Section 312(g) of the Communications Act authorizes the FCC to cancel the license of any broadcast station that has not operated for a full year.   In a recent case, the Commission clarified when it would choose to use that authority to cancel the license of a station that had not been on the air with authorized facilities within that one year period.  In this case, the FCC decided not to cancel the license of a station whose tower was destroyed, where the station came back on the air from the old site but with reduced facilities before the end of the one year period, even though the resumption of operations was initially conducted without FCC authority for the low power operation. The station did, however, ask for Special Temporary Authority to operate with these facilities, authority which was not granted until several weeks after the station had resumed operation.  As the station had requested the authority to resume operations, and had been candid with the FCC about its operations and intentions, the Commission did not cancel the license, but it did fine the station $7000 for operating with unauthorized facilities during the period before the STA was granted.

The decision distinguished the actions of the licensee here with that of the licensee in another case, about which we wrote here, where the FCC canceled the license of a station that was forced off the air at its licensed site, and came back on the air just before the end of the one year period from a totally new site where it had no FCC authority, and where it could not get FAA approval for operations.  The Commission stated that the element of deception in the earlier case, with the station coming on the air at a site where it could not get FCC approval as the FAA had refused its operations from the site, was the distinguishing factor which caused that station license to be canceled. 

Continue Reading STA Request Saves Broadcast Station License From Cancellation For Being Off the Air for A Full Year

While we have written much about the battle over the broadcast performance royalty (or the "performance tax" as broadcasters call it) – whether broadcasters will have to pay artists and record labels for the right to play their music on the air – we have not written much about another looming issue with the royalties that broadcasters must pay to play music on their stations.  While broadcasters are very familiar with the ASCAP and BMI royalties, they may not be fully aware that there is a looming dispute over the amount that broadcasters will pay to these organizations in the near future.  At a panel that I moderated at the NAB Radio Show, Bill Velez, the head of the Radio Music Licensing Committee, talked about the current negotiations for the renewal of the royalty agreements between radio stations and these two Performing Rights Organizations ("PROs").  Both of the current agreements expire at the end of this year, and the RMLC is in the process of trying to negotiate new agreements.  However, because many broadcasters feel that the current deals charge more for these music rights than is justified in the current economic environment, while the PROs are reluctant to decrease the royalties that the composers they represent currently receive, the differing perceptions of the value of these rights could lead to litigation over the amount that should be paid by broadcasters for the use of this music.

First, it is important to understand what rights ASCAP and BMI are providing. These organizations, along with SESAC (about which we have written here), provide the copyright license for the "public performance" of the "musical work" or the composition, the words and musical notes to a song.  This is in contrast to the rights to the sound recording (the song as performed and recorded by a specific artist), which is licensed by SoundExchange.  Webcasters have to pay ASCAP and BMI for the use of the composition, as well as paying SoundExchange for the use of the sound recording when streaming music on the Internet.  Broadcasters only have the obligation to pay ASCAP,BMI and SESAC for the composition in connection with their over the air broadcasts but do not, under the current law (unless the broadcast performance royalty is passed), have to pay SoundExchange.  Because the current ASCAP and BMI royalties have been in place for several years, most broadcasters probably don’t think much about them, but they may have to in the near future.

Continue Reading ASCAP and BMI – Another Royalty Battle for Broadcasters?

Just this morning, we posted a comment about the new FCC Form 323 Ownership Report that was supposed to be required of all commercial broadcasters on November 1 of this year, and then on November 1 of every other year thereafter.  We wrote about how the approval of the form by the Office of Management and Budget under the Paperwork Reduction Act had been held up, and that the November 1 filing deadline looked unlikely.  Well, the FCC today issued an Order officially putting the November 1 filing obligation on hold pending approval of the new form.  There had been a suggestion in the FCC’s order issued in late May, which suspended ownership filings for stations in states that had ownership filing obligations between then and November 1, that stations in these states would have to file on the old form on November 1 if the new form was not adopted by that date.  Today’s Order suspends even that obligation.  Thus, no station needs to be prepared to file the new Ownership Report until the new version of Form 323 is approved by the Office of Management and Budget – whenever that may be.  Stayed tuned for more developments.

Several months ago, we wrote of the FCC’s requirements for a new biennial Ownership Report for all commercial broadcast stations – to be filed by all stations in every state on November 1 of every other year – beginning with November 1 of this year.  The FCC has even suspended the requirements for commercial stations to file reports that were due between the date that the rule was adopted and November 1 (reports being due on the even anniversaries of the filing of license renewal applications for stations in the state to which the station is licensed). Yet, here we are, less than a month from the supposed filing deadline for the new forms, and we’ve not seen any notice from the FCC that the new forms are ready to be used or any reminder for broadcasters to prepare and file those reports.  What gives?  Well, the Paperwork Reduction Act has struck again.

We’ve written about the Paperwork Reduction Act before, and its obligation that the FCC (or almost any other government agency) has to justify any new paperwork obligation that it is imposing on companies that it regulates – showing that the burden is as minimal as possible and serves a necessary regulatory process.  Here, when the new ownership reports on FCC Form 323 were submitted to the Office of Management and Budget for approval under the Paperwork Reduction Act, several parties, including the NAB, objected that information requested by the new form was unnecessarily complex, and in fact might violate other Federal laws (in particular Federal Privacy laws) as they required not only the filing of information about the companies who own radio stations with identification of their owners, but required that each and every attributable owner of a station (and actually including a few nonattributable owners who must be reported under the new reporting scheme), obtain an FCC "FRN" identification number that would be attached to that person and uniquely identify them in connection with each and every broadcast interest that they have.  In most cases, that would require that the individual provide a social security number (and  corporate entities would have to file Taxpayer ID numbers).  While the FCC promised to keep those identification numbers private, security issues were not addressed and questions were raised why the Commission had to put so many individuals through so much of a burden when the FCC reports had not been adopted to track individual ownership interests, but instead to track the minority ownership of broadcast stations.  Other issues with the new forms were also raised, as the new forms would have required many filings for stations held in independent corporations, but with a common parent company as parent companies cannot simply cross-reference multiple licensee companies that they own, but instead have to file multiple ownership reports for each licensee company in which they have an interest.  In addition, ownership structures and other broadcast interests can no longer be identified by PDF attachments, but they instead needed to be separately entered into their own fields on the new form.  The idea was to make the information searchable – but it would also result in vastly more time to prepare these reports.

Continue Reading So What Happened to Those New Ownership Reports that Were Supposed to Be Filed on November 1?

In a Public Notice issued yesterday, the FCC announced that it would do a series of open "workshops" in connection with its review of the broadcast multiple ownership rules – the rules that restrict the number of radio or television stations which one party can own and which restrict the cross-ownership of radio and TV stations and newspapers in the same market.  The FCC is poised to begin its quadrennial review of the ownership rules in 2010.  The open proceedings just announced (without details of how many workshops will be held) will be used to gather information for the Commission’s review of the rules. According to the public notice "the Commission will seek viewpoints and information from a broad range of experts; consumers; public interest and trade associations; labor unions; media industry representatives, both traditional and new; and other interested persons,"  as the first step in this review process. So what is this all about?

As part of the Telecommunications Act of 1996, the FCC was instructed to do a regular review of broadcast multiple ownership rules, seemingly with the intent of reducing the prohibitions of those rules as part of the general deregulatory spirit of that Act.  Originally, proceedings were to review the rules every two years, a Biennial Review.  However, those reviews kept dragging on and becoming consolidated with each other so Congress eventually amended the law to require that the review take place only once every four years.  But each time the FCC has taken action on the rules, especially any time there has been any liberalization, there has been a major outcry from consumer groups that they were left out of the process.  Perhaps the just announced hearings are an attempt to short circuit that protest by getting the public involved even before the process begins.

Continue Reading FCC Plans Public Workshops to be Held in Connection with Its Review of Broadcast Ownership Rules

With the end of the DTV transition, the future use of TV channels 5 and 6, about which we have written before, is now back before the Commission in connection with an FCC filing by the Minority Media and Telecommunications Council, whose "radio rescue petition" was recently placed on a public notice opening a 30 day public comment period.   The FCC already has before it comments filed in its Diversity proceeding suggesting that these channels be reallocated for radio use, as Channel 6 is immediately adjacent to the lower end of the FM band, and the sound from many analog channel 6 TV stations could be heard on FM receivers.  While this petition has been opposed by certain TV interests, it is interesting to note that many television operators have been acknowledging that VHF channels, which had been the preferred channels for analog operations, may not be as advantageous for digital use, especially in urban areas, and may be particularly problematic for use with mobile digital television systems which are about to be introduced.

 In an analog world, VHF channels (those between 2 and 13) were prized by broadcasters, as stations operating on those channels could operate at power levels significantly lower than UHF stations (saving electricity costs), and still cover greater areas.  Many broadcasters thought that these benefits, particularly the lower power costs, would carry over into the digital world, and opted to remain on VHF channels for their digital operations – in some case abandoning the UHF temporary transition channel on which they were operating digitally during the period when they were running both a digital and an analog station before the end of the transition, to return to their VHF channel for their final digital operation.  Right after the digital transition was complete and these stations had moved back to their old VHF channels for their digital operations, in several major markets, many broadcasters operating on VHF channels found that their digital operations had significant problems, as the power levels were insufficient to reach many over-the-air sets, particularly those using "rabbit ears" antennas in urban areas.  

Continue Reading Will TV Channel 6 Be Used For Radio? – MMTC Petition Raises the Issue, Again

The FCC recently issued two reminders about television programmer’s obligations to members of their audience who are hearing impaired.  The first notice made clear that stations must caption 100% of their "new, non-exempt" Spanish language programming as of January 1, 2010.  The second notice was to remind broadcasters that, when providing emergency information, they must make that information accessible to the hearing impaired, even if the programming falls into one of the captioning exemptions.  For instance, emergency information provided in live programming on a broadcast station with less than $3 million in revenues must still be accessible to the hearing impaired, either through closed or open captions, or through white boards or chalk boards or other devices that can be read by those who cannot hear the aural announcement on the station.

These issues are addressed in more detail in our Davis Wright Tremaine Advisory, here.  The memo also summarizes the current obligations of broadcasters and other video programmers under the FCC’s captioning rules, and the status of pending proceedings to potentially change the exemption for programming channels with less than $3 million in revenue so that DTV multicast streams would be included with a station’s main channel in deciding if the station met the exception.  It also discusses the status of implementation of new FCC rules changing the complaint process for violations of these rules.  These are important rules that the FCC takes seriously so, for more information, check out our Advisory. 

In the past several weeks, broadcast indecency has been back in the news – seemingly almost on a daily basis.  First, there was the story about Bob McDonnell, the Republican candidate for Virginia governor who, seemingly inadvertently, dropped the f-bomb, perhaps as a result of tripping over his tongue during a news interview on a news radio station in Washington.  Then came the extensive coverage of New York City TV newscaster Ernie Anastos who, during on-air banter with the weather man, also let the f-word fly – in what was apparently not a slip of the tongue, but perhaps a slip of the brain, where the anchor must have thought that he was somewhere other than on the set of a live TV newscast.  And then this past weekend, an actor on Saturday Night Live let the word fly during the late night program.  These incidents come on the heels of the FCC releasing its statistics on complaints that it had received in the first quarter of this year (reflecting many indecency complaints in the last month), while the Commission has asked the Court of Appeals for the opportunity to reexamine its decision in the Janet Jackson case to determine if any violation of the indecency rules was "willful."  What does all of this activity mean?

The recent well-publicized on-air slip-ups demonstrate how the fleeting expletive, which have formed the basis of a number of recent FCC cases, including the Supreme Court decision upholding the FCC’s authority to decide to change its prior holdings and issue fines for such utterances (but leaving open the constitutional questions as to whether the FCC regulation is consistent with the First Amendment), can no longer hide from public examination.  In the past, fleeting expletives were just that – fleeting.  If there was an on-air slip up, people in the audience may have done a double take, trying to decide if they really heard what they thought that they heard.  Often, there would be a shrug of the shoulders and the event would pass.  Not so in today’s electronic world.  Now, when a politician or a TV announcer slips up and let’s one of those you-can’t-say-that-on-TV words slip, the listening public quite often has the opportunity to check out YouTube or some other website to confirm what they did or didn’t hear.  As a recent press article about the NY anchor observes, these events become viral.  A similar observation was made today about the SNL skit.  And, when they become viral, the FCC often hears about it in the form of a complaint.  As the FCC does not usually monitor stations themselves looking for indecency, but instead only takes action where a member of the public complains, the viral preservation of these incidents have no doubt resulted in far more FCC complaints that would have otherwise occurred – certainly more than have occurred in the past.

Continue Reading Broadcast Indecency Can’t Hide – A Candidate for Governor, a TV Newscaster, Saturday Night Live and the Clothing Malfunction

The FCC’s auction of 122 FM radio licenses came to a close last week with nearly a third of the licenses — 37 to be precise — remaining unsold at the closing hammer.  The outcome of the auction, which raised a net total of just $5.25 million on the sale of 85 licenses, may be seen by some as but the latest example of the current state of the radio industry.  As others have noted , the auction did not attract much attention from the beginning, with many of the qualified bidders depositing only small amounts of money, signaling that interest in the slate of licenses was not very keen. 

Admittedly, the large number of unsold licenses and the small total earnings for the 85 licenses that did sell is a reflection of the fact that many of the licenses being offered were smaller facilities in less populated areas, however, the auction results also reflect that it is a buyer’s market these days.  The fact that 37 licenses went unsold meant that not a single bidder was willing to pay even the opening bid amounts for over three dozen of the licenses.  In the current marketplace, the FCC’s opening price for these licenses was simply thought to be too high.  Further, of the 85 licenses that did sell, 33 of them were virtually uncontested, with the winning bid being submitted in the first, second, or third round.  Only a handful of the licenses saw active bidding throughout the auction. 

For those that succeeded in picking up a station in the auction, the 20% down payment is due by October 2, with the final payment and long form applications due by October 19, 2009.  A copy of the FCC’s closing Public Notice is available here.  And for now, the unsold licenses will remain with the FCC to be re-auctioned at some point in the future, hopefully to a better result. 

Last week, we wrote about the FCC fining stations for a number of violations found at the studios of some broadcast stations.  In these same cases, the FCC also found a number of technical violations at the tower sites of some of the same stations.  Issues for which fines were issued included the failure to have an locked fence around an AM station’s tower, the failure of stations to be operating at the power for which they were authorized, and the failure to have a station’s Studio Transmitter Link operating on its licensed frequency.

An issue found in two case was the failure to operate at the power specified on the station’s license.  In one case, an AM station simply seemed to not be switching to its nighttime power – in other words, at sunset, it was not reducing power from the power authorized for its daytime operations.  The second case was one where another AM station was not switching to its nighttime antenna pattern after dark.  In that case, there were apparently issues with the nighttime antenna but, rather than request special temporary authority from the FCC to operate with reduced power until the problem was fixed, the FCC notes that the station apparently just kept operating with its daytime power.  An STA is not difficult to obtain when there is a technical issue (as the FCC does not want stations going dark if it can be avoided), and some effort is made to specify a power that avoids interference to other stations.  So, if faced with technical problems, request authority for operations that are different from those authorized by the station’s license until those problems can be fixed, or risk a fine from the Commission.

Continue Reading FCC Inspections – Transmission Site Fines for Overpower Operation, Unlocked Tower Fences, and Improper STL Operations