In December, the Commercial Advertisement Loudness Mitigation (“CALM”) Act was adopted by Congress and signed by the President, addressing consumer complaints about television commercials that seem louder than the program content that they accompanied. As we wrote in our summary of the Act when it was adopted, Congress has long received many complaints about loud commercials and decided to act, even though many industry groups were concerned about the ability to design an effective system to deal with the contrasts that sometimes exist between the quiet dialogue that might precede a commercial break and the commercial advertisement itself. Nevertheless, Congress adopted the CALM Act, and instructed the FCC to adopt implementing rules within a year. This past week, the FCC released its Notice of Proposed Rulemaking, looking to adopt rules to implement the statute for over-the-air television broadcast stations, cable systems, satellite, and other multichannel video programming providers. In its NPRM, the FCC asks many questions trying to clarify the details of CALM Act implementation.

The NPRM raises a broad array of implementation issues, ranging from deciding exactly which broadcast stations and which MVPDs are subject to its terms, to the establishment of safe harbors for technical compliance. As discussed in more detail below, the Commission also asks whether stations and systems can shift the burden for compliance with these rules to program suppliers, such as broadcast and cable networks, and whether contractual means of guaranteeing compliance (such as indemnification provisions in contracts between networks and affiliates) are sufficient to ensure compliance by these program providers. Questions about how MVPDs deal with retransmission of broadcast programs, and who is responsible for noncompliant broadcast programming, are also asked. Finally, the FCC suggests processes for consumer complaints and the grant of waivers to stations and systems that cannot quickly comply with the new rules.

Continue Reading FCC Seeks Comments on Implementation of CALM Act Regulating Loud Commercials on Broadcast and Cable Television

In March, we cautioned broadcasters against the airing of ads for medical marijuana.  Our concerns stemmed not only from a complaint pending at the FCC, but also because, despite the widespread belief that the Federal government no longer cared about medical marijuana use and sale, the Department of Justice had only said that prosecution was no longer a priority, not that it was no longer illegal.  In recent months, our concerns seem more and more justified.  We had worried about some local Federal prosecutor deciding that he or she had time to prosecute offenses, even though DOJ headquarters did not think it to be a priority.  But, based on press reports and DOJ’s own press releases, it looks like there has been at least some rethinking of the policies in Washington, DC as well.  The DOJ appears to be backtracking on medical marijuana, now saying only that it won’t prosecute individuals who use medical marijuana, but that dispensaries, even if set up under the color of state laws, are still illegal under Federal law and subject to Federal prosecution.  Thus, broadcasters, as Federal licensees, need to exercise extreme care in advertising such dispensaries.

In the last few days, NPR has broadcast stories about the Department of Justice writing letters to authorities in Rhode Island and Arizona, in both cases saying that the Federal government still considers the sale of marijuana, even medical marijuana, to be a Federal felony subject to prosecution.  Both states are now reconsidering their laws that would otherwise allow for the operation of medical marijuana dispensaries.  The DOJ, on its website, cites a US Attorney in Washington State who has written to the landlords of medical marijuana dispensaries, warning them of the penalties that they may face if they allow these dispensaries to continue to operate, going so far as to warn them that they may face the forfeiture of their property to the government as it is being used to distribute prohibited drugs.  As this letter states, “We intend to use the full extent of our legal remedies to enforce the law.”  This language should serve as a warning to broadcasters of the Federal government’s attitude toward marijuana dispensaries.

Continue Reading More Concerns About The Broadcast of Medical Marijuana Ads

In several recent cases, the FCC issued big fines to stations that had significant gaps in their public inspection files – fines of between $10,000 and $14,000.  Unlike many other recent public inspection file fines, these fines did not arise from self-reporting of violations in a license renewal application, nor were they discovered as a result of a complaint from a disgruntled listener or competitor.  These fines also did not arise in connection with the discovery of other violations at the stations.  Instead, these fines were the result of FCC inspections – inspections that seemingly did not turn up other significant violations.  Thus, these cases serve as a warning that broadcasters need to ensure that their file is complete and up-to-date at all times.  Curiously, these large fines come at the same time that the FCC is about to consider comments on whether the public file paperwork burden is justifiable.

These fines were large – demonstrating a seeming trend to ever-higher fines for public file violations.  The $14,000 fine issued today went to a Class A TV station that had no quarterly programs issues lists in its public file for the entire license renewal term – 34 reports were missing at the time of the inspection.  Based on this egregious violation, the FCC decided that an increase over the base $10,000 fine was in order.  Two AM stations, which had pretty much the same violation as the Class A station – no QPIs for the same period of time – received $10,000 fines (see decisions here and here).  A third AM station received a $10,000 fine for having no new information in its public file since 2006.

Continue Reading FCC Fines Of $10,000 to $14,000 for Broadcast Public File Violations – Discovered By FCC Inspections

Legal issues regarding privacy have long been an issue for broadcasters and other media companies.  Traditionally, privacy concerns for media companies have arisen in the context of news gathering, advertising or other on-air content that either was gathered in a way that intruded on someone’s privacy, or which used private facts or personal images, without consent, for commercial purposes.   As technology developed, privacy related issues followed. There are legal restrictions setting out rules about using automated calling (or texting) for commercial purposes to people who have not consented, sending faxes to persons who have not given you permission to use their fax numbers, and sending unsolicited emails.  Online, the issues increase, with rules or policies in existence or in development.  There long have been rules about collecting personal information about children under the age of 13 (under COPPA – the Children’s Online Privacy Protection Act, see information about a recent enforcement action here).  Other laws govern the need to keep secure any private information that you collect about others – like credit card information that you may collect from advertising clients or listeners who buy merchandise or other goods from the station (everything from tee shirts to Groupon-like coupons).  And recently, there have been a number of lawsuits and government actions targeting the collection and unauthorized use of personally identifiable information about website visitors (or those using a station App) without knowledge or consent.  All of these issues were discussed during a webinar that Ronnie London and I conducted for the Texas Association of Broadcasters.  The slides from that session, providing a good outline of many of the basic legal issues that arise in connection with privacy issues, are available here.

We’ve written about these new media privacy issues before, and our firm’s Privacy and Security Blog cover these issues regularly.   This is an important area that broadcasters need to pay attention to, especially as they increase commercial activity from their websites, on mobile applications, and in other forms of digital media.  Plaintiff”s attorneys are looking for companies who do not adhere to their privacy policies or who provide personally identifiable information (known as "PII" in the privacy world) to third parties without permission.  Congress, the FTC, the FCC, and the Commerce Department have all been looking at new regulatory regimes to govern privacy in many areas – including enhanced and targeted advertising, and the use of geo-location information.  Pay attention to these development as, while the web offers many new opportunities to increase revenues, it also may well bring new legal concerns for broadcasters beyond those FCC issues with which broadcasters have so long concerned themselves.

Just a reminder that radio stations in North Carolina and South Carolina are up next in the license renewal cycle, which means that pre-filing announcements for radio stations in these states must start on June 1st.  The announcements continue on June 16, July 1, and July 16, for a total of four pre-filing announcements.  These announcements give notice to the local community that the station will be filing a license renewal application with the Commission and invite participation in the renewal process.  The precise language of the pre-filing announcements—which is dictated by the FCC’s Rules—can be found here.

The announcements should be aired in the primary language used on the station, so if the station broadcasts primarily in a foreign language, the announcements should be broadcast in that language. For commercial radio stations, at least two of the required pre-filing announcements must air on the station between 7 a.m. and 9 a.m., or 4 p.m. and 6 p.m. local time. If the station does not operate between 7 a.m. and 9 a.m. or between 4 p.m. and 6 p.m., then at least two of the required announcements must be made during the first two hours of broadcast operations. For noncommercial educational stations, the timing of the announcements is the same as for commercial stations, except that such stations need not broadcast the announcements during any month during which the station does not operate.

For more details about the pre-filing announcements and the license renewal process for radio stations, please see our recent advisory which will help radio stations prepare for the process.  A copy of the advisory is available here.  And next up in the queue will be radio stations in Florida, Puerto Rico, and the Virgin Islands, who will start their pre-filing announcements on August 1st in advance of filing their renewal applications on October 1st. 

The FCC has issued a flurry of fines against broadcast stations in the past week or two.  While a number of these fines were for the operation of unlicensed pirate radio stations, several of the fines were for public inspection file violations, stations broadcasting with excessive power or failing to reduce power at nighttime, or for other technical violations.  Agents from the Commission’s field offices have been busy visiting stations, and licensees are urged to heed these recent forfeiture actions and review their own operations to ensure compliance with the Commission’s rules, starting with the main studio rules and public inspection file requirements, about which we’ve written often in the past.  (See here, here, and here, for example.)

While the main studio and public inspection file requirements seem basic, the failure to properly follow these rules can be quite costly.  Today’s FCC releases carries news of two such fines, one for $24,000 and one for $25,000.  In the first case involving two AM stations, the Commission fined the licensee $12,000 per station for failing to maintain a local public inspection file.  A copy of the decision is available here.  The FCC increased the forfeiture from the base fine of $10,000 based on its finding of violations at other stations operated by the licensee, which in the FCC’s view may indicate a "systemic compliance issue".  In the second case, available here, the Commission fined two other AM stations operated by the same licensee a total of $25,000 for public inspection file violations, failure to operate consistent with the terms of the station’s license, and failure to make required annual measurements. 

Of particular note, one of the AM stations had failed to conduct the required annual equipment performance measurements, and had failed to switch from its authorized Daytime pattern to its authorized Nighttime directional pattern during the month of April.  Section 73.1590(a)(6) of the Commission’s rules requires that AM stations make annual equipment performance measurements, and that the details of those measurements be kept on file at the transmitter or remote control point for two years and be made available to the FCC upon request.  These measurements ensure that the station and transmitter are operating properly and are not causing any spurious or harmonic emissions, and must be conducted every year with no more than 14 months between measurements. In the case issued today, the station had no record of the measurements and had apparently not conducted the annual equipment performance measurements. 

These fines should be a clear warning to broadcast stations — particularly AM stations — to review their operations and ensure that they are in compliance with the Commission’s rules and their authorized parameters.  And AM stations should make sure to make their annual equipment performance measurements and retain the proper documentation in their files. 

With the kick-off of the FCC’s broadcast license renewal cycle comes some additional obligations for licensees, this time in the form of an FCC Form 396 Broadcast EEO Report.  The Form 396 is filed only at renewal time and serves to: 1.) confirm the licensee’s commitment to EEO, 2.) provide a narrative statement about how the station has achieved wide outreach in the preceding two years, and 3.) provide copies of the station’s two most recent Annual EEO Public File Reports (assuming that it is not exempt from the Commission’s EEO rules).  By June 1st, radio stations in the first batch of license renewals — those located in Maryland, Virginia, Washington, DC, and West Virginia — must file an FCC Form 396 EEO Report electronically with the Commission.  A Form 396 must be filed by every station, even if the station has fewer than five full time employees and is thus, generally exempt from the FCC’s EEO Rules.  In that case, if the station has fewer than five employees, it will basically just check the box to indicate that and will not need to provide anything further.  Larger stations will need to complete the entire Form. 

And please note, the Form 396 Report must be filed before the Form 303-S License Renewal application can be submitted, as Question 2(a) in Section III of the Form 303-S requires that applicants cross-reference and specify the FCC filing number of the previously submitted Form 396 EEO Report.  For more information about the EEO Annual Public File Reports and the June 1st deadline please see our recent advisory. 

It’s almost summer time, and broadcast stations and other media companies are getting ready for the arrival of the summer associates.  As we’ve written in our Guide to the FCC’s EEO Rules, all FCC-licensed stations with 5 or more full-time employees must, in addition to widely disseminating information about their job openings, must complete a certain number of "supplemental efforts" from a menu list provided by the FCC – efforts intended to educate the public about broadcast employment, the training necessary for such employment and how to locate such employment. One of the menu options is an internship program – and many stations have such programs, some conducted in connection with various broadcast associations, some conducted with local educational institutions, and some just set up by the station itself.  As with anything else, stations, especially commercial stations, need to consider the legal issues that internship programs raise – especially unpaid internships.

In particular, stations need to be careful that interns don’t cross the line, doing more "real" work at a station and displacing paid employees, in a way that might create wage and hour liability to the station.  Our Davis Wright Tremaine Employment Practice Group has just published a great memo, setting out the details of an analysis that all employers should go through in setting up an internship program to make sure that the don’t run afoul of the wage and hour laws – in a simple and straightforward way .  You can find that advisory, Summertime Blues: Limits on Using Unpaid Student Interns and Volunteers, here.   Read it, and make your summer worry-free!

As part of the Local Community Radio Act which, among other things, repealed restrictions against protecting full-power FM stations from third-adjacent channel interference from LPFM stations, Congress required that the FCC conduct a study of the economic impact that such stations will have on full-power FM stations.  The FCC began the process of conducting that study, asking for public comment on a series of questions designed to look at that impact.  Comments are due on June 24, 2011, with reply comments to be filed by July 25.  The Commission asks for comments in two general areas, asking what impact LPFM will have on full-power stations’ revenues and on their audience share, but tentatively decided that it would not look at any economic impact that interference from LPFM would have on full-power stations.

What led the FCC to this tentative conclusion?  The FCC said that the Act did not specifically require any study of the economic impact of interference and, since the principal purpose of the Act was to set out how the FCC should deal with interference remediation, Congress had already addressed all that needed to be considered about any potential interference.  This view was bolstered by the inclusion in previous legislation of a specific directive to study interference, which led to the report from the MITRE  Corporation.  That report concluded that there would be no substantial interference from LPFM to full-power stations, which opened the door to the passage of the Act.  Thus, the Commission reached the tentative conclusion that no additional study of the economic impact of LPFM was necessary, but they seek comment on that tentative conclusion.  We expect that there will be such comments.

Continue Reading FCC to Study Economic Effect of LPFM on Full-Power FM – But Not the Economic Impact of Any Interference that May Be Caused

Just as webcasters thought that they had their royalty obligations figured out, there comes news that the already complicated world of digital media royalties may well become more complicated.  Last week, EMI, which in addition to being a record label is a significant music publishing company, has reportedly decided to withdraw portions of its publishing catalog from ASCAP – which had been licensing the public performance of these songs. The withdrawal from ASCAP applies only to "New Media" licensing.  What is the impact?  As of today, webcasters pay ASCAP, BMI and SESAC for the rights to play virtually the entire universe of "musical compositions" or "musical works" (the words and musics of the song).  By withdrawing from ASCAP, EMI will now license its musical compositions itself, adding one more place that webcasters will need to go to get all the rights necessary to play music on an Internet radio type of service.  In addition to royalties paid for the musical composition, webcasters also pay SoundExchange for public performance rights to the sound recordings (the song as recorded by a particular singer or band) – and by paying this one organization, they get rights to perform all sound recordings legally released in the US.   But any Internet radio operation needs both the musical composition (except for those compositions that have fallen into the public domain) and the sound recording performance rights cleared before they can legally play the music.

The news reports quote EMI as talking about the efficiencies that will be created by its licensing the musical compositions directly – in conjunction with the licensing of other rights – like the rights to make reproductions of its compositions, or the rights to publicly perform sound recordings to which its record label holds the copyright. But the whole idea of a performing rights organization with collective licensing is that it provides to digital music services the efficiencies offered by a one-stop shop for the purchase of rights to all a very large set of musical compositions.  Up to now, a digital music service knew that, by entering into licensing agreements with ASCAP, BMI and SESAC (the "performing rights organizations, or "PROs"), it had rights to virtually all the musical compositions that it would normally use (i.e. they received a "blanket license").  If these rights are balkanized, so that each significant publisher licenses their own music, the webcaster will have to make multiple stops to license all the music they need – which always leads to confusion.  The more places they have to go to license music, the more possibility that they will overlook a necessary rightsholder.  But there is even a bigger potential issue for webcasters – price.

Continue Reading Another Royalty Payment for Webcasters? EMI Withdraws From ASCAP For New Media Licensing