While the FCC is entertaining comments on its proposal to move the public inspection file for broadcast television stations online (see our article here), the existing physical public files of several New York area broadcasters came under examination by the New York Times, according to an article in Sunday’s paper. The article seemed to both make fun of the contents of the required public file, while at the same time noting that the people at several stations contacted by the reporter seemed to be unaware of the Commission’s requirements that the file be made available immediately to anyone who visits a station and asks to see it, and that requiring appointments is not an option. We’ve written in the past about stations that received substantial fines for requiring a visitor to make an appointment to see a station’s files (see, one case where a commercial TV station was fined $10,000, and another where a noncommercial FM was fined $8000 for a similar violation).  If the NY Times article is accurate, stations need to reexamine their policies and be sure that those dealing with the public know of the location of the file and the fact that it must be made available upon request – no questions asked. For more information about the public file requirements, see our Guide to the Basics of the Public Inspection File for Commercial Stations, here.

The second aspect of the report, poking some fun at some of the weird comments from the public found in the file, reinforces some of what I have been told by broadcasters. At a broadcaster meeting last week, I was told stories of station public files that have expanded exponentially since the FCC added a requirement that the file contain emails from the public, as well as letters. Broadcasters report that the letters from the public can now often take up several drawers of a file cabinet, while the remainder of the file fits in a single drawer. While the Commission has tentatively concluded that these letters would not be required to be included in the electronic online file, the recent rulemaking proposal did suggest that the letters be retained at the station, and that perhaps summaries of the written comments be made part of the online file. In addition, comments were requested as to whether social media posts about station operations be kept in some fashion – even though sites like Facebook and Twitter, by their very nature, keep most of what it posted on their sites for the public to view (see our summary of the proposals here). Broadcasters at my meeting last week were very concerned about the volume of paper that would generate, and the need for manpower to review Twitter feeds and Facebook posts almost around the clock to see if any needed to be placed into the file as they related to the station operations.

Continue Reading What the NY Times Article on the Broadcast Public Inspection File Says About the FCC’s Public File Requirements

New ASCAP royalties are on their way to radio broadcasters. ASCAP and the Radio Music Licensing Committee (RMLC) have just announced that they have reached an agreement in principal to return to the percentage of revenue royalties that for so long were paid by radio stations to ASCAP and BMI – a system that was abandoned for a market-based flat-fee system designed to avoid having the licensing organizations as partners that shared in what stations believed would be forever rising radio revenues. Of course, soon after the deal was struck, the current economic troubles hit, radio revenues fell, and the flat fees left many stations paying multiples of what they had been paying under the prior system. A return to the percentage of revenue-based system would seem to be a very good thing. See our previous summary of this royalty controversy, here and here. 

But, as of now, we know very little about the details of the deal – other than it returns to the percentage of revenue basis and that it seemingly will include all revenues of the broadcaster – including the ASCAP royalties due for streaming, other website music uses, and mobile applications (note that these royalties cover only the fees due for the public performance of the musical composition.  In online digital applications, fees still need to be paid to SoundExchange or other rights holders for the public performance in the sound recordings – the actual recordings made by a band or singer of one of those musical compositions – see our articles here and here). The deal with ASCAP will run through 2016.  We’ll have to wait until the final deal is released before a full assessment of its impact can be judged. 

For the RMLC and the broadcasters who financially support it, a deal should limit further litigation expenses with ASCAP (as a rate court proceeding had begun) while the final details of the settlement are hammered out. Watch for those details coming at some point in the future. And, remember, the RMLC also has BMI to deal with – which also had an agreement that expired at the end of 2009. The final royalties to be paid to both of these organizations should be retroactive to the beginning of 2010, so some analysis will need to done as to whether stations have over or underpaid under the interim fees that are currently in place (see our article here) once the details of the ASCAP deal is announced, and a final resolution of the BMI royalty is reached through settlement or litigation. 

The FCC issued a declaratory ruling this week finding that Anderson Cooper’s new talk show appeared to be a bona fide news interview program exempt from equal opportunities under the FCC’s political broadcasting rules interpreting the mandate of Section 315 of the Communications Act. This ruling is another in a series of rulings by the FCC making clear that virtually any interview-type program on which a candidate appears, that is not administered in a partisan fashion and which is regularly scheduled and regularly conducts interviews with newsmakers or discusses political issues, is exempt from equal time. The FCC has, in the past, issued such rulings for programs as diverse as the Phil Donahue program, Geraldo, Howard Stern, Entertainment Tonight, Today and a variety of other programs. As we have written before, these decisions stem from the FCC’s belief that people no longer get their news from the stereotypical Sunday morning news interview program, but instead they find news of interest in programs that might otherwise be considered entertainment or even comedy, but which regularly touch on political topics. As long as these programs are not administered so as to be a mouthpiece for a party or candidate, but instead pick their guest based on some form of journalistic discretion (“journalistic” being a very broad term – one that covers any sort of reasonable judgment as to newsworthiness or topicality), the fact that the program talks to one candidate for a public office does not require a station carrying the program to give equal time to all other candidates for that same office.

At one time, these rulings regularly were issued by the FCC, but they are less frequent now, as the FCC has clearly established the precedent and shown its very liberal interpretation of the bona fide news interview program exemption from equal opportunities. Stations do not need to get a declaratory ruling to operate pursuant to this exemption. Any program that your station produces that is under the control of the station, and which regularly interviews newsmakers and covers political topics, can rely on this exception. So that crazy morning team that occasionally talks to the mayor or the local state Senator can interview political candidates without the fear of having to provide every minor party or write-in candidate an opportunity to be heard. A free speech victory.

All commercial broadcasters (AM/FM/TV and even LPTV) have to file their Biennial Ownership Reports on December 1, beginning a very busy month in the broadcaster’s regulatory world.  December 1 is also the deadline for noncommercial ownership reports to be filed by noncommercial radio stations in Alabama, Connecticut, Georgia, Massachusetts, Maine, New Hampshire, Rhode Island and Vermont, and noncommercial television stations in Colorado, Minnesota, Montana, North Dakota and South Dakota (see our Advisory here).  Annual EEO Public File reports are also due to be in station files for stations in all of the states where noncommercial stations have ownership filings (see our Advisory on the EEO Public File Report here).  License renewals for radio broadcasters in Georgia and Alabama are also due on that date (see our License Renewal advisory here) , as are the Commission’s cut of the ancillary and supplementary revenues made by digital television broadcasters (our summary here).  And all full-power broadcasters need to file their reports on the results of the recent Nationwide EAS Test by December 27 (see our post here).

December also brings a Commission meeting, at which the CALM Act rules will be adopted according to the tentative agenda for the December 12 meeting.   The CALM Act is intended to eliminate loud commercials.  These rules are required by statute to be adopted in December (see our summary of the proposed rules here).  Comments on a number of other FCC proposals in rulemaking proceedings are also due. The FCC just announced  that comments in the proceeding to determine if FM digital operations using the IBOC technology (so-called HD Radio) can operate with different power levels on each side of the main channel are due by December 19 (see our summary of this proceeding here). Comments on the controversial proposal for the online public inspection file for television stations are due on December 22.

Continue Reading December 1 Deadline for Biennial Ownership Reports Begins A Busy Regulatory Month for Broadcasters

In an eagerly anticipated case involving TV stations in the Honolulu market, the FCC’s Media Bureau determined that a programming swap that permitted one company to hold the licenses of both the NBC and CBS affiliates in a single market, and to also provide technical and office services and news programming to a third station in the market, was permissible under current rules.  However, the Commission warned that it would consider in its upcoming Notice of Proposed Rulemaking in its Quadrennial Review of the multiple ownership rules whether similar situations should be permitted in the future, and seemingly implied that even this combination could be subject to further review in future licensing proceedings.  The permissibility of shared services agreements has been a question raised by public interest groups for quite some time (see our post here), and has also been raised by certain cable and satellite television operators as such combinations can result in one broadcaster negotiating carriage agreements for multiple stations in a market.  Based on this case, and the issues raised in connection with previous decisions, this will no doubt be a very controversial topic when the Commission considers the upcoming multiple ownership proceeding.

The Honolulu case began with one owner – Raycom – holding two licenses in the market – one an NBC affiliate, and the other an affiliate of the MyTV Network.  As there are 8 independently owned television stations serving Honolulu, the combination of these two stations, only one of which is a Top 4 station in the market, was permissible.  Raycom then entered into a deal with the owner of the local CBS affiliate, where the parties swapped call letters and network affiliations.  Raycom also purchased many of the non-license assets of the station, and received an option to purchase the station, and agreed to pay the licensee, over time, $22 million.  Raycom also entered into a shared services agreement with the owner of the station that had become the MyTV affiliate where Raycom would provide back office services, sales personnel, and a physical location for the station’s studio and transmitting antenna, in exchange for 30% of the stations revenues, and a flat monthly payment.  As detailed below, the Commission determined that the swap of call letters and network affiliations was not subject to review at this time as there was no licensing transaction before the FCC, and the shared services agreement did not violate current FCC policies.

Continue Reading FCC Says TV Shared Services Agreement and a Combination of Two Top 4 Network Affiliates in One Market is Permissible – For Now

The FCC has set the date for comments on the proposal for television stations to maintain an online public inspection file, including an online political file (see Federal Register notice here).  Comments are due on December 22.  Replies are due on January 6.  Happy Holidays from the FCC!  We summarized the FCC’s proposals here and here.  While the proposed new rules will relieve stations from the burden of hosting the files themselves (as the FCC is proposing to host all of the files on its own servers), it still requires that stations upload their information – including all information that is put in their political file, into a new electronic reporting system to be devised by the FCC.  As we described in detail in our summary of the proposal for the online public file, the FCC is asking whether certain new public file obligations should be added to those currently in place.  These include possible posting of comments on programming that come from the station’s social media efforts in addition to the letters and emails currently required; a proposed requirement to place in the public file information about sponsorship identification of all "pay for play" material that is broadcast on a station (currently only broadcast, not kept in any paper form); a requirement to provide information about shared services agreements and the programming that they provide to a station; and a requirement that all information about fines and other enforcement actions taken against a station be posted to the online file.  So how much does the FCC think that this will cost stations?

As we wrote yesterday, in adopting rules, the FCC is currently bound by the Paperwork Reduction and the Regulatory Flexibility Acts, both of which require some assessment of the impact of new regulations, particularly on small businesses.  In the Federal Register publication, the FCC’s assessment of the regulatory burden of these proposed new obligations is broken down into several pieces.  The burden for the new online public file requirement, including the posting of the political file, is set forth as follows:

Respondents/Affected Parties: Business or other for-profit entities; Not for-profit institutions; Individuals or households

Number of Respondents and Responses: 25,422 respondents; 59,833 responses

Estimated Time per Response: 1 to 104 hours.

Frequency of Response: On occasion reporting requirement; Recordkeeping requirement; Third party disclosure requirement

 Obligation To Respond: Required to obtain or retain benefits. The statutory authority for this collection of information is contained in 47 U.S.C 151, 152, 154(i), 303, 307 and 308

Total Annual Burden: 2,158,909 hours

 Total Annual Costs: $801,150.00

Stations should look at and evaluate these numbers as part of their response, as the FCC has invited a cost-benefit analysis of the proposed new rules.  How is it that the FCC assumes that the regulatory burden would be over 2 million hours, but that the costs would be less than a million dollars?  How will this work be done and paid for?  It is also interested in that the number of respondents is listed as 25,422.  As there are only 1,782 full-power television stations and about 450 Class A stations according to the last FCC Report on station totals, who else is expected to report on this form?  The FCC, in its Notice of Proposed Rulemaking, specifically exempted radio from the obligations for an online public file – at least for the time being.

Continue Reading December 22 Comment Deadline Set for FCC Proposal for Online Public Inspection File for TV – What is the Regulatory Burden?

In recent weeks, there seems to be a competition to make the FCC more responsive, and to mandate that, before it adopts any new regulations, it take into account the costs of the proposed regulations and the burden that they place on those being regulated.  The Communications and Technology Subcommittee of the House Energy and Commerce Committee adopted a bill (The FCC Process Reform Act of 2011) that would, if adopted by the full House and the Senate, require that the FCC, before adopting any new regulations, take several steps to make sure that regulations were really necessary (see a summary of House bill here).  Before adopting any rule, the Commission would have to survey the marketplace, determine that there was a market failure or specific consumer harm, then take into account the cost of complying with regulations before the new regulations are adopted.  The proposed legislation would also require that the FCC adopt deadlines on many FCC actions ("shot clocks"), perhaps in response to a Study commissioned by the House Committee looking at the length of time that many FCC proceedings take.  The FCC adopted its own proposals for making its regulations less burdensome by reviewing the continuing need for existing rules, following the President’s call for all agencies to take such action.  The FCC report, after making the seemingly obligatory bows to broadband adoption that the Commission seeks to foster, talked about many of the same issues that the Congressional committee seemed to be addressing – deleting unnecessary regulation wherever possible.  What changes will these efforts bring to the FCC?

Call me cynical, but I doubt that the proposed changes will really lead to any significant differences in the way that the FCC does business.  The FCC is already bound by all sorts of laws that demand that it take into account many of the same considerations that are included in the plans of Congress and the FCC.  The Paperwork Reduction Act has already stopped certain regulations from going into effect, including the Form 355 (which sat in limbo for 4 years and the FCC is only now considering reviving in a somewhat more abbreviated form).  The FCC also must take into account the Regulatory Flexibility Act, looking at the impact of any regulation on small entities who would be subject to any new rule.  Congress itself has already enacted other requirements that the FCC review regulations on a periodic basis – for instance the required Quadrennial Review of the FCC’s multiple ownership rules.  And what do these accomplish?

Continue Reading Congress and the Commission Look to Make FCC More Responsive and to Take Costs Into Account in Making New Rules – Will It Work?

The FCC has just announced another of its regular EEO audits, though this time its just for cable systems (see the FCC Public Notice and list of affected systems here).  The FCC will audit 5% of all broadcasters and cable companies each year to assess their EEO compliance, so be prepared in case you are next.  Broadcasters were last audited in August (radio stations only), so expect another group to be required to submit their information for scrutiny in the not too distant future.  Our Advisory on complying with the EEO obligations of broadcasters is available here.

This audit also serves to remind broadcasters of their obligation to annually prepare and file an EEO Public File Report, detailing information about hires made and employment recruiting sources used in the prior year, as well as on the "supplemental efforts" that they have engaged in to educate their communities about opportunities in broadcast employment.  Station employment units in Alabama, Colorado, Connecticut, Georgia, Massachusetts, Maine, Minnesota, Montana, New Hampshire, North Dakota, Rhode Island, South Dakota and Vermont need to have their reports in their public file, and on their website, by December 1. For more information about that requirement, see our Advisory on the EEO Public File Report here.

When the FCC last month started a new proceeding to mandate an online public file for television stations, the Commission promised to soon initiate another proceeding to look into the need for a new form to document the public interest programming that TV stations provide.  The FCC today fulfilled that promise, and issued a Notice of Inquiry ("NOI") to start the process of adopting a new form for TV stations to complete to report on various categories of "public interest programming," however that might be defined.  In 2007, the FCC had adopted Form 355 to accomplish that task.  But, after an outcry from stations about the paperwork burden that the form would impose, the FCC never submitted it to the Office of Management and Budget for approval under the Paperwork Reduction Act, and thus the form never became effective.  The adoption of the Form 355 was vacated last month in the online public file proceeding.  But the Commission now proposes its return – in some fashion.  So what does the Commission now propose to require from TV stations to document their public interest programming?

First, the FCC asks a series of questions about how such a form should be structured, and how the information should be collected to be meaningful for those that want to analyze it, but not overly burdensome for the TV stations.   The Commission seems to conclude that the form is necessary – not even asking questions on that basic issue of whether to adopt a standardized form.  The NOI states:

We continue to believe that the use of a standardized disclosure form will facilitate access to information on how licensees are serving the public interest and will allow the public to play a more active role in helping a station meet its obligation to provide programming that addresses the community’s needs and interests

The Commission then goes on to discuss the Quarterly Programs Issues lists  ("QPIs") that are currently required to be placed in a station’s public file every three months – describing the issues that station management sees as important in the community and the programs that the station has broadcast to address those issues (see our most recent advisory on this obligation, here).  The Commission states that these quarterly reports should be replaced, as broadcasters have been uneven in their recordkeeping of such lists.  Of course, that may be because the FCC has never proscribed any specific form for these reports, nor specifically said what is acceptable and what is unacceptable in connection with such reports.  Seemingly, replacing one form with another (albeit a more complete, detailed new form) may well accomplish nothing if the new report does not have clear and unambiguous instructions – something never adopted for the Quarterly Reports.

Continue Reading FCC Proposes New Form Requiring TV Broadcasters to Document their Public Interest Programming

By December 1, 2011, all commercial and noncommercial full power digital television (DTV) stations, as well as all digital low power, Class A, and television translator stations must electronically file an FCC Form 317 with the FCC. This Form reports whether the station has provided any ancillary and supplementary services during the twelve-month period ending on September 30, 2011. Under the Commission’s Rules, in addition to providing free over-the-air broadcast television, DTV stations are permitted to offer services of any nature, consistent with the public interest, convenience, and necessity, on an ancillary or supplementary basis. Some examples of the kinds of services that may be provided include computer software distribution, data transmissions, teletext, interactive materials, aural messages, paging services, audio signals, and subscription video.  If the station did provide such ancillary services, then the FCC wants to know about it. More importantly, if the station generated revenue from the provision of those services, then the FCC wants its 5% cut of the gross revenues derived from such service.

All full power DTV stations — regardless of whether the station holds a DTV license or is operating pursuant to Special Temporary Authority (STA), program test authority (PTA), or some other authority — must file a Form 317 reporting whether or not it provided such services and whether it generated any income from such services. In addition, all licensees of digital low power television stations, digital television translator stations, or digital Class A television stations must also file a Form 317 by December 1st.  The Form 317 is brief, soliciting information about the license and the types of services provided, if any, and must be filed electronically through the FCC’s CDBS filing system.