On October 8, 2009, David Oxenford moderated a panel at the Digital Music Forum West in Los Angeles on the Future of Internet Radio.  Panelists included Kurt Hanson, the publisher of the Radio and Internet Newsletter; Johnie Floater, General Manager of Media for Live 365; and Jim Rondinelli, SVP of Strategic Development at Slacker.  The panel discussed the business of Internet radio, as well as the issue of Internet Radio royalties. 

On October 6, 2009, David Oxenford participated in a panel called "Post-Millennium Analysis: The DMCA in the 21st Century" at the Future of Music Coalition’s Policy Summit in Washington, DC.  Other panelists included David Carson, General Counsel of the US Copyright Office, and Mitch Glazer, Executive Vice President, Government and Industry Relations for the RIAA.  The panel discussed, among other topics, webcasting royalties and the proposed broadcast performance royalty, and the safe harbor provisions of the DMCA for services which allow the posting of user-generated content.

David Oxenford presented on the topic "The View from Washington –Issues Posed by the DTV Transition" at the Columbia Institute for Tele-Information Symposium Digital TV Transitions: DTV Switchover, Mobile TV, IPTV Lessons and Projections, held at Columbia University in New York City on October 2, 2009.  David discussed issues including low power television’s continuing transition, the possible use of TV Channel 6 for radio, DTV reception issues in major markets, and the FCC’s OTARD rules restricting zoning and land use regulations on home television antennas.

On September 25, 2009, David Oxenford moderated a panel at the NAB Radio Show in Philadelphia called "The Day the Music Died – Streaming, The Performance Tax and Other Copyright Issues."  In addition to the music royalties involved in webcasting and the possible broadcast performance royalty, the panel discussed other copyright issues, including the state of the current negotiations between the Radio Music Licensing Committee and ASCAP and BMI over composer’s royalties for broadcast stations, and issues about licensing music for podcast and mobile applications.  Panelists included Bill Velez, head of the Radio Music Licensing Committee, which is conducting the ASCAP and BMI negotiations, and Jack Donlevie, the General Counsel of Entercom, who was involved in the negotiations of the Broadcaster-SoundExchange settlement on Internet Radio Royalties.

Many broadcasters have had the conception that there are FCC rules against liquor advertising,  As we wrote in 2007, the FCC has never directly regulated liquor ads.  Many years ago, the FCC did ask broadcasters seeking a license if they would rely on the NAB Code of voluntary conduct, which set out limits on broadcaster advertising for alcoholic beverages (essentially forbidding hard liquor ads).  When the Code was declared unconstitutional in the 1980s, there was no longer any FCC review, direct or indirect, of any alcoholic beverage advertising.  But that is not to say that there were no restrictions, as many programming providers and rights holders themselves limited the kinds of ads that could accompany their programs and, as we wrote in our previous post, the alcoholic beverage trade associations had voluntary codes of conduct, which the FTC looks to in determining whether advertising is an unfair trade practice.  The rightsholder restrictions were demonstrated this past week, when the University of Wisconsin reportedly banned beer advertising on broadcast coverage of its school’s football games.  Private contracts from program suppliers and rights holders, including sports programming from schools and colleges, often include restrictions against certain types of advertising which, if breached, can carry contractual penalties including the potential for the cancellation of a station’s authority to continue to carry the programming.  Especially where such rights were the subject of competitive bargaining, broadcasters want to insure that they do not violate these restrictions and put their valuable programming rights at risk.

Some of the broadest restrictions on advertising accompany sports programs.  On Friday, there was a story in Inside Radio (subscription required) about the NCAA’s requirements for broadcast advertising.  With college football season up us, we thought that we’d look at some of those advertising restrictions.  Those restrictions can be found on the NCAA website, here.  The NCAA has a list of specific products that are permitted to be advertised, with guidelines on how those presentations should be made when the product is pitched.  In addition, the list includes certain products that should not be advertised on NCAA games.  For instance, while beer advertising is permitted, the NCAA says that such ads should not take up more than 60 seconds of commercial time per hour (one 60 second ad or two 30 second ads).  The ads should feature no "gratuitous and overly suggestive sexual innuendo, no displays of disorderly, reckless or destructive behavior."  The ads also should include a "drink responsibly" message.  Hard liquor, on the other hand, cannot be advertised in NCAA programs.  Similarly, there are prohibitions on gambling ads of any kind (including ads for casinos or race tracks); firearms; adult entertainment locations including pool halls; adult movies and video games (with NC-17 ratings); ads promoting any products containing NCAA banned substances (including ginseng); and ads for controversial and political issues.  

Continue Reading No FCC Rules Against Beer Ads, But NCAA and Other Program Suppliers May Have Their Own Limits

An FCC decision released today reminds broadcasters of the need to notify the FCC of the completion of construction of a new broadcast auxiliary station.  Studio Transmitter Links (STL) and Remote Pickups (RPU) have for several years been licensed through the FCC’s Wireless Bureau, rather than through the Media Bureau.  Unlike a grant of authority to construct a broadcast station, where the new authorization is granted in the form of a construction permit, when the Wireless Bureau grants a new authorization, it is in the form of a license.  Most broadcasters think of a license as something given to a station that is already constructed and complete. The Wireless Bureau’s grant of the license, however, is conditional on the operator providing the FCC with notification upon the completion of construction within a specified period.  If no such notification is provided within the specified period (18 months for most broadcast auxiliaries, but only 12 months for some), and no extension is requested, the Wireless Bureau will automatically issue a public notice canceling the license (see the FCC Wireless Bureau website for details on how to file the notification of construction or extension request).  If the licensee does not request reconsideration of the cancellation of the license within 30 days providing evidence of timely construction, the cancellation will become final.  To operate with the facilities that had been authorized, the licensee would then have to file for a new license – starting the authorization process over from the beginning.  If the auxiliary had in fact been constructed, to continue to use it while the new application is pending, Special Temporary Authority (an "STA") would be required.

In 2006, when announcing the system that automatically generates the termination notice, the Wireless Bureau issued a Public Notice explaining the procedures that it would use.  The Commission states that its system will automatically generate a letter to the licensee providing notification of the cancellation and the 30 day reconsideration period.  Importantly, the Commission reminds licensees to keep their addresses in the FCC’s systems current, as the mere fact that the letter did not get to the licensee at the correct address will not be an excuse for an expired license.  But having a correct address gives the licensee a better chance of getting the notice of cancellation if they inadvertently forget to file their notification of construction.  So remember the dates, and remember to keep your address up to date in the FCC’s records.

In the next few days, concerns about the protection of children from indecency and violence could lead to a report from the FCC to Congress urging use of the V Chip and other parental controls in devices other than television sets.  Remarks several weeks ago by FCC Chair Julius Genachowski suggesting that the FCC might want to look at content regulation beyond the broadcast medium, a view reiterated in an interview yesterday in TV NewsCheck, also suggest that  concerns about the exposure of children to indecency and other troubling programming on cable, online and by wireless devices may lead the FCC into unprecedented extensions of its regulation of entertainment content beyond the broadcast media.  An article today from Bloomberg News confirms that the FCC will be starting an inquiry to see if the television program ratings should be extended to cable and wireless entertainment services.  This extension of Federal regulation to protect children is occurring at the same time that similar concerns are being expressed by state legislatures, including the adoption of a recent law in Maine that effectively prohibits direct marketing to minors.

The report due this week follows a Notice of Inquiry issued by the Commission in March, as required by the Child Safe Viewing Act, legislation passed by Congress.  The law required that the FCC solicit public comment on "advanced blocking technology", the next generation of the V Chip, to see if these technologies can and should be extended to video programming other than broadcast television, including online communications, wireless communications (including video delivered to mobile  devices), DVRs and other video recorders, DVD players, and cable television.  The FCC Notice also asked why the current V Chip has seemingly not been used much by parents.  The FCC even asks if rules should be extended to video games – which were not specifically named in the legislation.  This would seemingly extend the FCC’s jurisdiction far beyond its current limits.  The FCC’s report is due by August 29. 

Continue Reading Protection of Children Prompts Potential FCC Regulation of Internet and Wireless Video Programming and Enhanced State Privacy Rules

A request for advertising rates by an ad agency representing the Mini Cooper serves as a reminder to broadcasters of the recently-imposed obligation to insure that broadcast advertisers do not discriminate on the basis of race or gender.  As we wrote several months ago, the FCC has adopted a new requirement that a broadcaster certify at license renewal time that their advertising contracts require advertisers certify that they were not making advertising decisions based on the race or gender of the audience of the broadcast station.  This was to eliminate the "no urban/no Spanish" dictates that many felt were a discriminatory part of the advertising landscape.  As demonstrated by the controversy that erupted when this request for rates was circulated, stations need to insure that their contracts contain language prohibiting discrimination in advertising buys, as any such dictates will not be a secret.  And once they get out, if a station has run a campaign purchased by an advertiser who had included such dictates, the station running the campaign may have difficulty in making the required certification as the station knows that the actions of the advertiser contradict any certifications that the advertiser may have made in signing the station advertising contract containing the required certifications.

Our earlier post on the issue suggested some language to include in an advertising contract disclaimer, and also discussed the issue of the positive use of racial or gender advertising specifications for ads targeting minority and gender specific audiences.  But the issue in the Mini Cooper case makes clear that many in the advertising community, and probably many in the media community, do not know about the adoption of the FCC’s policy, or the proposal to extend the policy to cable advertising.  It is also interesting to note that the FCC has refused to provide more specific guidance on this rule, not even specifying the language that should be used in contracts.  Nor has the new license renewal form containing the required certification that the broadcaster must make about his compliance with this rule been released, making it unclear if this form has even passed review by the Office of Management and Budget under the Paperwork Reduction Act. 

Continue Reading Mini Cooper Ad Request Reminds Broadcasters of No Urban Dictate Certification

The question of when a digital music service is “interactive” and therefore requires direct negotiations with a copyright holder in order to secure permission to use a sound recording is a difficult one that has been debated since the Digital Millennium Copyright Act was adopted in 1998. In a decision of the Second Circuit Court of Appeals released today, upholding a jury decision in 2007, the Court concluded that Yahoo’s Launchcast service (now operated by CBS) is not so “interactive” as to take it outside of the statutory royalty despite the fact that the service does customize its music offerings to the tastes of individual listeners. To reach its decision, the Court went through an extensive analysis of both the history of the sound recording copyright and of the details of the criteria used by Launchcast to select music for a stream sent to a specific user. By determining that the service is not interactive, the service need only pay the SoundExchange statutory royalty to secure permission to use all legally recorded and publicly released music.  Had the service been found to be interactive within the meaning of the statute, the service would have to negotiate with each sound recording copyright holder for each and every song that it wanted to use on its service to get specific rights to use each song – potentially resulting in hundreds of negotiations and undoubtedly higher fees than those paid under the statutory license.

The issue in the case turned on an analysis of the DMCA’s definition of an interactive service.  The statute defines an interactive service as one where a user can select a specific song or “receive a transmission of a program specially created for the recipient.” It is clear that Launchcast did not allow a user to request and hear a specific song.  But, by specifying a genre of music, and by specifying favorite artists and songs and rating other songs played by the service, a listener could influence the music that was provided to it.  Was this ability to influence the music sufficient to make it an “interactive service” and thus take it out of the coverage of the statutory royalty?

Continue Reading Court of Appeals Determines that Launchcast is Not an Interactive Service – Thus Not Needing Direct Licenses From the Record Labels

The Commission today announced the agenda for its August 27, 2009 FCC Open Meeting.  The agenda contains two Notices of Inquiry involving Wireless Telecommunications matters, as well as a Notice of Inquiry Notice of Inquiry about protecting American consumers by ensuring sufficient access to information about communications services.  The first of the Wireless NOIs seeks input regarding the factors that encourage innovation and investment in wireless services and aims to identify concrete steps the Commission can take to support and encourage further innovation and investment in the area, while the second solicits info for the FCC’s next annual report to Congress on the status of competition in the mobile wireless market.  A copy of the agenda is available here.

So there are no proposed orders on deck for adoption and no radical agenda items at this month’s meeting, but rather a few new proceedings as the new Commission starts to get its sea legs.  We’ll see if September brings any Media issues to the table.  As we’ve written earlier there are plenty already in the pipeline.