The FCC has announced that on January 24 it will begin a new round of testing of wireless devices that will work in that part of the communications spectrum currently reserved for television station operation.  The idea, about which we wrote here, would be that these devices could operate at low power, on channels not used by television stations in a particular market (the so-called "white spaces"), without creating interference to television stations.  Proponents (mostly tech and computer companies) claim that these low power devices could be used for wireless broadband and other communications devices, while opponents (principally television broadcasters, but also and wireless microphone companies which operate in the television spectrum) fear that the devices, when released into an unregulated, real-world environment, will create damaging interference to the new digital television operations that begin in February 2009.  The Commission’s tests will attempt to resolve this controversy.

The Commission has already once tested some devices, and found them wanting (see our summary here).  However, those who support the devices claim that the tests were flawed and one of the devices that was tested was malfunctioning.  So the FCC has announced revisions in the testing process, and opened the testing process to public observation.  Four devices will be tested.  No matter what the results of the tests, you can be sure that the debate will continue.

[Correction 1/24/2008- we have published a correction to this entry, here, noting that the Federal Register publication described below contained only half of the FCC’s order in its LPFM proceeding, omitting the portion seeking public comment.  That section of the order will apparently be published in the Federal Register at a later date – so the February 19 comment date set out below is incorrect.  Everyone has more time to prepare their comments.  The actual filing date will be set in the future.]

The FCC Order establishing new rules for Low Power FM (LPFM) Stations was published in the Federal Register on January 17.  This sets the date of February 19 for the filing of comments on the question of the relationship between LPFM stations and both FM translators and full-power FM stations.  These comments will address two issues, (1) whether LPFM stations should remain secondary stations, subject to being knocked off the air by new full-power FM stations and (2) whether LPFM stations should get some sort of priority over some or all FM translator stations.

LPFM stations have been "secondary" stations, meaning that they could be knocked off the air when a new FM station came on the air, or when improvements to the facilities of an existing FM station were constructed, if the new full-power FM facilities would be caused interference from the existing LPFM station.  As we wrote here, at its November meeting, the FCC decided that it needed more information to determine whether LPFM stations should continue to be secondary to new or improved FM stations.   While not reaching a final determination on that issue, the FCC adopted temporary processing policies which essentially force the full-power stations to deal with LPFM operators in cases where such interference arises – potentially blocking improvements in the facilities of a number of FM stations. 

Continue Reading Comment Date on the Relationship of Low Power FM Stations to FM Full Power Stations and Translators Set

In a wild series of legal decisions preceding the Democratic Presidential debate in Nevada, a Nevada judge ruled that MSNBC had to include Congressman Dennis Kucinich in its debate, only to be overruled by a decision of the Nevada Supreme Court released less than a hour before the debate was to begin.  Notably, the initial decision was not based on FCC rules, but instead on a breach of contract theory, as FCC precedent seems relatively clear that a Presidential debate sponsor need not include all candidates in a debate for the coverage of that debate by a broadcaster or cable operator to be exempt from the equal opportunities rules enforced by the FCC. 

 The FCC has long recognized that, to promote the coverage of debates on broadcast media, the sponsors need to be able to limit participation in those debates for them to have any meaning.  In some races where there are minimal requirements for being placed on a ballot, there can be dozens of candidates for a particular office.  If all needed to be included in a broadcast debate, the debate would never be broadcast, and the public would not receive the benefit that on-air coverage would provide.  The issue first arose when the equal opportunities rule was adopted, as broadcasters feared that, unless every candidate for a particular office was included in the debate, any broadcaster or cable company carrying the debate would have to give free "equal time" to any candidate that did not participate in the debate. 

Continue Reading Nevada Court Denies Kucinich Right to Participate in Broadcast Debate – Recognizing FCC’s Exclusive Role to Regulate Equal Opportunities in Political Debates

As 2007 wound to an end, advertising issues figured prominently on the agenda of Washington agencies, including both the FCC and the FTC.  While the FCC is looking at specific regulatory requirements governing broadcast advertising, the FTC is investigating the privacy issues raised by advertising conducted by on-line companies.  In November, the FTC held a two day set of workshops and panels where interested parties discussed issues of behavioral advertising – advertising that can be targeted to individuals based on their history of Internet use, and whether or not regulation of these practices was necessary.  The wide-ranging discussion is summarized on our firm’s Privacy and Security Blog, here.  After gathering this testimony, we will see if the FTC decides to proceed to propose any regulations dealing with this sort of personalized, on-line advertising.

At the FCC, there are two separate proceedings dealing with advertising issues for broadcasters.  The first came about as part of the FCC’s diversity initiatives adopted at its December meeting.  There, the Commission determined that broadcasters will need to certify in their renewal applications that they have not discriminated in their advertising practices.  While this proposal was adopted at the Commission’s December 18 meeting, the full text of the decision has yet to be released, so we do not know the specifics of this new requirement.

Continue Reading Advertising Issues on Washington’s Agenda for 2008

The FCC has released the agenda for its first open meeting of the year, scheduled for this Thursday, January 17, 2008.  The agenda consists solely of presentations by the various Bureau Chiefs discussing their various policies and procedures in implementing the agency’s "strategic plan."  Such an agenda, while not common, is not unheard of, especially for the first meeting of the year, and especially after so many controversial decisions were made in the last two meetings at the end of 2007.  

This agenda was released a few days after House Energy and Commerce Committee Chairman John Dingell announced an investigation of the Commission’s rulemaking procedures and management practices.  FCC Chairman Kevin Martin has been under fire from Republicans and Democrats alike in both the House and Senate, especially following the agency’s December meeting in which the newspaper/broadcast cross-ownership ban was modified, as we discussed here.  Congress has criticized the agency’s lack of transparency, and infighting among the Commissioners has become open and much talked about in Washington, as reflected in meetings that are often delayed by hours and in Commissioner’s Copps’ vitriolic dissenting statement read aloud at the December meeting. 

Continue Reading FCC to Hold Open Meeting Featuring Bureau Chief Presentations – While Congress Investigates

This week, the Copyright Royalty Board issued an Order denying a request by SoundExchange for rehearing of certain aspects of the decision released last month setting the royalties for satellite radio – XM and Sirius.  These are the royalties for the use of sound recordings by these services on their digital systems.  The decision, which set royalties at 6 to 8% of revenues of these services, and the denial of the rehearing motion, provide examples of how the CRB applies the 801(b) standard of the Copyright Act.  In setting royalties, that standard assesses not only the economic value of the sound recording, but also the public interest in the wide dissemination of the copyrighted material and the impact of the royalty on the service using the music.  The satellite radio decision sets a royalty far lower than that assessed on Internet radio – where the royalty is set using a "willing buyer, willing seller" standard looking only at the perceived economic value of the sound recording.  That willing buyer, willing seller standard is also proposed for broadcast radio in the recently introduced performance royalty bills now pending before Congress (see our summary here) – so it could be expected that any royalty set using that standard would be higher than that set for satellite radio. 

The initial Copyright Royalty Board decision, the full text of which is available here, first made a determination of how to compute the royalty.  While both the satellite radio companies and SoundExchange initially suggested a percentage of revenue royalty given that satellite radio can’t count specific listeners, the parties later amended their proposals (after the Internet radio decision) to include a computation based on the frequency of a song’s play, to try to more closely approximate the Internet radio performance-based model (about which we wrote here).  In addition to the suggestion that this metric more closely approximated that used in the Internet radio decision, the satellite radio companies suggested that a metric based on the songs played would give them the opportunity to adjust their use of music to reduce their royalty obligation.  The satellite companies suggested that, if the royalty was too high, they could reduce the number of different songs that they played.  While not specifically referenced in the decision, it is possible that they also considered the possibility of getting waivers from artists to encourage playing particular songs, which could further reduce a royalty based on a per song computation.  The Board declined to provide that option, finding that the percentage of revenue option best took into account the business of the companies.  The Board also suggested that it doubted that satellite radio really had the ability to lessen the use of music in reaction to a high royalty rate.  (The Board does not discuss the possibility of royalty waivers, which are essentially worth nothing in a situation where the royalties are based on a percentage of a service’s entire revenue). 

Continue Reading Satellite Radio Music Royalty Reconsideration Denied By Copyright Royalty Board – What a Difference A Standard Makes

Investors in broadcast properties often seek to have their interests "insulated" from "attribution"   meaning that the interests do not count in a multiple ownership analysis.  In other words, if a party has an attributable interest in a company owning a broadcast station, that interest counts in determining whether the party can, under the FCC’s multiple ownership rules, own an interest in another station in the same market.  The FCC has extensive case law describing when an interest is non-attributable and does not count in a multiple ownership review.  In most cases, a non-attributable interest is one that does not hold voting rights on most company decisions.  However, the Commission has always recognized that the non-attributable, non-voting equity owner may retain certain voting rights when dealing with certain fundamental company actions, as necessary to protect the fundamental integrity of their investment.  In the recent decision approving the transfer of the Ion Media Network broadcast stations, the FCC clarified some of the permissible voting rights of nonattributable shareholders.

In the past, the FCC has permitted nonattributable owners to vote on certain fundamental actions of a company without threatening the owner’s nonattributable status.  Such fundamental actions included changes in the articles of organization or the by-laws of the company, a sale of more than 10% of the assets of the company, a merger or transfer of control of the company, a declaration of bankruptcy, or the issuance of new stock.  As these actions could all affect the fundamentals of the economic interests of the nonattributable owners, votes on these actions was permitted.  In the Ion Media case, new rights were found to not affect the non-attributable status of their investments

Continue Reading FCC Clarifies Permissible Activities of Nonattributable Investors

The National Telecommunications and Information Administration ("NTIA") now has made available the coupons for consumers to use to buy converter boxes that will allow analog television sets to pick up the digital signals of television stations.  We have written about the NTIA program before, here.  Digital signals are now available in most markets, and these signals will be the only signals available from full power television stations after the February 17, 2009 digital conversion deadline. The coupons, valued at $40, will be available until they run out (and, by most estimates, Congress has not appropriated enough money for every household to get coupons).  They are available to any household regardless of financial need, but can be used only to buy certain very simple converter boxes to convert over-the-air digital transmissions to analog so that the digital programs can be seen on analog television sets that are not hooked up to cable or satellite (cable and satellite systems will provide signals that will not need the use of these boxes).  The NTIA has a very helpful website, here, to explain the coupon program.  The applications for the coupons are available here. 

Any household can apply for up to two coupons.  Coupons cannot be aggregated to buy a single box – so the multiple coupons will only be of use to households with more than one set that is not connected to cable or satellite.  As set forth on the NTIA site, the boxes are expected to cost between $50 and $70, so the coupon will not completely cover the cost of the box.  What is perhaps most interesting is that, even though the applications for the coupons can be filed now, the coupons will not be sent out for another month or two, as there are no boxes yet available in local retail outlets.

Continue Reading Coupons For Converter Boxes Now Available From NTIA, So That Consumers Can Watch Digital Television on Analog Sets

On the last day of 2007, the FCC released a 108 page order detailing its rules for the final stages of the transition of US full power television stations from analog to digital, a transition that is to be completed in less than 14 months.  The Third Periodic Review, as the order is titled, covers in detail the timing of required construction of the final facilities for each full power television station, as well as various details on other transition issues.  While we will prepare a more detailed summary of the order, some of the more significant issues that the Commission addressed include the following:

  • Established firm construction deadlines for final digital facilities for television stations which have not yet constructed those facilities. The deadlines are:
    • February 17, 2009 for stations moving to a new digital channel, or to their analog channel, for their ultimate digital operations
    • May 18, 2008 for stations that will remain on their current digital channel and which already hold a construction permit for their digital operations
    • August 18, 2008 for stations that will remain on their current digital channel but which do not have a construction permit for their ultimate facilities
  • Extensions of these deadlines will be permitted only upon a showing that the circumstances preventing construction were unexpected or beyond the control of the licensee, including zoning and financial inability – though these standards were made more limited than those that previously applied.  Any extension beyond February 17, 2009 will be granted only if it meets the Commission’s tolling standards, e.g. there is litigation which must be resolved before the construction can begin or an Act of God that temporarily precludes construction.
  • By February 18, 2008, each television station licensee must file a new form with the FCC, Form 387, detailing the status of construction of the digital facilities of the station, and must update the information periodically if they have not yet completed their DTV construction.
  • The Commission has agreed to allow stations to receive Special Temporary Authority to operate with limited facilities, and to even cease analog broadcasting before the end of the transition or for periods of up to 30 days, if necessary to facilitate their ultimate construction, under certain specific guidelines and after prior notification that must be given to viewers. 
  • The current freeze on applications for increased facilities will be lifted after August 18, 2008
  • The Commission adopted new interference standards for applications for improvement in digital stations
  • Any digital station, whether operating as a licensee or permittee, must pay fees for any ancillary or supplementary services that they provide with their digital spectrum
  • Provided a format for the station identification that must be used when a digital station uses a secondary channel to rebroadcast another station, such as a low power television station.

 

Continue Reading FCC Releases Order Addressing the Process for the Final Transition to Digital Television

As the dates for the first Presidential primaries draw near, more and more stories appear in the press about attack ads growing in importance.  These ads are coming both from the candidates themselves trying to draw distinctions with their opponents, and from third party, supposedly independent, groups either attacking or supporting one of the candidates.  See, for instance, the recent story in the Washington Post on the increase in third party ads.  These ads have raised political issues on the campaign trail as to whether negative campaigns work, and as to how independent of the candidates the third party expenditures really are.  They also raise legal issues for broadcasters.  Whenever there are attack ads that are run on a broadcast station, there are complaints from the candidate being attacked about how unfair the criticism is.  Broadcasters have to deal with these complaints, and the sponsor of the ads makes a huge difference in the broadcaster’s responsibilities to check the truth of the statements made.    As we explain in our Political Broadcasting Guide, broadcasters may not censor the content of a candidate ad, and thus are exempt from any liability for the content of that ad.  But attacks contained in third party ads may require the broadcaster to do some investigation into the claims being made to make sure that they avoid legal liabilities.

For ads run by a candidate or his or her authorized committee, the Communications Act forbids a broadcaster (or cable company that chooses to sell time to political candidates) from censoring the candidate’s message.    Because of the no censorship rule, the Courts have ruled that broadcasters are immune from any sort of liability for defamation that may arise from the content of the ad.  Thus, broadcasters cannot reject a candidate’s message based on its content (with the possible exception of cases where that content would violate a criminal law, as opposed to just creating some civil liability), and need not take any action in response to a complaint by an opposing candidate that the ad contains incorrect or distorted information.

Continue Reading As Presidential Races Heat Up, So Do the Attack Ads – Legal Issues For Broadcasters Dealing With Third Party Political Ads