The FCC has issued Notices of Apparent Liability against two radio licensees for apparent EEO violations at their respective station clusters. These NALs, issued on the next to last day of the FCC’s business year, are the first to address EEO violations in a year and a half. The common thread in both NALs was the licensee’s failure to properly recruit for new hires, relying primarily on "walk-ins" or referrals in lieu of the "wide dissemination" required for information about job openings.  In one case, where the licensee failed to widely disseminate information about 28 job openings, the FCC proposed a fine of $20,000.  In the other case, where the station owner was able to document recruitment efforts for some of its openings, the FCC proposed a fine of $8000 for the six jobs where the required recruitment efforts were found lacking. 

In the first NAL, the $20,000 proposed forfeiture was based on a finding that the licensee failed to properly recruit for 28 of the 29 full-time vacancies filled over a six year period.  Instead, the licensee relied on "walk-ins" and referrals for six vacancies, and used the Internet or on-air ads for 22 vacancies.  These methods alone do not constitute sufficient dissemination of job vacancies under FCC rules.  In a post last year, we explained that the FCC does not consider Internet advertising alone to be sufficient for recruitment purposes, and questioned whether that policy is appropriate in this day and age.

Continue Reading FCC Imposes Fines Up to $20,000 for EEO Violations

The Local Community Radio Act has been pending in Congress, ready to be approved for many months, but held up by the Senate.  This weekend, as the Congressional term was drawing to a close, both the House and the Senate approved a bill modifying the interference standards for Low Power FM radio stations, opening the possibility that more channels will be available for LPFM use when the next window for filing new LPFM applications opens. However, this bill is substantially modified from the LPFM bill that was just passed by the House of Representatives earlier this year (see our summary of the House version of the bill). The NAB has been working with the LPFM advocates to adopt a bill with substantially more protections for full-power stations, while still allowing LPFMs to locate on channels third adjacent to full power stations. The bill passed by Congress and soon to be signed by the President makes substantial changes to the original House version, and seemingly provides many such protections. Specifically, the final legislation is different from the old bill in many ways including:

  • It does away with all the introductory language in the original House bill that contained many Congressional findings about the value of LPFM stations, language that could have been used to justify FCC actions in the future that would be unfavorable to the interests of full-power stations. 
  • It specifically forbids the FCC from amending the distance requirements between LPFM and full-power stations for first and second adjacent channel operations.  It does allow for waivers of these separations, but requires LPFMs to cease operations if complaints of interference to a full-power station are received.
  • It makes clear that LPFM stations are secondary to full power stations, both as they currently exist and as they may be modified in the future. 
  • The law specifically requires that the FCC treat LPFM and FM translators and FM boosters as being equal in status, and secondary to full-power stations (both existing and modified full-power stations) – thus seemingly ending some of the LPFM proposals that would allow LPFM stations to preempt existing FM translators.
  • For LPFMs that are located at less than the full distance from a full-power station set out by the LPFM rules, even on a third adjacent channel, the LPFM must provide the same protections that translators give to other stations under Section 74.1203, which includes the requirement that a new secondary station (like a translator or LPFM) cease operations if it interferes with the reception of any regularly used FM signal (even if the signal is outside of the existing station’s primary service contour)
  • The bill adds a provision to protect stations in certain densely populated states (principally if not exclusively New Jersey) by imposing the translator interference rules on LPFM stations (seemingly the same provision as provided for stations in other states when the LPFM is operated at less than the current spacings. 

This bill does contain some provisions that are not entirely clear, and in some cases, provisions that seem a bit contradictory. These issues will no doubt be sorted out by the FCC, and potentially by Congress itself, in the future. 

Continue Reading Bill Changing LPFM Spacings But Protecting FM Stations Passes Congress – After NAB Assures More Protections to Broadcasters

The Copyright Royalty Board today released its Determination of Rates for noninteractive webcasting services for the period from 2011-2015. These rates will form the default rates for webcasters who have not opted into one of the many voluntary agreements negotiated last year under the Webcaster Settlement Act (see our summaries of the Pureplay webcaster deal here, the Broadcasters settlement here, the Small Webcasters or "microcaster" settlement here, the noncommercial webcasters settlements here, the Sirius XM settlement here, and the CPB/NPR settlement here).  The Board set the following per performance royalty rates as the default rates for webcasters who are not terrestrial broadcasters:

  • 2011 – $.0019 per performance
  • 2012 – $.0021 per performance
  • 2013 – $.0021 per performance
  • 2014 – $.0023 per performance
  • 2015 – $.0023 per performance

Thus, the rates for this coming year will remain at the same level at which they are now set for 2010, and will increase slightly every other  year.  A performance is one song played to one listener. 

The decision also adopted default rates for noncommercial webcasters, setting those rates at the levels agreed to in a settlement between SoundExchange and certain noncommercial educational webcasters reached last year. Those rates establish a minimum fee of $500 for each individual channel offered by a noncommercial webcaster. If the listening on any channel exceeds 159,140 Aggregate Tuning Hours in any month, the webcaster would pay for such overage on a per performance basis at the following rates:

  • 2011 – $.0017 per performance 
  • 2012 – $.0020 per performance
  • 2013 – $.0022 per performance
  • 2014 – $.0023 per performance
  • 2015 – $.0025 per performance

Continue Reading Copyright Royalty Board Reaches Determination on Royalty Rates for Webcasting for 2011-2015 – For Internet Radio Operators Not Covered by Webcaster Settlement Act Agreements

In recent years, the FCC has been to aggressively enforcing a policy requiring broadcasters to announce all material rules of a contest on the air enough times for a reasonable listener to hear the announcements.  This past week, there was yet another case where this policy was enforced, resulting in a $4000 fine to a broadcaster.  While the FCC continues to enforce this policy, at least one broadcaster has reportedly decided that a fine for not having broadcast of the material rules of a contest is not justified, and is apparently ready to take the FCC on in Court in a case where the FCC tries to enforce a fine issued several years ago.

The newest fine involved a station in Cleveland, which ran a contest called "Who Said That" where a clip of the voice of a sports figure was played on the air.  The first person to be able to identify the speaker won a prize.  Apparently, if no prize was awarded, a new prize was added each week until the voice was identified, when the winner would get all of the accumulated prizes.  In this case, the station ran an announcement about the rules regularly until the station aired a clip that was not identified for some time.   As the clip remained unidentified over the course of many weeks, and then many months, the station apparently became less rigorous about announcing the rules.  But, more importantly to the FCC, the station did not announce on the air all of the prizes that had accumulated, nor did it announce that some of the prizes had become unavailable and had been replaced over time by prizes of what the station considered to be of an equivalent value.  As the station had not announced the "extent, nature and value of the prizes," the FCC found the station to be in violation – even though the right to substitute prizes of equal value was contained in the written rules published by the station.

Continue Reading FCC Fines Another Broadcaster For Not Announcing All Rules of a Contest – While One Broadcaster Protests

In three cases released in the last week, the FCC grappled with the issue of when the amount of a fine (or a "forfeiture" as the FCC refers to it) imposed on a broadcaster for a violation of an FCC rule is too much to be sustained.  Clearly, the FCC wants a fine for a violation of its rules to be meaningful, so as to discourage bad behavior.  But in some cases, the fine could be so great as to impact the public service provided by a station – or to even put it out of business.  Thus, the FCC has adopted a test where it will look at the gross revenues of the licensee of the station to see if the licensee can pay the fine.  And these cases make clear that it is the entire gross revenue of the licensee – not just the revenue of radio operations that is considered in this analysis.  And, even for noncommercial or nonprofit broadcasters, these same tests apply.

One case very clearly demonstrates that the FCC is looking at a licensee’s full revenue – not just that revenue available to the broadcast station.  This case involved a school district  that submitted financial information about its noncommercial radio operations in an attempt to reduce a $7000 fine for a late-filed license renewal.  The FCC rejected that ground for reduction (though it did reduce the fine to $5600 based on the applicant’s prior history of compliance), saying that the entire funding of a licensee must be reviewed before a hardship reduction would be granted.  As no information about the district’s revenues was provided, no hardship reduction was in order.  In another case, the FCC looked at the revenues of the licensee (a church).  As these revenues were between $391,000 and $520,000 during a three year period, the FCC determined that a $7000 fine, approximately 1.5% of the licensee’s gross revenues, was not too much.  There, the Commission cited cases where fines of as much as 7.9% of a licensee’s revenues were not deemed excessive. Only in a nonbroadcast case, involving an individual who was found to have been operating an unlicensed radio transmitter on a government frequency was the FCC moved to decrease a proposed fine, reducing it from $10,000 to only $750 upon a finding that the individual had no current source of income from which the fine could be paid.  The moral is that, if you operate a broadcast station, violate the FCC rules and have money, the FCC is going to be looking for a piece of it.  One more reason to assess your operations and make sure that you are operating on the right side of the rules.

In a speech given last week, FCC Commissioner Michael Copps called for a new regime to review the public interest performance of broadcasters – suggesting that license renewal become a more rigorous exercise for radio and television operators.  In his address called "Getting Media Right, A Call to Action", given to the Columbia University School of Journalism, Copps specifically suggested a "Public Value Test" for broadcasters when they file their license renewals.  If the broadcaster passes the test, the broadcaster would get a renewal.  If the broadcaster did not pass – if it does not show that it has "earned" the right to "use the people’s airways" – then the licensee would get a one year probation period to prove that it should keep its license.  If it does not improve, then the license would be taken and given to "someone who will use it to serve the public interest."

So what would this Public Value Test look like?  The Commissioner suggested that the following factors would be reviewed: 

  1. A Meaningful Commitment to News and Public Affairs Programming – an increased commitment to news, local public affairs, election debates and issues oriented programming would be reviewed according to some quantitative benchmarks.
  2. Enhanced Disclosure – requiring broadcasters to provide more information about their programming performance, on the Internet, as the Commissioner believes that information in the public file is "laughable", and also requiring that the FCC review that information at renewal time
  3. Political Advertising Disclosure – requiring more information about the sponsors of political ads
  4. Reflecting Diversity – looking to increase the gender, ethnic and racial ownership of broadcast stations
  5. Community Discovery – requiring that broadcasters be required to, in some formal way, communicate with their communities to determine local programming needs and the interests of various groups within a station’s community
  6. Local and independent programming – requiring that broadcasters provide more local and independent programming instead of "homogenized music and entertainment from huge conglomerates – the Commissioner suggesting 25% of local programming being dedicated to local and independent programs.  More local PSAs too.
  7. Public Safety – requiring that all broadcasters have a plan to address emergencies and be either staffed during all hours of operation or be otherwise able to respond immediately to any local emergency.

 What’s likely to happen to these proposals?

Continue Reading FCC Commissioner Copps Calls For Stricter Broadcast Station License Renewal Standards – Could It Happen?

Applications to participate in the auction of 144 new FM channels are to be filed at the FCC between January 31 and February 10, 2011.  The FCC today released a Public Notice setting out the dates and procedures to be used in the auction.  Upfront payments of the minimum bids for channels in the auction will be due on March 21.  The auction itself will begin on April 27 – a postponement of about a month from the dates originally proposed as the initially scheduled dates could have resulted in the auction running through this year’s NAB Convention, making it difficult for some entities to participate.  We had written about the initial announcement of the proposed auction here.  Note that the list of channels available in the auction has changed slightly, as a few channels originally listed for sale were deleted when it was discovered that they were not vacant or were otherwise not available to be sold.  Thus, the auction will include only 144 channels, not the 147 originally proposed.  The list of open channels is available here, and this list also sets out the minimum bids established for each channel.

To freeze the FCC database so as to allow applicants in the filing window to specify a transmitter site that will be protected from new applications, the FCC will freeze the filing of all applications for minor changes to existing FM stations during the filing window.  Thus, if you need a technical change in an FM station, get that application on file before the January 31-February 10 window.  The FCC Issued a Public Notice setting out the details of the freeze.  After the window, all subsequently filed applications for minor changes in existing stations will need to protect sites specified for the new channels during the window.  The FCC also froze – effective right now – any rulemaking proposal asking for a change in the coordinates assigned to any of the channels to be sold in the auction. 

Continue Reading FCC Announces Filing Window and Minimum Bids for Next Auction for 144 New FM Stations – And a Freeze on FM Minor Change Applications

Yesterday, the House of Representatives passed the CALM Act, directing the Federal Communications Commission to adopt regulations controlling the volume of commercials on television broadcast stations, cable systems, satellite, and other multichannel video programming providers. This bill was passed by the Senate in September.  Once signed by the President, the Federal Communications Commission will be required to adopt a rule to implement the legislation within one year, and the rule is to become effective within one year after its adoption. The FCC rule is to adopt parts of the ATSC A/85 standard, which seeks to target the volume of commercials in digital programming to the volume of dialogue (or other “anchor element”) in the accompanying program. An interesting description of the issues that must be addressed in determining just what is "loud," and for controlling that volume, can be found in a recent Wall Street Journal article (here, subscription may be required). 

Congressional estimates are that the costs of necessary equipment range from a few thousand dollars to $20,000 per device, for an aggregate industry cost of tens of millions of dollars. Congress anticipated that the costs may be burdensome for small cable operators and smaller market television broadcasters, and provided that waivers may be granted for financial hardship for one year renewable terms  The Commission may also grant waivers or exemptions from the rule that it adopts for classes of broadcasters and multichannel video programming distributors under the FCC’s general waiver authority.

Continue Reading Congress Passes CALM Act to Restrict Loud Commercials

A recent FCC decision fining a station $10,000 for having an unattended main studio provides a good explanation of the staffing requirements for the main studio of broadcast stations.  While the fine in this case was evident – FCC inspectors having twice visited the main studio of a station to find no one there, and a representative of the licensee admitting to the FCC that the studio was not regularly manned as the licensee did not know that there was such a requirement – the decision explains the requirements of the FCC’s policies as to main studio staffing.   The Commission explains that the FCC requires "meaningful management and staff presence" at the main studio.  There must be both management and staff employees at the studio on a regular basis.  The decision reminds broadcasters that the management and staff employees need to report to the main studio on a daily basis, use it as their "home base", and spend substantial amounts of time there.  While the employees are not "chained to their desks", they must be at the studio regularly.  

While the decision does not specifically say so, the Commission has, in the past, said that there should be at least one management and one staff employee who use the studio as their principal place of business.  I like to think of it as the place where these employees have their desks, where they stop in every day to look at the pictures of their family that they keep there.  While the employees can go out and sell ads, produce programs, or go to Rotary meetings, while one employee is out of the office, another should be in the office, so that there is always a station employee present during normal business hours. So don’t leave that studio unattended, or you’ll risk the kind of punishment that the FCC issued here. 

The Copyright Office today announced an extension of time for the fling of comments in its inquiry into the possibe extension of Federal Copyright protection to pre-1972 sound recordings.  We provided a details of that proceeding here.  Internet radio operators and other digital music services that play significant numbers of pre-1972 sound recordings (particularly recordings first made in the United States), may want to comment in this proceeding, as the statutory royalty paid to SoundExchange currently does not appear to cover such recordings, though, should the Copyright Office recommend the extension of the law to cover the recordings, and if Congress takes actions to amend the Copyright Act as a result of this suggestion, royalty obligations could be extended to these recordings.  At the request of the RIAA, the Copyright Office has extended the deadline for comment until January 31, 2011.  Reply comments are now due on March 2, 2011.