In recent weeks, Low Power Television stations have been the center of attention in Washington in connection with the Digital television transition.  While all full-power television stations are set to convert to digital operations less than a year from now, ceasing analog operations at the end of the day on February 17, 2009, there is no specific deadline for LPTV stations to convert to digital.  As the NTIA rolls out its coupon program for the purchase of converter boxes that will take digital signals of over-the-air television stations and convert them to analog for those who do not have digital television receivers (see our summary here), LPTV advocates noted that many converters do not pass through analog signals.  Thus, once a television is hooked up to a converter box, that television will not be able to pick up stations broadcasting in analog – so many unconverted LPTV stations after the conversion date will be denied access to television receivers.

Suggestions have been made that the converter boxes be reconfigured to pass through analog – unlikely as many of the boxes have already been manufactured and are on their way to stores (note that some converters do pass through analog signals, but a consumer needs to look for those boxes).  LPTV advocates have also asked for some form of cable must-carry during the transition process – a proposal sure to be opposed by cable system operators. 

Continue Reading The Trouble With LPTV – No Plan for DTV Transition

In a decision last week, the FCC fined a radio station $4000 for broadcasting the message from someone’s telephone answering machine without permission.  The FCC’s rules forbid the broadcast of a telephone call without permission (and the recording of a phone call for broadcast without permission).  So, a station violates the rule when a caller says "hello" before giving permission for the call is broadcast (except in cases where the caller is presumed to know that they may be put on the air, e.g. if they call into a call-in show where callers are regularly put on the air).  Here, the Commission made clear that the airing of even a voicemail or answering machine message without permission violates the rule.

This case is also interesting in that the licensee tried to avoid liability by saying that the infraction occurred during a program that was under the control of an independent contractor who had bought a block of time from the station in which the contractor aired programming that he produced.  The FCC reiterated the importance of a licensee maintaining control over all programming that is aired on a station, even if it is provided by a contractor.  Years ago, the FCC even revoked the license of stations that were broadcasting lottery information during brokered programming, in a foreign language that the licensee did not understand.  In those cases, the FCC made clear that a licensee had to take steps to understand what was being broadcast on its airwaves.  This most recent case should remind stations that sell blocks of time that they need to monitor those blocks to make sure that all broadcasts comply with FCC rules. 

This week, after a long period when we saw little in the way of indecency enforcement by the FCC, the Commission issued two orders compelling payment of fines for television programs broadcast in 2003.  The Commission issued a Notice of Apparent Liability (an order proposing a fine) only a few weeks ago asking ABC affiliates to respond to a potential indecency violation in connection with an NYPD Blue episode run in February 2003 (see our description of the proposed fines here and here).  Only a week after the submission of arguments against the proposed fine made by the cited affiliates in a 75 page response to the Notice of Apparent Liability, the FCC issued its order rejecting the arguments against the fines – an unheard of speed in issuing a decision.  Each station involved was fined $27,500.  Then, later in the week, the FCC issued an Order which fined a number of Fox affiliates $7000 each for perceived indecency violations in an episode of the Married By America reality television program, also broadcast in 2003 – following up on a Notice of Apparent Liability issued over two years ago by the FCC.  In one case, an incredibly quick action resulting in a large fine against many stations – in another a smaller fine against far fewer stations.  Why the differences?

The reason for fines coming now was that, in both cases, the 5 year statute of limitations was coming to an end and, if the Commission did not quickly act, it would be precluded from doing so.  In both cases, the Commission determined that it would fine only stations against which complaints were filed.  In the case of Married by America, the Commission had sent a notice of Apparent Liability to 169 stations, but ended up fining only 13 against which actual complaints had been filed.  In contrast, the Commission fined 45 stations for the NYPD Blue episode, even though the "complaints" were in many cases filed months after the program aired on the stations, and even though many of the "complaints" did not even allege that the local viewer had actually seen the program for which the fine was issued.  Instead, many of the complaints were apparently initiated by an on-line campaign urging that the people write the FCC to complain about the program – even if they hadn’t necessarily seen it.  In its decision, the Commission concluded that the fines were appropriate – even without specific allegations that the program was watched by the people who complained.

Continue Reading A Tale of Two Indecency Decisions – FCC Issues Fines for Married by America and NYPD Blue

In two recent cases, the FCC discussed the issue of "blanketing interference," the interference that can be caused by a broadcaster to electronic devices that are located in homes and businesses near to the station’s transmitter site.  In the first case, the FCC rejected a license renewal challenge finding that there was no specific showing of interference to protected RF devices.  The FCC appends to this decision a guide to the types of interference which a broadcaster must resolve.  In the second case, the Commission also denied a complaint filed against the renewal application of a radio station based on the interference that it allegedly caused in nearby homes.  Here, the Commission published a set of Guidelines as an appendix to the decision – guidelines which help clarify the procedures that a broadcaster should go through to assess its responsibility to remedy interference complaints.  Together, the attachments to these two cases should give stations guidance on what they should do if they get complaints of blanketing interference.

Essentially, broadcasters are required to resolve all complaints of blanketing interference which occur within a station’s "blanketing contour" (1V/m for AM stations, 115 dBu or 562 mV/m contour for FM stations) during the first year of a station’s operation from a particular transmitter site to "RF devices."  These include radios, TVs, and VCRs with tuners in them.  Licensees are not required to resolve complaints to mobile receivers.  Telephones, phonographs, tape recorders or devices using high gain antennas also are not covered.  After the first year, stations, while not fully financially liable, do have the responsibility to provide information and assistance about how to resolve the interference to the person who is suffering that interference.  The Appendix to the second case states that licensees will have to respond to all complaints filed with the FCC and provide details of what they have done to address interference complaints.  So broadcasters should be aware of their responsibilities, and take appropriate actions based on the guidelines set out by the FCC.

The Commission’s Localism Report and related Notice of Proposed Rule Making seeking comment on a slate of proposed new rules has been published in the Federal Register.  Accordingly, Comments in this rule making proceeding must be filed with the Commission by March 14 and Reply Comments must be filed by April 14.  This is a very short period of time in which to comment on a number of significant proposals that are poised to return the broadcast industry to the regulatory structure of the 1980s.  As we reported earlier, the Commission proposes to re-regulate broadcast stations, and the NPRM suggests a number of substantive rule changes, such as effectively re-instating ascertainments, eliminating the unmanned operation of broadcast stations, imposing quantitative programming requirements, and requiring that main studios be maintained within a station’s community of license.  This NPRM proposes a number of potentially burdensome requirements, many of which were eliminated by the Commission long ago, and many of which go beyond what the FCC has ever required.

Given the potential impact that the FCC’s proposed rules could have on broadcast stations, broadcasters are encouraged to file comments in this important rule making proceeding. 
Comments can be filed with the Commission in paper or electronically through the FCC’s Electronic Comment Filing System.  When submitting comments, commenters should be sure to reference the docket number for this rule making, MB Docket No. 04-233.  

As more and more broadcasters create and use websites (and, to some extent, are required to post more information on those sites by the FCC, see our post here), they should be cautious about the legal liabilities that arise from these sites.  For instance, as websites are used to gather personal information for listener’s clubs, news alerts or for e-commerce purposes, the site owners need to be concerned about privacy issues. Many states are now requiring privacy policies to be posted on websites that gather personal information.  In a recent decision, the Federal Trade Commission entered into a consent decree with a website owner who had not abided by the privacy policy that it posted, requiring that the site owner hire security consultants and regularly file reports, for the next 20 years, with the FTC on its efforts to comply with its policies.  This case is a demonstration that website owners should not casually adopt privacy policies without fully understanding and adhering to their terms.

Davis Wright Tremaine’s Privacy and Security blog features a summary of this consent decree and explains the ramifications of the decision.  Broadcasters and other website owners should learn from this decision that they should not blindly copy a privacy policy that they find on some other website and adopt it as their own.  Instead, they need to carefully craft a privacy disclosure that honestly discloses their policies and practices.  In this case, the website owner promised that personal information would be maintained in a secure fashion, yet the FTC found that simple hacking techniques were able to get access to that information.  For website owners who are collecting private information, and promising privacy and security, to avoid legal issues in the future, make sure that you are living up to your promises. 

On the last day of 2007, the FCC released its Third Periodic Review of the Digital Television rules and policies, providing the rules and procedures that TV stations must follow in their final transition from analog to digital operations.  This transition leads up to the February 17 deadline when all television stations must cease analog broadcasting and operate full-time in digital.  We first summarized that order here.  Now that the order has been published in the Federal Register, and deadlines and filing dates have become fixed, our firm, Davis Wright Tremaine, has published a more complete summary of the DTV transition rules.  The advisory containing that summary can be found here.  Read it and prepare for the hectic year before the digital conversion is complete.

The FCC this week released the full text of its decision on the revision of the multiple ownership rules that it adopted at its December 18 meeting.  While the text goes into great detail on the decision to relax the newspaper-television cross ownership restrictions (causing the ruling to be condemned by consolidation critics), the order is very brief in addressing the numerous other issues with the multiple ownership rules that were raised in this proceeding.  Television broadcasters sought greater opportunities to consolidate in local markets, and radio broadcasters requested reconsideration or clarification of various aspects of the Commission’s 2003 decision adopting Arbitron market definitions as the basis of the determining how many radio stations are in a particular market.  These requests were all rejected, some summarily.  Will these parties who were denied relief from the FCC protest as loudly as the critics of the decision with respect to the relaxation of the TV-newspaper cross ownership limits?

We summarized the decision with respect to the newspaper television rules here.  That summary was based on the statements made at the December 18 meeting and on the press release issued that day which provided a brief summary of the Commission’s decision.  The outline we provided in December was basically accurate, and there were few surprises about the newspaper-television cross ownership rules in the text.  The Commission was very thorough in documenting the basis for its decision that newspapers and television stations could be commonly controlled without adversely affecting the public interest, citing a legion of studies supporting their decision, while carefully refuting the studies supplied by consolidation critics.  However, the remainder of the decision, dealing with other aspects of the multiple ownership rules which the Commission refused to change, contained reasoning which was far more limited.  In some cases, particularly dealing with radio issues, the reasoning was almost absent.

Continue Reading FCC Issues Text of Its Multiple Ownership Decision – New Combinations for Newspapers and TV, No Ownership Changes for Radio

Last week, the Copyright Royalty Board published an order seeking comments on a proposed settlement establishing the royalties for "Business Establishment Services."  Essentially, this is the royalty paid by a service which digitally delivers music to businesses to be played in stores, restaurants, retail establishments, offices and similar establishments (sometimes referred to as "background" or "elevator" music, though it comes in many formats and flavors, and may sometime include the rebroadcast of programming produced for other digital services).  The proposed settlement would essentially carry the current rates forward for the period 2009-2013.  These rates require the payment of 10% of a services revenue (essentially what they are paid by the businesses for the delivery of the music) with a minimum annual payment of $10,000.

Some might wonder how a royalty of 10% royalty can be justified – and why it shouldn’t set some sort of precedent for the Internet radio services about which we have written so much here.  Once again, as we’ve written before, the Digital Millennium Copyright Act sets different standards for different kinds of music use.  For many consumer-oriented services (like satellite radio, digital cable radio and Internet radio), there are different standards used to determine the royalty rate.  For Business Establishment Services, it’s not the standard that is different – it’s the royalty itself.  Under the DMCA, there is no performance royalty paid either by the business or the service provider.  Instead, under the statute, the royalty is paid only for the "ephemeral copies" – those transitory copies made in the digital transmission process.  That is different than the royalty for all of the other digital services, where fees are paid for both the performance (under Section 114 of the Copyright Act) and the ephemeral copies (under Section 112).

Continue Reading Copyright Royalty Board Requests Comments on Business Establishment Service Royalty Rate

In the last few days before the Super Tuesday series of presidential primaries, efforts are being made across the political spectrum to convince voters to vote for or against the remaining candidates.  With Obama buying Super Bowl ads in many markets, Clinton planning a one-hour program on the Hallmark Channel the night before the primaries, Rush Limbaugh and other conservative radio host attacking McCain, and third-party interest groups and unions running ads supporting or attacking various candidates, a casual observer, looking at this media blitz, may wonder how all these efforts work under the rules and laws governing the FCC and political broadcasting.

For instance, sitting here watching the Super Bowl, I just watched a half-time ad for Barack Obama.  Did the  Obama campaign spring for one of those million dollar Super Bowl ads that we all read about?  Probably not.  It appears, according to press reports, that instead of buying a national ad in the Fox network coverage, the campaign purchased local ads in certain media markets.  And with reasonable access requirements under the Communications Act and FCC rules, he could insist that his commercial get access to the program as all Federal candidates have a right of reasoanble access to all classes and dayparts of station programming.  Moreover, the spot would have to be sold at lowest unit rates.  While those rates are not the rates that an advertiser would pay for a spot on a typical early Sunday evening on a Fox program, they still would be as low as any other advertiser would pay for a similar ad aired during the game.  In this case, by buying on local stations, at lowest unit rates, his campaign apparently made the calculation that it could afford the cost, and that the exposure made it not a bad deal.

Continue Reading The Run-Up to Super Tuesday – Rush, the Super Bowl, Union Ads and an Hour on the Hallmark Channel