Yesterday, it was announced that CBS would be operating Yahoo’s Launchcast Internet Radio operations.  This is ironic as the industry seems to have now come full circle, as Yahoo’s Internet Radio operations include the interests that they received when they purchased Mark Cuban’s Broadcast.com, which had a substantial part of its business in the streaming of terrestrial radio stations.  While Yahoo long ago stopped streaming the broadcast signals retransmitted by Broadcast.com, it is ironic that a traditional broadcast company has now taken much of the control of not only the Internet radio operations of Yahoo, but also those of AOL and Last.FM (see our post on the AOL deal here).  Explicitly blamed for Yahoo’s decision to turn its Internet radio operations over to CBS was, according to press reports, its concerns over the Internet radio royalties as set by the Copyright Royalty Board last year, a decision about which we have written extensively.  How will this transaction affect the debate over those royalties?

Initially, this action once again shows that assumptions about the state of the Internet radio industry that colored the perception of the Copyright Royalty Judges in their determination of the royalty rates were incorrect.  While not explicitly part of the grounds of the CRB decision on the webcaster’s royalty, there was much testimony in the CRB proceeding that suggested that Internet radio brought customers to portal sites, and that higher royalties were justified by the value that these visitors added to the portals when the listeners engaged in other activities at the portal.   Yet, that model now seems in tatters, as both AOL and Yahoo have turned their operations over to CBS.  This seems to emphatically demonstrate that the economics of Internet radio operations, whether stand-alone or as part of portals, simply do not justify the royalties that were imposed (see our discussion of the Pandora economic and the royalties here).

Continue Reading CBS to Run Yahoo Launchcast Internet Radio – How It Impacts the Royalty Debate

Today FCC Chairman Kevin J. Martin released a tentative agenda for the scheduled December 18, 2008 Open Commission Meeting.  The tentative agenda, available here, contains a number of items that the Chairman has circulated to the other Commissioners for consideration at the upcoming Open Meeting.  Whether these items actually make it to the agenda for that meeting remains to be seen, as the formal agenda for the meeting will not be released until one week before the meeting.  Of particular interest to broadcasters are the following items:

  • Program Carriage and Program Access–  A Report and Order modifying the program carriage rules and procedures and a Further Notice of Proposed Rulemaking seeking comment on the practices of programmers and broadcasters.
  • DTV Translators–  A Notice of Proposed Rulemaking proposing a new digital television translator service for analog loss areas.
  • DTV Consumer Education Notice of Apparent Liability–  An omnibus Notice of Apparent Liability against various companies for apparent violations of the Commission’s DTV consumer education requirements.

It is unknown whether the Notice of Apparent Liability for Forfeiture (FCC-speak for a fine) will include broadcast television stations, retailers, multi-channel video providers, or some combination of all three, but the fact that the FCC intends to fine parties for failing to comply with the FCC’s DTV education rules is a strong indication of how seriously it is taking the DTV transition.   

On October 13, 2008, David Oxenford conducted a session at the Kansas Association of Broadcasters Annual Convention, held in Wichita.  The session, called "What Else Can Washington Do For You?" focused on regulatory and legislative developments that affect broadcasters. 

A copy of the PowerPoint presentation used at this session will be available here soon.

On October 3, 2008, David Oxenford moderated a panel at the Digital Music Forum West in Los Angeles.  The panel, titled Digital Rights and Clearances, discussed what rights were necessary for the use of music by online digital services, in movie and video production, and for other purposes.  Panelist included,  Kevin Arnold, CEO, IODA; Richard Conlon, VP, New Media & Strategic Development, BMI; Maurice Russell, VP, Bus. & Licensing, Harry Fox Agency; Patrick Sullivan, President & CEO, RightsFlow LLC; Les Watkins, SVP, Business Affairs, Music Reports; Bob Kohn, Co-Founder, Chairman & CEO, RoyaltyShare, Inc.
 

A video of this panel can be viewed here.

Last week, the FCC granted a brief extension of time in which to file comments on the proposed increase in power for the HD Radio operations of FM stations.  We wrote about the request for comments here and here.  Comments will address the requests of those who want higher power for their digital operations in order to increase building penetration of the HD radio signals (which have proven difficult to receive in some brick and steel buildings) and otherwise fill in coverage areas, and will also include submissions of those who are concerned about the potential interference to adjacent channel stations. The later includes NPR Labs, which produced a set of maps, available here, computing the potential interference that higher power HD operations could cause to a number of stations.  Especially for stations which rely on coverage beyond their protected service areas, and which operate close to adjacent channel stations that run HD operations, the proposed increase could have a substantial impact.   With the proposal for shared time operations that has now been highlighted by the Ion Media applications about which we wrote here, the diversity that comes from such fringe stations will have to be balanced against the diversity that can come from multicast digital channels.  Comments are now due on December 5, with reply comments due January 12.

 

This week, an interesting concept has been advanced in a series of applications filed with the FCC.  Ion Media Networks, the successor to Paxson Television, has proposed to transfer some of its broadcast stations to a new company, Urban Television LLP, to be owned 51% by Robert Johnson, the former owner of BET, and 49% by Ion itself.  But, when we say that they are transferring "some" of its stations, we don’t mean that any of its stations are being transferred, but instead only that a piece of its stations are proposed to be transferred.  Ion proposes to continue to own and operate stations in every market where it currently operates, but proposes to sell digital multicast channels to Johnson. Unlike any LMA or other programming agreement, the proposal is to actually take one 6 MHz television channel and break it up so that Ion continues to program one channel with its programming and the Urban Television will program the other channel with its programming, and become the actual license of that portion of the spectrum.  The FCC has accepted the applications and issued a Public Notice, giving parties 30 days to file comments on the proposal. 

It is not unheard of for two licensees to share the same channel – though where it is currently occurs most frequently is in connection with noncommercial broadcasters who share a single radio or TV channel, they divide it by time, so that one licensee operates, say midnight to noon and the other operates from noon to midnight.  Obviously, in these shared-time arrangements, both broadcasters are not operating on the same channel at the same time.  This new proposal, though, does not come out of the blue.  The idea of allowing a broadcaster to sell a digital channel to a different company, has been proposed before, for both Digital Television and Digital HD Radio channels when the original station is multicasting, as a way to increase diversity of ownership.

Continue Reading Splitting a Television Station License – Ion and Robert Johnson Propose a Unique Concept for Increaing Media Ownership

There’s a new top-level domain name ("TLD") on the block, and broadcasters and other media companies will want to protect URLs that include their call signs, unique slogans and positioning statements or other registered marks or names.  The new TLD will be ".tel."  Unlike .com, .net, .org, and other current TLDs that link to websites, the new .tel TLD is designed specifically for access by mobile devices such as the Blackberry and iPhone and will access to the contact information of the holder of the .tel URL without the need for a standard website.  The theory behind the .tel TLD is to allow instant access to contact information without having to access a registrant’s website.  When contact information is accessed via mobile devices, the telephone numbers will appear as "hot links" that will dial those numbers upon touch or selection.  Of course, links to websites may also be provided, but the primary purpose of the TLD is to provide a global contact directory without the need for the user to have Outlook or other address books or for the registrant to have a website.

Beginning December 3, 2008, anyone with a registered trademark or service mark can register a .tel domain name using that mark for a cost estimated to be in the $500 range.  This so-called "sunrise" period will last for two months.  Beginning February 3, 2009, there will be a so-called "landrush" period allowing anyone to register any unregistered .tel domain names, including generic or descriptive marks or names, such as radio.tel or cable.tel, on a first-come, first-served basis.  (Bad faith use of a third party’s trademark will be subject to cancellation under existing domain name dispute procedures.)  The "landrush" period will last until March 23, 2009, after which the .tel TLD will be generally available to anyone at a much reduced fee, currently estimated to be as low as $1.25 per month.

Continue Reading “.tel” Domain Name To Become Available Soon

The FCC this week released the details of its "White Spaces" decision, authorizing the use of both fixed and mobile unlicensed devices within the television spectrum.  In theory, these devices are supposed to be able to sense the existence of television signals so that they can operate on other frequencies and avoid creating interference.  However, as an extra safety measure, the FCC has also required that these devices connect at least once a day with a database of all other protected users of the television spectrum and, by used of geo-location technology, determine what other users are in the area where the "TVBD" (television band device) is being used and operate on frequencies which protect those other users.  Our firm has prepared a memo outlining the full decision.  The Davis Wright Tremaine memo can be found here.  When one reviews the full text of the FCC decision, it becomes pretty clear that we should not look for such devices anytime soon.

While the Commission’s order actually discussed in some detail the question of whether these devices should be permitted to operate before the end of the digital television conversion in February 2009, given the issues that still need to be resolved, this discussion really appears to be an academic one.  First, devices that meet all of the FCC requirements have to be designed and built, and type-accepted by the FCC labs.  In a recent article by Shelly Palmer in his well regarded blog on television issues, he suggests that many engineers are convinced that these devices simply will not work.  When one reviews the FCC requirements, one can see why that might be the case.

Continue Reading Details of White Spaces Decision Released – Don’t Look for Them Soon as There is Lots to Do Before Any Devices Will Be Introduced

The Stephen Colbert Christmas Special begins with Colbert sitting at the piano, writing new Christmas songs.  Why?  He explains that, while he likes all of the old Christmas songs well enough, he’d only get royalties if he wrote the songs, so he’s writing his own.  In a few sentences, Colbert explains the system of broadcast royalties in the United States, and the source of the dispute over the broadcast performance royalty that took up much committee time in the last Congress, and is bound to return in the next Congress in 2009.  As Colbert explains, in the US, the composers get paid when their music is played on a broadcast station. These payments come from the the royalties that broadcast stations pay to ASCAP, BMI and SESAC, the performing rights organizations or "PROs" that represent the composers or the music publishing companies that hold the copyrights to those songs.   But, as Colbert points out, the performers do not get paid when they sing the song on the air.

We’ve written about the controversy about whether or not performers should get a royalty when a song that they perform but did not write, is played on the air.  But Colbert seems to have solved the problem about the performer not getting royalties when their songs are played on the air – simply by writing his own songs. And maybe we’ll be singing these songs at future Christmas parties, paying Colbert royalties, and at the same time explaining broadcast performance royalties to future generations.

Continue Reading Stephen Colbert’s Christmas Special Explains Broadcast Performance Royalties

An FCC decision in a case involving two applicants for a construction permit to construct a new noncommercial television station in Tulsa illustrated an interesting dilemma that can arise from the application of the "point" system that is used to decide comparative cases for new noncommercial stations. We wrote about the point system, here.  In this case, neither of the applicants enjoyed a Section 307(b) preference for superior technical coverage.  And neither had any preferences for being part of a statewide network.  Instead, the only differences between the applicants was that one was a local, established non-profit organization (Oral Roberts University), while the other was not a local group, thus giving ORU 3 points under the comparative system.  The non-local applicant received 2 points as it had no other station in the market.  Thus, Oral Roberts received the grant – despite the fact that it already had another television station in the same city.

Commissioner Copps, while not specifically dissenting from this decision, did point out that the decision might not really be one that served the public.  Is it really better, he asked, that a second television station be awarded to a local group, or would the local community be better served by a new voice – even if that voice was not from a local community organization?  While Commissioner Copps did not mention it, under the comparative hearing system used to evaluate commercial applicants before the adoption of the auction system now in use, favored diversity of ownership (not having other media interests) over local ownership.  Seemingly, almost any system of selection will lead to some anomalous results that may demonstrate the need to reexamine the system from time to time to determine if it really does benefit the public, or if it is simply making arbitrary distinctions between applicants.  This may be one of those cases showing that it is time for a reexamination.