The FCC’s Order and Notice of Proposed Rulemaking implementing changes resulting from the Congressional delay in the DTV transition deadline and seeking comment on a number of proposed rule changes has been published in the Federal Register.  Comments on the Commission’s proposed rules, including changes to the transition procedures that would restrict the ability of television stations to terminate the analog operations, must be filed by Wednesday  March 4, 2009.  The Commission’s rule making is on a fast track as it must be completed by March 13th.  Accordingly, interested parties should prepare and file comments quickly.  Comments can be filed electronically through the FCC’s ECFS database found here.   

 

In the last two weeks, we have seen Capitol Hill rallies by the Free Radio Alliance, opposing what they term the “performance tax” on radio, and yesterday by the Music First Coalition, trying to persuade Congress to adopt a performance royalty on the use of sound recordings for the over-the-air signal of broadcast stations. We’ve written about the theories as to why a performance royalty on sound recordings should or should not be paid by broadcasters, but one question that now seems to be gaining more significance is the most practical of all questions – if a performance royalty is adopted, how would broadcasters pay for it?

 The recording industry and some Congressional supporters have argued in the past that, if the royalty was adopted, stations could simply raise their advertising rates to get the money to pay for the royalty. While we’ve always questioned that assumption (as, if broadcasters could get more money for their advertising spots, why wouldn’t they be doing so now simply to maximize revenues?), that question is even harder to answer in today’s radio environment. With the current recession, radio is reporting sales declines of as much as 20% from the prior year. Layoffs are hitting stations in almost every market. In this environment, it is difficult to imagine how any significant royalty could be paid by broadcasters without eating into their fundamental ability to serve the public – and perhaps to threaten the very existence of many music-intensive stations. And the structure of the royalty, as proposed in the pending legislation, makes the question of affordability even harder to address.

Continue Reading Rallies on Capitol Hill on the Performance Royalty – Who Will Pay?

The week before last, we wrote that FCC’s filing fees for applications submitted to the Commission would be going up on February 18, and included a link to the FCC Fee Filing Guide for the new fees.  Well, shortly before the supposed effective date, the Filing Guide disappeared from the FCC website, and the new fees have not been programmed into the FCC’s electronic filing system.  So those new fees have not become effective yet – though we would expect that they will be soon.  Stay tuned for more information. 

The FCC late Friday released an Order and Notice of Proposed Rulemaking addressing a number of issues which arose as a result of the Congressional delay in the DTV transition deadline from February 17 until June 12.  In many cases, the actions taken in the Order are ministerial – e.g. changing the expiration dates on digital construction permits from February to June.  But there were also a number of substantive issues addressed by the order – including the public education requirements for the remainder of the transition and the potential for delaying any further terminations of analog service until at least April, and subjecting any planned termination of analog service before June 12 to additional scrutiny to determine if that termination would serve the public interest.   This is despite what many have termed a relatively uneventful termination of analog service on February 17 by over 400 stations nationwide.  Comments on this change in the transition procedures are to be filed on an expedited basis – within 5 days of the publication of this order in the Federal Register.

The delay of the early termination of service is likely to cause the most controversy, as Senate Republicans backed the transition delay only after specifically including in the legislation language that seemingly permitted such transitions under the rules that were in place at the time that the legislation was adopted (see our post here).  This would seemingly have permitted stations to terminate analog service within 90 days of the June 12 deadline, provided they had given their listeners at least 30 days notice of their plans.  A number of stations have started to provide that notice, planning a termination in March. But the Commission has tentatively concluded that it can amend the process for termination, and has set the date of March 17 for a notice to be filed at the FCC by all stations that want to terminate analog service before June 12.  As the Commission plans to continue to require 30 days public notice of the termination, and as they won’t allow any termination decision to become official until the March 17 filing, the earliest a station can terminate analog service under this proposal (absent a technical issue or other extreme circumstance) would be April 16. 

Continue Reading FCC Releases More Details of Delayed DTV Transition – No More DTV Conversions Until April?

In a decision released this week, the FCC granted the application of an FM station for license renewal, denying petitions filed by two former employees who contended that the station had violated a number of FCC rules.  After the FCC inspected the station and found only a few minor issues with the station’s public file, the license renewal was granted.  The FCC action was itself routine, but what it points out is that stations need to be very careful in their dealings with employees, especially employees who are about to leave their service.  This is not the first FCC case that was brought based on allegations made by former employees, and it will no doubt not be the last.  Putting aside the merits of the claims made in the complaints, the station had to endure a delayed renewal and no doubt significant legal expenses in bringing the matter to a resolution – which perhaps may have been avoided had there been better relationships with the former employees .  A few weeks ago, we wrote about the need to handle lay-offs and reductions in force in a manner that is least likely to cause legal problems for the station, and pointed to a memo from Davis Wright Tremaine’s employment law practice that highlighted some considerations to keep in mind.  That memo is probably worth review once again in these troubling economic times where layoffs have become the norm at many broadcast stations.

The case also highlights the need for the broadcaster to be absolutely candid and forthright in its dealings with the FCC and the public.  A broadcaster may be tempted to fudge on certifications on FCC applications as to issues like whether it timely placed documents into the public file, or whether it did all the EEO outreach that was required for all of its job openings.  But, beyond the simple fact that you should tell the truth, there are usually employees that know what’s happening at a station.  And, one day, those employees could become "disgruntled" (funny that no one ever talks about a "gruntled" employee), and seemingly innocent certifications that ignored some minor transgression can be blown up into a major issue – claims of misrepresentation or false certification which can cost broadcasters their licenses.  The admission of a missed deadline, incomplete public file or similar issue will at worst bring a fine, while the false certification can lead to much more.  Be candid, treat employees well – and stay out of trouble.

The FCC has an open proceeding pending to allow AM stations to use FM translators.  As we have written, while this proceeding continues, the Commission is allowing AM stations to rebroadcast their signals on FM translators on under Special Temporary Authority.  In a case decided today, the FCC made clear that this is only permitted where the translator already is an authorized facility.  In this case, an applicant requested that the FCC grant it temporary authority to operate an FM translator on a frequency where no authorization has been granted or even applied for.  The Commission’s staff found that it had no authority to authorize such an AM station to put its signal on the FM band unless there was an authorized translator that could be used, or until the full Commission decided differently in the pending proceeding and allows AM stations to apply for new translators.

While this seems like a fairly straightforward decision, there is one interesting issue noted in the decision.  The applicant claimed that the FCC could authorize an FM translator on a temporary basis if the public interest supports it, citing a case in Nevada where the FCC authorized the temporary operation of a Low Power FM station for which no authorization had been filed.  We wrote about that case here, and the press suggestions that this application was granted at the request of a Nevada Senator even though it was not within the normal FCC processes.  In the case released today, the Commission’s staff denied that the Nevada case provided any benefits to the applicant – stating that the Nevada decision was an unpublished decision with no precedential value.  Perhaps the decision also reflects the change of administration – to one that promises to be more observant of established processes and to make decisions based on reasoned decision-making.  

The FCC today issued two fines to stations who violated the FCC’s rule against airing phone calls for which permission had not been received before the call was either taped for broadcast or aired live.  We’ve written about other fines for the violation of this rule, Section 73.1206, many times (see here, here, and here).  What was interesting about the new cases is that they made clear that a station needs to get permission to record or broadcast the phone call even before the person at the other end of the line says "hello."  

In one case, the station was broadcasting using a tape delay.  The station placed a call to a local restaurant and, when the person at the other end of the line said hello, the station DJ informed the restaurant employee that he was being broadcast and asked if that was OK.  The person responded "yep."  But he changed his mind later in the call.  The station claimed that, had the person not given permission, the tape delay would have allowed the call to be dumped but, as permission was given, the station continued to run with the conversation on the air. The FCC found that insufficient, as permission had not been received prior to the person saying hello.  The second case was much more straightforward – a wake up call by the station to a randomly selected phone number.  While the station immediately informed the person who answered the phone that the call was on the air – that did not happen until the recipient of the call had already said hello.  In the first case, the fine was $6000 – in the second, $3200.

Continue Reading More Fines for Stations That Broadcast Telephone Conversations Without Prior Permission – Permission After “Hello” Is Too Late

Many television stations are making the conversion to all-digital operations today (see our post here for details).  These stations should remember that the DTV Consumer Education efforts that are currently in place apply to both the analog channel and the primary digital channel, and thus will continue after the conversion. Based on the current rules, the obligation to continue the education efforts extend through March 31st. So even if stations shut off their analog signal today, the digital station should continue airing the 16 PSAs per week, 16 crawls per week, the 30 minute long format program, etc., on their primary digital channel. Similarly, under the current rules, the stations all still need to file a Form 388 on April 10th reporting on the First Quarter efforts.  Our memo detailing these efforts can be found here. 

Presumably, the FCC will be providing further guidance on the consumer education rules, but given that the existing rules contemplate that DTV stations will continue these general consumer education efforts past the hard date transition, with the transition deadline now extended through June 12, these rules may well be changed to require that the education efforts extend beyond the current quarter through June or perhaps beyond.  So watch for further information.
 

While all the details are not out yet, the trade press has been filled with announcements this evening reporting that SoundExchange and the National Association of Broadcasters have reached a deal on Internet Radio Royalties.  This deal will apparently settle the royalty dispute between broadcasters and SoundExchange for royalties covering 2006-2010 which arose from the 2007 Copyright Royalty Board decision, as well as the upcoming proceeding for the royalties for 2011-2015.  According to the press reports, the royalties are slightly reduced from those decided by the CRB for the remainder of the current period, and continue to rise for the period 2011-2015 until they reach $.0025 per performance in 2015.  According to the press release issued by the parties, there was also an agreement between the NAB and the four major labels that would waive the limits on the use of music by broadcasters that are imposed by the Digital Millennium Copyright Act.

These limits, referred to as the performance complement, set out requirements on how many songs from the same artist or same CD can be played within given time periods which, if not observed, can disqualify a webcast from qualifying for the statutory license.  If a webcaster cannot rely on the statutory license, it would have to negotiate with each copyright holder for the rights to use the music that it plays.  The performance complement imposed requirements including:

  • No preannouncing when a song will play
  • 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
  • Identify song, artist and CD title in writing on the website as the song is being played

It will be interesting to see the details of this agreement setting out what aspects of these rules are being waived.

Continue Reading SoundExchange and NAB Announce Settlement on Internet Radio Royalties

With February 17 only two days away – when all television stations had planned to be terminating their analog service until Congress passed the extension of the conversion deadline until June 12 – many stations are still planning to convert to fully digital operations on that date.  In the last few days, we have seen a flurry of FCC orders about the conversion – including one issued late Friday night modifying requirements that had previously been announced, including the requirement that stations providing analog nightlight service provide emergency information in Spanish.  As stations complained that they did not have the ability to translate their emergency information into Spanish, the FCC dropped the requirement (though still requiring information about the DTV transition to be broadcast in English and Spanish, probably assuming that Spanish-language PSAs providing the necessary information can be obtained from the NAB or other broadcast groups).  That order also officially extended all digital construction permits that would have otherwise expired on February 17, and extended the conditions that are on many of the permits prohibiting digital operations on their final digital channels until the new transition deadline – unless these stations get explicit permission from the FCC to transition early by showing that they will not cause any interference to other stations when they operate on their new digital channels.

The Commission also has been publishing lists of the stations that had intended to go all-digital by February 17 despite the extension.   First, the Commission released a Public Notice of all stations that had initially indicated that they would go silent, with a market-by-market analysis of which stations would go all-digital on February 17 (marked in red) and which would continue in analog.  After analyzing that list, the Commission issued another Public Notice, with a list of stations that could not go all-digital without submitting certifications that they would meet certain consumer education requirements after the transition – including having at least one commercial station in a market continuing to broadcast a nightlight service that not only included information about the digital transition, but also news and emergency information, for at least 60 days.  the certifications also required having a local call center for those who have questions about the transition, having a walk-in center where people can come for assistance with their digital converters, and otherwise taking steps to publicize the transition.  Stations either needed to make these certifications, provide another public interest reason why they had to terminate analog operations on February 17, or agree to continue their analog operations.

Continue Reading Countdown to February 17 – Some TV Stations Still Going All-Digital Despite the Extension of the Conversion Deadline