As we reported on July 7 and 17, the FCC had intended to issue final rules on Ibiquity digital radio standard in July, but suddenly pulled the item off their agenda.  Currently, all broadcast stations operating in a digital mode are doing so on temporary authorizations pursuant to interim rules, and multicast operations are conducted pursuant to experimental authorizations. 

Rumors at the time, reported in our blog entries, attributed the delay to attempts to work out issues over the public interest obligations of broadcasters on their multicast channels.  Today, at the annual convention of the Maine Association of Broadcasters, an FCC representative, while not confirming that this was the basis of the delay, did say that there were requests by public interest groups for some quantification of the public interest obligations for these multicast channels, and also said that there was a pending proposal that leasing a digital subchannel to a community organization could be one way of meeting such obligations.

In thinking about this issue, it seems to me that the imposition of strict public interest obligations on these multicast channels may well impede their development.  These channels may be used in ways that are far different than traditional broadcast stations.  For instance, a station could use some of its multicast spectrum for an "all traffic and weather channel" (like that offered by satellite radio), or an all local sports channel.  Uses like these may develop as a way to give local audiences programming that they may want on demand, as a way to compete with satellite or on-line offerings.  If there are strict public interest obligations, requiring specified amounts of news or public affairs programs, the development of these innovative uses of the broadcast spectrum might be delayed.  The FCC should tread carefully, as they don’t want to stifle the development of digital radio – or over-the-air radio’s ability to compete with new technologies. 

With only a week to go before comments are due in the FCC proceeding to determine whether or not to change the Multiple Ownership Rules (our summary of the issues on which the Commission sought comment can be found here), a controversy has arisen over a 2004 study concerning the effects of local ownership on news programming.  During the confirmation hearing on Chairman Martin’s second term on the Commission, soon after the Chairman expressed his open mind about the outcome of the multiple ownership proceeding, California Senator Barbara Boxer produced a surprise.  She produced a report written by FCC economists purporting to show that television stations that are locally owned air more local news programming.  This report, though written in 2004, had never been released to the public.

The clear implication was that the Commission had tried to bury the report though as it contradicted FCC proposals to loosen ownership restrictions.  According to a report in TV Newsday,  the Chairman today sent a letter to Senator Boxer stating that neither he nor any of the other Commissioners knew of the existence of the report or any efforts to suppress its release.  However, in another news report released today, a former FCC attorney said that senior managers at the Commission ordered "every last piece" of the report destroyed. 

Continue Reading Flurry Over Consolidation Study

A front page article in today’s Washington Post reports that the National Republican Congressional Committee expects to spend about $45 million on negative campaign ads this year, attacking Democratic challengers on personal and character issues.  One academic quoted in the article indicated that this year’s election may be "a more negative campaign that any in recent memory."

If the Republican Party spends money, no doubt the Democrats and other interest groups will be spending as well in this tight election with control of Congress potentially at stake.  For broadcasters, this means that they will be in for lots of controversy, and lots of work. 

When a legally-qualified candidate buys advertising time on a broadcast station, the station cannot censor that ad.  Therefore, the station is exempt from any liability for the content of that ad.  But when the ad is purchased by a non-candidate third party group, the station has no obligation to run the ad, and therefore, if the ad is defamatory, the broadcaster could have liability for running it.  Particularly if the broadcaster knows or suspects from the content of an ad that it is false, or is put on notice that the facts contained in the ad are untrue, the broadcaster faces liability if it does nothing to investigate the truth of that ad.  So, if a broadcaster is running an attack ad and gets a complaint about the truth of the ad (most likely from the candidate being attacked), the broadcaster needs to verify the truth of the claims being made before any further airing of the ad.  And usually the proponent of the ad will have reams of paper to support the claims that are made – support that needs to be evaluated by the broadcaster.

Continue Reading Negative Ads Expected to Increase

Another executive of an on-line betting site was arrested late last week when changing planes in the United States.  According to a New York Times story, the executive of SportingBet was detained based on a warrant issued by Louisiana state authorities. 

As we wrote on July 18 and August 12, the arrest of an officer of BetOnSports.com caused the website to cease its operations in the United States.  This new arrest, based on the actions of state authorities, rather than Federal officials, may signal a new offensive against such sites.  In the past, we have found that many state authorities have been the first to approach broadcasters with threats of legal actions over advertisements for gambling websites.  This action may indicate that authorities will also be going after the sites themselves.

We warned in an August advisory that broadcasters needed to exercise great care in accepting advertising in any way related to on-line gaming.  Even the "dot net" sites, which don’t take money for bets, but are for "educational purposes" or for fun using free points instead of money for betting, need to be approached with suspicion.  Check out the advisory for cautions on how to approach this increasingly hot topic.

Today, the FCC released an order fining a station over $16,000 for not having a local main studio, for operating over its authorized power at night, and for not maintaining a local public inspection fine.  Many might think that these violations are obvious ones.  Yet weekly, the FCC issues notices of fines for stations all over the country.  So not all stations are paying attention.  Back in April, we published a bulletin highlighting a number of problem areas where the FCC has been finding violations and fining stations.  These are worth another look, as today’s fine makes clear that the FCC remains vigilant in enforcing its rules.

A few weeks ago, the New York Times featured an interesting article about the impact of Internet video and other new technologies on the traditional media.  The premise of the article is that big media players, like AOL, FOX and Disney are being forced into bold moves to keep up with the the Internet.  Decisions such as AOL’s recent decision to from a subscription to a free service is one move cited by the article as being driven by the availability of free on-line content.  A comment by Rupert Murdoch that he would consider merging Direct TV with Echostar because of the competition from Internet video was another instance that the article cites as support for its premise.  This Sunday’s Times featured another article on the impact of Internet technology on the distribution of music, including traditional radio.

These changes impact not only big media, but local media and small Internet players as well.  The choice provided by the Internet has already caused changes in everything from local television to Internet radio.  I started writing this post from rural Wisconsin, where I was for a family event.  Watching the local television station, WEAU-TV in Eau Claire, Wisconsin, I was somewhat surprised to see an a promotion for "build your own newscasts."  The station was promoting its website, and the ability to watch local news stories produced by the station on the website, watching only those stories that you want to see, when you want to see them.  This on-demand availability of new stories when done with local stories avoids most copyright issues.  And it allows local media to serve their audience in the way that the audience wants to be served. 

Continue Reading New Media Changes Everything?

This Friday, September 8, begins the 60 day "window" during which lowest unit rates will apply for broadcast advertising for the November 7 general election.  Stations should already be observing equal opportunities obligations and maintaining their political files, as these obligations exist as soon as there are legally qualified candidates, even outside of the political windows.  Reasonable access, the right of Federal candidates to demand to buy time on commercial broadcast stations, also applies as soon as there are legally qualified candidates.

According to reports in many publications, including the Wall Street Journal and Broadcasting and Cable Magazine, this may be one of the most active political broadcasting years ever.  With many observers believing that both the US House of Representatives and the Senate are potentially up for grabs, and there being many significant gubernatorial races in large states including New York, California, Texas and Michigan, money should flow into political advertising, straining the inventories of some broadcast stations in battleground states.  Now is the time, early in the campaign, for broadcasters to consider how to manage these political buys.  Remember that a station must give equal opportunities to opposing candidates to match spots run by their opponents within the prior 7 days.  So stations, when approached early in a campaign by candidates with lots of available funds, need to be careful about booking too many large buys from one side of a political race for spots to be run in the last days of the campaign.  By booking too many large buys now from only one side, the station may find itself, in the last few days of the campaign, with requests from the opposing candidate for equal time, which will have to be accommodated.  Accommodating those equal opportunities may require the preemption of commercial advertisers, something that stations may be loath to do to advertisers who will be around well after the political season ends.

Continue Reading Political Broadcasting – The Window Opens

In our posting of July 17, we asked whether President Bush’s comments to Tony Blair at the G-8 summit, which had occurred earlier that day, could get broadcasters who aired the unedited version into trouble under the Commission’s indecency policies.  Well, it looks like the President may have indeed found a unique way to raise government revenue.  Press reports yesterday reported that  complaints were filed with the FCC asking that fines be imposed on stations that aired the President’s comments without bleeping the "S-word."  Specifically, at least one complaint named a Maine television station airing the unedited comments, while another complaint was registered by the FCC about NPR’s coverage of the event.

While unedited coverage of a news event had, in the past, in more tempered times, been found by the FCC to be permissible if the station felt that it was necessary to convey the context of the story (for instance, in the case of coverage of a mobster using some colorful language about the prosecution’s case as he emerged from a courthouse).  But these days, with the recent FCC crackdown on even fleeting uses of expletives, stations are unsure of the law, and frightened of FCC actions.  And, with recently legislated higher indecency fines, which we reported on on June 16, the fears take on even more urgency for broadcasters.

For instance, CBS plans to air a documentary on 9-11, which includes footage of the reactions of emergency personnel at the site of the collapsing World Trade Center.  The reactions to the tragic events include some use of FCC-prohibited expletives.  This documentary has already aired twice on CBS without any adverse action.  Yet now, certain groups have reportedly suggested that complaints should be filed at the FCC about the upcoming airing of the program.  And now, reports state that at least one broadcaster has announced that they will delay the program until after 10 PM – in the FCC’s "safe-harbor" where adult content will not be subject to FCC penalties as the potential for children in the audience is less.

Continue Reading George Bush, 9-11 and Potential Big Fines

This week’s Economist includes an interesting story on the competitive pressures being faced by newspapers.  One of the observations about successful newspapers in this competitive, digital world is the ability of the newspaper to exploit its on-line presence.  Successful newspapers were able to not only use their existing content on the Internet, but were also able to expand the reach of their paper and create compelling content to attract their readers and others to the website.  This includes the extensive use of audio and video.

On Friday, I participated in a live webcast, "Webcasting for Rookies" sponsored by the International Webcasters Association.  In a discussion with Michael Gordon of Limelight, the content delivery network, a similar observation was made – that newspapers are some of the biggest users of streaming media.  He observed that newspapers did not view on-line audio and video as competitive to their primary product, but instead as complementary, so they were more willing to promote their on-line product.  Conversely, broadcasters were reluctant to exploit the Internet, as it was seen as being more like broadcasting, and more threatening. 

Mr. Gordon’s comments, and those of the other speakers including my discussion of legal issues for webcasters, can be accessed here (free registration required).  Broadcasters should take note.  As the Internet grows, they don’t want others to steal their audiences by doing what broadcasters do best – audio and video.

On Friday, the FCC announced that it will auction 9 new FM channels on January 10.  These are channels that went unpurchased in prior FM auctions – either because no one bid on the channels or because the winning bidder defaulted on its winning bid (presumably by not paying for the channel when the full payment was due). 

The channels are for new stations at the following locations:  Covelo and Tecopa, California; Cedar Key and Perry, Florida; Kihei, Hawaii; Outlook, Montana; Ocracoke, North Carolina; Meyersdale, Pennsylvania; and Parowan, Utah.  The FCC proposed rules for the auction, here, and set out the amounts of minimum bids that it expects to collect for each of these channels, here.  The exact date for the filing of the initial short form applications and the posting of the minimum bids will be announced after the final rules for the auction are adopted.  Comments on the Proposed Rules and the minimum bids are due on September 6.

Perhaps most interesting is the fact that the FCC has chosen to open only this mini-window at this time.  In each of the last two years, at about this time of year, the FCC has announced the opening of auction windows for large numbers of FM stations.  Hundreds of stations have been auctioned in these last two years.  The FCC has hundreds of FM allotments around the country that already been made but which have never been available for applications.  These will be apparently be subject to auction at some later date.

Continue Reading New Radio Channels to Be Auctionned By FCC