We reported on the settlement under the Webcaster Settlement Act between the NAB and SoundExchange on Internet Radio Royalties. As provided in the Webcaster Settlement Act, that settlement has now been published in the Federal Register, and thus it is available for broadcasters who are streaming their signal on the Internet, or who are streaming other programming on the Internet, to claim coverage under that settlement. To do so, broadcasters who are already streaming must file a notice of Intent to Rely on this settlement, available here, with SoundExchange, by April 2, 2009 – thirty days after the Federal Register publication occurred. Broadcasters who are not now streaming, but who start in the future, must file the election notice within 30 days of the start of their streaming, or they will be bound by the rates established by the Copyright Royalty Board in their 2007 decision (see our post here). The publication sets out several other details of the settlement, set forth below.

The rates: The rates, which represent some savings under the CRB rate for the years between 2007 and 2011, are set forth below.  These rates are "per performance", meaning that the rate is paid on a per song, per listener basis.  If you play 10 songs in an hour, and each song is heard by 10 people, you have 100 performances.  There are companies that provide services to track and report on performances.  See our post, here, for details.  There are also limited exceptions to the full "per performance" reporting, summarized below.  The rates under this agreement are as follows:

 

2006 ……………………………….. $0.0008

2007 ……………………………….. 0.0011

2008 ……………………………….. 0.0014

2009 ……………………………….. 0.0015

2010 ……………………………….. 0.0016

2011 ……………………………….. 0.0017

2012 ……………………………….. 0.0020

2013 ……………………………….. 0.0022

2014 ……………………………….. 0.0023

   2015 ……………………………….. 0.0025

Continue Reading Details of the Broadcaster SoundExchange Settlement on Webcasting Royalties

Perhaps not surprisingly, the FCC has suspended the re-start of the 100-day DTV Countdown Clock, which was to begin tomorrow.  In the FCC’s own words:

"We find that it could be confusing for viewers to see a 100-day countdown beginning on March 4, only to see a different clock in the event that we revise the requirement soon thereafter. Therefore, we temporarily waive the Option Two requirement to air countdown information until the effective date of the relevant rule adopted in the pending rulemaking proceeding…"

Accordingly, those stations following Option Two of the FCC’s DTV consumer education rules should NOT re-start the 100-day countdown clock until further notice.  A copy of the FCC’s public notice can be found here.  Option Two of the consumer education rules is the option that most stations have elected to follow, and includes, among other things, an average of 16 spots per week along with 16 crawls, tickers, snipes, etc. per week.  All other consumer education requirements besides the 100-day countdown clock remain unchanged (at least for the moment).

 

The FCC has released a public notice asking for comment on the procedures that it plans to use for a new FM auction now scheduled to be held in September.  The channels to be included in that auction, and the proposed minimum bids for those channels, can be found on a list released by the Commission, here.  Parties who are interested in bidding for any of these channels will be able to submit short form applications indicating the channels in which they are interested at some point to be determined in the future – probably late Spring or early Summer, so that the FCC can process those applications and receive the necessary upfront payments from parties interested in the auction in time for the auction itself to begin in September.  Thus, parties who are interested in any of these channels should start their due diligence process now, and determine which channels may be of interest, and which channels can actually be built in such a way as to cover areas that an applicant may want to serve, so that they can be ready to file their applications, probably in May or June.

Applications, when filed, will not need to specify a specific transmitter site but, once the auction is over, winning bidders will need to quickly identify and file complete applications containing specific transmitter sites for which they have reasonable assurance.  Thus, they should begin preparations for the auction now.  Applicants who have identified a site can specify that site in their applications to protect it from subsequent applications.  Thus, FM broadcasters should also anticipate a freeze on the filing of any FM technical applications at some point in late Spring in anticipation of the auction, in order to give applicants a stable technical situation so that they can identify usable transmitter sites. 

Continue Reading FCC to Hold Auction for New FM Stations in September

At the end of last year, we wrote about the decision of the Detroit newspapers to go to a 3 day a week publication schedule, and asked the question that we had heard posed by a writer for one of the communications trade publications – "will the FCC rules limiting the cross-ownership of broadcast stations and daily newspapers outlive the newspaper itself."  In the last few weeks, that question has become even more relevant.  The FCC’s decision to relax the cross-ownership restrictions in December 2007 drew widespread condemnation from many big-media opponents, and even attempts to overturn the decision, even though its direct effect was limited to the nation’s largest markets.  One now wonders whether, with the current economic condition of newspapers and broadcast stations, the rules should not be revisited, for purposes of further relaxing those rules, not tightening them.

In the last few weeks, we’ve seen a major newspaper in Denver stop its presses for the last time, and companies owning papers in many major markets, including Minneapolis, Philadelphia and New Haven, all declare bankruptcy.  At the same time, papers in San Francisco and Seattle have warned that they may also shut down if there are not significant savings found or new buyers.  Even venerable papers like the New York Times have been the subject of shut-down rumors, and the Wall Street Journal and other papers in the Rupert Murdoch empire have been said to be dragging down the profits of the News Corporation. 

Continue Reading Will the Newspaper-Broadcast Cross Ownership Rules Outlive the Newspaper?

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.