Each year, we remind webcasters about their obligations under various settlement agreements entered into with SoundExchange and under CRB decisions to make minimum payments and, in some cases, to file a Notice of Election to be covered under certain negotiated rates – all due by January 31.  All webcasters have minimum fee obligations due by January 31.  Many, though not all, Webcasters who have elected the the royalty rates set by many of the settlement agreements entered into pursuant to the Webcasters Settlement Act must also file an election notice with SoundExchange by January 31 to continue to be covered by those settlement agreements.   These agreements were entered into by groups of webcasters and SoundExchange, and allow the webcasters to pay royalties at rates lower than those rates set by the Copyright Royalty Board for 2011. 

While SoundExchange has, in the past, sent out reminders of these obligations to services that had paid in the prior year, sometimes these notices get lost, so Internet Radio operators need to remember to make these filings.  The original election forms filed under settlement agreements signed by the NAB and by Sirius XM cover the entire settlement period from 2006-2015, so no election form must be filed each year, though minimum fee payments must still be made.  Note that certain small broadcasters, who under the Broadcaster agreement need not comply with SoundExchange recordkeeping obligations, do need to file an election to certify that they still meet the standards necessary to count as a small broadcaster.  The WSA settlement agreements that cover Pureplay webcasters, Small Commercial webcasters, and certain Noncommercial Educational webcasters are all are entered into on a year-by-year basis (though, as noted below, there is a default in certain noncommercial webcasting agreements that, if you were covered in prior years, you will be continued to be covered in the current year, unless you opt out).  Thus, to continue to be covered, parties currently governed by these agreements need to file a Notice of Election to again be covered by these agreements by January 31.

Continue Reading Reminder: Most Webcasters Need to File With SoundExchange Minimum Fees and Many Need A Notice of Election of Webcaster Settlement Act Rates, All By January 31

A controversy has bubbled up in connection with the FCC proceeding to set the date by which Low Power Television stations will be required to convert to digital operations.  While the analog operations of full-power TV stations were mandatorily terminated in 2009, Low Power television stations and TV translators have not yet faced any end date for their analog operations – though the FCC recently suggested that the final date for analog broadcasting by these stations be set – perhaps as soon as next year.  In comments filed in the proceeding to set the end date, the question of when to terminate analog broadcasting became tangled in another issue – whether Channel 6 LPTV stations should be allowed to continue to be used to broadcast FM programming.  NPR suggested that the practice be terminated now, while Channel 6 licensees argued that this use was perfectly permissible under FCC rules, and that it provides a public interest benefit that should be preserved.

Channel 6 is immediately adjacent to the FM band.  Analog television stations used an audio transmission standard that was very similar to that used by FM stations, and the audio from analog Channel 6 stations could be picked up by FM radio receivers. In many major television markets across the country, LPTV operators have taken their stations, optimized the audio for FM reception, and started broadcasts intended to be treated like radio stations – programming music or talk like a radio station, with the video programming being secondary to the audio output.  Some have called these "Franken FMs", and many listeners don’t even realize that they are listening to a station licensed for video operation – just assuming that radio on 87.7 or 87.9 is a normal extension of the FM band.  But this proceeding to end analog television broadcasting has brought the issue to the forefront.

Continue Reading The Battle Over TV Channel 6 and LPTVs Used for FM Radio Broadcasts

Many broadcasters, both television and radio, have been running the NAB spots on the Future of Television.  Those spots contain a description of the service available from local television stations and the new technologies that over-the-air television are in the process of deploying, and end with the suggestion that the Future of Broadcast Television lies in "technology not regulation from Washington DC."  Obviously, these ads are geared to address some of the many legislative and administrative issues facing TV broadcasters – including the proposals to take back some of the TV spectrum for wireless broadband uses.  Given that these spots could be arguably be seen as addressing Federal issues, to be safe, they should be identified as issue ads in stations’ public inspection files, and appropriate information about those spots should be placed in the files.

The NAB, in announcing the availability of these spots, suggested this same precaution.  We’ve written before about issue ads, and the need to place notations in the public file about these ads. For instance, when stations ran ads on the broadcast performance royalty, we suggested that same treatment (and proponents of the royalty complained that broadcasters might not be making such notations).  What needs to go in the public file?  As the issues are Federal ones (as opposed to state and local issues that have lesser disclosure obligations), the requirements are similar to those that apply to political candidates. 

Continue Reading Is Your Station Running the NAB Future of Television Spots? Are You Identifying Them As Issue Ads in Your Public File?

February 1 is the deadline by which broadcast stations in Arkansas, Kansas, Louisiana, Mississippi, Nebraska, New Jersey, New York, and Oklahoma must place into their Public Inspection files their Annual EEO Public Inspection File Report.  The report must also be available on these stations’ websites, if they have such sites.  The Annual EEO Public Inspection File Report provides information about the full-time jobs filled at the station in the previous year; the sources used by the station to recruit potential employees to fill the open positions; and the additional "supplemental efforts" conducted by the station, whether or not they had any employment openings, to educate and inform their communities about broadcast employment.   This obligation extends to all "station employment units" (groups of commonly controlled stations, serving a common geographical area, with at least one common employee) with 5 or more full-time employees (a full-time employee, for FCC purposes, being one working 30 or more hours per week).  Our firm’s Advisory detailing the requirements for this report can be found here, with a model for the report at Appendix A of that advisory.  More information about Broadcasters’ EEO obligations generally can be found in our Primer on the FCC’s EEO Rules, here.

Yesterday, I conducted a webinar for the Kansas Association of Broadcasters to provide a refresher on broadcasters’ EEO obligations under FCC rules, regulations and policies.  The slides used in that presentation can be viewed here.  With the next cycle of license renewal applications beginning later this year, stations need to be especially vigilant about EEO obligations to avoid scrutiny at renewal time, which could delay the processing of renewal applications (and potentially of any sale that might be underway at that time, see our post here) and possibly lead to fines or other penalties.    Radio stations in Arkansas, Louisiana and Mississippi will file renewals on February 1, 2012;  radio stations in Kansas, Oklahoma and Nebraska will file their renewals on February 1, 2013; and those in New York and New Jersey will file by February 1, 2014.  TV stations will file one year later than radio stations located in their states.  As two years worth of public inspection file reports must be submitted with the license renewal applications, the hiring process used this year will be scrutinized by the FCC during the renewal process for stations in most of these states.  So make sure that you are following the rules, and documenting your EEO efforts for the FCC to avoid renewal-time problems. 

The Supreme Court issued its landmark opinion in Citizens United v. FEC one year ago today.  That case allowed corporations and labor unions to make independent expenditures for or against political candidates.  An editorial in today’s Washington Post by the President of Citizens United and its lead counsel argues that the hysteria following that decision was unfounded because the amount spent by citizen groups in the last election paled in comparison to the amount spent by the Democratic and Republican parties and by the candidates themselves.  Rather, the authors argue, the primary political speech to come out of the Supreme Court’s decision has been that of independents, and politicians are upset by this because they cannot control the speech of independents.

 As a reminder, the Supreme Court case arose as a result of a film directed against then Presidential candidate, Hillary Clinton.  Citizens United was a nonprofit corporation that produced the film, and there was debate whether this was a "documentary" or an "electioneering communication," as well as whether distribution via video on demand constituted "public distribution" of the film.  The Supreme Court found that the film was indeed an "electioneering communication" and that VOD was likewise a public distribution of the film.  Thus, Citizens United ran smack up against the FEC prohibition on independent corporate political expenditures.

Continue Reading “Citizens United”: The Supreme Court Decision One Year Later

With only four and a half months until the start of the first radio license renewal cycle, broadcasters need to start to consider the processing time for license renewal applications and its implications – particularly if they are considering the purchase or sale of the station with a license renewal due in the near future.  The FCC has a processing policy that, in most cases, will forbid the closing of the sale of a broadcast station once the license renewal for that station has been filed – delaying any closing until the renewal has been granted.  Given that routine processing of a license renewal will take an absolute minimum of 90 days, and the processing can take much longer if there is a protest or other problem, closing of a contract for the sale of a broadcast station which is signed too close to the license renewal filing may be significantly delayed by the license renewal process.  Parties need to plan for such delays. 

As we wrote several months ago, the first set of license renewals are to be filed on or before June 1 of this year – for radio stations in  Virginia, West Virginia, Maryland and the District of Columbia.  Owners planning a station sale in those states should be looking to finalize any deal have any plans to sell their station in the very near future to allow for the processing time necessary to get an FCC application approved and the transaction closed before the renewal is filed.  For instance, if a seller is thinking of selling his or her station in one of these states, and is in the process of negotiating a contract right now, the process contract would need to be completed very soon, and processing would need to run without a hitch, for a closing after "finality" of the FCC approval of the transaction to be possible before the renewal is granted.  Otherwise, the parties will need to be willing to wait until at least September to close.  To demonstrate, here is the likely timeline for an application for the sale of a station if the contract was signed by February 1, and an FCC application was filed by February 4.  The application would likely be on an FCC public notice late in the second week of February, triggering the required 30 day public comment period.  The end of the public comment period would be in mid-March, most likely putting an FCC grant in late March – if the application was uncontested, non-controversial and otherwise processed quickly by the FCC.  That would put finality (40 days after the public notice of the initial staff grant of the application, assuming no petitions for reconsideration of the grant, other appeals, or decisions by the FCC Commissioners to review the application) in mid-May. 

Continue Reading Start Planning Broadcast Transactions Around The License Renewal Processing Periods – Or Expect Closing Delays

As we have advised before in both 2009 and 2010, "Super Bowl" is a registered trademark belonging to the NFL, and they will aggressively enforce their trademark rights against any station that attempts to use this term in connection with advertising or promotional matter of any kind, including ticket giveaways, if not specifically authorized by the NFL. You are free to use trademark protected terms like "Super Bowl" in news stories or noncommercial discussions about the event under a concept known as "nominative fair use," but use of trademarked terms in a commercial context crosses the line from acceptable to unacceptable use.

Although the NFL is more aggressive than many other trademark owners in enforcing its rights, these same principles apply to other registered trademarks, including "March Madness," "NASCAR" and even TV shows such as "American Idol."  Discussions among DJs or with listeners and viewers are fine, but you cannot use these terms to sell products or do station promotions without authorization from the trademark owners.

Refer to our previous posts linked to above for more guidelines on what stations can and cannot do with regard to the Super Bowl and other registered marks.

Every year, about this time, I dust off the crystal ball to offer a look at the year ahead to see what Washington has in store for broadcasters.  This year, like many in the recent past, Washington will consider issues that could fundamentally affect the broadcast industry – for both radio and TV, and affecting the growing on-line presence of broadcasters.  The FCC, Congress, and other government agencies are never afraid to provide their views on what the industry should be doing but, unlike other members of the audience, they can force broadcasters to pay attention to their views by way of new laws and regulations. And there is never a shortage of ideas from Washington as to how broadcasters should act.  Some of the issues discussed below are perennials, coming back over and over again on my yearly list (often without resolution), while others are unique to this coming year.  Issues unique to radio and TV, and those that could affect the broadcast industry generally, are addressed below.

Television Issues

Spectrum issues have been the dominant TV concerns in past years, first with the digital transition, and more recently with the "white spaces" rulemaking and the proposals advanced as part of the FCC’s Broadband Plan to reclaim part of the TV spectrum for wireless broadband uses.  These issues remain on the FCC’s agenda, as do new issues dealing with the carriage of television stations by cable and satellite television providers.  Specific issues for TV include:

Spectrum reclamation:  The initial proposals for the reclamation of part of the TV spectrum for wireless broadband were laid by the FCC’s Notice of Proposed Rulemaking released in November, looking at how the TV spectrum could be used more efficiently, and how incentive auctions encouraging some TV stations to vacate their channels could be conducted.  Congress still has to pass legislation to allow such auctions, and it will probably also mandate a spectrum inventory to determine if the reclamation of the TV spectrum is really necessary to provide for wireless broadband needs.  At the same time, some TV operators have begun to talk about television stations themselves providing broadband service with their excess spectrum.  While Congress will probably act on the auction bills this year, and there will be much debate about the details of the reallocation issue, so don’t expect final resolution of this matter in 2011.

White Spaces:  The FCC has authorized the operation of wireless devices in the television spectrum, resolving many of the concerns about interference to television operators by requiring all wireless users to protect operating TV channels in specific areas based on databases of existing users, not on spectrum sensing techniques.  But implementation issues still need to be worked out – including finding parties to compile and administer the databases to make sure that all existing spectrum users who are to be protected are registered.  Expect action on these matters this year, but no actual white spaces use until after these implementation efforts are completed.

LPTV Digital Transition:  While many members of the general public may consider the digital television transition to be complete, many Low Power TV stations and TV translators are still operating in analog.  The FCC has commenced a proceeding to require the transition of these stations to digital, suggesting that the transition be complete as early as the end of 2012.  Expect controversy on this issue.  Many LPTV stations feel that being forced incur the costs to covert to digital is premature and could imperil broadcast service, especially to rural areas and minority populations who rely on translators and LPTV stations, if spectrum repacking caused by any future repurposing of TV spectrum for broadband forces further technical changes.  These issues will be considered by the Commission this year.

Retransmission Consent Reform:  At the end of 2010, there was much controversy over retransmission consent issues, as there were instances where broadcasters and cable operators and other multichannel video programming distributors had difficult negotiations over the carriage fees to be paid to the TV stations.  FCC sources stated at the end of the year that a proceeding will be initiated to determine if the rules governing the negotiation process should be changed.  The multichannel video programming distributors and some public interest groups argue that the FCC should protect viewers who may have their TV service disappear if a TV station does not reach a deal with a MVPD, while the broadcasters argue that the ability to remove the station is the heart of the negotiation, and removing the risk of the MVPD losing the right to carry the station would negate the negotiation.  Look for this proceeding to commence early in the year but, as it will no doubt be very controversial, it may take some time to resolve.

DMA Boundary Issues:  The FCC has also begun a proceeding to look at DMA boundaries that cross state lines to see if every television viewer should be guaranteed to receive service from cable or satellite providers of a station in his or her state.  Television stations fear that this guarantee could upset traditional television markets, and could have an impact on retransmission consent negotiations in border counties.  Comments in this proceeding are due on January 24th, 2011.

Continue Reading Gazing Into the Crystal Ball – What Washington Has In Store For Broadcasters in 2011

The Second Circuit Court of Appeals today issued a Summary Order vacating the $27,500 FCC fines imposed on a number of ABC television network stations in the Central and Mountain time zones which had aired, prior to the 10 PM safe harbor, an episode of the television program NYPD Blue on which a woman’s bare buttocks were shown on screen.  We had initially written about this case when the fine was issued in 2008, here.  While this case was on appeal, the Supreme Court issued its decision on the FCC’s indecency rules in Federal Communications Commission v. Fox Television Stations, Inc, dealing with "fleeting expletives", upholding the more rigorous enforcement of the FCC’s indecency rules begun under FCC Chairman Kevin Martin as being justified under administrative law procedures, but not addressing the constitutional issue as to whether the FCC’s indecency policy could be constitutionally justified.  The Supreme Court remanded that case to the Second Circuit, which had initially thrown out the fines as being inconsistent with prior FCC precedent, for consideration of the constitutional issue.  In a decision released this past July following the remand, the Second Circuit determined that the FCC rules were unconstitutional, as they chilled the speech of broadcasters without giving broadcasters sufficient guidance as to what speech was permitted and what speech was prohibited.  Restrictions on speech which are "impermissibly vague" are constitutionally prohibited.  In today’s decision, the Court relied on its decision from July and determined that, whether the indecency claim is based on speech or nudity, the FCC rules as to what is prohibited are impermissibly vague, and therefore the Court threw out the fines.

We have likely not heard the end of the indecency story yet.  These decisions may yet end up back in the Supreme Court for consideration of the constitutional issues.  So stay tuned as these issues are sorted out. 

It’s the beginning of a new year, and each year brings numerous regulatory deadlines for radio and television broadcasters.  We’ve put together a calendar that sets out many of those dates.  You can find the calendar setting out important dates for broadcasters in 2011 here.  It sets out many important dates – including the dates for regulatory obligations including: EEO Public File Reports, Quarterly Programs Issues Lists, Children’s Television Reports, Ownership Reports (yes, a Biennial Ownership Report will again be due from all stations this year), and even dates for SoundExchange payments and reports of use for stations streaming their signals on the Internet.  This year, the normal filing deadlines are supplemented by deadlines in connection with the first sets of radio license renewals due for stations in many Mid-Atlantic and Southern states.  So check out your obligations by referring to our Broadcaster’s Calendar for 2011, and be prepared to meet your regulatory obligations.