In recent weeks, decisions of a US District Court judge in the Southern District of New York led to the suspension of service by the Internet streaming company Locast, which built its business on streaming local television stations generally without obtaining the consent of TV stations or the copyright holders in the programs they broadcast.  Facially, the service looked much like that offered by Aereo, which the Supreme Court determined seven years ago violated federal copyright law by retransmitting TV stations without first obtaining the consent of the copyright holders (see our article here on the Aereo Supreme Court decision).  Locast offered a novel defense to the claims that it was nothing but an Aereo imitator, contending that the Copyright Act permitts nonprofit entities to retransmit copyrighted materials without the consent of copyright owners.  The federal judge in the Southern District rejected that argument in his opinion on a motion for summary judgement, and then issued an injunction ordering the service to cease operating (though Locast had already suspended those operations after the initial decision on the motion for summary judgement).  What did the judge find?

Locast had argued that Section 111(a)(5) of the Copyright Act permits “secondary transmissions” of a “primary transmission” (i.e., an internet transmission of an over-the-air television signal) without permission of copyright holders if the retransmissions are made by a government body or nonprofit organization “without charge to the recipients of the secondary transmission other than assessments necessary to defray the actual and reasonable costs of maintaining and operating the secondary transmission service.”  This provision of the rules was intended to allow governments and local nonprofit associations in rural communities to provide TV translators or community antenna systems to bring television service to their communities.  Locast argued that the provision should also be interpreted to authorize its service, which interrupted service every 15 minutes to ask for donations unless a user paid a $5 monthly “contribution” to the service.  The judge determined that the payment of this $5 monthly fee took Locast outside the narrow “nonprofit organization” exception provided by the law. Continue Reading Looking at the Court Decision Which Led to the Shuttering of Locast’s Retransmission of Local TV on the Internet

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.

  • In anticipation of this week’s deadline for payment of annual regulatory fees – 11:59 pm, Eastern Daylight Time on Friday, September 24, 2021 – the FCC’s Media Bureau released a guide to computing the fees due for broadcast stations (Media Bureau Fee Filing Guide) and made available a fee lookup webpage. A separate Fact Sheet on who is regularly exempt from paying these fees (including noncommercial stations and those payors with total obligations of $1000 or less) was also released this week.  Read our summary of all of the FCC notices on the procedures and requirements for paying these fees on our Broadcast Law Blog, here.
  • The FCC released a draft rulemaking that asks, among other things, whether broadcast stations should be required to report their operational status to the Disaster Information Reporting System (DIRS) when it is activated during an emergency. That reporting is currently voluntary.  If the rulemaking is adopted by the FCC, it would ask about the burden that mandatory reporting would place on stations in the middle of an emergency and whether the burden would impede coverage by the station of the emergency, whether the FCC has the legal authority to require reporting, and the penalties that could be tied to a failure to report.  The draft will be considered at the FCC’s September 30 regular monthly open meeting.  (Draft Notice of Proposed Rulemaking)
  • NAB and two other media trade groups are trying to delay the effective date of the FCC’s new rules which require the on-air identification of programs supported by foreign governments (and require research by broadcasters as to whether any buyer of program time is a representative of a foreign government), while the groups pursue a review of the rules in federal court. The groups argue that they are likely to win in court, so implementation of the rules before the court acts would be premature and unnecessarily costly for stations.  We mention the foreign government sponsorship identification rules in one of our weekly updates, here and the court case, here. (Petition for Stay)
  • A New York federal district court judge issued a permanent injunction blocking Locast from any further operation of its service which had retransmitted on the internet the programming from over-the-air television stations without consent of the stations. The same federal judge two weeks ago ruled that Locast’s operation violated federal copyright law.  We noted that decision, here.
  • About a hundred organizations wrote Acting FCC Chairwoman Jessica Rosenworcel urging the FCC to formally examine what is claimed to be the agency’s history of systemic racism in its policies and licensing. The letter calls on the FCC to “investigate its own history of anti-Black racism in the policies it has adopted” and to “identify reparative actions it will take to redress the structural racism that exists in our media system due to those FCC policies.” (Letter)  This letter comes as some of these issues may be considered in in comments due September 30 on the FCC’s rulemaking on whether to bring back the FCC Form 395, reporting on the racial and gender breakdown of each broadcast station’s workforce, and in the October 1 reply comments on the FCC’s inquiry into potential changes to its multiple ownership rules, including changes to the radio ownership rules, changes opposed by several organizations because of the alleged impact that changes would have on minority ownership (see our blog article here about the FCC inquiry on the ownership rules).

With a week to go before the deadline for submission of annual regulatory fees, we urge broadcasters to get into the FCC’s fee filing system now and pay their fees.  We have been told that there are sometimes glitches in the electronic payment system that can take time to resolve.  With a 25% penalty on payments received after the September 24 deadline, broadcasters should not wait until the last minute to submit these fees and risk having to pay the steep penalty for a late payment should a glitch arise.

The FCC has issued numerous public notices about the payment of these annual regulatory fees that anyone paying fees should review to make sure that they know all that they need to know to make a complete and timely payment.  The FCC initially issued a Public Notice announcing that the payment window is open and will be open for timely payments through 11:59 pm Eastern Daylight Time on September 24, 2021. The Media Bureau subsequently released a Media Bureau Fee Filing Guide setting out payment specifics for computing the fees due from broadcast stations.  The Bureau’s online fee lookup portal for the fees that the FCC believes are due from any specific station was activated early this week (see the FCC Public Notice here).  Remember, fees are based on a station’s status as of October 1, 2020, so stations that have since changed facilities pay on the facilities as they were last year – and that is what should be reflected in the FCC’s database.  This week, the FCC also issued a Fact Sheet explaining who does not owe fees – including noncommercial stations and companies whose total obligations are $1000 or less. Continue Reading 2021 Regulatory Fee Deadline of September 24 – Don’t Delay!

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 opened the window for Fiscal Year 2021 regulatory fees which must be paid no later than 11:59 pm, Eastern Daylight Time on September 24, 2021 – a 25% penalty will be attached to late payments (Public Notice). The Media Bureau released a guide to computing the fees due for broadcast stations (Media Bureau Fee Filing Guide).  A separate notice on payment procedures was also released by the FCC (Payment Procedures Public Notice).  Licensees that want to seek a waiver, deferral, or reduction of their regulatory fees based on financial hardship from the pandemic should review yet another public notice setting out the procedures for such requests.  These requests, which are to be submitted by September 24, must include financial documentation demonstrating the hardship of a timely payment.  (Public Notice on Fee Waivers)
  • The FCC reminded broadcasters of their obligations to file biennial ownership reports this year. The window to file these reports opens on October 1 and closes on December 1 (Public Notice).  To help broadcasters prepare for filing their biennial ownership reports, the FCC will present an online information session on October 5, 2021 at 2:00 PM EDT, which will include the opportunity for questions from online attendees.  The session is designed to help both novice and experienced filers.  It will be streamed live from the FCC’s web page at fcc.gov/live and the FCC’s YouTube page at https://www.youtube.com/user/fccdotgovvideo (where it will also be available for later viewing).  )
  • The FCC is seeking comment on the accessibility to children with disabilities of children’s educational and informational television programming.  Specifically, the agency wants to gather information on the extent to which short-form programming and regularly scheduled weekly programming aired on multicast streams is closed captioned and/or audio described, including on multicast channels like PBS KIDS. Comments are due October 7, and reply comments are due November 8.  (Public Notice)
  • The Incentive Auction Task Force reminded phase 0-5 repacked full power and Class A TV stations that they must submit all remaining invoices for reimbursement from the TV Broadcaster Relocation Fund by October 8, 2021. The deadlines to submit all remaining invoices and initiate interim close-out procedures for phase 6-10 repacked stations is March 22, 2022, and the deadline is September 5, 2022 for all eligible MVPDs, FM stations, and LPTV/translator stations that intend to seek reimbursement.  (Public Notice)
  • The FCC released the tentative agenda for its September public open meeting to be held on September 30 (Agenda). The agenda includes the proposed adoption of a Notice of Proposed Rulemaking seeking comments on standardized questions to be asked of foreign entities seeking to acquire interests in US communications facilities, including interests in broadcast stations, which require approval of the FCC or other government agencies (Factsheet and Draft Notice of Proposed Rulemaking)
  • A Low Power FM station entered into a consent decree for violating the FCC’s underwriting rules. LPFM stations are all licensed as noncommercial educational broadcasters and cannot run commercials.  The consent decree includes a $17,500 fine and requires that the licensee adopt a compliance plan to prevent future violations. The station was also granted a short-term, four-year license renewal instead of the normal eight-year renewal.  This action began with a complaint from a commercial station which argued that the LPFM station routinely aired commercial advertisements and had failed to air educational content.  The Media Bureau rejected the educational content argument, noting that the FCC has long recognized that licensees are entitled to broad discretion in the scheduling, selection, and presentation of programming; but found that many of the underwriting announcements were too promotional leading to the fine and other penalties. (Consent Decree)

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.

  • In a significant win for television broadcasters, a federal district court in New York determined that the nonprofit company Locast, which was retransmitting to viewers via the Internet local television stations without permission of the stations and without compensating them, was not entitled to rely on an exception in copyright law that allows nonprofit entities to retransmit copyrighted material without permission. One of the requirements to qualify for the exception is that the nonprofit that is retransmitting the signal do so without charge to the consumer other than a reasonable amount to cover its costs of maintaining and operating the service.  The Judge found that Locast was receiving revenues from viewers which exceeded its costs of operation, and thus he concluded that Locast could not rely on this exception.  After the release of the decision, the company shut down its operations, though an appeal of the decision may be filed.  (Decision)
  • For radio broadcasters, the full decision of the Copyright Royalty Board setting webcasting streaming royalty rates to be paid to SoundExchange for the period 2021-2025 was released, redacting confidential business information submitted as evidence by the parties (CRB Decision). We wrote about the decision here when the rates were initially announced, explaining how the royalty rates will increase from those that were in effect through 2020. The decision can be appealed to the US Court of Appeals but will become effective while any appeal is pending.
  • Comments and reply comments will be due September 30, 2021 and November 1, 2021, respectively, in connection with the FCC’s Further Notice of Proposed Rulemaking that seeks comment on reviving the FCC’s collection of data from broadcasters via Form 395-B which would require periodic reporting on the racial and gender characteristics of a station’s workforce. (Public Notice)
  • Eighteen television stations that were fined $512,228 each for violations of the good faith negotiation requirements of the FCC’s retransmission consent rules have petitioned the agency to reconsider its decision upholding the fines. The TV stations make, among others, a constitutional argument saying, in effect, that the stations could not have had notice that such large fines were possible, because the FCC had never fined a station for violation of the good faith negotiation requirement of the retransmission consent rules.  For more background on the earlier stages of this proceeding, see our blog posts here and here.  (Petition)
  • With about a month to go until broadcasters can start filling out their biennial ownership reports, the FCC released its report on broadcast station ownership as of October 1, 2019 as compiled from the last set of biennial reports. The Report provides a breakdown of the race and gender of broadcast station owners – information compiled from the 2019 biennial reports.  (Report)

The saga of Flo & Eddie seeking performance royalties for the pre-1972 sound recordings of their old band, the Turtles, seems to be finally reaching its end. For years, they have sued both broadcasters and digital media companies trying to exploit an ambiguity in copyright law over the status of pre-1972 sound recordings – songs as recorded by a particular band or artist before February 1972 when sound recordings first became subject to federal copyright law. While federal law still only conveys a performance right in sound recordings when those recordings are performed as a digital audio performance (e.g., through a streaming service or digital cable transmission), Flo & Eddie had argued that pre-1972 sound recordings remained covered by state laws, that some of those state laws provided a performance right, and that this  performance right extended to all performances, not just digital ones. Courts in other states had rejected that argument (see our articles on decisions in New YorkFlorida and Georgia), but the question of the status of the law remained unresolved in California. A court decision last week helps to resolve that issue, though intervening events have lessened its impact, so the decision has gone relatively unnoticed despite the extensive prior coverage previously devoted to this subject.

The decision was one of the 9th Circuit Court of Appeals, specifically related to XM Sirius royalties. In the decision, the Court conducted a searching review of the history of copyright law’s treatment of sound recordings, and found nothing in that history that would suggest that the California legislature, when adopting its law giving a creator the “exclusive rights” in these recordings meant to convey a public performance right in a sound recording – noting that the first use of that exclusive right language was in the 1870s, before there were sound recordings. The Court analyzed all the decisions in the interim and found none that suggested that there was a common law or California statutory right that created a public performance right in these recordings.  There was no suggestion that the California legislature had intended to depart from the practices that have otherwise generally applied throughout the US where no performance right has been paid for sound recordings except for the digital performance right that was adopted by Congress in the 1990s. The Court did note that, since the case first began, the Music Modernization Act extended the federal performance right in digital performances to pre-1972 sound recordings. So, the Court’s decision was limited in its application to disputes about whether a digital performance royalty was due for performances before that extension.  But there was one other issue not mentioned by the Court that makes this decision relevant to everyone who performs sound recordings even in a non-digital context, including broadcasters. Continue Reading Court Decision Finds No California Performance Right in Pre-1972 Sound Recordings – Why It Was Still an Issue

As Fall approaches and kids head back to school, be sure not to lose track of the regulatory dates and deadlines in September.  We outline some of those dates below.  One date is applicable to all commercial broadcasters, the obligation to pay regulatory fees.  While the exact due date has not yet been announced, look for that announcement any day as the Commission adopted the decision setting those fees last week.  See the Report and Order, here, for more details and to see what your station owes.  As part of that proceeding, the FCC also decided to seek comment on assessing fees in the future on users of unlicensed spectrum, especially large tech companies.  Many such users manufacture devices or provide other applications that use spectrum or otherwise benefit from FCC regulation, but right now do not pay fees.  Watch for comment dates on this proposal in the near future.  The Notice of Proposed Rulemaking begins on page 38, here.

Comment dates have been set for parties that want to weigh in on the FCC’s media ownership rules.  They have until September 2 to file their comments in the 2018 Quadrennial Review proceeding, which focuses most heavily on local radio ownership regulation.  These comments are to refresh the record with updated information about the state of the media marketplace since initial comments in the proceeding were filed over two years ago.  Reply comments are due by October 1.  We wrote more about this review of media ownership, here. Continue Reading September Regulatory Dates for Broadcasters: Regulatory Fees, Media Ownership and Sponsorship Identification Comments, Auction Applications, 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.

  • On Friday, the FCC released its decision setting 2021 annual regulatory fees. In a win for broadcasters, the NAB and other broadcast groups convinced the FCC to lower the broadcast fees that the FCC had initially proposed, avoiding a proposed significant increase in the fees on radio.  As was the case last year, stations that can show that COVID significantly affected their finances may qualify to pay their fees over time, rather than in the lump sum that will be due before October 1.  The FCC will release a Public Notice in the next few days announcing the window during which broadcasters are to pay their fees.  (Report and Order)
  • The FCC’s Media Bureau continues to scrutinize television license renewals. This week, the Bureau announced that a South Carolina TV station faces a $3,000 fine for uploading four quarterly issues/programs lists more than one year late and three lists between one month and one year late. The violations were discovered during the FCC staff’s review of the stations’ public files for license renewal.  (Notice of Apparently Liability for Forfeiture)  It also admonished a Mississippi TV station for uploading two lists between one month and one year late, and eight lists between one day and one month late.  (Letter)
  • In our weekly update last week, we noted a proposed $3500 fine on a broadcaster who had completed construction of a new FM translator and commenced its operations, but forgot to timely file a license application informing the FCC of the completion of construction in accordance with the translator’s construction permit. Showing that this fine is now a standard in similar cases, the FCC issued four more decisions this week imposing similar penalties (here, here, here and here).  These decisions remind broadcasters who are building new technical facilities authorized by an FCC construction permit to file a license application before the construction deadline showing that they have timely constructed the station as authorized by their permit.
  • Flo & Eddie, leaders of the 1960s band the Turtles, were again rejected—this time by a federal appeals court in California—in their latest attempt to get a court to recognize a right to receive royalties for the public performance of pre-1972 sound recordings. The case had implications for broadcasters, as a contrary decision could have recognized a state-based performance royalty that could have applied to over-the-air radio and to anyone else who played these oldies in public in California.  (Opinion).  Watch for an article with more details on this decision later this week on our Broadcast Law Blog.
  • Visit the Broadcast Law Blog on Monday afternoon for our monthly feature on important September regulatory dates and deadlines for broadcasters.

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.

  • Two Federal Register notices set dates for changes to the FCC’s EAS rules. We wrote about these issues here and here.
    • One notice set an effective date of September 20, 2021for rule changes expanding FEMA’s ability to send emergency alerts during national emergencies and requesting that States that don’t have effective State Emergency Communications Committees (SECC) activate one. Other rules changes adopted at the same time will take effect after further Paperwork Reduction Act review and approval. These include rule changes allowing government entities to report false EAS alerts to the FCC, requiring submission of State EAS plans to the FCC for its review, requesting annual updates to State EAS plans, and mandating annual SECC meetings. (Federal Register)
    • A second Federal Register notice announced that the FCC will accept comments through October 19 and reply comments through November 18 on several other EAS changes, 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 for the duration of an emergency involving possible loss of life.
  • The FCC proposed a $3,500 fine against the licensee of a new Oklahoma FM translator for its failure to file a license application and for its subsequent unlicensed operation after the completion of its construction. As a reminder, when you have a construction permit for a new station and complete construction, you need to file with the FCC a license application certifying that construction was compete in the manner set out in the permit – for translators, before commencing operations.  (Notice of Apparent Liability)
  • Two radio stations entered into consent decrees with the FCC over their failure to comply with the FCC’s online public file rules and, in one case, failure to file biennial ownership reports. In the first case, a commercial station appears to have failed to upload any quarterly issues/programs lists. (Georgia Consent Decree)  In the second case, a noncommercial station appears to have not uploaded any quarterly issues/programs lists or filed any biennial ownership reports for the entirety of its license period. (Montana Consent Decree).  In each case, the consent decrees impose reporting conditions and other paperwork requirements so that the FCC can more closely supervise the operations of the stations in the future.  These decisions are another reminder that you need to be sure your station’s online public file is complete and accurate, as the FCC will scrutinize it when it processes your license renewal application.
  • The FCC issued a Public Notice setting out a dispute resolution process for the reimbursement due to C-band satellite dish operators by the satellite companies for costs the dish operators incur as a result of the partial repurposing of the C-band so that it can be used by wireless carriers. This notice should serve as a reminder that the transition deadline for C-Band operators in Phase I markets is December 5, 2021 (Phase 1 stations are located in Partial Economic Areas 1-50, except stations in the Washington, DC area and certain counties in Georgia, Colorado, and Hawaii – see a PEA list here).  By that date, C-band earth stations in Phase I markets need to install filters or make other changes to avoid interference from the new wireless users.  The transition deadline for the remaining markets is December 5, 2023.
    • In the last two weeks, the FCC’s reimbursement coordinator, RPC, has begun emailing entities holding C-band earth station authorizations, alerting them that RPC has begun to accept claims for C-band transition reimbursements, including for lump sum payments. To be reimbursed, C-band operators need to set up an account in RPC’s Coupa payment system.  See RPC’s site here for a flow chart of the reimbursement process plus information on setting up an account and on dispute resolution.  When RPC will begin paying out the reimbursements is, at this point, still not known.
  • On our Broadcast Law Blog, we this week summarized recently introduced legislation to bring back the minority tax certificate which, if adopted, would allow the seller of a broadcast station to defer any gains from the sale if the buyer is controlled by women or members of socially disadvantaged groups. (Broadcast Law Blog article)

 

The minority tax certificate is back in the news with revised bills being introduced in both the House of Representatives and the Senate.  We wrote about a version of this bill introduced in the last session of Congress here.  The tax certificate offers perhaps the most meaningful route to increasing diversity in broadcast ownership.  While the certificate was abolished by Congress over 25 years ago, these new bills signaling the potential for its revival merits another examination of what this policy did and why it was effective, and what is now being proposed.

The minority tax certificate was a program designed to provide broadcasters with an economic incentive to sell their stations to minority owners.  Rather than directly subsidizing the potential owners, the certificate instead gave a tax break to sellers of broadcast stations that incentivized them to sell to a minority-owned business even if there were multiple bidders for their properties.  If the seller sold its station to a minority-owned business, the seller could take the proceeds from the sale and roll those proceeds over into a new media property without recognizing the taxable gain from the sale.  Unlike the typical like-kind exchange where the roll-over into a new property has to proceed within a few months of the sale, the tax certificate treated the sale as an involuntary sale (like the sale of a property because of a government’s exercise of eminent domain) under Section 1033 of the tax code, giving the seller several years to roll the proceeds over into a new purchase.  At that point, the new property would have the same tax basis as the old – meaning that no gain would be recognized until the sale of the new property.  In the closing decades of the last century, this policy spurred many sales to minority-controlled companies by broadcasters looking not to get out of the business, but instead looking to realign their holdings or to move up into larger markets.  Several hundred radio and TV stations were purchased under this program in the last 20 years of the program’s existence.  Why was this seemingly successful program abandoned? Continue Reading Bills Introduced to Bring Back Tax Certificate to Foster Diversity in Broadcast Ownership – Exploring the Proposals