decision to eliminate the newspaper-broadcast and radio-television cross-ownership rules and to relax the local TV ownership rules (see our summary here).  These groups have now filed a request – an Emergency Petition for a Writ of Mandamus – asking not only that the Court put the rule changes on hold, but also that the Court appoint a “special master” to oversee the FCC’s further action on the ownership rules.  The request to put these rules on hold could, if adopted, block transactions that are pending or those that parties are planning on filing to take advantage of the changes in the ownership limits.  The request also asks that the case be assigned to judges on the Third Circuit who have dealt with prior appeals of the FCC’s ownership rules and have, in a few cases, overruled those decisions (see, for instance, our article here).

These public interest groups allege that the FCC has ignored prior decisions of the Court which the groups characterize as requiring that the FCC look at the impact of any rule change on minority ownership, and look for ways to enhance ownership diversity, before any changes are made in the ownership rules.  Of course, the same court has also suggested that the FCC do away with the newspaper-broadcast cross-ownership rules and recognized that other changes in the ownership rules (like on JSAs) need not be stopped in their tracks (see our post here on one such order from the Court).  And several broadcast owners previously asked the Third Circuit to wipe all the media ownership rules off the books—creating, in effect, complete deregulation in the industry. While the court declined to do so, it noted that “this remedy, while extreme, might be justified in the future if the Commission does not act quickly to carry out its legislative mandate.”

So the public interest groups’ filing is, as is always the case, one side of the story.  We will be watching to see further developments in this case in the near future.  As the ownership decision is set to go into effect on February 7 (see our post here), if any action is taken on this motion, it would have to be taken quickly.