For Tuesday’s FCC meeting, the Commission had an agenda crowded with items dealing with the cable television industry.  The issues that were to be discussed may well have provided the controversy that caused the Commission to start its meeting 12 hours after its scheduled beginning.  At the end of the day, two controversial issues were discussed, prompting strong rhetoric from the Commissioners.  Two specific items were adopted over dissent from some of the Commissioners.  In the first, the Commission agreed to collect more information from cable systems about their subscriber numbers to determine if the cable industry has surpassed the 70/70 threshold, (passing 70 percent of all U.S. television households with 70 percent of those households subscribing to cable) which would open a statutory door for the Commission to adopt more intrusive cable regulations.  Second, the FCC slashed the costs of leased access to cable channels, cutting the costs for non-affiliated programming companies that want to lease channel capacity on cable systems to provide their programs.  Details about both of these actions, and some of the discussions about these items, can be found in a Bulletin published by our firm, available here.

The FCC today adopted new requirements for television broadcasters to quarterly file a report with the FCC quantifying their service to the public.  The order also requires that stations keep their public file on their website, if they have a website.  Broadcasters will also be required to broadcast twice each day a notice as to how listeners can find their public file.  This order resolves some of the issues raised in a rulemaking proceeding (about which we wrote here) begun over 7 years ago as part of the rules to govern TV’s digital transition.  Yet these new rules apply to analog as well as digital television operations.  In fact, the public file rule goes into effect 60 days after the publication of the FCC’s order in the Federal Register.  

The new FCC form will replace the Quarterly Issues Programs lists prepared by licensees since the mid-1980s.  The Quarterly Issues lists were originally adopted to replace more detailed reporting requirements which forced broadcasters to collect and file the same types of information that the FCC is now requesting.  While the new forms are not yet released, from the discussion at the FCC meeting, it appears that they will require the following information:

  • Details about civic and election coverage provided by the station
  • Information about programming from independent producers that is aired by the station
  • Information about the number of Public Service announcements (PSAs) aired by the station
  • A description of efforts that the station has undertaken to serve its community
  • Specifics about emergency information provided by the station
  • Information about how emergency and other information is provided to viewers with disabilities
  • There was also some discussion that indicated that the reports would require information about how stations ascertain the needs of their community that are addressed in their programs.

Continue Reading FCC Adopts Rules Requiring TV Stations to Keep Public File on Website – and Adopts New Requirements for Quantifying Public Interest Obligations

In an unusually contentious FCC meeting, the FCC adopted rules that promote Low Power FM ("LPFM") stations seemingly to the detriment of FM translators and improvements in the facilities of full-power FM stations.  While no formal text of the decision has yet been released, the Commission did release a Public Notice summarizing its action.  However, given the lack of detail contained in the Notice as to some of the decisions – including capping at 10 the number of translator applications from the 2003 FM translator window that one entity can continue to process and the adoption of an interim policy that would preclude the processing of full-power FM applications that created interference that could not be resolved to an existing LPFM station – it appears that the Press Release was written before these final details were determined.  And given that the two Republican Commissioners dissented from aspects of this order supported by their Chairman (and also dissented on certain cable items considered later in the meeting), one wonders about the process that resulted in the Republican chairman of the FCC voting with the two Democratic Commissioners on an item that in many respects favors LPFM stations to the detriment of existing broadcast operators.

In any event, specific decisions mentioned in today’s meeting include:

  • Treating changes in the Board of Directors of an LPFM station as minor ownership changes that  can be quickly approved by the FCC
  • Allowing the sale of LPFM stations from one non-profit entity to another
  • Tightening rules requiring local programming on these stations
  • Maintaining requirements that LPFM stations must be locally owned, and limiting groups to ownership of only one station
  • Limiting applicants in the 2003 FM translator window to processing only 10 pending applications each, and requiring that they decide which 10 applications to prosecute before any settlement window opens (the two Republican Commissioners favored allowing applicants to continue to process up to 50 applications)
  • Adopting an interim policy requiring that full-power FM stations that are improving their facilities in such a way that their improvement would interfere with an LPFM station to work with the LPFM to find a way to eliminate or minimize the interference.  If no resolution could be found, the full-power station’s application would not be processed (which we have expressed concerns about before)
  • Urging that Congress repeal the ban on the FCC making any changes that would eliminate protections for full power stations from third-adjacent channel interference from LPFMs

Continue Reading FCC Meeting Adopts Rules Favoring LPFM, Restricting Translator Applications, and Possibly Impeding Full Service FM Station Upgrades

By December 1, 2007, licensees of commercial and noncommercial digital television stations must file an FCC Form 317 electronically reporting on whether the station has provided any ancillary and supplementary services during the twelve-month period ending on September 30, 2007.  If the station did provide such services and generated any revenue from such services, then the FCC wants to know about it.  More importantly, the FCC wants its 5% cut of the gross revenues derived from such service.  Currently, only licensees are required to file the Form 317, so stations that do not yet hold a DTV license for some reason are not required to file.  The form is very brief, soliciting information about the license and the types of services provided, if any, and must be filed electronically through CDBS.

The Federal Election Commission last week adopted new rules, implementing a relaxation in its rules defining what is considered a prohibited "electioneering communication" by a union or corporation.  This change may allow more political spending by these organizations during the upcoming election campaigns  The rule changes were adopted in response to a Supreme Court case which threw out the FEC’s old rules (see our post on that decision, here).  The old rules had prohibited in the 30 days before a Federal primary or 60 days before a general election the purchase of ads by unions or corporations if they mentioned a candidate in that election.  The Supreme Court found that restriction unconstitutional, where the ad addressed an issue without mentioning the election.  Because of that Supreme Court decision, the FEC was forced to rewrite its rules.

The new rules allow corporate and union expenditures on ads on issues, even if the ads mention a candidate, unless the ad is "susceptible of no other interpretation" other than as urging a vote for or against a particular candidate.  The new rules (Section 114.15) provide a "safe harbor" which allows a union or corporation to conclude that their ad is not prohibited.  If the ad does not mention the upcoming election (or the candidacy of an office holder, or the political party of the candidate or the fact that the public will soon be voting) and does address an issue, where the mention of the candidate comes in connection with a suggestion that the public urge the candidate to support a position on the issue, then the ad will fall within that safe harbor.

Continue Reading Federal Election Commission Adopts Rule That May Allow More Issue Ads During Election Season

The FCC has released the agenda for its Open Meeting to be held on Tuesday, November 27.  The agenda is full of issues of importance to broadcasters, and several items may resolve issues that may be troubling – including issues relating to low power FM stations (LPFM) and resolving a long outstanding proceeding concerning the possibility of mandatory public interest obligations for TV stations.  The Commission also has on tap initiatives to encourage the entry of minorities and other new entrants into the broadcast business – even though comments on the Commission’s proposals on this matter were received just a month ago.

First, the Commission is to release an Order on Low Power FM.  We have written about some of the issues that could be decided previously – including issues of whether or not to allow the assignment and transfer of such stations (here) and whether to give these stations preferences over translators and even improvements in full power stations (here and here).

On the TV side, the Commission seems ready to issue an order on the public interest obligations of television operators.  We wrote about the proposals – made as part of the Commission’s DTV proceedings (though to be applicable to all TV stations), here.  Proposed rules included the standardization of quarterly issues programs lists, making station’s public fies available on the Internet, and quantifying other public interest obligations. 

Continue Reading FCC Meeting to Consider LPFM Reform, Public Interest Requirements for TV Stations, and Minority Ownership Proposals

The US Court of Appeal for the District of Columbia has set the briefing dates on the appeal filed by various webcasting groups seeking review of the decision of the Copyright Royalty Board setting Internet radio royalties for the period 2006-2010 for the use of sound recordings (see our coverage of this controversy here, and a detailed summary of the CRB decision here).  The briefs of the various webcasting groups who appealed are due on February 25.  The brief for the CRB (represented by the Department of Justice) is due on April 25, and that of SoundExchange (the "Intervenor) will be filed on May 15. Reply briefs are due on June 12, and oral arguments are yet to be scheduled. As the Court usually takes a summer break in July and August, the argument is likely to be held in the Fall of 2008, and a decision would likely not come until very late in the year or, more likely, in 2009.

Appeals were filed by the a number of groups including large webcasters (including AOL, Yahoo and DiMA), the small commercial webcasters (who I have represented), various noncommercial groups (including two collegiate broadcasting groups and the National Religious Broadcasters Noncommercial Music Licensing Committee), and various commercial broadcasters who also stream their signals on the Internet.  A group called Royalty Logic, which is seeking to become a collective that is competitive with SoundExchange, also filed an appeal of the CRB decision. 

Already, there has been a settlement announced on one narrow aspect of the case, the minimum fees for companies that stream multiple channels, limiting the per company minimum fee to $50,000.  Obviously, if there are other settlements, these appeals could become unnecessary in whole or in part.  See our summary of the remaining issues to be resolved here.

I had an interesting question this week – asking why beer companies won’t advertise on radio stations with younger demographics.  Was it a law or just a marketing decision?  What I found is that it is a little of both.  While there are no laws specifically prohibiting the advertising of beer on radio stations with younger audiences, the Federal Trade Commission and Congress have been very concerned about all alcohol advertising, especially advertising that appears to encourage under-aged drinking. Thus, to avoid regulation, the Beer Institute has adopted voluntary standards that require its members to advertise only on radio stations which have an audience that is at least 70% comprised of those older than the legal drinking age. 

The FTC has periodically issued reports on advertising for alcoholic beverages, the last report having been issued in 2003.  Appendix D to that report contains the Beer Institute guidelines.  As set forth in those guidelines, the industry looks to audience demographics, by daypart, in deciding whether or not its members should buy time on a particular station.  If the Arbitron or similar ratings data shows 30% or more of a station’s audience in a given daypart is under 21, then there will be no advertising in that daypart on the station.

Continue Reading Britney and No Beer – Why Beer Companies Don’t Advertise on Radio Stations With Young Demos

On Tuesday, the Senate Judiciary Committee held a hearing on the possibility of imposing on broadcasters a performance royalty for the use of sound recordings.  This would be a new royalty, paying for the public performance of the recording of a song by a particular artist – a fee that would be on top of the fees that broadcasters already pay to ASCAP, BMI and SESAC for the public performance of the underlying compositions.  Unlike the House of Representatives Judiciary Committee Hearing, about which we wrote here, this hearing was a much more measured proceeding, weighing carefully the implications of imposing a new royalty – both as to whether it was really necessary to encourage creation of more music by performers, and as to whether radio stations could afford to pay such a royalty.  In fact, in closing the hearing, Senators asked the representatives of the Broadcasters and of the musicians to provide the committee more information on these two issues.

The Music First Coalition seeking the new royalty was represented by two recording artists, Lyle Lovett and Alice Peacock.  Committee members were clearly excited to have Mr. Lovett testifying, thanking him repeatedly for taking time out from his touring schedule (he had played a concert the night before in suburban Washington, at the Birchmere Club in Alexandria that Senator Leahy, Chairman of the Committee, said was attended and enjoyed by some of his staffers), and the committee was even treated to a few bars of Ms. Peacock’s song "Bliss."  But between the performances and the star treatment, committee members did ask hard questions – including whether a royalty was really needed.  Both artist stated that music was their passion, that they would be performers no matter how much they were paid.  If passion drove the creation of music, asked one Senator, as the purpose of copyright is to encourage the creation of artistic works, why is a new royalty on broadcasters even necessary? 

Continue Reading Performance Royalty (or Tax) on Broadcasters – Promotion, Fairness and The Impact on the Small Guy

Yesterday’s unique Public Notice outlining Chairman Martin’s proposals for reform of the multiple ownership rules (which we summarized here) is a surprisingly restrained and limited approach to relaxation of the ownership rules – proposing to relax only the newspaper-broadcast cross-ownership prohibitions, and only in the Top 20 TV markets.  Moreover, the reform would only allow the combination of a daily newspaper and a single radio or TV station, and the newspaper-TV combination would only be allowed if the TV station is not one of the Top 4 ranked stations in the market.  While the extremely limited nature of the proposed relief has not stopped critics of big media from immediately condemning the proposal (see the joint statement of Commissioners Copps and Adelstein, here), much less attention has been paid to those multiple ownership issues that the Chairman’s proposal does not seem to address – including TV duopoly relief in small markets and clarifications to the radio ownership rules requested by a number of broadcasters who sought reconsideration of the changes that arose from the 2003 ownership reforms. 

The Chairman’s Public Notice is itself a new approach to regulation – putting out for public comment (due by December 11) an action of the Commission just before that action is to be taken.  Usually, the Commission proposes a set of rule changes in a Notice of Proposed Rulemaking, and the Notice provides time for interested parties to comment and then reply to each other’s comments.  Once all the written comments are submitted to the Commission, parties and their representative often make informal visits to the FCC to argue about the suggestions that have been made, and eventually, after much consideration, the Commission’s staff writes up a decision which is vetted by the Commissioners and their staff, and voted on by the full FCC.  Usually, these final decisions are shrouded in secrecy – though outlines of the proposals are often the subject of informed gossip and rumor, rarely does anyone see the full set of rules that the Commission is considering until after the decision is made. 

 

Continue Reading What Chairman Martin’s Multiple Ownership Proposals Omit – No Relief for Radio and TV