Comments are due to be filed with the FCC by this Thursday, August 24, on the NAB’s proposal to allow AM radio stations to use FM translators to fill in nulls in their coverage.  Particularly for AM stations with very directional patterns, or with authorizations that specify little or no nighttime coverage, this proposal could provide an excellent way for these stations to maximize service to their listeners.  The NAB is making the filing of comments easy through an electronic filing system available on its website here.

While it is important for those supporting this proposal to file comments to urge the FCC to consider it, this is but the first step in a long process before this proposal can become reality.  The FCC here is asking only for comments on the NAB’s Petition for Rulemaking.  If the FCC finds merit in the NAB proposal, then it would have to draft its own Notice of Proposed Rulemaking to suggest rules that would govern the use of such translators.  After taking comments on the Notice, if the FCC is still convinced that the idea is a good one, the Commission would then have to draft a set of final rules and an order adopting those rules.  Thus, in the best case, this is a long process.

Continue Reading FM Translators for AM Stations?

In the early 1990s, calls were heard in the halls of Congress, among public interest groups and in the press about the harmful effects of advertising on children. Within a few years, we saw legislation and FCC actions limiting the amount of advertising aimed at children, and effectively prohibiting the hosts of children’s programs from promoting goods or services during their programs. We may now be seeing a similar wave building with respect to the advertising “unhealthy” foods – particularly as that advertising affects children.

A recent Broadcasting and Cable article referred to discussions held between advertising organizations and Senator Brownback of Kansas, seeking to encourage industry self-regulation on the advertising and promotion to children of unhealthy foods.   After the discussion, the Senator reportedly agreed to refrain from pursuing any Congressional action at this time, while industry efforts to develop voluntary guidelines proceeded. However, the concern was clearly expressed that, should industry actions not be forthcoming, legislative action may follow.

These efforts to regulate the advertising of unhealthy foods have been arising not only at the Federal level, but also in state legislatures around the country.   Several state broadcast associations have faced proposals in their legislatures to enact restrictions on the advertising of unhealthy foods. So far, most of these efforts have not resulted in actual regulation, at least in part because of the difficulty of defining what foods would be covered by any rules that may be adopted. 

Continue Reading Restrictions on Advertising Unhealthy Foods?

Today, press reports stated that the FCC has sent letters of inquiry to 77 television stations inquiring about their use of Video News Releases (VNRs) without properly notifying their audience about the source of such releases.  VNRs are essentially pre-produced segments provided to television stations for inclusion in their programming.  The Washington Post carried a story, here, describing some of the stories which triggered the FCC investigation.  These reportedly included a report from an electronics show used by several TV stations in their news reports.  The producer of the report had been paid by the electronics manufacturers featured in the story for including their products in the story.

The FCC released a Public Notice in April, 2005 detailing its policies on VNRs.  The Public Notice makes clear that a station must disclose who paid for material broadcast on a station, whether or not the station received the consideration.  Clearly, if an advertiser paid a station for airing a news report, the station would be required to disclose the payment.  But the Public Notice makes clear that the station also owes its audience a disclosure even if it received no consideration, if the party that produced the material broadcast on the station received some consideration, and the station could discover that consideration by asking the producer if he or she was paid or through other means of reasonable investigation. 

Continue Reading FCC Investigates Video News Releases

On July 18, we wrote about the arrest of the CEO of BetOnSports, the Internet gambling site, and the indictment of individuals involved with the Company, including representatives of its advertising agencies.  Yesterday, the New York Times reported that BetOnSports has stopped taking bets from people in the United States in compliance with the US Court Order banning all such activities.  The Times story is here.

Even though BetOnSports has ceased US operations, there are other Internet gambling sites that continue to operate, continue to solicit US citizens to place wagers, and continue to seek to entice broadcasters to run their advertising.  We warned our clients of the risks posed by taking such advertising in our bulletin on the subject.  As we stated in the bulletin, not only is the Federal government active in enforcing restrictions against such sites, but state governments have enforced their own bans.  Given the capitulation of the one of the biggest and best financed of the Internet gambling sites to the US Court order, broadcasters should not be promoting the sites directly, and must very carefully consider the risks of taking any advertising which even indirectly solicits US citizens to patronize these on-line gaming sites.

In recent months, SoundExchange has been reaching out to webcasters seeking to identify those who are delinquent in their royalty payments for music used on the Internet. Numerous broadcasters and webcasters have received calls or letters from SoundExchange seeking information about apparent underpayments or missing mandatory reports of royalty liability that should be filed regularly by webcasters.

Some webcasters may believe that, as the rates for Internet radio music use for 2006-2010 have not yet been established, they don’t have to pay anything until those rates are set. That is not correct, as the legislation adopted in 2005 which established the Copyright Royalty Board also specifically required that fees be paid at the old rates until a new rate structure is adopted. Some broadcasters have assumed that their ASCAP and BMI fees, which cover “streaming,” cover all costs of putting their signals on the Internet. Again, that is not the case, as the ASCAP and BMI cover only the use of the musical composition (the song) on the Internet.  The SoundExchange fee compensates the copyright holder in the actual performance of the music (the money that is collected goes to the copyright holder of the recording and the musicians who play on the recording).   The SoundExchange fee is entirely different from ASCAP and BMI, and is imposed only for non-broadcast digital transmissions of recorded music. Broadcasters do not pay a SoundExchange fee for their over-the-air broadcasts, and may not be familiar with this fee, but it is one that should not be overlooked, especially given SoundExchange’s recent attempts to identify noncompliant webcasters.

For those who may be unfamiliar with the royalties for use of music in an Internet radio broadcast, a memo outlining the requirements is available <here>

Yesterday, the FCC released its text of the Notice of Proposed Rulemaking on Multiple Ownership.  The text summarizes the findings of the Commission in its 2003 multiple ownership proceeding, the questions about those decisions that were raised by the Third Circuit Court of Appeals, and then basically asks for public comments – without making any specific proposals on how to deal with the issues that have been raised. 

With so little guidance from the FCC, this is going to be a wide-open process. The FCC doesn’t give any hint on how it is leaning on any issue, nor even suggest how to address many of the open issues. Given the issues that were remanded by the Third Circuit to the FCC, and the broad spectrum of issues raised in the Petitions for Reconsideration (all of which will be considered in this proceeding, but on none of which the FCC made any comment or suggested any way in which they would treat the issues raised), there is almost no ownership rule that is off limits in this proceeding.  In fact, the FCC could quite well revisit all the ownership rules decided in the 2003 Order, with the possible exception of the Television national ownership limits which have now been set by statute (though the FCC again raises the question of the "UHF discount" that goes into computing the national cap – asking if that discount should be retained).

A summary of some of the issues involved in this proceedings is contained in our client advisory – Multiple Ownership, Yet Again – sent out after the FCC meeting last month that announced the initiation of the new proceeding.

With so much to consider and so little guidance, this will be a long process.