This evening, at about the close of business on a Friday evening, the FCC issued a decision on an number of indecency complaints involving a five-year old episode of "NYPD Blue."  The Commission fined approximately fifty or so ABC affiliates in the Central and Mountain time zones $27,500 each for airing indecent material.  Specifically, the Commission found that a scene in the episode aired on February 25, 2003 containing adult female nudity to be indecent.  The Commission rejected ABC’s seemingly common sense argument that a woman’s buttocks are not "sexual organs" within the definition of the indecency rules.  Instead, the FCC has now determined that showing the backside of a naked woman is a violation of the indecency rules if it airs before 10 PM, as it did in the Central and Mountain time zone.  A copy of the FCC’s decision can be found here.  If there is a silver lining it is that the FCC imposed the statutory maximum that existed at the time the programming was aired — $27,500 — rather the new, stepped up fines.  Further, the Commission fined only those stations about which it received an actual complaint, and not simply all stations in those time zones that aired the episode. 

The stations have until February 11th to either pay the fine or appeal the forfeiture.  This is an accelerated timeframe for responding or paying the fine, as usually Commission gives stations 30 days to respond to a Notice of Apparent Liability for Forfeiture.  It is unclear what the impetus was for the FCC to finally issue a decision on the "NYPD Blue" complaints nearly five years after the episode originally aired and with several challenges on earlier Commission indecency rulings currently pending before the courts.  No word yet on whether ABC and the affected affiliates will appeal the decision, but it seems likely that this indecency decision will join the others already in the pipeline for judicial review.  And in the meantime, broadcasters have been put on notice that a woman’s posterior is now officially indecent material.  No word yet on whether showing a man’s rear end is equally problematic, but if there’s a station willing to air it and a viewer willing to complain, the FCC will undoubtedly tackle that critical issue if and when it arises.   

At its December meeting, the FCC adopted a Notice of Proposed Rulemaking on Localism.  At that meeting, while the Commissioners discussed the generalities of the proposals being made, the specifics of the proposals were unknown.  The full text of the NPRM has now been released, and it sets out the areas in which the Commission proposes to re-regulate broadcast stations.  The order also hints at a number of other proceedings that the Commission intends to launch in the near future, and reminds broadcasters of a number of other existing proceedings that will potentially bring about greater regulation.  From the discussion in the NPRM, new rules will apply to all broadcasters – large and small – and potentially place significant burdens on all stations which, as always, are hardest for small stations to deal with.  Given the number of new regulatory initiatives discussed by the Commission, the NPRM is a must-read for all broadcasters, and this proceeding is one in which all broadcasters should participate.

Among the specific proposals on which the Commission asks for comments include the following:

Community Advisory Boards:  The Commission tentatively concludes that all stations will be required to establish a community advisory board to advise the station on the issues of importance to the community that can be addressed in the station’s programming.  The Commission indicated that it did not want to bring back the burden of the ascertainment process that was abolished in the 1980s, but asks how the Board should be established so as to represent the entire community, suggesting that the categories of community leaders that were used in the ascertainment process could be used as a standard to guide the licensee in determining the make-up of the board.  Other questions include how often the board should meet, and how the board members should be selected (or elected – though by whom, the Commission does not suggest).

Other Community Outreach Efforts.  The Commission also suggests that other community outreach efforts should be considered as possible mandates for broadcasters.  These would include the following:

  • Listener surveys by telephone or other electronic means (general public surveys were also part of the ascertainment process abolished in the 1980s, so if this were adopted together with the Community Advisory Board, ascertainment would effectively be back)
  • Focus sessions or town hall meetings
  • Participation of management personnel on community boards, committees, councils and commissions (mandatory civic participation?)
  • Specific phone numbers or email addresses, publicized during programming, for the public to register their comments on station operations.

Remote Station Operations.  Comments are sought as to whether television stations should be forbidden to operate without being manned during all hours of operation.  Radio operations will be addressed in the proceeding to consider the public interest issues posed in the Digital Radio Proceeding (see our summary here).

Quantitative Programming Guidelines.  The Commission proposes to adopt quantitative standards for programming that a station would have to meet to avoid extra processing and scrutiny at license renewal time.  Questions include what categories of standards should be established (just local programs – or more specific requirements to set required amounts of news, public affairs and other categories – and how to define what programming would qualify in each category), should requirements be established as specific numbers of minutes or hours per day or per week or by a percentage of programming or through some other metric, should other specific requirements or measurements be established?

Main Studios.  The commission suggests reverting to the pre-1987 requirement that each station maintain a main studio in its community of license

Network Programming Review.  The Commission asks whether rules should be adopted to require that local network affiliates have some ability to review all network programming before it is aired.  If so, what programs would be exempt from the requirement (e.g. live programs), how much prior review is necessary, would such a right disrupt network operations?

Voice Tracking.  The Commission asks if "voice-tracking," (i.e. a radio announcer who provides announcing on a radio station from outside a local market, sometimes including local inserts to make it sound as if the announcer is local) should be limited or prohibited, or if disclosure should be required.

Local Music.  While the Commission indicates that it did not think that a ban on national playlists was required, it did ask whether broadcasters should be required to report the songs that they play, and how they choose their music.  With that information, the Commission asks if it should consider the amount of local music played when assessing whether a station has served the needs of its community at license renewal time.

Class A TV.  The Commission asks whether it should adopt rules that permit more LPTV stations to achieve Class A status, meaning that they would no longer be secondary stations subject to being forced off the air by interfering uses of the TV spectrum by full-power TV stations.

 

Continue Reading FCC Releases Specifics of Localism Rulemaking – Proposing Lots of New Rules For Broadcasters

Last week, we published a note that the FCC had published the new rules on Low Power FM (LPFM) stations in the Federal Register, starting the comment period on the issues raised in the Further Notice of Proposed Rulemaking in that proceeding – principally addressing the relationship between LPFM stations and FM translators and improvements in full power FM stations.  But we were wrong about the comment date.  In an unusual action, the Federal Register publication only contained that portion of the FCC’s order actually adopting new rules on ownership and transferability of LPFM stations, limiting the number of FM translator applications that one entity can process from the 2003 filing window, and announcing interim processing rules with respect to situations where interference to an LPFM station would be caused by upgrades to FM stations.  The section of the document which constitutes the Further Notice of Proposed Rulemaking were omitted from the Federal Register publication, even though it had been acted on simultaneously with the new rules that are going into effect, and even though the language dealing with the Further Notice was released together with the new rules, in a single document back in early December.

So the comment date on the relationship between LPFM stations, FM translators and the upgrades of full-power stations remain to be set – watch for the date to be set soon. 

The FCC has now joined the Nevada Courts (see our post here) in denying Dennis Kucinich entry into the Presidential debates.  In a decision released this week, the FCC found that they could not force CNN to include Kucinich in its Democratic Presidential Debate, as such an action would violate the First Amendment.  The FCC only has the jurisdiction to determine if Kucinich was entitled to equal opportunities for not being included, and the Commission rejected that claim as well, finding that the carriage of the debate was on-the-spot coverage of a news event, exempt from equal opportunities. 

This decision is what we predicted in our post when the court’s denied Kucinich access to the Nevada Presidential debate.  As we set out in that post, to encourage political debates, the FCC has determined that debates are on-the-spot coverage of news events as long as more than one candidate is included, and the decision as to which candidates to invite is made based on some rational criteria that is not exercised in some discriminatory, partisan fashion.  In this case, the Commission found that CNN’s criteria – that a candidate had to have finished in the top 4 in a previous primary and be polling over 5% in an established national Presidential preference poll were not standards that were being applied arbitrarily for partisan reasons. The Commission concluded that the mere fact that Kucinich was receiving Federal funds and had unique positions on the issues was not enough to conclude that CNN was required to either include him in the debate or provide him equal time.

Continue Reading FCC Rules Against Kucinich Request for Inclusion in CNN Presidential Debate

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