Last week, a US District Court Judge adopted a new interim rate to be paid by commercial radio broadcasters to ASCAP for the use of ASCAP-licensed music by over-the-air radio stations, reducing the fees paid by the industry by about $40 million dollars, or about 20% of the total that had been paid by the industry under the rate deal that expired at the end of 2009. These rates replace interim fees that had been negotiated between ASCAP and radio representatives earlier this year.  The rate just adopted by the Court is the rate that will apply until a permanent rate for ASCAP fees is set by the Court (or agreed to in a settlement).  The permanent fees will be retroactive to January 1, 2010, so this apparent reduction in the ASCAP fees should not be taken to mean that the fees that will be paid by radio stations under this order will be the full extent of the ASCAP liability for any station. As we have written before,the Radio Music Licensing Committee (representing most commercial radio broadcasters), has been trying to renegotiate the rates charged by both ASCAP and BMI downward from their current levels. Both the ASCAP and the BMI agreements for over-the-air radio broadcasters expired at the end of 2009, and final rates for the future need to be set by rate court or by negotiations between the parties. As negotiations have yet to produce a deal, the RMLC has initiated rate court actions – which will involve long hearings, and may not be resolved fro quite some time (if there is no settlement prior to a final decision).  Each action is heard by a different judge, so this decision is not necessarily indicative of the interim or final rates that will be set by the Judge hearing the BMI case.

Besides the rates, which are clearly the major issue, there are other matters to be decided in a rate court proceeding. In the past, the rates paid by broadcasters covered their over-the-air broadcasts, plus the streaming of their over-the-air signals. Other use of music on websites, including “side channels” of music streamed by broadcasters that was not heard over-the-air, plus other digital music uses (e.g. mobile media uses), required independent ASCAP and BMI agreements. There has been an attempt to include all uses of music under the single ASCAP and BMI license given to commercial radio stations.

Continue Reading Judge Orders ASCAP Fees for Radio to Drop – On an Interim Basis

So it seems like we have been posting about Closed Captioning issues at least once a month recently, and this month is no exception as word comes now that the FCC is expecting to ratchet up enforcement of its closed captioning rules as it has now become easier for consumers to file complaints directly to the FCC.  Today, the FCC released a Public Notice aimed at informing consumers of just how easy it is to file complaints with the FCC regarding closed captioning.  The Notice also instructs viewers on how they can find contact information for video programming providers in order to contact satellite providers, cable systems, and broadcast television stations directly with any issues they may have.  Today’s Public Notice, a copy of which is available here, is specifically aimed at viewers and touts that:  "The simplified complaint rules make it easier for consumers to bring their concerns about closed captions on television to the attention of the Commission." 

Today’s notice comes on the heels of public statements made earlier this week about the fact that the FCC intends to ramp up its enforcement of the captioning rules.  According to trade press reports, the Deputy Chief of the FCC’s Consumer and Governmental Affairs Bureau believes that the DTV transition has resulted in an increased number of captioning issues, and that the FCC expects to step up enforcement in this area to respond to the growing number of complaints.  So television stations, cable operators, and satellite television providers are on notice that the FCC is paying close attention to closed captioning issues.  Video programming providers should be vigilant to ensure that they are complying with the rules and that they respond promptly and thoroughly to any inquiry or complaint from either a viewer or the FCC.  Further details about the recent changes to the closed captioning complaint rules can be found in our earlier post here.   

On Wednesday, Congress passed the Satellite Television Extension and Localism Act of 2010 (STELA), which extends the blanket copyright license allowing satellite television providers to deliver distant signals to "unserved" viewers who are unable to receive a signal from their local network affiliate.  The Act extends that blanket license for five more years until December 31, 2014.  Enactment of this bill (assuming President Obama signs it into law) will essentially extend the current blanket license scheme — which previously expired on December 31, 2009, and which had been hastily extended temporarily a couple of times this year — that governs the importation of distant signals.  Although the Act did not tackle many of the issues that had been raised and debated regarding satellite television and the rebroadcast of local station over the past six months, the final bill does allow Dish Network to get back into the business of rebroadcasting distant signals directly, instead of through a third party.  In exchange for this change in the law, Dish Network has committed to delivering local television signals into the remaining dozen or so markets in which it doesn’t provide local-into-local service presently.  By virtue of this trade, Dish will likely become the first satellite television provider to offer local TV stations via satellite in all 210 markets in the country.

One subtle, but potentially very significant change for broadcast stations is the fact that the rule changes the definition of what constitutes an "unserved household".  Today, the law defines an unserved household (i.e., one that would be entitled to the importation of a distant signal) as:  "…a household that cannot receive, through the use of a conventional, stationary, outdoor rooftop receiving antenna, an over-the-air signal of a primary network station affiliated with that network…"  47 USC 119(d)(10)(A).  Now, however, the STELA Act changes that definition to simply state that an unserved household is one that:  "…cannot receive, through the use of an antenna, an over-the-air signal…"  Changing the definition to reception simply by "an antenna" instead of a "conventional, station, outdoor rooftop receiving antenna" would appear to mean that Congress has just extended the definition of unserved households to include those that cannot receive an adequate signal using rabbit ear antennas, not one that can’t receive a signal using a 30-foot, fixed, outdoor antenna.  This could lead to a significant change in the provision of distant signals and potentially eat away at a station’s protected service area.  How exactly this plays out and whether or not it allows the satellite providers to bring distant signals to households previously considered "served" remains to be seen. 

Continue Reading Congress Passes STELA Act Extending Satellite Television Provisions and Changing the Definition of Unserved Household

On May 11, Brendan Holland presented a Webinar on the FCC’s EEO Rules.  Hosted by the Michigan Association of Broadcasters and shared with 28 other state broadcast associations, the seminar provided a refresher course on the Equal Employment Opportunity rules.  A copy of the Power Point presentation from Brendan’s seminar is available here, and an archived copy of the Webinar itself will be available on the web soon.  Broadcasters should contact their state broadcast associations or the Michagan Association of Broadcasters for the link  and access to the archived Webinar.  Also, a copy of DWT’s EEO primer is available here.  A description of yesterday’s Webinar is below.

With annual EEO public file reports due for stations in Michigan by June 1st, and the next broadcast station license renewal cycle just around the corner in 2011, stations need to make sure that they are familiar with the FCC’s EEO rules and are taking all the steps necessary to ensure that they stay out of trouble. EEO continues to be a hot issue for the FCC, and one that draws many fines from the Commission, both at license renewal time and in connection with the ongoing random EEO audits that the FCC conducts several times a year.

With the changes in ownership, personnel, and hiring efforts that inevitably occur at stations over time, it is important that station owners, managers, and hiring personnel are on top of the FCC’s rules. This session hosted by the Michigan Association of Broadcasters will provide a primer on the FCC’s Equal Employment Opportunity rules, including the outreach required for the opening of jobs at the stations, the non-vacancy related activities that stations should be engaging in, and the record keeping requirements to make sure you keep all the necessary documents to support what the station did. The goal of the session is to refresh your understanding of the rules, provide insight into the FCC’s enforcement and guidance in the past few years, and highlight some common pitfalls.

To move or not to move? For broadcasters considering a change in a station’s community of license, this question now requires a bit more forethought. There may be unintended consequences for broadcasters that request a community of license change based on tenuous future plans.   In a recent letter decision, the Commission’s staff reminded an applicant that upon receiving a final Commission decision to change the commercial FM radio station’s community of license, it traded in its license for an ‘implied STA’ to continue operating its station with its existing licensed facilities. In other words, the existing facilities would no longer receive contour protection from other stations and technical proposals that they wanted to make through modifications or other applications. The FCC staff stated that the applicant who had received authority to change city of license was obligated to construct its stations at the new community. Furthermore, the Commission could cancel the implied STA, requiring the station to cease operations, if the existing facilities continue to impede construction of any approved third party modifications.   According to the Commission, a request to change a community of license carried with it an implied certification that the applicant is ‘ready, willing and able’ to construct and operate the facility. Because the applicant who changed city of license in this case did so through a modification of the FM Table of Allotments rather than through a one-step application (which was not available to make the change they requested at the time they first sought the city of license modification), this decision leaves us with many questions, but certainly warns applicants for city of license changes that they must consider their plans carefully.       

The facts in this case began in 2003 when, as part of a rulemaking proceeding, the FCC issued a Report and Order modifying the KIKT(FM) community of license from Greenville, Texas to Cooper, Texas and later that year granted a construction permit to implement the same. Immediately prior to expiration of the construction permit in 2006, its licensee re-filed for identical facilities, and did so again immediately prior to the 2009 expiration date. The Commission granted the licensee a total of three construction permits for the same facilities in Cooper, Texas. Meanwhile, another broadcaster filed an application to improve the facilities of its station KNOR(FM) – an upgrade that was mutually exclusive with the existing KIKT(FM) facilities at Greenville.  Therefore, the Commission’s approval of the KNOR(FM) upgrade contained a special operating condition requiring KIKT(FM) to initiate operations at Cooper, Texas before KNOR(FM) could implement its upgrade. After what amounted to three, three-year extensions, the KNOR licensee petitioned the Commission for the condition to be removed and KIKT(FM) be forced to make its move to Cooper, Texas. The Commission agreed, finding that, despite the fact that allowing KNOR(FM) to implement its upgrade would result in interference to KIKT(FM)’s existing facilities, the Commission decided that it was in the public interest to remove the special operating condition at issue. However, the Commission denied the request to cancel the implied STA, and instead threatened to cancel the implied STA if KIKT(FM) isn’t constructed at Cooper on or before the current construction permit deadline in 2012.

Continue Reading Beware of City of License Change Proposal That May Not Be Implemented

Last week, the FCC issued fines to Class A TV stations which seem to have forgotten the requirements for such stations. Class A TV stations were low power television stations on which, early in the decade, Congress decided to confer "protected" status, meaning that they could not be knocked off the air by a new full-power TV station or by a change in the facilities of a full-power station.  LPTV stations, by contrast, are "secondary services," meaning that they can be knocked off the air by changes in primary stations.  Class A stations were given this protection if they could show that they were providing local programming, had a local studio, and otherwise complied with all the operating requirements that a full-power station station has to meet – including a manned main studio, children’s television obligations, EEO reporting, and public file requirements.  Cases released last week remind these stations that they must still meet all requirements for full power stations, as the FCC fined Class A stations for main studio, public file and children’s television violations.

In one case, the FCC fined a station $1000 for violations of the main studio, main studio staffing and public file rules.  The fine was originally set at $24,000 but, as the licensee demonstrated that it had no ability to pay the higher fine, the penalty was reduced to $1000.  The FCC had tried to inspect the station, and was unable to obtain access to the transmitter site.  The Commission staff then tried to find the station’s main studio, and found that no one answered the phone number listed for the station, there did not appear to be anyone at the address on file for the main studio location, and there was of course no access to the public file.  As Commission rules require that stations have main studios in their principal service areas that are manned during normal business hours, and that stations have their public file at this location, the fine was issued.

Continue Reading Class A TV Stations Need to Remember They Are Subject to Full-Power Rules – Fines for Kids TV and Main Studio Violations

In recent years, as competition in the video marketplace has become more intense, in a number of broadcast television markets, competing stations have teamed up to combine certain of their operations to achieve economies while still allowing for some degree of independence of programming.  Under these "shared services agreements", one station will provide back-office support and often advertising sales for another station in the market.  Where the station providing the support programs less than 15% of the programming hours of the station being supported, the contractual arrangement is not "attributable under the FCC’s multiple ownership rules.  Thus, these services can be provided in circumstances where the supported station could not be owned by the station that is providing the services.  Nevertheless, a number of these arrangements have been under attack from public interest groups, and recent Commission actions indicate that the FCC may well be reviewing its position on these sorts of agreements.

A few weeks ago, in approving an application which provided for a shared service agreement between two television stations in the same market (over the objection of a competitor), the FCC noted that it was approving the deal as consistent with its rules as they are currently enforced, but warned that the arrangements would be reviewed as part of the FCC’s review of its multiple ownership rules – a review which is to take place this year.  This week, the FCC agreed to treat a case in Hawaii, which has generated much controversy and press coverage, as a "permit but disclose" proceeding, meaning that parties are not confined to the usual process of arguing their cases through written submissions served on all parties (or meetings at which all parties are present).  Instead, interested parties can now meet with FCC decision-making staff (including FCC commissioners) on their own, as long as they file an "ex parte" notice in the record summarizing the presentations that they made.  This process is usually used only for high-profile decisions with potential far-reaching impact or where new policy is potentially to be made. 

Continue Reading More Indications of FCC Review of TV Shared Services Agreements

A petition was recently filed at the FCC proposing to allow all AM stations to increase to 10 times their current power in order to overcome the effects of interference that has grown up in most urban areas from the operation of all sorts of electronic equipment, fluorescent lights and other devices that simply did not exist when AM power levels were first established.  The petition was drafted by an engineer, who argues that, as the amount of background noise from all sorts of electronic devices has increased, so has the noise on the AM band.   He believes that the only way to make the AM signal usable is to vastly increase power on all stations.  As the stations would maintain their relative power levels towards each other, he claims that there would not be increased interference between AM stations – but that the increased power levels would overcome the background noise.  However, because of AM skywave issues, the petition suggests that nighttime power levels remain at their current levels.

How realistic is this proposal?  The petition recognizes that, in border areas, the power increase could not happen without international coordination and the amendment of existing treaties.  But, given the proposed high power for AM stations and the cumulative effect that their signals can have on distant stations, this increase could seemingly affect international AM stations even if the US stations increasing power are far from the border.  However, the use of AM stations has been decreasing in some countries – in Canada, a number of AM stations have already ceased operating, so maybe the international implications could be overcome given enough time.

Continue Reading An Across-the-Board AM Power Increase to Overcome Electronic Interference?

In a recent decision, the FCC made clear that analog FM translators can rebroadcast the signal of a HD digital multicast channel from a commonly owned FM station.  For months, broadcasters have been introducing "new" FM stations to their communities via translators rebroadcasting HD-2 signals which are broadcast digitally on a primary FM station, and available only to those who have purchased HD radio receivers.  In the decision that was just released, the Commission’s staff rejected an objection to the use of an FM translator taking a signal that can only be heard on a digital HD Radio and turning it into an analog signal capable of being received on any FM receiver.  In this case, the broadcaster rebroadcast his AM station on the FM HD station so that it could then be rebroadcast on the FM translator.  But, even if the HD multicast channel was a totally independent station that could otherwise only be heard on an HD digital radio, it could be rebroadcast on the FM translator and received by anyone with an FM radio in the limited area served by the translator station. 

The Commission did make clear, however, that a broadcaster cannot use another station owner’s HD multicast channel and rebroadcast that on a translator if the broadcaster already owned the maximum number of stations allowed by the multiple ownership rules.  In other words, if a broadcaster is allowed by the multiple ownership rules to own 4 FM stations in a market, it could put a fifth (low power) FM signal in that market through the use of an FM translator rebroadcasting one of its own HD multicast signals.  However, if it had not itself converted its FM stations to digital so that it had its own multicast abilities, it could not do a time brokerage agreement and program the multicast signal of another broadcaster in town who had installed the digital equipment needed to do such multicasts.  An LMA or time brokerage agreement with another station for use of an HD multicast channel counts for multiple ownership purposes in the same way that such a programming agreement would if it provided for programming of a primary analog  FM station. 

Continue Reading FM Analog Translator Can Rebroadcast FM Digital Multicast Programming – Opportunities for New Signals in Local Markets

In reaction to the Citizens United Supreme Court decision invalidating restrictions on corporate spending on advertising and other messages explicitly endorsing or attacking political candidates (about which we wrote here), new legislation, called the DISCLOSE Act,  has just been introduced in both houses of Congress seeking to mitigate the perceived impact of the Court’s decision.  While the announced goal of the legislation is aimed at disclosure of the individuals and companies who are trying to impact the political process, the draft legislation, if adopted would have significant impact on broadcasters and cable companies, including potentially extending lowest unit rates and reasonable access to Federal political party’s campaign committees (and not just the candidates themselves).  The draft legislation also proposes lower Lowest Unit Rates in political races where there are significant independent expenditures, more disclosure by broadcasters through an on-line political file, and even mandates for audits by the FCC of the rates charged by television stations to political candidates.  The language could also be read as an expansion of the current applicability of the political rules to cable television – applying reasonable access to cable systems and lowest unit rates and equal opportunities to cable networks.  As Congressional leaders are proposing to move this legislation quickly (with votes before July 4) so that it can be in place for the coming Congressional elections, broadcasters and cable companies need to carefully consider the proposals so that they can be discussed with their Congressional representatives before the bills are voted on by Congress.

While much of the bill is intended to force disclosure of those sponsoring ads and otherwise trying to influence the political process, the portions of the bill that amend provisions of the Communications Act include the following:

  • An extension of Reasonable Access to require that broadcasters give reasonable access not just to Federal political candidates, but also to Federal political parties and their campaign committees.  In recent years where the Democratic and Republican Congressional Campaign Committees have been big buyers of broadcast time.  The extension of reasonable access to these groups could put even greater demands on broadcast advertising time on stations in markets with hot races, as stations could not refuse to provide access to "all classes of time and all dayparts", as required by the reasonable access rules.  This could crowd out other advertisers, and even make it harder for ads for state elections (as state and local candidates have no reasonable access rights) in states where there are hotly contested races.
  • Extends the Reasonable Access requirements to require reasonable access to "reasonable amounts of time purchased at lowest unit rates."  The purpose of this change is not clear, as all political time must be sold to candidates at lowest unit rates in the 60 days before a general election and the 45 days before a primary. 
  • Extends the requirement for Lowest Unit Rates to Federal political parties and their campaign committees.  Currently, the lowest unit charges apply only to the candidate’s campaign committees, not to political parties.  Under the proposed language, LUC rates would also apply to the parties, and to groups like the Republican and Democratic National Campaign Committees
  • Extends the "no censorship" provisions to Federal political parties and their campaign committees.  This change may be a positive for broadcasters.  As we have written before, a broadcast station cannot censor a candidate’s ad.  But, as they have no power to reject a candidate’s ad based on its contents, they have no liability should that ad contain material that could potentially be defamatory or otherwise subject the station to liability.  This proposed language would extend the no censorship rule to cover ads from Federal political parties, so that stations would not have liability for those ads either.  As many of the hardest hitting attack ads often come from these committees, if this legislation were to pass, stations would not have to worry about evaluating the truth or falsity of the committee’s ads, as they would have no liability for the contents of the ads as they would be forbidden by law from rejecting the ads based on their contents.
  • Provides for a lower Lowest Unit Rate in races where there are independent expenditures by any group of more than $50,000.  If a corporation or other group spends $50,000 in any political race, then all stations would be required to charge all candidates in the race the lowest charge made for "the same amount of time in the last 180 days" – not just the lowest charge for the same class of time as is then currently running on the station.  First, this would force stations to look back 6 months to determine their lowest unit rates.  For a primary election in June or July, rates in the doldrums of January or February could set the June political rates.  Moreover, the legislation does not state that it would look at the lowest rate for the same "class" of time over the previous 180 days, but instead it talks only about the same "amount" of time.  It is unclear if this is an intentional attempt to make stations sell prime time spots at overnight rates, but the current language of the bill seems to avoid the traditional distinctions on spots being sold based on their class.
  • Forbids the preemption of advertising by a legally qualified candidate or national committee except for unforeseen circumstances.  This provision may well be intended to force stations to sell candidates advertising at their lowest nonpreemptible rates, and then treat the spots as they would much more expensive non-preemptible fixed position spots
  • Requires the FCC to conduct random audits during the 45 days before a primary and the 60 days before a general election.  Audits would have to be conducted as follows: 
    • 6 of the Top 50 TV markets
    • 3 of the markets 51-100
    • 3 of the markets rates 101-150
    • 3 markets below 150
    • Audits would be required of the 3 largest networks, 1 independent TV network, 1 cable network, 1 provider of satellite services, and 1 radio network.  The language here, too, seems odd, as the requirements for audits are for "networks" of broadcast, cable and radio stations, not for local operators, and for an "independent television network" which would seem to be an inherently contradictory term – if a station is truly an independent, it is not affiliated with a network, so how can the FCC audit an "independent television network"?  It is unclear of whether this provision is requiring audits of the networks themselves, or of affiliates of the networks in the markets in which audits must be conducted. 
  • Requirements that stations keep on their website information about all requests for the purchase of broadcast time by candidates, political parties or other independent political groups. Right now, the rules specifically do not require that political files be kept online.

Continue Reading The Impact of the Proposed DISCLOSE Campaign Reform Act on Broadcasters and Cable Operators – Lowest Unit Rates and Reasonable Access for Political Parties, On Line Political File, FCC Audits and More