The Commission this week released an Order exempting certain small cable systems from the requirement that, after the February 2009 digital transition, for a three year period, cable systems carry both an analog version of a broadcast television station’s signal plus the station’s high definition signal.  This dual carriage requirement was imposed so that the cable system would ensure that a version of the station’s signal was available to all subscribers to the system, and so that those who had high definition sets could receive the television signal without "material degradation" of its signal, as required by FCC rules.  As some small systems either did not have the bandwidth to transmit an HDTV signal or could not meet the costs necessary for such carriage, the Commission decided to grant these systems an exemption.  Specifics of the FCC decision and the exemption, and on the background of this ruling, can be found in Davis Wright Tremaine’s Advisory on this order. 

In two recent actions, the FCC has evidenced its concern about the EEO performance of its licensees.  Last week, the Commission’s Enforcement Bureau entered into a Consent Decree with DIRECTV, by which DIRECTV paid the FCC $150,000 in lieu of a fine for the company’s failure to abide by the FCC’s EEO rules by not preparing an Annual EEO Public File Report or submitting a Form 396-C for several years.  The FCC also released a Public Notice announcing changes in the racial categories to be used in FCC Form 395 – the Form breaking down the employees of a broadcaster or cable company by race and gender.  That form has not been filed for years, as its use was prohibited when the FCC EEO rules were declared unconstitutional.  In adopting new EEO rules in 2003, the FCC promised to return the form to use, but has been wrestling with the issue of whether or not the form should be publicly available or whether it should simply used internally by the FCC to collect data about industry employment trends. The adoption of new definitions for the racial categories specified on the form may signal the return of this form.  Together, these actions demonstrate that the FCC has not lessened its concern about EEO in any fashion.

The DIRECTV fine was the result of the company’s failure to prepare Annual EEO Public File Reports or to submit 2003 and 2004 Form 396-C reports – reports that are more detailed versions of the Form 396 filed by broadcasters with their license renewals and the Form 397 Mid-Term Employment report.  The Form 396-C requires that multichannel video providers detail their hiring in the previous year and the outreach efforts made to fill job vacancies, the supplemental efforts that the employment unit has made to educate its community about job openings, and other details on the company’s employment practices.  After review of the company’s efforts, the Commission not only faulted the company for its paperwork failures, but also determined that the company had not engaged in sufficient outreach for all of its employment openings – relying solely on the Internet and on word-of-mouth recruiting for many job openings, which the Commission found to be insufficient.  Broadcasters need to make sure that they do not forget to file their required EEO forms, prepare their annual EEO Annual Public File Report, and engage in wide dissemination of information about all job openings.  Details of the FCC’s EEO rules, policies and requirements applicable to broadcasters can be found in Davis Wright Tremaine’s EEO Advisory.

Continue Reading Big EEO Fines on DIRECTV, and The Return of FCC Form 395B

The FCC has released a Public Notice, warning regulated entities that there are websites that pretend to be the site on which FCC regulatory fees are to be electronically filed.  These so-called "phishing" sites are apparently out to obtain from broadcasters and other entities regulated by the FCC information about their financial accounts.  The Public Notice reminds broadcasters that the site on which fees are to be paid is www.fcc.gov/feefiler.  If you see some other URL address, beware.  Make sure that you are in fact on the FCC’s website before revealing any private financial information.  More on the FCC filing fees can be found in the Davis Wright Tremaine Advisory on the fees, and in our prior posts, here and here. 

Political Broadcasting season is now in full swing, with the Democrats just ending their convention, and the Republicans beginning theirs next week.  Already, we’ve seen disputes about third party attack ads (see our post here), and there are bound to be many more issues about the FCC’s political broadcasting rules that arise during what looks to be a very contentious political season.  For guidance on many political broadcasting issues, you can check out our Political Broadcasting Guide, with discussions of many common political broadcasting issues (including reasonable access, equal opportunities, lowest unit rates, public file issues, and political disclosure statements) in what we hope is an easy to follow question and answer format.   Broadcasters should also remember that the Lowest Unit Rate "political window" opens on September 5, meaning that stations cannot charge political candidates any more than the lowest rate that is charged a commercial advertiser for the same class of time run at the same time as the candidate’s spot. 

We have reminded broadcasters that the Lowest Unit Rate (or "Lowest Unit Charge,"  often abbreviated as" LUC" or "LUR")must be available to all candidates for public office – including state and local candidates.  While state and local candidates have no right of reasonable access (meaning that a station can decide not to sell time to those candidates, or to restrict their purchase of time to particular limited dayparts), if the station sells state and local candidates time, it must be at Lowest Unit Rates during the political window. 

Continue Reading Lowest Unit Rates for Political Candidates Begin on September 5; Get Answers to Political Broadcasting Questions from Our Political Broadcasting Guide

The FCC has released its Public Notice announcing the procedures for submitting Annual Regulatory Fees.  These annual fees are paid by broadcasters and other entities that are regulated by the FCC, essentially for the privilege of being regulated.  We detailed the amount of the fees for broadcasters in our post, here.  Regulatory Fees can already be submitted to the FCC through its on-line filing system or on paper, and some broadcasters have already done so as the Commission’s alerts about the specific fees that each station owes were mailed to broadcasters in the last two weeks (minus the information as to the final filing date).  If your station has not received such a notice, check the mailing address that the FCC has on file for your station, as it may not be accurate.  Today’s Public Notice sets the deadline date for the filing of regulatory fees as September 25.

The payment of regulatory fees is very important, as the failure to pay on time can cause the FCC to impose a "red light" on a licensee – blocking the processing of any application by the licensee.  In fact, in the last few weeks, the FCC has been sending out delinquency notices to licensees claiming that past regulatory fees have not been paid.  We are finding a significant number of these notices are being sent in error, so watch you mailbox carefully and, if you receive a notice that you failed to pay your regulatory fees for past years, and you did in fact do so, get that discrepancy corrected as quickly as possible to avoid the perceived failure from blocking any application that your station may want to file at anytime in the future. And don’t forget to get this year’s fees on file by September 25 to avoid late-fees and potential red-light issues.

The Digital Television conversion has allowed the FCC to reclaim significant portions of the TV spectrum for wireless and public safety uses – television channels above 51 will no longer be used for broadcast TV at the end of the analog to digital transition.  But, as part of the FCC’s Diversity proceeding (see our post here), a proposal dealing with the other end of the TV spectrum is being considered – whether to remove Channels 5 and 6 from the television band and instead use these channels for FM radio.  These channels are adjacent to the lower end of the FM band.  Because of this adjacency, the existence of TV Channel 6 in a market can limit the use of the lowest end of the FM band (used for Noncommercial Educational stations) to avoid interference to the TV station.  Similarly, Channel 6’s audio can be heard on many FM radio receivers, a fact that has recently been used by some LPTV operators to use their stations to deliver an audio service that can be received by FM radios (see our post on this subject).  In comments filed in the Diversity proceeding, parties have taken positions all across the spectrum – from television operators who have opposed using the channel for anything but television, to those suggesting that the channels be entirely cleared of television users and turned into a digital radio service.  Proposals also suggest using the band for LPFM operations, and even for clearing the AM band by assigning AM operators to this band to commence new digital operations.

In comments that our firm submitted on behalf of a group of noncommercial FM radio licensees who also rebroadcast their signals on a number of FM translator stations, we suggested that Channel 6 could provide a home for LPFM operations, instead of trying to squeeze those stations into the existing FM band.  There are currently proposals to squeeze more LPFM stations into the FM band by supplanting some FM translators (see our summary of some of those proposals here).  In these comments in the Diversity proceeding, we pointed out that, as there are currently radios on the market that receive 87.9, 87.7 and even 87.5, using these three channels for LPFM service would provide an immediate home to these stations, and far more opportunity for than LPFM would have in the already congested FM band.  These opportunities would exist even in most of the largest radio markets in the country, except in the handful of markets where a Channel 6 television station will continue to operate after the digital transition.  By adopting this proposal, the service that would be provided by FM translators would not be threatened. 

Continue Reading What to Do With TV Channels 5 and 6 – Proposals to Turn Them Over to Radio Services

The American Issues Project has recently started running a controversial new television ad attacking Barrack Obama for his connections to former Weather Underground figure William Ayers.  The text of the ad is reported here.  While reportedly some cable outlets (including Fox News) have refused to air the ad, numerous broadcast stations are also wondering what the legal implications of running the ad may be.  We have already seen many other attack ads being run by third-party groups – including political parties, long-standing activist groups like Move On.org, as well as from new organizations like American Issues Project which have seemingly been formed recently.  As the use of such ads will no doubt increase as we get closer to the November election, it is important that broadcasters understand the issues that may arise in connection with such ads under various laws dealing with political broadcasting.  Legal issues that must be considered arise not only under FCC rules, but also potentially in civil courts for liability that may arise from the content of the ad.  Broadcast stations are under no obligation to run ads by third party groups, and stations have a full right to reject those ads based on their content.  This is in contrast to ads by Federal candidates, who have a right of reasonable access to all broadcast stations, and whose ads cannot be censored by the stations.  As a candidate’s ad cannot be censored, the station has no liability for its contents.  In contrast, as the station has the full discretion as to whether or not it will run a third-party ad, it could have liability for defamation or other liabilities that might arise from the content of such ads that it decides to accept and put on the air.  

The standards for proving defamation (libel and slander) of a public figure are high, but if the ad does contain some clearly false statements, the standard could in fact be met.   Basically, to have liability, the station needs to run an ad containing a false statement either knowing that the ad is untrue or with "reckless disregard" for the truthfulness of the statements made.  This is referred to as the "malice standard."  Essentially, once a station is put on notice that the ad may be untrue (usually by a letter from the candidate being attacked, or from their lawyers),  the station needs to do their own fact checking to satisfy themselves that there is a basis for the claims made or, theoretically, the station could itself be subject to liability for defamation if the claims prove to be untrue.  A few years ago, some TV stations in Texas ended up having to pay a candidate because they ran an ad by an attack group that was shown to contain false statements, and the ad was run even after the candidate complained that the statements were untrue.  These determinations are often difficult to make as the ad’s creators usually have hundreds of pages of documentation that they say supports their claims, while the person being attacked usually has documentation to refute the claims.  Thus, the determination as to whether or not to run the ad is a decision that each station needs to make after consultation with their lawyers, and after careful review of the spot and the backing documentation.

Continue Reading Independent Groups Start Running Presidential Attack Ads – What Are the Legal Implications for Broadcasters?

The FCC has begun the process of resolving the groups of mutually exclusive noncommercial FM radio applications. In an Order released today, the FCC decided 12 groups of mutually exclusive applications ("MX Groups") by analyzing only one decisional factor – the question of "fair distribution" of noncommercial service.  As we wrote when we set out the criteria for FCC decision making , when the FCC chooses between mutually exclusive groups of applications for new Noncommercial Educational ("NCE") stations, the initial level of analysis is a consideration of whether the application serves extensive areas where there is little other noncommercial radio service.  If a station covers any area that currently has fewer than 2 noncommercial radio services, and that area exceeds 10% of the proposed service area of the applicant covering more than 2000 people, a conclusive preference will be awarded over another applicant who does not meet that threshold.   All of today’s decisions were made based on this criteria.

One interesting aspect of the decisions was how many cases were essentially won by default – as a number of applicants did not bother to compute the areas and the populations that they served.  Where that information was not provided in the initial application as submitted by the applicant, the Commission gave the applicant no credit for any service. So even if an applicant submitted an application that would in reality serve underserved areas, if they did not claim that service in their initial application, they got no credit for the service.  The FCC did not fill in any blanks in the applications.  So, if you are planning to claim credit for anything in an application – be sure to do it up front when the application is filed, or you’ll get no credit.

Continue Reading FCC Begins to Resolve Mutually Exclusive Noncommercial FM Radio Applications

The Washington Post today ran an article on the continuing Internet radio royalty battle – highlighting the service Pandora and the fact that it will likely go out of business if the current dispute about royalties is not resolved.  We wrote (here and here) about many of these same issues in our coverage of the recent Senate Judiciary Committee hearings.  What is notable about the article is its mention of settlement discussions that are being conducted under the supervision of Congressman Berman of the House Judiciary Committee.  But the article also makes clear that the disconnect continues between the perception of the recording industry and of the Internet radio industry on the revenue potential of Internet radio.  The differing perception continues to make settlement difficult, as the recording industry keeps complaining that the industry has not done enough to monetize their operations – and the Internet radio companies express frustration at that attitude.  If there was some way of making more money from Internet radio operations, doesn’t the recording industry think that the webcasters would take advantage of those practices?  Why would they leave money on the table if they could figure out a way to make it?  If they could make money, they would – though the recording industry seems not to believe it.

The other issue that the article overlooks is that the settlement discussions that are going on are apparently the same settlement discussions referenced at the Senate Judiciary Committee hearing – those between the recording industry and the large webcasters.  But there are many other groups involved in webcasting – the small commercial webcasters that I have worked with in the Copyright Royalty Board proceeding, the broadcasters who also stream their programs, and noncommercial webcasters (including NPR affiliates, religious broadcasters and other noncommercial entities).  There is no discussion in the article of any talks with them and, as set out in the written testimony at the Judiciary Committee of Kurt Hanson of Accuradio, the small commercial webcasters have heard nothing from SoundExchange in months.  A resolution by the large webcasters, unless it is all encompassing and on terms that all parties can live with (which seems unlikely given the diverse interests involved), will not resolve the dispute over the CRB decision.  So the battle continues.

We’ve written extensively about the FCC’s proposals to turn back the hands of time, and return to the regulatory scheme that existed prior to the early 1980s by mandating that broadcasters serve their local communities – in a manner dictated by the FCC.  In the 1980s, the FCC decided that it did not need to micromanage the programming of broadcasters, as marketplace forces would ensure that stations met the public interest.  If they did not provide the services that people wanted, the FCC reasoned in the 1980s, the people would stop listening or watching – hurting the broadcaster who was not serving its community in the pocketbook.  While the FCC is now looking to retreat from this position – apparently believing that the market is no longer capable of insuring that broadcasters serve their communities, evidence that the marketplace will provide localism is now available on that most unregulated of media – the Internet.  Tomorrow, the Huffington Post, a website that had heretofore concentrated on national stories, will be launching a version of its product targeted to Chicago and, according to a story on American Public Media’s Marketplace, it will be expanding by providing local service in many other markets in the next 18 months.

This is not the only evidence that the Internet is going local.  Local news sites are springing up in many communities. quite often with no ties to "established" media.  Micro-targeting of on-line ad sales shows that marketers know that, if they offer a local product, they need to reach local people to buy that product, and the Net more and more can provide that targeting.  Many websites, from registration information, IP address or other identifying information, greet users of a site with localized information – weather, TV listings or event information for the particular user’s hometown.  Thus, while the FCC seems to believe that that marketplace is incapable of guaranteeing local content to serve local communities, the actions of companies on the Internet demonstrate that, if there is a need for a local service, it will be provided – more efficiently and in a way more likely to provide the public with the service that it demands – if it is left to the market to provide.  The Internet does not seem to need the government to dictate how that local service is provided – nor should the broadcaster.  Particularly now, with the broadcast industry hurting economically and facing more competition than ever before, the FCC’s actions to seek mandated localism seems to be the wrong solution to a nonexistent problem – and one that will hopefully fade away in the coming months.