According to British press reports, Warner Music’s CEO Edger Bronfman Jr. stated that it will cease making its music available to advertising supported streaming music sites.  This has prompted some questions about how this decision would affect services such as Pandora, Slacker, Accuradio and other Internet radio companies – would it deny them access to substantial amounts of music?  In fact, as these US services operate under a "statutory license", created by Congress, they get access to  all legally recorded music in exchange for the payment of a royalty established by the Copyright Royalty Board.  Essentially, under this statutory license (otherwise known as a "compulsory license"), a copyright holder cannot deny access to companies operating under the license, as long as those companies comply with terms of the license, and pay the established royalty.  Thus, even if the Warner Music decision really is true, this decision should have little or no impact on US Internet Radio stations operating under the compulsory license.

What would it affect?  Presumably it could hurt services that don’t rely on the statutory license.  Internet Radio operators who want to rely on the statutory license must meet a set of requirements set out by statute in order to qualify for the license.  We’ve written about those obligations before here, in connection with the waiver of some of these requirements in the royalty settlement between SoundExchange and the NAB.  Services operating under the license must meet the "statutory complement", meaning that they cannot play more songs from an artist or CD in a given time period than allowed by the law, specifically:

  • No more than 3 songs in a row by the same artist
  • Not more than 4 songs by same artist in a 3 hour period
  • No more than 2 songs from same CD in a row

In addition, Section 114 of the Copyright Act sets out other limitations on a service operating under the statutory license.  The service must provide the name of the artist, song and CD in text on its site, to the extent technically possible, while the song is playing.  There are also certain restrictions about tying the music being played to commercial content on the site, and requiring that sites take steps to prevent digital piracy.  And, most importantly, the service cannot be "interactive."

Continue Reading Warner Music Says No More Music for Streaming – What’s It Mean for US Webcasters?

Two FCC cases were released last week fining broadcasters for violations of the FCC rule against broadcasting a telephone call (or recording a call for broadcast purposes) without first obtaining the permission of the person at the other end of the call.  In one case, a licensee was fined $16,000 for phoning a woman, pretending to be a hospital calling with news that her husband had been in a motorcycle accident and had died.  The FCC refused to reduce or eliminate the fine because the call was made by an independent contractor, as the Commission found that the contractor had been hired to provide recorded "bits" for the station, and was thus not acting outside of any limits set by the licensee.  The decision also made clear that the violation occurs as soon as the person at the other end says "hello", if a recorder is running, even if the person being recorded subsequently consents to the broadcast of the call.

The size of the fine may seem surprising, but the Commission’s staff found $16,000 to be appropriate due to the fact that the same licensee had just recently been fined for a similar offense.  In another case released the same day, the fine was "only" $4000.  Here, the call was made to airport officials in the context of asking these officials questions about a local controversy.  The licensee raised a host of defenses – all of which were rejected.  First, the FCC would not eliminate the fine based on the fact that the station employee making the call had immediately identified himself as being from the station.  The licensee argued that, as the caller had identified himself as being from the station, the recipients of the calls should have known that they were on the air, and had thus implicitly consented to being broadcast as they kept talking.  The FCC rejected this argument for two reasons.  As the call was immediately put on the air, the decision found that once the "hello" was broadcast without prior permission, the station had violated the rules.  Moreover, the exception in Section 73.1206 (the rule that bans the broadcast of phone calls without permission) that allows calls to be broadcast where the person on the call can reasonably be expected to know that the call will be broadcast applies only to situations where the caller "originates the call" to the station – calling the station to be put on a program (like a talk show) that they know or should anticipate will be broadcast. 

Continue Reading $16,000 Fine For Recording Telephone Conversation for Broadcast Without Prior Permission – No Excuse Because Call Made By Independent Contractor, By Subsequent Approval, or By the First Amendment

As we enter the 2010 election season, questions are beginning to arise about broadcast station on-air employees who decide to run for political office, and what a station needs to do about such employees to avoid issues under the FCC political broadcasting rules.  For instance, in Arizona, talk show host (and former Congressman) JD Hayworth recently left his radio program and announced that he was planning to contest John McCain’s reelection by challenging him in the Republican primary.  On a local level throughout the country, on-air station employees are deciding to throw their hats into the political ring.  And, whether that ring is a Federal office like the one that Mr. Hayworth is seeking, or a state or local elective position, whether it be Governor or member of the Board of Education or Water Commission, an announcer-candidate can mean equal time obligations under Section 315 of the Communications Act and under FCC rules for a broadcast station. 

We wrote about this issue last election cycle,here, and the rules have not changed. Once a candidate becomes "legally qualified" (i.e. he or she has established their right to a place on the ballot by filing the necessary papers), equal opportunities rights are available to the opposing candidates.  What this means is that, if the on-air broadcaster who is running for political office stays on the air, any opposing candidate can come to the station and demand equal opportunities within seven days of the date on which the on-air announcer/candidate was on the air, and the opponent would be entitled to the same amount of time in which they can broadcast a political message, to be run in the same general time period as the station employee/candidate was on the air.  So if your meteorologist decides to run for the city council, and he appears on the 6 o’clock news for 3 minutes each night doing the weather, an opposing city council candidate can get up to 21 minutes of time (3 minutes for each of the last 7 days), and that opposing candidate does not need to read the weather, but can do a full political message.  So what is a station to do when an on-air employee decides to run for office?

Continue Reading Leaving the Air to Run For Office – What to Do With The Broadcaster Who Becomes a Candidate

The FCC has proposed amending its rules governing the Emergency Alert System (EAS) in order to test and improve the effectiveness of the system.  In particular, the Commission has proposed that all EAS participants be required to join in a nationwide test — to be scheduled by the FCC in consultation with the Federal Emergency Management Agency (FEMA) — to ensure that the system will function properly to inform the public in the event of a national crisis.  The FCC proposes to implement the national test on a yearly basis and seeks comment on the specific language of the proposed rule.  A copy of the Commission’s Notice of Proposed Rule Making (NPRM) was recently published in the Federal Register establishing the deadline for Comments on the proposed rules as March 1, 2010, with Reply Comments due on or before March 30, 2010.

In issuing its NPRM, available here, the Commission acknowledged the shortcomings of the current rules and its belief that a national test — and the data gathered from such a test — is critical to ensuring consistency and reliability in a system that has actually never been used to deliver a national Presidential alert.  Under the current system, an EAS message is initiated, which is then passed via specially encoded messages to a broadcast-based transmission network, and then on to broadcast stations, cable operators, and other EAS participants in a daisy-chain distribution to the final end users, i.e., the public who is listening, watching, or reading, on radio, television, cable, or other services.  This daisy-chain structure leaves the system, in the Commission’s estimation, vulnerable to a significant failure if the message distribution is severed or delayed at any one point.  By proposing an annual national test, the Commission seeks to test the system in an organized, controlled manner, gather data from the EAS participants, and apply what is learned.  Under the Commission’s proposed rule, the annual test would replace one of the required monthly tests and participants would have at least two months advance notice of the nationwide test.  EAS participants would be required to log the test results of the test and provide information on the results to the Commission’s Public Safety and Homeland Security Bureau within 30 days of the test.  The Commission seeks input on the proposed rule, including whether once a year is sufficient, and what the costs would be attendant to the testing and reporting.

Continue Reading FCC Proposes National Test of EAS – Emergency Alert System; Comments on Proposed Rules due March 1

In two just released cases, the FCC fined television stations $8000 each for failing to publicize the location of their Children’s Television Programming Reports for an entire license renewal period (the cases can be found here and here).  The FCC found that any remedial steps taken by the licensees after they discovered their failures at renewal time did not excuse the failure to comply during the license term.  The Commission, in the orders, cites a survey that found "virtually all of the stations in the sample complied with the requirement to publicize the existence and location of the stations’ Children’s Television Programming Reports", thus dismissing arguments that the rules were vague and unclear as they do not spell out how much publicity must be given to the location of these reports.  Based on these decisions, it’s obvious that not all stations in fact got the message.

These cases remind all television broadcasters that they do in fact have obligations to publicize the location of their children’s television reports and the contact person at their stations for information and comments about programming directed to children.  For more information on a television station’s Children’s Television obligations (or, as many broadcasters know them, the Kid-vid rules) under the Communications Act and the FCC rules, including the periodic notice that should be given by television stations, check out the Davis Wright Tremaine Quarterly Reminder, the most recent of which can be found here. 

In a decision just released, the FCC fined a noncommercial FM station $8000 for failing to make its public inspection file available when it was requested.  The FCC made clear that past cases where a noncommercial station was given only an admonition for similar violations were no longer good law, finding that the public file was an important part of the station’s obligations to the public and the failure to make it available was a serious violation.  This case should serve as a warning to all stations, commercial and noncommercial, that they need to have people at the station at all times who know where the public file is located, and that all visitors who request access to the file need to be given such access.

This case was perhaps a bit more egregious than most, as the visitor who requested access to the fine was known to the station, as the person was employed by a college that had tried unsuccessfully to buy the station.  After its request to purchase the station was turned down, the prospective buyer had allegedly filed a number of pleadings at the FCC trying to force the licensee to sell the station.  When the person appeared at the station to request access to the public file, the person was first told to return another day.  After protesting that was illegal, an official of the College which is the station licensee, arrived at the scene and told the visitor that he had to leave, and could only view the public file after having made a prior appointment with the college’s attorney.  When reached by phone, the attorney allegedly told the visitor to leave the premises or he would be arrested.  Only when he returned another day, after being initially turned down yet again, was the visitor eventually able to persuade the station employees that refusal to give him access to the file was illegal.  When he was finally able to gain access to the file, he stated that he found it to be incomplete.

Continue Reading $8000 FCC Fine for Noncommercial Station Not Making Public Inspection File Available Upon Request

This afternoon the Commission released an Order authorizing FM radio stations to increase power on their hybrid digital radio operations. This power increase is a welcome boost to HD radio operations and was eagerly awaited by many FM stations broadcasting in digital.  In a nutshell, the rule change allows stations to increase from the current maximum permissible level of one percent of authorized analog effective radiated power (ERP) to a maximum of ten percent of authorized analog ERP.  In raising the power permitted for digital radio operations, the Commission acknowledged that the current digital power levels are insufficient to replicate stations’ analog coverage and that indoor and portable coverage are particularly diminished.  Building on proposals advocated by National Public Radio (NPR) and iBiquity, the Commission has provided for an immediate voluntary 6 dB increase in Digital ERP (except for super-powered FM stations, as discussed below).   In addition, stations will be allowed to seek authority for increases over 6 dB up to a maximum of 10 dB using an informal application process.

Once the Order becomes effective, eligible FM stations may commence operations with FM digital operating power up to -14 dBc (that is, up to a 6 dB increase), consistent with the existing IBOC notification procedures.  Stations availing themselves of the voluntary power increase must notify the FCC electronically of the increased digital power within 10 days of commencement using the Digital Notification form via the Commission’s Consolidated Database System (CDBS).   The exception to this is super-powered FM stations, which, regardless of their class, are limited to the higher of either the currently permitted -20 dBc level or 10 dB below the maximum analog power that would be authorized for the particular class of station, as adjusted for the station’s antenna height above average terrain.   The Audio Division’s web site contains an FM Super-Powered Maximum Digital ERP Calculator available here to assist super-powered stations with determining the maximum permissible Digital ERP.  Licensees of super-powered FM stations must file an application, in the form of an informal request, for any increase in the station’s FM Digital ERP. 

For power increases over 6 dB, licensees will be required to submit an application to the FCC, in the form of an informal request, for any increase in FM Digital ERP beyond 6 dB. Licensees wishing to operate with an FM Digital ERP in excess of -14 dBc must make a calculation and determine the station’s max permissible Digital ERP as detailed in paragraphs 17 through 20 in the Order, available here.  

Continue Reading FCC Gives Digital FM Radio a Power Boost

Reading the trade press and the blogs, one would think that the Tim Tebow ad that will reportedly air during the Super Bowl presented novel, controversial legal issues.  In fact, while we haven’t seen the ad, from what we’ve read, there do not seem to be significant legal issues – most particularly ones that arise from an FCC perspective.  The word is that this ad is pro-life, telling his mother’s story of why she decided to have her child after a medical recommendation that she not, and how that child grew up to be a famous quarterback.  Where are the FCC legal issues?  Even were this ad to explicitly address a "controversial issue of public importance", like the abortion debate, and even were stations running the ad not willing to take ads from pro-choice groups (and there is no indication that this sort of rejection of opposing viewpoints has occurred), as the debates earlier this year on the airwaves and over cable channels made clear, there is no longer any Fairness Doctrine enforced by the FCC.  Thus, there is no FCC requirement for stations having to give equal time to competing sides of any particular issue (even when the Fairness Doctrine existed, there was never an obligation for strict equal time – a broadcast station just needed to, in some manner, present both sides of an  issue).

At most, were the ad to advocate some specific Federal action, there might trigger an FCC obligation for stations that carry the ad to place a note in their public file about the ad and the amount paid to run it (see our post here), but otherwise the issue seems to be a tempest in a teapot.  Since the abolition of the Fairness Doctrine, broadcasters have been assumed to be able to exercise their own editorial discretion to decide what serves their audience and what doesn’t.  In the vast majority of cases, no one bats an eye.  But combine celebrity, the Super Bowl and a reference to a political hot-button issue, and you have a media controversy – even though there is no legal one.  So, unless the ad has some content that no one seems to be contemplating, the folks at the FCC should be able to relax and simply watch the game (assuming no clothing malfunctions or similar unexpected events – which we will leave to another post on another day…)

With the Super Bowl and the Winter Olympics less than 2 weeks away, and March Madness not far behind, we once again need to remind our readers that all three are trademarked terms, meaning that their use, particularly for commercial purposes, is limited.  We’ve wrote here last year about the use of the term "Super Bowl" in commercials, and about the use of "Olympics" two years ago (here).  Our warning then bears repeating now – the trademarked terms should not be used in commercial messages except by authorized advertisers.  These advertisers have paid big bucks to be able to say that they are an Olympic sponsor, or that they are having a Super Bowl sale.  The holders of these trademarks enforce them rigorously (so that they can get the big bucks from the official advertisers), so don’t risk their use without official permission.  See our Super Bowl post from last year for details on how to refer to these events without running afoul of trademark limitations.

As we wrote last year, this does not prevent all use of these terms.  News reports about the events can still be given.  DJs can still chat about who is going to win the Super Bowl, or about the latest judging controversy in Ice Dancing at the Winter Olympics.  But don’t try to commercially exploit these terms (e.g. saying that you are "Springfield’s March Madness station") unless you have really paid for the rights to use the trademarked term.  Be careful, as a cute promotional idea can end up costing your station far more than you intended. 

Continue Reading Remember “Super Bowl”, the “Olympics” and “March Madness” Are Trademarked Terms – Don’t Use Them In Advertising Without Permission

The Supreme Court Decision in Citizens United v. Federal Election Commission, freeing corporations to use their corporate funds to take explicit positions on political campaigns, has been mostly analyzed by broadcast trade publications as a good thing – creating one more class of potential buyers for broadcaster’s advertising time during the political season – which seems to almost be nonstop in these days of intense partisan battles in Washington and in the statehouses throughout the country.  What has not been addressed are the potential legal issues that this "third party" money may pose for broadcasters during the course of political campaigns.  Not only will an influx of money from non-candidate groups require that broadcasters review the contents of  more commercials to determine if the claims that they make are true, but it may also give rise to the return of the Zapple doctrine, one of the few remnants of the Fairness Doctrine never specifically repudiated by the FCC, but one which has not been actually applied in over a quarter of a century.  Public file obligations triggered by these ads also can not be overlooked. 

First, the need for broadcasters to vet the truth of allegations made in political ads sponsored by non-candidate advertisers.  As we have written before(see our post here), the political broadcasting rules enforced by the FCC allow broadcasters to run ads sponsored by the candidates themselves without fear of any liability for the claims made in those ads.  In fact, the Communications Act forbids a station from censoring a candidate ad.  Because the station cannot censor the candidate ad (except in the exceptionally rare situation where the airing of the ad might violate a Federal felony statute), the broadcaster has no liability for the contents of the ad.  So candidates can say whatever they want about each other – they can even lie through their teeth – and the broadcaster need not fear any liability for defamation based on the contents of those ads.  This is not so for ads run by third parties – like PACs, Right to Life groups, labor unions, unincorporated associations like MoveOn.org and, after the Citizens United case, corporations. 

Continue Reading What is the Impact on Broadcasters of Supreme Court Decision that Corporations Can Buy Political Ads? More Money, More Ad Challenges and the Return of the Zapple Doctrine