Only last month, we wrote about the proposal of a consulting engineer for an across the board power increase for AM stations so that they could overcome the effects of interference from all the electromagnetic devices now existing in our modern world that, while making our lives easier, interferes with the signal of AM stations, particularly in urban environments.  In what seems like record time, the FCC today sent the proponent of that change a letter declining to pursue the proposal.  The FCC’s Media Bureau sent Richard Arsenault, the engineer who made the proposal, a letter stating that, after review, the staff decided that the proposal would increase AM interference, in contradiction to the attempts by the FCC to reduce interference on the AM band.  Thus, the proposal was dismissed.

When we first wrote about this proposal, we expressed skepticism about how likely such a move was to get buy in from all of the potentially affected parties, including neighboring countries.  Nevertheless, we are surprised at the speed of the FCC’s denial of this proposal, and its reliance on an almost 20 year old proceeding which took some initial steps to try to reduce AM interference, but which has essentially been inactive for many years.  AM stations are suffering in many places in the country, and the interference identified by Mr Arsenault is real.  We hope that, while the FCC has denied this particular remedy, it will continue to look at means to address AM issues.  One proposal still out there – moving AM to a rededicated TV channel 5 or 6.  Over time, we will see if that proposal, on which the FCC has already received public comment, has any traction at the FCC.

The FCC yesterday released a Notice of Inquiry, formally beginning its Quadrennial Review of the Multiple Ownership Rules.  While the FCC informally began the process of the Congressionally-mandated review of the ownership rules last November through a series of informational panels and workshops, the Notice of Inquiry ("NOI") provides the first formal opportunity for the public to comment on the ownership rules.  The FCC will take the comments that it receives in response to the NOI, and formulate some more specific proposals on how it plans to change the current rules (if at all), which will then be released for additional comments in a Notice of Proposed Rulemaking.  The NOI is a broad-ranging document that gives little indication of the FCC’s final direction in this proceeding – though it does go into detail as to how the media marketplace has changed in recent years, citing declining advertising revenues, and more media outlets providing competition to broadcasters for both audience and advertising revenues.   The NOI posed dozens of detailed questions asking how the Commission should assess the various aspects of the ownership rules, and what impact the changes in the media marketplace should have on its consideration of rule changes.

The FCC is concerned with all aspects of its media ownership rules.  Thus, it sets out that it will explore the following rules:

  • The Local Television Ownership cap, which limits owners to two stations in markets where there are at least 8 competing television owners and operators, and which forbids combinations of the top 4 stations in any market.  Television operators, particularly in smaller markets, have been urging the Commission to allow more consolidation in those markets so that stations can provide better service to their communities.  They argue that the current limits preclude small market consolidation, which is most needed in these markets where the costs of operation are not significantly lower than in large markets, but where revenue opportunities are far more limited.
  • The Local radio ownership caps, that currently limit owners to 8 stations in the largest markets, no more than 5 of which can be in any single service (i.e. AM or FM).  Some radio owners contend that these limits no longer make sense given the competition for audio listening from so many sources (including satellite and Internet radio, who can provide unlimited formats in any market).  Other issues include whether AM and FM still need to be treated separately, and even whether AM should be counted to the same degree as FM in a multiple ownership analysis.
  • The Newspaper-Broadcast cross-ownership rule, that forbids cross-ownership of broadcast stations and daily newspapers without a waiver – which, as the result of changes in the cross-ownership rules in 2007, will be granted on a more liberal basis, but only in the top 20 markets.  Given the economic state of the newspaper industry, many seek the repeal of this rule in its entirety. As we have written before, will the newspaper cross-ownership rule outlive the newspaper?
  • The Radio-Television cross-ownership rule, which limits the number of radio and television stations that can be owned by a single party in a single market
  • The Dual Network Rule, that prohibits the common ownership of any of the top 4 television networks.

Each of these rules is up for review, and numerous questions have been asked, and issues identified, for consideration in this proceeding. 

Continue Reading FCC Issues Multiple Ownership Notice of Inquiry – Formally Begins Quadrennial Review With Lots of Questions To Assess the Impact of Media Consolidation

In a very cryptic announcement, the Chairs of the House and Senate commerce committees, and the Chairs of the subcommittees dealing specifically with communications matters, have announced that they are beginning the process of rewriting the Communications Act of 1934, the Act which governs regulation of broadcasters as well as telecommunications, satellite and mobile communications entities.  The announcement, from Senator John D. (Jay) Rockefeller IV, Chairman of the U.S. Senate Commerce, Science, and Transportation Committee, Rep. Henry A. Waxman, the Chairman of the House Committee on Energy and Commerce, Senator John F. Kerry, the Chairman of the Senate Subcommittee on Communications, Technology, and the Internet, and Rep. Rick Boucher, the Chairman of the House Subcommittee on Communications, Technology, and the Internet, merely states that they will "will invite stakeholders to participate in a series of bipartisan, issue-focused meetings beginning in June" to address the issues that would be involved in such a rewrite.  The announcement then says that more details will be forthcoming.

What does this mean for broadcasters?  At this point, until more details are released, the issues to be addressed are anyone’s guess.  Much has been made in recent years of the changing nature of the media and communications industry, particularly in light of the development of the Internet.  In a recent decision, the Courts have said that the FCC is limited in its ability to regulate the provision of Internet services, and the initial impetus for this rewrite proposal may well come from that decision.  But these processes, once begun, often take on a life of their own, with new proposals covering issues not necessarily anticipated at the outset of the proceeding arising as the process goes on.  While there are minor amendments to the Act almost every year, the last comprehensive rewrite of the Act took place in 1996.  There, while much of the debate focused on telecommunications issues (which will likely be the case here as well, as there are far more dollars at stake than in the broadcast world), broadcast ownership reform emerged at the last minute – abolishing numerical caps on television ownership and all caps on radio ownership nationally, and raising the local limits on radio ownership from the 4 stations (2 AMs and 2 FMs) previously allowed to be owned in one market by any party, to the current cap allowing ownership of as many as 8 radio stations in the largest markets.

Continue Reading Congress to Rewrite the Communications Act – What Could It Mean For Broadcasters?

The DISCLOSE Act recently passed the Committee in the House of Representatives charged with dealing with it, without many of the provisions that most worried broadcasters and cable companies.  We recently wrote about the DISCLOSE Act legislation proposed in both the House and Senate in response to the Citizens United Supreme Court case (which freed corporations and labor unions to spend money during political campaigns to explicitly support or oppose the election of particular candidates).  When introduced, in addition to provisions mandating new disclosure requirements for corporations, labor unions and other third parties who decide to run political ads, the legislation had a section expanding the requirements for lowest unit rates and reasonable access – extending these rights to political parties (as opposed to being limited to the candidate’s own campaign committees, who are the only ones eligible under current law) and mandating advertising rates even lower than the current lowest unit charges in certain circumstances.  That section of the original bill also required that the FCC conduct audits of broadcasters’ compliance with the political rules, and seemingly expanded the FCC political advertising obligations of cable systems.  The House of Representatives Committee on Administration this week approved the bill, sending it on to the full House for consideration.  The DISCLOSE Act’s sponsors want to have the bill approved and in place by July 4th so that it will have an impact on the November elections.  The approval without these provisions, which may well have caused broadcasters and other media companies to come out in opposition to the bill and delayed its passage, signals that the Act may in fact move on the rapid timeline that its sponsors envision.

Of course, this is not the end of the story.  The Senate still has to consider the bill in committee, and the full House and the full Senate have to vote on the legislation before it is adopted.  At any point, amendments can be offered that could have the impact of returning some of these provisions of concern.  But, at least for now, while imposing some additional disclosure requirements on political advertisers, the House version of the legislation is much more palatable to the broadcasting community.  But watch this bill as it progresses through Congress in the coming month to see what else may develop. 

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