The broadcast trade press has recently been full of talk of the possibility of reaching a settlement with the recording industry on the adoption of a Performance Royalty for broadcast stations -paying performers and record companies for the use of music by radio stations (on top of the fees already paid through ASCAP, BMI and SESAC to composers).  The latest controversy was set off by comments made at the Conclave Radio Conference by Bonneville Radio’s CEO Bruce Reese, who has also been prominent in NAB activities, who suggested that broadcasters were on the defensive in Congress, and that a good settlement was better than a bad legislative outcome.  Other broadcasters have disagreed with Reese’s assessment, asking why broadcasters would be willing to settle when they have a majority of Congress on their side, having signed the NAB-supported resolution opposing the royalty.  Which side is right?

It should be emphasized that, even though broadcast groups have done an amazing job rounding up support for their opposition to the "performance tax" – signing up far more than a majority of the House of Representatives on a resolution opposing the royalty – that resolution is non-binding.  Congressmen can change their mind, and of even more concern, the proposed performance royalty can end up getting tagged on to some must-pass legislation that Congress needs to adopt before the end of the year.  Congress has many budget bills that need to pass to fund the government’s operation, and these huge bills have a way of attracting all sorts of unrelated matters being folded into their provisions.  With leaders of many important committees in the House and Senate being supporters of the royalty, its easy to imagine that one of these bills can end up with performance royalty language included.  While one broadcast trade publication suggests that NAB lobbyists are paid to stop this sort of thing from happening, it is unrealistic to believe that the NAB is invincible, as provisions on unrelated bills can pop up seemingly out of nowhere and surprise everyone, especially when pushed through by powerful congressional leaders who less committed representatives are unwilling to challenge (especially when to do so might mean voting against some important legislation to which the performance royalty is attached).  Congressman simply will not vote down the defense appropriations bill just because there is a performance tax attached.  This kind of maneuver is of particular concern given that many of these bills may well be considered after the election in November, during a "lame duck" session of Congress when, especially this year, there will be many representatives who may not be around again in January to face the wrath of voters (or of broadcasters) who may be disappointed by their final votes.

Continue Reading Talk of A Settlement on the Terrestrial Radio Performance Royalty – What Would Broadcasters Get?

Last week, the FCC’s Media Bureau granted waivers of the requirement that television tuners be capable of receiving both analog and digital television transmissions, but only with respect to tuners meant for mobile use.  The FCC justified the waivers of the All Channel Receiver Act given the technological constraints that an analog reception chip would put on mobile receivers meant for the reception of the Mobile/Handheld Digital Television Standard (A/153) signals.  This signal is being tested now to allow television broadcasters to provide mobile programming in addition to their current over-the-air broadcast signals – a service planned for commercial roll out at the end of the year.  These waivers, granted in response to requests by Dell and LG Electronics, not only signal the seriousness with which this new service is being regarded, but also provide evidence of the coming end of analog television, now used solely by LPTV stations.   

In considering the waiver, the Commission recognized that the only television stations that would be affected by the lack of an analog tuner were LPTV stations, and no such stations opposed the waiver request.  As one of the waiver proponents noted, analog television signals were not meant for mobile reception, and thus the lack of such a receiver in a mobile device was no big loss.  Moreover, the FCC noted that the digital conversion of LPTV stations has already begun, in that it no longer accepts applications for new analog LPTV stations.  The Commission reiterated that it will soon set a date for the final conversion of the last analog LPTV stations to digital.  Thus, the failure to receive analog would be, at most, a temporary issue.

Continue Reading FCC Authorizes Mobile DTV Receivers Without Analog Tuners – Further Signals of the End of Analog LPTV, and Raises Questions of Recapture of TV Spectrum for Broadband

As we wrote earlier this week, the US Court of Appeals for the Second Circuit on Tuesday struck down part of the FCC’s indecency rules, finding that the rules were too vague and had an undue chilling effect on broadcasters.  DWT’s First Amendment experts have now taken a closer look at the Court’s decision in Fox Television Stations v. FCC and have released an advisory with further analysis.  The advisory, available here, provides further details and insight into the decision from Robert Corn-Revere and Ronald G. London.  Given that there are several other indecency cases still pending before the courts, including the Second Circuit, it will be interesting to see what impact this decision has on those pending cases and whether the FCC’s indecency rules can ultimately withstand constitutional scrutiny. 

The US Court of Appeals for the Second Circuit today struck down the FCC’s indecency rules, finding that the rules were so vague as to not put broadcasters on notice of what programming was prohibited and what was permitted.  Today’s decision was reached following a remand of this case to the Second Circuit by the Supreme Court.  The Supreme Court’s decision did not resolve all questions about the FCC’s rules, instead only deciding that the lower court’s prior decision voiding the rules was not justified.  The prior Second Circuit decision had not been decided on a constitutional basis, but instead it was based on the Court’s perception that the FCC had failed to justify its departure from prior FCC precedent that had excused broadcasters from liability for fleeting expletives.  The Supreme Court found that the departure from prior precedent was justified.  The Supreme Court left open the issue of whether the rules were constitutional, and sent the case back to the Second Circuit for further consideration.  In today’s decision, the Second Circuit takes up the constitutional review left open by the Supreme Court, and has determined that the vagueness of the FCC’s guidelines and the inconsistency in its decisions chilled the First Amendment rights of broadcasters in violation of the First Amendment. 

The Court, in reaching its decision, looked at a number of the Commission decisions on indecency which have arisen since the Commission started its enhanced enforcement of these rules in 2003.  After reviewing the cases, the Court felt that the FCC could not logically articulate when the use of certain prohibited words would be punished.  In one passage, the Court asks how the FCC can find that the broadcast use of expletives in the fictional movie Saving Private Ryan were permissible as the words were essential "to the realism and immediacy of the film experience for viewers", yet at the same time find that these same words did not rise to that same level of importance when spoken by real people in the PBS documentary The Blues.  The Court then cited numerous instances where broadcasters felt that their speech had been chilled – often refraining from airing significant programming for fear of FCC fines.  For instance, the Court cited one station that refused to cover a political debate as a candidate had previously used a forbidden word in a prior debate, and another case where stations did not run a documentary about emergency workers and the 9-11 tragedy as the documentary contained some actual footage from the Twin Towers, where emergency workers used some of those forbidden words. 

Continue Reading Court of Appeals Strikes Down FCC Indecency Rules

The FCC has released its order setting this year’s Regulatory Fees to be paid by broadcast stations.  While has not yet set the deadline for paying those fees, that deadline should fall sometime in August or September.  In setting this year’s fees, the Commission made some decisions about fees for broadcasters that may not make sense to some – but it promised to review the decisions in the future when determining the amounts of fees in future years.  Perhaps the most controversial issue will be the fees that it set for television stations – which retain the distinction between UHF and VHF stations, and retain the requirement that VHF stations pay significantly higher fees – even though such stations are often disadvantaged (and certainly not advantaged) in the digital world.  Fees for television stations range from $81,550 for VHF stations in the Top 10 markets (versus $32,275 in those markets for UHF stations), to $6125 for VHF stations in the smallest markets versus $3050 for UHF stations.  The many stations now operating digitally on UHF channels that had previously operated on VHF channels in analog will receive some big savings, while some stations forced to operate on VHF channels for the first time may well be in for a surprise as to the reg fees that they will be paying.

The Commission also rejected requests to decrease the amount paid by AM stations in comparison to FMs, though it promised to revisit that issue in the future.  Other proposals to base payment directly on population served by a station were also rejected.  For TV translators and LPTV stations, if an entity is operating both an analog and digital station while in the process of its digital conversion, fees will have to be paid on both stations.  Full-power television stations will have to pay on their digital operations, even if they were operating with STA facilities on October 1, 2009, the beginning of the fiscal year for which these fees are paid.  All fees are based on the facilities of a station as of that date.  Specific fees for broadcasters are set out below.

Continue Reading FCC Sets Regulatory Fees – Payment Date Not Yet Set

Three months ago, we wrote about a case where the FCC held that it would grant only one application from each MX Group in the recent NCE FM window for new noncommercial FM radio stations.  MX Groups arise when multiple applicants file applications that cannot all be granted without prohibited interference.  In some cases, an MX Group can span several states, where not all applications are mutually exclusive with each other, but all are tied together in a chain, with each link being mutually exclusive with the next link.  The FCC has just released another decision, slightly refining the decision from March.  In the new case, the FCC dismissed one applicant on essentially the same grounds as in the case from March – the only reason that the dismissed application could stand on its own was because other applications with which it was mutually exclusive were themselves dismissed because of the application that was to be granted as a result of the FCC decision selecting the preferred application in the MX Group.  However, in the new case, the FCC did allow for the grant of a second application in the same MX Group, where that application was no longer mutually exclusive with the winner or with other dismissed applications because its mutually exclusivity with the chain of application was broken by the voluntary dismissal of another applicant and the settlement with yet a third.  Because of these two actions, the FCC said that this application was not in the same circumstances as was the application whose dismissal was upheld.

What this case seems to say is that, even after a 307B) grant order is released by the FCC, another application in an MX Group can possibly be granted if it is made grantable before the official dismissal is released, not by the dismissal of applications that are only dismissed because they lost the FCC comparative analysis, but if the actions eliminating the mutual exclusivity were caused by other voluntary actions.  A slim exception – but one that NCE applicants in MX Groups where they are not technically precluded by the grant of the winning application may want to explore if they do not prevail in an FCC 307(b) analysis. 

As I was preparing for a session updating and refreshing broadcasters about their obligations under the FCC’s EEO rules at the Iowa Broadcasters Association annual convention in Des Moines on June 30, I learned of what seemed to be a startling development – the Minority Media and Telecommunications Council, one of the most effective advocates in Washington for minority hiring and ownership, had urged the FCC to suspend its enforcement of the EEO rules. What was this all about? I went on with my presentation (the PowerPoint slides for which are available here, and the slides for the presentation that I did at another session providing an update on Washington issues for radio broadcasters are available here), quickly adding a summary of the MMTC request. While some broadcasters might have hoped that the request recognized that the EEO rules were no longer necessary as broadcasters were, on their own, making great strides in diversifying their workforce, in fact what the MMTC was seeking was tighter EEO enforcement, contending that the current rules are so ineffective as to not be worth the time spent on their implementation and enforcement.

While MMTC acknowledged that there have been a number of recent cases fining stations for noncompliance with the EEO rules, it contends that often the stations that are hit by such fines have very diverse workforces, and thus should not have to worry about EEO outreach. We have written about some of these fines.  These cases demonstrate that the current rules are not targeted at minority and gender-based affirmative action, as FCC rules requiring any evaluation of minority and gender-based hiring were twice declared by the US Court of Appeals to be instances of unconstitutional reverse discrimination. Instead, the current rules are focused instead on bringing new people into the broadcast employment workforce – people recruited from a wide variety of community groups, and not exclusively by word of mouth or through other hiring avenues that simply take people from traditional broadcast hiring sources. But, as MMTC points out, these rules are not based on necessarily seeking to include members of minority groups or women in station workforces.  Thus, as their focus is simply on wide dissemination of information about job openings, even stations that have high percentages of minorities and women on their staffs can still run afoul of the rules by not publicizing job openings.

Continue Reading David Oxenford Reviews EEO Rules with the Iowa Broadcasters, While MMTC Asks the FCC to Suspend EEO Enforcement

As we anticipated, the FCC has suspended indefinitely the opportunity to apply for new, digital low power television (LPTV) stations in non-rural areas, which had been slated to begin on July 26, 2010.  Given the FCC’s new focus on repacking and reallocating the television spectrum for use by broadband competitors, the Commission’s postponement of the filing opportunity is not unexpected.  In fact, based on the fact that the filing opportunity had been extended once already — from January of this year to July — it was a fairly safe bet that the window would be closed before it even opened once the National Broadband Plan was released in March.  It would seem to be counter-intuitive to put more stations into the spectrum that you are working to (potentially) reclaim or repack.  And that’s just what the FCC thought as well, as they have now postponed "until further notice" filings for new digital LPTV stations in non-rural areas. 

Although it will not accept any applications for brand new digital LPTV stations in non-rural areas on July 26th, the Commission will permit existing LPTV, TV translator, and Class A television stations to file applications seeking digital companion channels in communities nationwide beginning on July 26, 2010.  In addition, parties may continue to file for new digital LPTV stations in rural areas, as well as file applications to flash-cut to digital on their current channels.  A copy of the FCC’s Public Notice is available here. 

The long-delayed revised Biennial ownership reports (about which we last wrote here) for commercial broadcast stations, on the new Form 323, are due on July 8, and the FCC is in the process of clarifying what it needs.  The Commission just released a Public Notice reminding broadcasters that the report is supposed to be detailing station ownership as of November 1, 2009 (when the reports were originally supposed to be filed).  Yet, in the 8 months since that date, many stations have changed ownership.  Is a new owner supposed to get the old owner to complete the form?  What if the old owner is off somewhere on a cruise, or simply wants nothing more to do with the station?  The FCC’s Public Notice clarifies (to some extent) what to do in that case – indicating that stations in that situation can file a waiver request, detailing why they can’t provide the ownership information for the owners who held the station license on November 1, 2009, and asking that the FCC waive its rules and excuse the filing of a report for this particular station.  This obligation to file the waiver request is on the current owner.  Note that the FCC does not say that it will grant all such waiver requests, and it specifically excludes from these waiver situations "pro forma" assignments or transfers, i.e. ones where the actual control has not changed but the legal entity holding that control has changed such as in a corporate reorganization where a station license is moved from a parent company to a subsidiary, or from a corporation to an LLC which is controlled by the same individual. 

Another looming issue may also create issues for the July 8 filings.  A group of state broadcast associations and broadcast owners has asked the US Court of Appeals to once again put the filing obligation on hold until the FCC justifies the information that is being collected.  Last week, the Court asked the Commission to justify its requirement that each person with an attributable interest in a station (i.e. anyone who would have to be reported on the Form 323) obtain an FRN (a unique identifier) which can only be obtained by furnishing  a Social Security Number.  While this may indicate that the Court is concerned about forcing every investor and officer and director of a broadcast company to provide this information, even if the Court forbids the collection of that information, it is possible that the FCC would move forward anyway with the Form 323 filing obligation – just removing the FRN from the required filing.  So don’t count on the July 8 deadline being pushed back – start preparing now to be on file by the deadline.

Continue Reading July 8 Filing Deadline for Commercial Broadcast Stations Form 323 Ownership Report – Clarifications Issued

The FCC issued a reminder to all video program distributors – including TV stations, cable systems and satellite television providers –  that emergency information must be made accessible to those with hearing or vision disabilities.  For those with hearing difficulty, the Commission reminded providers that they must make information available visually as well as aurally – either through closed captioning or some other method that the aurally impaired can understand the nature of the emergency. For the visually impaired, if the emergency information is provided in a crawl or through some other non-verbal manner, there need to be alert tones broadcast identifying that emergency information is being conveyed so that visually impaired viewers can make arrangements to find out what the emergency is.  With hurricane season upon us, the Commission wanted to remind video service providers of these obligations.

The Commission also reminded service providers and viewers of the new complaint process, about which we wrote here, that sets up a process for viewers who believe that there has not been proper captioning information provided.  This reminder alone should alert broadcasters and other video program providers of the seriousness with which the FCC views these rules.

Continue Reading FCC Reminder About Making Emergency Information Accessible to People With Hearing or Vision Disabilities