In a decision released last week, the FCC imposed a fine of $4000 on a broadcaster licensed to a community in the state of Arkansas for airing an advertisement for the Missouri State Lottery.  In this case, a station licensed to Arkansas ran a remote broadcast from a store in Missouri.  During the course of the remote, the on-air announcer invited listeners to come to the store and made some not-too-subtle remarks implying that, when they did, they could buy Missouri lottery tickets.  As there is a statutory provision prohibiting a station located in one state from running an ad for a lottery in another state if its own state does not have a lottery, the Commission issued this fine.

This ban is based on a statute passed  by Congress, and approved by a Supreme Court decision 15 years ago – finding a compelling state interest in protecting the citizens of states that ban gambling from allowing stations in their states from advertising that prohibited activity.  Of course, in many cases, a station licensed to one state may be heard (and may in fact be physically located) in another state.  Even so, the city of license is what counts – so a station has to observe the laws of that state.  In some cases, that can mean that there are different rules that apply to different stations in the same cluster (and possibly located in the same building, with advertising being sold by the same sales people).

Continue Reading No State Lottery in Your State? – No Gambling Ads Even For a State Lottery In a Nearby State

The FCC today provided two more examples of its policy that virtually any sort of interview program is going to be deemed a "bona fide news interview program" exempt from any claim of equal opportunities (or "equal time" as it is commonly referred to) if the program features an appearance by a political candidate. In the decisions released today, the FCC declared that the 700 Club produced by the Christian Broadcasting Network (decision here) and TMZ produced by Telepictures Productions (decision here), both syndicated across the country, were analogous to programs like Entertainment Tonight, which the FCC had previously found to be an exempt program.  While these programs may focus on some unique aspect of the news or current affairs, the fact that they cover the candidates with their own particular slant (entertainment news, music news or whatever) does not prevent them from being considered bona fide news interview programs.  Where the coverage of the candidate is done based on good faith determinations of what is newsworthy rather than to politically favor the candidate, and where the programming remains under the control of the program producers and not the candidate, the programming is considered exempt from equal opportunities.  This is fully consistent with past Commission policy which we have written about many times before (see, for instance, our post on the evolution of this exemption in the context of political debates, here, and our posts on the candidacies of Fred Thompson and Stephen Colbert).  Thus, while these decisions are not controversial, they do raise some questions that broadcasters and candidates should ponder.

The first interesting question is raised by a paragraph included in both of the decisions released today.  The paragraph warns licensees that, if they are carrying syndicated programming that contains an appearance by a political candidate, and that program is relying on  the news interview exception, the licensee must itself make a determination that the program is newsworthy.  I think that this ties in with another line in the decisions stating that there is no evidence that the decisions by the program producers that the appearances by the candidates are newsworthy were not bona fide journalistic decisions.  In other words, if the program producer was to include candidate appearances in a blatantly political way (e.g. by totally excluding the candidates of one party and promoting the candidates of the other), then the Commission could conclude that the decisions were not "bona fide,"  and that equal opportunities did apply.

Continue Reading FCC Declares 700 Club and TMZ are Exempt From Equal Time – With Some Issues Left Unaddressed

A decision by a US District Court in New York was just released, setting the rates to be paid to ASCAP for the use of their composers’ music by Yahoo!, AOL and Real Networks.  The decision set the ASCAP rates at 2.5% of the revenues that were received by these services in connection with the music portions of their websites.  These rates were set by the Court, acting as a rate court under the antitrust consent decree that was originally imposed on ASCAP in 1941.  Under the Consent Decree, if a new service and ASCAP cannot voluntarily agree to a rate for the use of the compositions represented by ASCAP, the rates will be set by the rate court.  The Court explained that they used a "willing buyer, willing seller" model to determine the rates that parties would have negotiated in a marketplace transaction  – essentially the same standard used by the Copyright Royalty Board in setting the rates to be paid to SoundExchange for the use of sound recordings by non-interactive webcasters (see our post here for details of the CRB decision).  The ASCAP decision, if nothing else, is interesting for the contrasts between many of the underlying assumptions of the Court in this rate-setting proceeding and the assumptions used by the Copyright Royalty Board in setting sound recording royalty rates.

First, some basics on this decision.  ASCAP represents the composers of music (as do BMI and SESAC) in connection with the public performance of any composition.  This decision covered all performances of music by these services – not just Internet radio type services.  Thus, on-demand streams (where a listener can pick the music that he or she wants to hear), music videos, music in user-generated content, karaoke type uses, and music in the background of news or other video programming, are all covered by the rate set in this decision.  Note that the decision does not cover downloads, presumably based on a prior court decision that concluded that downloads do not involve a public performance (see our post here).  In contrast, the CRB decision covered the use of the "sound recording" – the song as actually recorded by a particular artist – and covers only "non-interactive services," essentially Internet radio services where users cannot pick the music that they will be hearing.

Continue Reading Rate Court Determines ASCAP Fees for Large Webcasters – Some Interesting Contrasts with The Copyright Royalty Board Decision

In a Consent Decree released this week, the Commission agreed to accept a "voluntary contribution" of $16,500 to the government from a tower owner, instead of a fine, for its failure to conduct an Historical Review of the locations of three towers prior to their construction.  Under the Nationwide Programmatic Agreement which implements the National Historic Preservation Act, the construction of most new towers (essentially unless they are in Industrial zones, areas already cleared by a review, in a utility corridor or replace existing towers), require that the owners coordinate with State or Tribal Historical Preservation Officers ("SHPO" or "THPO") to assure that the new construction will not have an adverse effect on any historic site listed on or eligible for listing on the National Register of Historic Places.  The burden is on the tower owner to make sure that the rules for such a review are followed, with the FCC having the power to take action against any applicant who does not conduct such a review.  A full description of the requirements of the Programmatic Agreement can be found on the FCC’s website, here.

This decision demonstrates how seriously the Commission takes these requirements.  In this case, the tower owner realized that it had constructed the tower without having done the proper review, conducted that review, found that there was no impact on any historic location, and voluntarily reported its failure to the FCC.  Nevertheless, the Commission agreed to the fine, plus a requirement that the tower owner appoint a compliance officer and submit reports to the FCC of its compliance with the environmental laws for a period of two years.  Constructing a tower?  Make sure that you conduct the proper studies.

Just prior to the filing of comments in the FCC’s Localism proceeding on April 28, one FCC Commissioner has spoken out, condemning these proposals as being unnecessary in a world of vast media competition, and likely unconstitutional.  According to press reports, Commissioner Robert McDowell last week argued that the rules were unnecessary and counterproductive in a world of media plenty.  The Commissioner pointed to all of the competition from digital and traditional media and asked why the Commission should impose on broadcasters rules abolished 20 years ago – rules which will put them at a competitive disadvantage in the new media world.  These are sentiments that we have repeatedly echoed here.

Today, as comments were being submitted to the Commission, a letter from 23 Senators was sent to the Commission making many of the same arguments.  The letter suggests that the Commission was imposing unreasonable costs on broadcasters when these broadcasters have an economic incentive to serve the public or risk the loss of their audience and the resulting loss of advertising and income.  In other words, they are arguing that the Commission had it right 20 years ago when it decided that marketplace competition would insure that broadcasters served the public interest.  This letter is a companion to the letter sent to the FCC the week before last by members of the House of Representatives, about which we wrote here.

Continue Reading As Comments are Filed in Localism Proceeding, Commissioner Speaks Out

The Public and Broadcasting is a document first written by the FCC in the 1970s to tell the public about how the FCC regulates broadcast stations, and to tell the public how they can get involved in the regulatory process.  Broadcasters must maintain a copy of the manual in their public file, and make it available to members of the public who request it.  For years, the manual was grossly out of date, finally being updated a few years ago.  Today, the FCC issued a Public Notice announcing that they have once again updated The Public and Broadcasting, and that all stations need to place the new version in their public file.  The new version, with a new subtitle "How to Get the Most Service from Your Local Station" can be found here.  Stations should print that document, and place it in their public file.

The manual is updated, and sets out most of the programming and other operational rules that would be of interest to the public.  The manual seems to be objective – pointing out that most programming decisions are left to the broadcast licensee to avoid violating the Freedom of Speech rights of the broadcaster. 

 

Continue Reading FCC Releases New Version of the Public and Broadcasting and Sets Up Help Desk for Broadcast Complaints

As part of its efforts to diversify the ownership of the broadcast media, the FCC promised in its recent order on Localism in the media (see our summary here) to have its engineering staff come up with a computer program to help people determine where a new FM station can be allotted by the FCC, opening the process that will result in an auction to determine who gets a construction permit to build that station.  Today, the Commission’s staff released a public notice announcing that this new program is now on-line, and that interested people can see where a new FM station will "fit" consistent with all FCC rules that require that certain spacings be maintained between stations on the same or adjacent channels to avoid interference.  The program for determining whether new allotments can be made is available here.  All you need to do is provide geographic coordinates for a potential station, and the Commission’s new program will tell you if a new FM station could work there.

As the Commission notes in its Public Notice, the tool will only locate Class A FM stations – the lowest power station – limited to 6 kw of effective radiated power at 100 meters tower height – giving a station a protected coverage radius of approximately 15 miles (though actual coverage may differ depending on factors including terrain and the proximity of other stations).  Also note that simply finding an empty channel does not get you a station.  Instead, a party who finds a channel in an area that they would like to serve must then petition the FCC to "allot" the channel to a specific community that they want to serve.  That proposal is processed by the FCC’s staff and, if acceptable, placed on public notice when other parties can comment on the proposal or file counterproposals suggesting the use of the frequency at some other location.  Once the Commission reviews any comments, they will decide whether to allot the channel.  If and when an allotment is made, it still isn’t ready for application.  Instead, the FCC saves new allotments and periodically puts out lists of these new allotments available for application – a "window" notice as a precursor to a possible auction.  Interested parties can then file with the FCC indicating interest in the channel and, if more than one person expresses interest in the channel (which virtually always happens), the channel will be auctioned to the highest bidder (though new entrants do get some bidding credits).  All told, the process can take several years from the discovery of the available channel to the award of the construction permit.  But, while the process may not be fast, this new tool provided by the Commission has made it somewhat easier.

The Senate Commerce Committee held a hearing this week on the Future of the Internet, dealing principally with the issue of net neutrality – whether Internet Service Providers treat all content carried through their facilities equally.  This issue principally involves questions of whether ISPs can charge big bandwidth users for their content to be transmitted through the ISPs facilities, or to be transmitted at preferred speeds.  The testimony of Chairman Martin at the hearing raised several issues – issues both about what he said and what some reports perceived him to say.  Some reports had him saying that the FCC did not need to regulate indecency on the Internet – though I never heard that question asked. But he did say that he did not have trouble with ISPs blocking illegal content such as child pornography and illegal file-sharing, which raises the question of whether some might look to ISPs to become copyright police – blocking access to material that does not have copyright clearances.  And, with the hearing being held on the same day as a media company purchased a company that can identify copyrighted material by reviewing that content when transmitted on the Internet – is that possibility coming closer to being a reality?

In recent weeks, there have been several trade press reports about government regulation of indecency on the Internet.  I’ve seen at least two trade press reports on Chairman Martin’s testimony before the Commerce Committee, claiming that he said that no government regulation of indecency on the Internet was necessary.  I did not hear any reference to indecency regulation in his testimony (a written version of his statement is available here, and you can watch the entire testimony, here).  Instead, that testimony was about whether Congress needed to pass laws to allow the Commission to enforce its net neutrality principles.  Nonetheless, the press seems to believe that Internet indecency is an issue which might be targeted by regulation.  A recent study finding that the majority of Americans think that FCC regulation of indecency should be extended to the Internet has also been cited in several reports.  However, despite the seeming interest in regulation of the Internet, there are serious constitutional concerns about any such regulation.  In fact, as we wrote here, numerous attempts to regulate indecency on the Internet have been overturned by the Courts on constitutional grounds, as the government could make no showing that the regulations were the least restrictive means for restricting access to adult content.

Continue Reading Indecency and Copyright Enforcement by ISPs? – Questions From the Net Neutrality Hearings

The FCC has scheduled a Summit on the Emergency Alert System ("EAS"), to be held on May 19.  The EAS system is the alert system used by broadcasters to pass on emergency information from government officials to their listeners.  EAS replaced the Emergency Broadcast System ("EBS") and was intended to be a more reliable substitute for the system originally adopted during the Cold War to convey a Presidential message about a nuclear attack or similar emergency to the entire country.  Over the years, the system has adapted to include information about local emergencies and "amber alerts" about the kidnapping or disappearance of children.  However, especially since 9-11 and some of the hurricanes in the South, questions have been raised about the effectiveness of the system, and means to make the distribution of emergency information more reliable and efficient have been sought.  The FCC currently has a rulemaking pending to determine ways in which that system can be made more efficient – a question sure to be addressed at the Summit.

In the current proceeding on reforming the EAS system, one of the questions that has been asked is how the system should be activated for non-Federal emergencies.  Obviously, the President can still activate the system for a national emergency, but how alerts about local emergencies are initiated is one of the more controversial issues in the proceeding.  Currently, there is no uniform system.  Instead, each state’s system may have different points from which an alert can be initiated.  Concerns have been raised that if the ability to initiate an alert is too broadly distributed, alerts may be initiated haphazardly, and if too many alerts are issued, the system will lose its impact and other important programming may be preempted unnecessarily.  Thus, proposals have been made that the alerts should be initiated only by a state’s Governor or his or her specifically designated representative. 

Continue Reading FCC Schedules Summit on Status of EAS

The deadline for submitting comments in the Commission’s Localism rule making proceeding is fast approaching.  Comments are due by April 28th, and can be filed electronically through the FCC’s Electronic Comment Filing System.  This proceeding contains a number of significant proposals and could possibly re-institute regulations that were lifted from the broadcast industry decades ago.  Formal ascertainment through community advisory boards and possibly other means, requirements for manning main studios during all hours of operation of broadcast stations, imposing quantitative programming requirements, and requiring that main studios be maintained within a station’s community of license are just a few of the many proposals the FCC is considering.  See our more detailed summary here.  This proceeding seeks input on these and other potentially burdensome requirements, many of which were eliminated by the Commission long ago, and some of which go beyond what the FCC has ever required before.   Given the potential impact this proceeding could have on broadcast stations, broadcasters are encouraged to file comments in this important rule making proceeding.   When submitting comments, commenters should be sure to reference the docket number for this rule making, MB Docket No. 04-233.

Some members of Congress have already chimed in in this proceeding and submitted comments opposing the Commission’s localism proposals.  Over 120 members of Congress signed on to a letter addressed to Chairman Martin urging the Commission to avoid imposing additional regulations on broadcasters and to carefully consider the cost and effect that such regulation would have on the industry.  A copy of the letter is available here.  A summary of the letter posted on Rep. Marsha Blackburn’s web site characterizes the localism proceeding as an attempt to "restore a 1970s era regulatory regime for local broadcasters." 

Continue Reading Comments on Localism Proceeding Due April 28; Congress Chimes In