In anticipation of the new auction of 123 FM channels scheduled for March 2012 (about which we wrote here) the FCC has frozen the filing of FM applications and rulemaking requests which seek changes in the frequencies of any of the channels proposed for inclusion in the auction or which otherwise fail to protect the reference coordinates for these channels. This is not a blanket freeze of all FM filings, but instead simply is meant to protect the channels that are included in the auction so that interested applicants can begin the search for transmitter sites and otherwise evaluate the prospects for these channels in a stable environment.

While the procedural dates for this auction (including the dates by which applications must be submitted) have not been finalized, we anticipate that these dates will be set soon, and that initial short-form applications specifying the channels in which each applicant is interested, will be due early in 2012. So if you are interested in the possibility of building a new FM station, check out the tentative list of new allotments here to see what is available, and start making your plans to participate.

Many radio broadcasters have recently received a notice from a company called Mission Abstract Data, asking to begin discussions about royalty payments for the use of digital music storage systems, which that company claims fall under a patent they control.  This claim seemingly covered systems used by most music radio stations – systems sold by several well-known companies in the broadcast industry. Before blanketing the country with the demands a few weeks ago, the company had initiated similar actions against several of the largest broadcast companies, filing a lawsuit against a number of them. After that action was filed, challenges to the underlying Mission Abstract Data patent were filed with the Patent and Trademark Office ("PTO"), arguing that the patents should be invalidated as there was “prior art”, i.e. there were other systems in existence at the time that the patent was filed and thus the technology on which the patent was filed was not a new invention warranting patent protection. Last week, a unit in the PTO tasked to review challenges to existing patents issued a preliminary decision agreeing with the challengers that many (but not all) aspects of the patent were improperly granted and thus should be invalidated.

This is a preliminary ruling to which the patent holder can respond (with an early December date set for the filing of such responses). Nevertheless, it does seem to be an important decision for the many radio broadcasters who received the notice. As we wrote several weeks ago, if you are one of the stations that received that notice, be sure to consult an attorney to determine your potential liabilities in this situation and how this PTO decision may affect the demands made by this company.  More and more claims like this are arising throughout the digital media landscape so, even if this one goes away, don’t be surprised to see some other claim cross your desk at some point in the not too distant future. 

Yesterday, the FCC released an Order that reversed a five-year-old decision by its Consumer and Governmental Affairs Bureau (“CGB” or “Bureau”) that had granted certain video programmers “undue burden” exemptions from the FCC’s closed captioning rules. The reversed Bureau decision had changed the criteria for undue burden exemptions and permanently exempted two video programmers from compliance with the closed captioning rules on the basis of the new criteria. Finding that the Bureau’s new criteria deviated from both the statute and FCC precedent, the Commission overturned the decision, reversed 296 subsequent exemptions that had been granted by the Bureau in reliance thereon, and reinstated the original criteria for captioning exemptions. DWT has just released an advisory that provides more detail about the Commission’s decision, which can be found here. In addition, a copy of the Commission’s Order can be found here.

In overturning the undue burden exemptions CGB approved in 2006, the Commission found numerous faults with both the Bureau’s initial decision and its handling of hundreds of subsequent petitions seeking similar exemptions. Although undue burden exemptions were to be reviewed by the Commission on a case-by-case basis after opportunity for public comment and were to consider four factors: (1) the nature and cost of the closed captions for the programming; (2) the impact on the operation of the provider or program owner; (3) the financial resources of the provider or program owner; and (4) the type of operations of the provider or program owner, the Bureau deviated from previous Commission decisions by expanding the scope of the factors considered.  In particular, its decision relied primarily on the non-profit status of programming providers and that the programming was not produced for primarily commercial purposes.  Further, the Bureau found captioning programs would constitute a “significant hardship” and that there was a significant risk that mandating captioning would cause the video programming provider to cancel the programming.
 

Continue Reading FCC Overturns Hundreds of TV Closed Captioning Exemptions and Clarifies “Economically Burdensome” Standard in Connection with Captioning Rules

So just what legal, regulatory and legislative issues are currently facing broadcasters in Washington?  On Tuesday, I did a panel at the Connecticut Broadcasters Association’s Annual Convention in Hartford with Kelly Cole, the Senior Vice President for Government Relations at the NAB.  In putting together our presentation, one of the most striking things to me was the number of different issues facing broadcasters with which the NAB is dealing.  57 different issues are set forth on the slides from the presentation (available here).  They range from Congressional matters such as spectrum auction authority (about which we recently wrote here), retransmission consent reform, and the performance royalty; to FCC regulatory issues including ownership reform, rural radio issues and the FM translator/LPFM debate; to issues pending in many other venues – including international intellectual property reforms and issues at the FTC and Copyright Office.  Even this list is incomplete, as there are other slides that we discussed during our presentation, including issues such as the upcoming consideration at the FCC meeting next week of an online public inspection file requirement for broadcasters (see our recent article here), video captioning of internet programming repurposed by broadcasters from materials already shown over-the-air (see our article here) to more mundane but nevertheless very important issues like the December 1 deadline for Biennial Ownership Reports for commercial broadcasters (see our article here). Also, as set out in the slides, there are all sorts of new deadlines coming up for broadcasters in addition to the Biennial Ownership Report, including the National EAS Test, the implementation of the CALM Act and the requirements for captioning video repurposed to the web, political broadcasting lowest unit rate windows  that may be open or opening in many states, as well as license renewal deadlines for many broadcasters.

Plenty to be concerned about, and plenty to follow and, where appropriate, to let your voice be heard on the many topics of importance. 

The FCC this week ordered an FM translator in Detroit to shut down as it caused interference to the reception of a full-power FM station from Toledo.  The translator had been rebroadcasting the HD2 signal of another area station, in effect introducing a new analog station in the Detroit area, to bring back a smooth jazz format that had left the city a few years ago.  But the translator caused interference to the reception of the Toledo station in areas where the Toledo station was regularly used and, in the eyes of the FCC, the translator’s operator was able to provide no relief to the complaining listeners.  Thus, it was ordered off the air.  Translators are required to shut down if they create interference to the regularly used signal of a full-power station, even outside of that station’s protected contour.  This happens somewhat regularly, so that part of the FCC decision is not particularly unique.  What is unique was that the FCC rejected attempts to resolve the interference by giving the complaining listeners mobile phones capable of picking up the Toledo station’s programming through a mobile "app" on the phone. The case also chastised the translator licensee for posting the names of the complaining listeners on its website.

As we wrote in a recent post, Section 74.1203 of the FCC rules requires that a translator cease operations if it interferes with the regularly used signal of a full-power FM station.  Objectors need to show that there are specific listeners who regularly listen to a full-power station, and that the translator creates interference to the reception of that signal in areas where these listeners had heard the station before the translator started to operate.  In the past, to get rid of these objections, translator operators have purchased the listeners who complain filters for their radios, or even new radios or other devices to overcome the interference objections.  In this case, the translator licensee went further when such traditional methods did not resolve the interference.  The translator operator bought the objectors mobile phones with an iHeartRadio mobile app that could receive the primary station (a Clear Channel station).  The FCC rejected that solution, finding that a non-broadcast solution to broadcast interference imperiled broadcast service – "a free over-the-air system that is and must remain a vital source of news, information and programming for all Americans" (emphasis in the original).  Thus, the translator was required to sign off unless and until it could resolve all interference claims.  Given that the Toledo station had only provided objections from those who complained about interference inside of the station’s protected contour, the FCC said that it would anticipate that many more objections would be submitted if it accepted the mobile app solution, and that it was likely that it would have to look at all sorts of different solutions to those future objections.  The Commission ordered the translator station off the air, and suggested that it might be difficult for it to restart operations on its current channel, which was co-channel with the Toledo station.

Continue Reading FM Translator for HD-2 Signal Shut Down By FCC After Interference Complaints – Can’t Remedy Complaint By Giving Phones With Internet App to Complaining Listeners

While the off-year elections of 2011 are not yet history, the Lowest Unit Rate period for the 2012 Presidential election will soon be upon many stations in the early primary and caucus states.  Last week, Bobby Baker, the head of the FCC’s Office of Political Programming, and I conducted a webinar for 13 state broadcast associations to provide a refresher on the political broadcasting obligations of broadcasters.  The webinar covered all the basics of the political broadcasting rules – including reasonable access, equal opportunities, lowest unit rates, the public file and sponsorship ID obligations, and the issues of potential liability of broadcasters for political advertising not bought by candidates but by PACs, unions and other interest groups. PowerPoint slides from the presentation are available here, and the video of the presentation can be accessed here by members of the state associations that were involved.  Additional information about the FCC’s political broadcasting rules can be found in our Davis Wright Tremaine Guide to Political Broadcasting.

One particular issue came up in the webinar that warrants additional discussion and clarification. Rate issues are always the most difficult to explain, and the questions concerning package rates are among the most confusing.  The FCC has said that stations cannot force a candidate to purchase a package of spots containing multiple ads of different classes.  Instead, stations must break up the price of packages into their constituent spots and, if the package spots are running during a Lowest Unit Charge period (45 days before a primary or Presidential caucus or 60 days before a general election), determine if the spots in that package affect the lowest unit rates of the classes of time represented by advertising spots contained in the package.  For instance, if you sell a package of 10 morning drive spots with a bonus of 2 overnight spots on your radio station for $100, you need to break up the package price and allocate it to the spots from the two classes of time in the package – the morning drive and the overnight spots. So some of that $100 package price gets applied to the 10 morning drive spots (say, for example, $96) and the rest (for example, $4) is assigned as the value of the 2 overnight spots.  Thus, in this package using this allocation, the unit rate for morning drive spots would be $9.60, and the unit rate for overnights would be $2.  You then take these rates, and see if you have sold spots for these classes of advertising time at lower rates.  If so, the package has no effect on your LUR.  If not, the spots in the package may reduce the LUR for one or both classes of time.  In such cases, the determination of which classes’ LUC will be lowered may be affected by the allocation of the package price that you make.

Continue Reading A Webinar Refresher on the FCC’s Political Broadcasting Rules – Computing Lowest Unit Rates in Spots Sold as Part of Advertising Packages

The battle over the reclamation of television spectrum for wireless broadband rages on, and some in the television industry fear that the future of over-the-air television may be sacrificed to Congressional attempts to reduce the Federal deficit. The current Congressional “Super Committee” that is attempting to find billions of dollars in spending reductions to lower the Federal deficit is reportedly considering “finding” potentially 20 billion dollars or more from the proceeds of an auction of spectrum reclaimed from television broadcasters. Various Congressional proposals have been submitted for the committee’s consideration, essentially to authorize the FCC to conduct “incentive auctions” to reclaim some TV spectrum. But, the National Association of Broadcasters and others have claimed that broadcast television service to a number of markets, particularly those in areas near the Canadian border and in urban, densely populated northeast corridor between Boston and Washington, will be particularly hard hit – imperiling the continued existence of free over-the-air service to some markets, including Detroit. In other markets, broadcasters fear there will be a lessening of the protections from interference that stations currently enjoy, or a repacking of the spectrum that will put stations on new and potentially inferior channels, without reimbursement of the costs of relocation.

The proposal for the reclamation of television spectrum was first advanced in the Commission’s Broadband Report, where the FCC committee that drafted the report suggested that as much as 120 MHz of television spectrum  be reclaimed for use for wireless broadband – 20 television channels from 32 to 51 on the TV dial.  With tablets and smartphone usage growing quickly, and the ever-increasing demands for wireless spectrum to deliver video, audio and other rich internet content, the Commission fears a spectrum shortage – especially in certain urban markets. As over-the-air viewing rates have been falling over the last two decades as more people sign up with multichannel carriers, the Report suggested that the TV band could be shrunk, with some of the spectrum being redistributed to wireless. TV stations could be incentivized to surrender their spectrum for wireless use or to share channels, an option that the proponents of reclamation claim is very feasible, as digital technologies now allow one television channel to rebroadcast multiple streams of programming.

Television broadcasters have fought back, claiming that, while the digital transition does allow for more channels in the same spectrum, they are just now rolling out new uses of that spectrum – including new programming streams and, soon, mobile video targeted to smartphones and other digital devices. An article in one newspaper  last week reviews some of the new ways for over-the-air TV viewers to get access to additional video programming to augment over-the-air programs, allowing some consumers to “cut the cord” – eliminating their multichannel video subscriptions. Some studies have suggested that such cord-cutting opportunities, combined with the recent economic turmoil, has actually increased the amount of over-the-air television viewing in the last few years, reversing or slowing the trend of decreasing broadcast TV viewership.

Continue Reading Reclaiming Over-the-Air TV Spectrum for Wireless Broadband Use – What Will the Budget Super Committee Decide?

The tenuous legal status of marijuana advertising on broadcast stations just got a little more tenuous as a Federal prosecutor in Southern California has reportedly indicated an intent to prosecute radio and TV stations, as well as newspapers and magazines, that advertise medical marijuana clinics.  As we have written before, advertising such clinics was always a legal grey area, as marijuana use and possession is still a Federal felony, even though many states have passed laws to decriminalize the use of medical marijuana.  While the Federal Department of Justice had indicated that marijuana prosecutions were a low priority for prosecution, as the number of medical marijuana clinics have mushroomed in many states, and the controls exercised over them by state authorities have been lax, some Federal prosecutors have seemingly taken action on their own (as we warned was possible in a prior article on medical marijuana advertising).  The prosecutor in Southern California has indicated an interest in going after property owners who lease space to clinics, and now seemingly has expanded her interest into going after media outlets who advertise for such clinics. 

Whether or not these prosecutions will be successful on their own may be subject to debate, but broadcasters, as Federal licensees, need to be particularly careful in their actions.  There is rumored to be at least one complaint pending at the FCC against a broadcaster who ran medical marijuana ads.  As an agency of the Federal government, whose Justice Department has said that pot is not a legal drug, the FCC would be hard-pressed to say that it is alright for a station to advertise for a marijuana clinic.  With license renewals now pending or about to be filed by all broadcast stations, the opportunities for more objections, and sanctions based on any such complaint, are many.  So, once again, we caution restraint when a broadcast station is offered the opportunity to make a few dollars from a clinics ads.  The dollars you make may be far overshadowed by the dollars you spend defending a legal action – whether it be before the FCC or before a Federal court.  So think twice!

Broadcast stations must charge political candidates the lowest unit rate that they charge any commercial advertiser for a comparable advertising spot during the 45 days before a primary and the 60 days before a general election.  Broadcasters need to remember that this applies to state and local races, as well as Federal campaigns, so those charges must be given to candidates for upcoming off-year November elections that are to be held in many states in less than a month.  As we’ve written before, while reasonable access does not apply to spots for state and local candidates, once a station decides to give these candidates access to the airwaves by selling time, most of the other political rules (lowest unit rates, equal opportunities, no censorship) apply.

With the Iowa caucus likely to take place on January 3, lowest unit rates will need to be afforded to presidential candidates by stations serving Iowa in mid-November, with stations serving New Hampshire, South Carolina, Nevada and Florida moving into a lowest unit charge window soon thereafter.  The FCC has held that candidates are entitled to lowest unit rates for caucuses as if they are primary elections.  And the rules apply to stations in neighboring states that have service into the states with early primaries and caucuses.  So many states are currently in lowest unit rate windows for local races, and others soon will be for the Presidential race.

Look for more information about the FCC’s rules in our Political Broadcasting Guide.  I’ll also be conducting a webinar summarizing the political broadcasting rules, featuring Bobby Baker, head of the FCC’s political broadcasting office, on Wednesday – sponsored by the Michigan Association of Broadcasters in cooperation with the broadcast associations of at least 10 other states.  Get ready for the political broadcasting season by viewing our webinar or one of the other refresher courses sponsored by other associations in the coming months. 

Online public files, detailed reports about virtually every program aired on a television station as to its source and whether it addressed various types of perceived community interests, and other paperwork requirements that would have required most television stations to hire a new employee just to deal with the burden, were all part of mandatory television public interest reporting requirements adopted by the FCC back in 2007 (see our articles here and here on these reports on FCC Form 355).  Similar obligations were also proposed for radio but never adopted.  The TV "enhanced disclosure" rules have never been implemented, however, and were apparently never even submitted to the Office of Management and Budget  for approval of their compliance with the Paperwork Reduction Act.  The numerous petitions for reconsideration filed against these rules are on the tentative agenda for the next FCC meeting, to be held on October 27.  Not only is the disposition of these petitions on the agenda, but a proposal for a further proceeding to look at new requirements for an online public file, to be hosted by the FCC, is to be considered at the same time.  What can broadcasters expect to happen?

In the Future of Media Report issued by the Commission earlier this year (actually renamed the Report on the Information Needs of Communities), the FCC study group recommended abolishing these 2007 rules, and terminating the proceeding looking at imposing them on radio (see our summary here).  The Report seemed to recognize that the reports were far too burdensome on licensees, and were not reasonably related to the current FCC rules on programming.  In essence, the reports required the collection of lots of information, without any regulatory purpose for the information collected.  In light of these findings, and the 4 year delay in implementing the rules already adopted, it seems safe to conclude that the 2007 rules are probably on their way out.  But the accompanying notice suggesting that the FCC will begin a new rulemaking to look at the online public inspection files, to be hosted by the FCC, raises questions about what will replace the 2007 rules.

Continue Reading TV Public Interest Obligations and Online Public Inspection File on Agenda for Next FCC Meeting