Now that we’ve completed last week’s first-ever Nationwide test of the EAS system, designed to alert Americans in the event of an emergency, the FCC is in the process of collecting information about the successes and failures of the test, through the submissions of participants.  Forms reporting on the results of the test are due by December 27.  At the same time, there has been at least one Congressional call for an expansion of the system in order to provide alerts not only by broadcast, cable and direct broadcast satellite systems, but also through on-line social networking communications tools. 

According to press reports (see, e.g. this article from the NY Times), the nationwide test uncovered many shortcomings in the system, as many broadcast stations (including all stations in two states) never received the alerts from the station that they were monitoring, in some cases because the message was never delivered to primary stations which were supposed to start the relay of the message to other stations along the daisy-chain system that is supposed to be in place.  Cable and satellite also had many problems.  Despite the fact that there may have been issues at your station or in your area, all participants should report on how their facilities fared in the test.  The FCC will take this information to assess what needs to be done to repair the problems that were witnesses.  The necessary Forms to report on the results of the test are available on the FCC’s website.  In adopting the rules for the test, the FCC stated that it was not intending that the reporting system be a way to punish stations whose facilities did not receive or transmit the test, but instead to be a diagnostic tool to determine whether or not the system worked.  So the failure to file the forms to report on the success of the test on your stations is much more likely to bring an FCC enforcement action against your station than is reporting that, for one reason or another, the test did not work.  These forms are due on December 27.

Continue Reading Assessing Results of the Nationwide EAS Test – More Forms, Calls for Internet Alerts

If your station engages in children’s programming and maintains a website or web page directed to children under the age of 13, this case may be of interest to you. 

The operator of a website called Skid-e-Kids, a self-described “Facebook and MySpace for kids,” has learned that it is not enough merely to have a privacy policy that requires parental consent prior to obtaining personal information online from children under the age of 13. Such website operators must actually abide by that policy as well. The Federal Trade Commission (FTC) reinforced that lesson via an enforcement action and settlement with the company this week.

Skid-e-Kids (skidekids.com) advertises itself as “Safe, Fun and very educational.” Their target group is children ages 7-14. The Children’s Online Privacy Protection Act of 1998 (COPPA) and corresponding FTC rule require parental consent before children under the age of 13 can be requested or required to provide personal information online.

Skid-e-Kids had a Privacy Policy that “requires child users to provide a parent’s valid email address in order to register on the website.” In practice, however, that was not the case. Children were required to provide a birth date, gender, user name, password and email address prior to using the website. Once that information was provided, the child was automatically registered on the website. Worse still, Skid-e-Kids did not even request a parent’s email address and made no attempt to notify parents or obtain parental consent.

Continue Reading FTC Consent Decree Reinforces Need for Websites Aimed at Kids to Comply with COPPA

The Commission today released its further Public Notice establishing the filing dates and adopting the procedures for the upcoming auction of 119 New FM Radio channels, scheduled to start on March 27, 2012.  The auction has been designated as FM Auction No. 93 and offers vacant FM allotments in various communities across the country.  Although the Commission removed four allotments from the slate of available channels, the remaining 119 channels are up for grabs.  A full list of the licenses available in the auction can be found here.  Anyone potentially interested in bidding on these new FM stations should start doing their due diligence now (and see our earlier posting for tips about specific issues to consider). 

The auction process will start with a filing window from January 3 to January 12, 2012 for the submission of an FCC Form 175 "short form" application expressing interest in the auction.  All potential bidders must submit a Form 175 by 6:00 PM ET on January 12, 2012 in order to be eligible to bid.  Next, applicants will need to make an Upfront Payment by 6:00 PM ET on February 22, 2012, in order to deposit funds with the Commission equal to the starting price for at least one of the licenses for which they are interested in bidding.  In order to be eligible to participate in the auction, bidders will need to follow both steps and timely file an acceptable short form application and wire a sufficient upfront payment.  The FCC will hold a Mock Auction on March 23, 2012 to allow bidders to test the bidding software and familiarize themselves with the auction process, and the real auction will kick off on Tuesday, March 27, 2012. 

In connection with Auction 93, the FCC will temporarily freeze the submission of all minor change applications for both commercial and noncommercial FM stations from January 3 through January 12, 2012.  This freeze will prevent existing stations from filing minor modification applications that might be mutually exclusive with the preferred allotment site coordinates that a potential bidder might specify on its short form application.  Licensees of existing stations should plan accordingly and file any minor modifications before January 3rd lest they have to wait until the freeze is lifted following the close of the Auction filing window on January 12.

 

 

Tomorrow (November 9) will be the first ever Nationwide test of the Emergency Alert System, and last minute questions and issues continue to come in.  One caution relayed to us from a very experienced broadcast technical consultant concerns post-test news coverage.  This consultant surmises, probably accurately, that news reports, and perhaps comedy writers, will want to do bits about the test, and may be tempted to use a recording of the test itself in their on-air programs.  As we wrote several months ago, if your station broadcasts the EAS tones in any such story or comedy bit, the tones will trigger the EAS monitoring system of any station down the ‘daisy chain" line, and thus the emergency information associated with these tones (in this case a national emergency) could end up being broadcast on other stations.  The broadcast of the EAS tones where there is no real emergency is a violation of the FCC’s rules – so warn your on-air staff now to avoid any use of the real tones in post-alert broadcasts.

Second, there have been many questions about the forms to be used to report on the tests.  The instructions to the on-line forms have been posted (here), even though only Form 1 is still the only form available (not Form 3, which will actually report the results of the test, and which will apparently form the basis of the paper form that stations can file if decide not to file electronically).  The instructions make clear several points.  This includes the fact that each full-power station should file a separate report, even if they are commonly owned and operate from a common studio with common EAS equipment. The Instructions also suggest that the FCC would like to get information about translators, boosters and other secondary stations that carry the test, so that the FCC can get a complete picture as to how far the test was disseminated.  While the instructions suggest that information about the translators can be filed in a separate paper filing (and that information about translators is apparently a request, rather than an order), they do indicate that some reference to that filing should be made, presumably in a comment section in the as yet unavailable Form 3.  So look carefully at these instructions, so that you can be ready to supply the information requested by the FCC by the December 27 filing deadline.  For more information about the test, see our previous posts here and here. 

Update – 11/09/2011 – The FCC late yesterday issued a public notice reiterating our concerns about stations using the EAS tones in news reports or other coverage of the Nationwide Test. 

There have been many reports about the attempts by Sirius XM Radio to license music directly from record labels, bypassing any royalty rates set by the Copyright Royalty Board.  Direct licensing would have Sirius pay the record labels or copyright holders for the rights to use music, avoiding any dealings with SoundExchange, which normally collects the royalties for the public performance of sound recordings under the statutory license.  The most recent report about Sirius’ efforts was in the New York Times, here.  Sirius, like webcasters, pays royalties set by the CRB (if they cannot be negotiated among the parties) that cover the public performance of all legally released sound recordings.  While webcasters currently have royalties that are in place through 2015, the royalties for Sirius end in 2012, and are being litigated now (see our story here on the last royalties set by the CRB for Sirius).  To avoid the uncertainty of litigation, with which webcasters are very familiar, Sirius has been attempting to license music directly from the copyright holders.  This is not a new story – Rhapsody reportedly tried the same thing earlier this year, and Clear Channel tried to get royalty waivers from independent artists several years ago in exchange for more exposure for their music (see our stories, here and here).  Each time a music service suggests that it might want to license music directly to try to recognize some savings over the rates established through CRB litigation, the music community objects – see, for instance, the statements of unions AFTRA and AFM here, that of SoundExchange here, and that of A2IM (the association of independent record labels), here.  But what is really wrong with the efforts of services to negotiate lower royalties?  If you believe the testimony of SoundExchange’s own witness in the Copyright Royalty Board proceedings – nothing at all.  In fact it is to be expected. 

In the CRB proceeding that was held in 2005-2006 (and from which, most of the settlements arose that now govern the royalties for sound recordings played by Internet radio stations), SoundExchange relied on a number of witnesses, including one expert, Michael Pelcovits, an economist whose model was the principal testimony relied on by the CRB in establishing the rates they determined to be reasonable.  In his written testimony, Mr. Pelcovits stated as follows:

…a rate that is set too low may have serious economic dangers.  By setting a rate too low, inefficient entry may be encouraged, and inefficient levels of production will be encouraged, which can hinder the development of an efficient market.  It is also worth noting that setting the statutory rate too high will not necessarily be harmful to the market.  If the price is too high, parties can (and are almost certain to) negotiate agreements for rates lower than the statutory standard.  Thus, a rate that is set too high is likely to "self-adjust" because of the sellers’ natural incentive to meet the market. 

(Emphasis added).  The statutory rate referred to in this quote is the rate that is set by the CRB.  What this quote says is that, if that rate is set too high, then parties will naturally negotiate after-the-fact to try to find what the real market rate should be, and that such negotiations should be expected – not feared as many seem to be claiming as these attempts to cut deals come to light.  In other words, the music community seemed to favor (and expect) such negotiations, before they were against them it in their statements today. 

Continue Reading The Debate Over Sirius’ Attempt to Directly License Music – SoundExchange Once Said A Marketplace Negotiation to Adjust for High Rates “Was to Be Expected”

Last week, I did a presentation on the issues facing broadcasters at the Kansas Association of Broadcasters annual convention (a copy of the slides from my presentation is available here).  I spoke about some of the day-to-day issues that can get broadcasters into trouble, as well as some of the big policy issues that broadcasters need to consider.  My presentation was preceded by a session conducted by the agent in charge of the Kansas City field office of the FCC, who emphasized the many issues that the field agents discover at broadcast stations that can lead to fines.  In the week since I returned from Kansas, it seems like the FCC has wanted to demonstrate the examples given by their agent, as there have been a large number of fines demonstrating the breadth of technical issues that broadcasters can face.  Fines (or "forfeitures", as the FCC calls them) were issued or proposed for issues ranging from faded tower paint, tower light outages, EAS problems, operations with excess power, and the ubiquitous (and very costly) public file violations.  Fines of up to $25,000 were issued for these violations – demonstrating how important it is not to overlook the day-to-day compliance matters highlighted in my presentation.

The largest of these fines was for $25,000.  This fine was imposed on a station for failing to have operational EAS equipment, not having an enclosed fence around the antenna site, and a missing public file.  The fine was originally proposed in a Notice of Apparent Liability (the first step in imposing an FCC fine, when the FCC spells out the apparent violation and the fine proposed, and the licensee is given time to respond to the allegations), released in July (see our post here).  The licensee failed to respond to the Notice of Apparent Liability, thus the fine is now being officially imposed.

Continue Reading A Host of FCC Fines of Over $20,000 for Technical and Tower Issues – And a Presentation on How to Avoid FCC Problems to the Kansas Broadcasters

With less than a week to go before the first ever Nationwide Test of the Emergency Alert System ("EAS"), changes are being made for the November 9 test.  In a Public Notice released today, the FCC announced that the EAS message that will be conveyed will be only 30 seconds long, not the two or three minutes that were originally planned.  There were some concerns expressed by certain groups, include groups representing cable television operators, that while the test was underway, certain automatic systems would kick in, overriding the visuals from the programming channel being broadcast.  The automatic EAS alerts that would be transmitted in a textual format would not specifically say that they were being conveyed as part of a test.  While the audio accompanying the test would provide that information, representatives of the hearing-impaired community were concerned that some people might believe that a real emergency was taking place.  While the FCC and FEMA had initially indicated that a two or three minute test was necessary to make sure that the message could be conveyed throughout the whole daisy chain system and that the system would be capable of conveying a long message that might be necessary in the event of a real emergency, it appears that they have now agreed that a 30 second message will be sufficient, and less likely to start a "War of the Worlds" panic among those who don’t hear the audio message from the test.

The EAS Handbook for this Nationwide test (which we wrote about last week, here) is supposed to be at the control point of all stations and has been revised to take into account the new length of the test.  The revised handbook is available here.  Also, the Commission has made heard complaints about Form 1 on its on-line reporting system for this test, which we also wrote about last week.  One complaint was that the form required information about the location of the station in geographical minutes in decimal format, not in the minutes and seconds as expressed on the face of FCC licenses and in most FCC databases.  Many broadcasters had complained about that requirement – not knowing how to convert from minutes and seconds to minutes in a decimal format.  In response to those complaints, the Form has been revised to provide a link to a decimal converter program – where you can put in the minutes and seconds as expressed on your license and get the decimal expression of the transmitter site location.  Other minor changes in the form have also been made – including making some information (like a cell phone number for someone at the station) optional.

Continue Reading Revisions to Nationwide EAS Test Plans – Shorter Message and Changes in the FCC Handbook and Forms

The Third Circuit Court of Appeals today issued its decision in the case dealing with the FCC’s fine for the Janet Jackson "clothing malfunction" Super Bowl incident.  The Court once again rejected the FCC decision – essentially upholding a 2008 decision that had found the FCC’s indecency fine to be an arbitrary departure from prior precedent.  The Court found that the Commission had a policy of not finding a "fleeting image" actionable, and the Commission did not explain why it was changing its policy, or even acknowledge that it was in fact changing policy. The 2008 decision had been remanded to the Third Circuit by the Supreme Court after the Court’s decision on the Golden Globes case (see our summary here and here), dealing with "fleeting expletives", to determine if the Supreme Court’s decision had any impact on this case.  In today’s decision, the Court also found that a fine cannot be imposed on a party who did not know that the conduct in which it was engaging could lead to a fine.  Bob Corn-Revere and Ronnie London from our firm litigated this case, and have written a much more detailed explanation of the Court’s decision.  That explanation can be found here.  The full Third Circuit decision can be found here. 

The FCC adopted rules for the digital operation of FM radio stations (known as HD Radio or the Ibiquity In Band On Channel system – IBOC for short) in 2007 and allowed the Media Bureau to amend those rules as technical developments warranted.  In 2010, the Bureau authorized an increase in the power level of the digital portion of the FM signal by 6 db in all cases, and up to 10 db upon a showing that such an increase would not cause significant interference to adjacent channel stations (see our summary here). As the digital signal is carried on "sidebands" of the analog signal, which operate on part of a station’s assigned  frequency that is closer to adjacent channel radio stations, an increase in power on these sidebands has the potential for causing interference to closely spaced stations.  In a Public Notice released today, the FCC asked for comments on whether it should allow stations to increase power at different levels on each sideband.  As set out by the Bureau, in some situations, a station may be closely spaced to another station on one side of its frequency, on a channel either higher or lower than the one on which the station operates, but not on the other side of its channel.  By increasing power on only the sideband furthest from the adjacent channel station, the station can protect the adjacent channel station, yet still enjoy the possibility of expanded coverage that the higher power provides.

As set forth in the Notice, this proposal is advanced by Ibiquity (the company that holds the patent on the digital radio system) and NPR, which has been very active in promoting its use.  According to studies that they have produced (and which are linked to in the public notice), a digital operation with greater power to one sideband than another is technically possible.   The FCC asks if it is a good idea, and gives interested parties 21 days to file comments (measured from the date that this notice is published in the Federal Register) and an additional 14 days to file replies to the initial comments.  In the past, we have found digital radio operations to be among the most controversial topics about which we write, with some who feel that the system is not working and will never work, and others who see much promise in the digital sound and multiple channels allowed by the system.  We look forward to seeing the comments filed in this proceeding, to see whether these attitudes continue to persist within the industry.

As Federal funding to public broadcasters faces serious challenge in a Washington looking to cut the budget for all but the most essential government services, and where voluntary contributions to all noncommercial broadcasters have been constrained by the economic issues faced by the entire nation, more and more noncommercial broadcasters are facing tough questions about the future.  We’ve seen colleges and municipalities sell stations that have been community fixtures for decades, and noncommercial groups (including some religious broadcasters) deciding to call it a day and liquidate their holdings.  At the same time, the ratings success of many noncommercial broadcasters (both public broadcasters and those owned by religious or other community organizations), especially in the radio world, are showing much success in developing a large listening audience.  With noncommercial stations, by law restricted to raising funds without commercial advertising, many are looking for new ways of operating.  How are FCC regulations and interpretations reacting to these new realities? 

The FCC’s Future of Media Study (and the resulting Report on the Information Needs of Communities that we summarized here) recognized the importance of the diversity provided to communities by noncommercial broadcasters and, without detailing any proposals, indicated support for the development of new funding sources for those stations.  Similar general statements were echoed in the hearing on the report recently held by the FCC in Arizona.  But the options of the FCC in pursuing solutions are limited.  In a recent decision, a noncommercial entity that operated a number of stations in small rural markets asked for a waiver of the FCC’s underwriting rules to allow it to air a limited amount of advertising for commercial entities, restricted to the top of the hour, and presented so as to not break up normal programming.  The applicant justified the request on the current financial climate that made donations and grants hard to come by, especially in the rural areas where this group operates its stations.  While the Commission’s staff expressed sympathy for the applicant’s financial plight, it stated that it was powerless to waive the Communications Act, which prohibits noncommercial stations from broadcasting "any advertising."  Faced with this prohibition, and a fear of opening the floodgates to similar requests, the FCC denied the waiver.

Continue Reading Financial Challenges to Noncommercial Broadcast Funding – What Is the FCC Doing?