The full text of the FCC’s Order overturning its 2007 decision on online public inspection files for TV broadcasters and the adoption of the Form 355 "enhanced disclosure form" has now been released.  This order, adopted at the FCC’s open meeting this week (held on October 27, 2011, which we wrote about here), also contains a Further Notice of Proposed Rulemaking again suggesting an online public file, but this time it would be one hosted by the FCC.  In reading the full text, more details of the FCC’s proposal become clear.  As set forth below, the Order suggests everything from a future application of these rules to radio once the bugs have been worked out, to an examination of whether a station needs to save Facebook posts and other social media comments in the same way that it preserves letters from the public and emails about station operations, to a proposal for stations to document in their files information about all "pay for play" sponsorships.  Comments on these proposals, and the others summarized below, which include a request for detailed information about the costs of compliance with the proposals, are due 30 days from when the order is published in the Federal Register, with Reply Comments due only 15 days thereafter.  The FCC, after sitting on these obligations for almost 5 years, now seems to be ready to move quickly. 

In reaching it’s decision, the order first discusses some proposals that it was rejecting – some for the time being.  For radio broadcasters, the most important of the rejected thoughts was the extension of this rule to radio.  The Commission noted that there were proposals pending and ripe for action as part of the Localism proceeding (which we summarized here), to extend the online public file obligations to radio.  In this week’s order, the FCC decided that it was not yet ready to apply these rules to radio.  The Commission noted that there might need to be differences in the rules for radio (implying that, at least partially, there might be resource issues making it difficult for radio broadcasters to comply with these rules), and also finding that it would be better to see how an online file works for TV before extending the rule to radio.  But, from the statements made in the Order, there is no question but that, at some point in the future, some form of the obligations that are proposed for TV will also be proposed for radio broadcasters. 

Also, it is important to note that the FCC’s Localism proceeding is not dead yet.  While this week’s Order stems from the FCC’s Future of Media Report (renamed the Report on the Information Needs of Communities), and that report recommended that the Localism proceeding be terminated, this Order did not do that.  The Commission notes its plans to start a new proceeding designed to force broadcasters to complete a more comprehensive report on their public interest programming.  That proceeding may be where the looming Localism proposals are finally dealt with.  Statements at the meeting and passages in the Order make clear that the examination of the public interest obligations for broadcasters will begin with a Notice of Inquiry, which is a most preliminary stage of an FCC proceeding (which would be followed by a Notice of Proposed Rulemaking after the inquiry comments are reviewed) and then an Order.  So final resolution of these issues seem to be far down the road.  If that is the case, will the Localism proposals stay on the table until the Order in this new proceeding is adopted?  It is certainly unclear from the Commission’s statements thus far.

Continue Reading Text of Online Public File Order Released – Details of What the FCC is Considering, and Suggestion that Radio May Be Next

At its meeting today, the FCC vacated its 2007 Order mandating an online public file and the filing of the Form 355 “Enhanced Disclosure” form that detailed the public interest service of television broadcasters. But these requirements are not gone, as the Commission has adopted a Further Notice of Proposed Rulemaking asking to reinstate an obligation for an online public file, and a Notice of Inquiry is apparently circulating at the FCC that would propose a substitute for the Form 355. The proposal for the new online public file apparently also suggests including new information in the online file, including information about sponsorship identification and copies of shared service agreements. While the text of the FCC order is not yet out, from the information provided at the FCC meeting, the following matters appear to be on the table at the FCC:

  • The FCC proposes that TV broadcasters will need to have an online public file, submitted to and maintained on servers at the FCC rather than on each individual station’s website
    • Several Commissioners suggest that the Commission will develop a mechanism for accessible storage of online public files, which may be searchable by the public
    • The online public file form will automatically import other FCC filings that are required to be in the file
    • Until the FCC electronic database is perfected, the documents will be placed online in their current formats
  • Letters from the public concerning station operations are proposed to be excluded from the online file out of privacy concerns, though broadcasters will still need to keep those letters in a public file at the station.
  • The online public file is proposed to include the political file, which was exempt under the 2007 rule as it would be too burdensome to update that report rapidly during an election season
  • The online file is proposed to include additional material not now required to be in the public file, including:
    • Copies of shared services agreements
    • Sponsorship identification information that is now only broadcast on air in connection with the program in which sponsored material is included
  • The FCC is currently considering a Notice of Inquiry, a draft of which is apparently circulating among the Commissioners now, that proposes some form of enhanced disclosure form that will replace the Form 355 (and the current Quarterly Programs Issues list) to document the public service provided by TV broadcasters

Continue Reading FCC Proposes Revised Rules for Online Public File – Including Political File – and Discusses the Public Interest Obligations of TV Stations

When the requirement that broadcasters have an antidiscrimination provision in their advertising contracts became effective, the FCC’s Enforcement Bureau issued a Fact Sheet that stated that broadcasters needed to make sure that this provision was not only in their own contracts, but also in that of rep firms and others who sold advertising on behalf of the stations (see our coverage here).  Many stations feared that this policy would alone be difficult or impossible to enforce, as the stations simply had no way of policing the actions of the reps.  There was also the fear that advertisers and their agencies would not want to sign agreements with these provisions, or that they would nevertheless buy advertising that avoided certain minority-formatted stations, just without the open "no urban, no Spanish" dictates that the rule was designed to guard against.  In an action this week, the American Association of Advertising Agencies, or the 4As as it is more popularly known, adopted a policy requiring equal opportunities for all "vendors" of member agencies.  As stations are considered vendors to the advertising agencies, selling them ad time, this policy is read as prohibiting its members from selecting stations on which to advertise with a discriminatory purpose – essentially filling in the other side of the equation that the FCC tried to enforce through the broadcast certification.  The 4As policy can be found here.  The policy establishes a procedure for complaints to its members for perceived violations of the policy.

This action was applauded in statements by FCC Commissioners McDowell and Copps, who both recognized that the FCC certifications could go only so far in combating discriminatory ad buying practices.  By having a strong partner in a strong trade organization working on these issues from the buyers’ side, the potential for the policy to have a real impact is increased.  The action should make the lives of broadcasters easier, by making advertisers more aware, through their own trade organization, of the general public policy against discrimination in advertising.  But broadcasters are in no way excused from continuing to enforce the FCC policy, and including the required disclaimer in their advertising contracts and other sales materials.  See our article here  for more information about this policy, some suggested language for the certification, and for ideas of what to do if the station does not routinely use advertising contracts in the sale of all of its advertising time.  Remember, this obligation on broadcasters is reviewed through a certification that the policy is in place at the station on the license renewal application, so take this requirement very seriously. 

The FCC has released its EAS Handbook, specially directed to the Nationwide EAS Alert that will occur on November 9.  This Handbook is to be posted at all stations that are participants in the EAS Network (which is virtually all stations) for purposes of this test only (stations should also have the standard EAS Handbook at their control points, but this Handbook will be used for the Nationwide Test).  Cable systems are also participating in the EAS system and are included in the test as well. As we have written before, the November 9 test is the first time that the Emergency Alert System (originally adopted in the 1960s as the Emergency Broadcast System) will be tested for a national alert, even though that was the original, and remains the primary, focus of the EAS system.  EAS is now used mostly for localized weather and Amber alerts. 

The Handbook also points to three FCC forms, to be accessed and filed online through the FCC’s website.  While the use of these electronic forms are, according to an FCC Public Notice summarizing the EAS obligations, not mandatory, any station not choosing to use this system will have to file a paper report at the FCC by December 27 providing all of the required information.  If you elect to use the simplified electronic forms, Form 1 is to be completed by all stations and cable systems prior to the November 9 test, to provide information about the station or system and a contact person.  Form 2 is to be submitted on November 9, indicating whether the test was received.  Form 3 is submitted after the test, by December 27, to report information about how the test was received, or why it was not received.  Stations deciding to use the electronic filing (which is easier than getting an original and a mandatory copy to the FCC if a paper form is filed) should begin to review and complete Form 1 immediately.

In addition, the NAB has provided much material on the EAS Nationwide test, available here, including PSAs that stations should run now alerting the public that the November 9 test is only a test and not a real emergency, and also providing a suggested slide for TV stations to air during the test itself.  The message that this is only a test, to be aired by radio stations, is contained in the Emergency Action Notification message that will be sent to stations during the alert.  A sample of that text is in the EAS Handbook.  As this is an important test of the EAS system, and will require broadcasters to report on their compliance, everyone should be preparing to take part – and checking their systems to make sure that they are fully functional – now. 

Continue Reading FCC Releases Handbook for Nationwide EAS Test – First FCC Form to be Filed Now In Anticipation of the November 9 Test

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