In a curious bit of timing, on the day after the NTIA released its Order setting out the process for providing consumers coupons to finance their purchase of converter boxes to allow their analog televisions to continue to receive a signal after the digital transition, a coalition of high-tech companies visited the FCC to promote the use of the television spectrum to provide a wireless broadband Internet service.  We wrote about the FCC proceeding to allow these uses, on a non-interference basis, here, when the FCC launched its "white spaces proceeding." 

The proposal by many of the leading high-tech companies, including Microsoft, Intel, Google and other computer manufacturers, would allow smart devices to operate in the television band to send and receive wireless Internet signals, without interfering with television users.  The NAB has expressed concerns about whether these devices could in fact operate without interference to television stations.  In a Washington Post story, it was reported that the companies provided the FCC with a prototype device for testing, and stated that the devices could be ready for consumers by 2009 – perfectly timed for the end of the digital television transition.

This is a proceeding that all television broadcasters should watch carefully.

On March 12, the National Telecommunications and Information Administration ("NTIA") released its Final Rules for the Digital-to-Analog Converter Box Coupon Program (Coupon Program).  This program is designed to allow consumers to purchase converter boxes which will allow analog televisions to receive over-the-air broadcast signals after the February 17, 2009 transition date when all full-power television broadcasters will be broadcasting only in digital.  This was a long-awaited action that many view as a necessary step before the country can meet the February 2009 digital conversion deadline.  The Order gives details of the implementation of the converter box program, providing guidelines for consumers, retailers and equipment manufacturers.  Details of the program are set out below.

The heart of the program is the coupons to be distributed to consumers.  Starting January 1, 2008, all U.S. households can request up to two $40 coupons than can only be used toward the purchase of two digital-to-analog converter boxes. There is no needs test, i.e. any household that wants coupons can request them, regardless of household income.  Only one coupon can be used for each converter box.  The coupons will be in the form of an “electronic coupon card;” like a gift card, but they will not carry any value that can be used for anything but a converter box.  The coupons will expire three months (90 calendar days) after the coupon is placed in the U.S. mail. In no case may consumers receive any cash value for the coupon so, if the cost of a converter box is less than $40, consumers cannot receive a refund or credit towards the purchase of another item. Consumers are also prohibited from selling their coupons. If a converter box does not work properly, consumers will be permitted an exchange only for another converter box. Applications for coupons will be accepted only between January 1, 2008 and March 31, 2009 and will be able to be requested by mail, by phone, by fax, or through a website.

Only households are eligible for coupons. No business, schools, or similar entities are eligible. Also, multifamily residences (i.e., a residence occupied by more than one family unit) will not be eligible for more than two coupons unless each household has separate living quarters and has a separate U.S. postal address. Because Post Office Boxes are prevalent on Indian Reservations, Alaskan Native Villages and other rural areas, these households may be required to supply additional information to identify the physical location of the household.  An NTIA  fact sheet for consumers summarizing the above information can be found here.

Continue Reading NTIA Releases Details of DTV Converter Box Coupon Program

I’ve received several calls in the last week asking if the political broadcasting rules apply to municipal elections – such as elections for mayor, city council, or school board.  Even though this is an "off year" for Federal elections, many communities around the country have local elections, and in some of those elections, candidates have sought to purchase advertising time on broadcast stations.  Many stations don’t seem to remember that the lowest unit rate rules do apply to local races.  The rules on rates, as well as the public file requirements, equal opportunities, and the no censorship rule all apply to state and local races, as well as to Federal candidates.

Only the reasonable access provisions of the FCC’s political broadcasting rules do not apply to state and local candidates.  In other words, stations need not sell commercial time to candidates for any local political contest, or the station can set upfront limits on how much time will be sold in the race,  but, once the station decides to sell time, if the spots are to run in the 45 days before the primary or the 60 days before the general election, Lowest Unit Rates do apply.  And all candidates for the same office must be treated alike.  The rules are mandatory – if you sell ads to candidates for public office within the window, the sales must be at lowest unit rates.  So make sure that these rules are applied. 

For those of you tired of reading about the recent Copyright Royalty Board decision on Internet Radio royalties, you can instead listen to a discussion of those royalties.  An interview that I did with World Internet Radio is available to download and listen on their website, at http://www.wirnonline.com/downloads.php.  The interview covers questions about the royalties themselves, the process that went into their adoption, the likely effects of the new royalties if they are not modified, and the possible routes by which the royalties may be changed. 

And, if you are not tired of reading about the royalties, our stories and the dozens of comments that we have received are archived here.

The Commission recently issued an Order fining a Kansas broadcaster $4000 in connection with a station contest – "Guess What is in the Santa Sack."  The licensee was faulted for not giving away the prize to someone who correctly guessed what was in the sack, and for also for not broadcasting the rules of the content on the air.  Obviously, a broadcaster must comply with its contest rules and give away a prize as promised.  In fact, as the winner had to complain to the FCC in order to get her prize, broadcasters should know that, when a listener complains, they should investigate immediately, give away the prize if warranted, and avoid the FCC fine that might result if the listener does not get satisfaction and has to ask for the FCC’s involvement.  This case also reminds broadcasters that the material terms of any contest must be announced on the air on a periodic basis.

According to the FCC rules, "material terms" include those factors which define the operation of the contest and which how a listener can participate in the contest. Although the material terms may vary  depending upon the exact nature of the contest, they will generally include: how to enter or participate; eligibility restrictions; entry deadline dates; whether prizes can be won; when prizes can be won; the extent, nature and value of prizes; the basis for valuation of prizes; time and means of selection of winners; and/or tie-breaking procedures.   The broadcaster can make a good faith judgment as to how often the terms need to be broadcast .  They do not need to be broadcast every time the contest is mentioned, but should be aired often enough so that listeners can become familiar with the rules.  The complete rules should also be readily available to listeners.  We suggest that they be on the station’s website, and hard copies should also be available at the main studio and at the business locations of any principal sponsors where contest entries can be made.  As we’ve written before, this is the year of the contest gone wrong, so broadcasters must be vigilant to avoid legal problems. 

This week, the FCC released its Order on Video Franchising Requirements, setting out rules that require that municipalities timely process requests by companies for local franchises for multi-channel video systems to compete with existing cable systems.  For details of this ruling and the issues to be resolved in a Further rulemaking proceeding, you can read our firm’s advisory summarizing this Commission decision.  We wrote about the significance of this ruling in December.

This article is no longer available. For more information on this topic, see FCC Issues Emergency Communications Reminders to Broadcasters and Other Communications Entities in the Path of Hurricane Sandy 

 

Continue Reading FCC Enters Into $18,000 Consent Decree With Television Station for Not Presenting Visual Presentation of Emergency Information

Following the recent Copyright Royalty Board decision, about which we have written several times this week, many individuals and companies have asked what can be done either to reverse the decision, or to operate in a world where the decision becomes effective.   While it is much too early to access all of the options, I thought that I would outline some of the possibilities.

First, Petitions for Rehearing of the Decision can be filed by the parties to the case within 15 days of the release of the decision – by March 19.   As such a Petition asks the Board to determine that the conclusions it reached after several months of deliberation were wrong, this is an uphill battle. There is, however, a much greater possibility that the Board will clarify some of the more onerous ambiguities of the decision – such as the issue of what constitutes a "channel" or "station" to which the minimum fee attaches. 

 After Petitions for Rehearing are dealt with, the Library of Congress must publish the decision in the Federal Register. Within 30 days of such publication, parties can appeal the case to the United States Court of Appeals for the District of Columbia. The filing of a Notice of Appeal by that deadline merely starts the appellate process. The Court will establish a schedule for the case – setting dates for the filing of full legal briefs and responses to those briefs. The Court will have an oral argument after the briefs are filed. A decision will follow. In appellate cases, this process can easily take a year to complete.   In order to overturn the decision, the court must find that the decision was arbitrary and capricious – in essence that, when presented with the facts, no there was no reasonable way for the decision to turn out the way it did.  This is a high standard that must be achieved, but not one so high that appeals are never successful.  So there is always hope.

 

Continue Reading What Next for Internet Radio In Light of the Copyright Royalty Board Decision