Putting TV or cable programming onto the Internet may soon not be as easy as it once was, as the FCC has just issued its Notice of Proposed Rulemaking on the captioning requirements for online video.  The proposals advanced by the Commission are summarized in our firm’s Advisory on the subject, here.  These rules are proposed pursuant to a Congressional mandate that requires captioning of television programming that has already been captioned pursuant to an FCC rule, when that programming is later shown on the Internet.  This obligation was adopted as part of the 21st Century Communications and Video Accessibility Act ("CVAA") which, among other things, looks to make Internet video programming accessible to the hearing impaired.  Programming that has run on TV stations or cable systems, and is later delivered through the Internet, will apparently be under the captioning obligations, subject to any exceptions adopted by the FCC in this proceeding.  The legislation requires that rules be adopted in January, and that implemention begin 6 months thereafter. Thus, there is a very quick comment period – with comments due 20 days after the NPRM is published in the Federal Register, and replies 10 days later.

The proceeding asks about who should be covered by the rules, and what exemptions to the requirements should be adopted.  For instance, it asks whether the exemptions that apply to TV captioning (including exemptions for small channels with less than $3 million in annual revenue) should be carried over to the Internet.  The report also asks what devices should be covered by the regulations that will be adopted.  Will these rules apply to smartphone and tablets, as well as to standard computer screens?  It also asks a number of technical questions about how the captioning should be implemented, though the FCC does not propose any single captioning standard.  These are all important issues for a requirement that may soon become a reality for traditional video providers looking to put their content online.  Thus, review our advisory and the NPRM itself, and comment by the deadline that will soon be set.  Obviously, where the FCC comes out on these questions may significantly impact the development  of online video, and could set a precedent for a further expansion of the captioning obligations in the future.  Watch this proceeding as it develops in coming months. 

Just a reminder that by October 1, Television stations must once again make their triennial carriage elections.  By that date, TV stations must notify the local cable systems and satellite carriers in their market in writing as to whether the station intends to be carried pursuant to must-carry or a retransmission consent agreement for the next three-year term, which runs from Jan. 1, 2012 through Dec. 31, 2014.  Accordingly, before Oct.1, stations must send a written election notice to the cable systems and satellite providers in their market via certified mail, return receipt requested.  The election letter should indicate the station’s call letters, channel, community of license, DMA assignment, and contact information, in addition to answering the basic question of whether the station would like to elect carriage pursuant to must-carry or else negotiate a retransmission consent agreement.  In addition, those stations electing carriage pursuant to must-carry should also indicate the channel on which they wish to be carried (i.e., the over the air channel, the cable channel on which it has been carried historically, or some other mutually agreeable channel).  And be sure to keep copies of the election letters sent out.  Copies of all the election letters must be maintained in the station’s public inspection files. 

If your station programs to children under the age of 13 or maintains a website or online presence directed to children under age 13, you should be aware of new rules proposed by the Federal Trade Commission (FTC) that will affect both the types of information you are allowed to collect from children and the manner in which it is collected.  The proposed rules, summarized here, would modify the Children’s Online Privacy Protection Rule enacted by the FTC to enforce the Children’s Online Privacy Protection Act (COPPA) enacted by Congress in 2000.

COPPA requires parental consent whenever personal information is collected from children under the age of 13.  The proposed rules, which would be the first changes made by the FTC since COPPA was enacted, are intended to reflect the recent popularity of social networking, smartphones and the availability of geolocation information.

Stations that have websites or apps dedicated to youth sports leagues or other children’s activities could well be subject to these requirements, summarized in our recent Client Advisory available here.  Interested parties may file comments on the new rules by November 28, 2011.

The FCC today announced that it is extending the deadline for participants to comply with the new EAS CAP (Common Alerting Protocol) rules until June 30, 2012.  The deadline had previously been set for just two weeks from now, September 30th; however, in light of the fact that the FCC had yet to finalize all of the new EAS CAP rules, it decided to extend the deadline until next June.  Thus, according to today’s Order, available here, EAS participants will be required to be able to receive CAP-formatted EAS alerts no later than June 30, 2012.  Such an extension had been widely supported by EAS participants and commenters in the current EAS CAP rule making proceeding.  The FCC expects to adopt the CAP-based revisions to its Emergency Alert System rules in a subsequent order, and it expects those new rules to be out sufficiently in advance of the June 30, 2012 deadline in order to allow EAS participants ample time to come into compliance with those new rules. 

In addition, the Commission’s Order urges EAS participants that have purchased or are considering purchasing any type of EAS equipment to verify with the manufacturer or vendor that the equipment fully complies with the FCC rules.  As the FCC has yet to rule on many issues related to the use of intermediary devices — i.e., devices that connect in some fashion with previously certified EAS equipment to allow receipt of CAP-formatted alerts — including whether such intermediary equipment must be certified under the FCC’s rules or whether they fully satisfy the new CAP requirements, it is not clear whether such intermediary devices will ultimately satisfy all elements of the Commission’s new EAS CAP rules.  So until the FCC issues its subsequent Report and Order addressing such issues, buyer beware.  See our earlier postings here for more information about the new EAS CAP rules. 

The FCC today announced a brief extension, until the end of the day tomorrow, for the submission of annual regulatory fees.  No explanation for the extension is provided. So you now have until 11:59 Eastern time tomorrow to get those fees submitted without facing late fees and penalties.  The FCC Public Notice announcing the extension is here.  Our previous post on these fees, setting out the procedures for filing and other details, is available here.

The FCC today announced the public testing of a new TV White Spaces database system.  Starting on September 19, 2011, the FCC’s Office of Engineering and Technology will open a 45-day window to allow the public to try out the TV Band Database developed by one of the potential TV White Spaces database managers.  If approved, the Database will be used by white space devices to find available frequencies and avoid interfering with authorized services and registered facilities.  As we have written about previously (here) the Commission has adopted new rules to allow unlicensed devices to operate in the television spectrum, but such operations must protect incumbent users.  Accordingly, as part of those rules, the Commission has required the development and use of a database, which TV band devices will be required to access periodically in order to determine available frequencies and adjust their operation.  As we discussed here, the Commission has tentatively selected a number of parties to serve as database managers to develop and maintain such TV white spaces databases.  With this upcoming public trial, interested parties will now have a chance to test the database system developed by one such potential database manager.  As part of its authorization process, each interested database manager will be subject to a similar trial period of no less than 45 days.

During this trial period, interested parties are encouraged to test the database, including the basic functionality, including the following elements:  The channel availability calculator; cable headend and broadcast auxiliary receive site registration; and wireless microphone registration.  Starting on Sept. 19th, the TV band database can be accessed here.  The test site will provide a description of the trial, details on use of the system, and a link for feedback.  Following the conclusion of the test, the potential database manager will submit a report to the Commission, which will also be available for public review and comment.  At the end of the process, the FCC will determine whether this particular system complies with the rules and requirements and whether this database manager will be authorized to operate one of the official databases.  In addition to giving feedback to the database manager through the test site, parties can also submit comments directly to the FCC in the open docketed proceeding ET Docket No. 04-186 regarding the TV bands database systems through the FCC’s Electronic Comment Filing System.  A full copy of today’s Public Notice can be found here. 

In addition, perhaps coincidentally, today it was announced in the Federal Register that the rules involving the collection of information for these white spaces database have received OMB approval and those data collection rules are now in effect.  So once the first database managers gain FCC approval and bring their databases online, the government has the green light to instruct parties to populate the databases by registering their services and facilities for protection.  

Looking for opportunities for a new FM station?  The FCC has just released a list of new FM channels to be auctioned in the next FM auction, scheduled to begin on March 27, 2012, along with the proposed rules for that auction.  On the list of channels, the proposed minimum bid for each channel is also set out.  If the Commission follows the schedule used in prior auctions, we should expect that the deadline for the "short-form" application to participate in the auction (which basically contains information about the ownership of the applicant and a list of the channels in which they are interested) will be due in early 2012, likely sometime between January 1 and January 15, 2012.  The upfront payment of the necessary minimum bids would then likely be due around February 20, 2012 or so.  In another Notice of Proposed Rulemaking released late last week, the FCC also proposed to delete a number of FM channels that have gone unsold in previous auctions.

The construction permits for the new stations that will be available in the auction are spread all across the country.  Many are located in large western states including multiple channels in California, Colorado, Oklahoma and Texas, among other states.  But there are even opportunities in eastern states like Florida, Vermont and Virginia.  So, if you are interested in starting a station from scratch, look through this list of channels to see if there are opportunities for a construction permit for a new station in which you might be interested.  If you find something that might be interesting, you need to start your due diligence on each channel now, as the bidder is responsible for insuring that the channel for which they are bidding can be built and will serve the audience that the applicant expects.  If you win the auction and decide that you can’t really find a transmitter site, then you may well be on the hook for the full amount of the bid even if you don’t build the station.  And, if you are successful in the auction, you will have to have an available transmitter site to specify in your "long-form" application about a month after the end of the auction – an application which will specify all of the technical details of the new station.  So look at zoning issues, FAA considerations, coverage questions, and even whether technical details like the rural radio order limiting move-ins of FM stations from rural to more urban areas, may limit the potential economic value of the channel in which you are interested. 

Continue Reading Auction for New FM Stations Scheduled for March – Look for Filing Deadline Late This Year – FCC Also Proposes Deletion of Channels for Which No Bids Were Received

A fine issued to a low power FM station today makes one wonder "what were they thinking?"  The decision cites a situation where interference was reported by an FAA Control center.  That interference was tracked down by the FCC, though radio direction finding equipment, to an LPFM station. When the FCC inspectors arrived at the station to inspect the transmitter, the person on duty at the station, and then the "owner", both refused to allow the inspection and refused to turn off the transmitter – even when told that the interference was a threat to aircraft safety.  Both said that the FCC would have to wait until their engineer arrived, delaying the shut-down for about half an hour.  The inspection discovered a transmitter that was not certified by the FCC which, when finally shut down, remedied the interference to the FAA frequencies.  Based on these facts, the FCC fined the station $7000 for the transmitter that was not certified (the base amount for such a fine), and increased the fine by another $5000 because of the failure to cooperate with the FCC inspector, especially in light of the threat to health and safety from the interference to the FAA frequencies.

Beyond the obvious failure to use equipment that had been certified for broadcast use, this case highlights the duty of a broadcast licensee to cooperate with FCC inspectors when they visit a station.  FCC rules (Section 73.1225(a)) provides that stations must be available for inspection by FCC the FCC at any time that the station is in operation.  If there are issues that could cause a risk to health and safety, including the kind of spurious emissions from a transmitter that were interfering with the FAA frequencies, the station must shut down within 3 minutes if requested by the FCC (Section 73.1350(b)(2)).  These days, in some quarters, there is an unwarranted suspicion of government intrusion.  Perhaps that somehow explains the actions of the licensee here.  But that suspicion is totally unwarranted when you are dealing with an FCC inspection.  Broadcasters operate their stations because of a license issued by the FCC.  If you are going to hold a license, you need to be ready to deal with the requirements of that license.  Ignoring  attempts by the FCC to enforce those requirements is to ask for trouble. And, when you add in the issue of safety that was before the Commission in this case, a licensee is risking not only FCC penalties, but potentially civil ones too, should there have been any sort of accident caused by the interference that his station produced.  If the FCC comes knocking – pay attention to what they say, and cooperate with them!

When an FCC licensee goes bankrupt, the question of how to treat the interests of secured lenders is the one that, from time to time, comes up for debate. Two recent cases deal with this issue – one appearing to be an aberration that would make lending to a broadcast licensee difficult if not impossible, while the second providing a more lender-friendly interpretation after a detailed analysis of the history of FCC and court precedent on this issue, affirming what most in the broadcast community have assumed, for most of the last two decades, is settled law. We wrote last week about how the FCC’s prohibition on taking a security interest in an FCC license can make enforcement of liens difficult in a normal debtor-creditor context. Today, we’ll look at how the FCC’s prohibition on taking liens in a license has significance in the bankruptcy context.

Due to the FCC’s prohibition on taking a security interest in an FCC license, if the FCC reviews any security agreement with a licensee company, it will insist that lenders need to make clear in such agreement that the lender has no security interest directly in the FCC license.  In most agreements, lenders now have that language, with a caveat that such an interest is renounced only for so long as FCC policy remains in its current state – though, as set forth below, that policy does not look like it will change anytime soon. As the FCC license is usually the most valuable asset of a licensee, to preserve its ability to get at the value of that license in the event of a default on the loan, even though it cannot take a lien in the license itself, the lender will include a provision in its security agreement that gives it a secured position in the proceeds from any sale of that license and in all other intangible assets of the licensee. Having a secured interest is important to lenders as it gives the lender priority over unsecured creditors in the event of a bankruptcy. Thus, if the lender goes into bankruptcy and there are insufficient funds to pay all creditors (as is usually the case), the secured party will get first crack at the assets that are available to pay debts.  The question of whether such priority should attach to the proceeds from the sale of an FCC license, when that sale may not occur until after the bankruptcy has been declared, was the heart of the controversy in the recent cases.

Continue Reading Securing a Loan to a Broadcaster, Part 2 – Bankruptcy Cases and Liens on Licenses

The FCC today made it easier to move an FM translator from one location to another, but at the same time adopted new policies that seemingly restrict how far a translator can be moved.  Today’s decision  uses a waiver process to relax the rules so as to permit a move of a translator a greater distance in a single application, but the decision also labels multi-hop moves as an abuse of the Commission’s processes.  As translators have become more important to broadcasters as a way to bring AM and HD-2 signals to a wider audience, this decision will have an immediate and significant impact on many broadcasters, once it becomes clear exactly what are the parameters set by the Commission.

Under Section 74.1233(a) of the FCC rules, a minor change for an FM translator requires that the facilities proposed in an application have a 60 dbu contour that overlaps with the translator’s current licensed 60 dbu.  In effect, this is saying that part of the protected service area of the proposed new facility must overlap with the current protected service area served by the station from its licensed facility.  As major change applications can only be filed during designated translator windows (and there has been no FM translator major change window since 2003), to make any move in a translator, it must be a minor change.  The decision today allows, through a waiver of the rules, a minor change application to be used if the licensed facilities preclude construction of the new facilities, i.e. if the interfering contour of the licensed facilities of the translator overlap with the protected contour specified by the application for new facilities.  A the interfering contour goes much further than the protected contour, this allows the FCC to approve in a single application a move of a greater distance than would be allowed under a strict reading of the rule.  However, there were significant conditions imposed on the application of this new waiver policy that may preclude longer moves that have been common in the last few years. 

Continue Reading New Policy on FM Translator Moves – Bigger Moves Permitted In One Hop, But Multiple Hops are an Abuse of FCC Processes